it's 5:00 a.m. nothing chill here shares of netflix sinking after something that's happened that never happened before in the streaming age. does the company that invented binging have what it takes to turn things around red arrows in japan. two economic data points disappointing. here the earnings rush rolls on numbers out of morgan stanley, united health and union pacific all on tap trade talks, they're stalled. reports this morning that the u.s. and china remain at a deep impasse over how to deal with

all the tension around huawei and not a pretty picture one u.s. senator calling for an investigation into that hugely popular face aging app maybe he didn't like what he saw either it's thursday, july 18th "worldwide exchange" begins right now. ♪ good morning, good afternoon, good evening and welcome from wherever in the world you may be watching. i'm brian sullivan before we get to the macro markets, look at that. that's a live check on shares of netflix. wow, they are down now 11% off $40 per share. big reason was the reason that the subscribers missed they had the first drop in u.s. subscribers ever in their streaming age. we have more on netflix and comments from reed hastings coming up on this. before that, let's get to your macro morning setup. coming off the s&p 500s worst

day in three weeks we could see a continued drop futures are in the red not big losses dow futures off 60 we are in the red. volume has been weak you probably don't care about volume you care about price prices have been weeen weak as f late bond yields not moving much. something we do want to talk about is the federal reserve the ten-year note yield at 2.05%. the upside of that is that mortgage rates should remain low. we'll get to the u.s. markets in a moment we have breaking news out of japan. exports out of that nation falling 6.7% in june that is far more than the expected 5.5% drop it also extends japan's export losing streak now to seven straight months. the bigger surprise may be that imports also fell 5% they were expected to effectively remain flat. the japanese market, one of the cheapest in the developed world

has continued to disappoint investors. the nikkei down 2% today the asian markets down as well the shanghai off 1%. by the way, south korea's central bank, we don't talk about it a lot we talk about global stimulus. now south korea cut its key interest rate by a quarter point to 1.5%. that's south korea's first rate cut in three years the reason we're talking about south korea's central bank is that what we've seen lately is this global rush towards lower rates, towards more stimulus europe talked about it china is doing it. now south korea doing it as well the european markets red across the screen let's dive in to this macro theme and what matters most to you now. that's not earnings. it's the federal reserve joining us is chris campbell chief strategist, somebody who knows personally some people on the federal reserve board.

earnings, they're important to individual stocks, guidance is important to the macro markets i don't think anything is as important more than the u.s. federal reserve. are you in the camp that we will get a rate cut at the july 30th federal reserve meeting? >> i'm not certain the market has fully baked in what the fed will do at the next fomc meeting. the market thinks we'll get a cut. i'm not 100% certain about that. i'm concerned about the fed, you know, needing to be independent and being independent, i think that they may surprise a lot of people and do nothing. they may keep rates unchanged. >> why do you say that >> you know, eventually heard chairman powell talk, i know him fairly well. >> personally? >> of course i think he's a person of great integrity but also wants to make sure the fed is independent. certainly there's pressure from

washington and certain areas in washington >> i would say 1600 pennsylvania avenue is one of those areas applying pressure. >> i think he may want to remain independent, they won't want to be seen as bowing to political pressure >> do you think there's something to the school of thought which is that because there's so much pressure on the fed to possibly cut rates that powell may take a step back and if anything just because "a" we may not need it, but also to show, hey, i'm my own guy. we're our own board. we're not going to be bullied around >> there's that and chairman powell has an enormous amount of pressure to reload the gun the my is doing well now but the fed rolled out its entire arsenal to get us through the last crisis. we're due for a correction who knows where it will come hopefully it never comes if it does, the fed has a lot of responsibility one of those is lowering rates if we cut rates now too much,

your point is there's no bullets in the holster for later on. >> correct >> do you think powell sees that >> he's talked about it publicly he feels that pressure as well >> i think it's 100% chance in the fed funds futures market, which is sort of the bet on where rates go, that we're going to get a cut you don't believe it as much won one wonders what would happen if we don't get a cut >> the market will react that will weigh on the fed as well the fed will be driven by economic data. the economy is doing fairly well we have seen some headwinds internationally, but we've insulated the u.s. government and the u.s. economy from a lot of headwinds >> we talked about the south korean central bank a minute ago. we mentioned it because europe is talking about their new

stimulus plan, china is stimulating, now south korea do you wonder if there's a point of view on the fed of are we going to be left behind? if the world starts to stimulate and we don't, does that mean we're strong we're good or should we get on that stimulus bandwagon >> we were on the stimulus bandwagon for ten years. our economy is doing fairly well now. perhaps we don't need it it's one of those arguments where the fed needs to remain as many weaponry as possible to get us through a crisis should we come upon one, hopefully we don't. unloading the weapon now and doing sugar stimulus is something that i don't think will happen. >> you worked at the treasury, you are a great guy to have on chris campbell, thank you very much red is the new black because your top corporate story is all about subscriber losses at netflix and now losses in the stock. shares down 11% right now after

the company said it lost subscribers in the u.s. for the first time since the dvd by mail era. kate rogers has more >> good morning. netflix had 130,000 fewer u.s. subscribers at the end of the second quarter versus the first quarter. that is the first time that's happened since 2011 after netflix launched a new pricing model that was widely rejected by customers globally netflix added 2.7 million subscribers, far less than the 5 million forecast. on the conference call the company attributed lower growth in part to its program lineup during the quarter >> this is one where we forecasted high. there was no one thing if i think about three years ago, we were also light. we never really were confident of the explanation then we were 2 billion in quarterly revenue. now we're going 5 billion. it's easy to overinterpret the

quarter membership ads >> the slowdown comes as competition is set to ramp up in the coming months. disney, apple, warner media and comcast nbc universal are launching rival services sparking what some are calling the streaming wars they're also taking their content from netflix including "friends" and "the office. the company is playing down those losses saying that will allow for spending on more original content reed hastings says subscriber growth will be bigger this year than last year netflix estimates adding 7 million new customers in the third quarter. back over to you >> thank you we'll see you in a few minutes. we are just getting started on a busy "worldwide exchange. much more on netflix and why one analyst says you should be buying into the losses this morning. then libra and all of crypto dominating conversations at the g7 summit, but what are they

saying about it? we'll go live to france for more later, one stock's year is about to get a little sweeter. they raised guidance there's your mystery chart the who and the why ahead. we're back after this. you should be mad at airports. excuse me, where is gate 87? you should be mad at non-seasoned travelers. and they took my toothpaste away. and you should be mad at people who take unnecessary risks. how dare you, he's my emotional support snake. but you're not mad, because you have e*trade, whose tech helps you understand the risk and reward potential on an options trade it's a paste. it's not liquid or a gel. and even explore what-if scenarios. where's gate 87? don't get mad. get e*trade and start trading today.

welcome back good morning 5:12, the sun not yet up

it was pouring rain as we drove in, hopefully it will cut some of this heat it could reach 100 degrees in new york city. g7 meetings are normally fairly boring affairs with lots of high level political speak. libra's digital currency and crypto in general dominating th conversation at the g7 summit in france that's where we find steve sedgwick who joins us live with more you know what i'm talking about, when they dig into crypto -- >> hang on, sully. >> what? what >> time out, sully hang on. you have written off after my career saying g7 meetings, g8 meetings, g20 meetings are boring >> you're the only thing that makes them interesting you and your unique style. did i dig myself out >> no, no. the problem is i actually agree with you.bad part of

this i don't know if they're boring but they're not conclusive this is why they've taken on this cryptocurrency story. maybe so they can get some headlines. libra is box office at the moment facebook has 2.38 billion monthly active users if you imagine just 50% of them, 25% of them, pick a number, if they were to adopt a cryptocurrency called libra as a means of payment, and if they had money going to their bank account and switched out, it was turned into libra, what would that mean for the world economy? what would it mean for the central banks who like to control the global flow of money with their regulations and their eyes on monitoring and eyes on data and money laundering. someone asked me on twitter today why are they worried about libra when they were not worried about bitcoin. it's about scale, i think. there are 38 million bitcoin wallets out there, give or take. there's 2.38 billion users of

facebook out there so i think that's where the scare is the other thing i think, brian, just to get our viewers excited about this, it's a threat. you can go after libra you can get u.s. accord, the french will agree with other if you try to argue about transatlantic digital payments you won't get agreement. if they talk about libra, they can say there's a united front if they talk about anything else, i don't think so was that more excited? i tried. >> is there anything else they should be talking about? what are they not talking about that perhaps they should be, steve? >> everything? look at the world. look at growth in europe i tried to talk to one italian finance minister yesterday, he didn't want to talk about the lack of growth in europe, the fiscal problems europe is having the trade wars there's the transpacific trade war, the tech challenge going on between the u.s. and france and

the potential 301 investigation and potential tariffs on the back of that what about the fact that interest rates are zero around the world? there's $16 trillion worth of negative yielding debt out there in the sovereign space the fact that some high yield debt has gone negative maybe some of this stuff i don't know these guys are supposed to be the architects of the world economy, the inhi don't know, m some of that >> if you were the italian finance representative, would you want to talk about the italian economy? come to lake coumo, have an espresso with george clooney, but let's not talk about our economic situation >> again, another large of my repertoire going to lake cuomo >> it wasn't an accident >> is it the fact i go to these lovely places and don't come back with much news?

>> i did that face app yesterday, it made me realize my own mortality. >> bill griffith is a handsome man. >> he is in my next life, i want to come back as you. thank you, steve sedgwick. all right. u.s. treasury secretary steven mnuchin is there and he will join us live from that g7 summit coming up in "squawk box" around 7:00 a.m. eastern time still ahead, the e-commerce winner not named amazon, but that is still saying even better times may be ahead and the ceo of one of the largest pharma giants of the world speaking exclusively to us his comments, if you care about pharma and healthcare, you wl nto arhem.il

. welcome back let's get you up to speed on some big stock stories of the day. ibm second quarter profit beat forecasts. the margins did go up a bit, but revenue fell for the fourth straight quarter ibm continues to struggle with its shift to the cloud cloud revenue did rise 5%, but that trailed rivals like microsoft and amazon and disappointed some investors. ibm down about 1% now. ebay's second quarter results top estimates. more shoppers are coming to the

ebay site. the company also raising its earnings guidance for the year sending shares up more than 5% by the way, ebay's ceo, def v we on "squawk on the street" today. and united rentals dropping today. second quarter profit coming in above forecast but they trimmed the top end of the guidance for the year citing historically bad weather this last quarter for that this morning, if you're in the new york area and commuting, be careful. i should have taken a boat to work rather than a car the roads are a mess trade tensions putting investors on edge. have the recent slide in stocks been a sign of bigger problems to come in the markets or will earnings help us rebound. and does apple have what it takes to dominate 5g one analyst thinks so, and he put out a big call this morning. we'll tell you what he's saying

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welcome back it is crunch time in d.c congress hustling to pass a deal to raise the debt ceiling and fund the u.s. government before it leaves for the month of august lawmakers hope to avoid a u.s. default which could be devastating for financial markets, the global economy and your money nancy pelosi says she hopes her chamber can vote on a debt limit

and spending deal by july 26th if they do, it would set up a key senate vote. but also in the headlines, president trump continuing to double down on his critique of congress tracie potts joins us from d.c. with more. >> reporter: good morning. his critique of these four members of congress, these women who he says should go back to their countries, we're watching how that played out at a trump rally in north carolina last flight [ chanting ] >> reporter: trump supporters at last night's rally chanting send her back as the president took aim at four congress women of color. >> omar minimized the september 11th attacks on our homeland tlaib used the "f" word to describe the presidency. she described contemporary america, that's you, that's me, that's all of us, as garbage she thinks that people with the

same skin color all need to think the same they don't love our country. >> the house of representatives called his comments racist, but rejected a bid to impeach the president. >> we have six committees that are working on following the facts. >> reporter: al green argued president trump should be impeached but his words could insight violence >> we risk having the blood of somebody on our hands and it could be a member of congress. >> some of us are getting death threats. >> reporter: even some trump allies think he crossed the line >> i wouldn't tell any american citizen to go back home because this is home. >> reporter: in a new poll more than two-thirds considered the president's go home tweets offensive. now, we are also watching what's happening here with the measures that congress is taking to hold wilbur ross, the commerce secretary and attorney general william barr in contempt for not complying with subpoenas

>> tracie potts, another busy day for you. thank you very much. when we come back, you may not see a stranger thing this morning. netflix sinking double digits after something happened that has not happened since netflix's dvd by mail era. that's next. my mom washes the dishes... ...before she puts them in the dishwasher. so what does the dishwasher do? cascade platinum does the work for you, prewashing and removing stuck-on foods, the first time. wow, that's clean! cascade platinum.

welcome back it's about 5:30 a.m. here. it's raining and could hit

nearly 100 degrees today let's show you the ugly, the good and the bad with stocks first, let's start with the good ebay shares are rising on an upbeat earnings forecast more people shopping on ebay last quarter the bad, ibm, shares lower, revenues falling for the fourth straight quarter and the ugly, i'm sorry, netflix shareholders, that's it. stock down more than 10% the company reporting its first drop in u.s. subscribers since the dvd by mail era. it's thursday july 18th. you're watching "worldwide exchange" on cnbc. ♪ welcome back good morning if you're just joining us, thank you. i'm brian sullivan

much more on netflix in a moment first a check on the other top headlines outside of the world of business includingpolitical chaos in puerto rico phillip mena has more on that. chaos in puerto rico the capital turning into a war zone as dozens of police in riot gear fired tear gas into a crowd of protesters. many calling for the end of the go governor's rein. jon stewart is launching a new salvo at the senators who blocked the 9/11 victim fund bill senator rand paul voted against the legislation alongside senator mike lee the move puts paul squarely in the sights of the median stewart pointed out the hypocrisy of voting for president trump's tax cuts but not this bill. >> it's absolutely outrageous. you'll pardon me if i'm not

impressed in any way by rand paul's fiscal responsibility virtue signaling at some point we have to stand up for the people who have always stood up for us >> stewart called the entire situation an abomination. a test gone wrong for spacex a fireball erupted from the base of the rocket star hopper. it happened while firing up the spaceship's engine the craft is the early version of the starship rocket and it is made of stainless steel. back to you. >> phillip, always a pleasure. let's get now to the top corporate story. that's netflix shares are down as we showed you more than 10% now. disappointing subscription numbers. they lost u.s. subscribers for the first time in more than a

decade the market exconnecpected they gain a few hundred thousand. on the earnings call, reed hastings blamed it on the program lineup during the quarter. >> this is one where we forecasted high. there was no one thing if i think about three years ago, we were also light. we never really were confident of the explanation then we were 2 billion in quarterly revenue. now we're going 5 billion. it's easy to overinterpret the quarter membership ads >> let's dig more in on this big story. joining us is michael morris what happened? >> it's a great question we as the analyst and investor community rely on the company's quarterly forecasts. when they're surprised, we're surprised. it appears there's more seasonality in the business model than anticipated

in the first quarter you could have people with new devices that have enthusiasm to use the new devices with new apps that doesn't carry over to the second quarter. in addition the company cited the content cycle, that was a bit of a new discussion point. the third thing was the company did push through price increases both in the u.s. and in a number of markets outside the u.s that seems to have had more of an impact than anticipated >> are people that sensitive to a dollar or two price increase on a monthly basis that they'll drop a service they enjoy? >> i think in the grand scheme of things the answer is probably no when you combine it with having a lighter content cycle, you have a bit of pressure on the gross ads, which is incremental interest, perhaps a bit of pressure on the pricing side, which drives higher churn. the two of those things come together and create a larger

dynamic than i think we and the company appreciated. >> it is hard to create high quality content that people love netflix has done it well but do we know they're going to be able to continue to do that the american public, the international public, they're fickle viewers just because they had success at creating shows like "stranger things" and others, how confident are you that they can continue to do that? and they're spending a lot of money on talent. >> yeah. it is a fair question. our view is more scientific. by nature creating content and trying to find hits is an artistic process there are no guarantees. for every "game of thrones" on hbo, there are shows that don't resonate as well when i say we're scientific about it, we think netflix has a great process, a better process than the traditional media

model. meaning there is less leakage in terms of the amount consumers spend on a service and then what they turn around and spend on content. that means they get more at-bats, they can spend more per unit of content which means they should get better looks at content. does that mean everything works? no but on average, with a big budget and better looks they should have a better batting average. >> you're still optimistic, you're still recommending this to clients you have a buy rating and a $420 price target on the name the stock has been dead money for a year the stock is below where it was one year ago why do you remain so optimistic? >> we believe in the long-term opportunity and streaming video. when we -- and it's interesting because i've been on the program previously after big quarters when things are positive, we

always say the same thing. we caution investors about the highs and lows on quarter earnings, but the global television marketplace is a 4$40 billion, 5$500 billion market across subscription and advertising spending netflix is generating low tens of billions of dollars of revenue now. we think there's a number of questions that are on invest minds, not the least of which are competition, new services, risk to continuing to get access to content all of these things we discussed on the call yesterday. in the grand scheme of things this is the industry leader in the early stages of disrupting a massive industry and we want to be there we will be going through periods like this where things happen that we can't explain. that's the nature of the stock we believe in this one >> maybe netflix should make a show about netflix shareholders, because they had highs and lows

as well. michael morris, thank you very much a buy rating and 420 target. we're about halfway through the 5:00 a.m. hour in new york stock futures are down the s&p 500 coming off its worst day in a couple of weeks yesterday. it's been a sluggish few days. we are off about 27 points now on the dow futures let's think longer term. more macro markets and dig in to the markets and your money joining us is drew mattis from metlife investment management. these highs and lows that were talked about stocks, earnings from a macro perspective it seems to be all about the federal reserve. when i look at the equity market, i look at the bond market, it seems that they are writing two different screen plays. which market do you think best reflects what the fed is likely to do? >> i think the bond market told the fed what they wanted to do,

and the fed acquiesced >> the bond market will control the fed, not the other way around >> seems to be if you look at the data, everything going on, the u.s. consumer, you look at the growth numbers, there's no reason for the ned to cut rates at the end of this month, yet they will do it >> you think they will we had a guest on at the top of the show who -- >> i appreciate his view there is no reason to cut rates, for them to hand over a rate cut because the markets are demanding it, i don't think that makes sense. >> but you still believe they are do it? >> yeah. >> the fed funds future showing a 100% chance.

what would the market do if they do not do that stocks will sink i'll say it. >> yeah. if the fed is telling you things are bad enough for them to cut interest rates, why is anything doing well >> we ask that all the time. it's an excellent question >> the underlying thing that equities could be looking at is the economy is looking good. consumer is doing well >> retail sales off the charts >> something good is happening the question is do we need to add the icing to the cake with a rate cut >> our rbi at the end of the show asks viewers what they're seeing in their economy. you will want to hear it it plays into your thesis. is there a down side to cutting rates? if low rates were a net positive all the time, set rates at zero forever. >> low rates hurt. low rates have hurt.

low rates are one of the reasons growth has not picked up low rates keep firms in businesses that shouldn't be in business low rates encourage savings rather than discourage savings low rates were seen as a panacea, but there's a growing body of evidence that shows low rates can cause more harm than good >> always a pleasure, drew thank you very much for joining us >> thank you. even more stocks to watch on this busy thursday apple upgraded this morning to outperform by raymond james. the analyst says he is bullish about the prospects for next year's 5g iphone cycle amd downgraded to neutral from buy and shares of novartis trading higher this morning. they posted better-than-expected results and raising the

full-year guidance novartis up nearly 5%. why don't we use that to head now to switzerland where julianna tatelbaum sat down with the novartis ceo i imagine it was a positive interview with those results and a stock move, perhaps some smiles >> it certainly was a positive interview. there's a lot for the ceo, vasant narasimhan, to be pleased about. it was another strong quarter for novartis we saw a lot of positive momentum in q1 that accelerated in q2 as you just said, they raised their guidance for the full year the market was braced for a positive result today. they have delivered in a big way. they also in addition to their existing drugs performing well over the quarter, they had two exciting new launches a potential blockbuster in the second quarter including a new gene therapy treatment with a hefty $2 million price tag that's the world's most expensive drug when i saturday down with the

ceo to discuss the quarterly results i asked about the prospect for reform when it comes to drug pricing in the united states and what president trump could get through on this front. take a listen to what he had to say. >> it's a very fluid environment right now. i don't have any more insight than anyone else in terms of how this will all ultimately play out. from a novartis perspective, we believe it's important that first and foremost we need to tackle patient out of pocket costs at the pharmacy counter. the key is not to do anything in haste that damages the innovation engine for the long-term. >> so that was the ceo of novartis discussing the outlook for drug pricing reform in the u.s., just like the rest of us we are in wait and see mode, it's unpredictable at this point. coming back to today's numbers, the bottom line, this was a

strong result for novartis the momentum is set to continue in the second half of the year they're in an encouraging place when it comes to those revolutionary treatments brian? >> good stuff there. julianna, thank you very much. coming up, the trade war drags on it's putting a dent in a specific commodity our mystery chart shall be revealed ahead first crank up the ac or just go back to bed. it's nasty out there we'll tell you about the so-called heat dome that's going to slam most of america. get ready to sweat next. ♪

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welcome back 5:46 on the east coast let's find out what else you will be talking about today. i have a feeling i know one of these stories. that stupid app that made everybody sad yesterday. the face app

>> yeah. but i think we have something else first >> the heat dome >> yeah. we'll learn about the heat dome. >> between the face app and the heat dome, do you have any good news for us? the weather is, i think it's fair to say, gross >> you don't like the summer sizzle >> it's great in a full suit and a tie with your neck constricted by a tight shirt fantastic. >> that is true. you newill be sweating right through that we have 40 states with heat index problems for the next 24 to 36 hours. that will expand here throughout the weekend. 152 million under the heat concerns, warnings and advisories from the plains to the midwest. i think these warnings expand into the northeast going into the weekend. we're talking about triple digit

heat have the water handy checking on your pets and elderly will ythroughout the ne4 hours. san antonio, when you factor in the humidity levels that are oppressive, we're in triple digit territory. that high pressure really goin to stay in place here even for friday afternoon it shifts to the east. so it will be a sticky and icky weekend for new york to boston here potential records broken from portland, maine, even for syracuse as well with daytime highs that will feel like 101 degrees. it's all due to this bermuda high brian, you just need to get used to it. sweat through those clothes. >> i think you showed it will feel like 112 in des moines, iowa spectacular. >> hurts your feelings, right? >> not as much as the face app thank you very much.

let's talk more about that app. the one that ages you. everybody talked about it yesterday until we found out that the russians own our image. >> a lot to digest here. the app that everyone is talking about might not be all fun and games. chuck schumer is calling on the fbi to review face app, which we demonstrated yesterday on the show now the app was developed in russia and can store personal information beyond just those photos you upload. the face app team released a statement saying that most photos are deleted within 48 hours. users can request all their data be deleted and no user data is transferred to russia. mine -- >> there's no way your face app aging just makes you like my age. >> no. >> i look like a -- i was sad. i saw my picture i realized that that inevitable march towards mortality -- >> my goodness okay they just showed -- show brian

mine he needs to know the truth it's really -- >> no way. >> it's something else >> you look good >> no, i don't >> that's -- you will compare that to mine >> i don't go in the sun i have a lot of wrinkles >> i look like i should be in an egyptian museum next to tutankhamen. >> you look like a nice, old man. >> don't want to be nice i don't want to be an old man. >> by the way, on a serious note, why don't apps that -- don't read the terms of service. nobody reads that. apps, i'll make a prediction in a year or two, if congress gets on the stick, apps that do that stuff, that basically say we own this picture, they should have big red letters when you buy it or download it, three or four bullet points here's what this app does. don't say check out our terms of service.

you have to sign a stack of papers like this to buy your home, but you can give away your data for nothing behind terms of service. >> i texted my parents my photo, and i said don't i look like nan? my grandmother they said the russians have your data now even my parents knew about it. >> nan would be upset that the russians had your information. kate, thank you very much. on deck, despite the reported success of "stranger things" netflix did something that it has not done in more than ten years it's not a good thing. the stock is down more than 10%. and then your morning rbi. today you are the star you are our reporters. we asked you how your economy is doing. the results are coming up. dear tech,

let's talk. you blaze trails... but you have the power to do so much more. let's not just develop apps, let's develop apps that help save lives. let's make open source software the standard. let's create new plastics that are highly recyclable. it's going to take input from everyone. so let's do it all, together. ♪ ♪ let's expect more from technology. let's put smart to work. ♪ ♪

welcome back time for your executive recap. netflix shares are down 11% right now. weaker than expected subscriber growth they had their first drop in u.s. subscribers since the dvd by mail era. alcoa posting a smaller than expected loss in the latest quarter but they're warning of lower growth worldwide blaming trade tensions and macro economic headwinds shares are down 3% and earnings remain a major theme for the markets and your money today. among the names you have to watch, united health, morgan stanley. those numbers out before the bell tonight, microsoft will headline the list of companies reporting after the markets close. let's talk more about the markets, the economy, the

federal reserve. peter boockvar joins us now. all right. we had a guest on this morning who said he did not think the fed would cut rates at the end of july. we had a guest who thought they will what is your view? >> it's a lock they will >> why is anything a lock >> i think this is because powell had every opportunity to walk back a cut, but instead reinforced it you can argue that the global industrial manufacturing side of the economy is in a recession. >> make that argument. i would push back on that. >> the global manufacturing pmis are below -- >> i know the data has not been great. >> look at a what csx said, msc industrial earnings said the architectural billings index broke below 50 the consumer, the labor market is holding us up

anything global trade related or china related is in a downturn >> the consumer is strong and the consumer is 70% to 75% of the economy. do i necessarily care what they have to say? >> since world war ii, two-thirds of the recessions we experienced, spending has been positive you don't need to have a decline in consumer spending to have an overall economic downturn. let's just say the manufacturing weakness continues that begins to affect the services side, which it has if you look at system of the surveys. if it starts to slow down the services side, do companies start to call a time out on hiring we have to see how this plays out. >> we talk about this a lot on cnbc

i want to go out amongst the people i want to do the morning rbi and have you respond the morning rbi is you all of you out there are our reporters because we put out a twitter poll to try to get insight into what may be the single biggest question in america right now, how much the economy is slowing down if at all? we asked to you finish this sentence the economy is strong, starting to slow, okay, weakening your answers suggested things are good 48% of respondents said the economy near you is strong 30% okay 12% said starting to slow. 10% weakening. peter, 478% strong or okay >> the consumer will feel it at the sort of the end of the cycle. the consumer is not where the excess is.

it's been on corporate balance sheets we've seen the slowdown overseas in europe and china, the tariffs, which i've been 100% against is really sticking and causing disruptions in terms of sly chains, slowing growth "wall street journal" reporting there's no prognosis dreress on talks. >> you were the first guy to point out that the average credit card rate in america is 17%. there's a lot of new stuff out there. new cars, new boats. one would assume some of this is bugts budget on credit how big is the debt threat >> credit card debt is high. a lot of americans don't pay off their credit card bill every month and are stuck with the 17% charges that i think is the reason why retail sales are good but not great. core retail sales were running at a 5.5% year over year rate.

now we're running more like 3.5% >> 17% on credit cards don't buy a boat on the credit card peter boockvar, always a pleasure thank you for everybody who responded to that poll thank you for watching "squawk box" is birthday girl becky quick begins right now good morning chilling numbers from netflix. the stock dropping after hours on weaker subscriber growth overseas and a loss of subscribers in the united states it's been a long time since that has happened and breaking overnight, dismal trade data from japan weighing on the nikkei wheel show you the big market moves. and new warnings about the viral app that ables yoages youe lawmakers sounding the alarm about how it handles your data it's thursday, july 18, 2019,

"squawk box" starts right now. ♪ live from new york where business never sleeps, this is "squawk box. ♪ good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. equity futures are lower it's been two days in a row now that the major averages have been down. yesterday's decline for the dow was 114 points this morning things are a bit weaker overall earnings have been strong, but you do have some outliers out there like netflix, that will be bringing down some technology stocks and others today. right now the dow futures indicated down by 32 points. s&p futures down by 7.