live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. let's look at u.s. equity futures. yesterday a big down day for the markets. the biggest loss that we've seen for both the dow and the nasdaq in a month also the dow closing at a two-week low despite that still looking at the dow on track to be just below break even the s&p 500 and the nasdaq are both on track to have their third positive week out of the last four. this morning you are seeing green arrows across the board. dow futures indicated up by 60 points s&p futures up by 10 the nasdaq up by 72. yesterday was the busiest earnings day we've seen so far this season. there were 52 s&p 500 reporting. earnings parade continues today. we have mcdonald's, that dow component that will be reporting

before the open this morning along with twitter overnight in asia, you will see what was happening there the nikkei ended down by almost half a percentage point. hang seng was down by 0.7% shanghai in china, you did see stocks higher. up by a quarter percentage point. in europe, the three major averages had all been in the green. the dax up by 0.3% the cac up by 0.4% the ftse up by more than that. italy and spain stocks there weaker spain down by 0.7% in the treasury market, again with the gdp number coming up later this morning at 8:30 the ten-year yielding 2.069% everything that happened with the ecb yesterday what that means for the fed, we'll talk about all that coming up in a bit. on the squawk planner, we have first look at gdp in the second quarter that's on tap. forecasters expecting an increase of 1.8% after a surge of 3.1% in the first quarter

on the calendar we will hear from twitter, mcdonald's before the opening bell next week it gets crazy. it is the busiest week of earnings season. we'll hear from more than 150 s&p 500 companies. apple, pfizer, verizon, qualcomm and chevron also set to report others, toyota at the end of the week qualcomm, people will be focussed on that some other stocks to watch, we have volatile trading taking place in amazon shares that company's earnings missed estimates, though revenue jumped 20%. that was the good news from the same period a year ago and beat forecasts on that side of the ledger margins were squeezed by bigger investment in next-day delivery. aws reported 37% growth, which

was a beth shy of it shy of whas expected the cfo saying we expect we'll work through that, meaning the cost of that for the next couple of quarters -- >> the prime delivery, you mean? >> yes >> but when the dust settles we will regain cost efficiency when you say something will take a couple quarters to figure things out -- >> having said that, amazon gets way more leeway from the street than anybody else. if you imagine walmart coming out and saying something like that the stock would be off 1.5% that's like a blip >> i was looking at it, you know, i don't follow it that closely, i think just over 2,000 is the all-time high >> right >> when there's some troubles -- when there's troubles, that thing back at 1,700. it's mid 1,900s now.

there is the chart >> why the dip in june was that -- >> we've had the -- if you look at it there, it wasn't that big. the dip we saw was december. >> that's the entire market. >> yeah. it was like at 1,500 or so all the f.a.n.g.s went down. there were no trillion dollar market cap stocks. now they're all pushing that number >> the interesting thing out of this is what it competitors what it means for walmart and microsoft. i think if you look at that -- if you look at the competitors, their story probably says more >> amazon never really cared about profits, after four straight quarters of record profits, maybe we got spoiled. what you care about with amazon is sales i saw 20%, i'm like 20% over

last year? that's what i would care about >> then i realize that doesn't include prime day. that came after the quarter closed >> they're spending money getting it there immediately >> that's a huge cost. >> but 20% growth in revenue -- >> but the point is once you do it -- to push walmart to do that, if walmart ends up having to do this, the pain could be so real >> walmart came out with their own announcement saying you will get free two-day delivery and you don't have to have a membership fee >> and you can go to the store, pick it up they're all trying >> but they keep pushing the boundary they continue to get leeway from investors. they said this is what the plan would be that's the bigger question when do amazon investor says no more we won't allow you to keep investing like this. >> i don't think that's happening any time soon. >> i expect the negative people on amazon -- we don't need to mention names, but the negative ones shorting it will say see, i was right.

i was right. 1970 i called this at 1,000 sharing of alphabet are up sharply. quarterly revenues jumped 19% driven by strong search and youtube ad sales on the earnings call ruth porat says youtube's revenue was the second largest contributor last quarter they blamed youtube on decelerating growth the second derivative. glad i took calculus the board also approved a share buyback of up to $25 billion. sounds like a big number it's a huge market cap, so it really isn't google looking good today.

$93. that's a move. shares of starbucks are trading higher, too. the chain posting better-than-expected quarterly results and raising full-year guidance same-store sales rose by 6%. results were driven by strong demand for its new beverages in the u.s. and in china. all of those stories that you heard about the china blowback, not the case for sbtarbucks >> big news this morning this i think is a bigger impacted than what's happening in silicon valley. softbank launching a new 1$108 billion fund they will invest in companies developing artificial intelligence technologies. the list includes apple, in the

first fund, microsoft, foxconn proceeds from the first vision fund will go into that in term's shakeup in the way sill son vicon valley has worke would argue that softbank has had a bigger impact in terms of valuations -- >> that's what i wanted to ask about. the idea they would get people investing in this, given the performance of some of companies like uber -- >> uber, it's all like that. there's a number of investments where they have had huge return. the idea that they would come up with another 1$100 billion, i

thought saudi. most of the first fund was saudi money. $45 billion of the fund. where will they get this money from everybody says size is the enemy of returns how is it possible this could ever work? at least at the moment it seems to be working. >> when i read it, i thought the same thing but you're also right to point out what it's done to valuations and the private markets beforehand >> and it kept stuff private longer it's changing the whole dynamic. we will continue to keep our eyes on masa son we have the sprint transaction happening this morning, the sprint/t-mobile deal which is a masa-backed deal he owns sprint >> all right >> how does silicon valley feel about this >> they hate this. they think this is crazy all of the smaller funs think you can't compete. he's saying i will buy everything in one space. and if i buy everything in one

space -- >> i will one. >> venture capital model even if two of them fail -- >> it's like buying every square on the roulette table. >> yes, then you win that's his hope. whether it works, we'll see. >> i can tell you it does not work >> you tried doing that? >> on the roulette table >> the house never loses the house never loses. right. you see people walk in and play the 4s >> i have a system that is only ruined by the green thing. >> you bet on -- >> you keep doing it >> same thing? >> sooner or later -- >> double zero blows that up that's why the house never loses. >> i still think you can do that then you think it's so easy, you try doing it again >> you can't repeat. >> it instant stay red forever, right? >> no, but then you have to double your bet every time

then green comes up and blows you out of the water try that >> that's why i don't like the feeling of -- >> right it's set up so the house wins. >> i do like that they have atm machines >> so you can get more money. coming up, intel shares surging after beating expectations we'll dig into the company's quarter straight ahead and facebook fighting a war on several fronts, privacy and data security and antitrust concerns. we'll talk to a former facebook chief privacy offer, chris kelly. as wehead to break, a look at the biggest premarket winners and losers in the dow. ♪

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let's talk about this. the stock last time i looked at it was up about 7% how much of this caught you of guard? >> i think general expectations were for slight lower in the near-term. a lot of that is because of china and trade issues not knowing how it would impact things >> that did not really impact them at all. for most of the semis, huawei in particular, they found ways that they have been able to ship to huawei i thought that was a surprise. you know, with respect to business conditions, you know, intel characterized some of the beat in q2 as demand pulled forward from the second half to the first half >> that's my question. some of this, it looked like they were -- shipments were coming in being sent trying to get ahead of potential tariffs if it's pulling forward what does that meeoan for the full year >> the net result was eps went up 5 cents for the full year not a heck of a lot. with that, they still expect

that some of the data center business gets better in the second half. it's off a low bar but i think the story here is back in may at the analyst day, intel's management was candid about the challenges they were facing over the next three years. a lot of that is intel specific based on the challenges they had in manufacturing at the time the stock reacted to that sharply with all semis now, everything has come all the way back. you know, the after-hours trade, intel is a couple dollars off the all-time high, which is unusual for a company that's facing such structural challenges >> you think this up 5% today is warranted? >> we're still negative on intel. i think that's likely to pull back at the least, as i look into the next year, the next two years with the smukemiconductor marke being cyclically depressed, as

you get numbers rising in other parts of the market, as you go into next year, intel will have those structural challenges. >> what about the deal to sell the 5g mobile phone modem business to apple? they said they looked at it and it doesn't make sense for profits where they're looking at 5g they are keeping others, but this one did not make sense. >> remember that apple and qualcomm also signed a deal in may. the reason for that is the intel product wasn't working the performance wasn't there that's was something they were spending money and time on at time we think apple had to make a decision. they need a 5g iphone in 2020, and that's important to them getting the intel business is strategically a good move for apple because it keeps qualcomm honest for the next couple of years as they get that to work and 5g is --

>> that's the question i had do you believe that the problem was with intel or with apple and did apple think we actually need to control this whole process because these people don't know what they're doing if we can get this in-house we can fix this and if they can fix this, given the length of the qualcomm contract, can they actually replace them in the midst of the contract is that possible are we really talking about a 6g product? >> my guess on that, go two years from now, for example, you go back a couple years ago, intel and qualcomm shared the 4g socket starting with iphone 7. but the intel modem was never as good as the qualcomm modem they brought intel in basically to keep qualcomm honest and then you know what happened with the legal issues i think once they get that working -- one day they will get

it working -- it will be used to keep qualcomm honest the question is in the hands of apple, will they be able to catch up to qualcomm >> maybe it's a good deal on both fronts. maybe a good deal for intel and also apple >> yes once you're starting behind in tech, that business is already in the hole, will they ever completely catch up to qualcomm? >> can you speak to this, not related to intel, but on 5g there was an article last week talking about how these phones you think will be out in 2020. the reporter doing this article about 5g saying they had to ice the phones to make them work they were walking around with literally like big jugs of ace to put them in because they're too hot. do you think this is happening in 2020? >> i do. you know, that's -- it's actually a good example of why

apple needed to do what they did. that's based on first generation 5g modems, they weren't ready. if apple had stayed with this intel modem next year, it's very possible that might have been the issue with iphone. and the second generation qualcomm modem will be much better >> you're positive i won't have to walk around with a cooler >> if you have to walk around with a cooler, apple won't release the phone. >> apple is keeping the same engineers, the same intel people who are there. what is different about how they manage the project >> i would say perhaps an area of focus i would say two things -- >> priority on it, maybe putting more money into investing in it? >> the other thing is that apple manufacturers tmsc tmsc now -- this is an issue that intel faces, they are having manufacturing issues now. so bringing that product out of intel into tshmsc where they ha

their act together on leading manufacturing will be a benefit. that will take some time, but that's a benefit >> chris, thanks for coming in >> thank you intel's ceo will be appear on "squawk alley" at 11:00 a.m. eastern time more to come this morning on "squawk box. more stock movers to tell you about including a major bank and a well known toymaker. if you're a kid you will care about this one "squawk" returns after this.

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time for the executive edge. we have some stock movers to tell you about the top one, if you care about toys, we all do. mattel reporting a smaller than expected loss. the toymaker saw strong growth in barbie and hot wheel brands american girl not doing as well in that business and we have that movie coming. >> what movie? >> the barbie movie. this is a big deal in mattel land they will do an adult -- >> an adult movie? that's creepy. >> okay. >> not an adult movie like that.

>> i think 2that may have done already. >> just suggesting -- >> like in a toy story kind of 4 -- >> not a cartoon >> all right >> live action >> live action barbie. >> a live action barbie. that's coming up >> so you told us -- what are you doing? >> this guy is making crazy signals. >> hi. >> i don't know what he's doing. >> he may have seen the show >> me? me i see you. i see you. >> he's saying you babble. >> he wants to take a picture. >> hi. >> who is cast as ken, do you know >> i heard you were possibly going to be ken. >> ken's dad maybe >> you don't know? >> i do not. >> chris pratt i'm making that up >> i'm trying to think who would be good.

>> chris pratt >> you know who would be good? the guy who played the winklevi. >> yes from the movie, the social network. >> yeah. he was in that other movie, the one in italy, the beautiful -- >> yeah. >> good looking guy. another legal victory for bayer. the company succeeded in getting a third large trial verdict reduced. the california court ruled the company's weed killer was responsible for a couple's cancer and awarded them $2 billion. a judge yesterday reduced that award to 86$86.7 million. bayer faces lawsuits from 13,000 mrv plaintiffs from across the u.s. and a new regulatory filing we reveals that berkshire hathaway increased shares in

bank of america. they have a stake of 10.4% that caught me off guard i didn't know they could go over 10% in bank holdings according to this filing, the nun of shares outstanding they did hold was 10.4% >> do you think that's between stock splits and -- >> that's what i was trying to think. with bank holding companies, they try to keep the shares below 10%. i don't know what happened here. caught me off guard. it has not been berkshire's policy in the past >> let's dig into this, i think they would also have to file with other people. >> i don't know what happened. filing caught me off guard we'll check in. when we come back, an update on the debt ceiling bill in congress your top stories at the

intersection of business and politics straight ahead. and later a star on the rise actress awkwafina will talk to us about her rise in celebrity as we head to break a look at yesterday's s&p 500 winners and losers >> that was wonderful. >> brave vo. >> that was good >> could have been better. >> i didn't like it. >> was terrible. >> it was bad. >> it was awful. through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. frto collaborating remotely with beyour teams.

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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. ♪ good morning, everybody. welcome back to "squawk box. we've been watching the u.s. equity futures after a disappointing day for the bulls yesterday you'll see some green arrows this morning dow futures up by 66 the s&p up by 11 the nasdaq up by 76.

despite yesterday's losses which were the biggest one-day declines seen since may, you are seeing green arrows this morning, and right now the dow is on track for the week to be just below break even. the nasdaq and s&p 500 are on track to being up for the third out of four weeks. the house has passed a bill to suspend the debt ceiling and set spending levels for two years. that bill goes to the senate which is expected to okay the legislation and then send it to president trump desk for his signature. president trump said he is in favor of it. coming up, we have the latest on the almost-there deal between sprint and t-mobile including some updates on the negotiations between the justice department and the state ags that's what was holding it up. we told you it would come yesterday, now likely today. plus take a check on these big tech movers, they reported yesterday after the bell we will break down the big

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the justice department set to announce a significant merger and enforcement action this morning with the t-mobile deal the doj has been in talks with

state officials to win support for the merger a group of states attorney general filed suits to block the $26 billion deal for more we welcome sarah fisher from axios and ed lee is here as well from the "new york times. we expected the transaction to be announced yesterday there was a hiccup in the last 24 hours, it sounds like they've been trying to get some states that wanted to block the deal to turn around and say no do we think there will be success on that front? >> i think they'll put up a fight. down in d.c. this is a republican administration, these are democratic attorney generals and they have been pushing back with this type of stuff. we saw this with the census last week and they're winning in court. i would expect them to put up a big fight here >> what happens? success for him, if he gets five states to drop the lawsuit, is that success >> you can get a few states sso

drop the lawsuit, but california and new york are leading the charge on this they were nowhere near that meeting yesterday. that was an overplayed headline. the state ags were there to discuss something separate the attorney general put out this whole thing that we'll look at tech platforms. there was a meeting they were convening to do that then they were like you're here, i can talk to you about this other thing for a second there was no good politicking around it. if you're california or new york, you'll say i wasn't a part of this. we'll continued to look at this. >> which means the deal being approved by the doj means nothing? >> there's another hurdle to cross. it used to be you got the two big agencies to sign off, you're more or less done. no it's become a new kind of mechanism of regulation. >> how will this work on a state by state level they all will bring the suit together >> yeah. >> do they bring it -- what state do they bring it in? >> new york.

it's led by latisha james. >> you will have a new york state judge therefore dealing with this. >> right which may have their own opinions about all of this so do you think this deal ends up happening can it be blocked in certain states how does this work if you block it in new york and california, you're effectively done there's no point in doing that they know that the other specific thing to be aware of is their complaint was based on the fcc agreement to start with they have not seen the doj agreement yet. once they see that, if they amend their suit based on the doj agreement, that tells you how far they want to take it >> what does this mean for new york and california, those attorneys general, do they want a pound of flesh do they want to block it >> i think they want to see a viable fourth player will be taken seriously. if you look at the blocking with the fcc, what's new now is megan dell rahim says we have somebody

viable to compete. he needs to convince them that dish will take this seriously. >> we should look at what is dish getting out of this they'll get a prepaid business called boost about 8 million subscribers. they'll get some spectrum, more airwaves dish was seen as a potential viable fourth competitor, because they owned some spectrum that they were not using >> if they weren't using the spectrum before, what is to say they will use the new spectrum >> and it's expensive to build out the infrastructure to make use of that spectrum 8 million compared to when t-mobile and sprint merge, over 100 million subscribers. if you look at the stock of sprint and t-mobile, it's come up on expectations on the fact that this deal will get done based on what both of you just said, it almost sounds as if this deal will not get done. there may be an announcement

today, we'll all talk about whatever that is if you think there's a much larger problem here, whatever we're about to hear later today almost becomes irrelevant, no? >> i think shareholders need to factor in the state ags. that he could end up dropping it maybe, but it won't happen -- they'll take a close look. >> in terms of settling, a new settlement -- so they'll have today's settlement, what else can they do, do you think that with move the needle for the states >> they need to figure out a way that they can convince states that dish will take this seriously. maybe giving them more assets, maybe giving dish more wiggle room to bring on another financial partner. whatever it is -- >> but have they prevented them from bringing on another financial partner? >> it was held up a few weeks ago. we heard they only wanted to give them 5% access to a financial partner. this is one thing i was hearing from an analyst in d.c you're handicapping dish, if dish says we need more

investment and you say they can only get 5%, this is a tough thing to bring up with the courts they have some wiggle room there. the other thing is state ags were wanting a cable company to come in and do this. the one thing we might expect is they'll push that hard we've seen reports that charter wasn't involved in this negotiation with doj >> they rebuffed them. >> it seems to me that if charter or comcast or any of the big cable guys fguys, if they ry wanted to get into the space president trump would be back on twitter saying this is terrible, the world is being taken over, it's a monopoly. >> it wouldn't surprise me if that's happening if you look at the state ag lawsuits, that's what they want. it wouldn't surprise me if they come back to the table and say we're not opposed to the sprint t-mobile deal, but we have to get a different partner in there. >> and then t-mobile could bring on another partner with a bigger

capacity >> ed and sarah, thank you coming up, some big moves from two f.a.n.g.s after the quarterly report we'll break down the numbers next and we're getting results from twitter at the top of the hour that stock already on the move in premarket as we head to break a quick check of what's happening in the european markets right now they're in the green

amazon shares taking a hit after reporting weaker than expected results i don't know if it's a hit a little bump.

deirdre bosa has the details >> it's barely anything when you think about the quarter. this is still amazon less than 2% dip when profits came way down, expenses went way up investors telling us they have patience for the big bets and they're looking for that top line growth. the one-day shipping costing more than expected but the cfo telling investors we have been down this road before. first there was the move out of books, then the massive warehouse expansion, two-day shipping, fulfillment by amazon, all of these things were risky investments that ate into profits which has made amazon the powerhouse that it is today. a few things could be different. one, amazon remember services. the profit engine is seeing slowing growth it was the first time this quarter it dipped below 40%. second international challenges. they are not going anywhere, particularly in india. this unit is losing money and

amazon is fighting a serious battle in india against flipkart and mounting regulatory scrut y scrutiny there was no comment on such matters, but when pressed he said amazon's guidance does not fake into account any potential penalties or impact from regulation all right. let's look closer at the results from amazon with charlie o'shea, retail analyst from moody's. and then for google, here to talk about the big number there, mark maheney, who we use frequently, rbc capital markets lead tech analyst. >> charlie, we've been talking about amazon when there's troubles, i remember it at 1500, 1600, 1700. we're mid 1900s. it's hard not to make a deal out of not setting profits for the quarter, but 20% revenue growth

seems staggering >> i don't know what people expected the announcement last quarter, we're going to spend 800 million. it's multiples of that over increased competition. other expenses and kind of the ripple effects the impact it has on the warehouse's fulfillment, all of that kind of stuff, it adds up what we saw this quarter was if you x that out, amazon had a phenomenal quarter from a profitability perspective. these are investments. this isn't lighting money on fire this is investing for the future trying to increase the competitive position with brick and mortar. >> it's the first time they haven't beat expectations in two quarters that may be the only. >> the expectations sometimes are a little, for me, rosie. a lot of times the mast just doesn't work when you look at where people think they should be. >> so the cloud business is

still growing gangbusters but it was growing a little slow. wasn't 40% or 36% or something revenue, is that microsoft are they -- is that still going to be a driver, no >> yeah. that sector is getting increasingly competitive as well and the competitors there are every bit as good as the walmarts are on the retail side. trees don't grow to the sky and at some point that growth is going to grow and margins are going to grow and that's a natural evolution. i think we have to be prepared for that >> i don't know if you've weighed in on mnuchin's comments that would scare me if he spoke for the administration >> which it seems to me he usually does. >> he kind of does. >> the president by the way makes his own comments that's not destroying you. >> i'll speak to it as a retail analyst, not a politician or political analyst.

i don't see where the analysis gets you to amazon having that much power as a retailer when you look at it and compare it to walmart, it is much smaller. when you look at it from a third party perspective, amazon has provided the third parties with the ability to sell online let's think about what brick and mortar has had to do over the last several years adapting to the online world walmart has spent billions, target, best buy e everyone has taken a lot of time and money. if you are a smaller retailer, you don't have time to do that you outsource it to amazon but at least you're there. >> in terms of defining the antitrust issue or market around amazon, you could say small on a relative basis if you define retail broadly, so actually the way treasury secretary defined it, it would be small, right >> uh-huh. >> if you say electronic retail, then you're at, what, 50%?

now that's -- >> that's why it's still larger. as an electronics retailer. >> electronics. >> no, online. >> overall online retail, they're about 50% of the market. >> if you count gmv, our calculations have them around 40 if you give them 4x for gmv. >> even if they're at 40%, the next largest at ebay at 6% i think that's where that argument comes from. >> if you look at it through that lens, but we don't look at it through that lens and i don't think that's the lens for which to look through it you have to look at it in the context of full retail from where i sit and there's no question that amazon has been beneficial to the consumer price transparency, all that sort of stuff, and has helped its third party merchants. yeah, they have to pay up, but at least they're getting the ability to do it without having to make the investments themselves and potentially failing. >> we don't want to ignore google you know, mark, i just -- i just looked you up with my yahoo

search engine. actually, i didn't no one else did either if there's anyone that probably has to worry about being dominant, it's google and the results this quarter, it's back to search, isn't it? they keep trying all of this other stuff with the money that they make from search. any success in these other areas that we should, you know, really say, wow, that's awesome or still kind of mediocre? >> okay. i like the setup, joe. three points here. i think first what was really unusual about google wasn't this quarter, it was the prior one where revenue came in short. this quarter, i thought this was kind of back to norm this was a company that for about nine years, believe it or not, sustained an average of 22, 23% organic revenue growth and they did it again this quarter it was the last quarter where it dipped down to 19% that was kind of the head scratcher and it still is. the core advertising business seems to be as healthy as ever

there were two new callouts last night that i think were part of the stock jumping up as much as it did that was the second best outperformance in the aftermarket that we've seen in google in three or four years versus if they called out google cloud. it's 8 billion -- >> is it profitable? >> we don't know we assume so i don't know why you wouldn't look at aws's business they proved that cloud computing can be profitable at scale >> why don't they say it it would help, right >> yes, it would help, you're right. the other place that would be helpful is youtube they give us anecdotes they said the number of channels with a million viewers it's a small little data point it proves what you thought which is that you tube is pretty big the last point, joe, real quickly is they upped their share authorization by 125 billion. they have 120 billion in cash sitting on the balance sheet

they increased the share reauthorization but it's good news >> it's been posited that there will be more -- you see more ads on maps and that's easy for me and on youtube as well after -- how long are they on youtube, mark? >> you stumped me on that one. ten years or something like that. >> we still don't know how that does financially no idea? >> no. it would be nice if they disclosed it we think it accounts for about 1/4 or 20% or a quarter of their ad revenue it's probably about a $20 billion a year business if that thing was trading on its own it would probably be $100 billion plus asset in terms of market cap, market value we don't know. our guess is it's around $20 billion a year. >> should they continue to try to do things that is not in their main lane or is that a waste of money >> yes no, absolutely

investors want to see the option value. we want to see some value out of waymo and that's what will help sustain the growth long term. >> big day to day, mark. thank you. you're going to stick around. >> all right. >> for twitter but charlie, thank you. buy anything you're wearing on amazon pocket scarf >> i'm not sure. >> socks, underwear. >> maybe socks yeah, maybe the socks. yeah >> one of the socks. thank you. deidre, thank you. >> we'll be right back

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read all about it. earnings from the blue bird expected any minute. we'll bring you the numbers and the reaction. trash talk the c eo of waste management. plus, rising star awkwafina. >> content creation and her new deal with hotel tonight 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 becky quick and andrew ross sorkin dow as far as equity futures up 53 nasdaq up strong a lot of that is alphabet up 70. the s&p getting back some of yesterday's giveback although it remained above 3,000 which no one predicted on the sell side you can see it's probably going to get 3010 or so on the s&p twitter results hitting the wires. julia boorstin joins us. she has the numbers. good morning. >> twitter growing its users as well as its financial results faster than expected the company reporting revenue of $841 million that beats expectations of 829 million. adjusted earnings per share, that's including one-time items coming in at 20 cents.

that's a penny better than projected. now as for all of those all important user numbers, up side surprise 139 million monetizable daily active users in the quarter. that's 5 million more than the prior quarter and over 4 million more than projected. that number particularly notable because there's so much concern about stagnating user growth and in the more valuable user market, which was expected to be flat, the company added a million daily users. third quarter guidance for the top and bottom line is on the lower end of analyst expectations company projecting revenue between 815 and 875million versus the analyst consensus of revenue of 869 million ceo jack dorsey saying in the release they've identified progress and delivering more relevant content of course you will hear more from him on the twitter call which starts in an hour. andrew, back to you. >> thank you for that, julia we appreciate it

want to continue the conversation about twitter mark boheney is joining us right now. mark, is this a first quarter that they're doing this monetizable daily active users, no longer talking about active users? is that right? >> yeah. they introduced this concept a few quarters ago it's not the first quarter but they have switched the -- we were starting to talk about dau, daily average users versus monthly average users. it's fine. >> it's fine what does that mean, it's fine you don't seem that excited. >> no, when companies disclose less it's not a good thing the metric they disclosed is a good thing the ads were good as julia pointed out. you want to see that the fact that they can add a million each quarter is a good thing. so these results are better than expected this company normally prints up side to its guidance they did it again this quarter seems like things are well

impacted twitter. >> stocks trading 39.62. when you go back and redo your models today based on the new numbers, i don't know if your models are going to change what do you think the stock is actually worth >> we have a hold rating on the stock. we think fair value is ruffly in this ballpark. it's not a clear buy for us. now i think the story has fundamentally gotten better. there's been a lot of management improvements and product improvements one of the interesting things they're doing is making it easier for you to follow topics, not just individuals so if you want to follow the golden state warriors, you can do that and capture all of the good bloggers, tweeters that hit that topic rather than try to find those there's nice key improvements that they're rolling out that will make the site more intuitive for a lot of people. that's good for twitter. there's tough comps. i think we're going to see holding off on the stock

>> you think there's material more investment than facebook had to make in the past couple quarters >> not that bad. not as big as facebook has had to make but i think they're going to have to spend a little bit more they want to make sure when the elections come around that there's no tampering, no influence and twitter's obviously an extremely important platform going into next year, twitter should be interesting as the stock, not this year. >> julia >> andrew, i think it's interesting the company has posted its shareholder letter and the priorities in this letter are two things. one is the progress they've made on health. talking about 18% drop in spam, suspicious behavior. they've showed that growth -- daily active user growth expanded to 14%. we haven't seen 14% growth since q3 of 2014 so i guess my question to you, mark, is whether you think fixing the platform and cleaning the platform up from that bad behavior is going to mean that this has a bigger potential

audience than people had thought? the question is sort of how big do you think twitter can be? did this quarter show that the market for this product is much broader than we may have thought a year ago >> julia, you're asking the right question the data point you just laid out, the 14% growth in daus, that trumps everything else, take that with all the puns intended that's the single most important thing. if they can show the single dau growth, it should follow making the sight sa-- site safe. the company has done a pretty admirable job in fencing that job on the side. if they can continue to do that, the base should expand it's not going to be as big as facebook or snap, but it can be bigger than it is today and that's good for the stock. >> that was my question for you, mark in an environment where facebook is going to be at least facing the cloud of washington, d.c.,

where does twitter land? where is snap? if you could own either -- you know, either or all three, in what priority would you put them >> facebook first, snap second and twitter third. >> third really >> yeah. i mean, look, you look at facebook, you can buy this thing at 20 times earnings so valuation is very easy you don't need to spend a lot of time thinking about it it's also got 20 to 30% earnings growth you're buying it at a discount to its growth rate and the number of option plays you get out of facebook with what's app and international markets, potentially libra. there are a lot of options. >> you're discounting washington completely it sounds like on facebook >> i hate -- don't quote me as saying that but, yeah, i think -- well, look what's happening with google's fundamentals over the last few years despite all of the glare these are really just taxes that

companies like google and facebook increasingly and amazon are going to have to face but google's results show that they can power through regulatory takes. my guess is that facebook's going to be able to do that as well the fundamental value of facebook to advertisers and consumers is overwhelming. it overwhelms regulators. >> we are going to quote you on that this is just taxes that they have to power through? but, mark, ask you -- >> look -- >> mark, just wanted to ask you about the guidance also though do you think the guidance is impacted by those regulatory issues and that concern? and what should we think about the gid dance? we've been talking about the user growth? how does everything happening in washington play into what's coming into the third quarter? >> i want to see what happens. the one thing we haven't had a chance to go through yet are the margins and the margin outlook look, i look at the revenue results as right down the middle of the fairway for twitter pretty consistent. that's a good thing.

the company is starting to show and generate a track record of consistency. investors like that. whether they're going to have to materially increase infrastructure investments around trust, platform security, that's the question mark for me and for some investors i don't know the answer to that question yet that's going to be probably the single biggest new piece of news we're going to try to get out of the earnings call. >> mark, we'll thank you julia, thank you both on the west coast this morning. thank you. >> thanks. here's what's making headlines at this hour shares of amazon are falling after earnings the bottom line earnings did not. amazon spent more on shipping to ramp up the amazon prime service. the first time in two years that the company has missed earnings expectations still, stock is only off by about 1.5% 19.44 is the last tick google parent alphabet beating estimates on the top and bottom lines for the latest earnings report. that's giving the stock a big

boost. it had continuing dominance of internet search and that stock is up by 8.2%. you heard what mark mahaney said here washington doesn't matter what comes into this. it's additional taxes they have to pay frankly, that's what the stock is reflecting. many of these stocks are reflecting that. they don't think -- >> the fine is now a tax >> where does it go though >> the money the tax? >> well, actually, i don't really know where taxes go either but the fines -- all these fines, where do they go? does it ever do any good >> they do a couple things they oftentimes pay for some of the enforcement action -- >> here's $5 billionto do an investigation -- >> if you have a department of justice, you have to pay these lawyers. what do you think is going on here >> it can't be $5 billion for lawyer fees. >> hopefully not >> fine the company so you can afford it. >> you're doing it so you can

have a competitive environment. >> i know lawyer fees -- >> astronomical. $5 billion. >> so you don't know where the money is >> no. you go back to some of the money from the financial crisis. >> where did that go >> it went back to people who were misguided by banks. >> did it? >> yes, it did. >> that's a complaint that not enough did i don't know where these goes. what's the e.u. do with it constantly shaking it down. >> money heaven. >> yeah. most taxes go to money heaven, right? >> not really. not really they have to pay for things. i don't understand the roads -- who pays for the roads that you're on every morning. >> i've got -- right now i'm glad i have rack and pin onbecause i've got to avoid a lot of things. maybe that's why there's not enough. >> not enough taxes to pay for some infrastructure. we're going to get -- >> maybe we'll do infrastructure >> we'regoing to do the first reading of second quarter gdp. that's coming at 8:30 eastern time economic growth is expected to slow from the first quarter

growth rate of 3.1%. coming up, the ceo of -- speaking of taxes, the ceo of waste management talks trash the business of waste disposal is considered a gauge on how the economy is performing. we're going to hear from him in a bit. if you don't appreciate your trash man, visit rome. see what's going over there. and chief privacy officer chris kelly, regulating big tech and much more. stay tuned you're watching "squawk box" on cnbc the music event of summer...

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check out a special encore performance of brett young's song, "catch." available only on xfinity. just say "brett young" into your x1 voice remote. welcome back to "squawk box. the futures are here a number coming at 8:30. meanwhile, the dow's indicated up 55. the nasdaq indicated up 68 and change and the s&p up just under 10 welcome back, as i said, to "squawk box. we're going to have a lot going on this hour after we check the futures, which we just did move along here, becky looks like we're going back to break? >> we are. >> we're going back to break and then we have a big star coming up. >> that's right. when we return, her start on youtube launched her into the business

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that's awkwafina she got her start on youtube in 2014 now she's had two film shows -- two film shows at sundance she's been to the golden globes and sag awards she's been the second asian-american to ever host "saturday night live." she's here to talk about that and her partnership with hotel tonight. comic, actor, rapper, potential "squawk box" guest host. >> yes. >> at some point >> i'm down. >> good morning. are you? >> oh, yeah.

you guys are fun. >> you don't have to go anywhere -- >> you could stay for the rest of the day. >> start the day. >> start right now i don't know if i've got -- >> checking your nonexistent watch. >> she has an appointment to wash her hair in ten minutes. >> exactly exactly. hair looks great looks clean. you don't need to -- start with this partnership for hotel tonight. how does that work why did they pick you? just explain it. >> i think it's easy to partner up with things that like you actually use, you know i was introduced to hotel tonight on the set of "neighbors 2," a co-star of mine. i was trying to book a hotel last minute. she was like, dude, you've got to check this out. it's this app and then it's -- i got very addicted to it. so, you know, level 7, you know, showing off there. but -- >> what's level 7? help us here >> it's the vip level. >> okay. so what do you have to do to get

level 7 besides be you >> no, you just have to use it a lot. i could be higher. i use it a lot. >> what do you get by being level 7? >> i think you get some credits, right? you get the like fulfillment of being a level 7, you know? so i show off about it, you know >> but the way it works is you get last-minute deals. >> last-minute deals show up and get cheap prices on hotels that are open that night? >> yeah. it's very vast range of stuff. like i actually put two friends on -- via hotel one is a service apartment in brooklyn and then my other friend wanted to stay in the city so i put her in the city i just -- it -- i think it's really a symptom of this generation who doesn't really plan for like three or four-week vacations, right i don't have time. instead taking smaller micro trips and a lot of the time you just want to be in your home by and near your friends.

>> i think level 7 in scientology, you're a god like tom cruise i'm not kidding. do you get min be any bar access or something >> no. no that does not happen. >> that's level 8? you can't get mini bar service with level 7 your whole career is kind of amazing because so many people -- how many people are on youtube? i found out it's 13 years that google has owned youtube, never disclosed any financial -- 13 years. everybody would like to do this. what made you different to be able to just -- to really parlay it into incredible you're so young. your career is just starting. >> oh, man i don't know i don't think that -- i think that a lot of people could do it and a lot of people did. back in the day when i first started, youtube was known as asian hollywood. it was known as this place where you uploaded your own videos and a lot of these kind of asian youtubers popped off because, you know, the format is --

you're in control of your own content. that's how i started there's no gatekeeper there on youtube. then i think that kind of -- it escalated into other things. i got my first movie seth rogen saw my youtube video, hired me from there. and, yeah, it's been like that. >> what did you think when you got that phone call? did you believe it was him >> well, seth rogen didn't call personally >> you know his voice? >> but, yeah he -- it was amazing i really didn't think that that -- that my career -- this -- i would have a career. >> how much of your life now professionally do you think has to happen on social media? meaning on a daily basis, how much do you say, i've got to take a picture, put it on instagram. you have a million followers on instagram. how much do you say i have to upload something on youtube in an ongoing way >> i don't instagram enough. i think i could be instagraming more i use it more to just watch like

funny videos and cooking tutorials. but i feel like, yeah, of course like if you're going to be in the industry in 2019, social media is going to be a big part of everything that you do. i think you also have to maintain a healthy relationship with it mentally i don't think you need to be constantly addicted to it and i also don't think it should dictate like your mental health. so you just have to have a good relationship. >> would you say you're an actress now? if someone says what do you do, do you say you're an actress >> if i'm trying to get out of the conversation quickly, if i go into it, it's too much. >> "farewell" has now dethroned "avengers end game." >> that's cool. >> it's a smaller number but -- >> yeah. i think the cool thing about what happened with the

"farewell" when we were making it, it hadn't gotten bought, all i know is i personally resonated with the story what we didn't know is how it would affect other people and what we're finding is that across the board asian-americans and more, you know, there's a universal aspect to it there's a deep relationship between the granddaughter and grandmother that i think a lot of people -- a lot of people feel and so it's a really cool bridge between cultures. >> so when did you do snl? it's hard for me to stay up. anyway -- >> i know. >> not because i'm old. >> not only because i'm old. >> you're right, thank you >> 3:45 is the wake-up call. when was it? how long ago was -- >> that was i think last october. >> last october. who's your musical guest >> travis scott. >> wow >> that was great. >> that was a great week for you. >> he's incredible and

everybody. >> yes, yes, very legendary. to sit in his office and hear all of the pitches there's a whole system that goes on there you feel like you're a part of history. it's really cool. >> it is very cool probably won't happen for us in our lifetime >> come on. >> maybe the three of us could maybe -- >> speak for yourself. speak for yourself >> right maybe you won't. good luck. keep us updated. >> thanks for having me. >> how do we book you for -- we just call you like seth? >> dude, just call me right up call my home phone, yeah. >> 215- -- >> yes >> yes, that's the number. >> the email address. >> the email address is 212-555 --@gmail.com. >> on the bar scene, i was like, that's not a number. >> thank you >> thank you have a good one. thanks. a lot more coming up this morning the business of garbage, waste management's

going to join us to discuss the economy, quarterly results and a lot more as we head to break, take a quick look at u.s. equities. dow opened up 55 points higher s&p 500 up 10 points nasdaq uovp er 70 points we return in just a moment

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♪ ♪ please file this by baby shark just to annoy both of my co-anchors. >> i don't mind baby shark. >> who's baby shark? >> the two most annoying songs to my co-anchors still to come, the ceo of waste management on quarterly results and the state of the economy that is coming up. >> sounds like garbage. >> then facebook under fire. chris hughes helped build facebook into a social media company and then it took off and became a giant now he's working to try and break it up. we'll have that story and reaction from former chief privacy officer, chris kelly ronald mcdonald ready to report

quarterly results. we'll talk burger numbers. mcdonald's is a dow component. the dow is up by 54 points byha wl bk thbeacwi ba srk

snoelt baby shark ♪ ♪ baby shark ♪ baby shark >> i don't get mad that often. i don't. but this song really gets me in a way that is beyond -- >> keep it going. >> why did you tell us that? >> because you're playing it ♪ ♪ >> keep it going >> now i know how to tick you off and i know how to tick you off. it's so easy >> good morning. talk about dom chu, he's patiently waiting with some names that are moving. you've got -- why? why? why? >> right >> huh >> why not >> don't ask why >> don't ask why always ask why not. >> my daughter went through that phase for a month and i had to hear it all the time you guys had to resurrect. >> thank you, dom. >> it was stuck in my head, i was humming it and andrew almost

lost my mind. >> i'm losing my mind now. ♪ ♪ >> i will try to do morning movers that song is burning in my head. we'll start with shares of twitter, baby sharking away here is the main event on earnings. up about 5% down 2 million shares on premarket volume a roller coaster ride following the earnings result here profits and sales both came in better than expected there's positivity over the growth in daily active users it's outweighing some of the negativity around a current quarter sales forecast that fell below analyst estimates. this is the first report from twitter that excludes the monthly active users metric. we're watching those shares, 6% higher also shares of amazon down by around a percent in a quarter or so roughly 25%. the online retail and cloud computing posting weaker than expected earnings. sales better than expected

a lot more emphasis placed on the 37% growth rate in amazon web services robust and then -- baby sharking has got me all throated up here. alphabet class a shares up 9%. 25,000 shares pre-market volume. announced a big boost in stock buy back program those shares moving. by the way, let's drop these tombstones and show you something else here. earnings related not yet. on monday beyond meat shows something else shares up 8 to 9% on pretty decent trading volumes the market cap of this company, now $13.5 billion. it reports earnings on monday. becky, that makes it worth more than molson coors, it makes it worth more than j.m. smucker's and it makes it worth more than campbell's soup. alternative meat bigger than any of those establishment consumer products companies back over to you.

>> that's amazing. >> i can do this, this one what's the other one >> there's like five. >> oh, my god. >> i'm sorry i just -- you're -- >> the song. >> do you remember, dom, were you around for the an him in mall orchestra >> yes. >> what about a rendition of the animal orchestra playing andrew -- >> that's what -- >> carl -- ♪ ♪ ♪ ♪ baby shark ♪ baby shark >> i have joe and the music to deal with? this is a lot for me. >> the walrus. >> you know who our next guest is, by the way, dom? >> know, who is it >> jim fish. >> getting chased by the baby shark. >> do you believe -- he's leaving. my god, he's leaving the set because he's a -- ♪ >> no, andrew is leaving he's had enough. >> dom, thank you. we'll see you later. >> he just fired his pr people

>> hosting better than expected profits and revenue. waste management also reaffirming their guidance the stock is up over 31% year to date it's outperforming the index joining us is jim fish >> beautiful shark. >> good morning, good to see you. >> not only did you beat earnings and expectations. the earnings and revenue and profit were up year over year. what does that tell you? what are you seeing in the end markets? >> it tells us that the economy is pretty strong we're usually considered a lagging indicator. we do have some components of our business that are leading indicators those are performing well. there's a lot of opinions on where the economy is going, but we seem to be seeing some strength. >> which parts of your business are leading indicators would it be cardboard boxes or things you're seeing from shipments and businesses >> that might be a piece of it if i think of construction demolition material. >> of course. >> that certainly is a leading indicator. commercial is a good proxy for

small business and when we see them adding to the size of their container, that means they're showing some confidence in their own businesses, which i think is a good indicator of the future of the economy >> how would you gauge where all of those leading economic indicators in terms of your business are versus where we were, let's say six months ago when people thought we were heading into a dire situation? >> they were pretty close to where we were. our special waste volume has been up double digits. our construction volume has been up double digits we haven't seen any weakness in either of those two which are the strongest leading indicators and they seem to be strong just a year ago. >> jim, when i think of you i think of waste management not only as a good economic indicator but also trade talks with china there's a bit of that that plays into your business, too, especially with recycling. what's happening can you get us up to speed >> two years ago china was a big customer they're buying 2%.

we've had to find other homes for those. most of it is here in the u.s. some in other southeast asian countries. we haven't thought much about china of late other than the fact that there's a micro economic problem that they've driven the price down. recyclables and the price we get for them are at 25-year lows. >> the china situation, is that directly because of the trade or tariffs or was it a situation building up before that? >> yeah, i don't think it's really related to tariffs. china imports this material and they want it to be clean i understand their position. they want it to be clean material they don't want to have to clean it up when they get it a lot of it was not. so they've put these quality controls out there >> is that just because americans are really bad at recycling, we don't clean things out before we try to recycle >> a little bit might be that. i think the more we recycle and the less we understand about what goes in the recycle bin, the more we default to the

recycle bin. that ends up contaminating. >> you think you're doing a good thing on the side of erring on the side of recycling but you're contaminating the other batch? >> we've started and have put fees in place. >> when in doubt, throw it out should be the lesson your operating ebida was up by $6 million even though revenue was down so what are you doing differently? >> that's those fees that i was talking about. revenue was down significantly, $38 million and operating was up $6 million so we're passing some of this through. it still is a tough -- you know, recycling is a tough picture right now. the good news is the solid waste business is more than overcoming that. >> one of the things that i also was really interested in reading through some of this, you've got a new training facility in fort myers that you're testing things out just in terms of what kind of training you can do for people, how that extends their career, how it makes them stick around with waste management longer what is it what are you learning? >> the new one is in glendale,

arizona. fort myers was the first one the reason we've put these training facilities up as opposed to just training them in the field is that what we find is when they go through the training facility, they're half as likely to leave of course, truck drivers are a pretty highly coveted position there's something like a million open truck driver jobs out there right now. so the fact that they go through this very structured training at these state of the art facilities causes them to not leave, and that's a good thing for us. >> the training facilities, you're doing that because it's such a tight labor market? we're going to get the jobs report next friday too. >> some of it is that. some of it is that we make sure they're fully trachtd on safety. we do that anyway but it's a very structured one. >> why do you think it's so hard to find drivers? >> you hear millennials don't want to drive trucks they don't want to operate equipment. we're putting up a remote operating system

we're remotely operating from off site that seems to be pretty attractive to the younger generation we have a couple of 25-year-olds that enjoy it. it's like playing fortnite basically. >> for the full year you are set to hit the guidance on the street >> we are. >> jim, i want to thank you for being here jim fish. >> you bet. coming up when we return, facebook under fire once again we're going to discuss the latest round of antitrust probes and the privacy issues facing social media company chris kelly, former chief privacy officer at facebook will join us to discuss one of the co-founders is helping the government helping the government try to up end all of this. here are the futures at this hour, dow jones up 57 points we'll return in a moment ♪ ♪

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>> 2001 so there was a thing or two. it was happening in washington >> i think a lot of that what obviously. continue engaging. >> look at the power of it that's together and then there's the antitrust issue. i want to ask you about that

"the new york times" reporting, chris hughes is actually working with the government to try to help the government. what do you make of it >> look, as i've said of it. >> vaguely defining it sprint on some levels. the reason that they're sort of reaching talk about the power of it and social media an interesting conversation. the power and it's leveraged and

at the end of the day that's a case that has to be proven >> one thing with the government. >> ultimately. >> brad fink

he was mark zuckerberg's roommate >> look, people make choices differently. >> maybe it's a less traditional argument the acquisitions effectively to limit the marketplace. that actually was the argument and back in the day. >> yeah, oil is limited at the end of the day you're competing for it. >> relatively unlimited supply

of what you're trying to get at. >> since i have you here, do you have a different view about third party marketplaces, for example, on amazon or on google or even the app store at apple given that the netscape/microsoft question? >> there are things that companies that have market dominance in a space can do that are designed to limit competition. i mean, one of the key examples in the microsoft position was for processor licensing and all of these things where the pc manufacturers had to pay even if they didn't load microsoft windows on as an operating system bring in those type of practices to an end. if somebody can point to what google, amazon, facebook are doing in particular areas and then engage on that, that's i think an interesting, you know, discussion to have >> unfortunately if the department called you, chris, though and said, look, we're looking at these four companies, what do you think, what would you tell them? >> i would say, look, the fact

that there is -- that so much consumer attention is focused on these companies and the fact that they're major economic markets is worth looking at. the question is you have to look at the conduct antitrust laws are ultimately about the conduct of the companies. having a monopoly is not illegal. it's even hard to say that any of these companies are monopolies until you get to a particular market definition space. when i had other clients where you would get ridiculously narrow market definitions in some cases that were proposed and you explained to the ftc or the doj that, look, you can't look at it this closely. there are substitutes and things that flow into the goal of the law is to protect competition, not competitors. and so what you often get is competitors coming in saying, i want this piece of advantage in the marketplace. >> do you buy from a privacy perspective or maybe from a security perspective one of the arguments that facebook will make, as will google, is look by

being big, we actually have a better chance of thwarting untoward actors because we can invest in the security and all of the measures that need to be taken if we were broken up in three or four pieces or whatever it would be, we wouldn't have the capital effectively to do that properly? >> you have to run a profitable business in order to make sure that your platform is properly policed and clean, and that's one of the things, you know, with this ftc fine that's $5 billion that facebook is not spending on upgrading privacy controls and on looking at how to compete more effectively in the marketplace. and -- because that -- you know, the company's gotten to a profitable place they can absorb it. >> do you look at a snap or twitter, which are clearly meaningfully smaller businesses but in the same space, and say that they are meaningfully less secure as a result of their size >> i don't think that that's necessarily the case i don't think you have to be

that sort of essentialist about it, but i think you have to see, you know, competition on pliefs si and security in the marketplace and facebook is certainly dedicated to that. google is dedicated to that. amazon as they get more into advertising and obviously running the cloud servicesen a good chunk of the internet, they've got to be very, very concerned about this so it has to be a major source of investment and influence and innovation and the question is are we going to make sure that these companies continue to do that and are you going to do it in a world where they're also competing with ten cent, alibaba and all of these other players. >> read the political tea leaves if you will. right now for reasons that seem almost inexplicable, this issue, these four companies, there seems to be sort of bipartisan support for at least investigating them, if not more. one of the things that we've debated at this table is whether

there really is bipartisan support or whether this is a little bit more of a we're going to do this, we're going to show and perhaps more from the -- on the republican or the trump administration side whether this is a little bit more for show, a little bit more for -- to demonstrate that they're interested but maybe not really do something in terms of enforcement where clearly there are people like elizabeth warren on the democratic side who would like to break them up meaningfully. >> in politics people do different things for different reasons. that's kind of the way it goes some of it of course is posturing. whether you're talking about overblown allegations of conservative bias or anticonservative bias. all sorts of different things that are going on. there are some people who are legitimately concerned about what privacy means in the digital age. what the companies are finding right now is they have to be very engaged in this conversation and i think that everybody stood up and taken

notice in silicon valley about this and that's a very healthy thing. i'm in des moines today. this will be a political conversation as we run around the state of iowa. >> chris, it's great to see you. appreciate it. >> appreciate it. >> say hi to the folks in des moines. >> thanks. dow component, mcdonald's ready to report numbers. stock rising 20% the numbers after the break. ♪ ♪ "squawk box" will be right back >> are you embracing it? >>. ♪ ♪ ♪

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earnings alert dow component mcdonald's reporting we will bring you the numbers and the instant analysis. faang in focus two tech giants on the move while regulators are looking for ways to restrain them. and a crucial economic report this hour second quarter gdp talk about what it means for the feds decision this week. 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 nasdaq market site in times square i'm joe kernen along with becky quick and andrew ross shark bite, shark bait, what's the name of that >> baby shark. >> dow out with second quarter results. earnings per share came in at an adjusted $2.05 it was $1.97 you add it back in you get to $2.05 which is right in line with expectations. revenue came in a little better than expected. $5.34 billion versus the 5.32 billion that the street had been

anticipated. it's same store sales. u.s. comp store sales up 5.7%. global comps were up by 6.5% let's say global comps up 6.5% versus the 5.1 the street was expecting. u.s. up 5.7% versus the 4.5% the street was expecting really impressive. you can see it being reflective. up by $1.56 which is 3/4 of a percentage point looking through, they said there was some refranchising efforts that offset some things. there is a currency impact consolidated revenue was flat. it would have been up 3% if you were looking at it in constant currencies looking through some of it steve easterbrook, the ceo and chairman said they're going to continue to focus on their customers. it's something they've done very well since he's been in that

job. >> we will come back to mcdonald's in just a little bit. before we do, i want to get you caught up on other big stories moving markets amazon posted mixed results for second quarter profit mixed expectations. revenue beat analyst estimates it was also the first time in five quarters that amazon did not post record profits with shipping costs escalating during the quarter. amazon gave third quarter operating income guidance that fell well below earnings estimate amazon says the growth in cloud business decelerated in mixed expectations it's the prime membership trying to do the one day delivery that has a lot of people -- i don't know if it's a problem but questioning how long it takes to get things ramped back up. >> 1%. >> 1%. big nothing. google parent alphabet beating the top and bottom for the second quarter results were boosted by google's continued dominance in internet search but said its board of

directors included a repurchase of up to additional $25 billion worth of the class of c stock. that stock up 8% at that i can a look at chip giant beating on the top and bottom lines intel's traditional pc business saw a 1% revenue increase compared to an expected design apple will be buying intel smartphone modem business. the purchase price is $1 billion. let's go back to mickey d's. >> now that we've had time to digest the mcdonald's numbers. deeper analysis. managing director. did something jump out at you or you were nodding i get this this is what i expected. what do you think? >> yeah, no, these were really good results earnings numbers kind of in line the comp numbers like you said in the u.s., really strong suggests they're resonating with

the consumer most of this is driven by the average check. the average check in the first quarter was up substantially a little more price. it's mostly moving away from deep discounts which really did not work last year they're pulling away from that now you're seeing the comps inflect. this should be good for margins and should be good for the franchise franchisees. >> can they just coast, take off? what needs to be done? a lot has been turned around in terms of how fresh the food is, how quickly you can get it, how clean the facilities are do we go back to innovation now? what would you do? >> i think it's all about technology you see all the acquisition of dynamic yield several months ago to invest in tech into the drive through. remember, the drive through makes up about 70% of their sales across the u.s. and they're making investments in the technology there to drive through put to drive the average check higher

in our view it's just investment behind tech which is a smart move on their part. >> how do you make drive through faster i didn't realize it was 70% of their sales. >> 2/3, 70% of their sales in the u.s. drive through locations. the way you make it faster is the order taking process that's one of the slowest parts of the process if you can figure out a way for the customer to place their order before they get there or move that process along faster, you can increase the through put at the drive through also, they have slipped down their menu a little bit so that helps with through put as we go forward. >> it makes a huge difference and just what you said right there, i've waited and watched these ridiculous looking drinks ten minutes later come through the window and it's like, it's not worth -- that was definitely i think, you know, not a benefit to mcdonald's or customers you have to slim it down, get it

fast, get it fresh and have it hot. that will do it. i think that's what this guy really brought to the table, so to speak, when he came in. >> yeah. i agree. i think you've just got to stick to your core menu items that sell really well, engage the customer through tech and drive the through put. i mean, consumer wants convenience and if you can't get it through the drive through, then where are you going to get it >> what do you hear about either beyond or impossible or mcdonald's when does that actually happen that would -- i don't know what stock i'd want to look at on that what do you think, peter >> so i think the challenge for some of these larger brands to get some of these plant-based products into their stores is supply that is going to be a challenge. whether they can do it is still yet to be known. i think they're still waiting to determine whether this is a fad or whether this is something that's going to have some legs

to it. so i still think it's a little bit early on some of these plant-based items. >> you also cover starbucks, do you not, peter >> i do, yes. >> what's the latest there, do you think? >> you know, i thought the results last night were excellent. definitely we saw an improvement in transaction counts sequentially so that was really impressive you have to remember that half of the up side to the earnings numbers so far this year have come from a better tax rate. the other half has come from improved results which is very impressive not trying to take anything away from starbucks, but it is approaching a ten year peak on the pe multiple and the earnings numbers, they're still impressive but we think they're going to slow into that high single digit, low double digit growth rate going. >> peter, you don't cover beyond meat, do you >> i do not, no. >> i was trying to figure it out because dom is making the point it's trading so high at this point, it's above some of the

other food companies. >> crazy. >> like campbell's or beer company he named, too. no thoughts on what any of that means, just the fake meat? >> they can't make it fast enough he said. >> yeah. you're right i don't think they can make it fast enough at this point. lots of restaurants lining up to increase the semi-but, you know, just waiting i still think it's early. >> peter, one of the big things is delivery. when you think about door dash, when you think about uber eats all of these companies that are in the delivery business how do you look at those guys given that they're in this space and connect to the mcdonald's of the world? >> i think delivery is clearly becoming more and more important. i think what you're seeing is more of the restaurants partnering with multiple delivery partners to increase the breadth and hopefully reduce the costs, but i think the bottom line here is i think the restaurants have proven that delivery is something that they

want to do, now they've just got to make the economics work in the end i think you'll see the consumer pay more. they can't give this away for free they can't lose money on each transaction. i think what you're going to see is the prices to the consumer for delivery going up. >> who would you bet on the delivery side? open table, i know that's not mcdonald's, but open table announced they're going to connect in to a lot of restaurants around the country so instead of being able to pick a reservation, for example, you can actually get delivery directly from them leveraging the uber eats, door dash. >> we're bullish on grub we cover grub hub. we think the expectations are too low. they're doing a great job of acquiring more users, building their base of restaurants, focusing on average checks that actually make sense which is $30 and higher average checks. that's their core.

that's where you make money in this business is delivering those higher average checks. that's where the driver can get paid, that's where grub hub can get paid and that's where the restaurants are going to make money. we're bullish on grub hub. >> dominos so dominoes decided to get faster deliveries from opening even more stores now starbucks i already think, you know, they've got three out of four corners in new york city, but that did not hurt here when does that become an issue and is mcdonald's in just the right number or do they still add? >> look, i think for mcdonald's in the u.s., i don't foresee them accelerating or adding a lot more stores. i think it's more about generating more out of the stores that you have and building off of that base. so i don't think you're going to see a lot more store growth beyond the 14,000 or so that you have in the u.s. >> how about starbucks >> on starbucks side, no, i

think they're still adding more restaurants, you know, across the country. i don't think that's slowing down any time soon i think you're seeing them invest more into the drive through restaurants which generate significant can'tly more revenue per location. i think that's going to continue and so long as these comps, you know, continue to be in that, you know, mid single digit type of range with positive traffic, i think they're going to continue to make the investments because the cash on cash returns are very impressive on starbucks. >> do we care about fish do they have a carbon footprint? do we need to replace the fillet >> is that actual fish or -- nobody knows, right? is it one of those fish with two eyes on one side do you know? >> i think it will be around for a very long time. >> do we need to worry about that they're not like cows, right we don't care quite as much,

right? >> i don't think they're going to get rid of the fillet o fish, right? >> already we're not sure whether -- anyway. peter -- >> i love them >> fillet o fish. >> i haven't had one in years? >> no. >> you're kidding me >> fridays. >> that shows you i'll eat -- i'll put anything -- >> yeah. >> ah, my fingers. >> make sure not to miss -- i even like white castle fish. >> white castle has a fish >> make sure not to miss a first on cnbc interview with starbucks ceo kevin johnson. >> sliders are one thing fish sandwiches? >> i love those. a little later this morning on "squawk on the street. >> i learned something new. >> we can play that shark song again. >> no. >> when we come back, key investor take aways from two of the biggest faang earnings reports. we'll highlight the numbers you need from amazon and alphabet and look at amazon's third quarter reports next week.

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they would open up about 53 points higher. the s&p 500 looking to open 8 points higher. we have some tech news as well >> big tech names moving on earnings reports google sharply higher after top and bottom line beats. amazon is slightly lower after an earnings miss joining us is gene muenster. founder and managing partner gene, let's break this down. google, those results were kind of amazing what do you think? >> well, the step up in revenue, becky, was most impressive 19 to 22%. google is the gold standard when it comes to revenue growth with the exception of last quarter where it dipped down it's grown for the last 4 1/2 years from the 20 to 24% range is the tightest of any of the faang names in terms of growth rates. that is the simple reason. the real reason why the stock is moving higher today is i think investors have more confidence

that the combination of youtube, search, a little bit of cloud, the three of those come together i would also mention there is a dark side to the impressive growth rate. that's simply the reason why the company can deliver the predictable results is they have a lot of control over how search monetizes, specifically in how they show ads to consumers, the frequency of ads, for example. and if there's a regulation piece to this, if regulators can impact how they show ads, that may have an impact on m monetization longer term the simple take away is the normalcy of predictable growth. >> gene, i'm glad you brought that up. we spoke with mark mahaney when we start looking at regulations, there shouldn't be any regulatory overhang because best as you can tell, there's nothing that would generally impact him

how worried are you that the feds could come in and say here's what you can do with advertising? how much of an overhang do you think there should be? >> i think it's a measurable overhang i think i am most supportive of the google story longer term i think it is an overhang. simply put they are bundling maps and youtube with search you can draw analogy to dell microsoft bundled search and google does the same that to me is one of the areas they're going to be needling at, the regulators the second is how they do their search results i think there is clearly an intersection point where regulators will hone in. evidence of that is what they've been through in europe and the amount of regulatory oversight they've had there and changes with how they've done business the company on the call really

shrugged off -- there's only one question surprisingly about this but they essentially said that they looked forward to working with regulators. i think when you put it altogether is that there is -- i put google at probably the second most at-risk versus all the large tech in terms of the regulatory environment. >> who's one who's number one on the list >> facebook. >> facebook? >> yeah. same basic concept how they bundle products how they bundle effectively instagram with facebook. we know instagram would not have been instagram if it wasn't for the rails that elevated it on facebook the same you can argue can be said about what's app. payments, for example, would ride on both of those platforms. i think there's some -- this is on a competition side. we're not talking privacy. on the competition side.

facebook and then separately google and then a distant fourth would be apple >> i want to talk about amazon's earnings, but before we do, just to put a very fine point on this you're worried about the regulatory overhang and what that would mean for profitability and monetization mark was saying the fines that are out there, you know, that's more like a tax that they're used to paying and they can power through it you think it's more than that. you think it could eventually affect their overall monetization down the road >> i think that risk exists. if you're going to say what's the probability that something happens? i would say that it's somewher between 25 and 50% it is a measurable enough probability that i think it will impact the world's multiple. >> let's talk amazon the stock is down by 1 1/3% after missing on earnings after eight quarters

investors have always had patience with this company do you think that's still the case go ahead with investments, forego probability >> it's been quite incredible. they invested in this growth and the growth really skyrocketed from 10 to 18% on unit growth. unprecedented. they din to make progress. most impressive. >> what would you do with the stock at these levels? >> i think it's over valued. i have a question for you three, how do you think about amazon's multiple this tends to be the biggest x factor 52 times when you compare it to goiogle at 21 times and apple a 15 this seems like somewhat of an outlier. from my perspective i feel shares are over valued understand the growth opportunity but i understand shares are over valued.

>> you felt that way for a long time, haven't you? >> i have, and the stock continues to go up the way i would put this, at some point amazon simply needs to deliver the earnings. i think one of the biggest take aways from last night is number one is amazon makes good when they invest in business they need to make good on delivering unit growth the best in the past year. investors, this is a growth story. invanya shivashank investors like that. at some point they need to deliver on the earnings piece of this the commentary on the call was that they will be investing aggressively in one day. that could be for the next several quarters so i think it's over valued. >> gene, thanks. it's good to see you >> thank you coming up, the economic number of the week our first look at second quarter gdp is on the way at the bottom of the hour. "squawk on the street" has larry kudlow coming up at 10 a.m.

eastern time you're watching "squawk box" on cnbc

the impasse continues between occidental petroleum and investor carl icahn. icahn opposes the $38 billion deal that occidental proposed saying it was financially irresponsible. "the wall street journal" says

icahn asked steven chasen to join his slate of board of nominee sources telling the paper chasen declined that request. told former ceo that he would join the board if it would help solve the dispute. icahn is said to have spoken both over the phone and continue to disagree over the anadarko deal occidental up 1%. david einhorn out with a new letter to shareholders it begins with a new case study of chewy comparing it to pets.com those who think the 2000 bubble was the big kahuna, consider chewy. he didn't say he was betting against chewy which seemed to be the implication. his market value is 30 times pets.com he also thought -- >> he was short in that same letter he talked about something he was short in. >> i'm going -- now i'm sort of

thinking back. i was actually thinking back right now to green mountain. remember when he was against green mountain for so long and then green mountain went up. it's kind of tough we'll see. when we come back, we've got breaking economic data second read on economic data a few minutes away we'll break wndo what it means for your market and investments. "squawk box" will be right back. oh, don't worry. voya helps them to and through retirement... ...dealing with today's expenses... ...like college... ...while helping plan, invest and protect for the future. so they'll be okay... without me? um... and when we knock out this wall imagine the closet space? yes! oh hey, son. yeah, i think they'll be fine. voya. helping you to and through retirement.

welcome back to "squawk box" right here on cnbc the second quarter gdp number is out in a few seconds rick santelli standing by at the cme. >> yes, our first look at second quarter gdp. it has a two handle. that's a good thing. 2.1 to be exact. definitely better than most expectations i was viewing and indeed follows sequentially 3.1. let's go through some of the internals, shall we? that's quarter over quarter. consumption rate, well above the estimates. sequentially blows away rear-view mirror at 1.1. the price index also a little hotter than expected hey, anybody at the fed watching

these numbers. 2.4 following 1.1 there as well. that 1.1 both on consumption and the pricing index were upgraded from .9 and finally a personal consumption expenditure. the quarter over quarter, kind of a fed favorite here, 1.8. that missed the 2% that we were expecting sequentially following up 1.1 listen, we're always supposed to look at this as an average many including our own steve liesman has done research saying the first quarter has anomalies. pretty good numbers as evidenced by yields yup ticking. we just ticked off 210 we were in the 190s just a couple of weeks ago. in the short end getting close to 190 and that's, of course, 2s, 3s, and 5s dollar index getting very close to some of the best levels we've

seen in -- well, since about the third quarter of last year becky, back to you. >> rick, stay right there. steve is here. he's looking through the numbers. steve, your take away on this? >> rick was absolutely correct to flag the consumption number which is up 4.3. we were looking for 4% it's nice that we held on to q1. i'm trying to see if there's a bit of the reversal. structure's down 10% equipment also kind of flattish at 07. the intellectual property number at half. you did have the capital spending slowdown, both on the equipment side and the i.p. side that the fed is worried about. it's not disastrous. you had exports reverse themselves down 5% versus up 4%. imports were up 0.1% government, very strong. very strong. federal spending we talked about this i said this was the reason why people had some of the strength

of 19 wrong which was because they didn't understand how the government spends money. they had all of this money allocated in '18 and spent in '18. it comes over. you have a 7.9 i have to go back in a very long way, and i'll do that in a minute, to find out when you had a 7.9% quarter on quarter annual increase plus a 3.2% increase in state and local spending that's going to be a piece of it in a second i'll tell you what the contribution to the gdp is here we have a reversal of the first quarter, which is what we expected i think the way to think about this, you take your 3.1, you take your 2.1, you average them together and you have a 2.5% economy which is still running a half a point or more above potential and this concern and craze about this slowdown that everybody was crazy about i just think at the moment looks -- >> rick had the right point. what is the fed watching on this you wrap up today's numbers, you

wrap up what we heard from the ecb today. what does it mean for the fed meeting next week? >> you can listen to rick's question, guys, a question, what is the fed watching? >> no, i was -- it was a rhetorical question. >> what is the fed watching? >> it was totally meant to be a rhetorical question. it was totally a rhetorical question. >> i know it was you and i both have the same question on this, which is, what is the fed watching? or what is -- i don't know, you put the emphasis wherever you want >> i think they're watching mario draghi and taking notes. the scariest thing this president has ever said, you know i like his policies for the most part, he's thinking he might have to hire mario draghi, oh, my good. ruth bader begi er ginsburg saif trump won she was going to new zealand. i'm having the same thoughts if mario draghi comes here. >> i just know that -- okay, it gets to be a bit of a semantic argument but it has sort of an investing issue here the economy did slow, right?

but is it a slow economy and it depends on where you put this potential let's dispense with the nonsensical political thing. president trump can say what he wants. it's not all that relevant to economic growth. it's not that recommelevant to investing. are we going above potential >> if i'm an investor, i care about what the fed does. interest rates and stocks. >> maybe too much, becky. >> it seems like that's been the only game in town for so long. >> as to how the market trades but -- >> stocks aren't expensive stocks aren't expensive if you're still looking at 2%, 2.5%. >> did you ever hear a reporter undermine his own beat that's what i'm doing now. >> what's that, rick >> reporter: if you are saying what many traders, investors and analysts are saying, the fed's the only game in town, then we have a problem. >> oh, yeah. >> reporter: we really do. i know central banks have gone

wild but truly, you know, congress, the public, eventually they're all going to be knocking on the door. central banks, and specifically the central bank in this country, really has to tone its influence down. >> but the problem is, look, as an investor you can't fight the fed. i'm not saying the fed is right or should be the biggest game in town. >> reporter: but it is it is the biggest game in town. >> why would you trade that in for 2% or 2.1% ten year. that's crazy >> reporter: i know. >> it sat things on their head. >> reporter: yes, investors like it, but in the end investors -- >> i don't know if investors like it. i think investors can't fight it what i'm saying is the federal research, other central banks loom large because the policies that they are setting have such a massive impact on the markets and what it means for whether stock prices are high or not it's just impossible to fight

it you may not like it, but it's impossible to fight it >> reporter: a massive impact moving aside the real market. >> right i agree with you on that i agree. >> reporter: it's not the star anymore. yeah, it's now a co-star, if not a supporting role, and that's just not a good thing. end of story. >> can i just give you some quick data here on this idea of reversing some of the strength of the first quarter investment was plus one in the first quarter, minus 1 point be point 09 in the second quarter inventories, plus a half a point or a little bit more in the first quarter, minus .86 big drag. >> inventories could be partly tariffs and trying to move forward? >> right all of this is potentially tariff infected maybe is one way to put it. trade. net trade was 3/4 of a point contribution of gdp in the first quarter. now it's .65 subtraction from gdp. all of this could have some

influence on trade not necessarily positive or negative, but just messing with thenumbers in terms of you hav people front running on the imports, front running on the exports. you have a buildup that's why i like the idea of looking at it across two quarters >> for more reaction, let's look at it. >> how are we going to get into it you're invited to dinner, too, at taco bell alex brill austin, i want to talk to you about a lot of things. i want to talk to you about this

debt deal that we finally reached and whether we should worry about what he was happening. let's start with gdp we -- as steve said, we've slowed but it's not a slow economy. do you think the fed is in a weird position to be thinking about cutting here >> i don't think it's that weird. i think it's slowing and so the fed -- they're either going to cut now which they probably are going to do or if they don't i think the market pressures on them are going to be really high to cut to me, the irony is that the only thing preventing them from cutting, i think, is that the president is out publicly haranguing them that he wants them to cut the interest rates so every time they go in and say, hey, maybe we should adjust it down, at least it has to raise in their mind, yeah, do we want the world to think that we're doing what the president is demanding of us. >> alex, do you like this gdp number about what you thought >> i do.

i think that it's a solid number the inventory piece and the investment numbers are a disappointment but not a surprise overall we see strong consumers. on the fed, i with agree with austin what the fed has to do more than ever is try to block out and make the best call to boost their credibility here or sustain, i should say, their credibility. >> the gdp grew 2.2% per year. you spent that whole time saying 2.2% is pathetic, it's horrible, look at how slow the growth is donald trump's first year in office the growth was 2.2% we have one year of sugar high from the tax cut and now we're

back down to 2.2% and you're telling me that it's great >> we'll see obviously nobody knows the future the depth of that recession if it was a different type of recession, fine. you can say we didn't deserve the ragan type numbers out of that dreep session when you head much higher you have spring loaded we had none of that. i think it was because of all of the stuff you were if a nagfana. would the average aei resident fellow have voted yes on the debt deal? would the average aei resident fellow be cutting interest rates here >> well, i hate to speak for my colleagues, we're a diverse group over at the american enterprise group i would be a no vote i would be alone they've unwound a budget constraint that they imposed a few years ago successfully maya mcginnis and her group put

the cost of this deal at about $1.7 trillion. we're thinking about things on the order of magnitude of the tax bill i would assume that folks are in the economics world across the political spectrum who railed against the costs of the tax cut would be concerned about the costs of this deal as well it's a significant increase. obviously the problems we have with the deficit aren't focused on discretionary, it's mandatory, but that doesn't mean we should -- we should go willy-nilly and spend blindly on discretionary spending. >> alex, do you see if you do a rorschach on this economy, do you see it the same way that austin does, that it's the same economy that owe boom ma had generated except for a one year sugar high from the tax reform or do you think there are some structural damages from what happened >> yeah, no, i don't see it the same way i do see it growing faster we have to keep in mind that the range of growth rates that we would expect in our economy are

at the low end 2 and the high end 3. the details matter it's not like we might have zero or we might have 10. growth is in a narrow range overall. we've got one quarter a little bit softer than the previous quarter. i don't think that means that we're in an obama economy. >> see, austin, not everyone -- you always -- no one was even bringing that up but you somehow just did that's why i'm worried about dinner is that all you're going to talk about is sort of trying to convince me -- >> he's going to talk about how right i was and how wrong you were and that's going to be the whole dinner rent out the restaurant, keep it open extra time. >> i don't know. i just remember that -- yeah, i was around for that ragan snap back we had like 7% gdp at one point. you know, we added like 700,000 jobs that was a real rebound. >> joe, i know when you were a kid it used to cost a nickell to go to the

movie. >> both ways. >> movies for a nickell? >> that was my grandma. >> i can still get a taco for 59 cents. that's what you're having. >> steve >> i want to correct something that austin said. >> oh, good. >> he didn't know he was wrong about this they revised 2017, the first year of the -- >> it's going to be a good revision. >> -- trump administration up to 2.4 from 2.2 the last year of obama is the mini slowdown that nobody talked about that i think was very influential remains be at 1.6. i will also point out that they revised the last three first quarters up. >> okay. >> so this may be part of the -- >> is that using your new -- >> buy bea. >> is that to adhere to your standards for the first quarter? >> it's getting closer well, we were influential in getting them to revise the way they calculated q1 and as a result q4 of last year took a really big whack as whacks go.

1.1% down from 2.2 it did not change the full year for 2018 so this happens, folks it's very important to nope, they're going to go back over the next five years and they'll revise today's number and the average size of the revision plus or minus 1.3 percentage points. >> why do we bother? why do we do this? >> that's been coming down the bea has been doing a good job. it's important to know we're in and around the job that's plus or minus. >> i'm sorry about that, austin. will you write that down, 2.4 or are you going to keep using 2.2? i know you you don't care anyway >> i'm taking him to chick-fil-a. coming up, when we return a live update on twitter's second quarter results. we have the conference call. we'll get you ready for the friday opening bell with the dow just barely negative for the week stay tuned "squawk box" returns in just a moment

under and hour to go until the opening bell on wall street. dom chu is standing by he has a look at the biggest stock movers what do you think? >> anyone, becky, who's been watching "squawk box" over the last year plus is not surprised by what's happening with mcdonald's stock because shares are up over 2% over 200,000 shares premarket volume the world's biggest publicly traded restaurant company are in line with expectations sales are slightly better.

it's the sales growth at established store locations that are getting a lot of attention with the so-called comparable sales with the u.s. up 5.7%. digital and mobile offering options. if these pre-market gains hold into regular trading, it will be another record high. twitter up around almost 6 to 7% at this stage. over 4 million shares pre-market in terms of volume it initially dropped on earnings profit better than expected. there's positivity over growth and daily active users that's outweighing some of the negativity around the current quarter sales forecast remember, this is the first report for twitter that excludes that big monthly active users metric then we will end two green but then one red one goodyear tire shares are down by around 7.5%. roughly 60 to 70,000 shares pre-market volume. it posted profits short of

expectations sales also below estimates and goodyear was hurt by lower unit volumes especially when it comes to tires, guys, that comstock on new car purchases which it said reflects lower global auto production amongst other others another commentary on the global auto market. back over to you. >> dom, thank you. let's talk more about twitter. second quarter earnings call is under way. julia boorstin has been tweeting about it no she joins us now with more have you sent out a tweet on twitter about twitter? >> i may have tweeted about these better than expected results. and twitter shares continue to move higher throughout the earnings call, going on right now. jack dorsey saying just recently that this quarter's higher than expected user growth reflects their work improving the health of the platform and the fact that now they're able to fix their problems quicker >> we're moving much, much faster on the health initiative, butllowing us to

move faster within consumer and revenue products as well we're finding the good development engine and we are better aligning all the teams to make sure that we focus not only on the clear and present initiatives, but we're able to move much faster with much more agility going forward in everything >> dorsey talking quite a bit about focus on the call, saying now they understand what twitter is and why people use it and that focus is enabling them to prioritize what they should be working on and he says they're continuing to work to continue to improve the platform, including making it easier to follow and participate in conversations, which he says is the heart of what twitter is about. this is all about continuing to drive that user growth we saw this quarter andrew >> thank you for that. we want to talk about the broader markets now, joining us now, dale kronks at wells fargo and president of the wells fargo

investment institute got to tell me what the institute is separately. and mike santoli also here this morning. what is the institute, by the way? >> it is just a group of all of our strategists and analysts that we have put together in one ra. >> we're looking at this mixed picture you see mcdonald's on one end of the spectrum and google on one end and amazon how do you make sense of this? >> so, we're about 52, 53% of the way through earnings season. we front end loaded a lot of the sectors already that have good earnings so financials, tech, industrials, all early in the season what comes later in the season -- later in the season, healthcare, energy, staples, which all -- >> apple coming up and other biggies. >> part of the tech side we're getting to the back side of the earnings season i think the percentage of beats on both earnings and sales probably slows in the back half, brings us back to 2%, 2.5% growth for the quarter. >> we're going to have -- i assume today will be a light day, it is a friday.

i don't know what time you think people will head to long island. >> yeah. it will be light but significant because we did get this gdp number that i think we have to kind of filter through people's zpek ta expectations i think investors will have to assess what this means for what this tightening represents it doesn't really seem to represent any kind of effort to stimulate the consumer u.s. economy, which looks great, when you have starbucks and mcdonald's comping those wages well above 5% in this economy. that's not the mission it is looking more like the technical adjustment to get short term u.s. rates down toward the global standard of the global norm and especially get them below where the ten year yields are. if that's the case, we priced it in the stock market is up 20% since the fed last tightened in december that's way different from almost every tightening -- from almost every beginning of a rate cutting cycle we have ever seen

before. >> wanted to ask you about this, did you see this story, investors buy bonds, even as shares rally what is going on here? >> it is interesting i'm glad you brought that up i was looking at flow data for the first half of the year $150 billion of net outflows of equities that's the largest outflow of equities we have seen in four calendar years through july. and yet markets are streaming higher inflows into bonds, $455 billion for the entire ten-year cycle we put 1.7 trillion so we had 25% of all the net inflows and fixed income, just in the first seven months of this year. >> but if these people were your clients, would you be telling them they're right or wrong? >> we think the bond market looks rich to us right now with where rates are unless you believe the ten year is going to zero, unless you believe we think the fed pricing in 100 basis points of rate cuts -- >> what do you think the people believe then >> people have still been

positioned for the slower growth and recession problems and we clearly saw as mike pointed without gdp, at 2.1% gdp on the back of 3.1%, this whole fear in the first half of the year on recession worries just is unfounded. >> don't you think we'll have tougher comps next year? >> on earnings >> yeah. >> the tough comps on earnings are this year. coming off of 20 plus percent earnings growth, that's why you're seeing 2%, 3% earnings growth the fourth quarter numbers have to come down 10% unrealistic earnings growth. next year sitting at 11% earnings growth on consensus is probably still too high. that has to come down. markets have to adjust. >> if everything adjusts -- >> second half of the year looks like a grind it is -- >> higher or lower >> probably a couple of percent higher we think we front end loaded a lot of the gains in first half of the year. and the second half of the year, episodic volatility, nonexistent in the first half and maybe 2%,

3% higher from here. >> do you want to be in cash now? do you think there will be a low point where people are going to be able to pick something up >> in our portfolios, we're overweight cash now. we think you're going to get some pullback here, so we would not be aggressively buying equities at today's levels. >> okay. darryl, great to see you. >> thank you. >> we'll be watching you today. >> you bet still to come, getting ready for the opening bell on the final trading day of the week. be sure not to miss a post earnings interview with starbucks ceo kevin johnson, coming up on "squawk on the ayunti" in half an hour's me st ted you're watching "squawk box" on cnbc

a final check of the markets for today, hopefully, not forever. but you never know, right? >> there is a cherry -- >> live every day. live every day >> carpe diem. >> the s&p indicated up nine the nasdaq up 58 no movement based on that gdp print, which was -- is this really across the board sort of in line with what most people were thinking. 208 now on the ten-year. and the dollar, which after the

eu stuff earlier this week, dollar got weaker and weaker -- sorry, euro got weaker and weaker, 111 today. have a fun weekend, good weather. >> i know. it is friday >> not everybody goes east some people go west. she goes south make sure you -- >> "squawk on the street" is next ♪ i just got paid ♪ i just got paid good friday morning. welcome to "squawk on the street." i'm carl quintanilla with sara eisen, david faber at the new york stock exchange. cramer has the morning off this is one summer friday you can't afford to miss earnings from twitter, mcdonald's, amazon, google, intel, starbucks, we'll hear from the ceos of the last two later this morning on cnbc futures do look to bounce off the thursday sell-off. europe is mostly green our first look at q2 gdp up