tv Squawk Box CNBC July 23, 2019 6:00am-9:00am EDT
"squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm andrew ross sorkin along with joe kernen and melissa lee. becky quick is off today take a quick look at u.s. equity futures ahead of the market open still 3 1/2 hours away right now the dow would open up about 86 points higher nasdaq opening about 27, 28 points higher. the s&p 500 looking to open higher as well let's show you what's going on overnight in asia. we have a strong picture, pretty much across the board there. the nikkei, the hang seng, and the shanghai all up. >> check out europe.
>> look at europe. those numbers are even stronger. you want to see this >> that's what i was thinking. >> wow >> is that because of our deal here we don't like crises >> crisis averted. >> yeah. only adding another 300 -- crisis kicked down the road. >> right >> it gets interesting when you think about the timing of when the next will be treasury yields at 2.055. >> he's like the cnbc app. >> you're like a human version of the cnbc app. joe just recited it before the show began >> like rain man >> i decided since you -- >> you may or may not know thank you.
i can't sleep. i'm like cramer, up at 2:00, answering people on twitter. talking to people. trying to help >> at 2:00 in the morning you're doing this >> no cramer is. cramer at 3:45 is. >> i know. >> yeah. it's decision day in the uk. the conservative party suspected to name a new prime minister today at about 6:45 a.m. eastern time we'll bring you that decision as it happens former london mayor boris johnson is seen as the clear favorite theresa may's successor will take over tomorrow afternoon of course with johnson's elevation to prime minister, the concern is that the uk is hurdling closer towards a no-deal brexit so the reaction in europe is maybe surprising >> in corporate news, apple is reportedly in advanced talks to buy intel's smartphone modem chip business. the "wall street journal" says the deal, which includes a portfolio of products and staff,
worth at least $1 billion, coul be struck in the next week the transaction would give apple access to work and talent behind the push to create chips for 5g wireless technology saving years of development it would have to do on its own. for intel it would shed a business that dragged on the bottom line. the journal says the companies have been talking for about a year this is like pocket lint for apple. >> it is >> people thought this deal was off when apple did the qualm deal you have to imagine if they do the transaction with intel, eventually -- could be two, three, four years down the road -- >> six years is currently the contract with qualcomm eventually they would replace that >> you could imagine they would try to put their own chips into the system >> it's interesting, they want to control their own destiny
more >> they did that with dialog semi, they bought that for 3$300 billion. trying to gain control over the supply chain and exact more cost efficiencies >> i'm sure the chips will be cooler looking >> so when you open up your phone -- >> though the design guy is leaving. >> maybe rounded edges instead of being chair >> see-through >> some gold >> okay. >> it will be cooler, no doubt >> sure. new numbers this morning -- i'm wearing my watch i'm proud. >> certainly not a fashion statement. >> it is my own version of a fashion statement. new numbers this morning on which tech giants in the top -- or are the top spenders when it comes to washington lobbying cnbc producers in washington and san francisco crunched the numbers to reveal that -- now it's on the screen, you know
if you're on the radio, guess. facebook is leading the field in q2 spending with just 4$4.1 billion. the money was spent amid heightened scrutiny on capitol hill around deep fake videos ahead of the announcement of the libra digital currency we have more on those findings coming up. facebook, alphabet, microsoft, qualcomm and apple it's interesting that qualcomm is number four on that list given its relative size to apple and everybody else autonation, the world's largest autotailer is making a change the ceo who took over in march is leaving we had him on a couple months ago. he had navwas a naval academy gd leave it there
i'll get to it go back down i know some stuff about it he was at usaa and a fitness guy before that. but the interesting thing maybe is that autonation -- they're going nuts cheryl miller will take over as ceo. she's been with the company for ten years. i think she's been ceo -- or cfo for four or five years cheryl and mike jackson will join us live at 8:00 a.m. eastern in an exclusive interview to talk about the change in direction. if you have not seen a female ceo at the helm of a publicly traded auto dealership >> the dealership. >> mary barra -- >> exactly i think mike jackson said the gap was too wide between what -- i guess there are some specific
things about auto retail -- >> i scratch my head when i read about that the idea that the auto dealership business is so complicated that somebody from the outside can't get their head around it? if it's not a good fit, it's not a good fit >> sure. >> sometimes it's do the personalities mesh, do they like each other >> do you think this happens all the time this kind of chemistry >> what's this >> what kind of chemistry? >> us? us >> is this a not good fit example or -- >> you know you're a guest here, right? >> i know. i can leave at any time. >> she's a single anchor nobody else could -- but with us, we're -- right >> you're a team >> it's a team >> a dynamic duo >> what happened when he came in today? >> you wanted to help him with
the ten-year yield it was beautiful >> do you see that often >> between you no coming up, more -- more of this whatever it is a busy morning for earnings. we're expecting numbers from coca-cola, united technologies all around 6:55 eastern. later, we'll talk about the debt ceiling deal with florida senator rick scott as we head to break a look at the biggest pree market winners and losers in the dow. and drive, intel, dow, united health up this morning >> back in a moment. >> yep >> the love is on. here, it all starts with a simple...
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jack, i'm worried about you. were you not as long as you would like to be or out of the market this market has you scratching your head, right >> i -- i don't think anyone after this year expects a 20% rally at mid year. i think a lot of people are caught off guard with respect to ou positive t how positive the market has been i've been thinking about being fully invested along the way and looking at rebalancing as things have moved and moved faster than i would have anticipated >> in other words, you have seen some things that maybe have not happened in a while. you make the point, you have to go back to the middle of the '80s since you saw public officials trying to what trying to control exchange rates? >> draw down the dollar. in terms of working through that thinking so much about the trade deficit, the trade balance
you could substitute challenge for japan, pushing back on germany as opposed to pushing back on europe as a whole. for the most part from the late '80s through the early 2000s, the position in washington has been let us regulate the economy, let the market operate within the guidelines of that regulation today you actively want to try or -- not you want, government officials are saying this is more the outcome i want. you're not giving it to me let me try to drive towards that >> are you making a case that things are stretched because normal fundamentals are not at work here? >> i would say that people are not experienced with it. if you think this is the way -- >> does it have a bad ending >> it doesn't have to. people have to get more comfortable operating in a different environment. you can think of my major was political economy. so which was a fancy way of
saying economics with a little overlay of politics. right now the overlay of politics seems more important than perhaps thinking about -- >> thank god that was your major. was that really it >> it was. >> you're perfect for this job now. people are like cafferty studied this stuff you will run jpmorgan private bank >> that's very kind of you and very unlikely. >> okay. all right. leah, what are you saying at this point >> it's been an interesting year this year. i disagree i don't think valuations are overly extended. if you look at the number of stocks that are trading at least one standard deviation above the historical norm, it's only 10% of the universe. to give context, back in the dotcom bust it was right before the dotcom bust, it was about 60% of companies before the financial crisis it was about 50% of companies
so i do think this earnings season is going to be critical you definitely have a lot of negative global macro economic headlines without question but so far you've seen companies that have any exposure to the consumer doing fairly well if you look at the big banks that have reported, anybody who has exposure to consumer lending has done well. if you look at united, a lot of their upside came from consumer discretionary spending we're focussed on what the tech companies will do. tech led the rally the last several years. they had a huge discrepancy ain performance, and year over year earnings should decline for the tech companies it will be interesting to see how they react >> whenever we have richard fisher on, he says of course texas is doing well. they have all that oil and gas he says that's not it. there's a lot of other things. all these things he brings up that make it a great place to do business
are you a bit skewed because usually things in texas are not quite recessionary resistant, obviously if oil goes down, but pretty solid place to do business i think your whole career has been down there. texas a.m., rice, et cetera? >> that's correct. i spent the vast majority of my career in texas. it has been a great place to be. we had a huge population shift westwood is a global company we have an office up in toronto that follows international and emerging market strategies, and an office in boston that converts for us. as a team we share economic data but you're right, texas is a great place. >> one of your stocks is conoco. so it's not just technology. you also like consumer staples technology you're increasingly concerned or -- what did we find out yesterday? four stocks account for 20% of the gains in the s&p this year
the well known names >> it's been an extremely narrow market we do like conoco. it's been a recent name we purchased. looking at valuations. if you look at the second quarter, it's the only sector 2 that is down fortsz yea the yea. it's attractive. conoco is fairly defensive, has a great balance sheet. we also like looking, as you mentioned, at consumer staples we like nestle quite a bit they're accelerating their top line they have a new ceo has came in in 2017. they sold their u.s. confectionary business and have been growing more in organics. and another company that we like a lot is capgemini we think europe is quite interesting. we took some money out of u.s. equities and put them in the international markets earlier
this year. europe is facing a lot of challenges, but it has been facing a lot of challenges and valuations are lower there >> jack, you're not buying and holding your nose exactly, but is there a level on the s&p where you would say this is too much >> when you started talking about 18, 19 times earnings -- >> is that 3 d,200 >> 7% would start getting fair there's an old guideline, inflation plus failing pe equals 20 different companies, different growth rates, different balance sheets, you will work around that you certainly have a reasonable chunk of the market that is trading cheap, effectively saying there is no expansion or the expansion will get cut off fairly soon. mid teens percent from here, you've gone too far too fast and life gets messier. >> okay. great. thank you both just looking at stanley and
black & decker 1$110 million of tariff commodiy and currency headwinds in the second quarter we'll take a closer look at that not sure if they beat or not we all have our antenna up for tariff issues. earnings are flat, right after some great gains last year that's the thing comps are tough. >> earnings are tracking a bit better than forecast about a 4% gain. when you start thinking -- you can tell the issue and what you want to exclude. >> we'll see after this week with 130 companies reporting >> okay. a lot more to come we have a couple of financial stocks on the move nearly trading. we have a rundown of the biggest winners and losers next. and the uk set to announce its new prime minister, it's going to happen in the next half hour. we'll take you to london for that official announcement "squawk box" returns with all that and more in just a moment
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ubs's ceo saying the u-turn in interest rates in the u.s. ha created pressure we're also watching shares of td ameritrade the ceo will leave the company in february, but he will stay in his role while the board conducts a search for his successor. earnings are out for stanley/black & decker they earned $2.66 a share for the second quarter, 12 cents above. revenue did come below wall street forecasts the company said it faced 1$110 million in head winds that related not only to tariffs but throwing in commodity costs and currency fluctuations during the quarter. have not seen the trade yet on stanley. it closed about 141. >> it's reiterating it's 2019 gaap outlook. shiares of whirlpool are
lower. the company said it sold fewer appliances in north america but at higher profits. it is trying to offset higher production costs and the impact of tariffs on steel and aluminum. and arcadia pharmaceuticals tumbling today the biotech drugmaker says its treatment for schizophrenia did not pass a late-stage clinical trial. shares are down about 16%. if you own that stock, change the channel. coming up, busy morning for earnings we're less than a half hour away from report cards from three dow compone components we'll bring you those numbers and instant reaction on wall street as we head to break a look at yesterday's s&p 500 winners and losers
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♪ welcome back you're watching "squawk box" live from the nasdaq market site in times square. triple digit gains now up 103 so far. it helps with this, i think. president trump and congressional leaders announcing an agreement on a two-year budget deal to lift the debt ceiling and raise spending levels the deal will avert a feared government default later this year but will add to the budget deficit. need to pass votes in both houses of congress before president trump can sign it. everybody said yesterday we're on board both sides did say that. it has been pointed out that the election is coming up. not hearing either side talk a lot about the 22 trillion.
mcconnell said this is a great deal, but it does keep things humming along in terms of how much we're spending. >> do you think the conservative base of if think conservatives are trump's base, will that impact this? >> i don't think conservatives are necessarily his base i think they're all on board he started with reagan-type democrats. blue collar people populism things like that some of the most well-known conservatives have been the most outspoken. bill crystal, he has not gotten over this yet at all it's gotten worse for him.
this date would be after the election, which would give president trump some breathing room, and if president trump was not to win a second term, the first 100 days of the next president, instead of dealing whatever you think the signature thing will be, they'll have to deal with this i will imagine all of a sudden it will become a fight all these people who don't care about the deficit, i imagine, it will care about the deficit a lot. >> you travel in high circles. >> low >> no, you do. are you getting the feeling -- i feel i know who the nominee will be i think it will be kamala harris >> you do? >> i had three really well-connected, wealthy donor types, they're all talking about
her. universally they don't think biden -- >> when there's a question about the enthusiasm about biden especially among people of means, if you will, there's a big question i'm not sure they want to support elizabeth warren in which case you get harris >> that's where it's headed. we have a long way to go coming up, when we return, we'll talk pop we may need to -- you guys have any edibles on the set bruce linton might bring some. he will discuss the banking problems facing the cannabis industry. and united technologies and lockheed martin set to report this morning we'll let you know what to expect you're watching "squawk box" on wee ckn mo 'rba ia ment
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jose, california, bruce linton thank you for joining us the last time we spoke to you was literally the day that you announced you were leaving the company, and it was quite dramatic you're now calling in from a conference, a cannabis conference before we get to what's happening in washington, it's important to learn what have you been up to the last three weeks? >> you know, it's remarkable you become fairly popular when you're available to probably lean in and help out some companies. so i'm organizing the three or four categories i will participate in going forward i will announce that in september. this event is amazing. i'm at the ncia, national cannabis industry association conference there's about 7,000 people here. they all have businesses that are growing and active everyone wants to talk about, you know, is the banking discussion going to lead to a --
everyone is assuming this will happen but then the question is what is the next topic will they start to discuss in those states that are legal, will there be a federal regulation of what products and sprays can be applied to the plants any federal regulation of formats and strengths, interstate commerce if they want an agreement this is an exciting top inic, is the lead topic, noise the end topic. >> we've been talking about the banking industry for a long time the cannabis industry has been unbanked, relatively speaking. you said you're convinced that there will be a move towards banking this industry in a meaningful way when do you think that happens >> maybe just right now any entrepreneur in business in the u.s. is at a serious disadvantage compared to 30 countries around the world it's not just banking, it's the ability can you list on a public
exchange and access capital in your own country no can you use that leverage to create a research program where you would actually have clinical trials that are properly and completely structured so you can create intellectual property no i think there's so much at stake in the exit from prohibition, europe is cracking open and accelerating, canada is doing what canada is doing i think all of this will put pressure on federal regulators to create a platform where people can create durable value. so it's a linked event, but it's mounting every day >> bruce, do you want federal legalization of marijuana or is it better to have a state's act or a safe act plus the
descheduling of marijuana as a narcotic can you get all of it short of federal legalization >> i think a states act will be better, it will be faster. any state determining they will have medical and/or rec, all the listing on exchanges will occur that seems like the least friction route to getting an answer others would like to go all the way and have a national mandate. that strikes me as a way to drag this out why not simply sanction that local and acceptable as the way you degree you're not in a position where you're alienating anyone >> i have a separate question for you. i don't know if you can see it on the screen. canopy growth is on the top. i'm curious, now that you're free, if you will, or free to speak, what do you think of the rest of the group on that list
aurora, tilray, cronos, how would you rank them? >> weirdly i don't have my tv on, but i would say that in the world of cannabis now and more so than ever, scale matters. as you go down the ranking, i would simply look at -- if people are trying to do an an l analytic, cash counts because clinical trials are not free intellectual property derived by being big and learning first is derived across an entire platform the list, i don't have it in front of me, not all the ones in canada are similar in terms of the depth and capability
i'm not sure some of them have a single patent. what happens over time, if all you're doing is simply racing to sell an ingredient, that is not a durable business model so i think everybody should start to shift their thought process to, you know, how bulletproof or how valuable is the portfolio of ip. >> you mentioned in september you will announce your next chapter. is that when the noncompete clause expires with can thcanopy growth >> my noncompete is longer than that i won't do anything there. it will be -- i may be co-ceo, but i think there's going to be a play where i can participate in something that is international. something for animals. something that ismulti-state operator one which is an ancillary, so it doesn't matter if it's producing the packaging, extraction equipment or media, there's
something to do there. that combination should work well together and not conflict >> okay. bruce linton, great to talk to you. thank you for waking up so early on the west coast. >> seems normal now. thanks >> thanks. coming up, big names reporting shortly. we'll get you set for those numbers and bring them to you as soon as they cross stay tuned they're changing by the nanosecond. that's why cognizant created a unique engineering approach to design and build new digital products. learn how cognizant softvision designs experiences and engineers outcomes. ♪ cool. ♪
welcome back we're moments away from the announcement of the new british prime minister willem marx joins us from london willem >> we're a few moments away. we expect to hear from the conservative party they had an internal leadership contest. that's been whittled down from almost a dozen candidates to two. jeremy hunt, the current foreign
secretary, ahead of all diplomatic affairs in the uk, administration his predecessor, boris johnson, the former mayor of london. he's expected to widely win this leadership contest and that matters because of brexit. he's one of the key drivers of this process over the last few years. he quit theresa may's own government in disgust at the way she was handling negotiations. now he's the man who will have to take the uk out of the european union something he has promised to do by the end of october, do or die, come what may in his own words. if he does leave the european union without an agreement, we've seen the uk pound sliding inrecent weeks, and we could see more action ahead if boris johnson is selected as conservative party leader, which is a formality before he's formally announced as conservative prime minister tomorrow he will take the keys of number 10 downing street from theresa may. she will depart tomorrow
afternoon. at that point we see some evidence of his cabinet appointments the last two or three days we've seen a number of high profile ministers in the uk resign their posts. some saying they would not be comfortable serving under boris johnson as prime minister. and that matters because he needs a parliamentary majority to get the kind of brexit he wants and for that to happen he needs no members of his party to vote against him some of these people resigning from the government would have the freedom to do that we saw again and again at the start of this year, theresa may failing to get her withdrawal agreement through the parliament because members of her own party voted against it >> willem, one minor correction to make. there's not any keys to 10 downing, because there's always a guard on the other side of the door that actually opens the door to let you in i just -- what i just found that out. we took a tour of the churchill war rooms a couple weeks ago,
that's one thing they talked about. there's no keys. you can't have the keys to 10 downing, there's always -- >> there's no keyhole either >> metaphorical. >> you were doing a metaphor you needed to make that -- i'm kidding. that's interesting >> my apologies. >> don't apologize love means never having to say you're sorry no keys. the amazing thing is it's bojo, after all is said and done mr. brexit i don't know what -- this is li like -- when it comes to the market reaction. the pound is down from its peak in march we've seen that reaction built into the currency markets. a weaker pound is good for the equity markets over there. will we see more reaction or have we pretty much baked that in at this point >> i mean, all the analysts are saying the pound could go significantly lower, weaker against the u.s. dollar in particular if we end up with no deal between the uk and the eu
though you mentioned this shoul have a positive impact on the market, it's not enough to match the deterioration in the economy here the parliament here goes on its summer vacation. don't expect to see a huge amount o don't expect to see a huge amount of movement after boris johnson takes the role after all of the officials are back, you could see a flurry of negotiations that's what johnson said he wants to see happen. leading up to that halloween deadline, you could see a real rip soaring. >> thank you we'll bring you the announcement of the new uk prime minister as soon as it happens we are getting earnings now. joining us ahead of that, managing partner and cnbc contributor. good to see you guys
we are looking for tariffs, higher input costs we've already seen some of this in the earnings reports and the ability to pass that cost on to the consumer >> a couple of things we'll look for is cost control and how much they can manage our expenses organic growth really one of the key drivers with the season is as we'll have had so much of this, how is the top line going to grow and we'll couple that with foreign currency we are looking at coke, united tech talking about the uk, how do you take that into your earnings or is that going to be a declining set of earnings. >> taking that and overlaying that into the sector, it sounds like industrials could be challenged because they are hit by everything. >> that's right. industrials have the hardest
time because not only are they facing, quote, business and not consumer and especially tariffs. if you go to tech, they'll have an easier time most of the focus will be consumer valuations are pretty extended over there they are the ones that have to show that we have growth to actually match valuations of the markets given them >> something like coke and kimberly clark, the stocks have been bigger. then it becomes a test of whether the numbers can support that i think you've seen it kind of both ways in the early going >> right coke is at 24 times earning. >> and still an underperformer regards to s&p 500 to date >> right a lot of these are at 20 plus and that's really telling you
the interest rates aren't going anywhere if you get any offset of that, you need to get the valuation. >> we have to take a break >> coming up, more on the big reports that are coming up we'll be joined by senator rick 'lshe hel arhis thoughts on the debt ceiling and huawei operating in the united states we'll be right back. for the most important part of you... your brain. with an ingredient originally discovered in jellyfish, prevagen has been shown in clinical trials to improve short-term memory. prevagen. healthier brain. better life.
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>> good morning and welcome back here on cnbc a lot of people we'll get to in a second u.s. equity futures are up this morning. nasdaq up 33 s&p up about 10 and the dow components are coming fast and furious, i think >> they are. coca-cola just reporting sara eisen is on set with us this morning she's our coca-cola whisperer with numbers and thoughts. >> i wouldn't miss this to be with you guys. numbers are coming out 63 krecents a share. on the top line 9.9 # 9 on
revenues the organic line that is shining and tells you the story. 6% growth for the quarter on organic revenues they are also raising their guidance on the year to 5% organic revenue growth from 4% which is indicative of the fact that they have seen stronger growth in the first quarter and second quarter coca-cola has underperformed for the market for the year and against pepsico. it is much more exposed globally all the geographies are strong they are getting dinged by the strong dollar. it is showing volume and price growth around the globe. i'll zoom in on the u.s., the story there is price and growth. they are doing well selling smaller packages
they are also innovating beyond brand coke, which is doing well double digit growth and zero sugar continues to show growth that is replacing diet coke. watch for these new products like the ready to drink coffee with 30% less sugar. they tried that out in the uk. trying out a new energy drink. new coca-cola orange vanilla in the u.s. that continues to do well you asked me about pepsi a few days ago or weeks ago, what is the secret innovation or execution? i think this quarter shows you it is three things the innovation, the execution, getting the smaller packages and pricing and marketing. if you put more marketing
dollars like pepsi has been doing behind some of these, you'll get the growth in places like brand coca-cola it is all working for coke right now. the question is, is the market going to give them credit. >> and a stronger dollar 9% head wind seems pretty steep. >> that was the warning. when kocoke released guidance i february, that was the key reason they said the world luke gloomy right now in terms of growth but it looks better than they expected he was a little negative going into the year in early months. he also said what analysts in this quarter were underestimating on coke besides the global environment and the weather. much of the growth in this company is outside the u.s. and
western europe and asia. that's also why this was a beat on what they were expecting. >> that's also why this is a proxyfor the global consumer >> that is another data point to look at to say, well things could be better than they are. >> over 3% of the deal one thing i think people maybe lose is that beverages as a category tend to shrink. it is like meals outside the home every time there is a new bottle trend, they are there to grab it topo chicco, that's at my house. it is the sparkling water out of mexico >> what is this sparkling water all about? >> topo chicco
>> we are watching coke by the way. take a look at it. >> i know it >> you do. >> stocks there on the back of earnings thank you. another component out. 2.20 a share the estimate had been for 2.05 so we are looking at a 2.7% hop. the company saying it is on track to establish otis and carrier as separate companies. they are excited about the raytheon merger for which they caught so much slack from activists. we are seeing that stock pop in the pre-market sessions. >> you have gray hair. never mind >> is that why my parents call it topo gigio.
>> you don't like it better than peligrino? >> i don't like it but my husband does it is a little bit salty and bubbly >> really big shoe harley davidson. >> harley earned on the quarter. the second quarter is the most important seasonally for harley getting between 30 to 35% roughly of retail sales in that particular quarter some concern the end of the quarter was sort of trailing off. concern about a new competitor to the market. the indian raptor. excuse, i'm not familiar with these motorcycles. they are going to launch providing competition for harley davidson we are siege the stock up about half a percent so far. >> travelers is always bizarre
it is bizarre again today. the estimate is dds 2.28 adjusted, you would think would be above the $2.10 because it is so far off from the $2.28. but $2.02 is the adjusted number travelers did beat forecast. higher noncasually losses. a lot of metrics to watch like a combined ratio that they have. property casualty is really inscrutable. whenever travelers reports >> there are so many one offs. >> you do travelers. >> they'll have the same issue they have so many moving parts on it now. >> you've got the merger and the spin off and focusing on what
aerospace is doing as well the utx number on the top line looks good >> trading on stocks >> utx is up like $3 or $$4. reporting honeywell said these companies are reporting. >> do you own utx? >> no. we own honeywell >> do you want to? >> too many moving parts right now. now you've got the raytheon merger and the spin off. honeywell is a much better run company at this point. utx has some issues but i think it is a good company >> let's get to the uk decision on the next prime minister let's see what we are going to find out here. this is the announcement is imminent >> the total number of ballot papers rejected was 509.
the total number of votes given to each candidate was as follows. jeremy hunt, 46,656. boris johnson, 92,153. there for, i give notice that boris johnson is elected as the leader of the conservative and unionist party [ applause ] >> thank you, very much. thank you, very much thank you, very much good morning, everybody. thank you. [ applause ] thank you, everybody thank you, gerald. okay, everybody. okay, good morning thank you, so much
thank you, sara. thank you, charles thank you for a fantastic well-organized campaign give a lot of credit to our party and our values and our ideals i want to begin by thanking my opponent jeremy. absolutely for midable campaigner, great leader and great politicians. in the course of 20 hasting style events it was more like 7,000 miles crossing the country you've been friendly, good natured, a font of excellent ideals all of which i propose to steal. above all, i want to thank our out going leader, theresa may, for her extraordinary service to this party and to this country [ applause ]
it was a privilege to serve in her cabinet to see her passion and determination to support her many causes from equal pay for men and women, tackling problems of mental health and criminal justice system thank you, theresa thank you. i want to thank all of you here today and everybody in the conservative party for your hard work and campaigning and your public spirit and for the extraordinary honor and privilege you have just conferred on me. i know that there will be people around the place who will question the wisdom of your decision and there may even be
some people here who still wonder what quite have they done i will point out to you that no one party, no one person has the monopoly of wisdom if you look at the history of the party, you will see it is we con serve tiffs that have the best insights into the human nature and the best insights of how to manage the jostling instigts and to us the country has turned to get that balance right. from the instincts to own your own house to earn and spend your own money, look after your own family good instincts, proper instincts, noble instincts the equally noble instincts to share and look after those and
look after the poorest and neediest and build a great society. it is we conservatives who have understood best how to encourage those instincts to work together in harmony to promote the good of the whole country today, at this pivotal moment in our history, we again have to reconcile two noble sets of instincts. between the deep desire of global security of britain and our european neighbors and the equal desire for the democratic self-government in this country. of course, as some people say, they are irreconcilable and just can't be done. indeed, i read in my financial
times this morning, devoted reader that i am seriously, great british write i read this morning, no incoming leader has ever faced such a daunting set of circumstances, it said. i look at you and ask myself, do you look daunted do you feel daunted? i don't think you look remotely daunted to me. i think i know we can do it and the people of this country are trusting in us to do it. we know that we will do it we know the mantra of the campaign that has just gone by in case you have forgotten it. you probably have. it is deliver brexit, united country and defeat jeremy corbin that's what we are going to do [ applause ]
>> i know some that have already pointed out that deliver, unite, defeed which says dud. they forgot the e foreigner guys i say dude we are going to get brexit done and take advantage of all the opportunities it will create in the spirit of can do like what some slum bering giant, we are going to arise and ping off with better education, better infrastructure and police with broadband sprouting in every household. we'll unite this amazing country. thank you for the incredible
honor you have given me. i will work flat out -- >> if you are watching, that was really an interesting little dialogue started out being very nice to everyone involved and moved on to a pretty zealous defense of conservatism in that we've looked at all the different ways to do things and we have won in bringing together all the ideas of human nature and the conservative path has been the one to follow. he has been so different than recent prime ministers that we've seen he was greg airious and funny. he said dud is not a good 5:0 row anytime but you forgot the e. i think that spells dude does it not? i don't know if that is a
tribute or not that was really interesting to watch. i also thought it was interesting that he said -- there is two varying forces here one is to trade with the rest of europe and to be very friendly, the other is to govern ourselves democratically that's what caused brexit in the first place. it was seeding through the court system and everything else that these unelected bureau crafts in belgium and others chaff at that >> i know you have this view -- i think there is no economic argument if you care about economics. i don't know what economic argument you can make that would put britain in a better place as a function of leaving. >> it is just crap it is one of the great republics in the world and to seed all of your thought to these bureaucrats -- there is a reason it happened.
>> i'm saying the economic argument >> if you are not british, obviously. and i'm not either but i could hear the people and what they are saying >> i am thinking it is going to be harder that what he thinks. >> what about when trump and him sign a trade deal? >> we have much bigger and have a much larger negotiating power. >> obama said they are going to be the end of the cue, which mean thes line >> for us, it will be better but the uk has an end deal with the rest of the world. i think their agreements with us will be find it is the rest of the world. >> we went from a second brexit vote to boris johnson becoming prime minister anyone who thought the best out of three, it is knonot going to happen >> he's go at putting out the message right now.
trying to get a version of an agreement through. >> you heard about the ft, it is one of the most daunting challenges >> churchill might have had a daunting future when he was elected to the position as well. >> at least a positive that he's taking it in a way he thinks he can get things done. >> he said some gracious things about theresa may as well. that was much different than anything we've seen in the last couple of years from the prime minister >> him underscoring the fact that he's going to work hard for brexit by the october deadline that's when you really saw the pound starting to move it had been down 7% against the dollar from the march peek we are seeing a little more weakness here today. this is an interesting set up going into an ecb meeting later
this week where this is going to be one factor in their decision. >> absolutely. even the fact that jay powell has mentioned brexit i think the market has set it assign and said, obviously a no-deal brexit would be a little bit of a growth shock for the world. >> it has been kicking the can down the road. the market still doesn't believe october is going to happen. >> it is like trump light over in the uk. your life is passing before your eyes watching it happen in another country. it must be very unsettling >> you know that this is not in their best interest. >> okay. bojo is not in their best interest >> it is not an economic argument you can make a lot of political
arguments. >> the european union experiment has been so successful in so many ways. -- they may not be the first out and everybody else may be out in five years you never know so everything you say is false, right? possibly if there is no eu to leave in a couple of years. >> let's have this conversation in five years. save the tape. we'll have the conversation in five years i don't know an economist who can make an economic argument. >> in the meantime thank you. let's get back to the states here quick round up of the earnings from three dow components. coca-cola raising organic revenue forecast stock hire just less than a dollar utx beating ot top and bottom
lines trading higher a mixed bag for travelers earnings falling short of top estimates. we are not seeing too much revenue stock down by .5%. overall a positive impact on the dout coming up, president trump meeting with members of the trade industry more from huawei and what was said stay tune, you are watching squawk box on cnbc dear tech, let's talk. 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.
how'd he get out?! 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. >> the ceos of several major tech firms met >> we now know the meeting did include president trump and went on for more than an hour the top executives of seven u.s. chip makers were there including qualcomm even google inviting them to talk about economic issues. of course huawei was the elephant in the room they called the discussion constructive they covered jobs, trade and 5g and asked for timely decisions
on whether they can get licenses to allow them to continue exporting huawei trump agreed he fried to walk the line regarding tough talk and the impact on the bottom line. >> i know all about huawei and 5g we are companies working on it we are going to have the best 5g in the world just like everything else. our silicon valley cannot be competed with. for the brain power and what we do >> the president also said he wants to find out more about a report that huawei helped build north korea's inphau structure and why they still think huawei is a international threat. more on trade talks with china, we'll speak with former
florida governor rick scott. help us understand where you think things reelgly stand given the conversation yesterday in terms of how they'll interact in the future >> first of all, huawei is a national security threat we have to think about them in that way we are hearing reports that they violated the laws working with north korea. we have to understand that before we go downey path no if, ands or buts about it they are a national security threat. >> do you not want the united states to have a blanket policy of no business with them at all? why wouldn't you want that >> i don't believe we should be doing business with them we need to understand before we allow anybody to sell with them is to understand what they are doing with north korea
if they are using our products to violate the law, that makes it easier. >> do you think this potentially opens up the window? >> i think we have to be very careful. china is not our friend. they are a competition i'm going to file a bill that says american on line retailers have to start disclosing where items are made so americans can say, i want to buy american products and help american jobs not chinese jobs >> do you have the ability to disavail any products. i ask you because of a company resuming huawei shipments last month. >> i think it is clear up here that they understand china is a threat and huawei is a national
security risk. i think there is a lot of support from congress to make sure we don't do business with huawei >> full stop no exceptions? >> we have to understand what is happening with huawei and north korea. if there an opportunity to sell products to them first attitude has to be, they are a national security threat we have to be careful. >> how do you feel about the president talking about huawei in the context of a chess piece in this larger trade negotiation then >> they are totally separate huawei is a national security threat the trade deal is do we do fair trade with china why i don't believe we'll ever do a fair deal with china. not stopping supporting the leader and genocide in argentina. why do we believe that this country and the government is
never going -- never does the right thing is ever going to do a fair deal with us. they are not >> given the seat you sit in, have you seen direct evidence that huawei has been used in a material way as a security threat to the united states? >> you get briefings in these jobs so i can't talk about any of those i think it is clear that they are a national security threat >> senator, you saw boris johnson. >> yes >> do you think that dire forecast about what happens to the uk has the same fate as the dire forecast made by many of the same people two years ago when trump was elected is. >> i was over in new england brexit is going to happen, they are going to figure this out i believe there is a big opportunity for britain and the united states to do more trade this is going on around the
world, people are fed up not getting a return on the government people in new england don't want individuals in brussels telling them how to live their lives i'm fed up with the size of our federal government we have a new deal i have not read but it seems like we are going to go spend a much of money without accountability >> you are already registering you are not happy with the latest ceiling deal? >> i don't know the details but running $22 trillion in debt doesn't seem very smart. >> thank you, senator. we'll return in a moment
to get a clean number here breaking it out in all the segments stock is up $2.90. arrow naught rotary emission sales. total sales, i don't know if we have something else in there $14.4 versus $14.2 that looks like it is up as well more about these numbers and other big names in the defense sector, sheila is an analyst at jefferys, how is utx for starts? >> utx looks good. they raised guidance and/ spoori growth mainly at collins, the recent
acquisition they closed. >> did you have a feeling for lockheed martin? >> we have a hold on lockheed but generally positive at defense. they are at about a 10% discount relative to the market weigh like defense you are seeing a budget agreement coming closer. i think it provides visibility where you are seeing a lot of volatility from industrials. >> 3%, that's capped at 3% some people seemed happy with that there have been years it didn't go up, right >> for fiscal 20, there had been a lag. it provides visibility through fiscal 21.
we would see a fiscal 21 number out there calling for slight growth >> boeing is out tomorrow with their results. yesterday, their out look got down graded. what is your take on what that could mean for boeing even if it is for higher cost of capital? >> i think it derisks putting out the charge we'll see the charge up 4.9 billion in the form of concessions or whatever it might be with the airlines at least it put a snap shot on that growth margin from that program from about 33% to 32%. >> i think they said boeing currently has debt about $14 billion and see that going up by about ten in the next year or so. >> it depends on how supplier
payments and cash looks. we'll look at that tomorrow and what it looks like in q2 >> do you feel like defense industry is all the way back, part of the way back do we need a different type of defense industry for future conflicts? it is hard to justify spending all that money if we are never going to use any of these things it's almost like a deterrent and you have to do those things. >> maybe all defense is not created equal. we are more negative on procurement, more positive on r&d. more on dynamics our top pick is lhx. we think it will benefit from r&d. north rup in the area of space and cyber engineering. >> just remember reading
anecdote al evidence in the two wars we've been fighting there are people in the defense industry that want to plan for the future wars and plan for the low-tech wars, for example the vehicles where all our guys were getting maimed and killed. the money wasn't there but it was there for the futuristic weapons systems. we need to do it right are we doing it right? is. >> we've seen that short-term cycle come through honeywell, they are very short cycled they supply systems to land vehicles we've seen thatspending come through. our position is more positive on that spending. that's why this merger, we need to see the rational behind that. >> one of our contributors, barny frank, he wants to go to
like zero on defense spending. >> not zero. >> lower to half at least >> lower >> it depends on who is in the white house on how we do this. >> it does but this latest agreement last night creates ability for fiscal 21 as well you think about that lag heading into 23 for that revenue with the contractors. >> we have the greatest in the world in the defense industry? >> you are seeing pick up from other countries as well. that is partially affecting that spending. >> you avoided all of the political. >> i did >> still ahead, as if amazon is not doing enough, now they are jumping into the real estate business more details after his arrest last month, stories continue to emerge about how jeffery epstein was tied to
on wall street we'll talk about some new names on the list and more about the relationships he had with them at the top of the hour, auto nation announced a new ceo and company results. the company's first female ceo and we'll have an exclusive interview. we'll return with all of that and more in just a minute. of savings and service.
much as $5,000 in services with things like painting, hanging your tv and installing devices >> there are so many ways you can get low quality internet leads out there that realogy and amazon are delivering high-quality leads >> the program launches in 15 major markets today including l.a l.a., san francisco, dallas and washington, d.c. >> short interest is very high red fin is down 1.6% is its business threatened by this partnership in your view? >> absolutely. it has become a very, very competitive market they have very high-tech a
platforms. realogy needed to step up its game we did ask the ceo if they expect to see the properties listed on amazon, which i got to believe will happen. he said they hadn't discussed that yet >> diana, thanks coming up, jeffery epstein's deep ties to wall street insiders check out futures at this hour looking at triple digits squawk box will be right back. moving is hard.
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go to xfinity.com/moving to get started. >> we had a quick round up of earnings they all crossed in the top hour raising organic revenue guide. you can see the stock there up 2.5% on the positive news. utx beating on the top and bottom lines as we turn things around as well it has been a bit of a mixed bag. that stock, can you see there off what we'll call marginally for now. >> a new report shedding light on jeffery epstein's ties including some of the biggest names. joining me now one of the journalists behind this story.
this has become as fascinating as opening up a madam's black book don't you think. everybody wants to see who is connected to jeffery epstein >> yes we have spent some time searching through the epstein black book, which does exist a lot of notable wall street players are in there our focus today is on a handful that seem to have serious client ties to him. leon black, the cofounder of apollo management and ceo now, he entrusted jeffery epstein with tax and estate planning for himself. he also had for a time jeffery epstein on his family foundation board from about 2000 going up and on they spent time together at the
epstein townhouse. the ceo of barclay's bank. apparently epstein steered dozens of clients to daily including helping to foster a deal in 2004 for jp morgan to buy the hedge fund stanley was so grateful for this help, he actually visited epstein when he was incourse rated in florida >> i understand that tie but i don't understand bringing epstein on for tax and estate issues >> there is something surprising about that we know he had a broad relationship with leslie webster. who managed any array of
affairs. i'm presuming, he sort of brandished that experience and drew on it there is a lot we don't know about how epstein and black first got connected as well as the extent of the work he did for black. >> here is the party don't get there is no real, serious office it sounds like it was him and the assistant. if you are running several billion under management or advising under tax strategy or something, you might have to send statements to people, just general infrastructure you have to send invoices, notes. if there is real advise being offered. if this is a one-man shop of a guy in his apartment offering people advise.
that is different. including having people paying him for that how does that work and what is going on >> there is something a miss here >> there is a lot of strangeness to it. one of the tricky things there was a lot of bluster and outright lies coming from epstein and associates as to who he worked for. for example, there were people that came through the door and attended his townhouse dinners who he might have seen and said this person is my confidentant or i'm add mivising their boardd he wasn't doing any of it. we've heard about a meet here and there. we are still trying to figure out exactly how they've known
each other they've they've really denied most of what we've heard >> this would mean, i would think, that these were okay with epstein's past, so it throws into question their more at and/or how are they connected at all with epstein's love and appreciation for underaged females? >> good questions. to be fair to black and stayly, we've heard nothing about them doing anything improper. in terms of visiting him in jail it was at an office but he was in terms of doing time i think it appears he was being
loyal. we don't know when musk stopped talking to him musk acknowledges only meeting him one time ever. >> if you saw today, i think it was reported to the new york post, the pr person who does a lot of screenings and movies >> hosted a lot of events. >> a number of big hollywood firms netflix and fx dropped her because of the fact this she z did business with jeffery epstein. >> in the wake whether you are being friends with him or good friend or not, i don't care that's what netflix has said to peggy siegele. we are not doing business for
you because we think there is a larger problem here. >> for leon, it wouldn't be a issue because he runs a family office >> if you are an event planner and you have epstein on your go to roster of guests, you might lose clients in the process. if you have a one on one relationship with leo. that is different than saying, leon black is inviting epstein to all of the apollo events. >> when are we going to know everything >> i don't know. >> i want to know everything business, politics everything involved has a really strong vested in this coming out. will be an actual paper trail.
even the pilots had records that are maybe what you see most people would not -- it would be like pulling teeth to get the real truth on this >> is there a black book >> there is a black book >> when is it coming out >> it is out >> new york magazine did a spectacular story on it. >> is not everybody in the book? >> why don't we know whether bill clinton had four flieghts o 27 flights >> that's not inthere. it is literally when you think of as a black book. >> i have a contact list there have some people i have called and some i never called
>> what will be the definitive piece of documentation that blows the whole thing wide open? >> it is going to be hard. it will be a lot of reporting and tracking it down who is going to admit to it? >> to which part >> there is two pieces the truly, truly bad stuff and whether we think there are big names involved in that. >> how do we know who visited the island and stayed. there is questions of whether he was blackmailing people and the really bad stuff then there is a question of where all this money came from and some people have the ideas that it was a ponzi scheme those are the questions people had. >> there is no guest list at the island how are you going to find out who visited offer who didn't.
>> some people may or may not want to tell you >> much more will surface. this case is not going away. the more prosecutors dig we've gotten a lot of comments on today's story and tips. i'm sure many other reporters are experiencing the same. i do think more will come out. >> we've talked wall street ties here are there hollywood ties as well >> that wasn't the focus of our story. there are definitely hollywood types. reporting on his business world, i would include entertainment in that it seems like if there was a couple of buckets here, it was finance and tech in recent years, he tried to be friend heavy hitters he was interested in science and
mathmatics and indicated to people that he was trading >> like managing it himself. if anything, it seemed like he was dolling it out to others >> maybe we do know he had assets managed by the deutsche bank managed private wealth arm they broke ties with him prior to his recent indictment more recently, he was banked by jp morgan. >> whether he was actually managing others -- >> was it his? >> whether he was doing the vesting himself or out sourcing it to others >> we don't know that. >> we don't know that. he's got to have so many
victims. you don't want to come forward you don't feel like a victim >> no. the girls that now a lot of them with women >> thank you coming up, auto nation making a leadership change. executive chairman who served as ceo for two decades along with the former cfo who will take over as ceo. that exclusive interview coming up next.
>> earning season is in full swing. we have a full run down on the performance and the moves in the stocks straight ahead. >> breaking news in the united kingdom. boris johnson is named the new prime minister a new day. the exclusive interview with the new chief executive with the final hour begins right now. >> live from the most powerful city in the world, new york.
this is "squawk box. >> good morning. welcome back to "squawk box" here on cnbc some rain. was that some rain or what over the last 24 hours. yesterday, did your phone go off? i need like a defib ru lator when that goes off you are minding your own business and it goes off we are dry in times square becky is off today the futures are above water. above 107 points on the dow. nasdaq indicated up 30 treasury yields are hovering above 2 and 2.1, which would be 2.05 >> it has already been joe, a big day for earnings reporting
this morning joining us now to wrap up all the reaction is dan chew done, we'll start with you >> we'll start with shares of coca-cola which are higher by nearly 3%. over 100,000 shares of pre-market volume. also boosted its full year organic sales and marked by better demand for lower calorie options like coca-cola plus coffee we are seeing an up move now on the rise by around 2.5%. industrial and aero space also came in. in the process of merging with partner raytheon also merging
climate control and elevator business as well >> shares of lockheed martin for sales are expected raise the the full out look for demand for the next gen fighter jet. also said the amount of orders it has at record levels. back over to you >> thank you, dom. let's get to mike now. good for the dow at least. >> very good i think the big take away so far, at least there was no sale on the news response on the news coming in. i think today, nonof the stocks reporting were stretched at a brand-new high you are seeing relief. yesterday was big cap tech i think it was significant that the gains on friday had a sloppy
session. right now, i think flat or slightly positive earnings seem to be good enough given what we are expecting from the fed bigger news for me is how valuations will get. why are we only at 17 times earnings because the foreign estimate include four times next year are we actually going to see that trajectory. >> for a lot of these companies, we still haven't gotten the confidence calls for these particular examples, we have heard the full forecast. the color from the conference calls on tariffs and info costs, we haven't heard any of it
that seems like it would be a little bit shorter than that it is good enough for this market because other stuff is going the right direction. even the budget cut would be given the earnings >> the stocks set up in the earnings, close to highs huge run ups and what happens. a facebook comes to mind, up 54% so far this year >> certainly, certainly the nasdaq stocks that will be the test >> auto nation reporting strong results for the latest quarter as well as announcing a new chief executive. joining us now for a cnbc exclusive interer view auto nation executive chairman and incoming ceo the operative word there is executive chairman i've said before, maybe there was a time when the face of auto
nation was weighing. i can see now someone still has some serious influence cheryl, you are thrilled for the first time in history, we have a woman who is ceo of a publicly traded auto company. your fingerprints are all over this >> joe, thank you for that introducti introduction we both share a deep love of wayne and what we did together let me start off to say i am delighted and thrilled to report a record second quarter. if you adjust for the impairment, it is $1.20 earnings per share versus the street expectation of $1.06 on all time record second quarter. but the reason i'm here this
morning, joe is to interdeuce the new chairman and cfo cheryl miller she replaces karl. i want to thank karl for his commitment this year, he was all in we all know the risks of hiring somebody from the outside. we had an ongoing discussion it was a mutual conclusion that it was just not the right fit. i wish him nothing but the best and he wishes us nothing but the best so turning to cheryl, she and i have worked together for the past ten years she's been in the auto industry for the past ten years what has driven the past years
>> second quarter was fantastic. if you think about customer financial services and all time records, we had great used unit growth and customer care growth strong at 7% all of that dropped to the bottom line as well. improving 190 basis points year over year. great quarter. a record second quarter following a record first quarter. >> that sounds like a cfo, mike. >> also, you've got 20 years in auto retailing i know carl was fitness and usaa and navy what is it about the auto industry and retail that is really sort of a different animal that doesn't necessarily translate, is that fair to say,
mike or did you just see cheryl and think we should have done this first. >> mainly because in the new vehicle business, manufacturers are deeply involved and have a different go to market than what i would do it is not a linear logical business it is tough to get your heads around we knew the risk we took it and here is where we are. cheryl, why don't you talk about how you feel take ig on this responsibility and you think you are up to it >> i'm thrilled to be taking it on i've spent most of my career in auto moative in retail i've spent time in
retail, rental i had a front row see in 2008, 2009 looking forward to running the base strategy, executing on the core and a strategy we created together i'm excited about continuing to bring that to life >> one of the things you were involved with was the wamo services when can we expect -- i have trouble with any change but that is really on the way >> let me say something first. i was looking at waymo thinking that was who we should partner with once again, it was cheryl i turned to. i said get on a plane, get out to california and get at the table with this west coast mindset and hammer out a partnership agreement that we can grow together and learn together cheryl is the one that got that
done why don't you talk about it. >> it was great to be there from the first day creating that relationship from phoenix. we started out there had a great meeting of the minds. we've expanded with waymo. it is early days but great to have a front row seat and helping drive that change for the business >> so cheryl, where is the growth going to come from in your view? i know auto nation, do you the repair business and you brand that now used cars -- you've called them preowned. >> nearly new. >> please, joe much classier. that works too >> are we near peek auto is winter coming to reference game of thrones
>> i'll go first, joe. i think on the new vehicle business, the consumer has been hit by a higher price point for the vehicle they want and higher interest rates this has moved that critical monthly payment and many have decided to switch to nearly new. now, if i go back six months ago, we had a forward curve that said interest rates would continue to go up. now that looks like that has significantly changed. we'll see if that happens. if will change my out look for 2020 if interest rates go down instead of going up, that will make a real difference for consumers because interest rates and the monthly payment remains critical >> we are running out of time -- i want to ask, mike, a little more about the transition,
cheryl to you from carl. i understand all the reasons carl, though took over back in march. it has been four months. are there any other reasons behind him just not getting his head around the impact of the auto industry. you knew the difficulties of understanding the auto industry. will we be hearing down the road some other reasons why you decided to go with cheryl, mike? >> absolutely not. it wasn't for a lack of effort or commitment. you sigh that the actual results are good it is a difference of a cultural fit that that wasn't going to reside over time and we decided
to call it a day there will be nothing more to the story and no other issue that drops behind my conversation this morning. >> we hope to see you at the next report as ceo >> mike, how long are you executive chairman >> to the end of 2021, so i have two and a year years to go >> you wearing pink shoes. you wearing them now >> on the way. >> i have them but i don't have them on today. i'll wear them next time >> thank you for coming on washington has a debt ceiling deal but not everyone is happy about it that includes our next guest republican senator who would rather fix the debt than kick the dcan down the road one more time he'll join us for a btde ceiling
>> welcome back to "squawk box," leaders have reached a deal to raise the debt ceiling more on that >> the president announced the deal over twitter yesterday evening. that agreement would lift the nation's borrowing limit and set spening lefts at $320 trillion over the caps. in a tweet, trump called this a, quote, real compromise to give another big victory for our military and our vets. steven mnuchin led the conversation there was a flurry of phone calls. over the weekend culminating with a call at 5:00 p.m. yesterday to seal the deal in a joint statement, they highlights the increase saying we must never let the full faith
and credit in the united states come under threat, however, conservatives are not happy. this deal doesn't include any major cuts instead, there are about $75 bi billion in offsets saying the club for deal with bran bankrupt america we'll see whether that type of blow back will change the president's mind the house is voting on the deal this week. >> to talk with someone who might not have been happy as the deals. senator mike brawn, republican from indiana >> i'd say disappointing is an
understatement i thought i heard the president say last time. that was needed because it was ee mashated over time. it was kind of unfurling since i got here you find any gimmick you can to avoid what any cfo would take on here with caps all there. we've been resourceful skirting them $22 trillion in debt, we've got this abomination coming across it is sad. this is different now, $22
trillion of debt than it was years ago or even when president trump came in. >> have you spoken to the president about this >> i have not but i'm going to tell my colleagues, this is a golden opportunity to vote against this because all it is doing is kicking it down the road throwing all of the burden on our kids and graduate kids in a time when the economy is as hot as it is going to be to start pairing this down, the sad thing here is, i'm impressed by the number of smart people that don't have any include because they've never done a budget, payroll or anything. they don't realize that in any other enter rite in any business
and school board, this gets laughed at only on a credit card you tloe it on can we do this >> you voted in favor of the tax cuts across the board. >> i did i was for them that wasn't in the senate back then. >> you were in favor >> i was that has been much closer to revenue neutral than what $150 billion per year ten years of the $1.5 trillion i am amazing information that will make that point impoli implicit is that we could raise revenues and some of the things we've got. that isn't the case. we are narrowly at the sweet spot of government revenue if you want 3% economy instead of
1.5% >> you don't believe it is adding to the deficit. >> it is adding a little bit but i've looked at month by month since it went into effect since january 2018 the government didn't get its first difference in revenue until april when individuals maetd their first estimated payments it has been closer to neutral than it has been busting we have a structural $800 billion deficit. i'm not saying there are ways to enhance income but it is so minute there is not enough of it there. >> do you believe the tax cut hurts the economy and by how much >> i'm a main street entrepreneur never had anything more measurable than not having to send 40% of your are he have knew to a broken institution to
reinvest it like i did for better wages and health care it has given us this 3% economy. i guarantee you, if those are tinkered with, we'll go back to where weem never get outside a 1% or 2% growth. >> we have to leave the information there. i understand where you'd want to cut and what you think the implications are for today we'll have you back soon to do all of that. >> look forward to coming back on >> you bet coming up, much of wall street is expecting a rate cut despite the relatively strong economy. we decided to take a look at the last time they lowered rates you'll want to hear what we found out. that's straight ahead when "squawk box" returns and you should be mad at tech that makes things worse.
big news out of the uk boris johnson has been tapped to be the next leader of the country's conservative party he is a staunchly pro-brexit politician some british lawmakers have vowed to bring downey government that tries to leave the eu without some kind of agreement johnson wants to leave come hell or high water this fall. >> i say to the doubters, dude,
we are going to energize the country and get brexit done. a new spirit of can do i thank you all very much for the honor you've done me i will work flat out with my team that i will build, i hope, in the next few days to rebuild your confidence. in the meantime, the campaign is over and the work begins thank you very much. >> in a tweet shortly after his speech, president trump said, congratulations to boris johnson. he will be great take a look at the yoeuro this morning. acting earlier to what many other people would be expecting. ramped up ahead of the fed cut this week. >> he's a very good speaker. he really is >> the dude of odds.
>> he said dude. tell you about that lunch with warren buffett and discussioning cryptocurrency sun bid for charity options but since he has fallen ill and needed to postpone since he called bitcoin rat poison squared saying he would close the gap in the realm of cryptocurrency he and sun have agreed to reschedule later we'll bring you that date when we learn about it. in the meantime, we hope he gets better soon. when we come back, an earnings deep dive on two most significant reports. we'll tell what you they could
mean for your portfolio when we return here on "squawk box." back in a moment 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 "squawk box" here on cnbc i want to catch you up on some of the earnings reports we've had a lot of them. toy maker hasbro posting quarterly earnings up. with strong help from toys related to "end game." hasbro ceo will be on tonight on mod money at 6:00 p.m. eastern take a look at shares of whirl pool, they are going lower also raising the full-year forecast as it raised prices to offset higher production costs the stock off now almost 2%.
pulte group up also beating forecasts. they sold more homes as home buyers returned to the market. that stock up a little over 2% jetblue is out with earnings more on the latest report. >> you can add jetblue to the list of companies that beat the street this morning. q2 earnings coming in 60 cents a share better than was expected up 9.2%. strong across the board. expanding margins, strong growth in the key markets where they are looking to drive the revenue. when you look at the full year for earnings, this is the stock getting close to the 52-week high it has had a nice run along with
jetblue and other airlines under pressure you see the stock raining at just under 19.30 a share we get american later this week. as you look at the airline earnings overall we also get southwest later this week those companies that have expose you're to the max feeling more pressure and certainly skepticism with inspectors you see that with southwest and american other companies like jetblue who do not have exposure that are benefitting. and talking about the airbus that is a little behind on delivery >> thank you, phil from chicago. harley davidson, one of the other big names reporting. revenue was short of forecast
cutting the full-year motorcycle shipment forecast. let's get reaction from james. great to have you with us. >> good morning. >> the shipment guidance cut was to levels not seen since 2009, 2010 what is your take on harley's business right now >> i would say domestically, i would say where the vast majority of their business is, they missed marginally, domestic retail was down 8% the street was looking for more in the 5% to 6% range. that is not a massive disappointment the bigger area for me was in the international business down 9 #% in retail. modelling that to be up. specifically eu sales were down 14% as were sales out of canada. clearly there are bigger issues there. that is where the company is trying to grow and offset
weakness in the u.s. at least in the second quarter, we didn't see that >> clearly, the tariffs the eu placed were impacted the company obtained regulatory issues should we expect to see those late looking forward announcing for harley davidson to eat those costs they are paying those as opposed to the consumer paying them through price increases. in theory, this shouldn't have impacted for now i guess the secondary impact would be whether or not that would impact davidson's brand. we are in a trade war with continental europe as a company that essentially
sells america anna, you have to ask yourself if that is impacting price for their bikes. >> james, it just seems like things that are sad. just the demo issues surrounding harley is insurmountable >> the people i see literally look like willie nelson, his age too are what the harley guys look like now. do any millennials do they want to buy a chopper or a harley it seems like a really sort of a dying breed. >> it really is the age old question are they able to bring in millennials at such a pace they are able to offset lost set of baby boomers that are approaching retirement age they would suggest that math would be pretty unfavorable.
i think it also points to the product initiatives they are undertaking. under month, they are coming out with a new electric motorcycle next year, they'll get into the adventure, touring segment they have another bike called the street fighter coming out next year. they are looking to expand internationally with smaller bikes being made in asia it is not an easy equation. >> it seems like a little too late you are talking about interdeucing smaller bikes next year when china had a love of e bikes i would say a decade ago >> yeah, that's correct. the maillion dollar question is, are they going to be able to solve this and fix it before the next recession i don't nose if it is a little
too late this will be the fourth year, i believe, of domestic decline they've got to solve it quickly. they are running out of runway during this economic cycle >> thank you for your thoughts we appreciate it >> coming up, can the fed boost inflation? stocks, brother and bank lending with a simple rate cut that's what wall street is counting on. has it worked in the past. we take a trip down memory lane to look for answers. 'lbeacin menwel bk aomt. can i get some help. watch his head. ♪ i'm so happy. ♪ whatever they went through, they went through together. welcome guys. life well planned.
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welcome back so "squawk box" this morning take a look at futures we are a little more than an hour away. dow just opened higher nasdaq opened higher stronger s&p 500 as well about 13 points higher >> the fed cuts rates at its next meeting did will likely be trying to do a few good things at once. is all of that possible with one little rate cut of 25 basis points >> good morning. we ask a simple question what is the basis and what is the point of a 25-point base cut? will the effects be only financial. it looks so good
appeared to keep stock rallies going. the recent policy by the fed if you look all the way to the right of your screen will turn stock around stocks in the year. most of the past decade. inflation is used a bit. the fed was still easy a lot of the time what about lending and banks it does appear to have curbed lending and growth that said, so many different ways for companies toboro in ways showing how important it is money is cheap in the job market what the fed is likely to achieve is to show it is more serious in the job market and keep financial conditions lose and edge closer to global rates.
there is skepticism that they will boost those cuts. >> we'll see at the next fed move and how we'll react the head of research at barclays the former treasury undersecretary for international affairs. for awful you at 25 basis points and maybe two cuts in the second half of the year, it is a weird time to be in a easing cycle in terms of gdp and unemployment, if you throw in tariffs and brexit >> there is some cross currents in the data. the unemployment rate on one
hand is low. as you mentioned growth seems okay on the other hand pmi and other indicators are soft. the feds worry about hitting its inflation objective. putting it together, i think you can make a serious intellectual case that the 25 basis points will be the right move i think the fed will be very open to doing more i think that jay powell will make that clear. >> michael, two years ago or three years ago whenever we were embarking on removing some of their accommodation, no one in their right mind if you told them this would happen, how many times did we go up >> eight they said we'd go down before we go up. that's a different world now it seems like it is okay
seems like a good idea we've been conditioned to think that this is normal. is it? >> i think they went a little too far. i do >> no one would have predicted that either. >> i think you can look at some of the inflation data, housing data and other components and say maybe things are a little bit too tight. it is in a historical context crazy to say that. the dollar is roughly on a 30-year high i think can you make an argument on bank lending. some parts of the economy have slowed i think you can make a couple different stories to justify cuts. >> michael, one of those outcomes, you expect a lot from. others you expect nothing from
recall recalibration. you can't have all currency exchange rates at zero but you know what i'm talking about. but something substantial comes from it. we are sort of talking about the expectations right now what kind of expectations do you have in terms of growth? >> our point of view is that it stabilizes thing consumer spending data looks great. depending on where the numbers shake out on friday. you'll have four to five quarters of negative growth on housing and equipment spending manufacturing has been down two straight quarters. by cutting rates, you've helped stabilize that side of the u.s. economy and global economy that gets you to around something like two
>> all of this boggles my mind housing, mortgage rates come down, you still can't get housing going. tax rates are slash. we are having a prop with cap x. all of that leaves me to be the hawk at the table to say what are you doing it for >> there have been two broad theories of what is going on one of them with what michael referred to, the futures, it is lower than what the fed thought. the fed need to calibrate a bit. i'd say another major theory in the case here is the u.s. economy has been hit by a major shock associated with a trade war. the underlying uncertainties and you want to layer on increased
weakness the chinese and the global economy has created extraordinary head winds with 25 basis points probably makes sense. it makes a huge difference for what the economy will look likem i think the jury broadly is still out as to whether over the long run, you know, r star is zero or -- >> explain what r star is. >> the neutral interest rate, it neither creates inflation nor e reduces it. >> got to be very careful. especially people in the uk beggaring. i get it >> i think it is a good -- >> it is i look it up it is used a lot i know about beggar thy neighbor is that the -- >> study of english. >> got to be careful
>> we have the ecb meeting this week they want to offset euro strength with the fed cuts and -- >> the united states is a funny place. we are ultimately the price maker, not the price taker we act like the price taker sometimes. we act like we're setting the rates because of we're europe and where japan sets their rates. they set their rates relative to where we set our rates a lot of the world also does in the -- we are the central bank to a lot of the world, not only that, we also are the reserve currency what we do is what matters let's turn, is there a way -- we had two theories over here, nathan had, the one i'm interested in is the trade war is that the ex-planation. are there other things going on? and how much are we slowing down given the data has been so
strong >> i this nk it is slower global growth and lag defects on monetary tightening. portioning those out, hard to do you see it in the business spending data. >> what is your number for gdp >> 2 4% private consumption and negative growth in residential and nonresidential -- >> isn't 2% the growth potential? >> it is the composition of the number >> what about you, nathan? >> so 2% sounds like a pretty good guess for the second quarter and frankly for the second half of the year. i think this budget deal is likely to be supportive. and i think the fed's argument is, look, we're in an okay place now but not setting monetary policy for the moment. we're setting policy in a forward looking manner and what we want to do is take out a little insurance to give us some
confidence, we'll continue to perform well over the next few quarters i think they're worried about the composition, about the -- some of the confidence indicators, and we're seeing pmis and investment. and this went a little bit more certainty and confidence that the economy is going to continue to perform well. >> all right we got it all figured out now. thank you. theoretically you could keep threatening a trade war to job own interest rates down and then not even follow through on it. >> i think nathan makes the best point, cheap insurance it is not going to, you know, ma make a difference in everything, but it is relatively cheap insurance, i think. >> down to the new york stock exchange, where our good friend jim cramer is right now. number of -- we had so many different companies report this morning. which one do you want to start
with which one moves the market the most >> i think united technologies is terrific. there was -- again, aeropace is incredibly strong. otis was weaker, but still much better than you could argue. you've got that climate control business, little hurt by weather, again, i feel it is good there is just a lot to like here coca-cola, holy cow, they have better growth than pepsico i haven't seen that in a long time, new products, execution doing well, james quincy putting his mark on things doing fantastic job, stocks will break out. maybe it returns to being the one that people say, you know what, i never got hurt by it and i'm recommending coke. that was a terrific quarter. coke zero is doing well. >> we had a segment about the int travails of harley-davidson. >> losing from overseas and when you do, willie nelson, the
correct term, that was willie nelson, that says it all you need some younger willie nelsons. i've not seen them i think harley, once again, long suffering, just not there. >> and got -- >> worst of the morning. >> we have snap and facebook later. what do you think? >> i like facebook very much here i think that's become the de facto way to be able to reach people through instagram i think snap surprises and just continues to surprise. it is a place to advertise it is working. and the people are looking for alternatives alternative places to advertise. facebook is number one i was hoping alphabet number two. and then i think amazon and then snap, there is enough money, maybe snap passes twitter. wouldn't that be something >> on twitter, am i not allowed to say i love you anymore? you are, like -- >> no. you can't say i love you, but you're an idiot. i think it is best to say, like
larry kudlow with all due respect, you're a moron. he lo i love that, i love you, period, not i love you but you're so wrong on tesla say i like me. don't say i love me. >> i want jim to end the debate. we have boris johnson becoming the prime minister five years from now, joe and i have a little thing going here, financial perspective. economically, good or bad for the uk. >> like we do with trump two and a half years ago. >> what happens if we save the tape >> initially shock and then the -- united technologies $2 billion of business. i'm not worried about it >> it is a better situation or worse situation? >> i'm worried about the navy. i'm worried about the navy >> the royal navy. >> can take out 2 million barrel tanker, i remember gelico. >> for like 500 years before -- >> going to go to the dumps, i'm
just saying -- >> you may go on the dumps. >> roger daltrey, ask him. >> i got to promote you, mr. cramer make sure you get this first on cnbc interview later this morning. coca-cola ceo coming up and then cramer "mad money" tonight, he's got some big interviews as well, the ceo of hasbro. back in a me mont is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. every day, invesco combines ideas with technology, data with inspiration, investors with solutions. because the possibilities of life and investing are greater when we come together. ♪
ready with the dow up nearly the highs of the day, up 122 thank you, melissa. >> my pleasure. >> see you again soon, i'm sure. >> what about me >> thank you, andrew see you tomorrow join us tomorrow, "squawk on the street." ♪ ♪ your love keeps lifting higher and higher ♪ >> good tuesday morning, welcome to "squawk on the street." say hello to s&p 3k at the open as futures agree on a strong morning for earnings five companies raise guidance including coke, lockheed, biogen, utx and whirlpool. europe is again. boris johnson set to become the 77th prime minister. oil is flat. just crossing the imf cuts its global growth outlook again. but ups th