Skip to main content

tv   Squawk on the Street  CNBC  July 23, 2019 9:00am-11:00am EDT

9:00 am
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 the forecast for the
9:01 am
u.s. road map begins with stocks poised to rally at the open, boosted by rising global trade optimism, those earnings we mentioned from coke and utx, ceo of coke will join us today. >> fiscal crisis averted the white house and congress striking a budget and debt ceiling deal. >> and lobbying for huawei restrictions release the ceos of qualcomm, google and intel and other tech giants make their case directly to the president. futures are higher this morning on the heels of a number of better than expected earnings. three dow components also cross beginning with coke. shares higher after the company beats the street, raises organic revenue guidance and utx beats on the top and bottom lines. mixed bag for travelers. earnings fell short but ref new be beat coke seeing organic revenue five versus the prior four. >> doing such a great job. doing it with coke zero sugar which happens for quite good tasting.
9:02 am
doing it with water. he's doing it with those small formats. whimsical. he's doing it with better technology, transforming the company, getting better bang for the buck and doing also, by the way, trying to get more environmental in terms of plastic, which i like. this is a good story it reminds me when coca-cola would churn and just churn and churn and get numbers. the stock deserves to be higher. i think quincy has really in his own very subtle way become a great consumer packaged goods ceo. he does not take himself too seriously. so what happens is when you're out with him, you're thinking, holy cow, this guy has some mojo it is a mojo factor. mojo per share >> if this holds, this 3.5 premarket level holds, the biggest gap higher on herbings earnings you don't get these kinds of pops on -- >> no. this is -- some people can argue
9:03 am
that this is the best in a decade for coca-cola it is pretty amazing a transformative situation double digit growth for zero i think people are saying this is the old coca-cola where you just have to say, you know what, warren buffett is right. >> the old coca-cola from the 90s. >> from the 90s. >> at what point do you go back to >> go back ten years >> i like everything i hear. and i get the new products and they have a new energy drink. i got to tell you, if i took the -- tuesday, take the night off. why sleep tuesday? >> we won't allow any -- >> the whole idea of sleeping tuesday night, what exactly was that illness that affected me so i didn't have to sleep
9:04 am
maybe take that off line i think the energy drink -- >> didn't youle le ityou tell r user that you woke up because of the bad guys. >> i got up at 3:20. the bad guys get up, look at pharma i'm all over them. they lack the coca-cola energy drink. >> utx, david, a beat. revenue up 17. they raise their guide on revenue and profit a lot of this is rockwell, of course revenue up 45 versus a prior 3 to 5. >> yeah. and it is a good number for a company that i think probably needed to put up a good number but that is not going to necessarily stop the yakking from large shareholders including dan lobe or bill ackman this is a company, great deal will happen to, in the next -- what do we want to call it, six months it a year spinning off, otis and carrier,
9:05 am
earlier in 2020. utx will change dramatically and then merge what is left with raytheon in a deal roundly criticized by some of their shareholders like mr. lobe. it is going to be interesting to see. you don't think they have done a lot of homework. it always helps when you put up and executing fairly well, no doubt, jim at the same time, you have dan lobe will keep coming. we know that these guys are nothing if not relentless it has been dramatically changed as a result of this deal, saying that they think they should be pursuing partnerships. this is from his letter by the way at the end of june as opposed to an out and out deal troubled by thomas kennedy, the ceo of raytheon's remarks in the paris defense show where he sort of talked about, well, this company might not have existed in ten years if it was stand alone, tha being raytheon. >> that was wrong. that was ill advised
9:06 am
i do think you have to look at collins, see we're talking about 15%. they are doing far more than that got to think about who this man greg hayes is and think maybe boeing may have grabbed raytheon boeing has its eye off the ball now. i think this man knows how to combine, raytheon, expensive missile costs, couldn't make the missile cheap. got a guy named cramer in there right now and he's trying. no relation. i think, look, aerospace is incredible and he takes a long-term view. talking about 2025 for the gtf, engine making money otis hung i there. i think why don't we give greg the benefit of the doubt after the collins acquisition? >> right and that is showing through in some of these numbers. >> people thinking it is like breen with dupont? >> as we get closer, you need a vote and there is some distance now
9:07 am
between here and there but you and i will tend to focus on this, i have a feeling. >> how about a -- >> this will get joined in a more significant way it is not a layup. almost always see the companies prevail. >> he'll prevail. >> there are -- more recent ones we talked about, bristol-myers. >> that one keeps going down have you seen that >> i haven't >> 42 down there david, the growth here in aerospace is the same as honeywell. there is an article about how everyone is being hurt by boeing, an article that is an ever green piece the companies that are involved are not. i want to hear what lockheed martin says about turkey i'm more concerned about turkey than i am about -- >> yes risk to the f-35 after turkey bought that russian air defense system >> how did turkey become so integral >> big customer.
9:08 am
>> jim, overall, got five big players raising guidance for the year i assume you do not want jay powell to hear any of this. >> in, jay has to turn this off. >> mute the tv. >> well, jay's got -- >> otherwise the rate cut is a risk what do we do then >> it is all about harley, jay it is all about harley. >> fastenal. >> basf. >> the job, everybody -- if you go and talk to greg hayes, every single thing is down a little bit. >> it is >> yes >> but -- >> he just needs to listen to the carrier business, a little weaker, versus last year and otis and he'll feel great he has to x out aerospace, put a little asterisk there and coca-cola is coca-cola, the issue, no, he needs to put himself into a washer and dryer. >> whirlpool
9:09 am
better than expected >> stock down. >> why >> we need a stock to go down for jay. ever is -- all the hedge funds are hitting bad. got to have something for jay. >> we have one potential crisis averted, an agreement on two year budget deal, lifted the debt ceiling, raised spending levels the president tweeted, i'm pleased to announce the deal has been struck with mitch mcconnell, chuck schumer, pelosi, mccarthy, on a debt ceiling with no poison pills this was a real compromise to give another big victory to our great military and vets. people still shaking their head about why we even have a sequester if when things got tough you're going to ignore it. >> is this the new kinder more gentler trump? i think he has -- i think he respects pelosi. it is -- probably annoying to the base that wants to send pelosi back to -- wherever pelosi is from, san francisco.
9:10 am
he's got new -- he's pretty quick with the congratulations reminds us he has to keep america great right after that i do think that -- i thought that was a rare bit of bipartisanship and maybe that is, i'll go a step further, maybe a good sign for the new nafta. >> maybe doesn't feel to me based on the last two and a half years that you can read anything into any one event in terms of saying it is going to dictate a longer term trend, don't you think? >> there has been some volatility. >> a little bit. but it takes care of a risk in the market place most, i think, participants were not seriously considering was going to occur, but nonetheless would have been very dangerous if it got closer and closer to -- >> the powell watch, powell referenced brexit last time. now he's got boris in there. >> moody's already out saying no
9:11 am
deal brexit risk is up >> now -- >> remember the famine that's the issue >> what? >> people are talking about potential famine >> where >> main britain. >> medicine supply >> not 1847. >> they're not going along here. >> your family during the potato famine how did they handle it? >> excuse me. >> how did your family do it >> i don't know. we weren't in that part. we were -- >> oh. >> we were east. >> oh, okay. just checking. >> by the way, things were not good there either. don't get me wrong >> no? >> i saw fiddler on the roof i agree with you >> back to the budget deal for a second, and something we talk about all the time, you tweeted earlier, i think, carl, the national debt. >> yes >> 14 to 19. i think going to rise by $3 trillion during the course of this -- of the current
9:12 am
president -- of the term. >> 3 trillion. nobody cares >> no. >> maya mcginnis, we bring her on once every couple of weeks. >> she says may be the worst budget deal in the country's history. >> yeah. >> grandchildren, put that one off. our grandchildren, got to be worried. it is like, our grandchildren, they'll figure it out. okta or z scale. >> nobody cares? >> no, nobody cares. >> if rates go up meaningfully, do you any what that would do in terms of our interest costs? >> let's run the tape. january 22nd tape of greg dalio telling us to sell everybody because of all of the issues want to go to -- >> been six months, doesn't mean rai ray's wrong. >> no. >> stan another one. >> your team fell apart at the all-star break there are teams in training camp we realize the giants sign their
9:13 am
quarterback, let's sell them i'm just saying if we look at what dalio said it a good reason to sell. now we had a big run so the deficit, yeah, there is a good reason. good reason to sell. i don't know >> of course not it never has been. it has been this abstract concern and probably will be until there is a true crisis of some kind or if rates were ever to rise meaningfully and people realize we're spending more on interest than we are on defense and more on anything else. >> business -- >> we no longer can afford to pay people social security benefits. >> only business is charity will surpass incredibly what the government has as discretionary budget soon. >> business is tax rate has come in far lower than even had been anticipated and revenues from business are running even lower than they had anticipated. the deficit will be a trillion dollars this year. >> what do you want me to do be sad >> let us know the minute before
9:14 am
we turn into greece. that would be a huge help. >> greece is coming back >> thanks to some help, yes. >> i always wanted to buy -- >> did you look at buying an island during the downturn >> no. they're all domestic ownership of their national debt we have ours all over the place. >> their holdings are near a two-year low >> the chinese, where are the chinese. see the new exchange they came up with, you know what the key thing about the chinese new exchange you don't need financials. i've always been waiting for something like that. financials. >> we're going to cut federal funding for buying chinese electric buses and/or railcars. >> they bought -- they bought soy. >> i don't know. >> they haven't bought soy >> send them some roundup. >> when we come back, big tech's meeting with the president at the white house. we'll tell you what they discussed and not just huawei. premarket, a shot at 3k as these
9:15 am
dow components and even other s&p players have strong earnings back in a moment your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. healthier brain. better life. ...or trips to mars. $4.95. delivery drones or the latest phones.
9:16 am
$4.95. no matter what you trade, at fidelity it's just $4.95 per online u.s. equity trade.
9:17 am
no matter what you trade, at fidelity here, hello! starts with -hi!mple... how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? 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. top executives met with the president. in attendance, google, broadcom, cisco, intel, micron and western digital. the administration calls the discussion constructive and said in addition to the economy, they
9:18 am
covered jobs, trade and 5g some reporting that there is frustration over commerce. the commerce department and wilbur ross and the guidelines have not been clear. >> i understand that the administration did a lot of listening and learning and that that's important because these are complex topics, a lot of goodwill at the meeting. a lot of sense of working united to try to work through the huawei situation and i think that the administration has not really been able to be as granular, need these people to explain where everybody fits in. so i thought it was -- i understand it was a pretty surprisingly informative meeting is the way i'm going to task it. >> is the calculus now restrictions loosen if china buys ag? >> yes. >> and where does that leave the hawks in congress who want to see this thing codified? >> well, i think that you -- people want a -- they want a process.
9:19 am
they want a process where it is not, like, a phony sure, we'll let them sell some huawei. they want a check. this helps them. this kind of meeting explains what >> chuck robins keeps putting his jacket on over and over again. keeps going back and doing it again and again and again. >> falcons fan >> i didn't mean to interrupt you. go ahead. >> that's okay i didn't mind it one bit >> i know you're a chuck robins fan. >> i'm a fan of everybody. >> you are >> i'm sure the intel announcement through him off. >> how about the story about apple. >> billion dollar price tag, what is -- intellectual property however, apple becoming more and more -- more decisive -- more responsible for its own supply chain. >> this meeting, taking a guy like chuck, chuck can talk about the edge of 5g
9:20 am
talk about what huawei is doing with their technology. i think the -- this was a teach -- i'll call it a teach it by these companies and that's valuable so that they -- so the government can say, you know what, this is not just huawei. huawei is a vast company with many different divisions >> laying off people in the united states in the research arm. >> we'll hire them immediately there is more jobs -- there are -- there is a talent war out there. and this huawei, those people already have jobs for the most part. >> we'll get cramer's mad dash and the opening bell coming up after a break. another look at the premarket as we aim for 3k once again don't go away. don't miss your golden opportunity to experience the luxury you desire on a full line of utility vehicles. at the lexus golden opportunity sales event. lease the 2019 rx 350 for $389 a month, for 36 months, and we'll make your first month's payment. experience amazing.
9:21 am
9:22 am
9:23 am
whether i'm high or low dip on the tight rope ♪ all right, seven minutes, we'll get started with trading on the new york stock exchange on a nice rainy tuesday in new york hasbro -- >> don't takes me, bro this is really a remarkable quarter. you know what, what bothers me is, look, obviously better, but brian told you -- >> ceo, who will join you tonight on "mad money." >> inventory issues, inventory is popping up all over the place. maybe china issues in terms of making product still two-thirds china he said look we have partners, gaming stuff and go with us. it was a no. it was going down. he was honest. i don't know where the inventory
9:24 am
is from toys "r" us. when fed inventory cleaned up and then it is a gaming company and the relationship with disney -- >> we talk often about transformation of companies. necessary. this is one of those examples. isn't it >> right. >> transformed not that the brothers didn't good a good job during their time. >> brian has made it so it is an interactive company. it is also a sustainability company, getting good engineers, develop new things, my hasbro. david, when you do -- when you have franchises, the way they have with disney, when you can just talk about frozen 2, "star wars," the rise of skywalker, come on, david their fortunes are linked with disney movies coming out every day now. disney is -- we don't talk about disney, morgan stanley had a piece, saying if bob iger could, if he had to, be the next man on
9:25 am
the moon everything positive. >> i see all right. >> we'll talk more about disney. we -- >> remember the days, we had tesla coming up. elon is not -- elon -- >> tweeting. >> elon, please tweet. >> my daughter loved the ride in the tesla. this is a good one, david. we'll talk to brian. he's the most transparent -- by the way, up 41%. that's not bad >> no. i think most of those investors will be pleased with that. "mad money" tonight, brian goldner will join jim. opening bell a few minutes away. stay there "squawk on the strt"omg ghbackee cin
9:26 am
9:27 am
9:28 am
you're watching cnbc "squawk on the street" live from the financial capital of the world the opening bell in under two minutes. strong morning of earnings we covered coke and utx and hasbro some of the numbers, u.s. down 8, europe down 12. >> i think when you form your budget at a company in america, you can't submit to your board that we're going to have a down year you end up with harley constantly missing the numbers you can't just say, guys, we'll have a down seven heyear
9:29 am
harley has a challenge we haven't seen a similar company to harley, maybe smith corona, they were trying to be a chemical company instead of a typewriter harley is -- i don't know what to say, the machines are great but it is just something that is not -- they need to buy someone, they need to buy a scooter company. they need to switch gears. >> working on an electric bike, but it takes time. >> yeah, it does and they maybe merge with polaris. i don't know i don't have anything for them their showrooms are better than ever bikes are beautiful. and the average guy on it makes me looks like, i don't know, what do i look like, i look like -- i don't know chris paul. chris paul is a vegetarian i learned that because i've been
9:30 am
hanging out with beyond meat guys and i am starting to understand the great -- now, it caramelizes really well. stay tuned i'm going to drift beyond meat they report next week. >> the opening bell, and the s&p 500, the big board, brinker international, franchiser the casual dining restaurants celebrating 30 years >> very good stuff love them. >> at the nasdaq, j2, services company. >> they have done a fantastic job. they became public during the beginning of the boom of the vek. 20 years ago, when the vek show was not there at the time. remember that period, cbs market watch, the -- >> i'm trying to figure some things out. >> you should use chewy.
9:31 am
you don't have to order the food on the show. >> i'm not trying to -- i do not advise ever -- by the way, for young reporters, do not report via text, but line some conversations up go ahead >> to your point about beyond meat, we're back above 200 i think this will be an all time high. >> there is a short squeeze going there. it is an ethos it is very -- it is very tesla-like. >> what did you find out you'll make us wait until the show >> i am. >> i got to tell you -- >> you did it what -- >> i didn't know, all right, there was side by side i didn't know. i found beyond meat burger better >> than what >> than the actual burger. >> that's crazy. that's crazy >> look -- >> position on either side of you -- >> real chef, real chef. what can i say i will instagram some of the
9:32 am
pictures but, david, one had a -- a nice, crisp feel to it the other had that kind of squishy, you know, inside. little too rare. >> by the way, at this point, beyond is now eight times higher than the ipo price 718% gain. >> people don't understand that this is -- it is a bit of a cult younger people, this is not -- this is not just -- okay, understand this is not just substitute for -- this is a way, we get -- how do we eat protein, mostly? they grow protein, 100 acres, they give it to cows we eat their protein we also get all their fat. how about if we only use seven acres and make burgers out of the seven acres, leave all the other acres, save the water, really become -- get rid of the methane. cows are no buddies of ours. and then it is a delivery system
9:33 am
for good protein, it is tasty. athletes are -- lindsey vonn. >> you made this point not a vegetarian decision, it is a humanitarian decision. >> humanitarian, about the environment. it is about being clean. it is about your body being a bit of a temple. >> it is a substrate something or other that is -- >> you're ignorant you're an ignorant -- you're -- >> not ignorant in anything. >> you need to have -- you have to make it by a chef egg sausage sandwich, i got to tell you, better. >> is all this -- does it deserve a rich multiple because you liked it. >> it is not tesla we have to talk to easter brook. easter brook has to catch up with the times >> maybe they'll mention it on friday when mcdonald's reports on -- >> somebody needs somebody big we already have carl's jr. >> facebook, jim, this journal piece suggests that as part of the settlement with the ftc,
9:34 am
maybe a board level privacy committee. >> would that be fantastic if they did that, that takes the stock to 220 i volunteered to be on the committee because i think that facebook at this point has cleaned up its act libra, i like libra. marcus liked libra from facebook, and i like libra. >> yes >> you're in the two of you. >> yes >> you think visa says anything about it tonight when they post >> if you push them hard, al will say, yeah, we're looking at that we're looking at that. that's what you say when you're not looking at it. you say we're looking at it. with all due respect >> with all due respect. >> all due respect i think visa will have a good quarter. i think mastercard will veihavea better quarter. >> that's a lot to play with. >> texan, the bar was raised yesterday by the goldman call.
9:35 am
texan does have some apple exposure not allowed to mention apple apple is ligke fight club. what is the first rule of fight club >> don't talk about fight club. >> snap, it has the mojo that's another mojo name. >> coke has the mojo also. >> they got the juju. >> stock up what 3%. >> why not >> 3.5%. >> quincy is bringing his game >> during the premarket. >> they have enough topo chico able to get that pipeline filled everybody knew when they filled the topo chico, the millennials would go nuts. glass bottle, easily -- the millennials don't believe in plastic recycling is real. >> the ceo of dow chemical knows this, thanks to you. >> blaglass, i think, takes lonr to decompose than plastic. >> it never decomposes >> some does -- >> i'll take you on an island in
9:36 am
the pacific. made of -- >> the ad, constantly, those guys cleaning up the ocean bare chests. >> they got a couple of mr. clean -- >> our friend carl icahn who i think loves plastic, by the way, i don't know, i assume he does. >> plastic bags. >> being banned in a lot of places >> he continues his fight at occidental, mr. icon, againk ict seat four directors. talked about it a number of times. he came with another letter. more and more, vicki howell, the ceo, not responding to him, letter for letter, word for word, he keeps going at that buffett deal the money that was brought in, that warren buffett got, the 8% on a $10 billion investment that allowed them to raise the cash portion enough so that they
9:37 am
could actually avoid a shareholder vote, which might have been more difficult for them in terms of completing the anadarko deal. if hollub negotiated a deal, despite her limited experience in m&a and the board says mr. icahn was misguided enough to rubber stamp it, one might say it was the fiduciary duty to accept the deal. it was a deal that only mr. buffett could get given his endorsement being so important, of such importance and it was out yesterday >> let me ask you, they bring in -- are they bringing in high level -- does icahn have high level oil executives >> no. he doesn't. >> no? >> some experience, i guess, and another guy who sat on the board of herbal life. >> herbal life, what is the
9:38 am
synergy with permian >> none that i'm aware of. >> you're telling me that he's not necessarily an oil person. >> are you questioning carl icahn's ability to put new members of a board -- >> did he say -- >> so the board can be held accountable and the new directors can be added to ensure the operating success and the management acquired to achieve >> is he talking about one hour martinizing? that's what i like one hour martinizing when you go to the cleaners. i don't like that overnight -- >> you should just get them pressed. >> you can't do that if you do "mad money." this group he's putting on, i was giving -- >> not putting them on >> he's not putting them on. >> in terms of actually having the four director seats. >> i think he raises a lot of good points. the 8% money at a time when you walk outside and someone is throwing 2% money at you, and
9:39 am
don't forget, david, one thing i learned from you of all people is that if oil goes down, oxy could be in a jam. >> we got to keep a close eye on it. >> we do halliburton cut 8% of the workforce. the drilling -- they're getting so good at drilling. she paid a pretty penny for anadarko. >> they need to execute quickly to justify to their shareholders, i think this is the right move we know how aggressive vicki hollub was in pursuing it. >> chevron, a signed deal, of course that was one of the more interesting transactions that have taken place during the course of this year without a doubt. we'll see. >> chevron is maybe the best oil company. i did a little homework on that you are supposed to say, i love you, jim, but chevron is not that good. >> i don't necessarily disagree
9:40 am
with you >> you don't love me mike worth is so good, the balance sheet is to great. they noknow the permian she intervened and that better start producing immediately. we want synergies. they have to fire everybody. >> there may have been a lot of fat at anadarko. >> there could have been. >> corporate plane was used a lot to go back and forth between california and houston >> did they have a corporate -- a plane right behind >> they had a trail plane -- >> there is a trail -- when i say trail plane, what am i talking about? >> mje >> i think that -- >> defining story strangely after everything, that ends up being the defining story. >> sure. larry culp, tusa did not write anything negative. i'm trying to get my arms around that >> indeed. today was -- who knows still early. >> it is early >> he tends to do them early getting ready for 3m.
9:41 am
>> couple companies we talk about and worried about regarding their supply chain exposure to countries like china, hasbro and stanley black & decker are belying that thesis today. >> i love the fact that hasbro was switching so quickly if you go back to ray dalio, the comments he made at the beginning of the year, there was a sense that china could hold us hostage, stanley works is doing everything he can to make sure it is not. stock is up 8. that's a good call hasbro, 60 to maybe 50 stock's up 7 if you say the magic words you're moving away from china, people go nuts with your stock love it. >> can we put up a long-term mattel and long-term hasbro? sometimes it is good to step back and remember that management does matter and that execution does matter mattel was once twice the size of hasbro. 20 years ago, they were trying to buy, mattel had a series of
9:42 am
ceos, hasbro had a much more directed sort of understood strategy and i don't know if we have it, but it is very telling when you look at the comparison of these two companies over the last ten years. >> they own all the factories, they had tremendous costs and hasbro meantime switched costs, became much more -- became toy light and game oriented. pretty amazing i like that. management matters. >> it does >> management in united technologies matters greg hayes wow. he doesn't -- i don't want to know if i want to work for greg. i don't want to work for greg. >> i think it will be okay. >> he's tough but fair tough but fair. >> that's good >> tough is no good. just tough like philadelphia tough. >> that's all we have. >> i'm seeing the eagles later this week. tough. meaning, you know what have you done for me last 30 seconds. not even the last game >> we got to 2996.
9:43 am
didn't crack 3k. to bob pisani. good morning, bob. >> nice start to the day great earnings, great guidance the guidance is the key. we're not getting guidance armageddon like a couple of weeks ago. united technology raised, kimberly-clark raised, lockheed martin raised. whirlpool, higher eps and increased prices all the numbers better than people expected. look at all the companies. all trading to the upside. and this is why the market traded up here, you see lockheed, whirlpool down a little bit here, that's a surprise here. everything eltrading to the upside a fifth of the way through, 105 companies reporting so far 75%, beating on growth -- earnings the key story is earnings are flattish no earnings recession that is developing that's the main story right now. key story today, i think after the close, texas instruments, big seller in china, that's been
9:44 am
doing very well recently remember, taiwan semiconductor last week, very positive comments on hopes for 5g sales increasing later in the year elsewhere, i talked about the retailers show descent 40% down this year macy's, 25, kohl's, jcpenney, all the department stores are collapsing and many of the apparel companies are doing horrible as well express, chico's, gap down overall. what we're seeing is the slow descent in key retailers here, brick and mortar little known negative sales growth is the real problem for most of the stores they can't open any more stores. the costs are going up for most of them. no clear path to growth for most that's the problem overall a small group doing better some of the discounters, we talk about why target outperforms, why costco outperforms, ross stores outperform.
9:45 am
discounters in 2019, they're all doing a little better. they can grow. this is a small group that can grow they can open stores they're the ones that are outperforming. on top of that, a small group of online retailers in 2019 doing well you have your chewy, great ipo way fair doing well. etsy, online, don't have a lot of brick and mortars, you can expand your audience, then you're doing fine. but it is a pretty small group maybe a dozen, maybe 15 to 18, exceptionally outperforming, risk of retail, brick and mortars having a tough time of it back to you. >> thank you very much, bob. to the bond pits check in with rick santelli in chicago. good morning, rick. >> good morning, carl. rates are kicking up just a little bit couple of basis points on pretty much all maturities. let's call it a parallel shift up two basis points. i wish i could tell you it was because of the budget deal don't you all find it so charming that we find such
9:46 am
compromise when both sides want to spend more money. one week of 10s, you can clearly see we have come down and we are going sideways really, if you wanted to see some bolder action, we need to close above 214 on the yield or close below 195 on the yield probably we're going to test the upper end of that range. look at one week of bunds. there is a bit of a difference here if the last chart was a ski slope, kind of go down and slow down would be gaining momentum on this chart if it was a ski slope. definitely bunds are getting within reaching distance, once again, of the all time low yield close minus 40 basis points. i have a feeling that will be extending in the weeks, months and quarters ahead get ready for ecb meeting, whether it is this one, the next one or christine lagarde takes over november 1st, no matter how it turns out, one thing i think we know for sure, more is coming if we go back to the u.s. and look at the yield curve, i
9:47 am
purposefully pulled this out to a two-year chart the reason i did that is so the scaling would show you exactly how flat it has been towards the end of last year and all of 2019 thus far but notice the far right, the last five weeks or so, much bigger choppy ranges that's usually a sign something will move, so i'm paying very close attention. if that spread gets above 28 or below 17, probably look for bigger follow through and finally, the star of the movie today, the dollar index, look at it, just zooming on that one week chart, if it were to close here, highest close since june 18th carl, jim, david, back to you. >> rick, thank you very much "squawk on the street" is back after this. dow is up 101. don't go away.
9:48 am
9:49 am
9:50 am
>> boris johnson set to become the new prime minister succeeding theresa may. >> i renew the mantra of the campaign just gone by in case
9:51 am
you've forgotten it. you probably have. it is deliver brexit, unite the country and defeat jeremy corbyn that's what i'm going to do. some wag pointed out, deliver, unite and defeat was not the perfect acronym for an election campaign because it spells dud they forgot the e, my friend, for energy i say to all the doubters, dude. >> dude. pound when positive, make it end, make the thing end. >> thank you i talked to a couple of executives this morning and they said maybe we'll get a conclusion so this is not all we talk, to the point maybe they told the iranian guys we'll get back to you. take the ship. we'll get back to you when we solve this problem, greatest navy in the world.
9:52 am
we need to get past this will is sick of them. >> that's it like when cronkite -- >> tett offense. >> lost cronkite, lost the country. you're done. >> stock trading with jim is after a break. (vo) the hamsters, run hopelessly in their cage. content on their endless quest, to nowhere. but perhaps this year, a more exhilarating endeavor awaits. defy the laws of human nature,at the summer of audi sales event. get exceptional offers now.
9:53 am
(indistthat was awful.tering) why are you so good at this? had a coach in high school. really helped me up my game. i had a coach. math. ooh. so, why don't traders have coaches? who says they don't? coach mcadoo! you know, at td ameritrade, we offer free access to coaches and a full education curriculum- just to help you improve your skills. boom! mad skills. education to take your trading to the next level. only with td ameritrade.
9:54 am
here, hello! starts with -hi!mple... how can i help? a data plan for everyone. everyone? everyone. let's send to everyone! [ camera clicking ] wifi up there? -ahhh. sure, why not? how'd he get out?! a camera might figure it out.
9:55 am
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. >> kimberly clark raised organic growth this quarter. this is a stock that's been hated all the way, continues to be hated because it doesn't have blowout numbers. think boult thaabout that, justd solid company. it just works. >> what happened to criticism of package companies not inventive, too big. >> kimberly does lack for in convenience. strong organic sales growth, people like their product. it's a strong brand name you have companies that percolate, clorox didn't do that
9:56 am
good, it's going higher. proctor is on fire what happens jay powell, i'm urging jay powell to look at -- jay has got -- jay has got to get on the golf course immediately. >> business too good. >> lockheed martin he can look and say lockheed martin needs a rate cut now. yesterday. yet. >> your must for mr. powell. >> brexit. he's got brexit. he's got to be ready. >> cross-currents. >> everything has slowed down a little but not as much as ray dalia predicted when he said something that made me shutter. >> three hits this hour from you. >> because i'm a kind man, a good man, said by the way apocalypse now, dennis hopper. it's important to point out we revere people, it's not fair people put their pants on one leg at a time. they get up typically after i do. >> that is all true. very few superstars out there.
9:57 am
>> brian goldner, hasbro remember, he told you to buy the stock last quarter daymond john, i want to ask about wearables. you know what i want to ask about, niche is he a buyer of the other kind of burger. i'm dropping faux meat, it's too pejorative. >> we'll see you tonight. >> robert mitchum, the other white -- >> that's right. >> i'm going to be the robert mitchum for beyond meat. >> dow up 75, "squawk on the street" stins with the chairman of coke. don't go away.
9:58 am
9:59 am
10:00 am
welcome back to "squawk on the street," i'm diana olig with breaking news from realtors. existing home sales in june down 1.7% to seasonal adjusted. that's a slight miss, street looking for 5.31 sales down 2.2% year over year, and that is the 16th month of declines analyst calling that very frustrating given market
10:01 am
conditions median price up 4.3% year over year and that is an all-time high although not adjusted for inflation. gains had been decelerating in prices, now accelerating again gains up but seeing bigger now because of low supply. inventory, there was no gain at all. we had been seeing inventory gains, a supply of homes for sale 10 months unchanged in june that's what's putting pressure on prices. again, a miss on existing home sales down 1.7% month over month. carl. >> thank you very much diana olick. good morning, everybody. welcome back to "squawk box. we had a pretty good open. dow was up 100 points, almost got to s&p 5003k settling back a touch. earnings are a big story pretty good. >> roadmap for the hour starts there. earnings rally, a boost from coca-cola and united technologies we'll break down the numbers for you. >> the art of the budget deal. what this two-year deal means
10:02 am
for investors. >> in just a few moments we're going to hear from ceo of coca-cola on that company's earnings as we said, stock up strongly this morning. >> speaking of coke, got some big earnings movers, three dow components report today, coke, utx beating estimates in aics maked bag for travelers. earnings fell a bit short but revenues ahead lockheed, hasbro, biogen beating across the board harley the outlier cutting motorcycle shipments and operating margin we did, in fact, coke had its highest gap up on earnings since 2015. >> yeah. haven't seen a move like this. also haven't seen 6% organic revenue growth from coke they up their organic revenue forecast we'll talk about it soon with the chairman and ceo but i just notice a little trend there on the guidance despite the gloom and doom over the global economy, whirlpool raised last night. lockheed martin raised guidance, united technologies, kimberly
10:03 am
clark and coca-cola. >> biogen. >> they have individual stories here, pricing and invasion, technology has its own set of factors but i think that does push back on so much uncertainty around tariffs, companies aren't going to know what to do or how to forecast their business. >> right why we're having that conversation with jim the fed chair wants to tone it out, go to the golf course and not necessarily listen to diseasent if not good earnings report. specific to coca-cola, which you cover closely. pepsi had a good quarter is there something across the board we can read into or separate situations. >> they aren't totally separate. what i would say is you're seeing especially in household products and beverage categories a newfound growth. i think it's a number of factors driving it new leadership both companies do have new ceos. they have instilled a new sense of urgency and better execution
10:04 am
in certain items increased marketing brands on brand pepsi, brand coca-cola that was a common theme in both quarters there's new ininnovation speaking of talk to the man himself. shares surging one of the dow stories of the day earnings beat and revenue guidance raise james quincy joins us from atlanta. first on cnbc, chairman and ceo of coca-cola welcome, james, nice to see you. why don't you tell us in your own words what's driving the growth at coke now and the better outlook. >> yeah. we had a great quarter, actually i think that the big story is that this is another quarter of growth on an improving trend of momentum we're now getting multiple years of good growth rates really the numbers are probably more like a multi-year growth. i think it's a sign that the transformation of our business being more consumer centric, more innovation and marketing led and being faster and more
10:05 am
nimble with our bottling partners on executing is really bringing together increased momentum across the global business system. i think it's very heartening for everyone that works in the coke system. >> i mean, we see it in the share price reaction up 5% as carl mentioned the numbers were a lot better than expected. the stock has underperformed the market this year, pepsi this year, what did the street have wrong? >> i think in a way we at the beginning of the year, came out to guidance you were just talking about the macro environment. we saw some clouds on the horizon, too, but the storm never arrived. by sticking to our plan, by executing against our strategy, we've been able to deliver stronger momentum than we were expecting. that's why it's allowed us to raise our guidance for the full year expecting a 5% or kbang revenue growth in the full year. clouds are still there but the storm doesn't arrive so we're going to stick to our strategy, focus on executing, and really
10:06 am
drive for a better underlying operational result for the year. >> talk about what you saw in different markets in terms of the balance between pricing and actual unit growth or volume growth and what that says about underlying demand. >> i think what's really, really encouraging for everyone is the fact we're getting a good mix of volume and price this quarter was a 3% unit volume growth. the average of the last four quarters has been two. average of the last four quarters of pricing has been three. really we're getting into the sweet-spot of balance of volume and price, which is really symbolic of the fact there's a tremendous opportunity ahead in the beverage industry. ultimately commercial beverages have a tremendous growth particularly in the emerging markets where 80% of the world's population lives and only a quarter of what they drink is a commercial beverage of any sort. there's a massive runway ahead of us. i think our ability to find a
10:07 am
sweet-spot of volume growth with price driven by the marketing, innovation and execution really sets us up for sustained long-term momentum. >> what about in north america specifically where pricing is obviously a bigger growth driver than volume growth is that we're going to get used to smaller packages and that's going to be the norm, or can you do anything to lift those volumes. >> we're really focused in the u.s. on driving our business through transactions so we have been bringing down some of the package sizes as part of our overall effort to grow our business and reduce our calorie footprint. so really in the u.s. we're looking to see the balance of the revenue growth driven by a little bit more price and package mix and brand mix. volume, of course, we'd love to see a little bit of positive volume, but we think that sticking to our strategy is going to help us reengage very
10:08 am
constructively with consumers well into the future so we're seeing household penetration of our brands growing, interaction with the brands growing, and, importantly, we're seeing growth both in the sparkling beverages and some of our premium stills beverages. setting ourselves for many good quarters to come. >> let's go through the portfolio. coke zero, sugar, start there, another quarter, another double digit growth is this another diet are diet drinkers going to coke zero sugar, what is it about this product >> it's three things it's some diet coke consumers coming over. generally that's not the biggest source, because people are super loyal to diet coke some of the people are going from coke, as they want to balance things out they maybe have a coke, coke classic and coke zero sugar, coming from coke and coming in from other categories. coming in from that sparkling
10:09 am
water categories, coming in from other sparkling categories really the sources of growth of coke zero are broad-based, which also gives us a lot of confidence that we have a lot of runway ahead for this brand. >> i did see in the release a shoutout to big coke stranger things you did, new coke, orange, vanilla. how do you turn up the notch on innovation where you can get products out there that younger consumers are interested in? >> well, i think it's that trying to find the sweet-spot of engaging with them on something that's relevant, whether it's a new flavor, like orange vanilla, which had kind of a whimsical marketing campaign behind it between the two guys that kept appearing at basketball games, in the smaller cans or different market approach like integration of new coke into the latest season of "stranger things," which is, of course, a super hot
10:10 am
program for teens and adults really finding ways to gain reconsideration. sometimes you come in on the moment of reconsideration and you stick with the franchise in one of the different barriers but it's about that constant need to reengage with consumers because there's so much choice out there, so much competition, it's about sticking with them and staying relevant. >> what about coke energy? i saw that you shared that it's doing well it's available in more markets you won that arbitration against monster. some people, investors are wondering what that's going to do to your stake in monster and whether you need to be there if you're developing your own product competitor. >> obviously we've got the arbitration, launched coke energy we absolutely think there's room for both we've got a great partnership with monster it's created a lot of value. they have created a great business and a great brand and we've helped them take it to the next level monster is growing we see a lot of future for that. we see coke energy playing in a
10:11 am
different space, being a more inclusive brand, a softer flavor compared to some of the other energy drinks. the early days, still early days, shows it's attracting consumers from outside the energy category, also nonmonster consumers of energy predominantly. so we really do think this is a complimentary approach for the coke system and will work for our partners, too. >> just wanted to go global with you a little bit asia has been a big story and growth driver for you. how do you balance what you're seeing in consumer spending across asia particularly china with weaker economic numbers we're getting out of the region? >> there have been some headlines softening but still growth in the region what we've seen is continued consumer demand across a broad range of consumables including beverages. i think some of the higher ticket item categories, durables, have been a little softer in china.
10:12 am
but in consumables, we see continued strength ultimately for the long-term growth trajectory of the coke system we see china, asean countries, indian and africa as four real large opportunities to extend out our growth into the future. >> your native uk got a new prime minister today, a brexiteer. what's your expectation right now as someone who does a lot of business in this country about whether there will be a brexit deal before october 31st or a crash out of europe? >> i wish i knew the answer to that question. firstly, congratulations on boris for becoming prime minister i'm hopeful that we will get some sort of negotiated deal ultimately to bring this all to some sort of conclusion. i have my own personal points of view i think most importantly we need resolution of the uncertainty in
10:13 am
the least disruptive way possible. >> yes you've said that before. currency was no joke again nine-point currency headwind for earnings per share do you welcome a rate cut from the fed chair at next week's meeting? >> i mean, i think whether he comes up with a rate cut or not, what we've definitely seen is some more stability in the foreign exchange market. there was a big strengthening of the dollar coming out of the summer last year but since then, since the third quarter last year, from our perspective, the dollar has been relatively stable it got a little bit stronger over the last 12 months but basically stable from our point of view, seeing that stability continuing to the future, whether the fed comes down a little bit, you're going to have to balance that against whether the ecb starts pursuing more buying or not ultimately it would certainly suit us to see the stability we
10:14 am
have now continue into the future. >> and finally, hard turn from fed easing to alcohol and cbd. wall street wants to know where you are on both. we're going to get an alcohol product in japan how bullish are you that could go beyond japan and cbd. what's your latest thinking in terms of experimentation. >> well, in japan the alcohol drink we have there is a very japanese logic we face full range of competitors from soft drinks to spirits to beers to all sorts of other things selling the same customers, same customers for the same occasion. so the drink there is very specific to japan and not projectable globally cbd there's absolutely zero change in my position, there's nothing happening. >> okay. keep us posted on that one james quincy, always a pleasure having you on earnings day. >> thank you. >> thank you ceo, chairman of coca-cola.
10:15 am
>> when we come back, the budget and debt ceiling deal is sealed but our next guestthinks it might be the worst budget deal in history we're going to explain that. as we go to the break, look at the top performing names on s&p. coke hits all time high going back to ipo in 1919. we're back in a minute with tough food, your dentures may slip and fall. fixodent ultra-max hold gives you the strongest hold ever to lock your dentures. so now you can eat tough food without worry. fixodent and forget it. - stand up if you are first stand up if you're a mother. if you are actively deployed, a veteran, or you're in a military family, please stand. i will tell you this, southern new hampshire university can change the whole trajectory of your life.
10:16 am
wiswitch wireless carriersn bring in your own phone, and save hundreds of dollars. it's pretty much the easiest way to save since sliced bread. sure is. because savings is as savings does. and sometimes you've just got to stop and smell the savings.
10:17 am
i'm sorry, i think you mean roses. oh right. you need to stop and smell the roses of savings. bring in your own phone, switch to xfinity mobile and save hundreds of dollars a year. now that's simple, easy, awesome. get $100 back when you bring in an eligible phone. click, call, or visit a store today. white house and congress
10:18 am
strikeing a two-year budget deal our next guest says it may be the worst in history maia mcguinness. nice to see you. >> nice to see you. >> nobody listens to you nobody listens to your warnings, not a senator, congressman or president. what do you say now snf it's discouraging fiscal responsibility and recklessness keeps on going. you're right i think the problem is fiscal responsibility versus partisan giveawa giveaways. in is a process where they are so eager to fight it between the parties. the only bipartisanship you see is i'll borrow for my priority and you borrow for yours obviously, not to mince words, i can't remember a time when the fiscal situation is this bad the economy is strong enough we could be accommodating sensible policies and congress got in line behind a terrible deal to
10:19 am
do something as fiscally reckless as it appears they are about to do. >> i can remember the strong economy of the late '90s where we actually were generating surpluses and people talking about the national debt going away we're going in a different direction. biff me the numbers. we're looking at the national debt the debt perspective right now and what it would mean if we saw meaningful increases in interest rates in terms of the budget. >> here we are the debt relative to the overall economy is the worst it's ever been in this country other than one time just after world war ii right after that the debt came down we are on track to borrow well over $13 trillion over the next decade this debt will continue to march and become at unprecedented levels trillion dollar deficits as far as the eye can see as you mentioned when the economy is strong in the past we've headed towards budget surpluses. here our borrowing is growing so interest payments in the budget are the single fastest growing
10:20 am
part of the budget right now we are on track so next year we'll spend more on interest than we do on children. in five years spend more on interest than we do on defense and as you said, highly leveraged, highly vulnerable if interest rates were to go up 1% of gdp, that would increase our interest payments by $190 billion a year so what does congress do it used to be that also when they increased the debt ceiling the boehner rule was you increase the debt ceiling for every dollar you increase it, you decrease spending by a dollar here we are with a bunch of people about to support a deal that increases the debt ceiling and increases the debt at the very same time possibly to the tune over the next decade of as much as the tax cuts cost in the trillions of dollars so we are -- it's just as though all constraints have been cast away and nobody is focused on the nature of the long-term health of the country anymore. >> but can you blame them, maya?
10:21 am
interest rates have not gone up, they have gone down. central banks around the world are embarking on new easing. we're going deeper into negative territory in europe. that helps pull down our rates we have a fed chair that wants to keep the expansion going for as long as possible. we've still got the reserve currency in the dollar so everybody is going to want to buy our debt and buy our dollars for a long time. i'm not saying none of this could end or there couldn't be a day of reckoning, but it's hard to see how to get political will and urgency when all of these factors are at play, which can keep the debt going. >> let me start by saying i absolutely can plame them for serving as terrible stewards for the country. this is a bipartisan abdication of responsibility. of course we should hold our politicians accountable. what they are doing is opting for short-term political gains instead of long-term responsible choices. we all know you need tohave a budget in place. we do not. we all know you can't borrow recklessly and endlessly, you
10:22 am
can't borrow towards prosperity, yet we're moving forward on that the fact interest rates are so low both means we're in a situation to get control of this it also reflects pessimism about the long-term growth in the country and actions of central banks that we're not quite sure how to handle going forward. but just because you're a college student with no income and a credit card company offers you a credit card, it doesn't mean you should spend up to the limit all the time right now the u.s. has the luxury of low interest rates we should take advantage of that to help fix this fiscal situation rather than wait until tomorrow when the cost could be -- could show up in so many painful ways we really are leaving ourselves immensely vulnerable to a situation that cannot continue. >> maya, always good to be hear from you. >> sorry to be so negative it's astounding at a time when we should be having decision makers really getting ahead of these problems, they are just so willing to constantly take the cheap, easy way out. >> it's not really astounding is
10:23 am
the thing. >> more common. >> what we expect from political leaders these days maya, we'll see you soon thank you. >> thank you. >> meanwhile the markets reacts to the news of that deal and stocks gaining on earnings joining us to discuss today is chief investment strategist brian nick and rbc capital markets tom per celli. good to see you guys how do investors process this long-term doom-like scenario that doesn't seem to be anywhere near us. >> from our perspective, i think everything the prior guest talked about is spot on. deficits are only going to get worse. i've said this many times on this channel, that's just a demographic reality. so until -- i think you made the right point. it's not surprising because this is exactly how politicians tend to focus on his. once it's right on their back side they will do something about it until then i don't see any political will to get anything done from an entitlement perspective in the united
10:24 am
states let me be clear, i'm not making a value judgment whether it is that's right or wrong, that's the math the math is going to blow out the deficit. >> the optimistic take this becomes a political problem before an economic problem, politicians are forced to deal with it. my take is we're not going to have the moment of reckoning where we have fantastic explosion in the treasury market with the dollar but the debt load will become so large it will crush a lot of the other types of investments and returns on investments they are making what we tell investors to look for, not the day with the big panic moment, but look for returns you're used to get grinding lower and lower over time. >> whether it's education or space or whatever else we want to do, other things will suffer. shorter-term, do you think we might be hitting peak evaluation on equities. >> if we haven't already one of the ways we tried to further bum out our base, after
10:25 am
the first half of the year everything up in terms of cash, stock market reflecting more rate cuts than we get from the new york fed, from the federal reserve. earnings growth is going to be tough to match those executivations especially for next year. that means whether things turn out unexpectedly good where feds don't have much multiples are probably threatened at this point. >> i get that the debt bomb is growing and ticking and worrisome, but in the near-term we're going to get another big round of spending. isn't that positive ultimately for gdp? >> it is you have to break it down. in the medium to long-term it's a problem. this sort of debt issue. but in the immediate term, i love where we are from an economic perspective we've been saying this for a long time. this is easily 2 1/2% year, probably 2, 2 1/2% next year the economy is clicking. the consumers have never been in better shape we're not looking for a recession in our forecast horizon, we simply do not see
10:26 am
that here we are with fed about to cut rates. here we are. no question in the immediate term, it's hard to find any significant holes in the u.s. backdrop. >> you just said with the fed about to cut rates as though that's not something that could happen >> we don't believe in cuts right now. make no mistake, they are going to cut we're not forecasting that i'm simply saying we still struggle to find the justification for why the fed would go through the effort of cutting rates at this point. again, it's sort of a moot point at this stage. they are going to do it. >> how many? >> we think 25 in july and another 25 built in for september. >> really? you don't think they can do one and say that's all you get >> again, if you're asking me what i think they should do, i think they should do nothing if you're asking me what they will do, you know, i think they are asked to do two so i think they will do july and september. >> on valuations i'd like to come back to you today strong earnings day. guidance moving up for a lot of major corporations yet you think we're at peak valuations.
10:27 am
>> i do. the problem isn't 2019, proper expectations for earnings. 2020, 11%, 12%, looking for half that those negatives have to kick in next quarters. 2020 is not as fantastic as consensus currently expects. so even if we can maintain the multiples, it's going to be a tougher climb just to get to higher and higher levels, higher all-time highs on s&p for the next quarters. >> brian, tom, thanks, guys. good to see you. >> thanks for having me. >> along those lines global growth downgraded, fourth time ins cutting the forecast for growth in the last nine months now sees 3 downtown 2% growth for the world economy this year, that's downtown about .1 from april. on the downsidish the u.s. is looking better, expected to grow 2.6%, a bit of this first half momentum goes under 2% growth into 2020. so why the lower expectation global well, the cuts really coming from emerging markets. imf trimming .2% growth.
10:28 am
mexico, brazil, both getting cut. in a report the fund calls global growth sluggish and precarious and says some of it is self-inflicted pointing the policy on certainty like u.s. china trade tensions and higher odds they say of a brexit no deal crash out of the eu so what could happen on the plus side if the trade deal is reached between the u.s. and china. i did ask imf economist who is the author of this report and here is what she says. >> we see trade tensions as one of the biggest risks to the global outlook going forward in fact, if there were an escalation of trade tensions to include all of u.s.-china trade, that plus the tariffs in place would shave off about half a percent from the level of global gdp in 2020. so this is quite substantial and something that has to be avoided. if there is a deal that rolls back the previous tariffs, that will have a very positive effect
10:29 am
in terms of market sentiment, business sentiment and that certainly helped raise growth. >> imf chief economist saying half a percentage growth of global growth will go off if u.s. and china do through with tariffs on everything. on the plus side it could be good for economy if they reach a deal hurts emerging markets a lot more than us because u.s. outlook improves. >> we are a consumer led economy. when we return, boeing is rebounding after receiving negative outlook from fitch and moody's. we'll hear from consumer ead tir ralph nader on troubles ahofhe earnings tomorrow more "squawk on the street" when we return.
10:30 am
10:31 am
10:32 am
welcome back, everyone i'm sue herera cnbc update. brexit headliner boris johnson is the uk's next prime minister. he easily defeated jeremy hunt in a ballot of conservative party members. he will be installed as prime
10:33 am
minister tomorrow. >> to all the doubters, dude, we're going to energize the country, get brexit done, take advantage of the opportunities it will bring in a new spirit of can do. >> a puerto rican judge has issued search warrants of phones tied to officials of controversial discussions that sparked political crisis clashes between police and protesters erupted last night as the embattled governor vowed to stay on. back at home the ongoing measles outbreak is continuing to spread, 1,148 cases that's the update this hour. carl, i'll send it back downtown to you. >> thank you very much time for etf spotlight take a look at semis. coming off four-day win streak and continuing higher.
10:34 am
broadcom, xilinx, a record close. intraday high as we get earnings from texan last night after the bell, intel later in the week. there was discussion about qualcomm and whether apple does buy this intel chip maker, does that sort of jeopardize their longer term agreement. >> it's a possibility certainly, although the agreement they did sign was an important moment for qualcomm having resolved that litigation qualcomm has issues to come in terms of ftc, that judge's decision overturned in terms of what's going to happen with the ftc. >> when we return, former presidential candidate ralph nader on why he thinks boeing should permanently ground their 737 max jets take a look at the dow leaders right now. dow is up 77 points. it's an earnings-driven story. coca-cola and united technologies on top adding about 30 points to the dow's rise.
10:35 am
also strong, american express, dow and travelers off earnings is the biggest loser we'll be right back. 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. ♪ - when i see obstacles, i create opportunities. (soft music) - when i see adversity, i find a way. - when i hear never, i say now. - [announcer] southern new hampshire university is education made to fit your goals with over 200 degree programs,
10:36 am
flexible class schedules, and some of the lowest online tuition rates in the nation. (cheering) - so when i face barriers, i can break through. - [announcer] breakthrough at
10:37 am
dow is up a little over 90 points boeing contributing to the rally, rebounding after receiving that negative ratings outlook from fitch and moody's ahead of earnings. waiting for answers on the grounded 737 jetliner. meanwhile prominent consumer advocate ralph nader stepping up pressure on the company calling boeing's board a, quote, collection of highly paid rubber stamping puppets in a recent letter to s.e.c. chair jay clayton. ralph nader is with us now welcome. tell us a little about your campaign against boeing. are you going after the board, against the plane? what exactly do you have in
10:38 am
mind >> well, boeing has been mismanaged for years a cell phone engineering company into a concern for investment, for share values, for compensation for its executives. that led to the wrong decision, instead of building a new plane, which they planned to do in 2011 they hoped up the 737 max. the chief didn't require pilot training they didn't notify the pilots, airlines or faa of critical information with the software it was designed to fix the instability, the basic prone to stall instability of the 737 max. that's why i and others like the professor who just put out a seminal report on the connection between boeing's investment and ignoring its engineering requirements have asked for the resignation of muhlenberg and
10:39 am
his officers and board of directors. if muhlenberg told the board of directors only the little bit he told the pilots, airlines and f faa, he's in trouble if he told more than he told faa pilots and airlines, they are both in trouble. so i think the leadership of boeing, notwithstanding its stock value now, which i think will go down to 200 within the year, the management has disinvested in new plane research development and production in order to beef up the executive compensation, their share price and all the other things that boeing would never have done, including overruling his own engineers warning about the instability of the 737 max. >> ralph, you've done a number of these crusades offense your lifetime going back to the '60s
10:40 am
and getting the traffic law passed is this different because this is personal for you? i believe your niece was involved as a victim in one of these crashes. >> of course it's more urgent and more heart wrending and we want to make air travel safer you can't put 5,000 more 737 maxes up without assuring the traveling public and airlines of safety i've seen some of the senators and representatives who are supposed to be investigating this congress is in slow motion, a lot more investigation the senate hasn't even demanded boek testifies yet they are waiting for the lions air report we're trying to get house and senate, transportation commerce subcommittees to get moving here they need to get boeing on the stand, so to speak, demand full
10:41 am
certification of the 737 max that's the next frontier of demand aviation safety consultants and by members of congress full certification, it's a new plane. they can't say it's just a little bit changed from 737, 800 n dpch ng or other series. >> to the point you made 737 should never fly again, why don't you believe boeing when it says it can fix the software or faa. there's clearly going to be a lot of scrutiny on this software fix. they are taking their time in doing so they are the experts here, right? why would they put a plane in the air that would be dangerous after those two crashes? >> because they are stuck in their bad decision there a career conflict now against the interest of the boeing corporation itself but muilenburg, the ceo and board of directors. they can't change course the problem is they made a very
10:42 am
bad unstable design decision with the 737 max that's been criticized by many aerospace experts, by ex-boeing people they have just got to take their losses you can't have a complex software system that tries to anticipate millions of configurations and expect it even if it doesn't have glitches and stitches and expect it to guide the pilots the pilots are in charge of the plane. you can't have software with a potential to overpower the pilots and take the control of the plane from the pilots themselves so you would think in the interest of boeing, i have made this point to senator wicker and others, that even if they just want to stand for the interest of boeing, they have got to have tough love here. they can't mess around with the current management and the trajectory to disaster they cannot afford one more crash, sara, never mind two or
10:43 am
three, even in the next five, ten years that's due to ignoring preventible aerodynamic design. >> obviously boeing would agree with that. ralph, you talk about taking their losses they have had no orders on this model for three months who knows when they will get another. they have taken a huge charge. so what needs to happen now separate from management can the plane be fixed do you think it has to be renamed? they are not just going to put this thing in the trash can. >> the plane cannot be refixed it has to be recalled and grounded whatever they do with it in terms of taking these engines off or reconfiguring it to a more stable plane, they are pretty good at all those adjustments, that's what they have to do otherwise we put all our marbles in one major monopoly in this country, competing with airbus this is what happens when you only have one production of
10:44 am
these large passenger aircraft and they can't afford to make any more mistakes. i think that the faa has got to start regular reducely investigating under the new head who is about to be confirmed by the senate, steven dixon from delta, and the other investigations have to proceed before any decision is made on ungrounding the 737 max. that is the criminal probe by the justice department, the studies by the national transportation safety board, the congressional inquiries, et cetera not to mention all the civil aviation agencies all over the world. you can't believe, sara, david, carl, you can't believe what's going on behind the scenes here. you have enormous tensions between boeing suppliers, boeing's customers how much of the boeing plane is going to continue and be labeled aircraft upcoming competition for narrow
10:45 am
body passenger planes like 737 from japan, from china, from brazil, all of these things are coming in. how much discounts are going to have to give the airlines because of the delays, the lawsuits with the airlines, the lawsuits with the victim these stock analysts are living in a cocoon thinking that pog in is going to bounce back on this. it's not going to happen what we've got to do is separate mismanagement from the future well-being of boeing and aerospace travel and safety in the future. >> ralph nader, thank you for joining us as you continue this pursuit against boeing i want to mention i did reach out to the company and got a statement from boeing expressing sympathies for families and loved ones who died on the crashes saying safety is our first concern as we look at the max in service. dow is up 90, s&p 2993 be right back. [ dogs barking ]
10:46 am
10:47 am
what about him? let's do it. [ sniffing ] come on. this summer, add a new member to the family. hurry into the mercedes-benz summer event today for exceptional offers. lease the glc 300 suv for just $419 a month at the mercedes-benz summer event. going on now.
10:48 am
one top strategist says a pull barch is imminent but investors should buy any dips. more "squawk on the street" coming up.
10:49 am
welcome back to "squawk on the street," rick santelli live on the floor of cme. i'd like to welcome my guest, brian weinstein. brian, thank you for joining me. let's get right into it. in order to understand our interest rates, we need to see what other central banks do. our meeting next wednesday ecb meeting next week. what do you expect out of the ecb. >> the ecb has to ease we're in a global easing cycle everyone is doing a little bit seems like they will move maybe 10 basis points, maybe some in the language i don't think that act in particular is the crucial one but with china easing and ecb
10:50 am
easing and other countries around the world about to join the party, i think you'll see more language about easing in the future >> now, when we see it ease, where this meeting or september for ecb, when you and easing co in china, australia, japan, it does affect our rates, especially the long-end rates, does it not, brian >> there's no question we see at morgan stanley investment management more and more demand for fixed income, which seems crazy given how much interest rates have rallied. but as you point out, our interest rates look meaningfully high the curve is flat, so that limits some of the buying, but you see it in credit and high yield. there is no question that global interest rates being low impacts demand for u.s. interest rates as well. >> now, right now, three months to ten year, which is the moniker of, you know, giving us a glimpse of the economy down the road, inversion is a negative thing, whether you believe it's right or wrong.
10:51 am
right now that spread is about five basis points. if we ease 25 next week, even if the ecb does 10, that could have the effect of taking that inversion out, could it not, brian? >> it could. there's no question. and it will be very interesting to see the language of the fed because i think if the fed goes 25 and doesn't promise anything else, you could have the opposite effect. you could have risk markets be disappointed you could have the long end rally. i think the question is, is this the beginning of the fed resetting policy, taking out real insurance, hoping to create more inflation or prolong the cycle. and that could certainly steepen the yield curve, and we think it should >> now, i heard this phrase several times. intellectually defensible, with regard to using inflation is the trigger for this quarter point ease i personally doin't think it's going to make any difference to inflation. i think the fed is concerned about the yield curve. you finish us off in the last half minute as to what the motivation of the fed really is on an ease
10:52 am
>> a couple of things. i think they're using this as a pressure valve release all of the things going on in trade wars and tariffs and slowing growth everywhere. i think the fed sees this as a chance for insurance so i don't think it -- you can couch it that inflation hasn't hit the target you can couch it that growth has been too low but i think the bottom line is, as a risk manager, if the fed's job is to keep full employment and to keep inflation towards the target, easing rates here makes sense. because whether steepening the yield curve or getting business confidence, it all will help the broad economy. >> excellent brian, thank for joining us today. david faber, back to you >> thank you, rick rick santelli. let's send it over now to jon fortt and get a look at what's coming up on "squawk alley." >> jon >> thank you, david. amazon, alphabet, facebook we have the bulk of f.a.a.n.g. up for earnings this week and the question is, what do you have to believe about big tech to believe it's going to power higher, especially given what profit growth has been doing
10:53 am
lately we have that coming up on "squawk alley. 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. ♪ ♪
10:54 am
10:55 am
ceo of coca-cola, sarah's just getting started, right? >> correct >> interview this morning, but you have some big guests as well on the "closing bell". >> we have a lot coming up,
10:56 am
including earnings after bell. but we'll speak with tim hockey following yesterday's earnings and the surprise news that he's going to be leaving the company in february of 2020 or earlier, if they find a successor we're going to talk to the president of american eagle, the teen retailer that's going to start selling cbd products this fall and earnings watch, snap, visa, chipotle, texas instruments reporting kicking off at 3:00 p.m., we'll also have some fresh info from kimberly clark you should have seen those diaper numbers personal care up 8%. they are just squeezing more and more on higher pricing and getting lower costs on pulp and other materials. >> don't really need volume if you've got the pricing power >> that's been the story >> we'll see you this afternoon, sarah. when we come back, bradley tusk will join us and talk about ghashetrading at some all-time his t dow is up 90 and "squawk alley" starts in a minute just ok?
10:57 am
(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.
10:58 am
i felt completely helpless. trashed online. my entire career and business were in jeopardy. i called reputation defender. they were able to restore my good name. if you are under attack, i recommend calling reputation defender. vo: there's more negativity online than ever. reputation defender ensures that when people check you out, they'll find more of the truth, not trash.
10:59 am
if you have search results that are wrong or unfair, visit or call 1-877-866-8555. dto experiencer gthrilling performance. now, at the lexus golden opportunity sales event. get 0.9% apr for 60 months on all 2019 models. experience amazing at your lexus dealer. good morning it's 8:00 a.m. at snap headquarters in santa monica, california it's 11:00 a.m. on wall street and "squawk alley" is live ♪
11:00 am
good tuesday morning welcome to "squawk alley." i'm carl quintanilla with deirdre bosa i'm jon fortt. got to start with tech today and a rally in some of the big earnings names nasdaq coming off its best day in a couple of weeks, with the tech sector on pace for a record close. you've got names like facebook, amazon, alphabet and twitter all set to report this week and snap after the bell tonight where is the value in tech, as we work through this busiest week of earnings season? janice henderson's denny fish is with us toda


info Stream Only

Uploaded by TV Archive on