♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. it may be august 1st out there, but it's freezing in here. 27 degrees here. we'll start with the fallout from fed chair powell's announcement that yesterday's rate cut could be one and done the dow fell as much as 450 points before moderating losses. the dow was down by 333 points at the end, a decline of 1.25% almost the worst session we've seen since late may first let's show you where the markets are now. u.s. equity futures have gained become a bit of ground they lost yesterday. dow futures indicated up by 88

points you were talking about down about 1.8% for the dow and s&p, down 2% for the nasdaq s&p indicated up by 7 points this morning nasdaq indicated up by 30 points overnight in asia, some weakness in stocks there, too probably started by what happened here. the nikkei actually ended flat the hang seng was off by three quarters of a percent. the shanghai was down 0.8% in europe, where there is active trading taking place at this hour, you will see there are green arrows across the board. the biggest gainer of the three major averages is the cac up three quarters of a spent. more modest advances for the ftse and the dax treasury yields will be watched closely. treasury yields went into a free fall on the fed's report yesterday or the idea that it would be one and done. you can see the ten-year barely held on to a yield of 2% that was the weakest level in three weeks. this morning trading back to

2.04%. there were two key words that sparked a strong reaction from the markets and president trump. let's get over to steve liesman in washington. >> bottom line from yesterday's meeting is the market expecting one less rate cut from the fed and there's criticism fairly widespread of jay powell's communications let's look at the probable leai and the change you had a 70% probability of a second cut coming in september before the meeting that's down to 39% it was 100% probability by december, and now that's 64% so still pricing in that second cut. it's the third cut that is pretty much gone away. look at the next screen. it will show that you a 57% chance of that cut happening in december third cut of the year, two more from here, that's at 33% jay powell did not appear to be confident nor did he clarify the ambiguity of the policy

statement. it was a somewhat hostile press conference markets sold off after powell said this was a midcycle adjustment and not a major easing cycle >> the committee is really thinking of this as a way of adjusting policy to a somewhat 34 more accommodative stance. again, we're thinking of it in the nature of a midcycle adjustment to policy >> there is a lot of disagreement on the street about where the fed goes next. this is a survey we put together with my crack producer 50 basis cut by year end,ed additional 50 from barclays, bank of america and deutsche 25 basis cut for goldman, jpmorgan the president saying powell let us down.

i don't know if you want to talk about it now or at 7:00, but i think the market misunderstands what a midcycle adjustment is. what do you mean >> i looked at the last two midcycle adjustments, one in '95 and waone in '98 '95, three basis point cuts over seven months in 1998, three basis point cuts in three months. if you're worried he called it a midcycle adjustment he just met where you were priced. >> we only have enough dry powder for an adjustment went doe have enough for an extended easing. >> we don't. right. >> so tell you what i thought yesterday, which was weird once again, the market hears from powell. you know, things are still pretty good. there's maybe a little bit of weakness in europe i don't think we'll need a lot to of accommodation. that's bad that makes no sense.

then from the context of the dollar, it looks like europe is weak, their currencies -- you saw what happened to the euro yesterday. >> dollar straight up. >> that wasn't supposed to happen from the viewpoint that we're not going to get anymore competitive currency-wise with a one rate cut, and europe's malaise threatens to really keep our dollar too strong. for them to drag us into their slow growth a little bit >> did you see what richard fisher said? he wrote a letter to a bunch of people yesterday he said his mother used to tell him when his brother did something -- when he did something stupid he would blame it on his brother, he said if bobby stuck your hand in the toaster, would you do that, too? richard is making the point of if the other central banks have these policies that maybe are not working so well, should the fed -- >> they are calling the shots over there that's the sad thing about it.

>> are they? i don't know >> the central bankers are >> we have to react to them. >> do we do we? that's part of -- do we really our growth is better than their growth we follow our own policy we're so hung up on this dollar thing -- >> you're criticizing him for it or you're saying he came under criticism for it, maybe it's unfair i also thought -- my initial response was my gosh, down 400, 500, we're pushing on a string and the market finally realizes it this is not a panacea. i thought that hopefully that wasn't it, it was the disappointment of not being a more extensive cycle >> el-erian is suggesting what the markets want are what the central banks can't deliver and won't deliver, having extended growth that has to come from other places >> one last thing that occurred to me yesterday, steve i can look at this two ways.

it could be good that we're importing this inflation from europe and slow growth, we can keep our pedal to the metal and maybe nothing bad will happen. we can have an economy with lower rates. the other thing that scares me is because europe is so slow, are they causing us to keep rates below where they should be andmal-investment occurring? >> i think those are good questions, joe what i'm trying to figure out is this, did powell -- let me set the stage a bit. i've been talking for a long time about the market being very aggressive relative to where i thought the federal reserve was. we have chronicled at least five committee members who have said they didn't want to cut at all so you want to think about what was going on in that room yesterday and how much scope powell had to actually explain himself relative to where the

committee was in the meeting that said, there was an adjustment coming. yesterday some of it happened. i think the key adjustment was backing off that third rate hike, at least making it more uncertain rather than definitively priced in >> that's why i think it was not a miscommunication or a communication error. >> did powell mean to do that or was it accidental? >> it's either that or continue to get led around by the markets. if you want to break free from them a little bit and say you're getting out of whack with where your expectations are and where they should be >> i've done nothing but ask fed officials the same question. are you happy where the market is priced? they did not push back against it the reason i think i disagree a little bit, they could have done that before, now they want to do it now after the meeting maybe that's right but i think -- >> you mean they should have communicated that message

earlier? >> it didn't seem that well thought out to me. >> the market reaction was initially disappointing, don't market traders realize we have two less months of the balance sheet rollof off, we got a quarr pointless. the adp looked okay. we got the quarter point, some easing here. if things are okay tomorrow i think it's back to going to new highs. >> it's the whole weirdness of the markets being so hung up on the fed and what the fed will do ver versus what the economy will do. i always thought they had it backwards. i would take 200,000 jobs over two rate cuts. >> the market wants 20 point cuts we'll be at minus 3% by then, but i don't get it >> we do have some other voices we want to bring to the table this morning we have the global head of rate strategy from td securities. and eric knudson joins us.

we can relate gate what yitigat trying to say and the way he said it, but you saw the expectations for the rest of the year i think that's what will move markets one way or the other am i right i'll go to you >> we're looking for another two more cuts this year and another three cuts next year >> let me ask you a different question, where were you 24 hours ago? >> we have not changed our call. >> okay. >> i think what the market was disappointed with is there was no clear reaction function i think steve is right, the committee is divided here. some want to do one or two cuts, others are nervous about global growth slowdown feeding into the u.s. that division in that committee was clear. >> and williamson wanted to do at least two and go aggressively >> exactly you have people across the spectrum i think it was not so much a miscommunication as they just don't know i think it's very hard for the

market when the central banker says we don't know -- >> were you surprised by the reaction of the market since this was the expectation or was this buy on the r50uumor sell on the news in. >> i think we went in with a lot of expectations. we wanted the fed to clarify that they will continue to cut and they didn't do that. >> should he have just shut up honestly >> right or to say that midcycle adjustment could be more than one cut. the market is pricing in four, maybe that's a midcycle adjustment i think the fed is trying to sell this hard as an insurance cut. i think the bond market is not convinced that essentially insurance cuts work. rates are already low. does housing get a boost does capexpic pick up that's where the markets reacted with disappointment >> does jay powell realize that

the markets can put him in a box? >> i think he realizes there's a third issue of solving the world's problems is the challenge here almost nothing changed in the official statement the only thing that changed was reference to the global economic situation, which is not necessarily anything the fed should be worrying about we have a little didn't view we were one fewer rate cut than what the market was pricing in the market was pricing in three to four, two this year we were always one under that. >> even prior to yesterday >> correct we think part of what happened yesterday -- you could look at the market movement and say powell muddled the communication. there's an element of that >> if you were jay powell, what would you have said? what could you have said that would have sort of threaded this needle >> without coddling the market >> he could have been clear this was going to be a multi-cut m -

mid -- it was midcycle but there would be multi cuts. what happened was he was taking out the tail upside expectation round of 50 basis point cuts we're up 20% on the year instead of 21% pe multiples went from 14.8 to 17 >> are you calling this a tantrum? is this a bigger issue there was more of a heart drop moment i sort of had it -- >> i think you will keep going around -- >> jerome powell says he says what he is thinking and it makes total sense, that's what you can't do as the fed chairman a midcycle adjustment, maybe we got a little too high, the

december thing was wrong, we'll take this back and take a step back and see what happens. >> we'll see what the data says. >> we're only talking about at the worst levels it was 2% >> 2% for the nasdaq the s&p and dow were down 1.8% to your point we're still up 20% here with earnings basically flat >> that's it it's about stopping focusing on the fed. that was largely priced in and getting back to focusing on the real economy and what will drive earnings or economic growth from here the biggest concern we would highlight out of yesterday's move was the response of the dollar the fed has not cut for ten years -- >> dollar index up 0.6%. >> against the euro it was up more our expectation is that the dollar will start to soften later this year as interest rates converge and economic growth converges if you get a situation where the dollar is rallying from here, that puts stress on the entire financial system and does create the potential for some kind of competitive monetary policy.

what can you do? i would say this is a race to the bottom but we have blown through zero in a lot of countries. >> that's an area of concern that's not our best case we think dollar is overvalued, it should be softening from here if it does, that would cause us to be much more cautious >> i would agree with that the fact that the fed -- i think it's remarkable that for the first time they've explicitly linked their fed rate cuts to global development if the focus of the fed to cut rates is that you want global growth to pick up, but in the process you are getting a stronger dollar, that will weaken yen that won't help business capex i think one thing that the market didn't like is when he was asked about recession, he fumbled a bit. i think the market wants the fed to say if we see a slowdown we're going all in we didn't get that strong reaction function aspect from the fed. if the data does stand out weaker, we're very concerned -- i'm not sure the u.s. can

continue to grow as this one beacon of strength when the rest of the world is slowing. you look at europe, it's all slowing. i'm concerned this business investment weakness is finally going to show up in hiring data will be critical. >> we'll leave it there. i hope you're wrong. you may very well be right thank you both >> thank you coming up, beyond meat shares plummeting again today. we have a list of surprising names cashing in on that secondary offering including olympic snowboarder shonn white. and news out from a beyond meat competitor as plant-based fake meat goes mainstream. oh that guy is so creepy. i like him, but creepy >> creepier than ronald? >> i think they tried to outdo each other ronald is a good clown he's not a clown to be afraid of he has those things for kids >> ronald mcdonald house >> yes >> he's a good clown >> okay. >> not one of these scary

clowns as we go to break a look at the premarket winners and losers in the dow. ♪ i want it that way... i can't believe it. that karl brought his karaoke machine? ♪ ain't nothing but a heartache... ♪ no, i can't believe how easy it was to save hundreds of dollars on my car insurance with geico. ♪ i never wanna hear you say... ♪ no, kevin... no, kevin! believe it! geico could save you fifteen percent or more on car insurance.

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♪ beyond meat. we were talking about food beyond meat shares are falling again. beyond meat plans to sell three quarter million shares, and most of those shares are coming from early investors, executives and employees. the ceo plans to sell about $6 million in shares. the cfo, mark nelson, selling about $9 million klein and perkins is cashing in nearly 1$100 million of its

stake. jack welch, evan williams, sean white, general mills and the humane society are cashing in. >> so anybody i ever heard of who bought stake is now out? why are they doing it at 160 >> i guess they got to do that to get someone to buy it, right? you can't do it at -- >> the market price. >> don't think they're doing it out of the goodness of their hear heart. >> to have the ceo and cfo selling big stakes -- >> those are not big compared to what they have >> should you be locked up or should you not >> we have companies that are not even public trying to sell shares before they become public >> that's worse. >> if it was you and it was up -- how many percent --

>> sure, but if i bought the ipo -- >> even those people some of those have flipped it. >> they've done well >> that stock is up. there's a lot of future growth in that stock. >> if you're considering buying the stock now and you see everybody who has a stake in it selling because holy cow i can't believe it has risen, does that give you massive confidence about what comes next? >> no. >> i saw it side by side for the regular burger versus beyond meat, that was sort of earth shattering the one thing was cholesterol. everything else -- costs twice as much. calories higher. fat higher sodium higher. >> theburg s burger is not for loss, it's if you're vegan >> i thought i felt queazy i'm not sure but someone else had similar -- did you eat a whole half of a burger >> i've done that burger and the impossible burger. >> you had no --

>> issues later? >> yes >> he can eat 12 doughnuts, he's fin. >> that's right. if i eat 12 doughnuts -- i can't. i'll get a new belt. now it's hot in here you're lobbying for the -- >> feel how cold i am. >> have you ever seen people -- we're on tv theoretically. >> yeah. >> i louse that in the loosest possible sense cable. if it's hot, you're going to be -- when it's cold, you're like -- that's why people in meetings -- >> you have pants and sleeves on they dress me like this. i'm cold by the way, it's august outside. it's probably 65 degrees in here now. >> no -- >> this is why we have to talk -- we should talk about the attire you can make it cold and everybody can wear a blazer or a fleece that's why hedge funds keep it

cold and wear the fleeces. letterman would keep his studio freezing wanted the audience to be excited. >> ceos, some of them have 58 degrees. i need that at meetings at cnbc. i do i need it colder than that >> coffee and 58 degrees news out from a beyond meat competitor let's get to adidi roy >> good morning. i have my fleece here with me. >> mine is on my legs. i have the same thing. >> so funny. we need them close by, right >> right >> yep we have our little one market logo here. very nice. burger king has just announced it will roll out the plant-based impossible whopper to more than 7,000 stores nationwide starting next thursday. the news follows a successful test launch of the impossible whopper at nearly 60 locations in st. louis the suggested retail price will be $5.59, about $1.40 more than

the cost of a regular whopper. this is a big win for impossible foods which is valued at $2 billion and backed by invests like jay-z, katy perry and serena williams. the other major chains carrying impossible products are white castle, red robin, applebee's and little caesars impossible also, by the way, just received fda approval to start selling plant-based ground meat at grocery stores and retailers this fall going head to head with beyond. you mentioned beyond meat's secondary shares start trading today at $160 per share. expect it to raise $40 million for the company. the company will use it for scaling up and marketing costs the stock now in the red back to you guys >> thank you good to see you. >> good to see you

when we come back, are you worried about your car getting stolen buy a tesla. we have new data on the cars most likely and least likely to get boosted. and later, debate night highlights that matter for your money. democratic presidential hopefuls square off on everything from healthcare to trade. "squawk box" will be right back. how do you gauge the greatness of an suv?

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models, a sedan and an suv, and then two pickup trucks, the sierra and the silverado teslas are about 90% less likely to be stolen than the average car because they're more likely to be parked in a garage because people are rich or close to a house where they can be charged. the one car that apparently has the lowest percentage rate of being stolen is the toyota highlander nobody would want to buy that car, they wouldn't want to be seen in that car >> oh. >> i'm not talking to you about highlanders. coming up, when we return, it's a great car -- you know what it's a fabulous, fabulous car. >> you can leave that thing a anywhe anywhere you don't need to look ick it. >> i don't lock mine >> i think it may be one of the

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welcome back, you're watching "squawk box" live from the nasdaq market site in times square good morning welcome to "squawk box." look at u.s. equity futures after jerome powell's comments yesterday seni sending the markt down, not up we might have a little bit of a something going on here. dow up about 91 points nasdaq opening up about 32

points higher. s&p 500 looking to open marginally higher. 8 points for now shares of fitbit, that stock falling as much as 21% late yesterday after the wearable devicemaker cut its guidance for the current quarter and for the full year. it said disappointing sales of the new smart watch overshadowing a beat on earnings and revenue for the previous quarter. earlier this week apple posted a strong game for its segment for its wearable devices, including fitbit shares. >> i didn't put two and two together >> the question is whether that's really the case >> whether apple is stealing market share there's a new -- the new model for a lot of these folks may be a services model so there's a new company called whoop that is giving out the device for very little then you pay a monthly fee to

have access to the data on it. we'll see how this all adds up >> it's very interesting i had not put the apple connection i don't know why i was quickly reading through that stuff but the apple connection is a good one given how strong they said they were talking about it. if you're in the apple ecosystem already -- >> and trying to do a watch thing. >> all right coming up, qualcomm out with some disappointing numbers last night, missi ining revenue an guidance expectations. that sent the stock down about 7% overnight does this mean big trouble for other semis? later we will be joined by former atlanta fed president dennis lock heahart to talk abot the rate cuts and where we go from here.

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. welcome back shares of qualcomm are under pressure the company's quarterly revenue missed analysts estimates, though earnings of 80 cents a share beat what the street was expecting. qualcomm had a much weaker than expected outlook for the current

quarter. the stock is down by 7.25% this morning. the ceo said huawei was partly to blame for the weak quarter and it would continue to create headwinds for the rest of the year he said after the u.s. export ban huawei shifted focus to building market share in the domestic china market, where qualcomm does not reap as many benefits in licensingand product revenue. another chipmaker says they have begun selling products to huawei after the u.s. eased restrictions the chipmaker, intel, the ceo told cnbc that the company was selling products that it deemed within the rules of the law. swan says he has no long it will take the government to process all of the applications. swan says most of the products that intel sells to huawei are

general purpose compute which they don't believe causes a threat to national security. here to tell us what's working in the chip arena is chris keso, analyst at raymond james this doesn't bother you with qualcomm, does it? you would reiterate a strong buy and buy it today >> yeah. and again, the story on qualcomm going forward from here is the 5g story that we expect to play out through next year. it was surprisingly weak in terms of the guidance and through the end of the year. you know, in your opening you described some things the company had said it was surprising that apple had seen some stabilization in china after weakness earlier in the year so a lot of what's happening with qualm ncomm now is a share shift where huawei is stronger than people thought, apple is a little stronger than people

thought. the other factor the company talked about is they believed there's some stall ahead of these 5g phones that get launched in china the beginning of next year and that's still remaining to be seen we'll see some other chipmakers that supply into handsets the next couple of days that will fill in the puzzle about what's going on in china now. >> chips overall, it's such an important group for tech and then even for the overall market have you seen some improvement or would you characterize it as at least not getting worst and we won't know until 2020 >> i would say more the latter you know, chip companies tend to lead the overall market because of where they are in the supply chain. we first started to see this weakness last august we're almost a year into the semi downturn. earnings reports this quarter have not been great. what's been disappointing about

them -- this is the strongest period of the year, this september quarter is usually the strongest, you're seeing the absence of strong seasonality. the problem with the space overall, from here, given you're a year into the downturn, numbers are cut, shipping below consumption, at some point, you revert back to the mean and you start growing again. the problem is most of these stocks are close to a high, the valuations are stretched so the dilemma investors are seeing with semis is the next revision over the next 6 to 12 months is probably positive, but is that already baked into the stock's valuation? >> i guess a lot is dependent on what happens with the china trade talks. i had not thought about qualcomm supplying some of huawei's competitors and losing grown as huawei refocuses there >> huawei was most impacted in europe some of that is they can't use a

full android version on their phones so european customers turned away from them they retrenched in china, and qualcomm has less exposure to huawei than others kaum has n kaum has qualcomm has no exposure to apple right now, but they're getting back in next year. that could possibly explain some of this -- >> i thought the whole thing with apple buying the division from intel that they're buying is so they don't have to be so reliant on qualcomm. >> going forward >> when we say going forward s that going forward as in -- my understanding is that it was six-year arrangement are we talking about -- do you believe apple will have an apple phone with an intel or apple chip inside it within the next two or three years or are you talking about 6g? >> yeah, two or three years,

that is certainly possible you know, what you have to understand with that chipset now that intel sold to them, that was supposed to be the chipset in the 2020 phone that didn't work that's why apple pulled the plug and intel pulled the plug. so you're buying a fixer-upper there. the question is -- >> can they fix it up? >> yeah. >> intel themselves -- >> they always struggled the intel chip was always -- the qualcomm chip was always superior to the intel chip >> intel bought the business from infineon about seven years ago. it took about five years to get something working so that apple when they started this dispute with qualcomm could design qualcomm out even then, for example, on the iphone 7 generation, you had intel and qualcomm on different models of iphone the qualcomm version always performed better so intel never really caught up to that. my view from apple's standpoint, for the billion dollars they

spent to acquire that asset t makes perfect sense, if nothing else to keep qualcomm honest at this point qualcomm is really the only big supplier left that has merchant silicon for 55g, if you're apple you want to protect the supply chain >> bounce along the bottom but evaluations are already high so you want to own them but be selective? we have to go but -- >> that's it the one call we've made over the past couple of weeks is where we have conviction is the apple supply chain -- >> boy them. >> it's apple, some suppliers, skyworks is another one. at least there's something tangible, something that has changed going forward. aside from that, i think that the -- the increase in valuations is across the market. >> okay. >> semis are just leading that, maybe with the fed action yesterday that goes the other

direction. >> thank you >> thanks. when we come back, debate night part two we'll break down the key moments from the democratic candidates last night with frank luntz. we have a pretty good relationship. you've done a lot of good for the world. but i feel like you have the potential to do so much more. can we build ai without bias? how do we bake security into everything we do? we need tech that helps people understand each other. that understands my business. we've got some work to do. and we need your help. we need your support. let's expect more from technology. let's put smart to work. ♪ ♪

lasjdnight was day two of the second round of democratic debates which saw propertytial front runner joe biden fending off his rivals joining sus a political strategist and pollster. he has been in detroit watching all of this frank lutz good morning, i think what we want to do is play back a few sound bytes and have you react to them. let's start with healthcare. joe biden and senator kamela

harris had ai heated exchange this topic let's listen in, we'll get your take right afterwards. >> let's talk about math let's talk about math. let's talk about the in fact that theo pharmaceutical companies and the insurance companies last yearñialone profited $72 billion and that is on the backs of american families. >> i have the only plan that limits the ability of insurance companies to charge unreasonable prices number one number two, we should put some executives that total by ?;opo my plan inñ çóail. >> frank, whoo what do you think? healthcare has been a huge topic on every one of these debates? president of the united statesñ calling for the jailing of ceo health companies if that's not an example how th democratic party has changed i don't know what is what i sawj over the last 48 hours is a democratic party that is hostile to corporate america,

hostile to some of the people who are watching right now and the language, the rhetoric and these were the lines that got the greatest applause. so if you want to get the nomination right now, you've got got to be against economic freedom. by the way, it's not just criticism of theo healthcare companies, it's all of economic ( there are 500 or a thousand ceos that should be waking up scared to death >> so that's something we heard especially i think with sanders but if that's what you have to do to win the democratic nomination right now run that far left, what does that mean about your chances in the generale1 election >> i want to talkxdabout the individual candidates in the prima primary. because all the candidates in the center, the moderates who bowled over the theater we were watching, there were thousands of audienc members, these are not just the

big wigse the crowd is there as well every line that was delivered against corporate america, what we might call economic 0lfreed, the lines in favor of the unions the line ifd favor of the pressure groups, allt of those got thunderous applause and the lines that were delivered for of the democratic party, well that was virtual silence. i think that the nominee is going to come from the left and i think that's, you can tell by the language >> i don't know. i misinterpret or i don't understand then theqconclusion that you draw. it's like, i guess i'm just from the old school i would think if someone were t come on and say i'm against economic freedom, thatt would automatic vote no i would never vote for them in the general election you seem, though, on the other hand you say these corporate executives should be scared to death. for me across the board for these candidates to puttrt&hác themselves in that mindset in that position, i thip+÷it's

incredibly positive for anyone that doesn't want them to win. (t&háp &hc% that under --l >> who is fwrj to vote owe glow -- who is going to vote -- >> it's a different under current, a different waking eu >> yoeng i don't believe bernie sanders is leading in the polls, i don't believe those. >> hold on, this is not about the general election right now let's be specific. let's be focused on what this is about. trying to win the primary. >> a leftist will win the primary you are saying >> a leftist is going to win and it isfá galvanizing the democrac party and i want to be clear on cnbc this morning, this is not a the democratic ñiarty i believe that battle is over. it is still a war between the ñ candidates but the heat, the intensity, the are goinglp to be hostile to the people whose companies are listed on the stock exchange

i attended an siuñrrally in america. they said no peace without justice, nola bore peace we are going to have 15 months of labor unrest, 15t(months of battle between the work force. i think you will see greater strikes. i think that's some of the intensity in these rally itself it will get much more difficult as the country continues to te!á itself apart i listen go ahead >> frank, here's a question that i have is2iv. i hear you saying the party has gone left. i get that i think the question ie1 know we're not in the gener, but the question i have ultimately is, even if t(ou, en if elizabeth warren isq ultimately the nominee, do you think that they ultimately have to tack toward the middle and can they, given where they are, irthat happens want to point out that elizabeth warren called them crooks onx wall street. crooks they talked about corruption it was -- this is thefáe1 stron

language you can possibly use against the distance in this country that has led the greatests economy in the last  years. can they tap to th( center? the answer isfá yes. except, medicare for all will require the removal of everyone's personal healthcare insurance. i don't think the american people are going to accept that a green new deal isw3going to cause energy prices to go up 30%. i don't think the american what these debates are doing is that they are forcing democrats into añ corner that will be ve difficult to climb out but america is movingok slightl. so this is going to be one hell of an election >> thank you very much, frank. we will talk to you again very soon when we come back work big hours ahead, the federal reserve cutting rates. xts r e rks fothmaet ne

the two words heard around the investment world. >> we decided todáa to lower th ta./eñfor the federal funds rate by a quarter of a percentage xdoint >> stocks dropping on fed chair powell's comments yesterday. investment advice from a man who oversees $142 billion. the eco-founder í#çour newsñr of the hour. çc chief hans veseyberg joins us on cnbc we will talk earnings and much w more, the second how far of

"squawk box" beginsçóright now [ music playing ®the city, new york, this is wk box." >> good morning, welcome back to "squawk box. i'm joe sorkinñ along with bec quick andok joe kernon the interest yuqj are left ç unchanged. that was expected. we are looking atús1 futures right now pointing up this morning. earnings are just out from dow and verizon, they had a profit 3 cents above estimates. they will come in below wall street forecasts, zowever we will talk aboututhe quart with verizon's chairman and'c o hans vestberg coming up at the bottom of this hour. also, we'll tell you what else is in our

shares are having a stock offering at $162 a share that's a discount to yesterday's closing price. you seexd[ it down 179.70. going in the opposite direction you got shares of insurer cigna. they beat forecasts on the top and bottom lines in the latest earnings report. it was boosted by a surge if revenue in the company's health >:@! stock is up by 3 and a third percent. the labor department will be out with initial jobless claims at ñ 8:30 eastern time. investors will look ahead at what the fed might do at its next meeting of course, at5a 10:00 a.m. we l be getting thew institute with the july manufacturing index. >> the fed cutting rates yesterday. but president trump wanted more. steve liesman joins us now with the details. hello again. >> reporter: a lot of debate on what fed chairman jay powell meant when he said the phrase mid-cycle adjustment those words sparked ai]arket

sell-off >> the committee/9% really thinking of this as a way of. more accommodative s'mce. we are thinking of it essentially in the nature ofn (t&háp &hc% this tweet from the president of the united states. quote, what the market wanted to hear fromxdj. powell and the federal reserve is that this wouldxdkeep pace with china and other countries around the world. as usual, powell let us down the most important effect some in the market beganxdwonderingf the market ma i do this as one and done is that the right way to think about it let's look at what fed watchers call other mid-cycle adjustments. 1995, they get three cuts over seven month, 1998, three cuts over these three months. '01 and e'03 or the nine in 20

and 2008.ó[ powell have you as to remembere stuck to the basic economy is in good shape it doesn't need helps, just tweets, it's not a major adjustment he honored someok former fed officials for fought making move next. the former philly fed president guest on cnbc frequently says the explanation justified the left and it may have a data dependency that could serve to guide future policy actions. of course, we'll see tomorrow, a warning if the job numbers are stlong strong, the cutting rates was justified by powell and, joe, i don't know, if it's too early to joke. but you know, you want to know what a mid-cycle adjustment looks ejke. well i brought a picture along of what a mid-cycle adjustment might look like. it's really not that threatening. i don't knowt if you have that picture in the back there, guys,

if you have it there it is. >> okay. >> you turn it back overwhelm. you had just it. you get back on the bike and run. >> i don't know if it was too early a good joke. unfortunately wnot. >> do you have another, a better joic >> no. >> you don't have a better joke that's joke. >> are you lenny bruce after a plane crash or jerry seinfeld, time. >> a much longerx time. i am neither for sure. >> yeah. you j you proved that. tck you. you know, you are more like gallagher i think the guys.[u)u$ the melons do you remember that that was funny, though, the guy >> uwri do.d mellons >> no, that was fine it was a bicycle >> it's a bicycle. you turn over the bike are you on your way. >> youre1 chain is loose you can hear it rattling around a littlelúwit >> a little tweak. kd8. for more on the fed decision, let's welcome dennis lockhart who almost justfá left

i saw him -- anyway former atlanta fed president and mike santoli can't leave,e senior markets commentator. i said;o dennis earlier that y powell seems like ano earnest, well intengsd, smy) guyf -- intentioned smart guy you can't say wha'1 the truth is uik5)uá base it in terms of what market participants want to hear. if you are a data dependent, it's an adjustment down at these low levels you see europe week weak.w we see -- europe weak, we seem ou! these traders, you arel dealing with spoiled brats that love a punch bowl i have got that right? >> yeah, in my opinion a fed chair and certainly jay powell simply can't fully satisfy the markets and for that matter satisfy the media. because he really can't say in

advance exactly what the committee is going to decide he does speak for the committee. he's ultimate will i the sole spokesman for the committee. but he isn't, doesn't dictate policyq andj unless the commi took ane1e1 explicit decision a secondñ or thirdñirate cuts, no talk about that in advance of a coming meeting >> i thought they spoke bye trying to reign in what williams had said, john okwilliams, whaéh lot and it needed to be kind of yll piled up very quickly and when they camee backw3and the york federal reserve said, hey, that was just a situation where that was based on his research, that seemed to me like that was fee hold on, don't run too quickly withe that. >>e well, i followed that

incident and i thinkx president williams was presenting an #óu%c academic paper and the media didn't fully underst4hé that as you said,q becky and not meant to be añicommenty on immediate policy decisions. i thought they walked it back very quickly and they handled that well. within a matter of hours they had clarifiedqthings. >> i wonder about dennis so, six months ago, president trump says this is outrageous. #ú1r at the time i said, he's a real estate guy, a president. the economy is great six months later, it looked like he was right three months later, which isq frightening.e right? because i thoughtçóit was less intellectually based than just wanting lower rates. now he's saying something again that i'm worried might

eventually be true again >> that is europe ise in full easing modexdand that does hurt you know that tstrengthens the dollar ande makes us less competitive. i'm wondering that he is right we should have gone 50 and do it where we can compete ande have also aspiring on the same, everybody on the same wave length in trying to get the economy book to 3% or above. >> well, in my experience in over ten yeq&-- we rarely, if ever, looked at dollar effects foreign exchange rate effects when setting çóolicy. it's just not really central to the question >>o but we weren't tethered to these low rate by then and didn't look at germany and say my gosh it's negative there, it seems like everyone -- >> why is everybody spoilede1 babies and the president is right when they're demanding the same thing >> i'm añ supporter of chairman

powell and thiscommittee i thiqf --ç >>o/ i don't know if he's rig. >> i think they have dialled in an appropriate setting of the policyç for now and they'veçókept their options opened yesterday >> so we're back to where the president always wants lower rates and that is what youñ expect him to say but you don't necessarily have to -- >> i think the market is reflecting and powell is reflecting the ambiguity of this moment right. when you do have all the standard indicators in the domestic economy you would look at, they're not really telling you to cut he also didn't come out there and 4çq this shortfall of inflation as some kind of qsq rethink the entire approach an% so the market just wanted more assurance that wmxqing to get off this treadmill of havin to watch every six weeks what arxi$u$y going to do? what to the indicators to determine the next decision5 stephen gave a greatw answer o that in the press conference. >> let me make a ps' that needs to be repeated >> that is the committeeiis

focused on the broad w3i, the so-called realñ?economy ande the interests in the market or the market situation is correlated with the broad economy, but not always. and so, when they're setting policy, they're setting policy for main street. and may or may not please wall o street in th%drocess how can you get anything more than an adjustment when youok oy got two points to deal with? >> o6ight >> i don't see how it can be owe throw is no cycle. you couldn't have a cycle. >> you think that's what he ac?wup&y meant? ñi. the standard wall street case going into the meeting was, it's ñ, series of insurance cuts it's not going to be a run back it's not a recession-fighting effort at this point it's just really at this point in the cycle wall street was dreekto it a as ayou can't say it's a mid-cycle

adjustment wall street wants the fed to act like it's late cycle and be preemptive >>l that's right. they shouldn't e1be. >> it wasn't a bigñ deal. the market didn't freak out. the problem is long-term treasury yields remained lower you had a curb flattening. it wasn't in that trap of lookingt(vl at what it meansn priority, we had a conversation whether j. powell was in a box because of the president he had to say something to do something just to fight back so there the a little stick it in the eye conv9ation here >> perhaps. >> well, i don't think -- i am quite certain that j. powell and the committee are not setting policy ifzv reaction to commen of the president politics just simply don'tt enr into the question. clear over the last several months iu) think steve said earlier, it'st maybe a little ambiguous at the

moment and they tweaked the policy and the mid-cycle adjustmenti idea is appropriate for an economy on its fundamentals that grew at an reasonable rate of 2.6% on average in the first half and has lowest unemployment in 50 years. it'so not al dire economic situation. >> and ; always have to consider the fact that when he's and you had two dissents that said no change on somee1 level you have to reflect thee1 sentiment in the room yepxñure. >> that's if you try to indicate exactly where things will go after that. >> well, as you pointed out, it's machines and it's less than 2% and it's less than 2%. >> in the immediate moment that's what was going eon the market is at -- >> we shouldn't say 500 points. >> a healthy evaluation. percent of decline at the height or i should say at the off the >> they are probably looking for

a reason to back off a little bit here as we enter into >> dennis, did you think steve's joke was funny>7%h the bicycle turned upsidedown as a mid-cycle adjustment or did you just go - >> i didn't see the carts. i continued to be very entertained. the last time i-was on, steve was talking about odyseus.r this timev'vp'ny goose came from you, joe >> right >> this is a talkw3quality program, for sure. >> whew. >> thank you, dennis i think. we're going to take you at face value. >> he said you are as funny as -- >> he said -- thank you. thank you very little. coming up,ich was thinking the earlier. coming up. >> you get that from your s.6 >> no, i have been on -- anyway sharesl of qualcomm getting hit 7:30 easternw time don't miss

verizon'st(ceo hans fávestbergl join us. he will be joining us live stay tedun you are watching "squawk box" on cnbc [ music playing liberty mutual customizes your car insurance, so you only pay for what you need. nice! but uh, what's up with your partner? oh! we just spend all day telling everyone how we customize car insurance because no two people are alike, so... limu gets a little confused when he sees another bird that looks exactly like him. ya... he'll figure it out. only pay for what you need. ♪ liberty. liberty. liberty. liberty. ♪

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a camera might figure it out. that was easy! glad i could help. at xfinity, we're here to make life simple. easy. awesome. so come ask, shop, discover at your xfinity store today. . welcome back to "squawk box. the stocks to watch thisvne morning, qualcomm shares are developing after revenues missed the mark qualcomm ceo said hauwei was

partly to blametju the quarter always nice to blame someone we continue to take head wind for the rest of the year. >> we do, weather, too hot, too °ñroyal dutch shellles under pressure this morning. the oil giant profits slumped, missing forecast was alsoñihity lower energy fáprices as well as lower refining margins >> okay. let's talk about lyft for a moment bicycles from san francisco. this is two months after launching them the mood coming afterok reportsf batteries on some bikes catching fire while in use. lyftrpvjthere have been no injuries thus far, but it's the company previously pulled it bikes nationwide afterç a malfunction with the brakes. take a look at the shares. >> is it a moped >> i think eighthozithium -- it's a lithium battery. "é!tteries are us always a

toughy >> i don't knowe1 if you have bn on these electric bikes. it's an amazing thing, you pedal. it's not like a motorcycle or something. you pedal and it accelerates >> you are getting no exercise?w >> it's an act sell ratedt(ped if you will. you keep pedaling. it's not you stop pedaling you have to put effort into it. >> a lot less effort actually an amazing thing. >> i want thew33bike i want exercise. >> you refer toe1çóthis as ano mid-cycle adjustmentp with steve you think? what are they doing to the bikes? they're replacing them, taking them off >> in cycle adjustment they r. >> you can believe that? >> ha, ha, ha. >> steve his impression and funny won't do that again. amazon a launching a personal shopper service it will be sending prime members, they answer a survey about their fit and style, you can preview the items before

they ship. everyone gets ajf seven-day tryn period you pay for what you keát the service will cost $4.99 a month and obviously will compete with all the ought boxes out there right onow. amazon getting into every industry and i keep hearing that every company if they're, how common it is i talk aboutç amazon as a competitor. >> that's how it is, if you have a whiteboard, amazon gets on it. >> it does. okay when we come back, the fast, casual restaurant sector serving up profits for investors we will talk about what names you should be considering forxd your portfolio by the way, the futures picking up a little ground after the sell-off yesterday dow futures indicated up 7 points we'll be right back.ç first trading day of august. stick around >> announcer: time m,for today's aflac trivia question. on the 1st of august, q1981,

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now the answer to today'sñr aflac trivia question. on the 1st of august, 1981, which tv channel went on the air for the first? the answer -- fmtv. welcome back, everybody, stocks in the fast casual sector have been soaring recently. you got technology developments and alternative needs creating strong tail winds, the restaurant brands, the owner of burger king, reportsx quarterly results on friday, starbucks is up by 49%. chipotle is upe 85% fore thee. duncan earnings is up 25% year-to-date.xd joining us right now for a look at what's working in the sector and what he thinks is likely to continueñ working is a çe)ju restaurant analyst at stevens.

it's good to see you, will >> good to see you thank you for having me. >> what do you think this is a phenomenal moves from some of these companies. do you think anything the continue with them >> first thet consumer is if a really healthy spot. we are seeing these companies drive a lot of ticket growth thexdconsumer is willing, he or she to add up, spend more money at their favorite restaurants. the interesting point is starbucks is the only one you mentioned driving transaction growth most of the same store sales gains are coming from the average check. the consumer says i'll come about the same amount,e$ will spend more money, i am feeling healthier. overall, it's a good consumer. we'd like to see a lot more track. willing to spend on the more expensive items. they don't have to offer the discounted items and mcdonald's did a good jobe of pivoting towards that trend you like, what else do you like

about it >> yes, i think mcdonald's w3e doing a lot ofe initiatives th oes down laste year this year theyj focused on val, the two for five mix and match value platform, which is a slightly higher price value platform it stille communicates values, you get more check out of the customer they come to the store, you are getting a little more profit out been good. little bit which isok giving the franchiseese1 a chance to work the side of the business they are speedingñiup drive through which is helping as well,qmcdonald's is focused and the right things this year.l you pointed up qsr, it's focusing one1 u-á innovation a the launch of the whopperxdis a big deal one thing youw3didn't mention i think is doing somee1 good thin that the stocks gotten xdit we think the stocks was a dominos, which was a home run

for a long time. it's pulled back it's interesting here. >> it's pulled back but youe1 think the sell-off hack overdone and the company has figured its way out some of those big issues overhanging with the ceo and things, that will just pass by >> i think it will so a lot of what people have been picking at, which is fair is that growth has slowed. they are putting up same sal÷ stores 3%. >> that slowed down last quarter on a multi--84 basis, their growth is better than anyone else in the industry.t we think they're going to we think their valueq propositn is really the best in the industry so dom nos toe1 me is one that here ise1 trading below peers at half its rate.e i think it will be seen as a great opportunity over time. but right now, people are focused on others. >> just reallye quickly, how exposed are all of thesee companies to an economic slow down, if they're doing better because the consumer feels ep&(o healthier.

will that be at risk if we see an economic turn down? >> yes, i think the answer is most.w especially when we're getting most of your sales growth through ticket and not e transaction. so as we see that happen, i think starbucks thet(a good example of they're doing a lot of right things for the economy right now. cold brew, et cetera, drives the average check up in 7% comps.ñ they're probably a little more vulnerable you can trade down if the company worked a wobble. mcdonald's q% growth wouldn't be there. of them would be i think dominos will be well positioned with their value. mcdonald's would be well positioned burger king ast well, i'd steer away from the higher ticket growers we are seeing right now. >> thank you very much good to see you. don't miss thet ceo of restaurt brands who will be live on "squawk on the street" coming up, when wrreturn, verizon ceow3ans vestberg will discuss a lot. we will talk to him live and ask him about the streaming wars,

quarterly results and media 'sioolidatns it an interview you don't want to miss. we are back with the ceo of verizon back after this. >> at comcast, we didn't build the nation's largest gig-speed network just to make businesses run faster. we built it to help them go beyond. because beyond risk... welcome to the neighborhood, guys. there is reward. ♪ ♪ beyond work and life... who else could he be? there is the moment. beyond technology... there is human ingenuity. ♪ ♪ every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. take your business beyond.

good morning shares of verizon are trading higher as the dow component reporting a profit of eq$1.23 share, 3 krnts above estimates let's head downtown to the new york stock exchange. david faber joins us along with verizon ceo hans vestberg. david, good morning. >> good morning, joe vest boring the chairman and ceo of verizon here. of course, we're on west street. not too far axdwalk for you it's one year since you began a the company's ceo. you took over as chairman. year. >> how do you view your own performance during the course of the year and what did you find that you didn't think you -- what was unexpected in terms of the

experience so far? >> if thinke that i should probably not put the performance on myself. in general, we have ae1 change the company, the new structure building the network differently, very voluntary program that almost x0,400 mps left us. we are changing the brand of the company. so everybody says verizon right now, all that and we still deliver very good results. i think that's what i'm really proud of the team has in this transformation somewhat changed. it's probably more than five years or ten years in one year we still deliver the result of the day and had a good result in the first quarter. >> we want to talk about those results. you think you having a sell rated change you said five and ten years in one year >> first of all, we will build it different we couldw lapsed on network and made one because that's our real assets in the company,ex feelg the best network in this continent and then, of course, we change how we both report and how we are structured in the verizon consumer group, busines

group, media group we also changed the name so everybody is verizon you. and wex have qure a large transformation in mpes, 17 peoe has left verizon it's a big change in the company andw3building ae good result d building 5g. >> we will see how they respond in the few hours.q likely to be positive. in theex early going the stoc appears to be up you(added q300,000 post-net additions in the business segment. >> yes. >> including 172,000 phone net e additis( 126,000 retail post net f additions. it's ra irto see that many ón additions. are you taking share from some of your competitors? >> i think we have the strongest growth in this quarter a good nete addition or phone b scrapers, basically, 245,000 so, yes, with egrew year over x year, we grew se queen usually

i think at the same time we had a strong bottomok lean with 123 earnings per share. >> you are talking growth again. listen, we're not talking blowing the cover off the ball here for a whilexdverizon's revenue wasn't growing at all. now you are again? >> absolutely. it is growing 3% in a tough competitive market i think the team is doing a great work. >> do you think it will become a more competitive work with the merger of sprint and t-mobile and dish wireless? >> it will be different and it probably hasn't hurt us. of course, we will come together it will be different one merger and a fourth entrance in the market n. our work, we will fought change our strategy we will continue to execute on what we have and ie usually say on we spend this year between 17 to 18 billion dollars in cape i think we have the best engineers in the industry oft tuning and fixinglp networks now the guys need to do a lot of this i think so to catch up and fas

>> you know john ledger always says, calls you guysf clueless, the 5g particularly millimeter wave because you are focused on urban areas so they say is notña full strategy. how do you are respond to that strategy >> i think we have responded, first of all we are in nine that is capacity that's where the most of the traffic is so that's wherewithal do in the 9mm way. we have all the assets to do coverage as well we wille1 do it when it's good r the customers. >> what does that mean >> youe will deploy 5-year-old and the spectrum spectrums are 4g people don't really grasp how technology works ultimately when a phone comes out, it's going to run on the when you can get some if you software features and answers out there. >> is millimeter wave going to

deliver eve$1hing you say it's going to is it working? by the way you have to use thet low bandx spectrum in the rural areas, done ñyou? is that how it works >> yes, we continuew3to have t best network in the market and we arex concluding the process here and we were winnin some but remember all other competitors are also buyinge1 millimeter, and all hands are a millimeter away. so ix think it's clear to get e best of theñi5 g millimeter and tennessees. don't talk about that sometimes we talk about the 5g, consumers own it think about enterprises when we will see enormous private 51 g ]=i-9 that's a millimeter away i thinke1 we are very good and happy that doesn't mean we will have the coverage. internet of things and the way it's going to really transform so much in terms of the way

business is done i know andrew has a question for you. >> i have a couple questions the first is, it's on the 5g issue. you probably saw the article in the "wall street journal" two weeks ago, where they were reviewing the current lot of 5g tne pleeft in this currente early lcurrent early engine racingw3 had itç keep it in the cooler 51 gñ because it gotws$á hot u couldn't hold onto theñ phone otherwise it would shut odown how soon do you think this technology will be available and have you seen a phone that doesn't get too hot yet? >> yes absolutely we have several hundred not getting hot. of course, in the beginning of technology, youñik can find the type of things.e @rt&háhp hc when we launch, we launch one or two markets to see it's working. now we are d- 2ying in all markets and with four different devices. so it is actually start working

very well. remember, in the beginning, we had 600 megabits on the phone, in comparison 50 to 140. right now we have 2 gig. only in the six-to-eight weeks we learn and do improvement on the software constantly. if i was around when 4g came, i think it took a long timeñito im. so i see a good trend and the industry is behind it. >> realistically in your mind, what is the true ñiimelinee1 wn thdce will be functional phones running on 5g let's say if 50% of the country >> i think that is next year it is a dynamics systems sharing, dss, we're diagnosing over what phone have you, is it a 5(14g or 5g. >> i'm asking a slightly different question 50% of the country where you are

able to use a ñ5g phone running overheating on you >> that's i think is5going tb next year. that's what i said before and remember theñ prediction is th 2024 50% of the u.s. population will have a 5g phone don't forget 4g is an extremely powerful technology as well and we need to indicate we're the best that we have. >> overall, comcast our parent company slowly but surely adding some commerce, 1.9 wireless. do they in your mind become a reale competitor as well? >> of course, they're a competitor and also a partner, because they're using our network. the whole idea with our fourth 23 will have a lot of supporters we are doing our own customer services in some cases we're partners and sometimes they're using our assets that's how we work how are you going to look back some say it'séíeen a eduopoly,

verizon and at&t you have been able to maintain a price difference for a period of time a lot of promises have beenfá me by sprint and t-mobile, sfifk investors as well and the fcc agreed theye1 made an argument they are coming after with you a capital structure that will allow them to compete in the way theye haven't previously. do you anticipate that will be be more competitive? what if dish comes in and cut the price within they get their 5g nee%5zup >> it is a competitive market and has been for a long time what 6@

in the network every year and we will continue to do so >> hans, you stay right there. i appreciate youe joining us oy on "squawk box." and &him around fore a fewe questions for "squawk on the street". thanks, for the time. >> thank you for the interview thank you, hangs, looking forward to see you you guys soon still to come the biggest top at the top of the hour,t(a top hedge fund investor michael novogratz. crypto is on the list. are you watching "squawk box" on cnbc c ayg plin

maker ate this hour, the ceo michael arougheti will tell use how he is puttingok $1 sfroo billi sfroo froo -- $142 billion to work that's next. here, it all starts with a simple...

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thinking of this as a way of adjusting policy toçóa somewhat who are accommodative stance to further the three objectives that i mentioned to insure against downside risks to /e"aq!those factors areuo pug down on economicógrowth and e to support?inflation. we are thinking of it as a mid-cycle to policy. >> that was fed chair powell+ yesterday joining usais michf arougheti. he is the co-founder of course, a global alternative

assetñimanager, $142 billion i asset management we spent some time withó[ your colleague down?óine atlantt a month or two ago your reaction to j. xpowell did he make a mistake? >> i think in the decision, in the communication, he could have been a little clearer. everybody likes toe talk about the fed. i think it's important to contextturalize it, one of the areas of area management, we have 1,700zmiddle market companies in our portfolio we>béu(r about e1800,000 consum loans. we probably touch 30ee shouch small businesses him everything says the u.s. economy is on unbelievable strong footing. rate cut, it has to be not about mandate what do with < see?

>> they should receive a cut at >> i think that's what we talk about a mid-cycle adjustment >> so you don't see anything, are you not worried about ajf recession? >> we are not. i'm dplaed the market is not >> when you say you have all of these consumer loans and middle market companies, aree1 they geographically broad spread? >> an international foot print i know it says most of the okpes and bank ceos they tell1 us thr consumer books have neff beene1 healthier. >> so as a function of this, then, are we at the end, 4rugh, are you thinking/got to harvest while things are good or will you buy >> one of the challenges we are trying to balance is when are you in a low rate environment, acid evaluations are high. everybody in the investment business, whether are youe1 in e markets like we are,e a.ce=u trying to measure thee1 health the economy agaqnq some very high aspects.

>> what are the businesses responding to, less reg lakes, a better tax environment ì% helped i thinke1 we have a very strong consume were if you look at the complexion of the economy it's a consumer and service-led economy. there is a lot of liquidity in the system inflation is in check. >> why >> well, there ise1 a lot ofñ theories about that. i thinke1 that's what's confusi. >> whatever it is, it's good is it innovation is it imported from europe >> some would say we're importing it some would say it's 2( aging demographicó%9 hi. i think there is an argument to be made it's slack in the labor market and there is more product ivity there than we believe. i seen some numbers that tells you inflation is taking basis rate it's a combination of all those is there. >> iw feel axdlittle chris matthews, there is a chill up m leg. >> i think that's the 68 degree

e. >> you are saying positive things that don't really make me think that cyclesçóend from old age. they might end -- >> everybody likes to talk about that one e1thing i don't want to say it's different. we're going to have a cycle. we have to be anchored in whatw we see in the real economy. >> you say the real issue is figuring out in asset prices are too high, are you buying anything right now >> is it in the privateñrmarket or public markets? >> we are exclusively in the public fámarkets we can spend six months, a year, two years, making an investment de4(rjzand improving assets w buy. i think we have a little less anxiety thanw the public market investors. >> are you selling something at thw3$tájñ1e >> sure. the environment is conducive to harvesting. >> what is interesting from an investmenti perspective >> we were finding the most ì% investments. given the low rate we are seeing an incredible amount of demand

from e1investors for yield prodt and if ymgare worried about valuation in the credit markets, you can come in at roughly 50-to-60% of asset value> what i'm getting from you is that the thesis táiasset prices aref ahead of fundament also, because of the fed and because of low interest rates, that thet underlying economy might actuallyl justify some of to worry as much. so i think the riskssn talk about prolonged cuts is that if we have too persistent of an interest rate environment, asset values could have run. >> i worry about thate1 all the time we saw what happened when money is too cheap it go es to places where it has m being around the world. >> that's the fine line. i think right now it feels like -- >> if they'rezñrgood as you r saying then assets aren't, they still justify. >> we'll know when weok know >> we're going to ask you a separate question about your business or at least your ô) ust. yesterday carlisle announced

this plan to become[a c corporation. you recently announced plans to become a c corporation along with flagstone, kkr and apal to get lo some of these indexes. >> that'sk actually a secondary effect i think it was all in an effort to improve the valuation andt liquidity in these stocks. i don't want to get too wompgyf about it -- wonky about it. if you look at publicly traded partnerships, which is what we were priorq to initiateing the conversion strength. 80% of public investors are unable to own publicly traded partnerships our investors can'txdown it for tax reasons. individual investors don't want to own it they have to have k2s. it complicates the filingles hedge fund, if you look at blackstone areas of apollo's publicly traded ocompanies. we weren't trading because we ininvestible the thesis wasoi if we okconv

whatever economic delusion there would be from the tacks, we would see a boost in the level. >> the change in the tax structure made this possible >> for lpmost, yes for areas unique we were positioned, we were able to go first. we have a high percentage of /u assetsñ not in ep.e. that we paying corporate taxes on probably 80% ofçóour income. >> has it worked >> absolutely. if you look at our stock we are up 62% since we converted. >> how much of that, though, do you think the a function of the success of the firm? you've had good earnings relative to simply strangeing the structure? so anecdotally i woulde meet wh an institutionale investor, they'd say we love your fundamental performance. we can't own you >> that can be frustrating it's both. we are seeing average daily (ding values up. >> it's so interesting to me what carlisle did, specifically, most of these firms, including your own are dual classçó &há%

>> yes >> from terms of control they decide to go with this one share, one vote approach. >> yes. >> hoping that lisaxdirussell might take them because they historically have not taken them i know there is lobbying efforts going on with s&p and others. >> so ayres in the russell 2,000. weç gave voting rights to our (t&háp &hc% one of the things is we own 80% of ayres, there is a governor nance how do we turn it over if time to public markets carlisle going to one share, one vote opens themselves up to'beingn the s&p oindices. that's the big difference. so i think everybody the same way they waited tousee how ñ stocks would performç will wait for the governance will perfncm. >> carefully, i will trye to sy as apolitical as i possibly. >> we have 30 second >> apolitical as i possibly can. but we are in a environment where we seen ae1 couple debates

when someone gets elected. right now generic democrats are ahead of the president it's ha ready to pass all these laws they talk about they wouldn't get passed do you think if it was an outcome where a democrat won the environment that youw are operatin)z would be as positive would that concern you in terus of your invwsvments? >> joe, we try to stay apolitical. >> that's what i said. but we're living in the real world. >> yeah, i this i the good news is in the markets that we participate in, we are making good returns for our investors regardless of who is in the white house. and it's ouro job as fidush ars for pensioners andeqetail investors to deal with and navigate >> anyway, thanks. >> good to see. >> you thank you. >> have fun. >> appreciate it. when we come back, quarterly sus om the cfo staye tuned you are watching "squawk box" oe

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markets looking fore1 a rebounds after the first fed cut if years since stocks tumbling we have general motors out with sending quarter results ceo live >>t michael novogratz and cryp currencies and the race, much, much xdore, "squawk box" begins right now! >> announcer: live from the most powerful city in the word, new york this is "squawk box."xd

lp good morning, welcome back to "squawk box" here on cnbc live from the nasdaq market site in time's square, i'm joe kernon along with becky quick and andrew ross sorkin the futures are indicated up about 56 points. that's kind of the low end of the range we seen forñrmost of the pre market session up almost 100.q got the nasdaq indicated up 17 and the s&p up 3 from treasury yields, you probably wouldn't know we had such a monument am event happen yesterday we were 205 yesterday morning. we're 204.4 today on the ten year. >> never mind. >> it moved around to get there. the journey. right.e and then it runs back up >> okay. let's talk about gm for the moment quarter results. i want to get over to phil lebeau,e1 who's got the numbers. phil. >> reporter: the beat on the top andfá bottome line which 20 ces

general motors 20 centse1 better than e1expectations. revenue 26.1 billion free cash flowi 2.5 billion we've talked about this for some time this is a tale of two markets for general motors basically as a company now. you've got north america, which is the engine where they hade 0 billione1< dollars in ebitda adjusting. essentially, this is thet engi for in company)s this is an increase from the second quarter of last year. then you got china where they are a cloç number two right behind volkswagon, they are $235 million. guys, that's less than 50% of what they've made in the second quarter of last year, where they had a record second quarter of $592 million in terms of north america, it's all about the trucks dhivya in about a half hour. we will be talking about china, where sales were down 12% in th

second quarter no change in guidance, between 650 and $7 a share again a beat on the top and bottom line. we wilí@e talking to dhivya int about a half hour. guys, back to tyou. >> phil, thank you very much as we mentioned, the federal reserve cutting rates yesterday for the first time in over a decade in a press conference following that move fed chair j. powell addressed the reasoning behind the decision and the independence of the fed. >> this action is designed to ensure against xdownside risks from gloz3 trade tensions and offset the negative effect they are having and return a faster ez . that's whatqwe have been talkin about all year long. i think what you see is an economy that has reacted well t so that's what we're doing and that's why we're doing it.ñ we never take into account political considerations there is no place in our discussions for that we also

don't conduct monetary policy in order to prove our independence. >> joining us to talk about the fed and our guest host,fáe1 galy ceo michael novogratz, great to see. >> you good to see. >> you we will talk about crypto currency and now i want you to put on your fortress head fudge group and partner at gold man sax and tell me what you this i this means with the fed cutting rates, j. powell saying for now we are data dependent. >> i am sure this was an insurance cut. you don't buy insurance once the last four cycles, i'd expect three cuts they will cut nextq month. >> we are taking one cut off the table? >> itself what we're e1doing stocks went down, they're coming back rates are repricing down maybe 20 basis points in the front end. yields are flattened and so it's qinteresting, whate said which was interesting was most of the weakness is overseas you look at earnings in the s&p. this will be the second quarter in a row negative earnings

growth and you haven't had that since 2016. >> i thought we were going to get actual maybe flatter, a little bit of growth >> maybe eb do you if you look at companies with big. >> sure. >> down 13%. and so, it's a foreign weakness story. the u.s. economy seems pretty strong. >> so you thinke1 the insurance keep that off of our shores? or - said this wasn't political. president. you can't get beaten on, beaten on, without eacting some the last core piece numbers month on month are hea ' higher you got 3.7 unemployment, inflation headed back towards its 2% what's also interesting is you look at this core piece over two years it goes between 1 andok 2e it's not like it's that dramatic >> it's not like the 1980s, 1970s, six if y]u"are right, if this is political to respond tow3the

happens next because the president came right back with a tweet saying he let us do un >> let me rephrase i think it's minorly political the insurance cuts around going to hurt. i think it juices the economy some so, as to, i was jftorn, you had priced a lot of easing in stocks should sell off. when you step back a bit, we've got strongi growth in the u.s. economy. i talked to my friend fortress, they run a big credit fund they don't see the weakness, and weakness i saw your last guest, they don't see weakness, you can see the stocks really go higher? >> that's what i think, too, it's still t÷wbest of all possible worlds from an investors perspective? >> i sold stocks yesterday, i it's a little schizophrenia. you priced a lot of good news in. >> what did you sell yesterday, broadly? looked at the futures and said oh my gosh, get out of ñrere? >> you buy futures. >> you buy them back higher than

you sold them?q >> a little5a bit a tiny profit. >> and when you look at all of these issues, when you look at what's facing us, i go es the big thing that we were also talking about with ouro lastçó guest is does market valuation seem fair to you here? it sounds likee you think it m maybe? >> i think we're long in this cycle. one side, ray dalios' piece on paradigm imshifts, maybe the best piece his written okay we got negative yields all &há% flattening out yield curves when you think they should be steepening you've got risk premium coming off and off and this could be like the last leg of this giant decade-long liquidity-driven rally. and so when you really step back, the macro's ldangerous. you are going toe surf that la leg of this big rally. i'm short osteoyawn 100 year bonds at 96 basis points

like you think there has been two more warse1 in the last 1 hundred years. the currency became toilet paper at one point.xd you can borrow money less than 1% for a hundred years it makes no sense. we're in a strange paradigm for investing in general it's why lots of guys aree1 buyg gold, lots of guys are skeptical of the equity market so it allows the equity mark to have a rally for the skepticism. but it doesn't mean it's a great safe-rick reward. >> i know everybody out there, all your fans, are they were on the edge of your seat when you said you are basing the -- it's full of money then you said they're buying gold and they're all ready for you to say bitcoin and you didn't let's not. we'll do that i know they're all out there going okay.e all right. you are leading to it. you didn't say it. >>ive saidf uncle >> we will talk about that last time you were on, you did,

some people were not happy because you're notx really aok huddleer you say i should have sold at 13 w:would you sell at 13,000 if it's going to>! million >> well you sell at 13l because you sell it back and make 30%. >> i'm talking about he called me a maximalist. i'm not. i'm not sure what that -- that scares me to say and i asked a chartist as a joke, i said, do your charts indicate 55,000 at the next having i was just having her as,xd because she does s&ps, katie stock zorn she does bovenltdz i was sort of tongue-in-cheek saying do you see a chart pattern, now i'm on record having predicted this i don't know i asked. i've read some research that you know alerted me to how things work and we talked about it off camera whether the stock to flow is relevant and the big wildcard

is regulation i think. >> that could throw a wrench intol the works, could it not could it not am i right or am i right >> i think bitcoin surprisingly ise getting through the regulatory hurdles some of the other coins will have a harder time >> the appeal is it's fought very difficult to figure out a is it qnot? >> a sovereignty. >> that's an issue >> we will talke1 about it ÷s will that bef me to read that you? >> it was you. >>le coming up okay.e1e i don't want to steal any air time, it's like oxygen the top business headlines, yes, i'm sorry. >> i apologize. >> top business headlines from what was likely thelp last democratic presidential debate don't get ride1 of sib el the st slayer

anyway, we will bring u yothe key points on etaxes, healthca and more stay tuned you are watching "squawk box" on really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade.

welcome back, everybody, this is "squawk box. welcome to august, everybody hmm, good month or not

on average dating back to 1980, mo>+zeqyear for the s&p 500. down an average of çó.93%.q however, the last couple of months, it's been a positive performance in august. over that extended period, only the utilities are positive up by 0.18%. materials and financials are the worst performing sectors down 1.5% almost and 2% for financials let's get a check on the futures on this first trading day of august will you see dow futures indicated up 48 points s&p futures up by close to ok2 the nasdaq up by 13 from you got p (% verizon reporting a mid-sect quarter result they added a net of 2,405. that's above 63,000 u. you heard verizonçóceo last hour here on "squawk box" >> i think in this quarter, we will have the strongest growth addition in this quarter

we will have a good net addition or phone sub scrapers, basically 245,000. so, yes, we grew year over year, we grew sequentially withxñi3% in a tough, compete market i think the team is doing a great work >> take a look at shares of verizon up a little over 1%. shares of qualcomm, though, much lower. they are beating profit expect@úions but missed on the top line,ok qualcomm gave a current quarter earnings forecast that falls largely below consensus, it strips out businesses from chinese tech giant hauwei they priced awtjt(á offerin of ñr3.25 million, nearly 19% below yesterday's closing price. the stock is still up more than 600% since going public in may also some questions about who has been selling, including some of the e1leadership selling into this as well and thatjfg

sort of raises eyebrows. cey not a good sign. where the market is trading for the stocks so i can lock in the gain >> it reminds me a little of crypto?ç 2017. >> that's not good >> it's not good at all. >> meaning you think it has a long-term play >> yes, i think big ideas grab the attention of people. this is a dbq bubble. it's aw ludicrous price everyone gets sucked ó[in, allh good guys are buying this thisx is their crypto. and thenl reality does set in and you know the ceo decides to sell he'll get more float right now it's really expensive to borrow. as you get more flow and the off, everyone will ceo and cfo agreeing to sell a discounted price. >> let me tell you, if i was in his seat, i'd be doing the same

thing. >> i would, too, i think it's because it's going down. >> it certainly is going down. >> the interesting thing, though, you say longer ideas, people when they defend things like this, they say look at amazon shares, if you keep you've never gotten a great opportunity to do it. m#!you know there are one or tw amazon's microsoft, if youi put them in 1987 when ié@ graduated from schools were 23 million there is a microsoft,?[%p' amaz. but of the hundreds ofç other companies, it doesn't work that way. i remember fortress when it was over $15 billion on the ipo day. that was ae pretty good time to sell uit >> more sparks flying at the second night of the latest democraticxe debates, kayla tausche is in detroit. she joinst(us with more of what she saw last night (t&háp &hc% >> reporter: good morning, candidates took a direct aim at they tried to level the support out. >> that support is concentrated firmly among four front runners,

vice president biden sustained repeated attacks on hisok record of immigration, ewomens' rights and trade, senior horizon on he healthcare plan?; and record aa prosecutor of jailing those with minor drug offenses, in three hours ofj!sparring, there wn thing that emerged, democrats argue that the trump economy is not working. >> there are a lot of americans right nowok that are hurting fast food workers that i joined a couple of weeks ago working forfá minimum wage and can'te provideqfor their families or pay the rent what we have to do is sayeiju stock prices, also record highs, suicides, drug e1overdoses,xd depression, anxiety. %q"uu has taken has beenñ5 extremely volatile without any clear strategic plan and has a ravageing and devastating effect on our manufacturers. >> it has resulted in american $1.4 billion more a month from

shampoo to t(ashing machines. he betrayed the american people. he betrayed american fáfamilies. >> reporter: now despite the criticism, theret weren't many alternatives that were offered up to the trump policies that they say have hurt the economy the cutoff for the next debate, guys, is if less than ae1 month. august 28th. so the next few weeks will be crucial for these candidates to get out on the campaign trail and sho4%ef up support and make that nexte1 debate in houston. many will hitfá the trail at the iowa state fair next t(eek. we will sm what happens then backe to you. >> kayla, are there more debates scheduled and what, how many people will not be there >> reporter: well, there is one more debate scheduled. that on the calendar right now it's september 12th in houston it's hosted by ac andok univisi. they say if there are ten candidates orxdfewer, it will take place on one fight.

there has been an expectation the field will be cut in half from 20 candidates to about 10 >> that being said, the thresholds are, 2% in the polling and ñ130,000 individual donors so there could be a lot of candidates, if some of the support broadens out, that could end up qualifying on both of if you have small color donations and support in the polls. >> is the dnc happy with the fact that they have 20-plus candidates running or are they regretting they made some thresholds so low? >> reporter: i think theyñrwand to givee1 these earlyt(debateso to introduce themselves toe the american people. a lot of thee members of congrs were mot household names they wanted to give them an opportunity to say, hey, here's me this is my platform. they act knowledge now there needs to be at(steepñidropoffn the support threshold actually create the qualifications. >> so the bigñiuestion, though, on this approach is, did it move

i think are still the top five was there somebody who shop how broke through over the, in these early debates thatç somehow changed the conversation and sort of jumped into a group that they would not have otherwise been in? is there a 52 you that somebody that >> reporter: night one, xno night two, potentially i mean, the one candidate that is really being talked about after last night is the new jersey senator corey booker. she's been described as a happy warrior, came to ronald treagan there were breakout moments where he was able to enter thee ì% owne1 positive demeanor. as having a good fight there are also about half a dozen candidates, michael bennet, the senator from color, kirsten jill brand from new york and chel se gab ord, the hawaii congressman that went directly after senator horizon as her record as a prosecutor that was one of the most vieshl

moments from last night. it potentially has propelled gab board into the poll.e she was at zero percent. clearly, there is quite a ways to go. pin the immediate aftermath of this second night are really going to be key to see whether, if e1any, of those candidates he been able to make the lead >> all right.o kayla, thank you i'd like it to get i like a little few tore think about. novogratz is on board with marion williamson. which is interest something i 6+a!iqand soulcompelling >> all right i want to get ba#1 to, now i'm disturbed. about how well thingse1qk were g with arougheti and ayres now we are in the final death grasp of this free money for the last ten years you got me thinking that way e now. i think maybe investors would

like to have some type of inoculate themselves from the next downturn, which i think yo alluded to >> absolutely. the realt issue is you don't kw when that -- >> the credit market is frightening. >> it's a sovereign credit mark that's mostly frightening. >> right >> so you don't know, they call sit minske moment. people all of a sudco say i don't trust this we have a modern economics you can print ase much debt as you want and it doesn't matter >>e this wasn't the burlesque guy. cst. theeit)áp& conservativessh republicans, they kindw of blew their story, with the tax cut. we're having deficits because of >> for pa lot of reasons, not just that. >> you have the democrats ironically fighting over the centrists are trying to be fiscally conservative and the voice of the partyñ right now much further right. >> where are we getting to

you have a huge amount of crypto to you do. what do you think the normalpere is 1%? >> i think 2 to 3% ut 7% of my network in gold right now. >> do you have more in bitcoin or gold. >> >> more ino bitcoin i'm speculating. >> now you say it's a 10 or 14,000 rate. do you think it will ever go back to 5? >> i don't believe so, if it goes below 6,000 i'm geti real( nervous. >> maybe wel& have, i want to talk to you more about that.i where you r. we'll come back have that conversation right now when we comeñack, a vfo will come offçóthe company's ttbeer than second quarter results. stay tuned, you are watching "squawk" right here onñ cnbc. these folks don't have time to go to the post office

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when we return, we got some economic okdata. the latest read on the weekly jobless claims oss l have that number as it crsethe wire and bring you

inn stay tuned you are watching "squawk box" here on cnbc or built to last? etfs are only part of a portfolio. so make it easy to explain. give me a quality fund that helps me get clients closer to their goals. flexshares etfs are designed and managed around investor objectives. so you can advise with confidence. before investing, consider the fund's investment objectives, risks, charges and expenses. go to flexshares.com for a prospectus containing this information. read it carefully.

welcome back to "squawk box" on cnbce1 live from the in fact market in time's square. we're seconds away, literally, 10 seconds from thee1 jobless claims futures are up, these are kind of thexdworstxdlevels wee seen, rick santoli is standing by in economy. rick, the inumbers, please. >> reporter: all right the survey sayslp a drop,e1 exce from 207 to 215,000w3and that 207,000, well, that's a thousand higher than originally reported last week. if we look at continuing claims a week in the rear view mirror, we move from 1.67 million shy of 1.7 million, a slight rise there. yield curve, some major flattening yesterday, of course, based on that quarter point cut. the dollar index just soaring. not necessarily the most logical

given the quarter-point cut. then again, everything about central banks seems a lit ill logical these days andrew, back to you. >> thank you for that steve liesman, i want to get back to you this morning in washington what are you thinking? >> reporter: andrew if your destination is more rate cuts rv carvere1 oft weaker economic data you can't get there from here. (t&háp &hc% have you not had the weakness that expresses the concernf on the part of busiotáqj firing people that should suggest that they'rew3really going to have a weak xi here and all of thise points us to about, let me reach the trend may be slowing, dramatic weakening is note1 liky without jobless trends climbing up that's not hang. all of that points us to the jobs report tomorrow we're expecting a healthy

report adp is healthy >> that may be while powell is exkurated today that he's proven to be smart tomorrow if that number comes inxdin that 150-to-2,000 range let's take ae quick look at the probabilities before the morning ends here.ç you can see where we are 44% chance of a cut of hold in september. that's new by the way. well, having now it's reversed, a 56% chance of hold in rqut so that's kind of reverse where it was december that's where you get that next cut really being fully baked if right now. guys steve, thank you we want to broaden out this conversation and talk about the fed's decision what it means and what may be coming next.e joining us is nathan sheets, a fixed economist. he formerly served as the director of the finance division

and treasury under secretary for international affairs ande1 a "w york times" opinion writerç ana member of the paper's editorial board, jfnathan, iñ want toñ/t with you, this was the first rate cut we've seen in almost 11 years, yet, you are calling this a neutral xmove.ç why? points is something. i think the markets were expectingçóthet(fed to leani]o the cutting cycle a little bit more than j. powell didok at the press conference said my expectation is maybe one more, maybe two more, which is a lot less than had been expected. >> you talked about how they're not going to roll off the (t&háp &hc% they will end that faster? >> they are ending it. they will end with the balance maybe trillion dollars there is a little bit there. the bigó[ question about this qaetincqpáh$w much does the

what's the forward guidance? and there i'd say,x it was a little m9+less thane1 many inh markets were expected. l >> i was really surprised. i was surprised by the story that the fed is telling. is they keep on failing to hit their inflation target there is a real argument they should respond to that by trying a lot harder instead we heard j. powellxe talking about trade problems, which it's not obvious monetary problems can address and weakness in manufacturing and confidence and then they rom out a very minor move and suggest that they're not entirely sure what's going to come next. it all felt very muddled and pointless. >> although, if you look at the economy, you look at the data that's coming in the fed sed it's data dependent. the data shows things aren't we heard from other guests who say that's what they hear from consumers, that's what they see from markets and see from ceos

f1 o >> that's 5ight that's why hanging the rate cut on the state of the economy felt like a puzzling thing to do. if there the aureal concern pá e going to get stuck in a ñ japan-like passture where inflation is sluggish in perpetuity and what you need to do to get out of that is to really hit the gas on monetary policy by fought doing that by not even talking about that after months of making it an issue and by instead focusing on i think theok fed0l left the em scratching their heads, saying what are you doing cot >> nathan, what is the market telling us >> my concern is that there are always÷global risks and, you know, you canllways look around and find a reason t cut rates. and so we don't know really what prompted this particular move or how they're going to size this move and i think thatf -- i think tt headed coupledç with it bei bit of a fdisappointment relate

to some expectations, the markets have been pretty volatile in response to j. powell's, particularly the press conference i think they absorbed the statement quite well, butqit was the press conferenceóthe shk things up. genuine? posture? do you think it was afá mistake? do you think he is sitting around jfafterwards saying i wi i didn't say it that way >> the federal reserve i think is trying to do something that's very difficult and that is they'rectrying to pull off a fine-tuning operation here where they say, well, it's3 basically okay, but we think we can make it a little bit better through a little bit mormontary accommodation. ñty difficult message to articulate. you know, back in the day when greenspan was doing this, he didn't have statements he didn't have press e conferences. he'd do it and then thee1 markeo

would guess why,e so the communications of it was much easier i think thisx is a challenging goal that they've set themselves both from a policy perspective and maybe even more so from a communications perspective. >> nathan,t the last three cor pce month on month readings are heading higher not over. we have a japan situation. sit really realistice right now to think one more core pc heading higher will put the fed on fápause?ó[ >> i was hoping that the fed would clarify a little bit more than what we heard on what it wants in terms ofenflation performance. -- of inflation performance. my read on what the fed is i thinkfá the fed is now in a position where the;uz activel seeking to shoot over her to 2% target to affirm a symmetry of

the target i think getting back to 2% by this year early next year may notfáe1e1 be enough for them i think theyo awant an oversho. it will take longer to get there. >> it's much more difficult when you have these press conferences when anybodyf can get up andxa questions. it's a much trickier fine line to walk. it's something that worked for the fed when they wereñ tryingo articulate to the market what there were going to be very low worry, weñrwant you to invest is it the best policy now? >> i think you know a press conference like the one yesterday can be a great help to an organization. you have a clear message and a story to them. the fed has used it effectively uz do that the problem yesterday is j. powell seemed confused when are you confused, it will(o magnify that confusion i don't think the mechanism is necessarily the problem. i thinkt(the problem is the fed

needs to decide what it wants. c8b rest ofoks. >> isn't the uncertainty youf will wait to see what happens next >> absolutely. they are clearly dealing withxd confusing timesxa cog circumstances. even some of the framing yesterday. some of this question of what are you doing and how does it lead to the results you want is relevant if your problemw3is trade uncertainty, you need toe tell story cutting a rate by a quarterfá point will give to building their next factory. that's not a story that's clear to me. >> all right let'sñigo ahead, let's do it. exactly. nothing is going to stop -- you got election uncertainty coming up if you are a corporation, are you on hold, are you not spending the cap x. >> nathan is right. >> you are not >> if you ever in the narrative where a ceo saysí you know what i feel really certain afterok that >> do you think the election

counts >> i think so. >> i agree, i think the next 18 months, particularly i'm worried about what happens after the election if trump wins, then he's not accountable to the same extent to the voters and the markets. i think he's unshackledxdat th point andw3it's not clear to me - >> this has been trump shackled? >> yes >> what i would argue, actually, the ñunshackling could cut both ways meaning the eunshackling could direction, too >> youx think he can double his owne1 shackling? i think he's unshackled! there isn't a point where you can'twnkget more unshackled. >> the interesting thing about has been willing to go against his party on certain things. >> right. >> so what i'm suggesting to sui completely e1unshackled if he doesn't care about being elected because he won't have to there the an upside case to this

unshackling not crazy unshackling. trade war even harder. >> that's the other side[% oft(t >> he doesn't have to worry about the markets. >> exact. >> i and the reason for the long term -- >> there are strategic competitor we got to take them. address it. >> all right >> thank you good to see you both. coming up, much more with our guest host galaxy digital michael onovogratz. we will talkwk more about bit and libra and the investability. i will ask you a question --j i went out to may of 2020 with stock this low have you looked at what it look like in 2025 and 2030? is that possible and a first on cnpcokñiintervi with the ceo of nel geramotors, dhivya survyadevara

general motors out early this hour with second quarter results. the car makert(reporting earnis and revenue that came in above what analysts are expecting. >> that stock is up by 3.2%. let's go now to cnbc's phil le beau he is standing by with the cfo >> let's bring in dhivya suryadevara. your stock is now trading about $41 per share pre-market this is an area where that stock

hasn't been too often since you guys went back public back in 2010, 2011 what'se working right now in t second quarter for general motors ì% results in the second quarter. they are inline with our expectations what you are starting to see is the earnings power of our structure franchise sbt is showing through and that'sx really driven by favorable to our physical-up trucks we're still in the early days of the launch and we are yet to roll out our rest of the truck q lineup here. we're excited about the momentum we have ahead of us and ase the team is navigating through the head winds that we see, we are focused on delivering on our plan and executing agility and the team is proud of results >> differentia a lot of people are worried about what they perceive to be the quote/unquote truck wars whether they aree much more aggressive with the pricing and marketing on ram, whether it's

your competitor saying wee1 have incentives is that possibly going to eat into margins as we look ate the ña strategy, we're very comfortable with our position hereéñ we went in with a very deliberate cadence strategy. we rolled out our high content crew cabs first. if you see the48t(áqá share, quarter over 4quarter, we're u segment and we've done this with discipline and incentives and record highptransaction prices so what we're focused on is the strength of our truck -- >> dhivya, you may be focused. you may be disciplined i know that is the message you and mary barra are putting out there. let's be honest, this is an industry where you got your competitors knockingq a lot off the hood, in terms of cashñ on the hood, thatv!ñsome point you have to respond. are you saying you not worried about the truck market becoming

a little overheated here in north america withttf incent♪ >> we're again we're very proud of our product weee have a very strong produ out here yotzsee the result it's manifesting itself in the second quarter despite the pricing of head winds that might have been out on the market. you see how we delivered and our market share is up we need to execute to that and we will continue to'ing that >> quickly, let'sxdtalk about china. the equityt income you receive from there, less than 50% from second quarter last year, which was a record quarter there.e how worried are you about the slowdown in the auto industry in carolina volatile environment in china. as youx look at the second quarter, we experienced industry head winds with the overall economic slow down there were pricing pressures as well from sellout of coin 5 emission standards going into china 6 emission standards when we were executingt within that framework, we took down

inventory. we had disciplines in costs. as we look at the second half, it's difficultj to call the microi macroenvironment. we have significant launches coming up. a lot in the sweet spot and the market as we look forward, we expect the earnings to be generally inline >> do you expect china's auto industry to be down? it's down the first six or seven months here, doxdyou expect th to happen in the second half of this year??8jrt&h >> it's hard to call it. we expect the auto industry to year long e1term, this is añ market where we are constructive. we have strong brands, a very strong parte1 in other words and our strategy in the overall market we are working in, we are c"6ñfident of, so despite the longer term constructive >> dhivyafá suryadevara.

thanks to the strength of the north american market. guys, back to you. >> okay. we want to thank you, phil, for thatl we want to change gears  get back to our guest host this morning. we want to talk about crypto and bitcoin, it's becoming, you seen the price. michael novogratz is here. let me ask you about it. about the regulation involved. you said you thought we got past thee1 regulatory hurdle. what i keep worrying or wondering about is if bitcoin or any of these crypto curr$!es become truly>!÷big deal, all of a sudden the g7 wefiáuuhad a meeting about libra and everything else will say you know what, we will make the on ramps to this, because we can't actually regulate the currency, we will regulate the onramps in a remarkable wayxe and that w complicate the whole picture >> that's being done already.w why? it's kyc, know your customer, anti-money laundering is specifically enforced here in the u.s. and in europe

so what's the good news is there are lots of institutional players that are coming into this space that will making a says much easier for credible players. so if it's fidelity or thejf d. being able to buy it through your brokerage. so on ramps in a credible way that the regulators are okay with are happening and so -- >> are we sure they're okay with it, or they just haven't caught up to it yet that's the other piece of it >> listen, if you're the federal reserve or the treasury and bitcoin was being used as a currency and starting to eat away at the dollar, you'd get really nervous that's why i think they're more focused on libra or these stable coin projects than they are bitcoin. >> because >> because if you put bitcoin in the digital gold space, it's just another asset gold is 8 trillion even if bitcoin got to a million dollars, that's only 2 trillion. and so bitcoin has a long way to

go before it's got any -- >> how many winners can there be i mean, is there enough room for all cryptos? is bitcoin going to be the one because of being one of the first? >> i think bitcoin will win this digital gold then there's going to be a big fight over what becomes web 3.0, eos. there are probably 15 to 25 credible projects trying to be this global super computer that processes and authenticates data that you can build on top of that's three to four, five years away those are really venture bets. it's hard for the market cap to get so, so high like bitcoin when you think about the entire cloud, if we took amazon's cloud and microsoft's cloud and alibaba's cloud and looked at the market of the cloud, it's less than a trillion dollars it's one-eighth or one-tenth of gold so that other group in round one is fighting to be the cloud in lots of ways >> okay.

so there's a halving in may of 2020 and maybe one or two more by 2025. but the stock shows a million dollars in just six years. you don't think that -- do you have to believe in the easter bunny to believe that? >> you have to believe in adoption so there's a college endowment meeting today should they put money into a venture fund with bitcoin or bitcoin directly. one thing that libra did -- >> a major college endowment fund we would know >> yes harvard and stanford are already in so one thing that libra did when you saw mastercard and visa and paypal and uber all sign up, it credentialized crypto. so every institutional player is looking how they get their foothold in. all of them. they're not all in yet most aren't in but they're all getting closer as those guys move in, first to bitcoin and then to broader crypto, you know, that's what drives this next price move. >> because that's what people ask, where's the money going to come from? and they're asking it in a

greater antiquated notion of what's happening here. that's not really what's happening. >> it's real, serious investors. >> but some people think gold is the greater fool because there's no underlying value. i know you think there's value because of the work produced to create a bitcoin, but the flip side of that is, i could dig a hole here and spend a whole year, hours hon houupon hours d, and you could decide that hole is worthless >> people say there's scarcity well, doggy-doo, if it becomes scarce all the sudden, you're not going to want it no matter how scarce it is i can tell you, i have three dogs you do not want it >> i was with a music publishing company yesterday. we were literally looking at, you know, imagine taking bob marley's publishing rights, tokenizing it, and selling out to the public. you can buy part of bob marley's future and being able to show directly how many radio plays, how many movie plays, all the accounting

built in the token >> that's not crypto currency. that's blockchain. >> but that's coming so emboldened in this whole idea is as we're moving to a digital and -- >> but that doesn't do anything for bitcoin necessarily. then there's the view that all these guys in silicon valley are trying to build on top of etherium still and what's that going to be worth or not >> if etherium wins that battle to be web 3.0, it'll be worth a lot. ma >> more than bitcoin >> no. >> even though that has quote/unquote utility. >> what do you think should be worth more, gold or the whole cloud? cloud has a lot of utility we use it every freaking day all this data is being shoved up there right now. gold has this special case of store value. >> it's beautiful and great for jewelry, but you cannot send it over to japan instantaneously to cover something for free it never will. the utility of that imbues it with value as well, the crypto

anyway, novogratz -- >> hang out. >> we'll talk to you in 20, 25 >> talk to cramer about this too. >> i want to talk to jim about powell you wrote something, didn't you? i'm trying to figure out whether you thought he did a good job yesterday. i thought you did initially, now, i mean -- >> no, i do. he's in a jam. look, he's got to go home at night and talk to his family and say, listen, i don't want to be attacked by trump. do you want me to be attacked by trump? it's easier for me to do a little gobbledygook than it is to say, listen, we got to do this because trump is trying to tame china and he can't really say, listen, i screwed up he doesn't want to do that he's in a jam. and i think he took this course of least resistance, but he's still data dependent whoever says, listen, in september now, i changed my view -- those people are just playing games. they've been wrong that market has been wrong all the time i think he's a good communicator in a very tough spot >> noah blackstein sent

something to me and said, look, we're a long way from neutral speech, which hurt credibility, to what was said yesterday, which hurts credibility. he's just saying that this is, you know, fool me once, it's my fault. if you keep doing this, there really is a loss of credibility. you don't see it they what >> no. look, let's say the president next week decides there should be big tariffs on 320 billion because the talks didn't go well with mnuchin he's going to be hailed as a genius powell is a genius, he saw it coming so it's hard to have a first take without realizing that our president could wake up tomorrow and just decide to trash the chinese. and thank heavens powell was a visionary. so let's give him a chance let's not just decide in the last 24 hours that powell doesn't know how >> he's a smart, good guy. >> we're willing to do that. >> novogratz is fabulous. >> all right awesome, thank you we'll see you in a couple minutes. later, don't miss an exclusive

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all right. we want to thank mike novogratz for being with us today. come back soon make sure youment coback soon too. we'll see you tomorrow right now it's time for "squawk on the street. ♪ ♪ good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with jim cramer david faber is back. futures look to steady after yesterday's selloff, the worst in two months, as powell's message was confusing to some, certainly drew criticism from the president. first day of august also brings reminders of seasonal weakness europe is mixed. bank of england holds steady ten-year holding that two handle but ism is on the way in an hour our road map begins with the phrase that spooked wall street. mid cycl