♪ >> live from new york where business never sleeps, this is squawk box good morning becky and andrew are off today joining us for the next few hours, guy adami >> all unbelievable things. >> all unbelievable into a perfect, perfect storm of sunshine. >> >> i don't know i would not bring that right into it then. >> it's funny that you mention stranger things.

a lot of people think when you and becky and andrew are here that's stranger things. >> that's very true. >> how quickly can we show mack. >> are we going to do this now at the top >> the guys that are here wear black and i asked him, magnum p.i. but you finally just rebelled you finally said f it, i'm sick of the black stuff and i'm coming in and i like it myself. >> i like the palms on it. >> i tried to picture myself in that and that's when i started getting uncomfortable for everyone for everyone involved but it is friday. >> it is friday. >> can you tell? >> is that what it is? casual friday or something >> it's a good look. >> man, oh, man. >> i asked you if you noticed and you said i have eyes, don't i? >> let's get to the markets because it was a record close pretty much across the board the dow rallied 227 points to close about 27,000 for the first

time ever. stocks got a boost from the signal that the rate cut could be becoming this month and a year and a half since the dow sit 23,000 the best performing dow stocks have been microsoft and let's get a check on them. the s&p looking at 8 points and closed 2999.9. so shy of 3,000 but a record close there. and the nasdaq looking at 25 that was the only major index. take a look at the treasury yields being impacted by the cpi data we got here on squawk box and we did see them edge higher along with a soft demand for the 30 year bonds in the auction held yesterday 10 year note yielding 2.141% and

2 year. >> what's the most important thing? >> in what context happiness. >> honesty. >> it's work place culture. >> work place culture. >> how much do we love mack? do you see how there's a lot of love. >> our show at 5:00, fast money, our crew, i come in and these guys are like walking around like -- pins and needles poor mack, you have taken 30 years off his life he's 17 years old. he looks like he's 90. >> that's not very nice. >> true. >> he looks great. >> not nice to you, actually. >> for a great grandfather he looks really good. we're going to talk to navaro later. >> peter navaro. >> yes we are. overseas in asia, stocks closed slightly higher in japan, hong kong and mainland china after the close. now after the close, china reported exports fell less than

expected in june and in the first half of the year, total trade with the u.s. was down just 9% but that's a big number. we'll talk more about trade numbers later this hour with the china policy expert and then at 7:30, a life interview with white house trade adviser peter navarro but where we're going with this is something that i saw on the way in and adami, you follow them occasionally. >> sure. >> him or her. >> we're so quick to say him or her. >> i thought it was brad pitt. >> from fight club. >> anyway, dhl is sounding the alarm -- >> shipper. >> yes about air and sea freight both and there's numbers that were supposed to be above 50. they're like down in the mid 40s for things going to china and things coming out of china from the u.s. and i want to ask navarro about that you were talking about fastenal and caranys in coal mines.

which i feel sorry for. >> your job is to die. >> it's to assertain whether the levels of methane are high enough for human beings to live. >> if there wasn't a chance that -- they're putting you in there to see if you die, guy that's the only time your useful is if you do die like insurance life insurance when do you want that to pay off? >> but we all face the same inevitability. >> so dhl, fastenal. >> canaries potentially. >> that would depend upon the metabolism of the individual

canary. >> you were like a bio engineering major. >> excellent point. >> we won't go there anyway, what about the frog though in the water. >> boiling. >> how does that work? that's interesting, isn't it >> so interesting but let's talk about this tweet. >> crypto. >> president trump making news saying he's not a fan of bitcoin and other crypto currencies. he says they're not money and they're highly volatile and based on thin air and can facilitate other unlawful behavior including drugs and illegal activities also taking aim at facebook's libra saying it may need to be subject to regulation. he isn't alone in criticizing the plans. fed chair jay powell and mark carney all voiced their own concerns and so has mark cuban in an interview. >> i'm not a big fan

it's a big mistake not so much because of what will happen here in the united states but what will happen globally. there's going to be is on african country that gets upset that they can't control their currency anymore i'm not a fan of what they're doing but it's only in the talking stage right now so we'll see what happens. >> president trump tweeting dependable and reliable dollar should be the only real currency in the usa calling it by far the most dominant currency worldwide saying it will always stay that way. bitcoin investors are shrugging off the president's comments bitcoin is up more than 2%. >> i think if you gave me 10 or 15 minutes with trump, i think i could make the case. >> you could sway him on cryptocurrency. >> he has become the gospel of bitcoin. >> bitcoin specifically. >> here's what you're up against. who has the biggest vested

interest in things staying the way they are. >> the united states of america. >> the government. they have no control. >> that's the whole point of bitcoin. >> exactly so this should not be a surprise that that would be the angle that -- but i'm going to defer to tyler and he is very -- we have elected to put our money and faith in a mathematical frame work that's free of politics and human error and it's that simple. >> think about bitcoin it was born out of occupy wall street, the financial crisis all of this interest where trusts in banks and institutions and government had been eroded. >> with everything i had seen when you say look at all the stuff you can do with it. >> same as cash. >> there's so many scams but it does make it easier and better and no one ever really denies that there are certain criminal

activities that are better with bitcoin but that doesn't mean it's not going to happen. >> without question and i don't want to necessarily go down this rabbit hole but it was born out of the wall street movement, there's no question, it's also born out of a movement where central banks globally are all in a race to devalue their respective currencies. so don't think this doesn't have anything to do with the fact that everybody is trying to torch their currency and president trump is right to say the u.s. dollar is the reserve currency but he said on a number of occasions he wants it weaker and quite frankly if the fed is going to go down this path of lowering rates that's what is going to happen. be careful what you wish you, you might actually just get it. >> what do you think the average fee on just a transaction is when all you're trying to do is take your, your hard earned money and give it to someone else somewhere else in the world. >> in the emerging countries like africa, where money

transfer is very prevalent, it's 10%. 10% of principle. >> what's the average all the time what would you call it that's the friction? the average is a big number. if you -- the way that amazon took retail to zero as far as middlemen and everything else, the same thing could be done for currency and trade and commerce and that gives it inherent value. am i right or am i right? >> you are right, joe. >> do you know who is going to be on today? >> no idea peter navarro. >> the pomp. >> i'm so far ahead. i'm light years ahead of you. >> most people are it's 5:00 in the morning. >> this is a guy we want to have on and i'm telling you, it starts spreading like wildfire i wish we'd have the other guy on too >> have you had him on >> no. >> why not

>> difficult to get. he's all over the world. >> this is squawk box. this is it >> we can get him. >> why don't you get al michaels to call him. that's brilliant, actually. >> i'm going to get him. anyway a developing story in the gulf of mexico, tropical storm barry is hovering just off the coast of new orleans the city has already seen record rainfall in recent weeks the storm could make landfall as soon as saturday the mississippi river has now been at flood stage in louisiana for longer than any time on record forecasters say it could crest as high as 19 feet after the storm moves through. all right. coming up, what time is it 6:11 pretty long a block wasn't it? >> well, you talked about max's shirt for like fyffe minutive m. >> let's see it again. can you just do the top button for me. >> undo it >> no, i want him to do it

bench chair powell's rate cut signals helping drive the market to new highs you can never do that on fast money. >> move on move on, move on. >> what if i scratch myself there. >> that might take a littl time and then next week earnings season kicks off and then next, later, don't miss our interview with peter navarro he'll join us live from the white house at 7:30 a.m. eastern. as we head to break, he has a ph.d. from your school. >> harvard >> no. >> here's a look at the biggest winners and losers in the dow. [leaf blower] you should be mad at leaf blowers. [beep] you should be mad your neighbor always wants to hang out.

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closing above the 27,000 level for the first time ever. hence why it's called a record joining us now is the financial analyst at sgh financial management and kathie head of research sam. >> yes. >> are you bullish, still? or are you scared? >> it's more neutral i would say bottom line --

>> you're going to get a lot out of this i can tell viewers will say i know exactly what to do now after listening to sam. >> you get an opportunity in just preparing for so tivolatily pe ratios at about 16.9 are showing being higher than the 5 and 10 year averages it shows slight overvaluation but nothing extreme at this point but with that too there's a psyche issue wednesday there was a sell off of set outflow and neutral funds and domestic equity and you have great news of interest rates going down and hitting new market highs and we are seeing huge outflows. that's the biggest single outflow since 2014 i believe it's a difference and i think the sell offs are going to continue throughout the presidential election. >> are you expecting 16% in the

first half of the year. >> i wasn't expecting this recovery to come as fast as it did. >> in the markets from the december low. >> correct, yes. >> i thought it was going to take probably the course of an entire year to get to where we are right now. but with the interest rate changes that are imminent, we would think this might just build a bigger bubble in the markets. again with that pe ratio saying prices go up. >> you think we're in a bubble right now. >> a very minor one. nothing to be concerned at at the moment but i don't personally agree with lowering rates. as of today i think that that's not a healthy standpoint. >> there's a lot of -- i know we worry about the slow down globally but domestically, gdp unemployment, consumer confidence a lot of things align to explain why we're at new highs sometimes i feel like we're looking and nitpicking when we

can't just -- we have low rates and low inflation. we have solid growth and low unemployment and wages rising and you can pick out a lot of really bullish things to explain where we are and it's therefore not bubblish. >> absolutely but bottom line is that's all very high, high thinking and when you get to the people that are actually investing, i would say that the political environment really scares a lot of both sides of the parties and then also, too, just slow down this economic slow down that's coming. >> i'd say that clouds their decision making and the republicans are looking to the future what if trump doesn't get elected and we do have tax increase. >> he's already been elected oh, you mean reelected. >> you had a 2915 target at

beginning of the year. we hit that, so kudos. are we going to close at 2950 so you'll be exactly right or have you raised your target >> yeah. i think it's important to factor in there are good combination of factors that have gotten us to this point of optimism and asset price inflation. at this point i think that we're on a sugar rush. i think there's way too many cuts baked into markets right now and that if your audience wants to protect their gains, a very prudent way to do that is to buy put options on the s&p for december expiration over the course of the next month today over the course of the next month, a july 31st rate cut is going to happen that's going to happen but icon tend this is going to be a one and done. >> so you mean people that are long you're talking about people out of the markets and buying puts. >> hold your positions. >> you don't have to sell it.

>> if you're long, you can buy puts for the next month. >> sure, you can relinquish 3.6% you can buy the december put option and if you're fine with giving up 3.6% of what you gained so far and it protects against what i think is going to be a market freak out when the fed doesn't cut more than once this year. >> that might work too that's your maximum output is 3.6. if it goes up another 10% then you participate in that by holding on to your positions. >> precisely. >> that's a very prudent way to go, but yes. >> does that indicate that near term your bearish or just protecting yourself. >> the u.s. economy is not going into recession it's something that i came on with you in december saying really this fear is really misplaced so if we do get a rate cut, one rate cut, that's

bullish so we should see more upside right after that first rate cut at that point i think it's prudent to start hedging yourself and putting on some type of protection for that inevitable down side when the fed doesn't deliver what the fed funds futures market is pricing in 3 to 5 rate cuts from now to year end with more than a 50% probability if we get one rate cut that's going to be positive for markets because we are in an economic expansionary cycle and it simply undoes the december error which many of us think was, in fact, an error for the fed to hike rates in december. if we have strong economic growth and one rate cut that is going to be good for growth. good for growth means wages go higher the fed isn't going to cut further into that. >> thank you catherine. good to see you, thanks. >> coming up the dark side of

the booming marijuana market a sneak peek into the impact of legal weed from the illegal market squawk box will be right back. jimmy's gotten used to his whole room smelling like sweaty odors.

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there's a much bigger boom in the black market of weed crippling sales. what is really going inside these unlicensed dispen eries plagued by our own rules here's our investigation weed killers. it's a weekday afternoon in los angeles, the epicenter of cannabis in the united states. this busy dispensary is open for business. >> hi. >> but if everything looks normal, it isn't this is, in fact, an unlicensed illegal dispensary part of the booming black market in california and around the country. it's what the cannabis industry says could be the biggest threat to sky high expected revenues. case in point, california. early projections of more than

$1 billion in an yonual tax receipts are far from the $345 million collected. that's in large part because the illegal market can undercut the costs of running licensed dispensaries it's not hard to see how a team of cnbc producers equipped with hidden cameras visited ten illegal dispensaries throughout l.a most aren't hard to find and they're open day and night this is exactly why legal store owners like cameron walt, executive vice president of project cannabis is outraged at how bold the black market has become we're facing, especially in california and l.a. specifically an elicit market that's extremely strong they're outnumbered 3-1 elicit operator to legal operator so we have outrageous price compressi compression. >> how much easier do you think it is to operate as an illegal

dispensary compared to what you go through >> easier. they have no permitting, no documentation, no legal process. >> so they're breaking the law, threatening the health of consumers and threatening your business. >> correct. >> and they're doing this in plain sight. >> in plain sight. >> our producers did not buy anything from the illegal dispensaries that we visited we did not respopd to ond to ou requests for comment by the way. more than 250 illegal ones in los angeles according to authorities. for a full story go to cnbc.com but we talk about the weed market all the time and the total market and the rosy projections. some of the assumption is that some of the illegal dollars will be converted to legal dollars. when you have a system where illegal operators can charge 40% less than legal operators it's very difficult for that convention to happen. >> no question about it. go back to prohibition

look at gambling and legalized gambling this is the next frontier. this is as disruptive as the internet was 25 years or so ago. it's coming. you're not going to stop it. it's going to disrupt spirit which is we have seen with constellation brands, cosmetics. pharmaceuticals without question that white outfit you were wearing which was fantastic. >> i only wear it on special occasions. >> remember willie wonka and the chocolate factory. >> i don't know if you'd bring up what i was wearing. what about seymour >> don't go down there. >> talking about illegal gambling and stuff and then -- >> firewor trying to cast dispersions on the great people of cnbc >> thank you, guy. so great to have you here this morning. >> big numbers for netflix's

stranger things season 3 so many strange things happen in 1 or 2 it's amazing that these things keep happening to the same people it's weird we'll tell you what it can mean for the stock at the time of these content wars as we head to break, here's yesterday's s&p 500 winners and losers

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welcome back, you're watching squawk box. live from the nasdaq market site in times square. >> good morning, u.s. equity future is up another 82 points we'll see how the premarket session goes forward here. the s&p back above 3,000 just missed it by that much yesterday but the dow did manage to close at 27,000 somehow president trump noticed that, mentioned it a few times i

saw. then the nasdaq up 24. new data says stranger things season 3 had a record 26.4 million viewers in it's first four days in the u.s. and that's an 17% increase from the season 2 debut of the netflix hit show netflix released it's own data earlier this week saying more than 40 million households globally watched the show during the holiday weekend. those kids are getting old looking a little strange in the outfits and stuff. >> what kids >> no. >> you haven't at all. >> he doesn't stream. >> i'm not a streamer. >> he watches tv live. >> when i watch squawk box in the morning i watch it live. i don't tape it because i don't do that. >> you have to watch squawk live. >> of course it's required. >> you should go back and watch the first season of stranger things i think you'd like it. to see what everyone is talking about. >> it's an 80s thing. >> it's set in the 80s.

>> wynonna rider is in it? >> i can see she's your type. >> she dated matt damon and it's a three hour show. >> that's plenty of time aapparently unlike fast money. >> you liked her in beetle juice i guess. >> she was a little odd in beetle juice i just liked her in general. she was engaged to that johnny d depp if you recall he had that tattoo which is problematic. >> he is a little unrecognizable. >> she should be in stranger things can you imagine putting them back together would be brilliant. >> sure might be hard to get -- >> johnny has turned into va val kilmner which is weird.

>> eric lindblad is retiring after 34 year with the company he had been considering retirement since last year boeings 737 max jet has been grounded since mid march he was in charge of the new mid market plane and will assume the role as the lead on the 737 max program. he was taxed with getting the plane recertified and ready to fly. shares are down more than 4% since it was grounded by the faa back on march 13 sergeant but real -- march 13th but the all time high dropped. >> the stock hasn't bounced. markets at all time highs and you know i think everybody says this is commercial plane company period it's not really true that's really only half -- a little more than half of their revenues this is defense cuts aspect of this company as wellbeing completely underappreciated and

when they were given valuation i think earnings would be very strong i think the stock is way too cheap here i understand why you would be concerned but this is a name that you want to own in this environment. >> it's a cash generator for boeing the guy taking on the 737 max program was the head of the mid market plane program some are saying when is this going to come out? >> it's above it's december levels well above so even at 350 everybody is low. >> do you know what's happening in london in a few hours >> the queen is having tea. >> federer and nadal. >> pardon me >> tennis. >> one of the great matches of

all time. >> they haven't met. >> shut up. >> haven't played against each other. i don't watch tennis i bet if andrew was here he would be all over that. >> i saw both of them play separately last saturday and nadal is a animal. i love roger but i'm worried coming up new important data on the chinese economy. you know the average age is s w skewed. >> more on china from the white house trade adviser. we'll get the latest on the trade talks as well as the other big deal in the works. pushing for approval on the usmca stay tuned you're watching squawk box on bccn

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read it carefully. new this morning, china reported exports fell less than expected in june for the first half of the year the total trade with the u.s. was down 9%. official who served in beijing

is now director of china analysis with the euro asia group. at this point, who is getting hurt worse or is it people on both sides? >> china is feeling more pain right now, then there is this really important medium term risk which is supply chains moving from china. and they're looking at shifting new production to other market and that's something that is serious and beijing has relatively little that they can do to make it. are we starting to see some signs that these things were filtering through to dhl and global shipping. we mentioned it. and starting to see things >> sure.

on the u.s. side it's not really showing up in a big way in terms of the macro story but absolutely, this is a really disruptive and you have investment decisions being thrown off and companies impacted directly. >> when does the stock market say this is going to cause a global slow down or is the stock market keying off jay powell >> i think it's that but we also have the important deflection point which is does trump follow through with additional tariffs for now coming out of the g-20 ceasefire between trump and xi, the most likely scenario is that tariffs stay in place. i don't think either side has strong incentive to reach a trade deal that's going to require tough political choices by xi jingping and president trump so it's status quo from here it's possible that we get a deal but it's also very possible that

talks break down and we get additional escalation and that's when you really see the markets react. >> we always think about how china is weathering the trade war in terms of how much pain it's feeling it's showing up in the data at the same time. there's the political side we sometimes forget that xi jingpijin jingping is an authoritarian at the end of the day and they had to deal with protests in hong kong and civil unrest is a concern as well. how should we weigh the overall picture of china and what it's considering in forging ahead with the trade war >> it's a great point. the economic impact has been significant but china places a lot of confidence in the stability of their political system and the way they see it, china is a one party state

their view is our markets have fallen but we're sticking together now they're looking at president trump. so right now the question for them is what is president trump's political vulnerability but from an overall perspective they feel confident about their ability to see through the trade war because of the political factor. >> both sides think they have the upper hand >> that's right and that combination does not lead usually to a trade deal if both sides think they're in a strong position. >> not watching democratic debates? >> they're watching. >> then i doubt if they think he's very vulnerable. >> do you? he's your guy? he could take any of the dems. i know that. >> coming up, big expectations for amazon prime day we'll get you ready for the day that could generate billions of dollars in revenue on monday and tuesday.

. amazon counting down to a july sales bonanza and this year this will be two prime days. courtney joins us with a preview. >> do i say prime days now it's the amazon created holiday, it's longer and bigger than

ever it begins at 3:00 a.m. on the east coast and runs for 48 hours. that's up from 36 hours last year 18 countries will participate. that's one more than in 2018 there's going to be more than one million deals this year, lightning deals some of them now foresight projects that prime day could create $18 billion, that's up significantly from $900 million on the first prime day in 2015. the goal for amazon not just to generate the sales but also to sign up new prime members. we estimate 63 million u.s. hold holds are already prime members, but says that 10% of non-prime u.s. households have indicated they would sign up for prime just to take part in the day's deals. that's really valuable, because a number of estimates suggests that prime members spend in some cases more than double annually on amazon than non-prime member shoppers and it's not just a big day for

amazon you've got ebay, walmart, target and actually hundreds of others that have competing deals. prime day 2018, in fact, was one of target's biggest digital days of the year. adobe an liftics says they could see sales surge 79% compared to an average monday, tuesday in july it's a very nice halo effect for a number of retailers. back over to you guys. >> courtney, thank you courtney reagan back in headquarters with the latest in amazon prime days, plural. let's continue the conversation. senior restaurant and retail analyst. good morning to you. when will we know if prime day was a success? >> i think we'll know right out of the gates i think what you see is the company gives some updates as they go through the two days so i think we'll know pretty early on how they're trending compared to the past couple years. i actually think we could see a 50% jump-up from last year, something in the 6.3 to

6.5 billion. i think we'll know early on and we're already seeing a lot of indications, too, with the early deals, and particularly on the subscription front i think that's what amazon is really pushing this year, is not only to get more prime members in but engage with them and offer them services like music, audible, kindle. i think that's where they're going to be successful in not only getting the members in. instead of the based 120 membership fee, they end up paying $150, $200 a year i think that's what amazon is looking for. >> you mentioned the gross merchandise volume number. as courtney mentioned it's the subscriber number that's more important in this day's event to get members to sign up what is your measure for success for amazon on that front >> we're at about 90 million memberships in the u.s., so not too different from what the other estimates are out there. our bigger look now is the company is kind of reaching a natural tipping point in the number of memberships and

households they can get into, is how do you expand that so you've got the $120 base fee that you're paying, how can you find ways to increase the membership fee per household and what we notice today last two years is that the membership and subscription fees that a prime member is paying to amazon is up almost 25% in the last two years. i think that's going to continue with the different offerings, kindle, audible, the subscription boxes that are starting to pop up on the site these are all important in keeping its prime members engaged, particularly as you're starting to see competing free shipping offers. these are things that are keeping people coming back and ultimately helping out not only the company in terms of top line, but these are very high margin businesses for the company. so that's what i'm really looking for is the membership and the other subscription revenue that can come out of prime day. >> in terms of amazon, april first quarter, i didn't think it was fantastic. they got a hall pass because they announced the same-day shipping and then a couple days

later warren buffet announced that he was taking a stake in amazon then you saw a drop, which in my opinion made sense here we are right back is this going to be a situation where in earnings i believe on the 25th it sets up another sell opportunity? >> typically with amazon this is the time of the year to take a little bit of -- take your profits and walk away, just because this is the heavy invest period and obviously with the one-day shipping, that's not cheap that's going to take a lot of investment it might start to change people's questions it's had a couple of good quarters, if it takes a step back and people realize how much investment is going to be required for one-day shipping. usually the best time to get back into it is the third and fourth quarter ahead of the holiday season you could see the same situation happen again it's all going to depend on the numbers obviously. but i think we're looking at prime day is going to set them up for a nice third and fourth

quarter. >> good to speak with you. quickly, guy, your take a amazon >> the move to the downside i think was important. here we are right back to levels we saw again, joe will correctly say he's been doing the show for how many years, 47 years, and you've done really well we try to get to the ins and outs of trading. i think you stay into earnings and sell it again. i think you have another opportunity for another move toward the all-time high and you get out ahead of earnings on the 25th. >> my point before was do you think all of your participants on fast money have been sufficiently bullish and i do not think they've been sufficiently -- my only point was when i started the business is dow as 800 and it's now 27,000 so the way that these bears always stay in vogue when the market has gone from 800 to

27,000 -- i'm not saying they are, i'm saying in general it's much more el leks wael attractive to stay bearish and all you had to do was stay and you would be at 27,000 so your default position should be long stocks coming up, the dow crossing 27,000 >> be long, have a nice day. >> i'm not saying be long. stocks outperformed every other asset. >> i get that. like.. pnc easy lock, so you can easily lock your credit card when its maximum limit differs from its vertical limit. and clover flex, for when you need to take credit cards when no one carries cash. or requesting a call to help get a new credit card- one that hasn't followed the family goldfish. pnc - make today the day.

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. futures pointing to another positive morning on wall street a day after the dow closed above 27,000 for the first time. >> blasting bitcoin, why president trump says he's not a fan of cryptocurrencies. >> and our newsmaker of the hour, peter navarro will voin us live as the second hour of "squawk box" begins right now. >> live from the beating heart of business, new york, this is "squawk box. >> good morning and welcome back to "squawk box" here on cnbc i'm joe kernen along with

melissa lee and cnbc fast money trader guy adami >> this is fantastic >> i don't know if it's her, but i do know she was the highest paid entertainer last year. >> unbelievable. >> quite a bit more. dow implied to open about 82 points higher and that would be another new high, obviously, and the s&p would be back -- would be above 3,000 where it spent most of yesterday above 3,000, but unable to close there. just missed by less than a point. and then the nasdaq also strong, up almost 20 points. >> comments from fed chairman jay pole this week sparking a rally in stocks. >> the most important thing we learned yesterday is that fed chairman jay powell on day two of his testimony before congress was entirely in agreement with jay powell on day one before

congress, and that was about the need to counter looming uncertainty with rate cuts the markets applauded it powell suggested the fed could do more than one cut >> you don't want to let -- you don't want to get behind the curve and let inflation drop well below 2%, because what happens is you get into this unhealthy dynamic potentially where lower expected inflation gets baked into interest rates, which means lower interest rates, which means less room for the central bank to react. that becomes a self reinforcing thing. we've seen it in japan and we're now seeing it in europe and we think it's important that we defend our 2% inflation goal here in the united states. >> we also learned several fed officials are in agreement with powell on day one and two. but not all. the bipartisan center is upbeat about the long-term u.s. economic outlook but concerned about near-term uncertainties.

the new york fed president offered similar views. barken suggested they are in need for a cut for slightly different reasons. but the majority of the committee is on board with powell and i think that's the key right now. i'm not even sure how much all the economic data matters at this point it has to be like so hot -- i mean, what's the next step, 2400 degrees? is that the temperature of metal? it's got to be beyond that you've got to have gdp north of 3% we've already got the inflation numbers, which he completely ignored yesterday so i don't know that it matters anymore >> joining us now, chief global strategist at jpmorgan chase and chief u.s. economist i think since last time i've seen you, we had sort of a big

sigh of relief on the jobs number that it wasn't derailed and we also had the inflation that we were worried, but we had powell rubbing sal v on the markets. any concern about whether he was losing his impulse to cut. it's amazing do you think he should be reevaluating that? a lot of people do. >> i understand that we've had some good economic data, but i think paul made it very clear it's not just about growth it's also about inflation. we heard in that comment from powell yesterday the concern that the fed has in falling behind on the inflation. but look at the inflation numbers now, which they cannot keep at 2% in what really is best the times of inflation. you've got an extremely tight labor market and you're not getting an acceleration in wage growth you can't keep inflation at 2% what happens if the economy

eventually slows and or inflation expectations, which are actually uncomfortably low even in these so-called best of times for inflation? i think the fed is quite worried about trying to be ahead so it's more than the inflation curve. it's more than just about growth here it is about inflation. and what steve mentioned i think is important i think powell was asked point blank on the first day of testimony is there anything between now and the end of the month that might change your mind, and he was very clear they're not looking at any one number they're looking for broadly. so i don't think, even with the 300,000 jobs or 3% gdp, i don't think the fed is going to be deterred. >> it's happening. july is definitely happening and to your question, we acknowledge it's happening we would perhaps say what good is it actually going to do, frankly? the issues pushing down both inflation, as well as investment here domestically and globally are not going to be fixed with a

rate cut or two. so we question actually what is it useful for, and perhaps could it do a little bit more harm than good. but it's happening. >> and we're sucking you into the fed discussion like cramer, you're sort of saying can we just talk about companies and earnings, please so we are coming into an earnings season. >> yes >> the question is whether it's going to be something that gives support to the market or something that scares the market the fastenal number was a little scary. cramer seems to think it's going to be a good earnings season where are you? >> we've been central bank heavy the past few weeks and i do think next week the attention shifts i don't necessarily -- i think the second quarter expectations have fallen a lot. i do think the attention is for the second half. there had been the expectation in guidance before and in consensus that there would be a bounce back in activity and earnings in the second half of the year, and that does not seem

to be happening. so we do think we'll get some slightly, shall we say, negative guidance for the second half of the year. >> isn't it hard to go into earning season when you're pretty much at record highs? if you're a company that is looked upon favorably in the markets right now, you're probably sitting at an all-time high so you're going in with stock strength either that or you're seen as a company that might suffer because of the china trade war and you're going in with expectations that are weak it seems like a lose-lose situation when it comes to stock reaction >> and we do think the fed and dovish central banks are happening. and we're hitting upon a ceiling right now. it comes back to the idea about earnings and economic growth that are very depressed and we don't see that changing, perhaps getting weaker. >> many times stock that hit new highs and then hit new highs

the broker, i can't sell it here, it's at a new low. next thing you know it's at ten more new lows. >> are you going to have an earnings result like a pepsi they reported a good quarter and their stock finished lower on the day. >> can you see where the numbers come out that actually justify where it is now and have people say, wow, i'm no longer worried about a bubble or air pocket >> we're sort of worried about the disconnect between where equity prices are and so many other indicators like -- >> that's your fault, because it's the fed >> i don't disagree that the problem the fed has is in trying to, for example, get inflation up, what we're seeing is that asset prices are far more responsive to fed accommodation than consumer prices and so the fed is taking actions to support the economy, and importantly, to boost inflation and inflation expectations and the result they're getting is

higher asset prices and this disconnect between sort of what growth economic indicators are signaling and the asset prices so i don't disagree with some of the concerns that are being voiced here. >> sometimes the wealth effect being engendered by the low interest rates saves us fr >> we talk about the fact, too -- i agree with you in some ways, what good is a 25 or 50 basis points of rate cuts. on the other hand if we didn't see that action from the fed, because the markets and inflation expectations have both responded favorably since the fed signaled rate cuts if we didn't get them you might be talking about a very different scenario and you say now i get what rate cuts will do. >> what was your end target on the s&p? >> so for us we think we're pretty much there, that there is

definitely much more limited upside here. so for us within asset management we don't do very specific targets we tend to look a little bit longer. >> 2900 on the s&p seem fully valued at the time >> perhaps i think -- >> 3200 would blow you away if that were to happen? >> i think so. we wouldn't completely rule it out, but when we look out over the rest of the cycle, shall we say, so less about the next six months and 12, 18, 24 months, we do think the upside is a little more limit from here so the approach we're taking the focusing less on capital appreciation so just the market or stock prices going that much higher, focusing more on income. >> up 16% this year. anyone in their right mind would take their money and go home, which makes me think that's the easiest thing to do. take your money and go home. what i heard was after the china truce happened two weeks ago, i

heard no more good news is coming and the market just seems to be melting up. >> we're riding the central bank wave soon attention is going to shift back to what is happening beneath the surface. >> thank you both. >> coming up, president trump says he is not a fan of cryptocurrencies, we'll tell you why next and then at 7:30 our newsmaker of the morning, president trump's top trade adviser peter navarro will join us live. stay tuned you're watching cnbc key portfolio events. all in one place. because when it's decision time... you need decision tech. only from fidelity.

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>> president trump says he is not a fan of bitcoin and other cryptocurrencies in a tweet he argued they're not money, it's volatile and based on thin air. they facilitate unlawful behavior, including drugs and other illegal activities he's saying it will have little standing and dependability and it may need a banking charter and be subject to regulation president trump isn't alone in his criticisms >> i'm not a big fan of what they're doing there. i think it's a big mistake not so much because of what will happen here in the united states but globally there's going to be some despot in some african country that gets upset that they can't

control their currency anymore and that's where problems start to happen. i'm not a big fan of what they're doing. i think they're ahead of their skis on that but they're only in the talking stage so we'll see what happens. >> facebook already in the regulatory cross hairs, next week they're going to appear before the financial services committee. if they have to be a bank, that wouldn't be good. >> no, it wouldn't be good but i understand why facebook is over the last couple of weeks, but i think facebook stands on its own with or without the cryptocurrency it sparked a recent rise, but remember we're coming into earnings season. if you look at what facebook did, and we've talked about this on the show, the june 3rd row around 162 is a perfect correction they did everything they needed to do technically. and i don't want to like facebook for a myriad of reasons, but with that said, i believe the stock will rally at an all-time high when they

release earnings i believe on july 24th. >> now you're the expert on crypto do you think libra is good >> that's a tough one for me it all started with when they said it was going to be based on the dollar that's what started it for me. i didn't understand why that worked but now i hear the argument that it could cause mass adoption discussions of crypto. >> awareness even. >> awareness and all of that but in terms of the most a trabtive things about bitcoin and the decentralization and the distributed ledger, the thing with inherent value, none of that is there. it sounds like a debit card to me. >> don't use big words on this

show >> coming up, social media and big tech under fire. president trump says he wants to meet with top execs in the companies soon we'll talk about the industry's biggest issues with former fcc aianom wheeler stay tuned you're watching "squawk box" on cnbc it's more like five million. there's everything from happy to extremely happy. there's also angry. i'm really angry, clive! actually, really angry. thank you. and seat 36b angry. you're clive owen. and you're barefoot. yeah... there's also apprehension... ...regret... ...relief. oh and there's empathy... ah, i got this in zurich! actually, what's the opposite of empathy? but what if your business could understand what your customers are feeling... and then do something about it. you can turn disappointment into gratitude. clive, you got to try this. i can't i'm working. turn problems into opportunities. thanks drone. change the future of your business. change the whole experience.

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president trump heads to the midwest today. yesterday he held a social media summit at the white house. good morning >> good morning, joe well, president trump is putting big tech back on the guest list. they didn't get an invitation to the social media summit at the white house yesterday, but trump says that he does want to meet with them soon >> we will ask representatives of the major social media platforms to join me at the white house over the next month, so we'll let you know the date. >> and yesterday's summit included about 200 conservative critics of social media who say the platforms are biased against them several republican lawmakers attended as well, including senator josh holly of missouri who has been leading the backlash against big tech. >> google, facebook, twitter, they've gotten special deals from government. they're treated unlike anybody else

if they want to keep their special deal, here's the bargain, they have to quit discriminating against conservatives. >> the special deal he's referring to is the liability immunity that the companies get from the content that users post it's an essential part of their business model, but holly has introduced a bill that would require frat forms to earn the immunity by proving they don't discriminate obviously industry is fighting back against this. the internet association sent me this statement after the hearing, the internet offers an unprecedented opportunity perspective across the political spectrum to be heard they said there is no bias among any of its members. >> thank you let's now bring in tom wheeler, the former chairman of the fcc always great to have you on. thanks for joining us. >> good morning. >> the social media companies, big tech companies have really fallen under the scrutiny of regulators, whether it be because of alleged bias of conservatives to their sheer size any of this criticism, is it

warranted in your view >> well, i think that what we need to bedoing is to be reassessing the situation that we have. we have a new economy, much like we had a new industrial economy in the middle of the 19th century. we've got a new data-based economy in the early stages of the 21st century we've got to say what are the rules for that economy if we continue to use the rules that we established for the industrial era, we're probably always going to be playing catch-up ball. we ought to be saying, okay, there is a new reality, how do we establish market freedom, the ability to in oh vat and invest, and at the same time, guardrails that protect consumers, that protect competition, and in the process protects this kind of innovative capitalism. >> so what does that mean exactly in terms of implementing

that view? because the metaphor back to the industrial economy makes me think about the big railroads and trying to break them up. is that the right approach when it comes to big tech, saying they're too big and they should be broken up as well that's a view that many democratic candidates hold >> there are really three prongs when you talk about what are the kind of anti-trust views, like you talked about break up. one is break up. and the difficulty with those kinds of proceedings is that they take years. the last couple of at&t, microsoft, were decades long and we probably have a supreme court right now that is not too inclined to be aggressive on that so we've got to ask ourself is break-up the right answer right now. but that doesn't mean that there aren't regulatory tools that are available to increase competition. when we passed the neutrality

rules, that was a specific pro-competition, anti-monopoly battle neck kind of activity so you can take regulatory action and the third is that we need to have anti-trust review, meaningful review of consolidations and acquisitions. and the tricky thing right now is well, i'm just acquiring this small company. but this small company, put together with my incredible assets of information and reach, has a different kind of an impact than we have seen before and we need to be serious about that kind of oversight as well. >> a lot of people are puzzled and kind of -- didn't really understand what they thought was a change in chance on net knew rality the world hasn't ended, obviously. but by saying we're applying new

rules to innovative technologies, that's what they said you were going with your guidelines in terms of going back to the '30s for a utility type of arrangement. now you seem to be speaking out of the other side of your mouth. i was surprised to hear you say that. >> you and i have never agreed on net neutrality. i think you're putting word in my mouth. >> i would never do that. >> what i'm saying is that we need to have a new approach that is based on the reality that the asset of this era is digital information. and digital information is different from every other capital asset that ever existed, because it's inexhaustible you have a finite amount of oil. you have an infinite amount of

data and data creates new products that creates new data it's close to a perpetual motion machine. we have to say, okay, how do we look at the challenges that are created by this new reality and have a collective set of oversights, rather than this, well, let's push in this direction or look at this or whatever the case may be we need to look at the entire digital economy and we need to be willing to not be afraid to step up. that's where you and i differ. >> tom, thank you. we appreciate it tom wheeler. >> coming up, trade remains front and center for the markets. we're going to talk to top white house adviser peter navarro next first as we head to break, take a look at u.s. equities. you're watching "squawk box" on cnbc

still to come on "squawk

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president trump is going to visit wisconsin today. he's expected to push a trade deal with canada and mexico and also talk about the defense industry tout the defense industry. for more, let's welcome peter navarro. he's assistant to the president and director of the office of trade and manufacturing policy, and it's great to see you. it's been a while, peter. >> last time we talked you were on the lawn here of the white house. and i don't want to tout what's happening today, but i do want to talk about i think one of the unsung heros of the trump economic boom, and that's the president's fine attention to detail to the defense industrial

base we're going to wisconsin, milwaukee. we're going to visit a company called deer co, which is a subpoena sid area of lockheed martin it's got about 300 employers basically they're an integral part of the supply chain both for defense and commercial they service things like the black hawk helicopter on the military side, boeing 777. throughout the state of wisconsin, if you look at osh kosh defense builds vehicles the president in his defense budget played a key role in saving the ship yard so it's building the combat ship just a few days ago, the president announced that coatsville, the facility there which build, muj other things, the marine 1 helicopter is going to stay open this is a great example of something i don't think any modern president has done, which is to actively engage with

corporate executives to figure out a way to keep jobs in america and keep them strong and so when coatsville was announced to close, the president had some discussions, one of the great ceos in this country of lock heed so all of these things in the defense industrial base, supply chain, creating great jobs the banner that the president runs under on this is what we call economic security is national security. so when we're creating jobs, in greenville south carolina or lime ma ohio with the tanks, we're not only protecting this country but we're creating good jobs with good wages. >> does secretary mnuchin ever

come to you and say i understand the president has refortified our defense industry obviously, which probably needed it, but the usually friendly report, the head line federal spending smashes records, budget deficit widens to 23%. something has got to give. jobs are great, defense industry is great where are you going to try to reign things in to allow for this increase in the defense budget >> so what's not going to give is the defense budget. as you know, the o-biden years were the years of se quest trump administration on the defense budget and the problem with that is there are a lot of companies in america whose only customer is the u.s. government, and so when they face these radical cuts, they go out of business and we lose skilled craftsmen, whether it's in ship building or aircraft or nuclear, whatever it is it's very important to this president to have a strong

defense. he was able to get a historic increase in the defense budget to make up for all we've lost. so that's what i focus on. manufacturing and defense industrial base. >> mnuchin is pulling his hair out with maybe the budget. this is going to kick off -- >> i've never seen steve pull his hair out, just for the record >> tell me about it. hair is so important anyway, peter, the usmca, let's talk about that. >> sure. >> i'll tell you how i'm going to ask this. you saw what it took to get speaker pelosi to go ahead with that -- to even go along with the senate, which was much more -- they were on the same page for the order, to try and help out down there. what makes you think -- i mean, she's going to be dragged kicking and screaming to the u.s. embassy i don't see any way she's going

to want to give president trump a win on the usmca, after how hard it was just to get the $4 billion for help down there. >> so what i see, two things on the hill that is bipartisan. one is on our china policy there's very strong bipartisan support for our china policy on the hill, as there is in the general public i think the same thing exists for the u.s./mexico/canada agreement. if you simply run through the numbers, the whole point of the usmca is to bring back our manufacturing based on our supply chain using the rules of origin, coupled with things democrats like a lot, which is strong protections for labor and the environment. and i think that -- >> that will do it, huh? >> i think the ambassador is actively engaged with the democrats to satisfy them on the enforcement issues, which is

what they've raised. i think if this were to go to a floor vote, both sides of capitol hill, senate and house, would pass it by overwhelming majorities so the fact is this deal is good for just about every state it's for farmers, ranchers, manufacturers, workers so i hope this doesn't get -- go down the sinkhole of partisanship there's been good discussions with the ambassador and the democrats. let's see what happens. >> the closer we get to the election, i don't know i don't see it that would be a big win for president trump. >> every once in a while, joe, congress rises above itself and does the right thing. >> not recently. >> well, this is so important to our economy, joe i mean, it affects literally everybody in this country. the giant sucking sound of nafta going back to 1994 was a disaster not only economically,

but also from an immigration point of view. the president is committed to getting rid of nafta he's done his job. let's be clear about this. he promised in june of 2016 that he would renegotiate the worst trade deal besides the china deal that we've ever negotiated. he's done his job. he's brought to capitol hill the smartest, biggest, most intelligent deal and he's got the best trade representative in u.s. history in robert white highser who has good relations with both sides of the aisle so let's be optimistic for your investors. if we get usmca passed and if we get a rate cut, we're over 30,000 on the dow and this mashlgt continues, this economy continues strong. >> let's look at china for a minute >> sure. >> there is a report out from dhl, this is one anecdotal point about global trade is starting to slow. does it get to the point where

both sides are in too much pain to continue and we get some kind of half deal done with china and also the election plays into this as well as we get closer to 2020 or are you going to hold out for something that's really significant and will you be able to >> so we are, in my judgment, in a quiet period for the negotiations what's happening is the ambassador is talking directly by phone with his counterpart. he was in osaka sitting right next to president xi there's a strong commitment to fully engage the ambassador is going to go to beijing with the treasury secretary in the very near future and we're going to have constructive talks to deal with these significant structural issues my advice for investors is to be

patient with this process. don't believe anything you read in either the chinese or the u.s. press about these negotiations unless it comes from the mouths of either the president or ambassador lighthizer i saw this before in december of 2018, months and months and months, all sorts of stories written that were designed to shape the negotiations, but they really didn't have any insight into them. so be patient. from an invests'point of view the big prize now is the rate cut, the uscma and the fact that this economy is hitting on all cylinders. record unemployment rates for blacks, hispanics, women we've got rising wages, particularly for blue collar workerst we've added 5 million jobs since the president has been elected, half the manufacturing jobs compared to the biden years when they lost

200,000 manufacturing jobs so as the director of the office of trade manufacturing policy, i couldn't be more pleased with the president's policies kree wr yating good jobs a lot of that is being facilitated by f-16 production in greenville, tank production in lima, ohio. so it's going to be a great trip today to milwaukee to see the president talk to key constituency there in the defense industrial base, as he talks about the usmca. don't forget the dairy farmers in wisconsin. >> speaking of wisconsin and manufacturing jobs, i wanted to ask you about what appears to be so far a failed promise to build the factory that they promised a year ago to be a $10 billion factory employing tens of thousands of people. at the ground breaking, president trump said it would be the eighth wonder of the world.

>> i'm not sure where you're getting that information i've talked directly with the foxconn folks. i've had them in my office and they've shown me the plans they are hiring construction people they are committed to their timeline so as far as i know -- >> it's a vastly scaled-down manufacturing plant. >> i wouldn't call it vastly scaled down at all you have several types of facilities on the campus we're actively trying to include other parts of the supply chain on there the project, as far as we see it so far, is vibrant and they're committed to doing it. >> are they fulfilling all the promises they made a year ago? >> you would have to list me the promises what i'm telling you here is that your description of this as you led this off is counterto the reality i know and i assure you that the white house is actively engaged with the foxconn team to make sure that

we move forward and help them with my obstacles they might face this is the beauty of the president. every morning he wakes up trooegt figure out how to put men and women to work. whether it's calling a ceo and making sure coatsville, pennsylvania, stays open or whether he's just committed to having rate cuts this is what the president does. he's all about creating good jobs for america, securing our borders with a merit-based system and having a national security policy that doesn't involve us in big foreign wars. >> i will simply quote the governor of wisconsin, who we interviewed -- >> he's not a fan of ours, by the way. he's going out of his way on a partisan basis to attack us and i think it's counterproductive for wisconsin. >> it's likely to continue falling short of the threshold in receiving billions of dollars

of state incentives even after production begins next year. >> i've seen the rhetoric here he's not a friend of ours and of the project. but i think that works counter to the interest of the state of wisconsin. i toured there about six weeks ago with one of the great congressmen in this country, shawn duffy. we went down to milwaukee and we saw all points of the compass. that's a state that is vibrant in fact, i don't know where it's not booming in this country. >> i wish we had more time have you got a way to thread the needle with huawei, where we don't want to -- >> good question yerng we're threading the needle beautifully. basically the 5g, we're going to build here we're going to build it without huawei that's clear

president trump is committed to being the leader on 5g so take that out of the equation they're staying on what's called the entities list, which means that they won't be buying anything that has any national security implications at all the only thing that secretary ross is going to allow to be sold to huawei are things that they could buy from other vendors worldwide. and so if we don't have that kind of policy, we're harming our own american companies so we're threading that needle beautifully and it's a relatively small amount of sales, in the neighborhood of less than $1 billion, which is small in the scheme of things. we know that huawei is a significant threat to our national security and they are not going to take 5g here in this country that's just not going to happen. >> if you had to bet money, when is something actually signed >> i can't do that i'm in the white house. >> when is something actually

signed between china and the u.s. >> so a quiet period, joe. patience. >> patience is a virtue. >> the ambassador and donald j. trump will take the lead on this i want to stress, joe, it's really important, there's just going to be a lot of garbage coming out in the "wall street journal" and everything in between. i saw this movie before. don't believe anything you read unless it comes from the mouth of robert white highser or president trump. >> good to see you see you again soon. >> bullish,baby. >> thank you. >> coming up, former democratic senator heidi and republican congressman david mcen tosh will talk trade, taxes, minimum wage and more stay tuned we're carvana, the company who invented

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so you can stream, surf and game all you want, with confidence you can get coverage where you need it most. that's xfi advantage. make your xfi even better. upgrade today. call, click or visit a store. >> when we're creating jobs, we're not only protecting this country, but we're creating good jobs at good wages >> i speak your language that was white house trade adviser. one of our favorites straight here from fargo, the movie. she's real good, you betcha. >> where people have good common sense. you've become so partisan since you left.

>> for goodness sakes. >> former senator of north dakota biden made $15 million you're raking it in now with your contributorship >> hair and makeup, i always schedule appointments after i'm here because i look good. >> and david mcintosh, who is now a president of the club for growth how much of the interview did you see? you've already been railing off-camera about it. your favorite thing was only believe things that come out of president trump's mouth. >> don't believe the "wall street journal". >> i would have made "the new york times," but don't believe

the ball strewall street jourm. >> just let me kind of set the context. we need certainty, which is why i've been absolutely bullish on getting the usmca passed i think the one thing i agree with peter navarro is lighthizer has built great relationships within the democratic party and everybody should be thrilled that he's on the ground doing the hard work of building those relationships, responding to concerns i hear good things coming out of that so joe, i heard you being much more pessimistic about passing the usmca. i don't think we should be overly optimistic, but i think we ought to give this a shot because of the work that lighthizer and pelosi -- >> she's doing everything she can to prove me wrong. that worked really well. >> full disclose ur, i've been working closely with trade works, which is a group that's promoting the usmca. i think if you don't, what you've got is a trade disruption and no one should vote for a bad economy. the one thing we need to do is

understand that in despite of what navarro said, we're looking at a fed rate reduction for what reason what's the main reason >> low inflation. >> coupled with trade disruption and a slowdown in the global economy because of trade uncertainty. >> the big worry was after the jobs number that powell was going to pull back on any cuts because the economy still seems to be pretty strong. let me get the congressman in. you're chomping at the bit here. >> i also got to watch the interview and this is an area i disagree with the senator. we should pass the trade bill, stabilize it and reopen normal relationships with can na and mexico i also think you guys really nailed it on the foxconn question, because that's a clear example of jobs mot coming to the united states because of the tariff war with china. that's the big drag.

the benefit, the reason we get manufacturing jobs created now is the deregulation and the tax cuts that the president put through. that stim plated investment in the u.s. and the trade wars are a drag on that. >> we're seeing now a slowdown in business investment and the one reason why you would reduce rates is to get more capital into the market. is that really the problem that we're having right now, that there isn't enough money out there for investment in fact, we're seeing record amounts of cash sitting on the sidelines and it's sitting on the sidelines because of the uncertainty that's been created by this administration is trade policy everything is clicking right, so let's throw a big wet blanket on what's happening and the trade strategy, it's interesting because a lot of people say, well, navarro says everybody agrees with the president's trade policy bipartisan not everybody agrees with how this administration is doing it. there's a big theory, and i tend

to agree with it, that the president sees this as a muscular thing that he's doing against a known enemy like china and this is going to go on through the election and as long as we don't see consequences in the farm bill which has hit the hardest. right now i saw a poll showing the president poll at 70% in the farm bill. as long as those numbers don't erode, i think he's going to continue this trade war with china because it fits his narrative in the election. it is bad for the economy and it will reap a reward short-term. >> you sounded like the opposite of chuck schumer that's why it's hard to do this show anymore to try to figure out who is going to say what anymore. it's like fair is foul and foul is fair. the president seemed like he was going to go a little stronger on china, schumer said stay tough >> what we really like about the president's approach on this was his stated goal of, okay -- and

it was with the europeans, lets get to zero/zero tariffs if he uses the tariffs to negotiate lower tariffs -- >> you sound like you're sick of it already >> i worry that this stall that navarro talked about is where he would like things to end up permanently. because he favors tariffs. we think if you get your goal is zero/zero, then to go through the negotiations, put pressure, but get to that deal so you can actually lower them in the end. >> thank you senator, your dream ticket, give it to me >> it would be you and andrew. only the other way around. >> my god, he would be my boss please, no anyway, thank you senator, congressman, thank you. >> thank you for joining us. >> i've got to go to work. i'll come back later >> up next, earnings season --

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>> major indexes reaching their best levels ever are more records in sight as we get ready to close out the week? >> trump goes after the cryptocurrency mark and we'll tell you what he said. >> the latest on america's multi-front trade war, one of the president's top advisers weighing in. when will we see a light at the end of the tunnel? the final hour of "squawk box" begins right now

>> live from the most powerful city in the world, new york, this is "squawk box." >> good morning, and welcome back to "squawk box" here on cnbc, live from the market site in time square the futures up 81 poins this morning on the dow, indicated to open there the s&p is above, would open above 3,000. just missed that level yesterday, which would be a record and then the nasdaq is indicated up about 18. do you like a lot of adjectives? >> no, just record. >> i hear fresh, new, high, all-time record. >> a record is a record. a record implies new. >> some of the flash flooding lately, it came on really unexpectedly and fast. >> hence flash flooding. >> do you need all these

adjectives >> like a newspaper's mentality where you want to be very precise. >> some braens from the auto sector here's a guy who doesn't waste words. phil lebeau joins us now. >>ford and volkswagen announce they are teaming up when it comes to electric vehicles here's what the deal means and we're going to have a press conference in a little bit with the ceos they get access to volkswagen's platform key to developing electric vehicles. for volkswagen it is paying to take an ownership shape in argoai it really is the key to this deal volkswagen will be spending $2.6 billion argoai's valuation now tops $7 billion. we should point out that neither company is saying exactly how much money they expect to save

by working together to develop these vehicles, but guys, they're going to be spending billions of dollars over the next five to ten years developing these vehicles, and they are realizing it's better to do it with a partner than to do it by yourself. and to drive this point home of just how much the auto industry is under pressure right now, take a look at shares of daimler. it issued a warning. it has lowrd it's guidance for 2019 the bottom line is there, every automaker realizes it has to develop electric vehicles and autonomous vehicles and it's going to cost a lot of money they've got to partner up and that's what ford and volkswagen are doing. we'll hear from the ceos a little bit. >> ford has been criticized for years of not investing in this area specifically. does this put them out there and make them competitive? >> far more competitive than they were there. and this started to change once jim hackett came ceo

people said you're not giving us our vision and telling us what the turnaround plan is he's made it clear they have to invest more in electric and autonomous vehicles. this is a big step in that direction. >> pretty interesting. i thought this interview with peter navarro, some news this morning on ongoing u.s./china trade war. one of president trump's top advisers says there's strong support in congress for the trade policy navarro, the white house director of the office of trade and manufacturing policy, spoke to us last hour here on "squawk box. >> we are, in my judgment, in a quiet period before the negotiations ambassador lighthizer is going to go to beijing with the treasury secretary in the very near future and we're going to have constructive talks to deal with these significant structural issues. my advice for investors is to be

patient with this process. >> navarro also made a prediction on president trump's efforts to replace nafta, saying he thinks if the replacement u.s./mexico/canada agreement went to a floor vote in congress today that it would pass maybe today, but it shouldn't take too much longer, i don't think, as we get closer to 2020 i really think it gets less and less likely. i think it starts getting too close to the election. we'll see. interesting that the former senator heitkamp -- she's from a state that might benefit, but she was more process tiv on the prospects. do you think it's going to pass? >> i agree with you. i think as we get closer and closer it's going to be harder to get both sides to agree >> maybe it was a good omen that they finally passed the border support. >> sure. >> but that was like pulling teeth for something that seems

like such a no brainer. >> larry kudlow has said that usmca is perhaps more important than the trade deal in terms of what it means for the economy. it's important for the reelection campaign. >> do you know how to do it? >> only you know how to do it, joe. >> i don't know if i've done it on the air before. >> if only we could play the music as well. >> we could, but let's not the s is tricky. the c is this way, too. >> in order for the viewers to see it the correct -- >> i have to rhythm, i can't usmca. why won't you do it? because you have a career. >> because i have dignity. earning season is coming up with major banks and tech companies reporting results next week. joining us with what to expect the vice chairman of investments

and director of goldman sachs portfolio. i'll start with you. we've already had the majority of the companies on the s&p 500 preannounce. what are we expecting? >> using thes&p consensus, dow 1.8% for the quarter in the portfolio group at goldman sachs we feel we're going to squeak into positive territory. our earnings and guidance takes them down just before the season starts examine then they start coming in. the rule is you don't overpromise and underdeliver so it will be a modest quarter the strength is going to be in financials and that's going to be 3.9% growth it might be a little bit better. next best is 2.1, health care. the weakest indications down 40%, materials 20% and of course real estate 9.8%.

>> all those numbers are interesting, but that doesn't -- that hasn't educated you on where to put your money over the past however many months financial earnings might be great, but financial performance has been underwell ming for most investors over the past year or so it doesn't help. >> i think it's really about what is already built into the price and what the future looks like i think the real key in that regard is the second half of the year from the growth perspective is going to be meaningfully better than the second quarter the financial conditions have eased a great deal and growth outlook is improving and i think the earnings outlook would improve as well. in addition to that, while the averages may be negative and they'll probably get -- they'll squeak into positive territory, for median companies the outlook isn't as dire as the average numbers would say.

so i think there are some individual companies, sectors, oil prices being low, dollar being high, all of that is dragging things down for this quarter. things are going to be materially better in the second half. >> do you think companies are going to come out and give that sort of forecast you take chair powell's list of concerns that he has that he's elaborated on over the past couple of days in front of congress, and those are all reasons why companies wouldn't guide higher >> they're being prudent, as mike said. if you build up expectations and under deliver, then that's a bit of a problem having said that, i think the outlook from a growth perspective, anyway, is improving. the china issue remains with us and usmca will be with us and joe will be doing his dance. >> it's not really a dance it's sort of a letters -- just spelling out the letters >> to music. >> at the end of the day i think

with financial conditions easing meaningfully and the fed delivering a rate cut in july and perhaps one in september, i think the outlook for the markets is much better than what the earnings will tell you. >> i would add a couple of things we're coming off terrible comps. secondly, expectations a year ago, we were in a different word a year ago they were 10% at the end of the year they were almost 5%. but people thought they were going to have a 4% yield last year they thought we were going to have the economy growing at 3% i'll say one final thing even at 17.7 next year's earnings, as long as interest rates remain low, as long as there's not a catalyst to inflation, i don't know that stocks look all that overvalued. >> there you go. >> i think the turnaround in stocks from december onwards had nothing to do with earnings. what changed was interest rate

outlook. and i think the expectation of fed cut remains built into the market, and as long as that is the case the markets do well overall. >> what if you do get cooperation from earnings. we've had tough comps. last year we thought these earnings were great. now you try to match them, you don't beat them and suddenly they don't seem as good. but if you beat them at all you're holding on to the better levels. >> and i think especially if we don't build up too much expectations in the guidance and then beat them reasonable well in the second half, things can get really good. >> i think that's spot on. i think literally we had distortedly high earnings because of tax reform last year and this year we've had historically low you'll probably end up with something in the single digits i was looking at the numbers and i thought for the first time i really think the 12-month forecast, 8% if you look at

looks pretty reasonable. >> in 2018, most of the sell side had targets and we went through december and they all -- >> took them down. >> they soiled their wears basically in december. it's like pulling teeth. some of the ones that are watching it go 2800 and then they go to 2950, high end of the range. >> i've been at 3100 for december. >> but you can feel with most of the people we have on they're very uncomfortable with 2950. >> i think the difficulty they had was with the fed stance. and if the fed was going to continue to do all the things that it was talking about in september or october, we wouldn't be at 3,000 or 3100 think the fed pivot made a big difference. >> one final thing most of what we've seen in the market hasn't been driven by earnings growth. it's been driven by multiple

expansion. the investors are far more forgiving of companies on earnings when you have a u.s. treasury ten-year when fields are low. it's that simple. >> the sell side, the job description if you're successful is not about whether you're right about things and you're may being your clients money it's whether you can say things in a way that you can't be condemned. it's a cya buy side guys, there's nowhere to side. >> before you insult anybody else, christian and mike, thank you. >> coming up, we'll take a break but then we're coming back going public without profits, the latest wave of ipos is bringing excitement to wall street but is it a good idea to be trading publicly when you're not making any money

joey levin is with iac and he's going to weigh in on that topic. we're going to get his thoughts on who is poised to come out on top in an online video streangmi war that is just getting started. you're watching "squawk box" on cnbc ok i'll admit. i didn't keep my place as clean as i would like 'cuz i'm way too busy. who's got the time to chase around down dirt, dust and hair? so now, i use heavy duty swiffer sweeper and dusters. for hard-to-reach places, duster makes it easy to clean. it captures dust in one swipe. ha! gotcha! and sweeper heavy duty cloths lock away twice as much dirt and dust. it gets stuff deep in the grooves other tools can miss.

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>> all week long we've been bringing you interviews with key business leaders from the conference in sun valley, idaho. as the event wraps up, let's get out to julia i haven't asked you any personal questions, julia you've got to just bear with me. did you go to the pyo yet? >> we did. we went to the pioneer last night. it's a local saloon and they have giant baked potatoes and we thought of you. >> because of the pyo or because of the potatoes? >> potatoes. >> i love that place i think i would go like every night if i could get a table anyway, take it away, julia. >> thanks so much. we're joined now by joey levin,

ceo of iac thanks for talking to us aic is an assortment of 150 different companies. at one point v ime o was going to compete and all the services are very much a topic of conversation they decided to focus on different interests, but what do does all of this mean for v ime o. >> we like to sent the product services to people who are making video video is relevant not just to people building streaming services, which there's now endless amounts of that and capital, but also every small business and event -- where people interact, they're expecting video now. it used to be text, then it was images and now it's video. people need the tools to make that and our goal is to provide them. >> but you pivoted away from

being a platform for streaming do you regret that >> no, i'm thrilled. i think between the time we announced that we were going to get into the streaming wars and the time we backed out, there was another several billion dollars that entered the category and we were not competing with weapons that size and thought we would be better off being a service provider. >> many of your companies compete with facebook and google in fact ask.com. with all of this talk and anti-trust hearings, do you think the company needs to be broken up? >> i don't know what the right answer is, but i do know that we need an answer and regulations are very hard to get right. i think kwelk regulations in areas like that end up helping the incumbents those companies have already built huge data stores and they know what to do with those it will just make it harder for the next people to come in and gather the data they need to

compete. i don't know how that would work i would love to see regulations allow for more competition and protect competition. but it's hard to see how that's going to work. yorng gppr did that and i don't know what would and so they may need other solutions. >> when you look at the anti-trust issue in particular and the size and scale of those companies, is it even possible to compete with a google when you look at what happened to some of your companies >> i think it's possible i think they have to play fairly they have a significant position in search and search starts -- and they have a significant position in other areas, too, and that's where poof people start their behavior and if goggle starts favoring their own products, that's not going to leave room for others and i think that's not necessarily great for the country. >> iac has spun off ten different companies.

as you look at the assortment and the ipo market and the fact that some recent ipos have fallen flat, what is your outlook for taking the companies public >> we don't think a lot about a particular market -- a particular market state when we're taking a company public. we more think about what's right for the company at the time, so does the company need access to capital, does the company need a currency, could the company benefit in some way by being public, having a public currency and kind of independent of what market we're in, that's when we take it public and just because the market might be high, it doesn't mean we need to hit the window. >> what is your outlook on some of the ist ipos. >> they're all different there's great companies. there's fantastic companies going public and i think it will be good for investors to have opportunities to invest in them.

it's better that they're public than in a lot of case being private. >> a number of your companies are in the home space, that are allowing people to sell services in different ways. when you look at the fact that there's legislation being introduced trying to get the people who are offering those services to be treated like employees, there are major concerns that it could effectively shut down these platforms like yours what are you watching? >> i think there's different answers for different businesses, so we have businesses that have gig economy workers, 1099 workers, the question is are the employees -- are the people doing the work getting the benefits that they want and getting the benefits that they need many of them prefer to be independent contractors, many of them prefer some of the benefits, and others like blue crew, which is all w-2 workers,

want benefits and need the things that come with being a w-2 worker each business has their own needs on that. one of the other things that we're doing at iac right now that's really important to us for our 8,000 employees is we're now -- we just announced a big change to our 401(k) plan where we are going to dress the income inquality gap, to get more people investing in the market and participating in the economy. we are now matching 100% of people's 401(k) contributions up to 10% of their salary which i think is relatively unheard f and i'm hoping other people follow in that. >> thank you so much for talking to us here in sun valley back to you. >> >> julia boorstin in sun valley president trump goes after bitcoin and the libra.

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america's top state for business we rank north carolina's economy as the best all around in the nation texas, lower oil prices over the past year have taken some energy out of the state's economy virginia, the business power house. >> so diversify the economy has been a top priority of ours. >> welcome back to "squawk box." let's take a check on u.s. equity futures ahead of the opening. the data is due out in 4 minutes time the s&p 500 is looking to add on s&p looking to be higher by 8 points and dow at 87 and nasdaq up 21.5 points.

>> coming up, some breaking economic data. the producer prices are just minutes away it will be interesting and some market reaction when "squawk box" comes right back. ta company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. from the day you're born we never stop taking care of you.

welcome back to "squawk box" on cnbc. the nasdaq markets are seconds away from the ppi data the open is up 90, s&p up 8. let's get to rick in chicago. >> we're we go ppi june read, will it be as hot as cpi was yesterday actually very similar, up .1%. taking out the meet, food and energy we have up .3 and x food and energy month over month on the trade side that is unchanged. that's actually a bit cooler, expecting up .2% year over year, up 2.3 remember, year over year cpi

yesterday? the string has moved from 22 to 23 months in a row of 20% or higher and ppi trade year over year is 2.1. so we could talk about a number of issues regarding pricing and we could talk about the preferred measures in the fed and the fact that it is one of the variables in the es that wasn't challenged that would most likely arrive at the end of the month. if you are monitoring inflation data and looking at a variety of metrics, it's not steaming, but it's definitely not cool joe, you're always cool. back to you. >> hot and cool, which is weird to be able to do both. rick, stay with us. >> did you read jim grant's op ed regarding the gold and the snikers and the ph.d.? that was fabulous, wasn't it >> we love having him on he's a thinker my favorite thing he always

says, the fed can make things look better, they just can't really actually make things better rick stay with us. joining us now, senior connist and steve lease man. let's get to you first. >> a little hotter than expected, it's kind of funny, it seems like the fed chairman had it right when he said the decline in inflation was transitory we don't know yet. it's just one month of a couple hotter than expect there are some other measures out there that people have been looking at there's an atlanta measure of inflation, which is a little hotter than expected and it was a reason why yesterday they said i don't see the case for cutting interest rates. you just have to ask the question given what the fed chairman has said the last couple of days how much the data matters. is the fed no longer really data dependent? >> conrad. >> i think we need to dispense

with the notion that the rate cut it seems worry likely to get at the end of the month has anything to do with the data we came off a report that was extremely strong we have employment gains that are running 100,000 above the labor market and inflation that's close to the fed's targets. >> one question, which was not asked of powell the last couple days he kept citing this business uncertainty and we have some had decline in capital spending. but the most confident thing a business ever does is hire a person it's a little hard to see the business uncertainty in the hiring. >> i would say even more so make a capital investment so i would say that -- i don't disagree with his view that there's some risk there and businesses might be a little bit uncertain and maybe not have enough certainty to make the investments that we hope they make however, i think there's a bit of an exaggeration i think the language that he used yesterday was that business confidence is gapped lower that's nonsense.

business confidence has come down a little bit but it's at pretty high levels businesses are still hiring and the economy looks fine to us this is not really about the data, i don't hink, the inflation data that we've had the last couple of days show it's at target i think the fed is exaggerating the risks. i think it's simply about the fact that they don't want to disappoint the market. >> rick, what do you think about this eminent rate cut? >> i think that they could find plenty of reasons to put forth based on their double pillars, but i really do think it's a waste of a quarter point of insurance. we're throwing a little over 10% of our insurance away, considering we only have nine of them data independentant was one of the things that made me get enamored with jay powell he is in a pickle. when the markets get so opinionated, especially the fed

fund futures, it really does direct the conversation. it focuses all eyes. someone once said that there's an issue when central banks become talking points. we had art talking about how they're not democratic, but they are just like the supreme court. i'll tell you what, sooner or later if this type of activity by central banks continue, politicians will be addressing this as platforms and you'll see voters in action potentially weighing in on the fact that they have now become the goliaths of the banking universe i think jay powell is giving in to precious. there was a great article on a slowdown in germany in the wall street journal i think that's what's going on in his brain even the inflation data that they look at, the small little piece, the consumption expend sure but at the end of the day i would be very happy if he takes

it back if we're all looking at a much better economy with slightly firming pricing pressures ahead. so me bits more about the next chapter. i would like to see jay powell much more fluid with respect to rates and actually get back to the central theme of why so many like his pragmatism. watch the data do what investors do deal with data process it and make the correct decision don't load the easing gun before you've seen the targets. >> speaking of processing data in terms of the market reaction, as you would expect with a slightly hotter than expected ppi, the yields have gone up a little bit ten-year note is at 2.141% going in they were 2.126 we had been at 1.8574, going in 1.87 is where we are now the futures came off slightly. the dow is easing off the highs of the session and the s&p 500 losing about 2 ever so slight, but it is worth

noting that the market is reacting to this. >> but not much reaction in the futures market for the fed it's interesting to think that as the fed perhaps disconnects from the data, does the mark -- at least the fed futures market disconnect from the data there's still 100% of that rate cut. we'll let this play out a little bit over the day and the way the market is expressing itself, is it more or less probability of a 50 basis point cut in july? >> because we did see that go up. >> it was zero and then like 25 and now it's 17. conrad, put aside what you think is fed ought to do is a 50 on the table here? >> i don't think so. i think there's a fair amount or enough consensus for them to get to 25. i think a 50 is going to be a step too far it doesn't surprise me at all the futures market on what the fed is going to do shifts very much based on the data for example, powell was asked did the jobs report change your

outlook, and he said no. so if the jobs report, if the data are not changing the fed's outlook, why should the data change the market's outfoot for what they're going to do. >> i guess the one quibble -- what rick said, the fed is not in a box created by the market, it creates the box a little bit. >> i agree. >> i've asked about a half a dozen fed officials over the last month or so, are you comfortable with where the market is priced and most of them chose not to paush back they could push back. >> and they have pushed back we've seen it before the markets drove the fed in 2016 in 2017 and 2018, the reverse happened there was a number of instances where you think about the march meeting where the market two weeks before had 20% chance that the fed was going to hike rates and they did in fact hike rates. the fed can switch in the other direction. >> rick, thank you steven conrad are going to be out of a job soon because we've

got a crypto guy coming on and there's going to be no fed in a couple of years. >> they're going to regulate it. >> you can't regulate bitcoin. >> it's unreg ulatable >> coming up, prime to sell one of the biggest e-commerce, but amazon's prime day is no longer simply about the online mega retailer and president trump relationships the project and the rest of the crypto occur cannes market. what does that mean for investors? next when "squawk box" returns in a moment. my experience with usaa

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>> this should be sum to the highest expectations in terms of privacy and regulation. >> you know who that was, hopefully. that was fed chair -- a lot of people don't know the vice president. that was jay powell in congress sounding a note of caution as he talked about facebook's upcoming libra payment system and the president weighed in he tweeted i am not a fan of bitcoin and other cryptocurrencies which are highly volatile. it will have little dependability and said if facebook wants to become a bank it must seek a banking charter and be subject to all other

banking regulations like other institutions >> take a look at bitcoin. obviously those comments not hurting. check out facebook as well take a quick look at that. unfortunately, it's still expressed in dollars joining us now to talk more about this is morgan creek digital assets partner i just know you from the crypto world. >> you're famous on twitter now. >> i think people have shown my progression in the five. i'm between four and five. five is where you're just a nutsoe van gellist. >> i'll tell you, what trump said, i think i could explain it to him where he would understand bitcoin and totally change his mind but what he said about facebook i tend to agree with they are creating something a bank would create. it's based on the dollar there's nothing crypto about it.

i'm glad he doesn't like libra i just wish he understood bitcoin. >> the best parallel i can come up with is napster, which a lot of people didn't like it it was easy to shut down and there was a company behind it. there was a ceo. that's very similar to what libra is experiencing. there's facebook to go after and corporations that you can pressure and regulate. with bitcoin there is no ceo you can't send a letter or call somebody in for a hearing. so i think the completely decentralized nature of the asset is what makes it compelling it's highlighting the beauty of bitcoin. >> after the movie, it's like you guys should go away and keep your 50 million. i read tyler's quote and it sums it up. i read it earlier. the mathematical frame work has nothing to do with politics. can bitcoin be regulated

how would you regulate bitcoin. >> you can regulate the ownership. they could say that it's illegal for financial institutions to support crypto companies kind of cut off the dependency on the financial system. you can't change the monetary policy you can't change the rhythm that governs the asset unless you have over 51% of people agree to change it. bitcoin has grown in such a decentralized fashion that it's too big to fail at this point. >> i don't think they're going to want to destroy it or prevent ownership as they finally understand that you could take friction of transferring money to whomever, you can take it to zero do you know how powerful that would be, to take that to -- >> unless it puts the western unions of the world out of

business and it causes job losses, et cetera where do you think the politicians are going to stand then >> this is the kind of thing that's trying to stop the machine, the industrial age. >> yesterday was such a big day. you have to remember, gold, for example, is a $7 trillion asset. bitcoin is $200 billion. it's been around for ten and a half years we have the federal reserve chairman talking about the alternatives to each other then you have the president coming out and acknowledging it, talking about it if you had said ten and a half years ago the president of the united states is going to be tweeting about magic internet money, we would have never envisioned that day. so i think what we're seeing is a shift in what we trust do we trust humans or -- >> if it got to a point where it had a value where it was being used for a bigger percentage of global commerce and transactions you can only have 21 million

coins. have i got that right? >> that's correct. >> how much would you need in total market cap to satisfy the -- to utilize this as a currency and what would that put an individual bitcoin at >> if you look at the different arguments that are out there, if it's just going to replace goal or be comparative, it would be about 7 trillion, $200 billion there's an argument that what ends up happening is that when you have u.s. dollars, you're incentivized to take your wealth out of, real estate, art, et cetera if all of a sudden the currency that we use is actually a deflationary asset, you no longer are incentivized to move the wealth out of the currency as we've seen across a lot of technology companies, they're market expanding technologies. if that happens to money, what we could see is let's say we go

from an $85 trillion to $125 tril market cap and it's stealing the market cap back you start talking about bitcoin being in the 8, 9, 10 million a coin that's not going to happen tomorrow that's going to happen over a long period of time. >> there's only 21 million and you couldn't use it, why couldn't you slice each bitcoin into millions? >> you can. >> there's a certain amount that's called my name. >> one bitcoin can be broken down and it's highly di visible. >> anyway, anthony, they're yelling at me. they don't appreciate it back there. >> we're waiting for your wallet address to go up on twitter. >> that's where it gets complicated because i've never used one of those little things. a usb thing, i thought it was a

key chain. i said look at this ugly key chain. >> thank you. >> absolutely. >> amazon has managed to turn midsummer into another opportunity for retail courtney reagan joins us now with what we can expect. >> it's the fifth annual amazon created shopping holiday, but of course it's longer and bigger than ever. it begins at 3:00 a.m. eastern time monday and it's going to run for 48 hours that's up from 36 hours last year it's in 18 countries this time they've got more than a million deals, light nij deals some of them that means the items are going to be in short supply. now, foresite projects that prime day could project $5.8 billion that's up significantly that $900 million that was estimated it pulled in in the first prime day. it's not just to generate sales, but to sign up new members they estimate there are 63 million u.s. households that are already prime members, but that

10% of non-prime u.s. households have indicated they'll sign up for prime just to take part in the deals of the day that's pretty valuable because estimates suggests that prime members spend more than double annually on amazon than nonmember it's not just a big day for amazon ebay, walmart, target, literally hundreds of other sites have deals. prime day last year was one of target's biggest digital days of the year adobe analytics says this year u.s. retailers could see sales surge 79% compared to an average monday or tuesday in july. pretty impressive stuff there and it looks like there's a piece of the pie for everyone involved back over to you >> all right courtney, thank you. courtney ragan back at headquarters. now let's bring in the retail analyst it's the prime members, the new ones, that sign up because of

this day that investors are focused on what do you expect there >> we expect that certainly there will be some growth. about 60% of people didn't even shop on prime day and of the rest that did, you had about half actually purchasing something. now when you end up having a 50% conversion rate, that is much, much higher than your average day in ecommerce and some of those consumers are going to be new, although the vast majority will be existing amazon shoppers. but the onus is on amazon to provide compelling deals the big theme that we've seen is that they've offered more appliances, more electronics, higher ticket items like the instant pot and their own devices to try to drive up sales. >> yeah, i mean, that would really boost the gmb numbers, tom, that could be had out of this holiday

what's your outlook in providing deals and having consumers shop for the amount of time prime day was a time and then it became prime 36 hours, now it's prime 48 hours can we extrapolate the pace of sales on a one day or 36 hour basis to 48 hours? >> so basically if you think about prime day, it's a dress rehearsal for black friday/cyber monday i do think that was one contributing factor to why prime day is 48 hours this year instead of 64 hours. they have one day shipping for prime members so to the extent that now you have their big sale for prime day but you're getting product to consumers faster, that could be another catalyst for increase in membership in prime. >> tom, let's say we get the

numbers out from amazon the day after prime day. what numbers are you looking for? what are you expecting >> well, the other challenge for amazon in 2019 is that they're experiencing decelerating growth in their u.s. sales. so hopefully the combination of shifting to one day prime from two and now a very successful prime day will result in a reacceleration in unit growth in both the june quarter on the move to one day and the september quarter on a successful prime day. >> is the one-day shipping going to make a hugedifference this time around? could we actually see higher volume of sales? >> well, as tom said, i think that the accelerated shipping really is about stress testing they know that for the last several years there have been challenges with q4 shipments and there are very low stakes with getting the shipments to customers within a day if they get it wrong, it's not a big deal

it's not as if somebody is going to be kind of all up at arms and probably turn away from amazon the way that a q4 missed shipment can have that negative effect because people are expecting orders at a specific time for them to be able to deliver the volume of transactions, it will likely be hundreds of millions in a short, compressed period of time and to push all of their distribution centers to be able to execute this as effectively as they need to, this really is about giving them basically practice for doing this later in the year, day after day in q4. >> tom, in terms of earnings, we're expecting them -- they're just around the corner what are you looking for how does prime day help amazon how much can amazon, you know, change its quarter or guidance based often thn this

>> it can be a needle mover. it can be like a black friday, cyber monday the story for amazon has been the three big profit drivers, cloud computing, aws, third party retail and advertising and i do think that prime day can be a stimulant on the advertising front to the extent they're getting brands to do more advertising on amazon to stick out from the crowd what we didn't see last year that we're looking for this year is more promotion of their private label efforts, especially in men's apparel. because that could then be an incremental margin driver and favorable to profits. >> tom, thank you. let's go down to the new york stock exchange. jim cramer joins us now with the dow indicated up another 80. jim, i'm feeling it. i'm feeling the angst and the disbelief and the bubble talk and everything else. it's continuing. it's good, right >> yeah, it's what we want we want to another firm to come

out at the beginning of the week we need even more negativity peter navarro, peter was very happy about the country. that could inspire a lot of people that are negative, right? >> exactly a certain contingent jim, i once again was talking about some of our previous discussions about earnings and it all makes sense if earnings come in okay do we -- do you have a high degree of confidence it's going to be okay or is that going to be what maybe takes us down? i don't know. >> i think if it's auto related it's going to be bad but that's really about it. some housing but auto is terrible anybody that sells into auto, you're going to see those stocks down ahead of when they report and then maybe they even bounce. so internationals are not going to be that good. i've loved this show this morning. it has been a blast.

you know what, bitcoin, they missed the regulation of that so now they have to go after facebook good luck. >> yeah. probably right >> facebook will get something done i mean, everyone thinks it's not possible, but don't under rate facebook. >> i don't know how it works i don't know what we end up. maybe there's room for a lot of different things i was reading a hyack quote that barry knapp said about the denationalization of currency and it would be amazing for the world, maybe we'll see. thanks, jim. >> thank you have a great weekend. >> we'll see you in a few minutes. "squawk box" coming right back -driverless cars... -all ground personnel...

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make sure you join us next week not tomorrow "squawk on the street" is coming up in four or five seconds this isn't the end >> the end for now. >> all right "squawk on the street" next. ♪ ♪ good friday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer futures looking to build with powell's testimony in the books, we're going to look ahead to earnings and today's tweets from the president on everything from trade to facebook and libra. make sure you keep an eye on europe and on yields as consumer prices end up warm economic fears are climbing, but so are