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 cycle adjustment

>> plus, verizon's 5g focus. the ceo says 50% of consumers will have access to that technology >> and beyond meat is tumbling in the premarket, pricing a secondary at six times the ipo price and has new competition on the way. stocks are looking to open higher after their worst day in two months yesterday the fed cuts rates by a quarter point, but the chair dampens expectations for more easing despite the selloff, the major indices still finished july in the green, their sixth positive month in seven, although we're headed into the historically weakest two months of the year >> well, look, we're making much too much of this mid cycle we're going to forget what that means five days from now we won't be thinking about that. we'll be thinking about it today until the market goes up then we say forget about it. he was in a spot he's in a spot because he has a president who can't fire him but would fire him, right?

and send him down the elevator he wants to make it so that it's not personal so he comes up with something to split the difference mid cycle because he can't say, look, i would have loved it if he'd said what's slow is what the president's done can you imagine the food fight jay powell is not a food fighter. jay powell is a legitimate business person who gets dressed every day and goes to work he doesn't think about things like sleepy joe. he doesn't talk about crying chuck. he's a legitimate businessman. and he can't get in a food fight with the president so he takes this thing >> you're echoing -- he's mkm today. he could have articulated that uncertainties continue around trade. he chose not a to do any of that, instead delivering a mixed and confusing message. >> what's he going to do here's what we wanted. hey, you know, i really screwed up i should have never raised in december by the way, we got a local president, and he's at war with china and good luck to him, but

if he does 320 billion more, we're going to be sunk because the manufacturing economy is slowing. he can't do that so he calls it a mid cycle adjustment >> there's a way to diplomatically say we continue to monitor closely there's certainly going to be a potential impact as we've already seen in terms of the willingness of businesses to invest if, in fact, the tensions continue to ratchet up >> wow, david. are you an adviser of his? is that where you've been the last couple days >> i've never spoken to mr. powell in my life. >> that was great. >> david could run coms for just about anybody. >> sleepless he runs it. that would have been much better but i think the guy doesn't want to be the story. we've made him the story because we came up with mid cycle and futures went down. give me a break. if he does 320 billion next week, which is possible, trump, we'll be saying, you know what, powell saw it. he's a visionary he came, he saw, he conquered. so let's just at least accept

the fact he's got a president that immediately trashed him think about jay powell before he took the job he's a legitimate guy, goes to work, comes home, has a cup of coffee in the morning. now he's got some guy saying like, you know, we're waiting for a name what is jay powell going to name dumb as a post or is that too many syllables come on, it's the president making fun of him, like we're in third grade. we come home and our moms hit with us the hair brush >> it's gone on for almost a year now >> what, the name calling? >> just the general tone of disfavor from the chief executive who does not have the power to fire him, at least according to powell. >> it's disrespectful. it's rude. he picked him. >> you seem to think trump's in powell's head. >> trump's in everybody's head in this whole country. no one wants to be called a name do you want to be called a name? he's got a name now for someone on msnbc that's so mean, i don't even want to say it. he's a namecaller.

i mean, senator warren is a senator, right what does he call her? >> we all know >> i know. that's what i'm saying jay doesn't want to be that. jay does not want to be the focus of the story he's very close to becoming the focus. >> the chair certainly has some who are close to the fed coming to his defense listen to bill poole this morning on worldwide exchange. >> oh, geez. >> what i think is that it's a big mistake for the federal reserve to believe that the one rate cut would satisfy president trump. let's be very clear. president trump knows very little about monetary policy i doubt that he knows the difference between a reserve ratio and a liquidity ratio. >> all right so after yellen, greenspan, dudley, everyone tries to give him cover. now they're trying to help him out with the relationship with the potus. >> true, just wasn't mentioned if the interview this morning. at one point, someone said they

know nothing, with reference to bill powell. it was me when bill wanted to tighten in 2007, 2008. i will say this about bill poole, he looks younger than ever >> oh, you're being -- that's it you're saying something nice you don't have anything to say >> what my mom say, if you don't have anything nice to say, don't say it trump's dad clearly said something else i listen to bill, and bill is a very nice man. >> 12 years ago, this coming weekend, i think saturday is the day, is the anniversary of jim's rant with erin ber nut -- burnett take a listen. >> he has no idea! >> cramer. >> i have talked to the heads of almost every single one of these firms in the last 72 hour, and he has no idea what it's like out there! none and bill poole has no idea what it's like out there! my people have been in this game for 25 years, and they're losing their jobs and these firms are going to go out of business and he's nuts!

they're nuts they know nothing! >> cramer. >> i have not seen it like this since i went five bid for half a million shares of citigroup when i got hit in 1990. this is a different kind of market and the fed is asleep. >> now, you went there because you've been hearing things from your contacts that you didn't think the fed was hearing. you wouldn't say that about the fed today, or would you? >> people thought i liked bear sternes. right before i went out there, bear was telling me they were in big trouble. say whatever you want about what i said about bear. there was a legendary funny tv man who said, listen, i said buy bear >> you didn't, you didn't. >> i said your money is safe it's insured i used to sell that. but the issue is that david and i both knew that there are a lot of firms that were in trouble. you have to at a certain point -- >> the fixed income with all the securitization >> you saw it. bear was in big trouble that day. >> confidence was starting to eat loss

>> i said there was a run on washington mutual. i got a call from a particular official who said, you know what, that really caused a run in washington mutual i said, no, there is a run in washington mutual. you can't be the story powell doesn't want to be the story. i don't want to be the story the fact is bill poole was famous for wanting to tighten right in, and then he made fun of me. we saw not the minutes but the actual transcripts i love bill poole because he came in over here and said very nice things, but the fact is that this fed is a different fed because of the president, and bill poole was dead right in what he said the president may not be that good on liquidity ratio, what did he say >> yeah. >> but poole is not worry. he's not anyone the president is going to come up with a name for. >> i wouldn't be so sure >> bill was not really listening to what the fixed income markets were saying. you were glued to the fixed income markets you taught me -- jim, the

equities, no >> certainly not at all. >> i'm not saying we all knew. i think we're all trying to say that, you know what, things were really bad there it's not like that now >> no, no. >> but our president is itching to have a war with this guy that he picked. and he should have kept yellen if he wanted ease, he should have kept yellen we need to move on >> verizon did report earnings this morning >> how were they >> they weren't bad. >> 5g stuff? >> well, it's funny. i talked to hans on "squawk box" this morning we also did a few more questions and answers, as we say, on tape. saved a couple things for our show as well as for the quarter, jim and carl, as you know, decent quarter for the company, which has done a lot over the last year since he's been in the ceo slot it's a year ago, in fact, exactly that he took over as company ceo. they came in either meeting or above in terms of a lot of expectations when it comes to

net additions for postpaid customers. that is always a key service revenue margin always a key. wireless is where this company is at. they're not trying to be a media company, even though they own a couple media assets. they're not trying to be a cable company, even though they own fios they did lose 52,000 video subs. they're a wireless company it is all about, as jim said, 5g and interesting, i wasn't here for apple earnings the other day, but i did ask as well about demand for hand sets, particularly for apple, but overall. he noted their equipment revenue was down why? well, perhaps because people are waiting for those 5g hand sets, including when apple is going to have one on the market take a listen. >> you can at least see that in our earnings this quarter that our equipment revenue came down, meaning that people are actually waiting a little longer to

change out their phones. so there are probably some wait and see. >> what do you think that is is that this iep issue or more about waiting for 5g >> generally we have this change of technology. 4g came and everybody wanted the 4g phone now it's been around for seven years. now 5zbrg comes and the pioneers are coming in, in the beginning. it's going to come, at least in my belief, it will become a movement of, hey, i want my 5g phone. and that's how it worked with 3g too. at the end of the cycle, it's less innovation. >> by the way, i was referring, when i used those eip, equipment installment plans, which i've talked about in the past as perhaps when people stop paying the 30 bucks a month to finance their phone. they go, wait a second, why am i going to buy a new one i'll just wait interesting, though, that there may be this gap. their equipment revenue did come down as people wait for 5g

phones that can do everything they want them to do on a network that actually is working, which by the way, they're really not there yet but they're moving 17 billion, 18 billion in capitcapex this year. >> they're advertising not the apple phone but android phone. that interview dove tailed exactly with qualcomm, which talked about the valley. i saw a piece of research this morning that said qualcomm 2019 recap, not complicated, merely awful. david, there is a big gap in this country because of 5g and also because of huawei i thought verizon -- i thought that interview was excellent because they're pretty much having to bridge this. they're in a tough situation because we don't want 4g we want 5g but does that mean we have to switch from apple if we want it now? >> if you want it now, yeah

perform i don't want to do that. >> but do you need it now? >> i don't think you need it now. >> it's not available in a lot of markets there's some criticism we discussed this on the live interview we did in terms of are they really just focused on urban markets, is the millimeter wave spectrum what they need, do they have a strategy for servicing the rural areas of the countries. so it's going to take some time. then andrew sorkin did try to push mr. vestberg on, well, when is 50% of the country really going to actually have it available? he said, you know, next year >> that's why i think you can wait did you notice tim cook dodged anything 5g on that conference call but this was a great interview because in many ways, verizon determines -- what, 100 million? 90 million, 100 million people >> yeah, enormous. >> they determine a lot of what we end up doing. in the ends, it's the carrier. with the exception of if you're

dealing with suppliers and trying to trace things back, then you've got the huawei problem with the president >> by the way, while we're on the subject of 5g, quickly, qualcomm getting hit because of guidance again, this gap. >> it's a gap year >> two quarters of we're not really quite there yet in terms of 5g. >> it's a gap year when your kid didn't do that well and you call it a gap year. it's like, wow i mean, that stock is going to be uninvestable. it went up very quickly. there were people who bought it on the win with apple. it's been terrible >> i remember. i reported it that day >> i'm sorry i forgot to say how great you are. i forgot >> after obviously the judge against them in the ftc case now this hiccup. >> how come you didn't have this beforehand boy, this was some story oh, you were busy with verizon >> i was out yesterday remember i was on vacation.

>> i listened to at&t and verizon. they know more than anybody. sometimes they play their cards very close to the vest i listened to the verizon interview, and all i could think about was, all right, i'm not going to change. i'm going to wait. i don't want android but everybody who listens to that has to be thinking, do i want 5g now? i don't know i watch cnbc on my phone it's perfect do you guys watch on your phone? >> that's an issue that's going to be an issue. a lot more to come from david's interview with vestberg later this morning when we come back, beyond meat, details about the secondary putting further pressure on the stock. there it is at 169 also ahead, fed reserve board nominee judy shelton a day after the powell selloff we got to get to cigna, gm, dunkin', yum, clorox we're back in a moment every day, visionaries are creating the future.

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so we put july to bed. take a look at the leaders for last month twitter number one on the s&p followed by micron and universal health as we start august, we'll see what the new gainers will be actually, july never went negative on the s&p. not for a single second. >> twitter is very interesting and micron those are two that pple eobet against. >> cramer's mad dash coming up after a break. (vo) the hamsters, run hopelessly in their cage.

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we'll get started with trading here at the new york stock exchange in a little less than nine minutes. i'm happy to be back to do a mad dash with you before you dash away for a long weekend, perhaps. what have we got today >> okay. interestingly enough, david, years ago my executive producer procured a crow for me to eat for something i got wrong. this morning bank of america/merrill lynch goes from a sell to a buy.

crow, please check, please. it turns out that gary freeman, the ceo basically just made a better product than people thought. it's the galleries which are so exciting you've got to take your wife to the gallery downtown in the meat district >> the one with the restaurant on top >> it is an instagram palace i went there with my daughter. we posted and posted and posted and posted it was, david, the place to post not dumb as a post, but a post and this macro holding up better he's been able to mitigate china, which is about 40%. he's got that down gary is a genius the stuff is good. what the guy basically missed was that the stuff's really good we did our bathroom stuff. >> what about their sourcing and supply chain >> he's been able to mitigate

some china i just think the new stores are great. he misjudged a very hard thing to do. he was thinking it was a photograph >> he, being this analyst. >> yeah, he was a photo critic, okay it was matisse gary freeman is an artist. he missed it so this stock is going to go to all-time highs >> all right there it is. >> get to the meat district, david. there's like a six hotel room place. >> i know. identify been there. i've been to that store. i've been to the restaurant. >> why >> i went out one night. >> someone dragooned you take a nap after >> i don't go out to shop. i do need a nap. long night home. >> not me. >> apparently bad weather yesterday. >> i didn't sleep on tuesdays for four years >> all right an opening bell. no more travel plans to discuss with you stay with us on "squawk on the

street." a lot more stocks and news to get to [leaf blower]

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you're watching cnbc's "squawk on the street" live from the financial capital of the world. opening bell in just about 3 1/2 minutes. very busy thursday obviously in the wake of powell's presser

you got beyond meat under some pressure in the premarket. company prices the secondary 3.25 million shares at 160 that's a nearly 19% discount to yesterday's close. the offering is expected to close on or about august 5th then the impossible going nationwide at burger king. >> impossible is gmo, remember i think impossible is great tasting, but it is -- the millennials don't like gmo i think this is a brilliant pricing. i think the ceo orchestrated the pricing, and i think if you had to get a mind meld, what would happen is he doesn't want to look greedy. everybody who bought it makes money. everybody who sold it makes money. i don't think there's a single flipper who bought it. it's all mutual funds that are going to hold it and this is a win/win for everyone is it a short squeeze? it's obviously a short squeeze did he do what fitbit and, you know, go pro did those were the other two that broke the lock-up. that's what everyone is saying

to me. fitbit broke the lock-up, and look where they are. meaning, they were able to sell before you thought they could sell a lot of people sitting around saying is beyond meat the nexto? i knew go pro was at the top when i was in hawaii and there was a goat wearii said, i smellu put the goat on the surfboard with the go pro. >> i remember that day well. so you don't believe there's a top here >> no, i think it can go down. they break the short squeeze a little this is not a $12 million company, but it should not be a $2 billion company i think they priced the offering -- there's an ethos thing going on here. anyone in the restaurant business is now confronted with this do you have any meatless tacos that taste like meat no, we don't have that we have meat tacos that taste like meat. >> that comes on a day where we got dunkin' comps up 1.7

yum -- >> yum on fire >> taco bell up seven. >> everyone wanted to be in yum china. but it turns out yum international -- creed has done such a good job. >> last friday, starbucks and mcdonald's were extraordinarily strong >> they have scale they have scale. they can deliver >> people like to go to get their coffee and fast food >> they like nitro have you ever had nitro? for me, i don't sleep for three days i think i went blind >> instead of the typical not sleeping for two days? >> i didn't sleep on tuesdays. that was my rule who the heck missed it >> let's get the opening bell here at the s&p 500. at the big board, celebrating an ipo today, it's dynatrace,

software intelligence platform for the enterprise cloud we'll talk to the ceo later this morning after the stock opens. at the nasdaq, celebrating an ipo, sundial growers we'll talk to them as well >> you've got to ask them about the scandal. they did some things that were unauthorized, and canada didn't like it. caused the group to come down. >> also this week, cuomo, governor of new york, signed a decriminalization of cannabis. now a fine essentially >> i know, a parking ticket. really something the dispensaries are still not ramped up in the state like massachusetts or washington. in california, they've got it going. in oregon, there's so many of them, pricing has collapsed in oregon, where my daughter's from that's how i know. >> pricing, why? what's happened? >> there's too much. >> the market is stubborn. >> if you want to know the

truth, they ripped up all the pinot noir fields. it wasn't that great you won't miss it. they put pot fields in southern oregon used to smell like wine. now you get high driving on interstate 5 >> got it. >> speaking of driving, jim, gm has to be one of the nice surprises of the morning >> yes >> strength in north america, crossovers, suvs phil lebeau just talked to the cfo a moment ago >> phil did so great i love what had he said, which is, hey, this hasn't been in this territory for a long time what's amazing is gm china has collapsed. they were still able to do this with north america very impressive. this management team is starting to really deliver what normally would have sunk that company, which is a decline in the second biggest market by the way, their biggest market last year. and they've managed to pull it off with u.s >> may do under 17 million total for the first time since 2014.

>> i know. that's something that jay powell can use. i would have used auto dupont this morning reported a quarter, and auto was terrible 3m, auto was terrible. auto is terrible except for gm because they're lean, they're mean, they're a fighting machine. came up with that myself >> i thought so. >> i got that at faber college >> college is good, my friend. >> jim, we've talked about consumer products companies doing well all week. then along comes clorox and guides 2020 revenue flat to two. >> it's the household products, carl the household products, i can't even bare to loear to look at i. this is bag, kitty litter, maybe the wet season for charcoal, kingsford. he's got some trouble here

and he can't make it up with filtration or with clorox, which was mentioned prominently in the debate >> yes, it was >> and that didn't help. but of course, that's next quarter. >> the senator from new york saying the first thing she would do in the oval office -- it was an ad. it was clorox. >> one of the most tweeted lines of the night >> but it's not driving sales because what she really -- >> it wasn't expected. i didn't expect to hear that >> because there's no policy involved >> clorox is very effective. clorox kills everything. there isn't anything that can survive clorox it's not killing their quarter what's killing their quarter is household products i don't know what to say because this thing was on a roll it was one of the absolute best of that whole sleepy group going up and up. now it's proctor >> i wasn't here when proctor reported

organic growth we had to do not one but two interviews with proctor. that's how great proctor was >> it was a double whammy. >> like restoration hardware >> not only the double upgrade, but their target goes to 85 to 165. >> yeah, he was kind of on the wrong side of the trade for a while. >> mentioning, as you said earlier, price hikes, this gallery conversion, which they did not believe in prior >> you have to go with someone who's a customer and my wife is like, you know how there's that trash ad where he points to it and it disappears my wife was like, doom, doom, doom, doom >> meaning i'll take that and that and that. >> and we were in there to interview gary freeman i said, go home, you're costing me he said, no, i wanted to go to the gallery. it is, wow it's not like going to the

gallery of signatures. >> does anybody go there >> so crowded, you mean? >> no, yeah, nobody goes there anymore. , app >> apple is back, by the way >> not only back ft has a piece out today about who has the number one cash horde. obviously it's been apple for a while. alphabet has replaced it at 117 billion. apple's has come down from 160 to 102 now >> they actually want to spend every penny. i think they have to keep pouring money toward the cloud i think that when you talk to these companies that are saying cloud spending could return -- we had lisa on yesterday you missed her >> i saw your tweets about lisa. >> data center going to come back i think alphabet had a great quarter, but that was so long ago. that was like a lifetime ago that's all right plus, it was also at the end of the week in the summer people aren't focused on a thursday night like starbucks.

i think they had a great quarter. they have a lot of cash. and they've been uniquely burning it in other bets as opposed to buying back stock like apple >> we're taking another look at verizon. had been up as much as 2% earlier. was generally a very positive quarter for the company in terms of at least beating a number in the analyst estimates in terms of its wireless franchise. i talked to hans vestberg on "squawk box" about coming competition in the wireless business given the expected merger of sprint and t-mobile, not to mention the entrance of dish wireless to create what the justice department hopes will be a true fourth competitor in terms of 5g. but guys, coming back to sprint/t-mobile for a moment, the states, remember, were supposed to go to trial october 7th, the 13 states and district of columbia that are still opposing the deal. we've never been in territory

like this where the doj says yes with all the things included in that consent decree. and the states are still saying, no, we want to go to court to try and stop it. something that may be somewhat helpful were comments from john ledger at the very end of the conference call. i don't know if you caught this. i think we have it on a full screen for everybody he was asked sort of about the profitability of the nvno deal, the capacity agreement they would agree to with dish he's got a transaction where boost, that's what they're divesting, the prepaid business, becomes an mvno stream to us in other words, boost using t-mobile's capacity, which certainly has positive financial implications for us. then he went on to say that, as well, you have a transaction on spectrum that's going to be at the value or if it doesn't take place, meaning when they buy the spectrum, we'll have an option later on to sell that, at that price or to keep it. then you got dish spectrum and the mvno that are all in of

themselves positives to theble ifs of the company why is this important? there's been a perception after the deal that it was going to be neutral. dish should be using this network sort of at cost. and that would help make them more competitive him coming out and saying, oh, we're going to make money on it -- >> no, you're not supposed to. >> might be helpful to the states' case a little bit. >> it was obviously a negative look, david, that's stunning >> he went off script. >> he can do that. but look at what's happening with bristol-myers they made them divest tesla, which hurt them badly. david, how did you feel when you asked him about dumb and dumber?

he's a distinguished man you had to go there. >> vestberg? yeah >> that was a great part i wish we had the clip i didn't speak to your producer beforehand >> vestberg is very -- >> see, this is like jay powell and the president. vestberg would not go there when david said, what do you think about being called dumb and dumber >> no, clueless. >> clueless. he didn't go there because he's a distinguished guy. i think he's swedish >> he's that too >> they're neutral they've always been neutral, right? kind of like switzerland of the scandinavian area. >> yes >> jim, really quick on some macro. dollar index, two-year highs today. >> killing us. >> we're going to get ism in about 20 minutes and the jobs number tomorrow what's the likelihood we spend the weekend asking if the fed made a policy mistake? >> i think that the weekend could come, then on monday president trump says i spoke to mnuchin and i think we ought to raise the tariffs. so therefore, it wouldn't be a mistake. but you're absolutely right. there is some momentum

claims were strong again i got to tell you, this dollar you got to go over the apple conference call because when you have -- people don't know what basis points are i wonder if bill poole wonders what the president knows about basis points 300 basis points on currency in one year, how do you manage that >> that's one reason for clorox. >> and clorox doesn't even have that much international versus the others, and they're hurt that's why procter was so amazing, that they were able to manage this. they once did an editorial about what it means to have a strong dollar it was brilliant there's some advantage of it, but overall, you're getting crushed by a strong dollar all these other countries are confederate dollars. we're union dollars. you know >> i get it. >> you got that? >> i do. i mean, you didn't know, i'm an expert on the confederacy currency >> are you >> no, i'm not >> who was the treasury secretary. >> i'm kidding was it larry sumner?

>> judah benjamin. >> who was the treasury secretary for the confederacy? >> i think it was judah benjamin, wasn't it? >> judah benjamin. >> are you on "jeopardy" i don't know why this is a problem. >> he was the treasury secretary. >> okay, i'll remember that. >> he kept that confederate dollar as strong as hec could, not unlike the japanese and the europeans with these currencies. >> did jefferson davis tweet about him too? >> you should read the last ten days of jefferson davis, about how reran away pretty amazing he was no general lee. they were on the wrong side of history, just so you know. let's get that straight. >> thanks for clearing that up >> no problem. sun power up strong, just want to point that out quickly. >> guys, we're back to 2985. let's get to bob this morning. >> good morning, carl. happy thursday, everybody. it's a rough start to the month. history is not on our side, unfortunately, for the month of august let's run through what we've got here in terms of the situation

august is the worst month for the dow and s&p going back to 1987 this is the stock traders alma knack. go back further, it's the second worst month. august and september, not a good setup historically up almost 20% this year, earnings essentially flat. we're pushing 18 multiple right now. that's historically priced yes, low interest rates help, but it's a tough setup we don't have a lot of clarity on global growth we don't have a lot of clarity on tariffs and of course the future rate cut, the fed has made it a little cloudier for us another additional factor here this is what i call a tough setup overall. but there's a lot of positives out there. there's plenty of bulls. economic data is strong. we'll see what happens with the ism this morning we got lower rates and generally, central banks are not the enemy of the markets, no matter what the cloudiness of the fed yesterday. they are still very aco accommodative. there's also a lot of rotation going on bob, i'm moving in and out of different stocks here and not

doing bad so far this year several people have pointed out to me, we've had disasters boeing has been a disaster for the dow. it's 24% off its 52-week high. 3m is 21%. these are high-priced stocks kat pillar, united health group. put these four stocks together, they're almost 1500 points on the downside for the dow because of their declines. but other stocks have been doing very, very well. this is this rotation that keeps going on here. so home depot, microsoft, mcdonald's, disney, coke, they're all 2%, 3% most of them were only 1% as of yesterday off their historic highs. a lot of rotations into various stocks generally big global industrials, not so good consumer names, a few select big international tech names have been doing much, much better overall. and that's why the market keeps holding up the dow, you would think, would be a disaster with boeing. yet, it's just fractions off of 52-week high that's what i'm talking about, that strong rotation that's going on today if you look at what's going on, here's this odd thing that's been going on for months

now. semiconductors up and consumer staples up this is an odd pairing, but it's been a theme throughout the year the slightly more defensive names combined with high growth cyclical names that's an odd pairing. transports a little weaker robinson fedex down a little bit. here's your weakness today there's a couple reasons for oil stocks being down. in particular, oil exploration and production companies we've got oil down today a little over 2% we had some poor guidance. concho, one of the big exploration companies, they talked about lower production. this is particular of course here in the united states. apache had their numbers out as well they're down, as you can see here all the big exploration and production companies are trading to the downside. this is not a new story. the etf is sitting essentially near a 52-week low this is the basket of all the exploration and production stocks in general, energy is now essentially 4% of the s&p 500.

a lot of the big hedge funds that were in energy are essentially out of that trade right now. so yes, it's unfortunate, but when you compare the strength of energy 20, 30, and certainly 40 years ago when it was 10%, 15% of the s&p 500, they're not as important in terms of the impact it's sad, but it's true. carl, back to you. >> as we said, we're awaiting ism in about 15 minutes. let's get to rick santelli in chicago. morning, rick. >> good morning, carl. well, the quarter point decrease in the fed funds rate from 2.25 to 2.5 now remains at 2 to 2.25. it might seem like a small amount, but it is one-ninth of our total amount regard to the amount of eases we have left, which is now eight and it's had a very strange effect on the marketplace. look at a three-day of two-year note yields. of course, most of their activity yesterday was to the upside all of a sudden, it is starting to break down.

if you look at a three-day of tens t really jumps out at you we're now below all of the trading yesterday. we just broke under 2% if you recall, the low for this move on a closing basis was july 3rd, 1.95 yield close. so we were within a handful of basis points of challenging that but the big beneficiary also very counterintuitive to a central bank that's easing is the significant pop in the dollar index and not only does it have a pop, as you see on this three-day chart, it has been popping for a while. right now look at the next chart, if we were to close here, it would be the best close since the spring of 2017 and of course, maybe the more appropriate story that i will discuss with dr. judy shelton at 10:30 eastern is how the euro currency now is at the weakest levels since 2017 against the green back how much of what the fed did is to get ahead of other central

banks and their impact on things like foreign exchange. very important questions and much of the motivation in the marketplace seems to be just that many investors believe there is now a bit of a race between central banks that might really neuter much of the effects the fed was hoping for raregarding this quarter-point cut carl, david, jim, back to you. >> rick, sooel wwe'll see you iw minutes. we did get yesterday the trailer for "the irishman," reportedly a budget of hundreds of millions of dollars a big bet for netflix. it will be the most expensive adult drama in recent history as they're spending over half a billion on three pictures. >> that's my street, by the way. they made the movie on my street they spare no expense. holy cow this is a lot. this is a very big bet i know a lot of people feel the stock has bottomed, technically,

but i think you have to look at that budget on these movies versus what disney does. >> the numbers are stunning. you know, i continue to wonder about the relationship with incredible talent like this or perhaps more the people who are developing series for them as opposed to major motion pictures how strong that will remain given the lack of detail the content providers are given about the success or failure of their shows, which then obviously colors their negotiation to get renewed >> zo ydo you think it's finall seen the heyday? >> netflix overall >> the only reason i ask is because that last quarter was bad. let's just call it bad but i remain convinced this is a company that has just not been that great at forecasting. and there's a love for netflix that could be worldwide. i'm a believer i'm just trying to figure out

the level. but that figure you just gave about the amount they spent on movies, that's too much. you have to have a lot of people sign on because of "the irishman irishman irishman." >> but what if it's the best movie made this year >> do you want to make a bet >> if you're going to make a bet, that's probably the one to make scorsese with those guys >> i would take it, yeah it looks good. people are happy to have a new tarantino and covscorsese pictue in the same year starved for adult drama in this country. >> look, i think "irishman" is so -- we just put it on, why because it's an event. i sat there spell bound. i just watched in the street my wife said, what are you doing? i'm watching this movie be made. they blocked off the street for day. i just was hoping to see one of those stars. i never saw a single star. they're always in the trailer. you can't get in the trailer not allowed in the trailer >> they do the same scenes over and over and over and over

again. >> well, they do it this way >> it's got to be minds numbing for those actors >> horrible to be an actor >> shoot it 700 different ways >> wi know how did you know that? >> because i've watched too. >> okay, okay. when we come back, burger king launching the impossible burger next week. we will talk with the burger king chief the dow is up 77

we did some of the best names for july on the s&p. here is some dow losers pfizer, j&j, boeing, which pisani just called a disaster. >> j&j is lawsuits i am not even dignified -- yeah, just say lawsuits. >> again, as ausugt skiks off, dow is up 87 back in a moment k off, dow is up 87 back in a moment i off, dow is up 87 back in a moment ck off, dow is up 87 back in a moment s off, dow is up 87 back in a moment we're carvana, the company who invented

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jim, what's on "mad" tonight? >> hat-trick we have whole logic. seat geek. and then american tower. it's unbelievable. david, you know the tower stocks win no matter who combines, no matter what. they are cell towers everywhere and american tower dominates

amt, which is like an atm for shareholders. >> see you tonight "mad money" 6:00 p.m. >> what a show we just had. >> when we come back fed nominee judy shelton in three minutes. just ok? (in dutch) tell him we need this merger. (in dutch) it's happening..! just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing.

"halftime report" weekdays noon eastern on cnbc a strong economy, jobs on the rise, should investors even be concerned with a slowdown? jobs numbers could hold the answer tomorrow on "squawk box" 8:30 a.m. eastern. ♪

good thursday morning. welcome back to "squawk on the street." >> i'm carl quintanilla with sara eisen and david faber at post 9 of the new york stock exchange markets trying to claw back some of the losses from yesterday the worst in a couple of months as we digest the fed, that presser announced new economic data let's get to santelli. >> i'm going to chronological order. june, for construction spending, something we don't see very often, carl, back-to-back negatives. minus 1.3 for june rearview mirror, last month down 0.8 is ounce 0.5 the last time we had back-to-back month-over-month negative numbers in construction spending was december of 2012, january 2013 so we want to pay attention to that in terms of the minus 1.3 stand alone, that's the lowest level

since september of last year now to the money ball number our july read on ism manufacturing nationwide expecting a number near 52 51.2 so it's a bit light. 51.2 51.2 is the lightest number going back to, well, we have to go back a little ways here actually, 51.2 is the lightest number since august of '16 when it was under 50 at 49.6. we have had lots of numbers right in this area, but not quite this low so it's an expansion, but not necessarily a good comp. now let's look at some important data the employment index, 51.7, down from 54.5. for prices paid, that number is 45.1 we don't see any pressures in the minds of those respondents finally, new orders, at least it's holding the 50 line

50.8 that's an increase from our last look at 50 sara, back to you. >> yeah, lower treasury yield stocks remain higher thank you. our roadmap for the hour starts with the first rate cut in 11 years. president trump saying chair powell let us down with the markets coming off the worst day in two months. >> plus, the impossible foods whopper. we will hear from restaurant brands jose cil on their new product. >> an interview you don't want to miss. we will hear from president trump's prospective fed nominee judy shelton a day after that rate cut. let's start right there. stocks, markets across the board digesting the fed's first cut in more than a dedecade more on the fallout, steve what's the big takeaway here as to what the fed is going to do >> i think the big takeaway, and everything else is sort of commentary on the side one is it's taking the form of the market baking out one of two additional 25 basis point rate

cuts priced in for the year. as well, there is fed chairman jay powell's performance at the press conference raised questions about his message and the direction of rates and the fed. powell said directly the fed is unsure how to handle the effects of the president's trade war. >> toa lot of experience in responding to global trade tensions it is something that we haven't faced before and that we are learning by doing. >> so answers like that led to concerns that the fed's messages, muddled the message about where policy is headed former philadelphia president writing the explanation/justification left for the broader rate cut left a lot to be desired. it muddled the notion of an underlying systematic function or data dependency that could serve to guide expectations of future policy actions. 61% chance of the fed holding in september. that was 70% chance of a cut

yesterday before the meeting 39% chance of a cut. moving on to october, then the cut gets baked in. 31% chance of the fed being on hold and 70% chance of a cut the chance of a december cut, a second one, that's now below 50%. but, hey, all this could change tomorrow with the jobs report. let's spin this ahead. more important now, the markets start looking at this number tomorrow 165,000 is the payroll estimate. unemployment 3.6%, average hourly wage up 0.2%, and payroll 156 for adp. a strong number tomorrow could help restore confidence in powell's message that the underlying economy is pretty much in good shape and does not need a large amount of stimulus. that's where we are. that's where the big debate is, sara. >> yeah, i mean there is a lot of blame for powell this morning. i read it in the research notes. obviously, the president is tripling, quadrupling down as he has against powell for muddying the message of what they are

going to do next but why not blame the market, steve, for aggressively pricing in a bunch of easing this year without the economic data to back it up >> of course, the problem is you blame the market, who do you haul in? i mean, ultimately, it's the fed's job to manage expectations it's powell's job to kind of set the level of difficulty by which his press conference is going to be judged. and not only him, but other members of the fed market committee. they went in without -- i mean, sara, you had rosengren on he said he didn't support it among those who supported it, nobody really pushed back against the market being priced in for three rate cuts he didn't do it. powell didn't do it. i talked to randy -- i talked to four or five other fed officials and nobody really pushed back against this aggressive pricing. i think you're right i think a reckoning was on the way, was coming sometime maybe we got that yesterday. maybe now,g for two

hikes or at least one more, maybe now the fed and the market are in the same place. >> all right steve, thanks. steve liesman, a busy week for you and all of us. joining us, former fed price chair, princeton university professor alan blinder good morning. >> good to be back good morning to you. >> is it fair to say you think the fed got boxed in on this one? >> yeah. and i think as steve and sara were just suggesting, they let themselves get boxed in. i don't think it would have taken much in terms of commentary to talk the market down from where it was i thought the market was way high in terms of expecting 75 basis points of cuts it wouldn't have been that hard to talk the market down. they didn't try. that's what's so seeded in my mind maybe they are planning that i don't think it makes sense based on what we see today

you never know what the next six months is going to bring it didn't look like there was a strong case for cutting. >> sara mentioned some of the criticism. it's not just from the president. a lot of people say even in the course of the presser itself powell's message was confused. was he trying to back up as he saw the market's reaction? i wonder what you think of his performance yesterday. >> well, you know, it was reflective of an underlying honesty that he doesn't know what the fed is going to be doing now between now and december he probably hasn't even made up his own mind about what he thinks is the right thing to do between now and december as to the remarks from the president, i find him an almost unairing indicator go the other way for the right answer >> what does mid is cyc-cycle adjustment mean, alan?

>> excellent question. it sounds a little bit like we think we went too far and we're backing off a bit. there is this notion that you have heard from a number of people, not so much from powell, that 25 basis points is, quote, enough to give a little stimulus or support to the economy. 25 basis points is next to nothing. i think if you are sitting on the fed and you are an advocate of cutting, and obviously not everybody is, you want to be thinking about 75 or 100 basis points i'm not an advocate of that. i don't see that the cards are pointing in that direction but if you are serious about giving the economy some stimulus, you have to be talking about a number like that, not about 25 basis points. >> i mean, i wonder if it was completely pointless and not just a small action. if you look at what the dollar has done in response, it's climbed to new highs for the year it's actually a two-year high

when you look at the dxy dollar index. that's tightening of financial conditions. >> that's right. and i think -- well, so is the fall in the stock market i think they are both reflecting the notion that these traders got way ahead of themselves in terms of what they thought they would do >> if i could take you away from the rates discussion for a moment a week or so ago we got a spending deal. everybody for 24 hours talked about ballooning deficits, trillion dollars deficits as long as the eye should see ballooning national debt, i should say any concern on your part or those who believe perhaps this is something that should not be concerning right in doing so >> you know, that's a good question there is a concern because we've gotten ourselves into the position, the political position that as long as a republican is sitting in the white house and the main cause of a burgeoning

deficit is a tax cut, it's all fine in this case, it was spending to go with it trump has combined both. spending's gone up tax revenue has gone down. i have never been a cassandra about an imminentcrisis from the budget deficit i like the analogy which goes back a long way, it's like termites in the basement they are eating away gradually, gradually, gradually at some point you have to do something about it before the house falls down we are doing the opposite. he is throwing more termites down into the basement it's not smart >> dowhen do we know when the structure is no longer safe? >> i think you start seeing it when interest rates on long-term, medium and long-term treasuries start going up. of course, that warning light is not flashing and hasn't flashed in a very, very long time. you remember when we used to

talk about the bond market vigilantes years ago the vigilantes disappeared from the face of the earth, basically. >> yeah. a lot of people wonder where they went. finally, i wonder what you think comes next bank of england healed steady today. what's the likelihood that dragky mak draghi makes another move? >> i think the likelihood of that is pretty high. what he will do isn't so clear people talk about the fed. people talked about the fed a while ago and some still do about not having much ammunition if you have to stimulate the economy. again draghi and the ecb have much less ammunition so i think he will do something. might be a little tweak in interest rates, a tweak, maybe more than a tweak in asset purchases. unlike the united states where, if you look at the data, if you're serious about being data dependent, the united states looks pretty good.

the euro area doesn't look pretty good, and obviously needs something. unlike the u.s., which is getting a lot of fiscal stimulus, they are probably not going to get a lot of fiscal stimulus. >> all right alan, we always appreciate your guidance on important events like this. good to see you. >> pleasure. >> alan blinder. looking at shares of verizon. the giant telecommunications corporation reporting earnings this morning that were generally, i think, seen as positive you can see the stock has had a decent morning thus far, of course they were, you know, according to moffett nathanson, fine, they say. they are not a huge bull on it peak wireless is a question some have overall, in terms of the numbers that people track, they were quite strong in terms of net additions and margin adjusted ebitda of $12.1 billion, up 8.1% year over

year and eps at 95 cents. that's gaap. $1.23. that was up about 2.5% year over year not huge growth, but that's not what investors are looking for they are looking for some semblance of growth. you got it in the guidance as well small, but some growth remember this is a company not that long ago that was forecasting flat year over year. i did talk to ceo hans vesberg who is one year on the job today about the results themselves, and about the coming competition as well for verizon given sprint and t-mobile's likely pairing, not to mention dish wireless entering the market as well. here is a sampling of some of the things he had to say >> i think that during the year, i think that's one of the areas where all the way from according to verizon media group, seeing that technology of the team that works for verizon media group is working with the network

it's a huge trust to have the a.i. expert and all these acronyms that you have in the future of the networks, they are working with us. on top of that i think that being over the top on the network, yahoo finance, those are areas we think we can be good at. that doesn't mean we are going into any content. >> you distinguished yourself by focusing on the core business, which has been delivering wireless service to the customers best you can not buying time warner not buying anything. >> right. >> are you going to expand in this area? are you going to try to -- i mean, it's still shrinking on a revenue basis, though less than it was. >> definitely. i think verizon media group has done great from taking from where it was with a big decline to actually now stabilizing new leadership team. so i think that they have come far frn the journey. there is quite a lot more to do. i think that's what we need. at this stage we are not looking

at that. >> that was a discussion with mr. vestberg and i about the media group. of course, yew hoo-hoo and aol, remember those acquisitions. revenues were down 2.9%, which is better than the 7.2% they were down a year ago but as you saw, they are following a very -- or listened to, they are following a very different strategy as we pointed out than at&t. it's really wireless as a percentage basis is not even 50% of the overall revenues. >> what did he say about competition? the new sprint/t-mobile, 5g. there are a lot of threats. >> there are he with not say much other than they are ready to meet them and that they are willing and able and ready to spend their 17 to 18 billion in capex to make sure they create that 5g network they have been talking about for a couple of years. they are ready to meet them on the playing field in terms of competing for the consumer you're right

that's a key question, sara, what that marketplace is really going to look like if you get more robust competition from the come bient sprint/t-mobile with the stronger capital structure, not to mention dish wireless. >> i want to know what it's going to me for me, the consumer higher or lower corona bills. >> verizon is up when we come back, david lipton joins us after taking the reins from christine lagarde his thoughts on the global economy, the trade tensions, the fed and more add the impossible bhoper. we will hear from jose cil on the meatless burger and the big announcement today when "squawk on the street" comes right back. >> delivering to the guests what they want, what they are looking r,nd it's something that we feel very passionate about ...when a plan stops being a plan and gets set into motion. today's merrill can help you get there

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the international monetary fund facing an early september deadline to nominate a replacement for christine lagarde now that she will likely be going to the ecb. the man leading the transition is david lipton, former number two. the acting managing director of the imf now joins us exclusively. welcome. nice to see you. >> good morning. >> congrats on the position. >> thank you. >> so we've got it start with the topic du jour. the federal reserve, most powerful central bank in the world, cuts interest rates for the first time in a decade how do you think about the global impact? >> you have had a parade of fed watchers this morning.

i am not going to join that parade the u.s. economy is still strong with wages growing, with unemployment very low, business and consumer sentiment strong. but i think it's right to be focused on the fack that the global economy is sluggish, and that affects everyone. so i think it's proper that that's taken into account by the central banks in the world we certainly want to see policymakers do no harm. the trade tensions, brexit, these are fem on that that introduce uncertainty and are not good for the global economy. it makes sense for the central banks of the world to remain accommodative and remain focused on achieving their goals. >> given that you have downgraded your outlook for the global economy again and that trajectory moves lower, do you think the fed will continue easing >> i think they have to see how the economy evolves. i think it's entirely possible

the major central banks of the world will be dealing with this sluggish economy for some time and so there will be a need to continue in an accommodative posture. let me add that i think it's time to, for everyone to start being a little more vigilant about financial stability risks. we have always said that when interest rates are low for a very long time, you get a reach for yield. that's not become a dangerous issue, but we've certainly seen interest rates creeping lower. i think now in the barclays index $16 trillion worth of bonds have, in the world have a negative yield where even just last october that was only $6 trillion. not only have the central bank rates gone lower and ten-year sovereign bond yields gone lower, but investment-grade spreads have gone lower and high-yield spreads have gone

lower. so the reach for yield is compressing spreads. it's no longer clear bl perhaps risk might come to be underpriced in a way that could lead to vulnerability. i would say it's not a time for supervisory or regulatory forbearance or easing. it's a time to be vigilant about financial stability issues while central banks are doing the right thing, which is focusing on their mandates and being data dependent. >> are you warning of bubbles? >> well, i wouldn't call it a bubble, but i think the way to think about it is that the reach for yield is leading to -- leading people to buy instruments that then leads to compression of spreads and the risk is a reversal if people are accustomed to our borrowing, accustomed to the very low spreads, holding instruments in their portfolios with very low spreads. a repricing of risk could then be a disruptive event.

right now, we don't see this as a systemically dangerous situation, but, you know, this kind of phenomenon can grow, can become more significant. so it's a time for vigilance. >> you guys have also been front and center at the merimf warnin about the breakdown of trade activity and how that's weighing on the global economy. the impact of tariffs. can you give us an update on how much that is slowing global growth right now >> you know, whether trade is a driver of growth or a conduit for growth, we can have a conceptual discussion. the most notable fact is that in the first six months of this year global trade is actually lower than the first six months of a year ago. so global trade is actually contracting, and that's not a good situation it is probably a harbinger of sluggish growth that will accompany it

it deviefs frrives from a numbef factors. it is certainly affected by the trade tensions and potentially will be affected by technology tensions more and more as time goes on. so i think it's time for the countries involved to have dialogue, to reach agreement, to try to find a way through this since the global economy is fragile. let me say it's for both sides to find the right approaches, the changes in policies and approaches that will lead to agreements but i think this is an extremely important moment not to do any harm because, after all, if we were to have a recession, i think we know that the world is in a weaker position to combat recession because monetary policy space has been used, fiscal policy space has been used it would be more difficult to cope with recession.

so it's best not to cause one. >> yeah. i know you in particular, david, have been very interested in the intersection of technology and finance. are you guys at the imf looking into facebook's libra? if so, what can you do about it? what exactly angles and aspects of it are you looking into >> we are spending a lot of time on this. we have a paper that's just out that i would refer people to, that came out two weeks ago. our view is that there is a balance of opportunities and risks. it would neither make sense to skel much the opportunities nor to ignore the risks. these innovations, these financial innovations, including stable coin concepts, could bring to transactions what the internet brought to information, which is to have transactions that are instantaneous, that are very, very cheap, and that are very secure. and that would be a benefit. it could lead to greater

financial inclusion. it could mean you could make a payment to someone in another country that would happen instantaneously and be very cheap, where that's not possible it is a challenge to incumbent financial institutions these are opportunities. but, on the other side, there are substantial risks. there are risks to a payment system that might become largely a private payment system there are issues about how large any particular stable coin might be and whether there would be market power there are risks of illicit activity happening there are risks if the payments are largely outside of existing channels, that monetary policy could, effectiveness could be changed. so there are a host of risks it makes sense to take a balanced approach to allow experimentation, but to be sure to guard against the risks over time. >> finally, david, i just wanted to get your quick thoughts on christine lagarde. i know you guys are very close

i think it was described at a recent town hall as brother and sister close i mean, what kind of challenge is she walking into at the ecb, which has slower growth, which has less policy ammunition, and which has much tougher politics? >> first, you're right we all are sorry to see her going. she has been a great managing director i think she has been the world's top diplomatic i think ecb faces challenging times for the reasons we talked about. there are difficult economic challenges ahead, monetary policy can contribute, but it's best not to overrely on it you need a central bank governor who can deal with all of the different things that can happen, but who can help enunciate for europe how to muster all of the available policy instruments in the event that there is a slowdown, how to cooperate and to deal with that effectively, and i think she is the person for that job. >> david lipton, thanks for

joining us. >> thank you. >> acting managing director of the imf. getting breaking news in the world of media let's get to julia on that. >> comcast announcing a new universal theme park will open in orlando, florida. the park will be called the epic universe and be called epic universe they expect to add 14 how now employees and the base rate of pay is $15 an hour amid controversy about pay for theme parks. >> this is a big expansion of universal's presence in orlando. you see comcast shares, comcast is also a parent company of cnbc, those shares up nearly 1%. back to you. >> all right theme parks big business now, as we know. thank you very much. when we come back burger king joining the meatless frenzy, teaming up with impossible foods we will hear from the ceo next and an interview with the

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i'm rahel solomon. here is your cnbc update secretary of state mike pompeo holding a news conference with his thai counterpart in bump stock. his negotiating team was working to resolve the ongoing trade and technology dispute with china. >> while we were here we were wrapping up a set of trade negotiations the u.n. was wrapping up a set of trade negotiations in china we are working with them on many fronts, but we were also very candid about the places we are hoping china will behave in ways that they are not behaving today. >> also, north korean state tv releasing still photos of kim jong un. it shows him in a control room for the firing of a multiple rocket launcher system that could enhance its ability to strike targets in south korea. it's their second weapons test in less than a week. actor stacey coach received the 2,688th star on the

hollywood walk of fame it's recognition of his more than 50-year career in television, film, and theater. congratulations to him. that is our cnbc news update for this hour. carl, back to you. >> coach is the man. american greed returns to cnbc monday, august 12th the focus is on the college admissions scandal you do not want to miss that august 12th, 10:00 p.m. eastern right here on cnbc. restaurant brands. parent company of burger king announcing it's rolling out the impossible whopper t it's a limited time at first of course, this comes on the heels of the surge in shares of beyond meat. the stock has been volatile. it's down 10% again today. i had the chance to interview jose cil earlier this morning and started with a big

announcement the expansion of the meatless whopper. take a listen. >> really excited about launching the impossible whopper nationally burger king has always been about giving choices and options to our guests. in our dna we have have it your way. impossible whopper, a plant-based option, goes a long way to addressing trends and wants of our guests. we have been studying this for a bit of time. we have seen a movement in this direction. we see that guests are demanding alternatives to beef and we tested this in st. louis and five other markets we saw really good results, really positive reaction from the guests on the quality of the product, the tees of the product, and what it means in terms of alternatives. we decided to launch it nationally we have been working with our supply chain teams we are excited to bring it to the u.s. across the country next week. >> do you expect this to be a sales driver for your restaurants? actually bring in new traffic and new customers, or are you just hoping to convert fans of

the whopper and other actual meat products? >> what we have seen in test markets is that it's a little bit of both. so what's exciting about this product is that existing burger king guests are always looking for alternatives for choices that they can make in terms of their products, and this gives them the great tasting whopper product, great tasting whopper build, i has been around since 1957, but with a different alternative on the patti so our existing guests are trying it. they are trading up in some cases or coming back for another visit to try it. new guests are trying the product as well. it's one of those product launches and tests that we have seen that addresses both really important elements of our business new customers and existing customers trading up. >> and how do you think about how key the delivery channel will be. doordash, your partnership there and some of these impossible burgers around the country >> we have seen delivery

continue to be incremental to our business a lot of the business comesin in dinner and the late nighttime. we think it's an opportunity for us to deliver our existing menu items to guests in different day parts, but also the impossible whopper as well. we are launching next week a promotion available on our bk app as well as doordash where you can actually taste for yourself which one tastes better or try to determine which is the impossible whopper and which is the original whopper a two for seven, one original, one impossible whopper or doordash or the bk app and taste for yourself what we're talking about here. >> why did you go with impossible over beyond meat? >> the burger king team in the u.s. tasted and tested a number of different alternatives and felt that impossible, given how we cook our product, our flame grilling heritage, the whopper build, they felt that was the best product for our best ds

our guests validated that through countless tests and ultimately through the test markets we have done it's delivering to the guests what they want, what they are looking for, and it's something that we feel very passionate about. we need to be brand led and the brands decide what are the products that our guests are looking for based on their feedback >> by the way, don't miss the ceo of the other side of that partnership, impossible foods. that coming up at 1:00 p.m. eastern on cnbc. guys, he said that impossible tastes better than beyond meat, which is interesting it's a private company, of course beyond meat is the public company. they are only launching this to september 1st. they want to make sure customers want it and they can meet demand which they feel good about the burger king announcement is no joke. burger king is number two behind mcdonald's in terms of biggest fast food chains sales in this country. it makes it the biggest fast food chain in the u.s. to carry the meatless burgers.

>> a lot is about through put, right, keeping kitchens simple how much additional complexity does this add to the kitchen maybe none i don't know. >> we know that they have tested this out in 49 different markets before they announced this official rollout to more than 7,000 stores they have been working on it he said he has been working with the franchisees on that. also impossible has geared up from this, for this on the supply side. they are partnering with osi, the big meat supplier in this country. they are all feeling good about it we will have more on closing bell, guys. >> are you going to do the taste test he is offering there. >> jim did it. >> doordash can do it. they do a whopper versus meatless. >> right. >> yeah, of course. >> got to try that i'm curious to see we have down it at home. >> we have done our own test subjects. >> were you able to tell >> yes. >> yeah. >> i asked him which one is healthier. he wouldn't go there a whopper or a meatless whopper. i think the comp is fewer

calories and the impossible, but more sodium. >> yeah. "the wall street journal" goes through some of the ingredients and does point out that there are tradeoffs. all right. tease, they tell me. let's do it. when we come back we will hear from prospective fed nominee judy shelton a day after that long anticipated rate cut from the fed. more "ua othstet ming right at you. it's part of being human. sonoma county declared a homeless emergency in 2018. you have to know the individuals you're serving to understand their needs. working with ibm watson we can bring together data spread across dozens of departments. that gives us a fuller view of the people we serve. dear tech, dear tech, we need to look after everyone in our community. and we want to help our fellow human beings. ♪ ♪

welcome back dow's up over 100 points right now. rick santelli, special edition, post-fed, sanders exchange i have been looking forward to this rick, all you. >> thank you very much i'd like to welcome my guest prospective nominee for fed governorship by the trump administration dr. judy shelton. and before we get into this, viewers, listeners, three-second delay, we will do our best judy, i would like to start out reading a "washington post" quote from the 22nd of july and an article where you were advocating a 50 paper decrease at -- 50 basis point decrease. here's what you said i do think global conditions and the clear monetary paths being signaled by other central banks are a factor considering how much our own federal reserve mighchoose to lower on july 31st my question to you is, are we now in a covert game of trying to neutralize perceived advantages by policies of other central banks and its effect on not only interest rates, but on foreign exchange >> yes, rick i am afraid that that is the reality of the situation when the fed or any other central bank talks about stimulus these days, it's not to stimulate growth the effect of 25 basis points is like tasing an inert body. it's not causing any growth to

be stimulated. but it is having an effect in currency markets and we are in a very dangerous situation it's not unlike the 1930s when you had bigger thy neighbor competitive appreciations. one nation after another devalued currency against trading partners in those days against a cold standard everyone was devaluing. today we have the european central bank, bank of japan, people's bank of china, bank of england, all devaluing against our currency and that turns out to be where central bank monetary policy decisions have the most impact, by far more than any presumed stimulus to real growth. >> you know, the result has been very counterintuitive. the dollar index is rallying strongly if we look at the forward swaps out of euros, yen, pound, dollars, it's close to the most

expensive it's been all year, and in the end, even if what you say is correct, and i believe it is for a long time, is it really in our best interest to join forces with a condition we don't believe is correct >> it would be nice to be virtuous in a vacuum, but i don't think we have that luxury. we are doing the right things in the united states. we have a pro-growth economic agenda the hard policy choices on reducing the regulatory burden and making the tax environment more friendly to encouraging business in europe they are not making those hard decisions but i don't think that means that americans should have to subsidize european exports i don't think that we should make it harder for our own manufacturers to compete domestically against imports from other countries where they have resorted to cheating, really, through currency devaluation to make it look like they are offering the same thing at a better price. >> you know, dr. judy, this is

going to sound crazy, but i'm sorry. here's where logic takes me. that there is very little real difference in money terms between tariffs and monetary policy aimed at lowering your exchange rate with other currencies you compete with in the export market. if you really think it through, we are areally arguen semantics here in the end, i guess my question is, as the dollar gets more expensive in the funding markets, it's having an inverse relationship with our desires, but more to the point what advantage are we trying to neutralize yes, multinationals make a lot of money and a stronger dollar from those u.s. multinationals may hurt a bit, but if you look at the economies playing this game more actively, their economies aren't any better. they are worse than the u.s. >> that's true, but it still

acts as a tariff they are effectively putting a tariff on our exported goods when they deliberately devalue their currency and i think in the end we're at a breakthrough intellectually in terms of figuring out where central banks are really effective. it's a shame that it turns out to be in moving currencies but it's a huge step to begin to acknowledge that and to start talking about the need for a level international monetary playing field. i think that kind of stability would do so much more to foster productive free trade and the flows of capital we have so much mal investment and distortions caused by the actions of central banks, who have engineered the global economy into these negative interest rates, who have brought about these bizarre yield curves, and i think that's very damaging i'm proud that the united states is showing the leadership to confront the practice and to get us back on track so that trade is carried out on the right foundation

>> you know, and i agree but i think that maybe as the reserve currency, we have more to lose than any other country playing these covert games more to the point, why don't we lead by example in a positive fashion? i would actually rather see tariffs levied versus trying to manipulate our own currencies through easing when conditions don't really dictate it or at least there is a debate as to whether they do, finish the discussion >> i think there is another danger here, and it's for global financial stability. if it were possible to just ignore what other central banks are doing and just let the dollar soar relative to these other currencies, we have problems because so much of the outstanding debt in the world is t denominated in dollars if the local currencies depreciate against the dollar, it's going to make it that much

harder for those borrowers to pay back that much i fear the risk of regional default if it gets too far out in terms of the value of the dollar against these depreciated currencies that would be dangerous. >> dr. judy shelton, thank you for joining me today carl quintanilla, back to you. >> all right rick, important interview. thanks rick santelli. keep an eye on qualcomm, briefly hit the lowest level since mid-june, although bouncing back. disappointing guidance, partly blaming huawei and carolina for the quarter. the dow is up 200. we have reclaimed the s&p 3k back in a minute

after the fed cut rates for the first time in a decade, one top strategist says this is the next big thing to watch for in the markets. find out what this is on trad g tradingnation.cnbc.com more "squawk on the street" is coming up.

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energy, the worst-performing sector for the month of july taking a look today at the xle as well as the oih and the xop all deep in the red this morning. sector, roughly 20% off its recent 52-week highs, this as brent crude oil drops below $54 a barrel after the federal reserve dampened hopes for a string of interest rate cuts and rising u.s. output is helping keep the market well supplied. wti crude also under pressure. down almost 3%, trading just below $57 a barrel >> okay, let's send it over to jon fortt now so we can get a look at what is coming up on "squawk alley. jon? >> well, zynga has hit a new 52-week high today after a big earnings beat. people are playing a lot more games than expected. so where's the next leg of growth come from for zynga what does it say about the smartphone ecosystem that is coming up on squawk al leal with xfinity mobile you can bring in your own phone,

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scissors, david zerzos who had a long-standing bet to cut his hair when the fed cut rates. >> he did not leave room for further cuts but he made me make the first cut. >> look at that! >> i'm cut yrg hair next >> great technique >> you are never touching my hair >> who's the stylist with you? >> edward trycomey and they raised a lot of money, more than $250,000 for charity over at jeffries for the cause >> so what's today on the "closing bell" >> it's going to be hard to follow that up, obviously. >> cut will's hair >> we're just going to stick to fed -- post-fed reaction and what the cut ultimately is going to mean for future cuts. we've got a great guest. former for everyone vice

chairman, donald cohn. we'll see how he react to the powell cut was it necessary and what should powell do next also grading the press conference we've also got a number of earnings to highlight today. square, pinterest, etsy, groupion and more. >> that's going to be a good show "squawk alley" is coming up next best gain for the s&p here since june 20. don't go away.

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good morning it is 8:00 a.m. at virgin orbit headquarters in long beach, california it's 11:00 a.m. on wall street and "squawk alley" is live ♪ bicycle ♪ bicycle ♪ bicycle ♪ i want to ride my bicycle ♪ i want to ride my bicycle ♪ i want to ride my bike ♪ i want to ride my bicycle ♪ i want to ride it where i like ♪ ♪ you say black ♪ i say white ♪ you say shark >> good thursday morning welcome to "squawk alley." i'm carl quintanilla with morgan brennan and jon fortt at post 9 of the new york stock exch