live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. i'm melissa lee along with andrew ross sorkin joe and becky are off today. sitting in with us is ed lee, "new york times" media reporter and cnbc contributor thank you for waking up early. >> happy to do it. >> big show. don't let the futures fool you they're quiet at this hour ahead of the big jobs report dow looking to lose 31 at the open nasdaq down by 5 a lot can happen and a lot will happen between now and the opening bell in asia, quiet there as well in anticipation of the u.s. jobs data the nikkei up by 0.2%. the hang seng finished down slightly the shanghai was up by 0.2%.

in europe, also eagerly anticipating the jobs report fractional losses across the board with the dax down 0.2% a check on treasury yields, we have yields, the ten-year specifically, the lowest level since november of 2016 1.96% on the ten-year. the 30-year at 2.47. the countdown to the employment report is on. forecasters polled say the u.s. likely added 165,000 non-farm jobs in june the unemployment rate is expected to hold steady at 3.6%. if those predictions are right, it won't likely be enough to discourage the fed from cutting interest rates later this month. we'll have a lot of predictions about all of this. a developing story off the coast of gibraltar

british royal marines interce interceptintercep intercepted a super tanker they believed the super tachktar was heading to a syrian oil rig. iran has demanded the tanker's release. u.s. national security adviser john bolton praised the move calling it excellent news. wti is down a percent. and samsung saying its second quarter profit likely fell 56% from a year ago operating profit expected to be 5$5.5 billion that includes a one-off reimbursement from apple for missing a sales target final figures are due later this

month. lower prices and demand for semiconductors are the primary reason for the decline experts say lower prices have been driven byemiconductors and u.s./china trade war some predict the sector will not recover until the second half of 2020 a lot to watch there other south korean tech companies feeling the pressure look at what's going on. lg down. sk down also issuing profit warnings a lot going on there guess who our guest host is? have you been properly introduced yet >> yes melissa did it >> do you listen to what i say >> do i listen everybody was taking different seats for being becky or joe that's a joe line. do you listen to what i say. >> does he >> i'm scared. >> the other piece of news that

has been sort of rumbling around, david faber talked about it earlier this week, the big deal that may or may not get announced next week, which is sprint t-mobile finally. >> we've been waiting for weeks. >> the potential sale of assets to dish. or not how will this work you tell us. >> well, a lot of this has been reported the sum is the -- they need a doj approval the doj is holding back because they want a fourth carrier to exist even after this deal you wonder doesn't that defeat the purpose? they still want a fourth carrier. along comes dish they own all the spectrum. they have not tapped into it there's a chance that sprint/t-mobile could sell a portion of their business to dish to create this fourth carrier. they're to the really selling part of their system they're selling access to their

system so that dish goes out there, they resell -- they end up reselling sprint/t-mobile system it's a wholesale deal. the sticking point now is the doj wants dish to have access to their full system. if they sell however much of their service they can, you have to open it up to them. sprint/t-mobile are like let's cap it keep it at 10%, 15%. >> that makes sense. you tell me. i don't know what you think the full weight of service would be on a t-mobile/prisprint networkf dish were to recreate that, they would be running 100% of the -- >> it's a marketing thing. at that point are you marketing the service better than the actual service owners?

verizon has a big deal with comcast, the parent company of this company apparently it's working well for them they're just reselling verizon service under their own badge. it's the same quality, same thing. if that's happening there. why want it happen with dish at the same time t-mobile and sprint will reap the benefit of that longer term, because dish is sitting on so much spectrum, which is what you need, they will convert that to having the service go over their own systems. they still need to build that out. that's an expensive thing to do. it's one thing to own spectrum you also have to own the infrastructure behind it >> is there a price cap associated with dish having access to their networks it is less advantageous for t-mobile/sprint -- >> they're getting less margin >> so the synergies of the deal would be affected if they had full access. >> nathey're trying to cap how

much of their system they're giving to dish >> the other thing is what would happen if dish turned around and decided they would sell the rights to whatever they're doing to somebody else >> right >> there was conversation at one point that amazon wanted in. it could be interested if google decided they wanted to be a player i'm not sure if i'm t-mobile or sprint that i would want that. google could say i would offer free service over your network, we'll pay for it we'll subsidize it because we'll make the money somewhere else. >> dish needs other investors to come in and build out this network. they could get an amazon or google or facebook to go in with them and become another reseller on top of what they're doing across this system if you're t-mobile or sprint, you don't want that. you can only sell so much. you can only bring in so many

partners dish is led by charlie, he's a strong negotiator. >> and he walked before. is there somebody behind him >> i think it hinges on him. >> making sure the doj is cool with this. >> if they see this creates a legitimate fourth carrier. you're combining these two but we need another one to support the system support the market around it >> do you think in this environment, this political environment that a google or an amazon would be ones to step in and make major investments >> i think they're not allowed to >> i think it's off-limits it's not possible. >> it's off-limits with the regulatory --

>> yeah. we talk about privacy all the time >> most people don't care. >> the public doesn't care if google offered a subsidized service where your phone service is cheaper -- >> how much do you pay for cell phone service? if that dropped by 50% -- >> if it's cheaper people will go for it. they're willing to eat whatever privacy concerns there might be. >> we have a lot coming up with ed >> i'll be here. it's the reason we're all here today the june jobs report is due at 8:30 a.m. eastern time, we'll have predictions and what the number could mean. before we head to break, a look at the premarket winners and losers in the dow.

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june apparel data is due out in about two hours time. joining us for that is kevin clemens and rob martin

rob, first of all, predictions here >> so we think it's going to be a decent report. we have 170,000 for this month's report there are some risks that it could be on the soft side. the payroll survey week is when trade tensions were at peak. mexican tariffs on the table >> we'll lock for average hourly wages. that will be key, correct? >> yeah. earnings we have 0.3% on the month. no sign of major overheating there. we have had a bit more moderate pace eventually. >> what's your total number? >> total payrolls, 170,000 >> so you're the same on -- >> headline is the same. yeah >> are we are soft of at a bottom

will unemployment tick back up from here? >> i think the jgeneral consensu is for no change >> going into second half -- >> if job growth slows, as we suspect, gdp growth is moderating, quwe could see a ri. >> we think job growth continues in the 200,000 pace over the rest of this year. that will keep the unemployment rate moving down steadily. >> so you think it will go lower. >> that's right. we think the fed cuts in july but stays on the fence for the rest of the year what do you see that most companies are not seeing >> a lot of boutique manufacturing. manufacturers have opened up over the last couple of years.

a lot of the weakness we're seeing is still tariff related >> overmanufacturall manufactur not expecting a strong month >> not adding much to gdp growth or the top line payroll number we think we're in for a period of moderation, closer to sub trend growth of 2% >> so you expect two cuts? >> yes, july and september >> you are july and never happens again? >> that's right. >> why go in july? because they're locked in? they're still looking for this uncertainty shock to weigh on activity right now they think the economy is okay. they're worried about the second

half so if you were on the fed, you would not be cutting >> that's right. we think the weakness is in the past the tariffs hit the economy hard >> i hope you're right, but -- >> me too. >> you are in the minority on this. >> 80% of s&p 500 pre-announced for the second quarter >> that's right. >> that's not just a q1 q4 phenomenon there's weakness in q2 as well >> some larger corporations do get hit a little bit, they're still feeling those effects. >> i think the uncertainty will loom for quite a bit there's a lot of wait and see. we've seen a pullback in business investment. it's a misplaced complacency >> you think politics will play into this? i think in 2020 that's a possible head wind

this uncertainty with regard to trade will linger. there will not be a major resolution eventually the slowing we have seen will creep over to the consumer side. >> can i ask -- i want to understand your election prediction my view is unless you told me that bernie sanders or -- if you told me bernie sanders o elizabeth warren would make a serious run at the president for the second term, and it was going to be close, i would think uncertainty all over every ceo puts their hands under the table and says i'm doing nothing for the two years. i don't know what's happening to me i'm going into a bunker. if you don't see that, it looks like -- not necessarily the anthony scaramucci landslide, i

assume things will keep going the way they're going, either way. i know there are people out there who are going to be like what are you talking about >> that's not a political call >> it's an economic call >> i would agree with that i think if there is uncertainty with regard to who wins the election and it seems like a much closer race, exactly that businesses and decisionmakers will sit on their hands and you'll see a wait and see approach to hiring that will eventually spill over to the household demand. we'll see weaker consumer numbers. >> same question to you in terms of where the uncertainty is politically. >> for political uncertainty this happens every four years. we have a presidential election. this one feels different >> we don't have candidates calling for the breakup of large technology companies every four years. >> that's a fact >> we don't have candidates calling for medicaid for all there's certain policy positions

that a lot of democrats are taking or siding or leaning toward >> and there are people who say some of those policies long-term would lead to greater growth and greater strength in the economy. we won't debate that here. the issue is the uncertainty issue and the immediate term >> if you started talking about medicaid for all, health care companies will feel that uncertainty pretty acutely outside of those companies, i don't think it's something you want to sit on your hands for a long period of time. >> okay. >> all right we'll leave it there >> thank you, guys >> coming up, took under fire. the company suffered a widespread outage on wednesday i was on instagram, these images were not coming up >> was it upsetting? >> was upsetting frustrating. >> it's like your cable went out. what will i do with myself that's what it was like.

>> who are you >> there's a new crackdown in france on hate speech on its platform. as we head to break, here is president trump's july 4th celebration featuring a display of military might and a speech at the lincoln memorial. my experience with usaa has been excellent. they really appreciate the military family and it really shows. 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 i should have changed a long time ago. it was funny because when we would call another insurance company, hey would say "oh we can't beat usaa" we're the webber family.

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welcome back in tech news, the apple icloud experienced an extended outage there was problems with calendars, contacts, reminders i don't use the reminder feature, that's a popular one. some customers noted the outage impacted services at physical apple retail stores. people were going to apple retail stores yesterday? were they even open? it was the second widespread outage for apple apple was not the only company dealing with trouble facebook users were locked out of applications for facebook, instagram, that happened on wednesday. the issues were resolved by wednesday evening. i was sitting on instagram,

having some fomo, and images were not coming up i'm thinking what's going on i thought maybe my wifi was out. i'm looking to do it on the telephone. >> what did you do instead of being on instagram for that allotted time? i spent time with my family. my children. >> you probably went to twitter. >> you know what i did i went to twitter, and typed in instagram, and there were #instagramdown. interestingly, instagram was kind enough to put out a little notice saying instagram down with their own #instagramdown on twitter. which i thought was sort of -- >> when twitter goes down, people go to facebook or instagram to figure out what's going on or go to the open web. >> the open web as opposed to the dark web >> but that's how we live now. we live on the internet. it's not just a source of information or commerce, it's entertainment. >> can we get scary for a

second think about if somebody really went down. facebook going down for an hour is not terrible. but if g-mail goes down, the banks good down -- >> if the banks go down, that's a bigger problem >> if g-mail or cookal seriously went down, like all of it for a couple of days, think about -- >> or even a few hours or aws goes down, that's a meaningful problem all of a sudden >> if aws goes down it's a meaningful problem because it's a major contractor for the governmen government >> a big portion of the internet in terms of what runs on it. icloud, i use it for the calendar system. >> he didn't know what to do you had no idea what appointments you had >> no. on a holiday it doesn't matter, but if the calendar goes down, you have a problem >> don't you have in your head basically what you need to do every day? >> i wish i could tell you

>> there are some days where i'm like wait, what am i doing that's right this is happening in ten minutes. that went down i don't know people would be missing appointments >> chaos chaos ensues >> i think it's legit. >> it's a big deal >> and a real economic issue it's sort of like a black swan issue for basically every business in the world right now. >> that's why most of the banks fear cyberattacks. >> that's representative of what it could be. >> what could happen more regulation could be coming for facebook. this time from france. french lawmakers approved a measure that would fine tech companies including facebook and google if they fail to remove hate speech within 24 hours. the bill still needs to pass the french senate, but president emmanuel macron is in favor of the measure. this could mean a lot of types >> hate speech, how are they defining that exactly?

is it facebook's standard for what that is, that keeps changing and adjusting is it the eu standard or is it country by country standard. facebook says they will operate within the laws of the country they're in >> if enough countries do it, does it come here? how do you do it >> they're designing -- the more stringent requirement is what facebook ultimately has to adhere to. they build it once -- >> gdpr happened, they're saying we're using that everywhere. if that's the standard, what does that standard look like >> these are all the right questions to ask that's where you get in trouble with regulating speech across social platforms >> is there an economic emplycation to whemmr implication? >> the gdpr, there's more i accept >> i accept the cookie i'll eat the cookie. okay >> this would require humans to

go through and take down speech. >> that's where -- there's a bigger infrastructure problem with all these networks. they say they couple algorithms with humans to vet things. it doesn't always work that's where they run into problems if you're on a 24-hour time clock, in terms of the economics and business, they may sort of ban whole swaths of things to make sure they're covered. i need to get this done in the next day or less that could hurt things >> later this hour we'll talk more about how social media companies are preparing for the 2020 election. up next, why univision is exploring strategic options. >> they've been doing that for a decade. and telecom showdown, we'll talked about the regulatory hurtles for the sprint and t-mobile deal. as we go to break, wednesday's s&p 500 winners and losers

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welcome back your watching "squawk box" live from the nasdaq market site in times square welcome to "squawk box." happy 4th. hope everybody had a great fourth yesterday let's look at u.s. equity futures on this friday morning things are down marginally all of this will change one way or another around 8:30 -- not around, exactly at 8:30. dow jones looks like it would open off about 22 points the s&p 500 off about 4 points

cable stations were going crazy yesterday with this. a powerful earthquake struck southern california yesterday setting off house fires, damaging buildings the magnitude of the quake was 6.4. it was centered about 113 miles northeast of l.a. near the city of ridgecrest. there have been no reports of serious injuries the quake was the largest in southern california since the 1994 north ridge earthquake. that was centered in a heavily populated area of l.a. seismologists are warning that there will likely be more earthquakes coming and one more large enough to cause damage we were basically going between cable showing this and the nathan's hot dog contest on espn2 yesterday. >> those are both different kinds of things. >> we were trying to stay outdoors, when we were indoors,

those were on the television >> the other day you were saying we should have a hot dog eating contest on the show. >> i had two hot dogs. that's far from 71 >> i like them charred >> you want to have the grill for that >> we can talk about this later. i don't understand how the nathan's hot dog contest encourages people to eat hot dogs >> i agree looking at it -- >> i can't watch, but i can't turn away. >> but you still ate two hot dogs yourself. >> but will i go out and buy nathan's hot dogs as a function of this? let's talk media news. univision exploring a sale the move would end 12 years of private equity ownership the "wall street journal" says the board is reviewing strategic options following a fall in ratings and a failed venture into english language content.

this was one of those things that was supposed to be a perfect bet. 12 years ago, remember this? >> yes >> private equity bought this. >> huge. >> everybody said you can't lose huge trend, spanish speaking population in the united states. it's the future. this is it now who will buy them? there's nobody right now at&t is out. they just bought time warner verizon is not doing this. comcast has telemundo. telemundo is now winning exactly. >> what do you do? >> there's still shari redstone. she's looking at being more inquisitive. >> what is this worth? >> has like 7 billion, $8 billion of debt on the books that's not a good thing. cash flow is 600 million a year. again, what would you pay for in >> they went down that strange path of buying digital assets, buying fusion, gawker. >> they offloaded that

>> yeah. yeah >> they're slimming back down to just being a spanish language broadcaster after all these moves -- >> is this a money loser in the end for the private equity guys? >> it will be, yes >> easily. >> i think if they get 60 cents, 70 cents on the dollar, that will be nice they're not. tough sell >> thank you general mills says sales in china fell 12% in the second quarter. they were hit by the slowing economy and the u.s./china trade war. it is the fourth straight quarterly sales decline for gm in china there was one bright note. sales of gm's luxury cadillac brand rose 36% cadillac is extremely popular in china. >> luxury important in china >> they make more luxurious stretch cadillacs for people with drivers coming up, the latest on the megamerger in telecoms. and later social media

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welcome back to "squawk box. deal news expected between sprint and t-mobile. for more on that and what else is working in the telecom sector we want to bring in jennifer fritche. good morning to you. we were talking with ed a bit about this potential transaction earlier this morning your sense is this will happen next week? >> i think it's going to happen next week. yeah or i should qualify that i think we'll hear from the doj next week. i think they will be leaning towards an approval. we have the 18 states trying to sue to block this mergerment >> that's what i wanted to ask about. this idea that let's say the doj approves this, it's part of a grand settlement -- not grand maybe, but settlement in washington, then you have the states what happens to that case? >> i think it depends a lot --

there's a lot of asterisks to that statement it depends on the concessions that the doj requires. will there be a spectrum divestiture, a creation of a new synthetically created fourth international competitor if that's the case, the states arguing four going to three is terrible for the industry goes away because essentially then four will remain four depending on the concessions that may come. >> in terms of dish being on the other end of this transaction, to the expentent that's the buy, do you think they are a strong fourth competitor? can they be a real competitor? >> i think it -- i think it's hard to get in charlie's mind in any moment depending on what his plans are, who is behind the black curtain of those plans -- amazon has been speculated. is it going to be a consumer

driven product i think that's -- i would be hard pressed to believe that i think an iot-light bill is more of the plan i don't think boost mobile will be a meaningful competitor that's been bantered about i think if there's money behind he them, there could be a real build out that is very good for the infrastructure companies and the wireless industry in general. >> jennifer, it's ed here. i'm curious, the state ag suit caught me off guard. i think a lot of people who covered this as well is this like a new factor in terms of m&a or these big deals where all of a sudden you see state ags going after these deals where it used to be just the two, three government agencies that you had to deal with is that something investors should be more aware of? >> i think it was caught off guard. it's my understanding that the doj was taken off guard. i think there was limited discussions that the ag moved

forward quickly. i think it's a question of what is theirs ain s ask. depending on what the concessions call for, that may be a weakened case of four going to three after we hear from the doj. >> more broadly, the way stocks react or have reacted in the past is that four going to three would be good for pricing for the industry and put a floor under pricing. that would be beneficial to at&t and verizon as well. ultimately, i'm sure t-mobile and sprint won't argue this to get their deal through, ultimately do you think it puts a floor under pricing in >> i don't again, i hate he to keep bringing up the word concessi concessions, if the doj allows the new t-mobile to keep as much spectrum as they're able to keep especially that coming from the sprint side which is very, very good 5g spectrum, they have a big empty airplane to fill

therefore they can be more competitive for pricing. i think ultimately that's good for the consumer that might be bad for the two other ones, at&t and verizon my big question is if you were the regulated her, what would you do do you think combining these companies it creates more competition, it's better for the consumer or worse? five years from now, we'll look at this if it happens and think what >> i think it will be better for the consumer believe me i fly a lot of airplanes. it will be unlikethe airplane industry which the scary comparison has been. i think it will be good for the consumer, good for innovation and good for job creation. i think it's a good thing. >> that's an interesting -- >> consolidation good for consumers. this is one of those things, especially in the context of 5g and developing it, u.s. is far behind on that that's the stated aim with this merger do you think that's real thing,

this combined company will try to develop going forward >> i do. i think there's a lot of hype around 5g. i will be honest there i think -- you're right. that was the slides for this original announcement, 5g for all. april of 2018. this will cause a sense of strong urgency of 5g for all players. >> real quick. expand on the view about 5g. i know that you're skeptical why are you so skeptical i'm skeptical as well in terms of how quickly it rolls out. >> i think it's a lot of talk. 5g pixie dust is everywhere we long it's going to come, but i think it's hard to live up to the excitement of what we have seen here i do think it's very, very good. we've been on record as saying this is go for infrastructure providers. >> jennifer, appreciate it >> thank you coming up, we'll dig into the new policies that facebook and twitter have around

political content and political advertising including one change at twitter that our next guest says does nothing. and as we look at europe, red arrows across the board. stay tuned at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond.

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welcome back to "squawk box" as we near the 2020 election social media companies are making changes to policies to fix mistakes pointed out during the previous election cycle. facebook announced ending commissions from employees who sell political ads, also banning

ads that tell users not to vote. also working on putting together an independent oversight committee with the power to take down any posts twitter announced alerting users on a politician's tweet violating its standards and will be graying out the content the users will still be able to see if the content, if they click on it, and joining us to discuss the preparations and more is a senior technology reporter at buzzfeed good morning how much of a difference will this make in washington right now? >> i think that it's going to show that these companies are trying to do something we all know that the federal government is bearing down on the big tech companies twitter seemed to have escaped it a little bit, but as we come closer to 2020, that's subject to change. i think this is a chance for them to say, hey, we're doing something when lawmakers are going out and trying to make names for themselves being tough on the social media companies, and ultimately much does it do

from a practical standpoint, very little but something to take to theoffices in washington and say, hey, we're trying. >> that's what's going on here >> yeah. this is built -- all of these programs are built to appease and placate, what can i do to get them off my back >> exactly. >> my question is, does it do that, though >> i think it does a little bit. it's a large increment i agree with alex. practically speaking i don't know it does a ton longer term, facebook, twitter, these guys really don't want this responsibility. they just don't want this on them curious to get alex's take on this the most interesting thing facebook is doing, the idea of a supreme court to, a separate body to decide what is or isn't within their policies and what the policies should be. >> why don't they just say we won't accept any of these advertising? >> that's what they should do. i'm shocked they continue to take political advertising

this stuff was initially served as a case study to advertisers to show, hey, this is how effective our political advertising is now we all know how problematic that is. i do think that the only reason they're continuing to accept political advertising -- probably two reasons one, ego two, actually a good case study for it's aers elsewhere and willing to take the blow. >> if you said no advertising, flip side, a., a freedom of speech argument and, b., online, if facebook, twitter and google said, know what? no mas out of the business. what would you do as a political -- i want to get to people, a bigger, new generation >> melissa is right. the bigger context every post on facebook is an ad. as a political entity you can create your own page, distribute them, disseminate them and get followers to share them as much as possible. the activity won't stop on

facebook just your ability to boost it, to make it more visible to the general population could go away, and even still, you're going to attract followers, attract -- that message still gets out there through social media just you won't directly pay for it. >> alex, interesting point on the share button on facebook and the last elections that helped proliferate fake news, et cetera it's still there an even bigger risk than just political ads? >> all of these changes we talked about beginning of the segment. the way they're going to handle advertising, that's just window dressing i think the real issue to look at is whether or not facebook should continue to have that share button maybe doesn't want it on political posts. no share button during the 2012 electi election, there was during the 2016 the quick share, re-share, hit a tap and the content goes to your news feed. if i see a post that says hillary clinton's a space alien, it's going to be much easier for me to just take no thought and hit that share button versus

copy and paste the link and decide to share it to followers. the share button removes that hesitation you have before you push content out and why we've seen a proliferation of fake news and outrage doesn't matter all the policies put in place to deal with that in the aftermath you should address the actual machinery that makes it so something we need to have a conversation about heading into this new election is -- does that share button belong >> 20 seconds, alex. do you think that the government is either going to break up or meaningfully regulate facebook or twitter or the other social media companies in the next, call it, three years >> no. i don't have any confidence in the government to do anything meaningful to these companies. we see the size of the ftc find. it's not that big. a lot of people trying to make a name for themselves. no not any breakup tleechat least next three years. >> thanks for waking up early. appreciate it. >> nice to see you. adding chief economist rest of the show previewing today's

big jobs report and how the fed should play the rest of the year later, a big growth of cannabis growth, stepping down talk with the ceo of the world's largest cannabis fund what is next for the sector. stay tuned to "squawk box" on cnbc i had a few good tricks to help hide my bladder leak pad. like the old "tunic tug". but always discreet is less bulky. and it really protects. 'cause it turns liquid to gel. so i have nothing to hide. always discreet.

jobs in america. the june employment report just 90 minutes away. >> it's a potential game changer. what today's job reports marines for the fed, markets and the 2020 presidential campaign. plus, deal or no deal? will the t-mobile-sprint tie-up finally get a green light from the government we'll handicap the odds as the second hour of "squawk box" begins right now ♪ hey, hey >> announcer: live from the beating heart of business, new york, this is "squawk box. ♪ you can't find the words to say ♪ good morning welcome to "squawk box" right here on cnbc our guest host chief economist at -- i never pronounce --

>> natixes i don't want to say na-taxes, gets into a tax debate. >> you can do it. >> cnbc didn't didn't we shall say cnbc contributor ed lee also here hope everybody had a great fourth of july do anything interesting? >> golf. >> golfed on july fourth. >> even with the heat -- >> inside. >> stayed inside hot dogs how many. >> not as many as joey chestnut. >> good answer and about to change in an hour and a half when we get the jobs number dow jones off and nasdaq off and s&p 500 off about four points and getting ready for today's jobs report in a minute. first, other headlines to bring you. samsung saying second second quarter profit likely fell 66% from a year ago. main reason lower prices and demand for semiconductors due to the u.s./china trade war and

world wye oversupply of chips. other tech companies feeling the same pressure, also issued profit rather thannings in their stocks lg off 5% now. also talked about this earlier apple's icloud back up and running for those who had this problem just yesterday an outage taking it down icloud, that is, a few hours calendars, contacts, reminders affected by all this the second outage, if you will, for icloud this year coming after facebook, instagram and whatsapp had their own outages ruined my day on wednesday, their own outages. sales in china fell 12% second quarter. automaker hit by the slowing economy and u.s./china trade war and increased competition from mid-priced suvs. about 90 minutes away from the june jobs report forecasters polled say the u.s. likely added 165,000 non-farm jobs and, you know, employment

expected to hold steady at 3. %. indicating quietality the op atd that will change bring in rick santelli at the cme. and a host guest and rick santelli you first what's the whisper number? >> i think the whisper number's darn close to the expected numbers. somewhere between 160 and 175. i know many analysts and economists thinking we're in the late days of an expansion, thinking you know, job cycle's peaked, wage cycle may have peaked and numbers from a three-month moving average will start to ratchet lower that's all possible. the whisper number down among traders and investors is, don't count this expansion out yet i think the whisper number really is right around 175 maybe even a little higher you could see right now that the markets are idling dollar index

up a little bit. we saw boom yields not doing much the big story over there is going to figure into our story as well. if kristichristine lagarde's ne marpio drago when his term ends. how important the number to potential easing in the u.s. and the continuation of lagarde with regard to draghi's policies and high still liss. that's what it boils down to in the stock market, interested to see the ultimate not knee jerk response especially getting an extreme good or extremely weak number to see if good news is bad news, because if investors think central banks can carry the weight of equity markets on theirs shoulders forever they'll be surprised at some point. >> joe, way below that whisper now, right, as a firm? is that going to make it harder? if the number comes in pretty much in that range of the whisper 161, 170 or so, harder for the fed to go ahead with

july >> no. the market's totally priced the summer strong expectations fed always delivered. the issue will be how they change the statement or what they might say about the next meeting. maybe it's like a hawkish-ee so to speak i don't think they will but that's possible if things turn out better i'm surprised rick didn't mention adp. softer and might impart down side risk. interesting if it's a strong number, but i say risks are more to the down side because momentum and the economy is slowing. see it on the stocks earning side with companies guiding lower. >> 80% of companies preannounced so far on the s&p. this, sitting at record highs on the market a weird dynamic. >> it is, although i think you only have to go back three years to see the exact same dynamic. bond yields as lows for the cycle. stock indexes at highs defensive and quality and yield stocks leading the market. the stock market, that way and a pretty poor earnings

track. so i think all of that kind of fits together, and when it comes to today's jobs number, the market seems to say, yes the fed kind of has gone beyond the point where it could push back against the market's expectation of a july ease but what kind of ease? one that does qualify as an insurance pro active measure as opposed to something we look like we need if a really bad number today would get people thinking, uh-oh. downside momentum and growth we didn't bargain for but certainly don't know if we'll get that. >> rick, a much weaker number, is bad news good news for markets? a bad number could mean 50 bits in july. >> you know, if this number was minus 25, i don't think we would have any chance of a minus 50, and listen, my own opinion i just don't think that we are -- as investors, or the investors class even the analysts that are watching and observing the markets, how they arrive at 50 when central

bankers around the globe have used low interest rates, negative interest rates and over-stimulation yet they haven't sparked a lot of positives with regard to higher price pressures or some of the issues that they're trying to get the central banks policies to address so i jut don't comprehend why everyone thinks that lowering rates in the u.s. is going to do anything but just give us a bit of a nitrous surge with investors. i even think that is over optimistic ultimately investors understand that the central bank could give us a little boost, but if this expansion truly is ending and we truly see signs of weaker jobs number over the long haul, they will ease, and i don't think it's going to be a good thing and i don't think we see any 50s and if the number's anywhere near expectations, i think maybe as joe said. if we're conditioned to think the next fed futures contract is some kind of a god, there's a surprise in the cards. >> if it's minus 25 and the fed

doesn't go 50, i'll take rick to his favorite chicago steak restaurant that he wants, on me. >> get that wallet ready they're not going to do a 50 take it to the bank. >> what are you thinking the chance of nothing this month? >> zero. >> basically zero? >> the thing is, a minus 25 the ma market will price it so pavlovian now, the market responds. >> no. the central bankers cannot afford anymore to give markets what they want, because there are central banks thinking easing more with minus 40 deposit rate and there's going to be a dawning here giving the market what they want at some point is not productive for the economy as a whole. >> rick, you're right. >> there's a price for that. >> here's the thing. they've conditioned us perpetually under greenspan, bernanke, yellen, now powell, right? there wasn't a powell put last

year now there is a powell put. you're right, just hasn't happened yet i'm going with the trend. >> no. i like going with trends, but these times are different. i don't think we see a 50. even if the number's weak. of course, we will see an easing cycle but i think that's not a forgone conclusion until we see this data. >> the odd piece here, and i have no strong feeling about why they would go 50 right now when the market is not yet fully expecting it, but the short end of the u.s. treasury curve is the one part of the world where bond yields are, you know, above 2% basically so it's one of these odd dynamics here where the fed is kind of holding this one part of the global bond market in its place and if they want to uninvert the curve, maybe do it july, september, or wait and see about september. >> do it -- >> 25 doesn't do it. >> right. >> mike what about the argument sake, rick's going to go crazy on this. what for argument's sake the fed went 50 in july and go back to

patient? we want to do a little more, get ahead of things. >> sure. >> then the market could sell off a bit because the market is basically pricing 100. do 50 and stop what about that? >> if i'm reading the mind of people in the fed, they would love to do that, but from december to -- patience this time lasted seven months, because the market pushed them in a direction they didn't seem to want to go. do they have confidence to get away with, you know, 50 and then stand pat for a while? i don't know could be. >> the other lever that we don't hear enough about beyond just the interest rate cut is tightening right? will we see more in terms of pulling back on their portfolio and that that's the factor that -- >> good point. stop in september. the only thing i -- mike was saying equity market, where we were three years ago the difference is the fed has raised rates in relative terms a lot and the balance sheet shrunk a bit, dollar remained robust and global growth because the dollar strong, softer. that's the difference today relative to where we were three years ago. >> because go down 50 but on

the, on a balance sheet sort of not telling you that as much, because they want to have it both ways. >> we estimate the balancing, tightening roloff worth basis 50 points leave it there thank you. rick, see you later. mike, thank you. ed and joe sticking around rest of the show. coming up a lot more or "squawk. closing the gender gap more women taking companies public this year and why this matters. first, as he head to a break check out the biggest nasdaq market movers's stay tuned you're watching "squawk box" on cnbc moving is hard.

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welcome back to "squawk box. junes jobs report could change this, this morning looking to be down at the open bitcoin trading lower, still up nearly 200% this year separately a new study from the university of cambridge says the cryptocurrency contains more energy than the entire nation of switzerland. maintaining the networks that support bitcoin. meantime switzerland uses only about 58 teara watts each year. and coffee, surging.

first day of trading, but not all that in common each led by a female ceo leslie picker joins us with the story of women taking more companies public. >> right a cnbc analysis found more and more companies are going public with women ceos this year. first half of the year, 13 women ceos led their company's ipo representing 15% of the total ipos in 2019 so far and mentioned, each a female ceo at the helm during their ipos in recent months. the proportion of women ceos far higher than any year going back to at least 2014 and triple the percentage of women ceos in russell 3000 and s&p 500 if the trend continues it could have potential to boost the percentage of women running publicly traded companies in america. historically, though, women faced large obstacles in the start-up world last year companies founded solely by women got only 2.3% of

the total capital invested in start-ups according to pitchbook and a study by the university of utah found when comparing appleapples to apples, women-led companies receive let capital, and if this is the turning point for women ceos start-ups like rent the runway, glossier led by women could all benefit. >> we mention how sad and pathetic it is, women running s&p 500 companies, how many of these -- are any of these going into the s&p 500 >> not sure of the ones run by women are going directly into the s&p 500. a lot of companies went public the extension how to do a class share structure often times preclude entrance into different indexes but at least for the universe of publicly traded companies, it should make a big difference. >> are these founders, these

women founders also and why -- >> yes, exactly. a lot of them are companies like the real real for example. their target demographic is women and they've been able to capitalize on just this resurgence of women as consumers online and things like that. in 2019 seems to be kind of a unique year for them to capitalize on that. >> despite the difficulties that a female-led start-up has in the venture world, seems that relative to the broader landscape of corporate america it's a way for a woman to run a company. right? to start one right? >> definitely, yes. >> if you're an entrepreneur better to go that route instead of working your way up the ladder in corporate america? is that the ultimate, despite the difficult trend in terms of the venture world still a better route right now? >> a good question and i think when you see women in particular and other minorities that have difficulty obtaining venture capital money you get start-ups bootstrap in nature. which means essentially they're

able to operate more based on cash flow as opposed to the vc funding in turn could be more attractive to investors down the road if they do succeed over time without that venture capital funding and are able to still grow and maintain scale accordingly. >> leslie, in the start-ups, is it across the board in terms of distribution, different types of businesses is it concentrated more in one area, more fashion, apparel, tech how broad? >> more fashion and apparel but we're seeing it in health care as well. seeing it in consumer with luck and coffee it is spread out ipos in general this year are much more concentrated a good question. much more concentrated towards tech and biotech of course, we will see more of a skew towards those two sectors this year. >> thank you appreciate it. coming up, consolation brands made a $4 billion bet on

cannabis growth. details on an industry shake-up and outlook for pot stocks next, and first as we head to break check out oil prices this morning. wti off the lows of the session but down 0.9%. brent up just 0.19%. stay tuned you're watching "squawk box" on cnbcen to us 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

welcome back to "squawk box" this morning cannabis growth ousting this week and called in to "squawk box" and had a lot more to say >> the board decided they wanted a different chair and a different co-ceo so i'm out effective immediately, and there's a search to replace the transitioning co-ceo. >> bruce, to be clear, have you been terminated or did you step down on your own and -- >> i was terminated. >> okay. >> you were fired? >> a lot of words for it >> a lot of words for it the stock dipping a bit on the news, but rallied within a few hours. joining us now on the "squawk" news line is ceo and founder of

etf managers group and the firm has the largest cannabis fund on the new york stock exchange. cannabis growth in that fund and our guests with us, ed lee and joe as well. sam, good morning. >> good morning, andrew. >> when you first heard of -- of bruce getting fired, maybe watching "squawk" what was your reaction >> well, i was watching "squawk" and i was shocked. i've traveled with bruce bruce is extremely knowledgeable in the cannabis space. very well received by investors and with those of interest so it was surprising to me. >> didthe sell-off make sense to you do you think he should have been booted what was your take >> typical knee-jerk reaction and actually recovered and was up wednesday >> right. >> as far as whether bruce should have been let go or not, i have no insight there. i have read a lot of, the news

and even listened to some analysts look, bruce is an entrepreneur, created cannabis in 2013 probably the most knollable i've traveled within the space. i don't think the industry or the company is that mature yet and i really think you need those types of innovators and pioneers but that was the board's decision. >> at the same time you invite a major shareholder like constellation in and so many other companies, sam, are doing this as well does it make you think in the universe of companies in your etf there could be more management changes ahead, if you do believe that the impetus for constellation booting bruce a basically they wanted somebody more stable with more of an execution track record than an entrepreneur like bruce linton >> i think it's the natural progression of any new industry and new company. i think we saw a lot of that in

silicon valley years ago with the starters and entrepreneurs replaced by more seasoned senior managers, but it doesn't speak to the space i mean, the space is still growing at a tremendous rate mj alone, which is our etf in the cannabis space is up almost 28% this year. we're $1.1 billion in assets it's a tremendous growth story, and the reality is bruce was a big part of it and probably will continue to be in some fashion >> once the non-compete ends i wanted to ask you more about your etf you started 2017 end of the year with $5.6 million. when i first talked to you when you first started this etf, sam. you mentioned, $1.1 billion under management when did the inflows come from curious. mostly retail investors? >> initially it was tremendous, or majority flow of retail we do have a lot of institutions in it now. so i think it's pretty broadly

held it's -- it's just been the best access for people in the u.s wanting to get rid of the stock risk but wanting access to the space. >> and pharma, the only and first fda approved cannabis-based pharmaceutical on the market what do you think is a key driver going forward for a lot of the companies in this etf in terms of growth? is it the medical side in your view or the recreational side? >> i mean, the company is tilted, i should say the etf is tilted towards medical, but all advancements in the space, whether it be recreational or medical, i think will help the visibility and the interest in the space, and mj as an etf. gw was a great story the number one treatment for children's epileptic seizures. fda approves them. then look at other holdings.

the almost 7.3% of the fund. it's the kind of story people want access to they see there continues to be growing interest globally in the space, acceptance. >> right. >> of cannabis and it's a great way to play it. >> sam, are you weed only or are you -- are you also involved in cbd? >> we have cbd so -- in fact, there are great applications of cbd that have also helped the fund and the interest in the fund you know, we're looking to gather a portfolio, currently we have 41 stocks that includes everyone that is -- every company important in the space that includes scots miracle grow visible about its investment we wanted to be a comprehensive action to the medicinal side of the cannabis space. >> sam, appreciate you joining us this morning. thank you. >> thank you, andrew thank you for having me. >> talk soon. coming up, the big question in the m & a world, will the

government finally give the go-ahead to the sprint-t-mobile deal first, u.s. equity futures slightly down ahead of the jobs report u' wchg quk x" yoreatin"sawbo on cnbcu've dear tech, we've got some work to do. we need tech that helps people understand each other. tech that understands my business. tech that works at scale. that works with my existing tools. that helps us help more people. let's see some more headlines about that. dear tech, dear tech, dear tech, we're using ibm blockchain to help make sure food stays fresh. we're using ai to help create more accessible, affordable healthcare for all. we're using iot to create new kinds of digital wallets. we're exploring quantum to develop next-generation energy. q-u-a-n-t-u-m, quantum. that's the smart tech i need. let's make a difference in energy. in commerce. in people's health. in the foods you eat.

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talking about a campfire ♪ ♪ it's the simple things in lif like when and where ♪ still to come on "squawk box" a deal called, will the t-mobile-sprint tie-up get the go-ahead from the government plus taxes, jobs, debate the bick issues playing out in the 2020 campaign and continue the countdown to the event of the morning. of course, the june jobs report due out at 8:30 a.m. eastern time stay tuned you're watching "squawk box" on cnbc ♪ singing sweet home alabama al summer long ♪

welcome back to "squawk box. a check on the futures ahead of the jobs report fairly quiet morning. here pretty much all morning long dow looking to open down 30. s&p looking to be down by 4.5 but the jobs report will change much of this. a powerful earthquake struck yesterday damaging buildings in a desert town northeast of los angeles. centered about 113 miles northeast of l.a. near the city of ridgecrest. no reports of serious injuries so far the quake was largest in

southern california since the 1994 northridge earthquake centered in a heavily populated area in los angeles causing billions in damage seismologists warn more earthquakes are coming and probably one more large enough to cause some damage. a couple big media tech stories to talk about now. sprint and t-mobile could be one step closer to a deal approval after t-mobile and dish network agreed to a divestiture. see who likes it joining us to talk about this and more on the media landscape exos reporter. everybody is at the table. start there and a couple other topics i want to touch on. you think chances are we'll hear about this next week >> i think hear about it pretty soon seems the deal has been compromised between deutsche telekom and other partners seems can we get the doj onboard. if not they're going to block the deal. >> what if doj is onboard but

everybody else isn't >> a complicated problem i don't think it's going to stop it from going through. seen other instances state ag's are pushing for action see this in tech companies all the time like with facebook. >> what happens? not bring our suit or the deal gets closed and agreed to -- and then the states bring the case anyway >> i think the nuance is that right now the states filed a suit based off the fcc agreement. doesn't cut it for us. doj has a new deal with the parties and the state ags have to look at it. if it doesn't satisfy them they might re-file. say, that doesn't work for us either but right now if the doj agreement, whatever, ends up looking like, effectively neuters the original suit from the state ags. again, there's a lot of political will here. right? even if the doj thing seems to sort of handle a lot of that stuff, the states might just say, screw it. we want to go after them anyway. >> asked the question already this morning i want your answer do you think that dish can

actually create a viable fourth competitor effectively running wholesale over these other guys' networks >> the deal pans out 100% access it might be possible right now with what deutsche telekom is advocating for only 12.5% no way they'd be able to do it off that the other thing they need, somebody to help finance it. again, part of the deal cnbc reports that they don't want someone to finance it more than 5% that's going to make it even more difficult. >> you still think it's happening? >> i think it's going to happen. we'll see something go through but will they be able to build out a full network. >> approve a deal at -- >> doj wants 100%. brokers want 12.5% that's going to be negotiated. hoping to get somewhere in the middle. >> the real question, somewhere in between that capacity is that

a real fourth carrier? is that a viable option for a consumer there's a fourth -- from a pricing perspective, that there's real competition now >> time will tell. i think if they can get someone to come in and finance it they have a shot. is it going to be as big as the other three? absolutely not we know at&t and verizon are way ahead of this combined company and anything when it comes to mobile and 5g. we'll see. >> do we think the investors will be a strategic investor or a private equity firm? >> i think somebody who wants to come in, be a strategic investors and play for the long game 5g is something a lot of people have business, incentive, to ride on. i think it's somewhat strategic. >> and pivot talk about netflix >> do netflix. >> talk about netflix, because "office" leaving netflix 2021. right? >> right. >> we've got, looking at this. friday is that today? today! is this the 30th anniversary of "seinfeld" today is that the case >> is today the --

>> there you go. >> i'm not sure. this friday? not sure. >> in the notes. getting side-eyed maybe i'm wrong. >> close enough. july 5th, right? >> all of these things are coming off, the big streamers, going back to the warners and everybody doing a new thing. the thing i don't get about this, are people subscribing -- people are watching these shows on these services but are people subscribing to watch these shows on these services? i've always thought the new shows are used effectively as a marketing device and advertisement to get people to actually subscribe to the service. once there they watch everything else and all the old stuff but can they turn that model around with some of these kind of programs? >> time will tell. what we do know is that most people spend six to seven minutes deciding what to watch if they can't figure out what to watch they resort to something they've seen in the past whether "seinfeld" or something like "the office."

what brings them in, the new shows. someone like netflix you're going to push to have all new shows come out and one of your competitors. >> do i care about all of -- the huge value, though, for some of these shows, "the office," "seinfeld," but my question, is the value really there >> i think it is look at the top streamed shows on netflix, they're all of these old shows. reruns. >> but my question -- where i'm going with this, do you think that's keeping people from churning >> it's a churn. a churn. "the office," "friends," "seinfeld" these are turn mechanism. >> and -- >> not coming up with any new, hot shows -- >> talking about what did you do fourth of july hot outside. stayed indoors what did we do we watched "stranger things. binged the new season all day. it's the new -- people -- netflix subscriber what you've been waiting for. >> and millennials, not just millennials. people going on watching

"handmaid's tale" on hulu. shutting it up a hbo, liked "game of thrones," then showtime, go to this, want that i'm not sure they're watching -- other things are helpful to keep things going kid shows are helpful if you're a parent, but i'm not sure >> i think they are. i think it ep had helps reduce. it's any direct to consumer service. once you're somebody who uses it you don't just drop. you go from service to service if you're netflix, anything that you can do or hulu, any of the streaming services, to reduce that person from dropping your service once your hit show is over you'll invest in. >> when they lose access to the classics what happens to their ability to keep people from churning >> first of all going to have to develop their own version of classics seen it now. "orange is the new black," "house of cards. these are deep-seeded series hundreds of episodes that will become their versions of classics and as have to shoot for bottom of the barrel

we're seeing this. if you're at&t you have a lot of debt sell out classics to reduce the debt netflix will take advantage of that. >> i told my kids about "different strokes." watch differe"different strokes" thought it was on amazon prime it's not the real way to get it is to get starz. >> did you sign up for the free trial? >> no. >> that's canceled i -- my son wanted to watch "twins." said it was one 6 his favorite movies i didn't cancel yet. thank you for reminding me. >> you're going to cancel? >> i don't need starz, i've got verizon. >> netflix wins because they're the first. they've got pricing power. just anecdotally, the whole "friends" trnds thihing coming netflix. op at&t service. talking to, her friends watch

"friends" on netflix all the time every night cue it up. if you have cable tv, a lot of these millennials don't. what will you do now that it's on netflix i don't know maybe buy it on amazon instead of buying it on a new service. interesting. the point, weren't thinking of cutting netflix. i'll buy the shows now. >> who wants to start an app where i think the business is, that literally turns on and off the subscriptions? when it's literally like, turn it on, turn it off. >> reminder, even. >> on one thing. reminder, finished watching the thing you actually cared about someone's going to build that and the game's over, right >> you just broadcast that idea, andrew it's out there now. >> and i'll take 10% heard it, heard it here first. maybe the issue, a dead issue? going to talk about the betsy ross nike sneakers you know talking about it nonstop. >> right. >> crazy now it's -- friday and i don't know anybody's talking about it except i'm raising the issue but

has it come and gone jthts come and gone but part of a trend we should pay attention to. the cool thing you have people like colin kaepernick, once representative of an issue not so main stream to main stream the brand wants to attach themselves to someone like a colin kaepernick curious in the future, will more brands adopt spokespeople like that because it helps their business s. he done with football i ask that seriously done with football or wanting to play >> always wanted to play closer to getting done because he's getting older apparently staying in fantastic shape in hopes of it he sent out a tweet yesterday on july fourth pap quote from frederick douglass did you this this? >> i didn't see it. >> and really about how independence day was not a day he celebrates. then it was retweeted by -- it had a lot of momentum on twitter. very, very interesting worth a look. >> doesn't celebrate july fourth >> does not. does not and i know that probably -- causing its own controversial.

anyway, great to see you thank you. happy fourth appreciate it. still to come the big economic debate in the early 2020 campaign. here's a hint. has to do with taxes and how much we're all paying uncle sam. as we head to break check out the free market movers big s&p winners at this hour stay tuned you're watching "squawk box" on cnbc [ dogs barking ] what about him? let's do it.

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president trump is confident about the countries's economic confidence will consumers agree president to the american action forum former economic policy director for john mccain's presidential election. he was also chief economist for the council of economic advisers and director of the congressional budget office. also with us jared burnstein former chief economist to vice president joe biden at the center on budget and policy priorities and also a cnbc contributor. gentlemen, thanks for joining us the day after july fourth. appreciate it. doug, start with you seems like there's a lot of time between now and the 2020 election in terms where the economy could go what is the message right now that the -- the president obviously says this is the strongest the country has been et cetera, et cetera but what should the message be right now? >> well, i think the economy's in good shape. there are reasons for concern. there's no question it was going to slow down during 2019, and it has. the question is, to what

are we going back to a trend growth rate that looks like a little under 2% or closer to 2.5% the latter an enormous success that's the key question. this year, i think we started off kind of poorly the household sector wobbled first quarter. surprising given low unemployment and wage growth we've seen seems to have stabilized recently 3% growth leaving it up to the business community as you know from watching the markets everybody day, the business community has a lot of concerns about the outlook, and their performance in 2019 will dictate momentum going into the election. >> is the fed, doug before i get to jared, is the fed sort of a, i want to say a running partner i don't want to say that, but a major determinant whether or not the president gets re-elected? >> he doesn't think so. >> obviously he doesn't like jerome powell in terms of what the fed does could it be a major factor >> i think the fed is in a good place. i think the hype around this has been vastly overrated.

talk of a 50 basis cut makes no sense to me. they're going to keep an eye on the underlying core fundamentals they are in pretty good shape, not perfect. inflation continues to run low that might give a bias towards easing i don't think he has concerns about the fed. i think it's quality of the remainder of policy, and the trade policy, that balance a negative the one he controls in the near term one he should think hard about. >> how do democrats run against this economy and the stock market, of course, close to at record highs right now >> the stock market's an easy one for democrats, because they're going to stress that the bottom half of households, where more of their base resides, holds little or no stock at all. of course, the booming stock market is from many democrats perspective a symptom of inequality if you look how concentrated stock wealth is among those at the very top of the income scale, but i think that for the democrats, the

issues are very much what doug teed up in terms of the economy. it's hard to imagine the unemployment rate won't be quite low by the time the next election rolls around, but it's going to be all about the deltas, the changes in key variables. if gdp growth downshifts and doug is right in the center of the forecast, if the downshift is three or north of three, to something around 2% which is a common forecast, i'd actually say about the median one, probably put upward pressure on the unemployment rate. it will be low but could rise by end of 2020. >> fortunately we have another economist here on set. joe, where do you see the gdp number being around 2020 >> i -- a lot depends, melissa, on what happens with the fed this year. i think the fed basically is the straw that stirs the drink central banks dominant i hear what doug said. economy is slowing

agree with jared as well from 3-something to 2 something. maybe less historically i can say a well-known economist attrition says the q gdp is important. late july if the economy and any quarter, gdp could be whatever it wants the economy will be okay next year especially with fed cuts aggressively as i expect, stabilizing things for a period of time. and a trade deal, psychologically gives the market a lift and might be able to juice things a few quarters to carry us through 2020. >> doug, if you had to write how this is all playing 0 ut in terms when we get the trade deal, how many times the fed cuts interest rates, et cetera, um to the 2020 election, what's the ideal scenario, in your view >> i think the thing that's not on the list that should be, get a budget deal. the real threat coming this fall is the fact that they have to raise or suspend the debt ceiling and come to agreement on how to fund the government and at what levels if they go on autopilot and fail

to get a deal that's $130 billion cut in spending, big negative head wind on the fiscal policy front something that really needs to be avoided white house should be all over that i think the fed's going to have one rate cut between now and the election, and honestly, i don't think there's a real trade deal to be had with china i think this strategy has always been doomed to fail but they need a face-saving deal to get them out of open warfare and i hope they get it soon. >> can the president win under those circumstances? rate cut, not a real deal, et cetera >> the president can if he winces, as close as last time almost nerve binevitably path to victory is always quite tight. >> i wanted to say spoken like a true former cbo director, doug, appropriately. bringing in theistic iffal storstor fiscal story

bringing down gdp from 3 to 2 something, we're in now, largely a function of the fiscal trade tradeuncertainty in there, yes and shaving some number of basis points off the gdp growth, but the big story is the fade and deficit finance spending and tax cuts that by itself is probably shaving something like 75 basis points off the gdp over, say, 2019, second half through 2020 first half >> guys, wanted your thoughts as we talked about it earlier on the program. do you have a view about going into 2020 sort of the uncertainty that that will create if it will create uncertainty and what do you think that will actually do in terms of real numbers? >> so -- >> sorry which one of us are you asking >> doug first. he started. >> sure. >> so i just, going into 2020, just the election itself, producing uncertainty? >> will it actually change, have an economic impact

a number of people came on the program to say look, markets in 2020 going to actually be difficult? >> look, this is a standard concern in election years but especially presidential election years. very different views of the way to go forward on the economic policy household and business sector looking thinking, gee, what will happen what do they usually do? they continue doing what they are doing at the moment, and you see maybe a little bit of a slowdown going into the election and the resolution uncertainty helps in late november >> i guess my view would be all of that pales behind the trade disputes or trade wars if the trade situation continues to create the volatility in markets that i think is bleeding over into the real economy, i think that will, that kind of chaos will swamp the 2020 dynamics you said i think the interesting wrinkle there has to do with federal reserve policy

the fed is already, i think, looking oesver their shoulder a the trump -- the pressure from trump, and so, you know, their initiative to cut, lower rates based on the economics they're observing. once you get into 2020 eve an fed that isn't badgered by the president doesn't like to fool around with interest rates too much before an election. >> gentlemen, thank you. doug and jared, leave it there thank you. >> thank you. coming up in just a moment, the main event the june jobs report is also here a little under a half hour away, or a little over a half hour away futures ahead of that number showing you what's going on. but it could change. dow off about 28 points. stay tuned you're watching "squawk box" on cnbc with a ryve big hour and an important one ahead.

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cool ♪ >> announcer: the countdown is on whistle >> just a half hour away from the all-important jobs number. the anticipation the data the reaction, and the analysis are all straight ahead >> did you see the memo about

this >> yeah. >> announcer: as wall street gets set for jobs friday, right here on "squawk box. ♪ live from the most powerful city in the world, new york. this is "squawk box. ♪ get it on jungle boogie ♪ good morning welcome to "squawk box" right here on cnbc live at the nasdaq market site in times square. andrew sorkin along with melissa and joe and becky off today. great guests "new york times" corporate media reporter ed lee is here. and natixis, chief economist joe here both cnbc contributors. futures, job number coming up in a half hour or so. almost disregard what i'm saying, but the dow now looks like it would open off about 33 points nasdaq off about 15 points and s&p 500 looking to open off about 5 points show you treasury yields as

well all-important ten year at 1.970. you can get a decent 30-year fixed. what do you think? >> mortgage? oh, yeah now's the time to do it. now's the tirchlts financing, all of that. >> do it all >> here are the stories investors will talk about today. crew members of an iranian oil tanker interviewed as witnesses show it being detained a spokesman for the territory. british troops detained the ship in violation of european union sanctions's in response iran summoned the britain ambassador and call the seizure of the ship illegal and unacceptable. meantime, shares of samsung are down forecasting second operating profit fell more than 50% and the company says revenue likely fell 4%. chip prices have fallen thanks to a supply glut and u.s. sanctions. samsung will report earnings

figures laters this month. spanish broadcaster univision reportedly exploring a sale according to the "wall street journal." the move would end 12 years of private equity ownership the board is reviewing strategic options following failing ratings and british content. and due out bottom of the hour, the jobs report. talking expectations, what the number could mean for the markets and fed this summer and scholar and director of economic policy studies at the american enterprise institute is on the set with us and chief executive officer of the management division at wells fargo. and on the "squawk" newsline, one and only austan goolsbee. on the phone, go to you first. first, good morning. you can hear us? >> good morning. i can hear you. >> technical issues earlier with

us. >> yeah. i'm down in the smoky mountains but they partied too long last night so nobody showed up. >> well, we're glad you could make it. we're going to save all of the real predictions in terms of numbers for just a little bit later. just to keep everybody on the hook, but in terms of what you think the fed is looking for this morning, and what, in terms of a goldilocks scenario what does it look like for you? >> well, feels to me like the fed has gotten in its head they want to be loose so the goldilocks scenario, anything that's not quite strong i think they will lodge as, yes, this fulfills our narrative. >> and you think -- but you think things are going to hell in a hand basket if i could -- >> i think it's slowing. if not hell, headed to purgatory in a hand basket.

>> really? >> yeah. look, i just think -- if you look at the gdp forecast, they're slowing. we're going along okay, but i just think we need to not be -- not be cocky about it. we could mess up what is now the longest expansion ever, easily so let's not do that let's hope that these job numbers don't portend the beginning of that. >> and also getting political. is that what's really happening? >> no, i don't think he's getting political. >> looking through a political prism channeling him this morning? >> no. i don't think so there's reasons to be concerned about slowing growth particularly in adp slowed, manufacturing survey slowing, concerns over earnings the trade war kearns all of those things add up, but i would remind people, if you look at initial jobless claims, still down 6,000 over the rolling four-week time period.

ism non-manufacturing off a two-year high. down earlier in the month but a two-year high. consumer confidence remains strong i actually think could be a stronger month for jobs this month. >> michael, i assume you think things are getting better, not worse? >> i don't know things are getting better arguing we're headed for purgatory seems a little dire to me you know, i expect that the jobs number will come in well above the rate needed to absorb new entrance into the labor market i expect that we will learn that last month the labor market soaked up additional slack, rather than created additional slack. and so, you know, are things going to slow? sure i think it's looking like we're starting to decelerate, but decelerating from a pretty high base, and i think, you know, if

we got a number that was, you know, 130, 140, 150, to me that still represents a good month, for the job market even though -- maybe not as good as we've been used to. >> over that 100k number crucial. and for markets to go higher off the jobs number today, what kind of number do you want to see embedded in that question is, if weaker is that actually maybe a good thing, because it paves the way for the fed cut maybe even to 50? >> i think if it's weaker, materially weaker, like s sub-100,000 i think equity markets become concerned about it because labor is such an important piece, again, the calculus what the recovery needs to extend. i think if you get somewhere in the 150 and north, i think equity markets look at that and say recovery chugs on. you know, remember, june is -- may's usually a soft month june is a good month a lot of graduates coming back into the market.

coming off of college. historically a stronger month, and you get a lot of travel and leisure people coming in for the summer months. the june payroll number often, if you look historically is a solid, strong month and off of a weak may and revisions we need to watch closely what happens with revisions. >> what ash this scenario. say the number is weak, fed moves more aggressively. ten year note moves down to 150. possibly the way rates are in europe. $13 trillion debt and doesn't that cushion a pullback in stocks rates moving lower? >> absolutely. scenario basically markets pricing in no recession, no trade war. right? lower rates with these dovish pulses coming from carney last week and the ecb lagarde a dove if she gets ahead of the ecb and the president nominating two doves that could

join the federal, the federal reserve board. so all of those dovish impulses are shoving rates down 150, joe, might be a little low. >> sure. >> tough to get that. >> also i might add china and japan also on the -- >> exactly right. >> talking about weak jobs numbers sort of potential bad news/good news thing, makes it easier for fed to find its way into this rate cut, but at what point does that number -- how much lower does that number have be to where it's fundamentally bad? regardless of however the fed might react? >> i have to give awe forecast in a few minutes, but this is a random number generator. you make a very good point about looking at claims. the other series useful, unemployment rate. every post-war real session preceded at inflection points unemployment rises beforehand. watch that i don't care much about -- >> nots the number the rate. >> market's not going to care. few years could be 25 and turn

out plus 150 and vice versa. look at the rate what i like to do austen, i want to know if you're jay powell what you want him to do? i know you think thinks are bad but not so convinced you want him to be -- do we need to have the most dovish policy in the world right now? >> maybe not in the world, but i think that the fed needs to -- leaning towards dovishness we'll see what this number is, but -- if -- and i don't want it to be. i hope we get a strong number and i hope that gdp forecasts for q2 are better than -- the actual is better than what the forecasts are, but if it looks like what's happening, which is not -- it's why i said purgatory in a hand basket not hell in a hand basket. it's not all falling apart, but there are -- >> austen, here's my thing my question. you have been saying things are going in a wrong direction for

quite some time, and have critiqued the trump economy, and then at the same time you critiqued president trump for wanting to have a dovish policy, and that's the part i'm trying to square these two ideas. >> no, i didn't. i didn't no, no i didn't i criticized him for publicly interfering and yelling at the fed. in an unprecedented way. and if you remember, when we talked about six months ago, i said -- and joe was making fun of me. he said sounds like you agree with trump and i kind of did. i do think that the fed, when it was -- arguing it was going to be able to raise rates four times in 2019. i kind of thought that was bonkers. i think they need to be oriented towards dovishness i don't think chairman powell is doing the wrong thing. i think that that's the way they should be thinking. >> austen, joe, got excited there.

i don't think that the president, his criticism of the fed is unprecedented in the sense that we hear lots of stories how nixon went after burns and of course lyndon johnson after martin, and baker putting pressure on volker just that the tools that are available now, that information gets disseminated. also, when bernanke decided to do qe 1, 2, 3 twist do the balance sheet extend unconventional policy a long period of time did the fed not think there would be political backlash at some point seems to be a consistent evolution how thing wos have progressed if you told me ten years ago what was going to happen >> yeah, look. that's two different issues. on the first one i don't think you're right in each of those cases where the president borders on or starts interfering with the fed, they're not publicly going out and criticizing or attacking the fed chair. that's the part that's really disturbing and awful in each of the cases that you're

citing where it's like one president one time had people behind the scenes call up the fed and try to influence a decision, we look back with gra it criticism and say, that was not appropriate and they shouldn't have done that now we're in an environment where the president is literally going out on twitter and saying that he thinks the head of the fed is a loser or whatever he said and anything that undermines the fed's credibility were we to get in a crisis in my view is a disaster now, on the qe, i do think it's true i mean, the fed did what they did because it was a crisis. they had to know that there was going to be a lot of backlash, and you remember -- you remember the days when they said, you know, bernanke comes to texas we're going to rough him up. there was significant backlash and i do think you're right that's probably to be expected. >> okay. >> austen, press pause for now bring in michael strain into the

conversation in a bit. we're going to take a commercial break and come back with the jobs panel. >> coming up, almost that time again. earnings season around the corner names like pepsi reporting next week. what you need to know when the numbers roll in. stay tuned you're watching "squawk box" on cnbc

back on "squawk box. futures in the red across the board. dow off 40 points nasdaq 17 points s&p 500 off round up to about 6 points now as we've said all of this may very well change in about 15 minutes. key corporate earnings on the way next week. dominic chu joins us with a look what could expect when earnings season kicks off. >> next week not the full thrust of that unofficial start of earnings season. still, big names to keep an eye on tuesday you have pepsico look at that snack and beverage giant's mix of products and how they're growing things levi one of this year's best ipos and performers. bed bath-an & beyond, and next week remember, following that week we

have all the big banks reporting. citigroup and goldman sachs on that following monday and tuesday we have what's happening with jpmorgan and wells fargo as well as dow component johnson & johnson. >> things coming down expectations-wise. definitive tracks earnings estimates, we could see earnings grow by nothing. zero percent growth earnings per share when it comes to this particular earnings season coming up in q2. revenue side, ratcheting down. 3.6% entering now up for revenue growth looking, melissa, just how much expectations are coming down, even ceos and cfos are taking down their expectations. the number of s&p 500 companies, there's been about 113 of them issued guidance for earnings, 77% reduced or said they will come in below analysts forecasts. looking to be more cautious seems everybody, melissa, on

wall street is thinking a little less about this particular earnings season coming up. back to you guys. >> dom, thank you. dominic chu at headquarters. what we can expect when earnings season kicks off, matt and our own mike, migrated down to new york stock exchange. good to see you both matt, start with you matters, context earnings season happens, correct dom mentioned 80% of companies in s&p 500 warned a lot of estimates are coming down going into earnings season and in the month of june most analysts downgraded most number of stocks in 2017. seens people are bracingal themselves for a weak earnings season what do you expect in terms of market reaction to earnings? >> interesting, because nobody's focused on earnings recently because of the, of course, what it's been going on with the trade deal and with what the fed may or may not do. the one thing is that they always seem to lower earnings estimates enough just to be beaten so that looking for

slightly lower earnings for the quarter, slightly down earnings. probably get beaten. they beat them every quarter the key is going to be the guidance the guidance is always important but even more so this time around because right now con -- earnings estimate full year 2.7% much reliant on a strong fourth quarter. people looking for almost 7% growth there if we suddenly get guidance for the third and fourth quarter that are much lower, that's going to be a very poultry, for the full year. down to the low single digits, down towards zero even, which is not good relying a lot on multiple expansion with the fed with lower interest rates if the earnings aren't good, it's going to be a problem. >> yeah. the conference calls, mike, key. when a company can take a free pass, right? cite china trade war why wouldn't you do that >> yeah. i do expect it to be noisy and sloppy for that reason, melissa. the idea that, well, the stock market's at a record high as we head into what's likely going to

be a pretty, not so great earnings season. i think kind of conceals one aspect of it, which is more than a quarter of the s&p 500 companies are down more than 20% from highs if you look at those stocks that are well off their highs it's retail, energy, transportation, lots of industrials. the places that are vulnerable to earnings erosion have already been disunt coulded to some degree market's held up by the fact that bond yields corporate and treasury are very low and kind of stocks without variation in earnings power doing well. to me that's going to be the question do we get a little bit of confirmation the second half of the year can hold up okay? that means this is just a plateau in earnings growth and not a cliff? that's going to be, i think, the key. what always happens in earnings season is a lot of offsetting occurs, some stocks up, some down index volatility smothered at times but a ton of action under the surface. the big question is, do the

cyclicaler yas discounted already by the market get relief at all in the numbers? >> smaller impact on the overall markets percentagewise, matt make as great point. if tech comes in great, financials are all right, you know can the markets continue higher? >> yeah. i think it's going to be -- obviously technology's very, very important estimates are down, looking for a decline of 11% that's very low and hopefully can beat that. one thing of course you worry about is this whole thing with huawei uncertainty about trade. looks like a long time before it settles. even the huawei situation. nobody knows how many restrictions are lifted, how many are not going to be hard for them to be able to come out with that -- with a strong comments on those situations that's going to be something to keep an eye on if they can give uncertainty, a problem, give something that's better than the lowered expectations certainly will be helpful. i mention what mike talked about. transportation stocks. a group earnings looked okay

not great. actually a little better than the group acted. if they can come in better than expected, a lagging group takes off, have positive for the market. >> leave it there. thank you both coming up, the government's all-important jobs number for the month of june. it's been building up to this. economists expecting 165,000 positions added to non-farm payal ros last month the number to beat up from just 75,000 in may. we will see if data show as rebound or a down trend going. plus, plenty of analysis with our jobs panel. japoll wy weill be watching. "squawk" returns in just a momentare you ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills.

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welcome back jobs predictions coming up ayitusetnsx" rur st wh

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>> announcer: coverage of the jobs report is sponsored by -- career builder work and work. ♪ welcome back to "squawk box" on cnbc. live at the nasdaq market site at times square. minutes away from the government's june job reports. predictions from our jobs panel. michael strain kick it off with you. what do you expect give us the headline number and other numbers you're looking for. >> expecting headline number 150, which is right about the three-month average that clocked

in, in may i see some arguments soar softening. i think the economy according to q2 forecasts is growing below potential. labor supply constraints start binding. same time i don't think we are anywhere near the point where we're going to be adding fewer jobs than are needed to absorb new entrance into the labor marketed i don't think we're at that stage in the cycle yet deceleration but a solid month. >> austen what do you say? >> i'll say 119 and unemployment goes up 0.1. unemployment slowing and seeing that this morning? >> 175 with a risk the print is over 200 more so than under 100. take the tails greater upside stronger june month. >> okay. i may have to change them in austen's purgatory i'm 130. >> 130 >> okay. >> lowest of the bunch. >> i mean, bodes well for "price is right" rules.

>> revisions key >> yes printed 75,000 jobs in may revised down 75,000. basically net zero jobs month of may. get paid back in june. >> santelli? >> 212,000 i think we're going to boil on this one. >> amazing. >> hard on the "price is right" rules. right now in washington with the number >> 224,000 non-farm payrolls rose by 224,000 jobs in june beating expectations unemployment rate did go up just a tad. it's 3.7% in june versus 3.6% during the previous month. now, average hourly earnings also rose. 6 cents in june to $27.90. that's a slightly smaller gain from the previous month, 8.2% increase month over month after the past year wages are up 3.1%. now, almost every sector of the economy did add jobs in june

may's job number was 51,000 for professional and business services in june health care added 35,000 jobs. manufacturing added 17,000 jobs. the retail sector lost jobs for the fifth consecutive month. almost 6,000 jobs were lost in the month of june. now, previous months jobs numbers were revised downward. the may number revised down from 75,000 to 72,000 jobs created. april's number was revised downward as well from 224,000 to 216,000. together that's 11,000 fewer jobs than previously reported. the three-month moving average is now 171,000 jobs. now, labor force participation, that edged up in the month of june from 62.8% to 62.9% that added to the labor, and

reasons increase in unemployment rate the rate for asians, though, at a record low in june of 2.1% veterans unemployment rate also went down from 3.3% a year ago to 3.2% in june, and broadest measure of unemployment ticked up from 7.1% to 7.2% back to you. >> wow a lot to chew on thank you. thank you for those numbers. keeps a straight face when she does that. doesn't react one way or the other but a lot of people reacting over here mike the strain first. michael, what do you make of this rnltsz i think wh . >> i think we're seeing wage growth accelerated over the last few years, still at a point pulling people in to the labor market so you saw an uptick in participation. there is slack left. that slack is being absorbed and the economy's adding jobs at a pace of around 170,000 if you look over the last three

months ignore last month's noise. ignore this month's noise. average to about 170 or thereabouts. that represents deceleration from where we were over the last several years but still solid. still in good shape. >> and should say rick santelli the winner got the number you want. i don't know if it's a number investors want given what the fed may think of that. >> who cares seriously. if our central bank -- you know, austen talked about purgatory. i remember reading "dante's inferno. the big ert contributor into that level of purgatory was pride. inordinate amount of self-esteem. that is what central bankers have if they think they're a transformers that can turn economic straw into gold, that ends up in rising equity cycle without the underpinnings of fundamentals, that really is purgatory. i think that 62.9 really gives

me optimism on bringing people back into the labor force. wages at 3.1 stiff hovering at lowest level in recent cycles especially this year but cities holding a free handle. listen, i think jobs slowing but nearly at the pace many believe and i think there are many uncertainties that will contribute to potentially giving us a tailwind on the jobs scene and i still debate late cycle because i think it was four years including in this ten-year cycle that just don't count. >> the question how the markets react seeing futures now a slight move to the down side and i do say slight. s&p 5 00 lost about 4 on futures and dow down about 54. what do you make of numbers so far? >> so lighter on wages doesn't surprise me on the headline as i've talked about. i thought the headline could be a 200-plus print strong month falling interest rates have put

a tailwind in home builders. and better manufacturing data than we thought. surprised on revisions thought wheat get positive lost 11,000 in revisions unemployment ticking up doesn't surprise me. rounding issue 3.6, 3.7 along with labor participation rate i don't think it changes the path of the fed, quiets frankte >> hold on talk to mr. purgatory himself. you might be in purgatory this morning with your number >> yeah. look, rick with the 200 iq point play not only getting the number right and with the revisions if you add those revisions, rick might have been exactly on the number, and then quoting dante knows purgatory, knows what caused purgatory i don't even know what to think. look, this is a very solid number and i'm happy to see that i hope this san indicator that

maybe the growth projections aren't going to be as slowed as what people are saying i think that this is a pretty strong number. i think if the market reacts in a negative way, it says, oh, that's so strong that the fed will change its behavior that would be sad. i don't think it will change what the fed does. i agree with what everybody else said. >> what the fed will do, cut 25 basis points this month. they're cutting. >> and, rick what did you just say? >> no rate cut in july is my prediction. >> no rate cut in july >> wow. >> because the number is so much higher or -- >> no. i don't think we're that close to begin with, quite honestly. >> markets completely offsides on that, then? >> at some point the markets will have to go to adolescence and grow up. these are not the old days the markets used to be more correct, because i think that our central bank had a better way to leverage its policy into our own economy. lowering rates here isn't going

to cure the ills of what other central bank policies are doing to our economy pull deals minus 100 no amount of fed poems will keep our rates from going down. end of story. >> if the fed doesn't move on rates, bringing back to early fall of last year. the markets seeing record highs the fed direction in the markets were in option direction, and seeing signs of weakening. that would scare me, because we know what happened then. we know what happened. >> eases and both are wrong. >> i agree i think with rick, it does -- if there's a risk it puts on the table there isn't a july cut and markets are incorrect here, there may be a cut in the second half of the year depending what happens with growth and gdp growth we have to remember jobs have slowed right? the average job gain in all calendar year 2018 was 223,000 a month. add 160,000, 170,000 jobs is still a slowing?

right? it's where we should are this point of the cycle. >> approaching 2%. the yield. 1.99% and seeing strong reaction in price of gold down by more than a percent. >> and the dollar. >> and the dollar. thank you. equity futuring look stable back of the jobs report gold down 1.6% it has been going into the longest stretch weekly gain since 2011 i believe still hold that brut we're s -- but we are seeing a pullback in gold. >> i hear what rick is saying. the fed hasn't done anything to convince investors they'll change their behavior. they created this monster and shouldn't have, and all of a sudden come out and not move for them not to move in july, unprecedented. literally can be proven. never not moved when the markets -- >> you think they should >> they should a lot of reasons to cut -- debate about the economy they've undershot inflation

target over this cycle worried about the lag effects from what's happening with trade, and, look, a crazy policy of qe working. the prices are high because of the fed. also rates aren't staying down if the fed doesn't cut mortgage rebuy activity and housing because rates rallied. if the fed wants to keep those rates low they have to validate to some extent market expectations. >> joe, is the question here -- >> a lot of the -- should they move or will they move two different things. >> sure. i would argue they should have done a lot of what they did. but will they move yes. that's what matters. what will they do. >> talked earlier about the unemployment rate, the change, seeing it go up. that signals -- >> you got to wait a few more months it's creeping up mi >> michael, a lot of earnings to go before the fed meets. will that be a determining factor or in the book? the cuts >> i think it will certainly be

a factor look, this reduces the probability of a july cut. i think pretty significantly a lot of the argument for a july cut was based on that 75,000 number that we saw based on the forecasts for q2 or the now casts at that time this is going to increase the forecast ofq forecastq 2, labor market slowing and taking pressure off the fed because the whole goal get that rate a little higher without causing a recession. i think 2019's going to see easing still the question of what they do in july i think is now a much more open question. >> okay. >> all right >> we'll leave it there for now. but got a lot more to come thank you to or jobs panel thank you austen for calling in from the smokies >> yep >> great to see you. appreciate it. coming up, it might not feel

like a friday since the markets closed yesterday but it is and the dow setting a new record high in the last session what's in store for stocks from the opening bell rings how will they digest the jobs reported get you ready for the day ahead. stay tuned you're watching "squawk box" on cnbc and we will be first to market! yes. when we do we launch? unfortunately, in 2 or 3, hours. why the delay? cognizant is helping banks use digital technologies at scale to advance speed to market.

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non-farm payrolls. unemployment rate 3.7% better than anticipated. look where the markets are now in this perverse the world's upside-down situation, good news is bad news what does the fed do about all of this? concerns now maybe the fed won't move as fast as it had been expected dow off about 100 points nasdaq off about 49 points s&p off close to 14 points a quick look at the dollar and ten year as well flip the board around for you to see what's going on there. the dow at 97 -- well 9721 show the ten year. what most people will be focused on probably so -- gold, yeah. exactly. over 2 now. >> insights what the numbers mean for the fed later in the month, bring in a representative from employment management good to have you with us.

>> thank you, has your view changed with release of these numbers? >> my view not getting 50 basis points the market was well ahead of itself the july cut i think can be justified on inflation grounds you know, they want to hit their target or go above it, even as someone on the panel early early mentioned hard to disappointment the market after all of this lead-in. i do think the fed's communication may have added uncertainty, taking out patience and trying to figure out what they're up to. i expect they will cut, unless you get a big inflation print. as they said, let's not overanalyze any one given number. >> do you think this number, this june jobs number, reduces the chance, even, that the fed cuts by 25 i ask you that as we watch futures weaken after this report >> you have to think so. the number was pretty good 174,000 on a three-month average is below the 12 month but better than last month.

a little bit of bean counting, i'm afraid as opposed to good solid monetary policy. >> and if you knew the fed would cut rates? >> anticipating over the course of the next 12 months rate cuts. i don't think we would. >> overanticipating? >> too many rate cuts. >> yes, too many. >> fed funds futures contract. lowered probability but only 50. basically taken 50 out, but 25 is still basically 100% priced. >> right. >> right. >> going to take a lot for them not to move at this point. maybe just give you 25 and the statement says, look, we're going to be cautious >> but if that's all they move -- >> the market's going to back off. the problem you have, talking about the yield curve in the u.s. it's basically totally inverted and markets tend to sniff things out before economists are doing. i don't want to fall back on the notion employment is lagging but essentially it is. a good point about inflation

under shot reasons to -- to ease and by the way, your 72, two months ago, 224 this morning next month back at 80 or 90, fighting again in september. >> 25 is happening. >> 25 is happening. >> markets are pricing in higher. >> pricing in over the next year that's correct. >> yeah. >> in terms's earnings season, what do you expect out of earnings season? the areas that could, i don't want to say overshoot but could beat expectations? >> generally speaking i think the manufacturing sector has been hit so much that maybe there's a little upside to that. >> yeah. how about technology since it's so important to the markets overall as a percentage? >> you'd like to see technology always do well i don't have an expectation on earnings season, though. >> not looking for it? you don't have a specific forecast or you're not expecting -- >> in the midst of kind of digging that all out >> okay. joe, do you think that earnings season will play a role?

earnings season -- >> no. >> no? what happened in september and october, earnings season played a correct role, right? with the fed >> sounds like us being hyperbolic guidance matters more. why i like when you look at duke's a great survey, cfos. what they're planning, expectations, guidance is important. not earnings for the reasons we talked about, lack of a better term companies can massage the estimates. where e wr goiare we going decelerating inflation consistently undershot its target and central banks relied unfortunately propping up asset prices to bring about growth the problem is every time the market corrects the fed's in an uncomfort spot feeling it has to do more to try to keep the assets ale vated earnings matter as much as what companies say. >> what i mean during earnings, conference calls get the outlooks this will mostly happen, a big percent of the s&p 500 will do

that before the next meeting. >> i like your point companies use trade as an excuse for everything china slowing the last couple of years. trying to offset that. growth is weak not just a trade story the global economy has been soft companies are taking advantage of using trade i think as an excuse a free option. take it. >> why not how could you not? do you expect a lot of excuse-making during this earnings season in conference calls? i tend to agree with what joe said trade is top of mind, driving the manufacturing globally lower, and will take a little bit to figure out the ultimate impact on trade, i will say companies and the economy are going to still be worried trade is still out there and the u.s. can almost ramp it back up. what happened recently is positive, but this is a little bit of an issue still out there. >> because you think we're taking a breather then it's going to get bad again >> no, no. if talks don't go well. >> what i'm wondering. wondering whether -- i agree in

one respect, which is that we could be in this sort of low a low meaning, in terms of what's happening we all think a trade deal will be done and then get hard again market sells off thinking shoul concerned and until things are really resolved. the president has been an advocate for a long time for trade restrictions, at least getting his way on it. >> in terms of manufacturing, being beaten down more than they deserve, are there specific areas of manufacturing or types of manufacturers, multinationals you think are worth looking at right now? >> i think the -- you now, the multinationals as i said earlier, everyone has been beaten down. probably some upside because, you know, we probably overshoot the downside and that gives us upside. >> i don't do a deal until the fed cuts a few times why do a deal before the fed cuts >> that's true >> now manipulate the fed?

>> they put themselves in this spot try to keep housing and then get a trade deal why did a fed deal before -- >> you think the fed is supposed to be reacting to the trade deal >> they told us. believe it or not, powell told us that last month, yes. >> isn't that terrible >> it is what it is. i don't want to judge whether it is good or bad. >> the fed is supposed to wait for the trade deal, the trade deal is waiting for the fed to move. >> there is other reasons to cut. inflation has been undershooting. a variety of reasons why you could cut. not just one factor. >> because of the productivity mystery that still no one has solved, right? the global growth is slowing altogether why? trade. trade. it is undercutting that on top of everything. >> inflation is undershot for 20 years. basically. the average is below 2% over 20 years. that's kind of been the long run. i will say on the fed, i don't really like the idea of the fed

validating what i would view as a questionable policy, which is the tariff situation they should have their eyes on monetary policy and just dealing with that. >> okay. thank you, tim, appreciate it. >> okay. coming up on "squawk box," what to watch in the markets as opening bell approaches. we're going to tell you what's going on in a moment don't miss it, this morning an interview with one of president trump's new perspective nominees, judy shelton, that's at 11:40 eastern time this sting. ay tuned you're watching "squawk box" on cnbc

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welcome back to "squawk box. a look at some of the market movers, post the jobs report dom chu joins us again. >> on the macro side of things, we saw a bit of a move, exacerbated just like the last 10 or 15 minutes or so the s&p 500, no doubt where that jobs report number came. you see that sharp move lower in s&p 500 futures, down by 9 points given that move in jobs and that particular move in futures. so that's something to watch there. we're also going to watch what's happening with gold prices which have sunk now towards their session lows we did drop by around just $19

per ounce in gold futures in response as interest rates tick higher, less likelihood of a possible interest rate cut, so we're watching gold prices there, currently 14.50 one other place to watch, across the interest rate complex, yields rise. for the two year note yield, above the 2% mark. there a couple of days ago, still, though, that move higher is about four basis points overall yield. so as we watch all these play out, the other place i would watch, andrew, any reaction as regular trading gets going in bank stocks, especially with the interest rate higher and earnings coming up in two weeks from now back to you. >> dom, thank you for that happy fourth, hope you had a great day yesterday. back to our guest host, ed lee is here, corporate media reporter at the "new york times," chief economist joe larornier. how do you deal with bank stocks now? >> a yield curve you got regulation, a fed that

suppressed volatility and averted yield curve. if you think the economy is weakening and -- we're going back to zero bound on rates and if it is just a few cuts, which is what i believe it will be trickier probably want to be in other area areas. >> i have a political question >> oh, my god. >> just because i'm sitting at joe's chair? >> i was avoiding -- >> i know joe is watching because i'm sitting in his chair. >> no, he's not. >> the political question is if the fed doesn't move, then does the president get involved, are you going to get into a whole twitter -- >> demote -- >> get back to your media tech life because you can tell me what jack dorsey should do about the twitter business. >> isn't he blanking out can you imagine if twitter started blanking out some of trump's tweets just because it violated their new policies around political action on your twitter? that would send the markets

crazy, for sure. i think overall given everything with just the trade war, like, tech is driving so much of the s&p 500 these days, i think what people fail to realize, not just the hardware stuff, but facebook or twitter or google, a lot of these companies are international companies. they're getting their money from overseas so as that starts to sort of seize up, there is less advertising, less money going that way, it becomes a bigger issue. >> for technology specifically what is interesting is a lot of these components of the tech sector and communication services sector, they're caught up in political wins whether you want to discuss politics, these are all -- >> here is the thing, melissa. you look at the global economy, the point i made before, growth was slowing before the president made the tariff comments back in march of '18 we're conflating what is happening with trade and the fact that the global economy has been weakening, which is why europe hasn't been able to take rates from negative

to close to zero i don't think as much as people think, i can't prove it, at least in the u.s., the u.s. very resilient. the weakest sector is housing. housing has been the weakest sector in the economy from a gdp perspective. that's a rate story. why? mortgage rates last year got to a near eight year high that gets lost in my opinion in this whole trade discussion, which i still think is ev overhyped. >> in the end, you think jay powell moves, does a little tip the waiter. >> 75 basis points, trade deal early next year and the economy will get a lift right around -- >> the timing of that trade deal could be key, though, for 2020. >> of course i would be advising the president to wait until -- >> you mentioned q2 as the most important quarter. >> that's when people -- they may not tell the pollsters what they think but they pretty much

made up their minds. >> joe, a little scheming there. a little schemy. >> steamy or -- >> ed, thank you for coming in melissa, thanks for hanging out. join us next week. "squawk on the street" begins right now. ♪ good morning, very warm welcome to "squawk on the street." i'm wilfred frost with morgan brennan and mike santoli at the new york stock exchange. jim, carl and david have the day off. futures took a little bit of a dive after we got that nonfarm payrolls number, which was much stronger than expected to the tune of 224,000 jobs added, well above the 165,000 forecast dow jones futures down 100 points nasdaq down 46 we're higher by 1.5 to