Transcripts For CNBC Squawk Box 20240622

Production for ten years and access to nuclear fuel and equipment for 15 years. Iran has to approve to the International International Energy Agency that it met it under the terms of a deal. Take a look at whats happening with oil prices. Theyre down by about 2 . This is coming because irans oil is expected to be coming back to the market. Thats putting wti at 5118. Not everyone is happy about todays news. Officials are condemning the deal. Benjamin netanyahu says it gives iran a surepath to Nuclear Weapons. Here in the United States congress now has to approve the deal and its expected to be a tough sale with many lawmakers saying they date of birthont think its close enough. President obama will make a statement on iran from the white house. Thats coming up at 7 00 a. M. Eastern time and we will bring that to you live when it happens. Our chief washington correspondent joining us on set to talk about all of this. This is a deal thats a long time coming. Many people thought it would not happen and we saw several deadlines missed along the way. How good of a deal or bad of a deal is this and how do we enforce it . Most observers agree its not a great deal. The question is compared to what . If you dont have a deal iran is relatively close to break out capacity for achieving Nuclear Weapons. This tries to slow that down. The alternative is to either allow that to happen or have a military confrontation, third option would be continuing sanctions for a longer period of time but the this president believes this is a chance to change the trajectory of this relationship and have a longer lasting effect on Irans Nuclear capacity with this. The interesting thing about congressional approval is they can stop it but they would have to override his veto. If they say no he could veto that measure. They would have to override that veto to stop the deal. So his odds are pretty good. An override is 2 3rds. How many . 290 in the house. So his odds of sustaining the deal are pretty good but he wants to get an affirmative vote which is going to be tough. Do you ever think i dont know if anyone thought the deal did you ever think it wasnt going to get done . Its quite obvious. The president kept trying to win over cynics saying i will walk away from a bad deal. Then he said 50 50 and then under 50 50. But thats the language. Nothing is a bad deal. I agree with you. He wants this badly so thats actually a burden for him in selling it if people look at this and say we know he wanted this so badly. There were reports that iran was cheating trying to get access to differ materials for Nuclear Issues as recently as a month ago. If thats the case why should any american feel secure with a deal like this . Not just americans but our partners in the region . I cannot touch for the verification procedures in the deal. First of all i dont understand them but i dont know what they are. But he has said unless this deal can be verified in its capacity to limit prevenn iran during the window to get a Nuclear Weapon and slow it down afterwards. Can you explain to the extent you understand how it works . What the ten year window is and five year window is and what can be done during that period . Iran is not destroying its nuclear facilities. Right. What its doing is moth balling them. Dismantling some components so they cant get further toward achieving a Nuclear Weapon during a ten year weapon. In return sanctions are going to be lifted on oil and financial sanctions. The Administration Says that if the verification procedures for seeing these facilities are moth balled are are violated they can snap back the sanctions. Thats a challenge. We dont know whether thats actually going to be achievable . Either the verification part or snap back part but thats part of how the administration is going to try to get these to congress. How quickly can we pull back from all of this if we get anxious that were not getting what we want . We can put back quickly. Is it just our decision or with the European Partners . Thats the other dynamic. Pushing the president toward embracing the deal. Their argument is if the argument is no deal means continued sanctions indefinitely, their argument is you cannot do that because you have is too many people that want to do business with iran that are going to back out of sanctions. That are going to stop supporting sanctions so you cant sustain that regime. Thats part of their argument. But the iranian people have had good thoughts at least the younger generations toward america. Do you think thats the case . How long does it take before those younger generations are in the positions . Thats part of the hope of the administration. This is a president that came to office saying what he wanted to do was have a different approach to diplomacy. The Bush Administration had 8 years. They didnt stop the Nuclear Program. The question was on the table, pushed especially by Vice President chaney do we have a military confrontation with iran . This one said no were going to engage and negotiate. He changed relationship with cuba and now he is trying to do this in a durable way with iran. Stakes are higher. This is a more dangerous region and a more dangerous particular situation and well see whether he can persuade people. What happens is not only right now with the rest of this administration but what happened with the new Administration Whether the tone or tener changes and what that means. Its an executive agreement. But theres people that said we cannot enforce what we can already do on issues. Someone else comes in and has tougher thoughts on these things it could change the entire tenner. A new president could with draw from this deal. So it is is it durable enough to out last his presidency. Is it too hard for somebody else to say differ approach to iran than president obama struck. Thats all of that is on the table and thats what this summer will be about. Thank you very much. Are you sticking around . I am sticking around. I got some political news for you. I hope so. Are you going to talk about the speech yesterday . I will talk about the speech but im really talking about john kasik who is the new entrant to the republican race next week. Scott walker was yesterday. John from ohio very intriguing politician, spent time in washington. Spent time as a Television Host on fox. Worked for lehman brothers. I know. Now into the race. Are you going to do a deep dive on all 19. Gives you something to do right . It does. Thats good. Everybody needs something to do. Some of them are more serious than others. How do you know . You have 19. Im looking at jeb, walker rubio. You have a lower bar than the debate then i can look at jim gilmore, the former irs commissioner who is running. Jim gilmore . I can make some thats what you call them right . No thats not true. Contrary to what i have been watching on some of these who have you said no to . I havent gone through the list yet but have not scheduled one with donald trump. Hes number two. Hes in second place. Hes the one guy i would. And you wont put him on your best seller list either. Thats cruz. Im confused. Have you done cruz already. I did cruz. Great one with cruz. I remember. Lets check on the markets this morning. Last i saw they were down fractionally. Thats what were seeing right now. Down about 7 or 8 points. Yesterday was interesting in that we maintained a 200 point up move even though everybody is saying wednesday is not a done deal with greece although its so weird that the austerity measures are worse than what tsipras initially rejected but he might have to go across the aisle which we never do in this country anymore but go across the aisle to get the deal done. Well see if it happens tomorrow. Giving back a little bit after a nice move as well yesterday. Probably will refocus at some point to see what starts happening over in china again. A lot of interesting pieces today that i have seen that this really does kind of have a lot of people questioning whether everything is is going as well as he hoped. This is a blot on whats happening in china. Heres whats happening with iran today with the deal being done. Threatening that at some point. Well see. But 51 today. Take a look at the ten year and get through these quickly and move on. Ten year 243. It was interesting that the yields started heading higher after greece got settled because it wont give the fed an excuse to delay again in september. Even though some of the members obviously, just act like theres a nice disagreement and discussion so well think they arrived at the right decision when they finally do. And 1153 and gold hasnt done much. Its two years at least on that. A rise that everyone forecasted at 2000. Took a wrong turn at some point. Were still down. Much closer to 1,002,000. Lets talk about the big corporate story of the morning. Chinas state owned unigroup is reportedly planning to make a bid for the u. S. Chip maker micron. The wall street journal with the offer price at 21 a share. Thats 23 billion in total. It would be the biggest chinese takeover of a u. S. Company. Previous record a 7 billion takeover of smithfield foods. Tsinghua is the largest chip design company. It had a majority stake in the chinese server and Technology Unit and news of a planned bid for micron came hours after David Einhorn augusted that micron would be worth more than netflix. He has been a fan for at least two or three years. But he is not a fan of netflix. He said Something Like red ink is the new black. But he did an interview with scott he was on the micron band wagon for quite sometime if i remember. Other Global Market news greece remains front and center. Michelle joins us from athens this morning and the front page of the Financial Times this morning is raising questions about this. It says tsipras faces rebellion in athens after accepting that 86 billion euro bailout. Whats the mood there . He faces rebellion within his party and he will have to reshuffle his cabinet but hes still going to get the votes. The opposition is going to go along with him. Hell lose a parliamentary majority but all paths lead back to him and to passage even if it gets messy. The other story with a lot of attention is the former finance minister, he is back in the news because of an interview he came to a magazine called new statesman in which he admits he had a plan for grexit ready to go and he was ready to print ious and hair cut the ecb and seize the sennal bank here and he was saying in the article that this was about getting an even better deal out of the negotiators and creditors when a lot of people read that and think, gosh we would have been going to grexit more than a week ago. If that plan had put in place it wouldnt have lead to a better deal from the creditors. It would have pushed greece into the abyss in terms of leaving the euro. Michelle just in terms of what he is now recommending people do tsipras is now coming back and saying this is the deal we have to take. The rhetoric is gone. He is saying this is the best possible situation after calling them blackmailers just a few days ago. Is he on board with that at this point or is he stoking these names . Hard to tell because this interview was done before the deal finally done over the weekend. I can tell you that on the ground its mixed. The people that voted no and wanted no and wanted to leave the euro still want greece to leave the euro. Theres a couple of sound bite where is they said wow, these guys pushed it as hard as they could and this is all theyve got. There must not be a better deal to be had. So tomorrow is when the vote is going to happen. Theres going to be a protest in front of the parliament. How big it gets who is involved, thats going to tell us to what degree theres really a sense of unrest that could happen as a result of putting in place all of these reforms that they have fought off against for so long here for the last five years in greece. Its still your best guesstimate that this is passed by wednesday . These changes ask from parliament by then . Theyll get them passed. Theyll pass probably the implementation law thats going to be required and that will be probably good enough so that when all the finance ministers get together on thursday and the ecb gets together as well that theres some kind of positive signaling so they can come up with intermediate funding so that way the ecb can get paid on monday. Thats everybodys goal right now. How do you get more than 3 billion euros in payments to the ecb so greece doesnt default on them as well as the imf . Thats the immediate goal. After that greece has all of these other steps to do and meet before theyll get one red cent that helps them fund the government. The only money in the shortterm is to help pay the ecb so there isnt a default on that debt. It does look like the support will be there for the banks to reopen though . So you think of opening banks as a continuum, right . Rather than this or that so they might get more cash which would mean maybe you could get more money out of the atms. Fully opening the banks at this point youll probably have to recapitalize them. In the plan theres money set aside that if they pass all of the hurdles, theyll throw billions into the banks. That would mean they have enough confidence to go back to the bank and not take all their money out the second that it opens. Thats what they want to avoid. The impliations of that are people that will end up dill lututed. If they dont comply with all of those hurdles so they can actually get the money for the recapitalization of the banks, you end up with cyprus and you have to hair cut depositors. You have those that put millions there. Here there are very few depositors left above 50,000 euros here. They would have to really squeeze the poor people that left their money in the bank unknowingly. Michelle, thank you. Well check in with you later this morning. In the meantime we have been watching the market. The dow edging positive for the year rallying amid relief of a greece deal. Joining us now with more on where the markets are headed is nancy, senior Vice President and thanks for being here this morning. Thank you becky. Anybody that was looking for gains in the market like we have seen in recent years has been sharply disappointed this year. Do you think theyre in for more of the same in the second half or there is something where the market is setting up for a rally . The latter. Earnings are starting to strengthen. Well see that in the second half. This season will be very important. Im looking at top line more than focus on bottom line just due to the Financial Engineering that we have experienced in recent years but i do think that things are starting to get better. Next year looks better. The rate of change on the dollar should slow and that will help the multinationals and oil is a benefit to big chunks of the market. Thats certainly something a lot of people are are hoping for but theres always the third scenario which is the market takes a big correction that comes in. Based on whats happening geopolitically. How do you weigh the two factors of where earnings are headed and what happened with the other scenarios . I think the fed is in the market to a certain extent. Im not as concerned about that. Its the event that is troubling and potentially what gets you. So im concerned about that of course. Our themes are that volatility will continue. Its with us for the foreseeable future. So volatility is difficult to manage against and in but the volume continues at a rapid pace. That provide ace floor and valuation is important. Im not arguing that its a straight up from here. I think we have a lot of difficulty ahead but i think that the trend is up. We do get earnings from the big financials today including jp morgan and wells fargo. Thats a sector you like why . Valuation is one. Theres a lot of pent up Dividend Growth opportunity. I like that a great deal and if we do get even actually a fed hike thats beneficial to the bottom lines but from a valuation standpoint theres attractive opportunities. Do you look at either of those stocks in particular . Jp morgan or wells fargo . We own them both. Were keen on the report. What are the takeaways we should be looking for this morning . Mortgage originations across the board . That. I think managing to the Employee Base. We really need to see continued cuts in some areas and i think you have to look at the Investment Banking activity and how dominant it is. Nancy, thank you for joining us this morning. Coming up much more on the Iran Nuclear Deal plus scott walker officially throwing his hat into the 2016 president ial race. It welcome likeooks like have you ever been to a hockey gail with the hat trick . Everybody throws their hat on the ice. They call that a carli lloyd. From jersey by the way. I forgot that. Gop field getting more crowded by the day. Well hear from another possible candidate. Next. But first well head to break. Heres a look back at this date in history. When you get up to 50 off thousands of hotels with travelocity it means you can also afford to get up to 50 romanticer romantic sunsets. Making it the place to find a place for summer escapes. Go and smell the roses. Good morning, if youre just waking upright now, news iran the u. S. And five other world powers reached a deal. Teheran promising to curb its Nuclear Program. In return economic sanctions will be eased. You can take a look now at Oil Prices Moving as a result of this. They are down. Wti crude by 51. 14. Theyll get on to the market. In the meantime president obama will make a statement on this deal from the white house. Its 7 00 eastern tile and of course we will bring that to you live when it happens. We have a special treat today. Youve already seen him. One helping. The first course. Probably even an appetizer but here with a special treat, john harwood. We had that written before. Stuff just changes in Live Television all the time. And he actual hily recently sat down with Ohio Governor john casik. I think we have known he was going to run for awhile. How long was he on fox . He sat in for oreilly. He had his own show as well. During the first decade of this century he had served in congress for about 20 years. Chaired the Budget Committee and negotiated the balance budget deal with president clinton during the 1990s. He also worked for lehman brothers. Thats a mixed bag. Although john kasich wasnt steering that ship. He ran a twoperson office and got back into politics as the governor of ohio in 2010. Reelected in 2014. He told me that having run in 2000 when i covered his campaign, it lasted briefly. He was swamped by george w. Bush, he said everybody told me like what you got but come back in a few years and now he says im back. So take a look. We talked to jan kasich about his time at lehman brothers. It was a fantastic experience to see the way ceos think. The way the boards of directors work. I wasnt in that to do politics. Sure. I was there to try to add value to the teams of people trying to add values to companies. What did that experience tell you about whats right and wrong in the American Economy . How does it inform your reaction when you hear people condemning wall street and the financial industry . Well i think theres an element of greed on wall street that is not good but when you look at the Banking Industry now with dodd frank one of the big problems we have in the country is that banks cant loan money anymore. One of the things that has come up the issue of misconduct in the financial crisis and some people made the point that no big wall street bankers went to jail. Does that strike you as wrong . If theres something to prosecute for somebody you prosecute them. Just because you do something thats greedy that can end in failure doesnt mean you committed a crime but the fact that you didnt commit a crime here theres a judgment that comes later about how many people get hurt and frankly thats a pretty tough judgment in my opinion. John kasich raising the prospect of that for people that are on wall street. He holds his regular bible study. Someone bringing a strong element of faith into this race and i think he will be a factor. He is somebody that the other mainstream candidates are going to have to Pay Attention to. Single digits. Sure, everybody is single digits. Nobody is doing too well. Does somebody have to make a misstep for someone like that to get in or is this about their own theres so many missteps being made constantly because theres so many candidates. Scott walker who formally got in yesterday built he has Campaign Around the idea that hell win in iowa. John kasich will win in New Hampshire. Jeb bush needs to win in New Hampshire. When does that list get wittel widelled down . By the end of the summer . Its a terrific question. Nobody knows the answer. Traditionally money has done that. By the time you get to christmas some people have been weeded out by events like the iowa straw poll. That was eliminated. So now you have debates. Will people not on sage for the fox debates, the cnn debate our debate, are they going to find it difficult to raise money . Remember if you have one superwealthy backer right now you can stay in. So i believe that the debates are going to perform some of that function and the field will shrink a little bit but i dont think its going to shrink a ton and then well get iowa New Hampshire and have the more conventional way. Only two former fox news hosts, huckabee and kasich. Don forget an nbc guy. We talked to john kasich about his time at fox. Well have more throughout the day on cnbc. He was brave to say i learned at the feet of ceos. He was talking about the companies. Oh okay. John thank you. You bet. When we come back amazon trading near record highs ahead of a big prime promotion this week. Why are some calling for an antitrust investigation into the company. That story next. First take a look at yesterdays s p 500 winners and losers. Its a big week for cincinnati. The Major League Baseball allstar game will take place there tonight and a hometown boy started things off right. He was the runner up last year and under a popular new format frazier beat dodger rookie peterson plus with 15 long balls in the contest, final round, the last coming in bonus time. The first derby contestant to win at his own ballpark since rye january sandberg did it in 1990. Hes the one when i do look to see how the reds are doing, theyre like 9 or 10 games below 500 and i look at all the stats that has the only name on the stats is frazier. Second with home runs for the year but i think pete rose is going to be there as well. He is not allowed in baseball but i think hell be there. Do you think hell make it into the hall of fame . Its easy to say guys that did steroids denied it the entire time and theyre eligible at this point. He has never really come clean. Thats what they all say about that. Do you need to come clean . Its the black sox and just the trying to keep organized crime its to keep organized crime out of sports. Right and we havent had cheating or at least we dont think theres been cheating since. A different type of cheating. You see step remember basketball a couple of years ago, theres a lot of places where it seemed like it would be easier to affect the than what rose was able to do and for awhile they said he only bet on the reds but other people arent sure whether he beat against the reds. Theres the unknowns that are still out there. If you come clean and then apologize. But you have a guy like jeter or look at the great hitters and theyre still hundreds and hundreds of hits away. It was like 200 hits a year for like 20 years. Eventually he will be there. Its whether hes alive or not. Theres a pete rose wing in cincinnati. Its a good idea to wait. A story that caught my attention this morning is on the front of business day. The business day section of the New York Times. Amazon stock hit another all time high yesterday. Were talking about the 20th anniversary of the companys first sale and in all of this theres a new story. Thousands of them will be combining together and asking the department of justice. Their concern theyre saying is not about themselves of course but theyre saying that theyre worried that the company has done things. Used its dominance in ways that they think armed the interest of america readers and impede the free flow of ideas in our society. Ill take the other side of that. I think the whole case is ridiculous. I think that amazon has done a Great Service for authors. Now its created its own inequality to some degree in the world where you have best sellers and Everything Else but also created the long tail so books that werent sitting on book shelves for years and years and years theyre Still Available and theres still an opportunity for those authors. Do you still get a lot of sales of too big to fail. Absolutely. Years after the fact anybody can get this book. And by the way you can sell theres a lot more opportunity now do they have more dominance than barnes noble used to have . Of course they do. Did you get apple music . Music is a tough one too. I have it on my phone. Still on spotify too though. Those things i dont understand. We have to do that. Do we have time for me to tell you about the other story. Were going to do it later i was told. I thought you would agree. We dont have time for it now. We have to wait until after a commercial. Weve got to find basically we have to find a way to reign it in. It could be bigger. And they could make even more and lets do this real quick. Might be counter productive to what were trying to do is have people make less money. To the extent you believe that in dodd frank you believe there were clawbacks but now to Corporate America when it comes to restatements and that had nothing to do with the financial crisis. It was another politically thrown in things. To the sense that you believe there was a rule trying to reign in executive pay, the point was to say guess what boys and girls its not doing that at all. They give you more up front. Now what youre doing is they have different ways of getting around this to the greedy. Let me just explain to the viewer that hasnt read the column the point is that youre now sending up a finding a three year window where Corporate America, every publicly traded company we talk about, any executive, its called a no vault rule. It could be something somebody elses fault at the company. Anybody at a company is going to be subject to the clawback. Whats going to happen as a result of that . The executives. Not just senior executives. Any type of incentive pay thats related to the metrics of the company are going to be subject to the claw backs so youre going to say you know what dont do that actually. Give me a bigger base pay. That will change the dynamic. What am i going to do . Watching hilarys speech there must be some way you feel positive or negative about it. That would have been my thing. I watched hilarys speech thinking maybe there was a column in there. Thats what i would have done but you didnt. Do you know why but i thought about you and i said but no that would never happen. I would have written a column on that. What would you have written. We dont even have time for me to start. You can do the oral version. Coming up the man behind the notorious and anonymous twitter account gs elevator describes himself as running a site that in his word aggregates commentary thats supposed to embody the 1 . I thought the New York Times said it was a huge yawn. The wall street journal had views. This was your idea . Its his idea. He wrote the book. Hell join us when squawk box comes back. If you cant stand the heat, get off the test track. Get the mercedesbenz youve been burning for at the summer event, going on now at your authorized mercedesbenz dealer. Hurry, before this opportunity cools off. Share your summer moments in your mercedesbenz with us. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . People really thought this twitter account initially was from goldman. If anybody thought this was about conversations in electrical say to in Goldman Sachs i would say theyre an idiot. But you do know that at the tile Goldman Sachs thought that there was somebody inside their institution who was telling stories out of school. Well initially i think a lot of the tweets did kind of capture that because i tweeted about specific people. I tweeted about specific deals. I tweeted about you know banks and it evolved from there but i think it is no surprise that perhaps people thought that. Before we get to the book one other issue though you had done several interviews. Journalists reached out to you without knowing who you were and in truth, you did not tell the truth to them. Not only did you not tell the truth to them you told them you worked at Goldman Sachs. Well gl elevator works at Goldman Sachs. Gs elevator works at Morgan Stanley and jp morgan. Its a fictional character. But when youre writing these emails back and forth do you say to yourself have to lie to the guy because otherwise the gid isgi gig is up . Not at all. When i talked to the New York Times hi 2,000 followers. You now have 700,000 plus followers. Yeah. And the success of the account didnt have anything to do with whether people thought i was actually in an elevator at Goldman Sachs. So then lets just fast forward. We write the article. Come on this program and talk about who you actually are in reality and then your book deal gets pulled. Again, we always anticipated my identity coming out. If you read the book you know that its poimimpossible to tell the stories without my identity coming out. You knew it was going to happen. We expected it. We planned on it. When i called you, you did not want me to call you. Thats not necessarily true. Again its impossible to tell these stories without an identity coming out so we anticipated it and wanted it to happen. But the publisher din clearly and then the question is did you tell the truth to the publisher . Because the publisher ended up pulling the deal. They supported it. You outed me. Right. Which again was part of the plan and then they supported me. It wasnt the plan in that nobody called me. It took me three months to figure out who you were. There were journalists that knew who i was going back a year. It was a terribly kept secret. Why did the publisher pull the book . Ask them. I have no idea. So you turned around and got a new deal. The next day. And this was the book straight to hell. Which was the book we invisioned from the beginning. Whats the story youre telling here . It is in my opinion, about illuminating wall street culture in a way that hasnt been done before. You talk about wolf of wall street or liars poker, im saying wolf of wall street is about scum bags who dropped out of Community College and went to long island and commit kiemcrimes and party like rock stars. A lot of the man fesifestaions, what they do you see in the best and the broithest. The brightest. Do you like wall street or not . Part of you seems to revel in this and part of you seems to condemn it. I think writing kind of a one of the cliches is having the epiphany. So i said these are my experiences i have no apologies for them and you can read them and draw your own conclusion. Thank you for coming in. Your book is called straight to hell. We appreciate it very, very much. Thank you for having me. Iran and six world powers reach a landmark nuclear deal. Stay tuned. Squawk box will be right back. Were not rich but we want to be able to enjoy our retirement. Futureadvisor has identified 9 best practices to help you retire sooner and with more money i was leaving a lot of money on the table. Futureadvisor uses awardwinning technology to give you investment insights once only available to millionaires. 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Joining us now ian davis. Are you getting signals for whats going to happen near term and immediate term with oil . Yes. We think oil is going to go a little bit lower. Wed say most of the bad news a priced in but the outlook has gotten worse. We downgraded oil in may because opec has been producing a lot more oil than they originally were in february by 4 Million Barrels. And the Global Economy has turned somewhat sour. That has changed our outlook for oil. We think iran is just going to make things worse. Over the past five years, ten years even. How much of oil would you say the price has been dictated by pure supply and demand and how much by other factors like fast money or financial money investments, hedge funds, momentum trades things like that . Well we run a statistic, we find china has almost a 50 correlation to the price of oil. 50 . People overly focus on supply and demand and truth is its the economy that drives the price of oil. So then its demand not supply. Its mostly demand and the outlook for demand. Giving you the signal to whats going to happen now. Its a double whammy. Its not just that supply is moving up more than it should but the demand is for the worst of both worlds. All right. Anyway, we appreciate it. Thank you. Coming up Quarter Results from jpmorgan. Then weve got the president. President obama ready to speak on iran. Squawk box returns in just a moment. Visibility into your business, it can quickly become the only thing you think about. Thats where at t can help. At ts Innovative Solutions connect machines and people. To keep your internet of things insync, in realtime. Leaving you free to focus on what matters most. Breaking this morning, negotiators have reached a deal to curb Irans Nuclear program. President obama set to speak moments from now. Well bring you his comments live plus reaction from the wall street Journal Bureau chief. Johnson johnson set to report this hour. Well have the numbers from wall street. And the chinese firm preparing a bid for micron. It could be the largest takeover by a Chinese Company over a u. S. Company in history. The second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Im here with joe kernen and becky quick. The latest quarter earnings from jpmorgan are out. Let me tell you whats going on in the mean time. We have a couple of big stories topping the agenda this morning. Iran and five world powers have reached a deal that will curb their Nuclear Program in exchange for sanction relief. President obama is set to begin a press conference any minute now. Well bring you that statement live. Then we have bureau chief bill spindel. Take a look now at the price of oil because it is dropping now. Expectation that some of that oil from iran will come on the market. Wti crude down to about 51. 13. Also a deal in the works this morning. Chinas xinhua looking for a bid for micron technology. That would be a bid of 21 per share. Its a 19. 3 premium to yesterdays close. It would be the biggest chinese takeover of a u. S. Company in history. Reuters reporting it could come as soon as tomorrow. And David Einhorn wrote that micron would be worth more than netflix in the next few years. In the meantime lets get a check on the markets see how things are setting themselves up given this deal in iran this morning and other news of the morning. Id call it flat across the board. Dow marginally up. Take a look at whats going on with the euro as we also awade whats going to be going on in greece this week. You can see the euro now at 1. 10 and the yen at 123. 35. Guys . Jpmorgan is getting a bounce immediately from this number that was just posted. 1. 54 was 10 cents ahead of expectations. 24. 49 or so is what the company was forecast to do in revenue. But has achieved something that decades of animosity has not. A comprehensive longterm deal with iran will prevent it from obtaining a Nuclear Weapon. This deal demonstrates that american diplomacy can bring about real and meaningful change. Change that makes our country and the world safer and more secure. This deal is also in line with a tradition of american leadership. Its now more than 50 years since president kennedy stood before the American People and said let us never negotiate out of fear but let us never fear to negotiate. He was speaking then about the need for discussions between the United States and the soviet union which led to efforts to restrict the spread of Nuclear Weapons. In those days the risk was a Catastrophic Nuclear war between two superpowers. In our time the risk is that Nuclear Weapons will spread to more and more countries, particularly in the middle east. The most volatile region in our world. Today because america negotiated from a position of strength and principleeipaleiple principle, we have stopped the spread in this region. Because of this deal the International Community will be able to verify the Islamic Republic of iran will not develop a Nuclear Weapon. This deal meets every single one of the bottom lines we established when we achieved a framework earlier this spring. Every pathway to a Nuclear Weapon is cut off. And the inspection and transparency regime necessary to verify that objective will be put in place. Because of this deal iran will not produce the highly enriched uranium and plutonium that form the Raw Materials necessary for a nuclear bomb. Because of this deal iran will remove twothirds of its installed centrifuge the machines necessary to produce highly enriched uranium for a bomb and store them under constant supervision. Iran will not use the centrifuges to produce uranium for the next decade. Iran will also get rid of 98 of its stockpile of enriched uranium. To put that in perspective, iran currently has a stockpile that could produce up to ten Nuclear Weapons. Because of this deal that stockpile will be reduced to a fraction of what would be required for a single weapon. This stockpile will last for 15 years. Because of this deal iran will modify the core of its reactor in iran so it will not produce weapons grade plutonium. And it has agreed to ship the spent fuel out of the reactor for the lifetime of the reactor. For at least the next 15 years, iran will not build any new reactors. Because of this deal we will for the first time be in a position to verify all of these commitments. That means this deal is not built on trust. It is built on verification. Inspectors will have 24 7 access to irans key nuclear facilities. Iran will have access to irans entire Nuclear Supply chain, its Uranium Mines and mills conversion facility and centrifuge manufacturing and storage facilities. This ensures that iran will not be able to divert materials from known facilities to covert facilities. Some of these transparency measures will be in place for 25 years. Because of this deal inspectors will also be able to access any suspicious location. Put simply the iaea will have access where necessary when necessary. That arrangement is permanent. An the iaea has also reached an agreement with iran to get access it needs into the iran past nuclear research. Finally iran is permanently prohibited from pursuing a Nuclear Weapon under the proliferation treaty. Which provided the basis for the efforts to apply pressure on iran. As iran takes steps to implement this deal it will receive relief from the sanctions that we put in place because of Irans Nuclear program. Both americas own sanctions and sanctions imposed by the United Nations Security Council. This relief will be phased in. Iran must complete key nuclear steps before it begins to receive new sanctions relief. And over the course of the next decade iran must abide by the deal before additional sanctions are lifted. Including five years for restrictions related to arms and eight years for restrictions related to Ballistic Missiles. All of this will be memorialized and endorsed in a new United Nations Security Council resolution. And if iran violates the deal all these sanctions will snap back into place. So theres a clear incentive for iran to follow through. And there are very real consequences for a violation. Thats the deal. It has the full backing of the International Community. Congress will now have an opportunity to review the details. To provide extensive briefings on how this will move forward. As the American People and congress will review the deal it will be important to consider the alternative. Consider what happens in a World Without this deal. Without this deal there is no scenario where the world joins us in sanctioning iran until it completely dismantles its Nuclear Program. Nothing we know about the iranian government suggests it will simply capitulate under that kind of pressure. And the world would not support an effort to permanently sanction iran into submission. We put sanctions in place to get a diplomatic resolution. And that is what we have done. Without this deal there would be no agreed upon limitations for the iranian Nuclear Program. Iran could produce, operate, and test more and more centrifuges. We would not have any of the inspections that would allow us to detect a covert Nuclear Weapons program. In other words, no lasting constraints on Irans Nuclear program. Such a scenario would make it more likely that other countries in the region compelled to have their own Nuclear Programs. Threatening a Nuclear Arms Race in the most volatile region in the world. Provide the u. S. With fewer options to prevent iran from obtaining a Nuclear Weapon. Ive been president and commander in chief for over six years now. Time and again i have faced decisions about whether or not to use military force. Its the gravest decision any american has to make. Many times in multiple countries i have decided to use force. I will never hesitate to do so when it was in our National Security interest. I strongly believe that our National Security interests now depends upon preventing iran from obtaining a Nuclear Weapon. Which means that without a diplomatic resolution either i or a future u. S. President would face a decision on whether or not to allow iran to obtain a Nuclear Weapon or whether to use our military to stop it. Put simply no deal means a greater chance of more war in the middle east. Moreover we give nothing up by testing whether or not this problem can be solved peacefully. If in a worst Case Scenario iran violates the deal the same options that are available to me today will be available to any u. S. President in the future. And i have no doubt that 10 or 15 years from now the person who holds this office will be in a far stronger position with iran further away from a weapon and with the inspections and transparency that allow us to monitor the iranian program. For this reason i believe it would be irresponsible to walk away. But on such a tough issue, it is important that the American People and representatives in congress get a full opportunity to review the deal. After all, the details matter. Weve had some of the finest Nuclear Scientists in the world working through those details. And were dealing with a country, iran that has been a sworn adversary of the United States for over 35 years. So i welcome a robust debate in congress on this issue and i welcome scrutiny of the details of this agreement. But i will remind congress that you dont make deals like this with your friends. We negotiated arms control agreements with the soviet union when that nation was looking for our destruction. And those agreements ultimately made us safer. I am confident that this deal will meet the National Security interests of the United States and our allies. So i will veto any legislation that prevents the successful implementation of this deal. We do not have to accept an inevitable spiral into conflict. We certainly shouldnt seek it. Precisely because the stakes are so high, this is not the time for politics or posture. Tough talk from washington does not solve problems. Diplomacy, leadership that has united the worlds major powers offers a more effective way to verify that iran is not pursuing a Nuclear Weapon. Now, that doesnt mean this deal will resolve all of our differences with iran. We share the concerns expressed by many of our friends in the middle east including israel and the gulf states about irans support for terrorism and its use of proxies to destabilize the region. But that is precisely why we are taking this step. Because an iran armed with a Nuclear Weapon would be far more destabilizing and more dangerous to our friends and to the world. Meanwhile we will maintain for terrorism, Ballistic Missiles program, and human rights violations. We will continue our unprecedented effort to strengthen israels security. Efforts that go beyond what any administration has done before. And we will continue the work we began at camp david. To elevate our partnership with the gulf states to strengthen their capabilities to counter threats from iran or terrorist groups like isil. However, i believe that we must continue to test whether or not this region that has known so much suffering, so much blood shed can move in a different direction. Time and again i have made clear to the iranian people we will always be open to engagement on the basis of mutual interest and mutual respect. Our differences are real. And the difficult history between nations cannot be ignored. But it is possible to change. The path of violence and rigid ideology threats to attack neighbors or eradicate israel its a dead end. A different path. One of tolerance and peaceful resolution of conflict leads to more integration into the Global Economy, more engagement with the International Community, and the ability of the iranian people to prosper and thrive. This deal offers an opportunity to move in a new direction. We should seize it. We have come a long way to reach this point. Decades of a Nuclear Program, many years of sanctions, and many months of intense negotiation. Today i want to thank the members of congress from both parties who helped us put in place the sanctions that have proven so effective as well as the other countries who joined us in that effort. I want to thank our negotiating partners, the united kingdom, france germany, russia china, as well as the European Union for our unity in this effort which showed the world can do remarkable things when we share a vision of peacefully addressing conflicts. We showed what we can do when we do not spread apart. And finally i want to thank the american negotiating team. We had a team of experts working for several weeks straight on this including our secretary of energy. And i want to particularly thank john kerry, our secretary of state who began his service to this country more than four decades ago when he put on our uniform and went off to war. Hes now making this country safer through his commitment through strong diplomacy. History shows that america must lead not just with our might but with our principles. It shows we are stronger not when we are alone but when we bring the world together. Todays announcement marks one more chapter in this pursuit of a safer and more helpful, more hopeful world. Thank you. God bless and god bless the United States of america. That was president obama outlining the deal reached to curb Irans Nuclear program. Here with some reaction right now bill spindel who just returned from a trip to iran. Give us a little bit of just Historical Perspective here you heard what the president had to say. I think its pretty important. You can see the most immediate acute is youve seen prices fall. Its straightforward there. More deal would mean more oil as fast as they can pump it. On the political side the implications are harder to read and extend farther into the future. Youve got really a sense that where things would go from here. You know, it was interesting to hear the president lay it out. He put a lot on the table in terms of saying he thinks this is in the best interest. He says he will Veto Congress if they dont approve this deal. He also pointed out the reasons he was pushed to the table. One is that the world would not support or allow sanctions to bring about the end of the regime. That this was done to get to a diplomatic point and that he thinks down the road things will change. The next president may be empowered down the road. But there are questions that remain whether we can verify any of the stuff in this agreement. Theres going to be a big fight in congress. I think at the end of the day hell definitely get it through for sure on the veto. And if not with a larger vote of support. Yeah the question becomes then as you go into the future this doesnt amount in any way diplomatic recognition but it does acknowledge in a way america has never done before, the republic will have a legitimate role within the region. Youve heard him talk about hopeful outcomes of that. The telling thing i could see recently was interestingly both the hard liners and reformers are behind a deal because they both think they can make it work for them. What does it mean to our relationship with israel who is not happy about this . Theyre going to be unhappy. The saudis are going to be unhappy. The uae. Traditionally all those eyes will be unhappy partly because whats going on here is a process of acknowledging what irans role will be in the future and thats a difficult adjustment. Mostly because of the bad behavior that they are continuing to undertake in the region. We are underselling it. We are talking about massive actions. Those are things that are going to obviously are profoundly disturbing to america, to the europeans, to americas allies there. And the question is can they is this really going to be the beginning of something or the end of something . Is it just the end of a Nuclear Negotiation and then things stop there and return to an antagonistic relationship. We never had the same threat from iran that the local neighbors have had. Saying our problem. Suddenly since theyre not as immediate in terms of threatening us and our border suddenly its like hey, in our interest to do this. Were sorry about you know were sorry. But its a much bigger deal for you than for us. Which a huge adjustment for them. Theyre worried theyll have to make. What does that say about our commitments our previous commitments of standing by our allies in the region . I think the u. S. Is feeling more selfsufficient on the energy front, on the oil front which gives up more flexibility. Although theyll hardly remove themselves from the region. But theres complicated problems going on in the middle east. Theyre looking to resolve a lot of who were allied with. At least our interests are with iran. That factors in. And what these countries see is really in some ways at though theyre not talking or directly coordinating they are definitely maneuvering jointly within iraq and syria to deal with this problem. That too, makes everybody nervous. What do you think having spent time there and watching this play out . Is this a good thing or a bad thing over the next five years . It opened up possibilities in a relationship that had been very stuck. Does that mean things are going to get better . I dont know. For them this deal is all about reveem preservation. The question is what is the downside . What is the nightmare scenario that results from Something Like this . That iran takes the takes advantage of this. Takes advantage of this. Takes the money. And exexpands. Really quick on oil, how quickly do you think all this is going to open up and how is saudi arabia going to react . Open up in what . Oh, in the oil market. Yeah. I think they have 20 to 40 Million Barrels in floating storage. That can be sold off pretty much immediately. Within another six months they claim they can bring another half a Million Barrels on and maybe six months after that by opening up new wells. If they want to bring another Million Barrels per day on the market within a year. Theres skepticism they can do that, but thats the goal. Thank you for joining us from the wall street journal. Appreciate it. Thanks for being here. Before we head to a break, lets get a recap of the results from jpmorgan. They posted better than expected earnings and revenue. Earnings per share came in at 1. 54. Revenue came in line. That was just about in line with what the street had been expecting. Jpmorgan did benefit from a drop in legal expenses. That stock is up by close to a dplar. Its a gain of 1. 3 . And almost at an alltime high. Got to get above 69. 82 to be at an alltime high. Up next much more on jpmorgan. Well dig through the report with david hilder. And still to come this morning, results from wells fargo and Johnson Johnson. Assion. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep them all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberyy apple scones smell about done. Ahh, youre good. I like to bake. With at t get up to 400 dollars in total savings on tools to manage your business. Jpmorgan with better than expected earnings. Here with his analysis is david hilder. The one thing that stands out is expenses were lower and that helped things flow to the bottom line so that expectations were beaten by 10 cents or so. Other than just expenses are there positive things that went along with this in terms of net income . Certainly. Thanks, joe, for having me on this morning. Trading revenues were very much as expected. Total was down about 1 year over year. Excludings other business exits. But equity trading was up 27 . Investment banking fees were up 4 . Loan growth was very strong. I think youre seeing that there are a lot of positive revenue drivers. I should say there are few nonrecurring items in that number of 1. 54. If you make all the adjustments which include tax benefits and other items, the core number is more like 1. 46. I think this is more in line with the consensus, not quite as far above consensus as the headline would indicate. Initially it did trade sharply high her. Now the gains have been tell pored to some extent. What do we know about just the way that banks do we have to wait for the fed to do that before they make any move . Yes. Theres not much change quarter to quarter. There will be a benefit for the large banks including jpmorgan. But especially bank of america. Once the fed funds rate is higher. And its really tied more to the short end of the curve rather than the long end. As far as the deployment level at jpmorgan is there more that needs to be done there or everythings matched up to generate good results . You know jpmorgan obviously has been trimming some employees this year. They talked about in february. I think theyre more or less around in a give or take a few thousand on a roughly 250,000 Employee Based. I think what is different today versus precrisis or certainly 20 or 30 years ago is that the banks view their Employee Base and their businesses as somewhat fluid. They will move people around from business to business. They will close branches and open branches more or less at the same time. Depending where they think they have the best growth prospects. Okay. I thought there was one more thing that i wanted to ask. Well one thing i would say is that jpmorgan is doing a good job of bringing down the size of the Balance Sheet. Up to 11 . Up from 10. 6 . And their goal is to get to 11. 5 . So theyre moving in the right direction. Both in shrinking the Balance Sheet a little bit while allowing for loan growth. What was it a year ago provisions for credit losses . Its really not very different from the credit loss. It was credit is generally Getting Better and they suggested that credit card losses which are a pretty siems a bit volatile will be lower through the second half of the year. Thank you. Appreciate it. When we return this morning with earnings underway a busy Economic Calendar this week and janet yellen set to testify on capitol hill tomorrow. Well be talking about whether the markets will be thinking about all of these numbers we have to sif through. Well talk strategy next. And another big event tomorrow. The delivering alpha conference. Our leadership tomorrow includes larry fink and jamie dye nan. Squawk box will be right back. Welcome back to squawk box this morning. Among the stories front and center, iran and six world powers reaching a nuclear deal this morning. Heres what president obama had to say about the agreement. Today after two years of negotiations, the United States together with our International Partners has achieved something that decades of animosity has not. A comprehensive longterm deal with iran that will prevent it from obtaining a Nuclear Weapon. And oil prices are moving lower this morning as a result of that deal. Wti crude right now at 51. 49. Couple other headlines. Fanduel announcing today it has raised 275 million. Partners include nbc Sports Ventures and comcast ventures. Also google incorporating hiring and ways to run more efficiently. Taking a stricter approach to its costs as it gets bigger and perhaps as a result of its new cfo who they say is a driving force behind those costcutting moves. It is a busy week for earnings and Economic Data. Its giving all of us on wall street something to think about. Joining us Barbara Reinhart from Credit Suisse Private Banking of the americas. And jeremy zieran. Thank you both for being here today. Obviously a lot of things have been happening. A lot of concerns headlines coming out from all around the globe. But barbara, youre still seeing the markets kind of hang in there. When we look at the all country world index, 7 are still in a 2 hurkds a day moving pattern which is optimistic for equities. You think we have gotten through a lot of these crises or is this just a situation where the market doesnt care until it does . There are a number of hurdles that the market has to overcome over the next couple of weeks. Greece is going to take the deal to parliament tomorrow. It will then have to go onto six eu parliaments that have to be loaded on. So were far from out of the woods. But i would say theyre starting to see some progress which is what gave the markets a relief rally today. We are seeing pressure on crude oil this morning. We just looked at that. Most people who are watching this say is the dollars not going to be dropping any time soon. That the euros still going to be under pressure. When you take all those things into account, what are you telling clients right now . Were still favoring a risk on position. I still think some of the risk factors seem to be fading. Seems like greece is headed towards a deal. Doesnt look like the volatility weve seen in the chinese equities will have real economic implications. Earnings season is upon us. We had a void where we didnt have a lot of Economic Data or corporate news. And earnings season should be decent. I mean, were looking at relatively flat earnings year on year. More importantly that masks broader strength in the s p 500 base because the only reason that the s p 500 earnings are even going to be flat is because of the 60 decline in the equity sector. Very similar growth rates to what weve seen over the last couple of years as markets continue to gro higher. Although you still like some of the cap better because of the stronger dollar scenario right . We do. They are a more direct play on u. S. Consumption. You dont have a lot of you know currency translation affecting the smaller cap names relative to the large cap names. And Weaker Oil Prices are certainly a net positive. And small caps are more exposed to that consumer. You still like europe better than the stocks . We do. We think european equities have a better tail wind at this point. You have some improvement in the Economic Data. And also dont forget a turn in the u. S. Cycle also helps equities as well. Data has gotten less bad out of europe. Although the brinkmanship weve seen with greece and by the way this deal is not done yet. Its still got to get through the Greek Parliament approved by 17 other parliaments after germany. People have said that kind of freezes business in the region. That that will have lasting impacts. The issue that were looking at, though is what the European Central bank has as well. Theyre engaged in a quantitative easing program. Two and a half times of outstanding debt every month. Theyre fully committed to that program in september of 2016. And potentially beyond. That is a very powerful force. And one of the key indicators we look at is bank lending in europe. And after multiyear periods of falling, its just starting to grow. So its really just a whole kind of tail wind. And youre starting to see some improvement in some of the Realtime Data that were looking at on Global Industrial production which is one of our leading indicators. If you had one sector or one area youd be pointing investors as your best bet, what would it be . We agree over the equity market. For all the reasons barbara indicated as well. We havent seen economic weakness or Business Investment slow down during this anxiety over greece. I mean if you look at the pmis in europe theyre still at postcyclical highs. Bank lending has picked up. One sector in the u. S. We like is technology. We continue to think that capx is going to build. And tech still trades as a multiple at a 15 to 20 freemium. I think youll see faster earnings growth. Perhaps not this quarter but over the next relative to the market. I want to thank you both. Appreciate your time. Thank you. When we come back this morning, currency headwinds and a chinese economy taking a toll on shares of apple. 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Try the uncarrier riskfree for 14 days youll love it, or well pay for you to go back. Welcome back to squawk box this morning. Will apple be the first to hit the cap milestone. Currently doesnt see it hitting that just yet. I think i mangled your name. I apologize. Just fine andrew. Help us to understand how you get to this price and do we ever get to the trilliondollar mark . Our price target is 150. That doesnt quite get you to a trillion dollars. But apples selling at a 20 discount to the market multiple. We think theres still room for earnings. Its true the next product is not going to be as big as the six. But we think with 20 of users upgraded, theres room to grow there. China in particular i think still has upside. Then some multiple expansion. I wouldnt go crazy but ultimately its got to turn by two or three times. What kind of multiple are we talking about . Certainly to get to a trillion dollars it has to be a market multiple. Thats going to be at least three times improvement. So that might turn out to be a bit of a stretch. 20 discount to the market multiple here. Theres room for improvement. Right now apple is a phone company. The question is whether it needs to whether the watch you think ultimately needs to get to some place and whether it does and whether theres new products that need to emerge. Youre right. Over twothirds of profits come. Its building an ecosystem. Its becoming more of an annuity. The watch is financially important in the next year because we think the phone is relatively flat. Going from zero to 12 billion in the watch is still a good inskremtin increment increment. In the meantime well probably see something on the tv side with over the top. And we still when do you think were going to see that . This fall . Depends when they get their contracts together. But i would hope by the end of the year. And when you think about the price tag, joe always talks about the trilliondollar mark and can never get there. Its gone up. Its doubled. Its gone up. Its doubled. Or, you know it happened so many times with apple. To double again it has to go to 1. 5 billion. And youre just as happy about the stock right now. Its ignoring the law of large numbers. I know its cheap. Its also knowing that almost every person that loves the stock owns it. I mean you are not alone in saying its undervalued and you like the stock. Theres no one who doesnt, is there . Thats true. We wouldnt argue for as much appreciation in the next 12. What about the next five years . A 3 trillion company . Certainly trees dont grow to the sky in technology. 2000 we talked about what cisco would have to become. Thats what i mean. Google or microsoft or anything of them. But they better have an annuity in that phone. If they dont, whats their run rate on revenue right now . What did they do the last quarter . 50 billion. Thats going to come in no matter what to a gadget make . 50 billion every quarter . Longterm risk is something actually replaces the phone. Thats what i mean. Somebody makes a better phone. You know makes some type of technological leap we never anticipated with any of the other companies in the past either. We talk about Disruptive Technology all the time. But i still think were relatively early here. Emerging markets, theres a lot of room for growth. Or buys a different phone. You think about nokia, rim. Those are the examples. Theres a million of them. I can go back. The difference between apple and nokia is the ecosystem. The platform they created to some degree that lacks. Saying the ecosystem isnt strong. Theyre killing in china. I never thought of i dont know what it is. But i did sign up for apple music. So thats the one thing that throws a wrench in my tell me this. Is there any company out there right now that poses a threat to your analysis . As i say, its got to be something pretty big deal. The internet assistant we think is going to become a big deal. Siri hasnt improved from a Voice Recognition standpoint as people want. Theres a Small Company thats coming out with something that looks like it could leapfrog siri. They have demos on youtube. Quickly can i interrupt and give the Johnson Johnson numbers. Out with better than expected numbers. 171 is what they came in with adjusted. Street was looking for 1. 67. Also came in with revenues that was about in line. 17. 8 billion versus 17. 75 billion estimate. Adjusting to 6. 20. The street was already at 6. 14. If you look at the currency impact here it is huge. Whats what weve been seeing with a lot of the multinationals. They say the negative impact of currency was 7. 9 . To put that into a bit of light for you, the International Sales were up. They fell 14. 3 but it was a currency so they were up. 5 . If you took out the currency effect, it was up. 5 . Instead they were down 14. 3 . You should point out sales here in the United States domestic sales were also down. They were down by 2. 5 . But it does look like that stock is trading slightly higher at this point. Like a nickel. Its tough to say. 100. 36. You were mentioning two companies that potentially could pose a challenge. Do they become takeover targets . These are small private companies. I have no idea what happens to them. But you have to look for something that is a real leapfrog technology to hurt apple. At this point its such a brand around the world that for now theyre in great shape. Thank you for coming in this morning. Thank you. Delivering alpha conference hosted by cnbc kicks off tomorrow in new york. And its got a huge lineup. Bill ackman carl icahn, larry fink jaime dinan. Promises to be a big event. Kate kelly will join us with what more to expect in just a moment when squawk box returns. If you cant stand the heat, get off the test track. Get the mercedesbenz youve been burning for at the summer event, going on now at your authorized mercedesbenz dealer. Hurry, before this opportunity cools off. Share your summer moments in your mercedesbenz with us. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Music etta james at last plays throughout sometimes, at last doesnt happen at first. Your dad just kissed my mom. Turning two worlds into one takes love. Helping protect that world takes state farm. Welcome back to squawk box. Some key activist Hedge Fund Managers lining up for cnbc annual delivering alpha conference tomorrow. Kate kelly is with us. Shes got more on what to expect. Good morning. Good morning, andrew. Activism has been on a tear this year with those strategies rising. Against an s p thats been kind of dull really. And tomorrow at delivering alpha well have a lot to watch. Bill ackman always a pace setter starts the day with a panel with nelson peltz. Well see what they actually tell us. Ackman recently took a 22 stake in nomad foods. Thats a british Acquisition Company set to focus on the food business. But hes also been going big on another as yet unnamed investment that he says is costing up to 15 of his capital or roughly 3 billion. Peltz has just loaded up on the valve maker pentair. But he hasnt elaborated on his his well also hear from keith myselfer and jeff smith as well as tom sandell and carl icahn who recently pulled out of netflix. He considered doing that once before, you may recall but his son talked him out of it. He may tell us tomorrow what he was thinking in late june when he tweeted that he had gotten out of it. And david has questions about it too. Yeah. David now saying i think his quip was that red ink is the new black. And the season three of house of cards was set to compete with ambien. But he makes an interesting point. He said this about Pioneer Resources in may. Totally different company, obviously, but his view is theres some overvalued names out there where it feels the excitement of the story is far more significant than accountability. His example with netflix was they had a huge earnings miss in the first quarter. And the market just shrugged it off. Im looking forward to carl icahn is he going to battle it out with larry fink . I think its going to be about activist tactics. And they come from different polls when it comes to how to approach these situations. That should be a great discussion. Really looking forward to that. And does who is ackman and peltz. Do they get along with each other . I dont know. They have such different styles that i would think peltz doesnt think hes in the same category. As he talks himself of being a constructivist. Does he . Is he a constructivist . Well i think i had nelson on the stage a couple years ago when we talked about dupont and he hes a constructivist and then they go crazy on the company. We will see what he has to say. He has an option to become a bill ackman. All right. We will see you tomorrow over there at the hotel. Becky is going to be doing a panel. Im now doing a panel in the morning on u. S. Global not u. S. Cant be u. S. Global macro. Global macro. In the meantime coverage kicking off tomorrow of the delivering alpha conference. 6 00 a. M. Eastern time. Heres our morning lineup. Blackrock chairman larry fink. Then york capital manager jamie dinan. And christopher allman. Hes got news relating to pensions and whether all the yields can hold up. All this starts at 6 00 a. M. Eastern time. Coming up earnings alert from wells fargo. Set to report the numbers and reaction in the street. Plus squawk market master Jeremy Siegel says dow 20,000 still possible by the end of this year. Hell join us next. So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep them all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberyy apple scones smell about done. Ahh, youre good. I like to bake. With at t get up to 400 dollars in total savings on tools to manage your business. Why should over two hundred years of citi history matter to you . Well, because it tells us something powerful about progress that whether times are good or bad, people and their ideas will continue to move the world forward. As long as they have someone to believe in them. Citi financed the transatlantic cable that connected continents. And the panama canal, that made our world a smaller place. We backed the Marshall Plan that helped europe regain its strength. And pioneered the atm, for cash, anytime. For over two centuries weve supported dreams like these, and the people and companies behind them. So why should that matter to you . Because, today, we are still helping progress makers turn their ideas into reality. And the next great idea could be yours. Breaking just this morning, iran and world powers striking a nuclear deal that will see sanctions on tehran ease. Oil markets moving on the agreement. Financial earnings in focus. Jpmorgan has already reported. Now well hear from wells fargo. The numbers are ahead. And a new view of pluto. Nasa has big expectations. As the final hour of squawk box takes off right now. From the most powerful city in the world, new york this is squawk box. Welcome back to squawk box right here on cnbc first in business worldwide. Im Andrew Ross Sorkin along with becky quick and joe kernen. The futures at this hour theyre switching around a little bit across the board. Check out europe right now as well. Weve had a lot of news with the iran deal. Of course questions about the future of greece also weighing on us. Then we have some Earnings Report in as well. Jpmorgan this morning and Wallace Fargo just reporting. In the European Market things down across the board. Wells is reporting. And i know youve been looking at that joe. 103. That is in line with expectations. The revenue number that wall street was looking for was 21. 695 and this might be light of that 21. 32 billion is what the number if thats a clean number is. The stock at this point looks like it is down a little. Initially traded higher. This one as you can see and i think j j traded up too. Out of the three weve done the knee jerk reaction at least at this point is down 24 cents or so. That number equates to 5. 7 billion in net income. So its interesting. The 292 billion market cap of wells fargo is well above 252 billion. Even though jpmorgan is more profitable the market cap is actually quite a bit higher. I guess people think of it because of the Quality Holding return. One of the gentlemen said earlier hes going to get too arcane by talking about basel 3. Well, i beg to differ. Hes speaking my language there. And 10. 5 was the basel. Thats the only spice they break out for wells fargo for the tier 1. No rosemary thyme, or anything else. Actually yeah. It was below expectations. Total average deposits, 1. 2 trillion. If you release a reserve of 350 million that would go into the 1. 03, right . Maybe this hit the number by reserves. We shouldnt say its not real when they bring it back out. Now the stock is actually down more than a percent. Dont miss the cfo of wells fargo on closing bell this afternoon. He must be incoming cfo. Havent we had i dont know. Maybe not. Maybe he isnt. Was the old cfo guy on council . Yeah. Anyway, lets get you caught up to date on other stories that investors will be talking about today. Iran the u. S. And five other world powers reaching a nuclear deal. Tehran promising to curb its Nuclear Program in return economic sanctions will be eased. The u. S. Congress now has to approve the deal and has 60 days to decide. Many lawmakers saying they dont think this deal is enough. Heres president obama in the last hour. I welcome scrutiny of the details of this agreement. But i will remind congress that you dont make deals like this with your friends. We negotiated arms control agreements with the soviet union when that nation was committed to our destruction. And those agreements ultimately made us safer. I am confident this deal will meet the National Security interests of the United States and our allies. So i will veto any legislation that prevents the successful implementation of this deal. Take a look at oil prices on this news. They had been down as much as 2 earlier. Right now wti is only down about 7 cents. 52. 13. Maybe thats some people trying to figure out what the congress will do. But the president said he will veto any legislation that will prevent this from being implemented so the bar is high at 67 votes in the senate. And well continue to watch this through the morning. Again, wti down about 2 earlier on news of this deal. Right now its relatively flat. Jpmorgan beating the street on both the top and bottom lines. A drop in legal expenses. Weve been watching that stock and it looks like it is trading up about 11 cents right now. Also deal talk for you this morning. China reportedly going to make a bid for micron. Puts the offer price at 20 a share or 23 billion in total. If this goes through, it would be the biggest chinese takeover of a u. S. Company. Yeah. The previous was the bacon deal. The one that really raised some concerns about whether, you know computer chips keep em. But to hoard bacon over there and not allow us to have it thats where youve got to have a hard time moving the rock up the hill. Is that the same thing . No. You think cipisus is going to look at that . Right. You want me to translate some latin for you. Marco was writing something in latin on his page. I forwarded it to you. And i sent back farmers and i carry you carry we carry. I think. Im not even sure. Or i scream you scheme we all scream for ice ice cream. Here to discuss where he thinks the market is headed Jeremy Siegel, finance professor at university of Pennsylvania Wharton School of business. I dont know jeremy. Why does anyone ever take latin . It was a dumb move. Dan quayle told me there is no litini litinius. No spoken latin. Thats one reason i didnt take it. But a lot of kids today really enjoy latin. The root of our language. It is. Of all languages i think. Unless its greek. So jeremy youve been bullish. The market this year has just been churning. And its given a lot of you know, fake signals one way or the other. Is it a positive that were basically flat right now with everything thats happened and is it a positive that thats been a rolling correction . Or does it indicate that its tired and long in the tooth . I think its positive. When you look at the negatives in the economy, you know now that the last well we dont know if the last chapter in greece has been written or not. But maybe if that subsides from the headlines, well get to the two things that the market should care about. One is Interest Rates and the other is earnings. And were only going to have earnings above 2 last year. The slowest increase by far since the great recession. But whats important is the two Important Reasons for that poor performance is the decline in oil prices which has certainly hit the oil sector dramatically. And the tremendous rise in the dollar. And we had j j about 15 . Of the earnings because of the rising dollar. That was to cut perhaps 8 off of s p earnings which are only up 2 to maybe 10. The good news is those two factors have stabilized. Oil is down a little bit now, but if you think of it is 55 to 65 region the euro seems now happy at 1. 10. We get stability there, we can go back to the organic increases in earnings that we have seen in some of the past years. Its my feeling once we get the first increase of the feds rate out of the way which i still believe is going to be september, were going to have a really good Fourth Quarter because the worlds not going to end and everyones going to say is this all it is . Theyre going to look for it and say earnings look pretty good in 2016. And i still think 20,000 is possible for the dow. Even both of the factors you just mentioned, you can certainly find a lot of positive things about Oil Prices Going down. And you can even oh yeah. You can even find some positive things about a strong dollar attracting money flows from abroad and Everything Else. So even though you point out it does make earnings look lower, number one you can see well thats you know theres reasons that earnings arent rising as much. Number two, there are positive aspects. Then sure the fed is going to raise eventually. Maybe it is september, maybe not. But its such a slow forecasted project projectry. And inflation stays so slow. The worst thing for financial assets, it just seems like its not a problem at all. So its almost like technically the market had to turn around just to wring out some of the complacency. You know youre absolutely right. First of all, the strong dollar is really good for the u. S. And lower oil prices. Were still in that importer of energy thats good for the u. S. It just hurts earnings because we have Global Companies in the short run. These are positive which will keep inflation very low, prevent the fed from going up very far. Were going to get some increases through 2016 but theyre not going to be anything that is going to be scary for the market. And were just not going to end up anywhere near the Interest Rates at all that have experienced in the 60s 70s, 80s 90s. Maybe were going to get to 3 on the 10year. Maybe next year 3. 5 . Not much more. And fed funds, maybe 2 . Bill gross has called that the new neutral. He thinks and i tend to agree with that. The world is different. Inflation is lower. Growth is lower. And that lowers Interest Rates. We have an older investing population that sticks with bonds despite their poor returns. And all that is going to keep Interest Rates down and keep valuations on the ie side for the equity markets. Yeah. Once we get greece and china out of the way, it was those two situations i guess, that could have either one or together could have caused at least some type of you know maybe nearterm problems for the scenario you just painted. But once you if you try to think of anything else that would present a big problem, its hard to come up with anything. Thats why we focus so much on those. So hopefully on wednesday, you know we kick the can a little bit further. Well worry about it again in two to three years when were trying to fund our government again. Well have something to worry about. China might be longer term. China we might need we may be dealing with this for a couple of years as they try to shift into a different type of economy. Joe, i think the important thing is greece is not the only country thats kicking the can down the road. Yeah. The United States and most of the developed world is kicking the can down the road. Thats what scares me. Because if you know were in a great position right now, but if our contingent liabilities ever rear up and really stare us in the face, weve got some issues too. And i dont know. If the chinese are as mean to us as the germans fortunately not in the next two to three years. The budget deficits look manageable, then its longterm. And you know as well as i do anything more than a few years out, hey. The market says just a minute im going to wait and see if anything really does happen. I also should mention i think its important. China is not all that unreasonably valued today. 20 times earnings 18 to 20 times earnings on the shanghai composite for you know, i looked over the last 25 years and the average pe ratio was 30. Often we had it in the 50s. Yeah. We did have a bubble there, but it was no it was also under higher growth times. Yeah. Under much higher gdp growth. Under higher gdp growth yes. 8 , 9 10 , that is definitely true. But still, 18 to 20 pe is for a country thats maybe even growing 5 6 and not 7 the way china claims is not a crazy multiple. It may come down some more. The tech sector really did bubble up too much in china. But the rest of the market is closer to reasonable than weve seen in quite a while. Okay. All right, jeremy. Thank you. Nice backdrop. Youre a lucky man living in philadelphia home of comcast. Isnt it Something Else too . City of comcast . Brotherly love. Yeah. Thats the other name for philadelphia. Not so good names too. There are. W. C. Field. I once spent a week there one friday afternoon. I dont know. Could be worse, you could be in philadelphia. Yeah. First prize is one week in philly and the second prize is two weeks. Two weeks. Thats right. All right. Thanks, jeremy. See you around. When we come back this morning, financials in focus. Jpmorgan ready to hold a call with investors after posting better than expected results earlier this morning. Well get some details on what the company is expected to say about the quarter next. And later, could david herro be your market hero . He manages a fund that has returned 18 annually for the last three years. Beating 90 of similar funds. His stock picks are coming up. Squawk box will be right back. A new season brings a new look. A chance to try something different. This summer, challenge your preconceptions and experience a cadillac for yourself. The 2015 cadillac srx. Lease this from around 339 per month, or purchase with 0 apr financing. Stocks to watch this morning. Johnson johnson. The stock as a result as you can see is up about 41 cents. Cocacola was upgraded from buy to neutral at ubs. The firm cites a probability of a breakout in the next year. They think coke will benefit from pricing and productivity. Intel was downgraded to underperform from market perform at bernstein. The analysts cite weakness in the data center business. But amazon at this price upgraded from neutral to buy at ubs. Gopro upgraded at barclays to overweight from equal weight. The firm pointing to solid execution, new products, and brand strengthens. When we return iran and major powers reaching a deal. President obama speaking a short time agent what about what was agreed upon and what it means for the Global Economy. As we head to break, check out this futures after a couple of great sessions for the bulls. At ally bank no branches equals great rates. Its a fact. Kind of like shopping hungry equals overshopping. If you cant stand the heat, get off the test track. Get the mercedesbenz youve been burning for at the summer event, going on now at your authorized mercedesbenz dealer. Hurry, before this opportunity cools off. Share your summer moments in your mercedesbenz with us. Opinions. Theres no shortage in this world. Who do you trust . Whose analysis is accurate . How do you make sense of it all . A simple unbiased stock score consolidated from the opinions of independent analysts. Is that too much to ask . Nope. Equity summary score powered by starmine, will help you execute your ideas with speed and conviction. And its only on fidelity. Com. Open an account and find more of the expertise you need to be a better investor. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . At ally bank no branches equals great rates. Its a fact. Kind of like mute buttons equal danger. That sound good . Not being on this phone call sounds good. Its not muted. Was that you jason . It was geoffrey it was jason. It couldve been brenda. Welcome back everyone. President obama heralding a nuclear deal with iran as an opportunity worth seizing. And warning the congress he would veto not implementing. The president spoke a short time ago. Today after two years of negotiations, the United States together with our International Partners has achieved something that decades of animosity has not. A comprehensive longterm deal with iran that will prevent it from obtaining a Nuclear Weapon. We are joined right now. Kareem, thank you for being here. Thank you. What do you think about the deal on what you know right now . On a macro level, i think president obama has achieved two of his Foreign Policy objectives. One is to avert a nuclear iran and the other is overt a conflict in the middle east. So i think from now until january 2017 we can be very confident that those objectives will be achieved. And then the rest will be decided in the years to come. There have been a lot of questions about this deal, the president owned up to that in the speech. He said it will be a difficult time with congress. They will need to meet a i hooer bar to derail this. But those concerns and questions come in terms of how we can verify this. How do we know we dont trust the iranians to tell the truth, how will we be able to independently verify any of it . Thats why i said this will take many years to play out. Certainly signing the deal was an important achievement. But verifying the deal and the Intrusive Inspections regime is something which is going to be extremely difficult. Either with north korea or saddam husseins iraq had shown. After a decade and a half of wars in iraq and afghanistan as a country the American Public is very interested in moving on from conflict the the middle east. They certainly dont trust the iranian regime. I think as obama laid it out today, any alternative was less satisfactory than the status quo. Certainly it seems like it may not have been possible for us to maintain the embargo. That could have eventually been broken down. The way we did this left some of our longterm allies in the region feeling they were completely betrayed. Israel the gulf states saudi arabia. Didnt see this coming werent given a heads up. So what does that mean in terms of our traditional alliances there . Well, it just shows you how the middle east is. This is a day of happiness for tens of millions of iranians and a day of mourning for many israelis and sunni arabs particularly in the persian gulf. The reality is i think they are very unhappen pi right now. But i think in some ways only increases their reliance on the United States as a protector. So i dont see those two alliances, the u. S. Israel Alliance or the u. S. Gulf Alliance really fraying in e the coming months and years. In terms of what this will mean for irans actions around the region this is something the president alluded to as well saying theyre hoping to go further and try and keep iran from sistering things up to fund terrorists. How hopeful are you that this is something well be able to achieve in the next several years . You know irans policies in the region have been significant for four decades. I think one of the hopes of this deal is it could possibly empower more moderate powers in iran who want to put the power of ideology. I think thats a possibility over time. But i think in the near term there is a valid concern that this simply enriches more radical actors in tehran. Thank you very much for joining us this morning. Thank you. When we come back june retail sales and import prices. Then stock picking with an international flair. The manager of the Oakmark International funds is here to make the bmw case. As we head to break, look at u. S. Equity futures right now. Were back in a moment. When youre not confident your companys data is secure the possibility of a breach can quickly become the only thing you think about. Thats where at t can help. At at t we monitor our Network Traffic so we can see things others cant. Mitigating risks across your business. Leaving you free to focus on what matters most. Xco0 welcome back to squawk box. Breaking news. Yes, june retail sales down. 3 on headline. Down. 3 on headline. Lets go to the internals. Autos now down. 1 . Down. 2 autos and gas. Down. 1 on the control group. We havent had a negative control group number since february. So we want to Pay Attention to that. Any revisions, you ask . A bit. If we look at the headline number last time it was strong on its original release. Its been down to up only 1 . And that control group at up 1. remains unchanged. Lets look at price index. Input price were looking up. 1 . If we look at year over year they were down 10. Thats pretty close to expectations. So we see that theres issues regarding energy that we will dig on throughout the day. A quick summary, this is the last retail sales of the Second Quarter in terms of the release. Of course next month well get whats for july. But at this point, at this point were going to continue to monitor atlanta gdp now. See if theres any changes, of course, as everybody tries to handicap not only the glide path of growth but the sequential slide path of growth when we look at the last several quarters. Squawk box gang, back to you at the desk. All right. Rick, thank you very much. Weve also been watching a lot of stocks this morning. Jpmorgan set to hold its conference. Kayla tausche joins us with details. That Conference Call is just about to get underway. But you can see jp mohr dan shares have actually been moving lower after being up as much as 2 on the earnings beat. Thats because as people are working they way through this le release, its apparent the beat is due to expense cuts. Expenses were down more than 6 in the quarter as well as a lower effective tax rate for the company. That came down as well. If you want to look for growth its hard to come by at jpmorgan. Up slightly. And asset management. But those are two of the smaller units at jpmorgan. The bigger pillars, consumer banking, that revenue is down 4. 5 largely due to mortgage banking. And that was due to lower fixed income trading. Now, jpmorgan cfo were talking about some of the volatility that led to that trading performance citing among other things a bond selloff in europe the middle east, and africa. Volatility in greece, and uncertainty in china. Speaking more specifically about some of those political flash points jamie dimon saying the European Union is trying to instill some discipline in greece. They need to make sure not to make it discouraging for other members of the eurozone to actually stay in that block. On china damon saying china has the wherewithal to deal with anything it encounters. And china does not reflect the underlying economy. He says he thinks the Chinese Government actually has some fire power to combat any market weakness that they encounter. That is certainly a different viewpoint than we have heard on wall street. Finally i want to take a look at what weve seen in crude oil. One thing were continuing to see is this building of reserves to cover loans that potentially could go bad in the oil and gas space as we see Oil Prices Remain at these low levels. Jpmorgan adding 252 million on the back of downgrades to some of these oil and gas loans. Because were seeing continued weakness there, they said theyre keeping a watch on it. They need to be careful. But that is something jpmorgan as well as other banks will watch. Well have more head lines from the call this morning. For now well send it back to you. Okay. Thank you for that. Fed chair janet yellen is going to be testifying before the house and senate this week. Among the many questions lawmakers are going to have when will rates head higher . Joining us is austan goolsbee. He joins us now. And i think youre going to tell us that she shouldnt be raising and shes not going to tell us that shes raising, right . I think both of those, yeah. Youre right. Just look at the retail sales numbers. Look around the world and tell me you feel fully confident that weve turned the corner and we ought to raise rates. I dont think its there. And when you say that i assume youre pointing to glooes and i assume youre talking to china or are you talking about our own economy in just terms of how were doing to ourselves at the moment . I think all three. Obviously china and greece are the scary side of the equation but even in the u. S. Side youre seeing weakness the job market coming in. Its not bad, its just not as good as what the fed was forecasting a year ago that it should be for them to raise rates. And so i think were going to be in the similar die namic that weve been in for the last four years where they keep saying next year is the year. Then next year comes and they say next years the year. Because the data is not strong enough. Youre now talking 2016. Weve had others talk about 2016, but now youre not even talking about the fall. I think december. Ive been saying december and i still think they so want to raise rates that i think theyre going to put december on the table barring something getting even worse than the modest growth. Austan if its not bad, lets say we agree and we see youre right, its not great but its not bad. Does not bad imply zero . Thats what people are saying. That the benefits of zero are hard to pinpoint right now. Other than the act of actually raising thats what i was going to say. In a normal time i agree with you. It wouldnt say zero. What you saw on sweden and what youre now seeing in the uk everyone talking in the uk about raising rates and they just got data to come out this morning saying the inflation rate has actually dropped to zero and theyre teetering on the edge of deflation again. You dont want to have to move. Far worse than waiting an extra two months in my view would be raising and then saying uhoh, its not this thing just got worse. Now weve got to lower it again. Theyre not sure at the fed, whats driving the economy or what the state of the economy is. What happened . Why are we looking at retail sales that were worse than expected . Whats impacting the economy . Why are things down . Look. My view is the economys growing okay. Its not bad. Its not teetering on recession. But we never got some turn the corner liftoff because we had a bubble and consumers are not going to go back to the old days. And whats embodied in the feds forecast is things are about to get back to normal. That now that house prices are going back up the stock market is high, were going to have a wealth of that. Consumer spending back to the go go days. Housing stargts are going to go back to the go go days. I dont think they ever are. So were in this waiting that the consumers are going to come back and start leading us back to some vshaped recovery. Could still make the other argument though austan that what people are concerned with is that first price means theyre raising rates or whatever. But given its not that bad, zero is probably not the right number. What kind of argument is that . Are you worried about the dollar is too strong. Weve talked about that joe. Right. But i wonder if thats what the fed should be worried about. But you dont worry about just by the act of pricing something where it wouldnt normally maybe it would be priced at zero. The artificial price of keeping them too low, somewhere theres a dislocation. I am worried about it. I think there are. It does look like there are dislocations. Its changing the price of risk. Its just i think the alternative is even worse. And the argument that we ought to raise the rates so that we will have something to do if it gets worse, i think its going to make conditions worse. And then it would lead us to lower the rates. Thats the dynamic i want to avoid. So if we wait another two months or four months before we start, i dont think thats a big problem. Even into 70. Theres no indication that any inflation at all. Even wages, weve been trying to drive them up are up modestly. Austan goolsbee lovely to see you. Great to see you. I think youre right. I think its going to be 16 at this points. Looking overseas for next . And later, why its taken nine years to reach 3 billion miles and now a nasa spacecraft is going to make a historic fly by of pluto and its moons. Much smaller than our moon. This is not a planet. Its expected to dwarf planet and its much bigger than we thought it was. Expected to see the first closeup images of a world unknown. A planet pro will join us in a minute. They got excited because they found it in the 20th century and they named a dog after it. Squawk box will be ragt back. Two streetlights. The only difference that little blue thingy. You see it . Thats a sensor. Using ge software, the light can react to its environment getting brighter only when its needed. In a night it saves a little energy. But, in a year it saves a lot. And the other street . Its been Burning Energy all night. For frank. Franks a cat. Now, two things that are exactly the same have never been more different. Ge software. Get connected. Get insights. Get optimized. [dad]i wear a dozen different hats doing small gigs,side gigs. Gig gigs. Quickbooks selfemployed helps me get ready for tax time. To separate expenses,i just swipe. Its one hat i dont mind wearing. [passenger] i work for me. And so does quickbooks. It estimates my taxes,so i know how much stays in my pocket. And thats how i own it. [announcer]stay in the flow with quickbooks selfemployed. Start your free,thirtyday trial today at joinselfemployeddotcom. With the greek crisis maybe looming over the eurozone is now the right to place your bets . Our guest says to take advantage of the share prices abroad. From Harris Associates where he manages the Oakmark International fund. I was going to a ask you how can the average investor participate, but i guess oakmark is one answer. Yes. Oakmark. Com. Go to our website, open an account. And yours there is a way to go into specifically some of the names that you think are cheap then you dont need to do all your due diligence. You can hand it over to you and you invest in europe for an investor. Heres what we do. We utilize the Value Investment approach which really looks for companies which we view as being high in quality and low in price. And we go wherever they may be. Doesnt matter whether its europe or japan or latin america. We will go looking for companies that meet our specific value criteria. Whats happening today in europe as a result of the greek crisis is people are scared to be on the continent of europe. They see whats happening with the volatility and disturbances and dont want to be part of it. Our view is that these events impact share prices but not intrinsic value. This becomes an opportunity to increase our holdings in quality businesses. Have to worry about the dollar . Well the dollar right now being stronger theres two impacts of this. First, when youre holding a foreign stock, that stronger dollar will clip your return. Because total return is currency return and local market return. But theres a positive secondary effect. And that is most of these companies will benefit. Most of these Foreign Companies will benefit from a weaker home currency as weve noticed that u. S. Companies are being harmed by the strong dollar the converse is true for Foreign Companies especially those based in kind of export oriented countries like germany or france. Lets look at your list of what we can buy. Lets say we go in can a person call up his broker and buy these individual names . Can we buy some richemont . And if i buy it in dollars, do i get hit if the euro gets weaker . In case of richemont, thats in swiss francs. But its based in switzerland. Exactly. Thats the company that owns cartier and mont blanc. In a word then youll get hurt if you buy it in dollars. But you can make up some of that because they export more because of of their weaker currency. In the translation effects, exactly. But each of these i could call my broker and buy the individual names . Theyll know how to do that . Some of them trade as adrs and some do not. Youd have to buy them on local exchanges. This is why if you find a good manager whether its us or anyone else who would sort through the world and look for companies that meet a sound investment criteria that is an approach as well. On your 17 , 18 return over the last three years each year thats net of all fees net of all currency translations . I could have beat the s p the last three years . Thats exactly what the shareholder received. Okay. Very good. All right. Thanks. Okay. Okay. See you later. Thank you. When we come back this morning, jim cramer from the New York Stock Exchange on what to watch on the opening bell. After a big day yesterday youll see things are relatively flat not helped out by the retail sales number that was depressing. Stick around. Squawk box will be right back. Ated investing strategies. My technology can help you choose the right portfolio. Monitor it. And automatically rebalance it. All without charging advisory fees, account service fees or commissions. That may be hard to compute. But im a computer. So trust me. It computes. Say hello at intelligent. Schwab. Com verizon say neversettle. Tmobile agrees. Never settle for verizons overpriced gimmicks. Try the uncarrier riskfree for 14 days youll love it, or well pay for you to go back. York stock exchange. Jim cramer is standing by. Jim, a lot of things to talk about today but why dont we start with what youve been concerned about. Thats the strong dollar. J an j got hit hard by the impact of the strong dollar. I think the initial tech is right but when you see the numbers and you are just so you gasp. I mean there could be such a swing because of the currency. The whole point ive said is the dollar is too strong and youre not going to like what you see and this is kind of what happened with peps sew. Initially they said the dollar is so strong we dont like these numbers. Two days later they came back to them. J and j could be higher in two days. When you read the press release, its like are you kidding me . Minus 14 . No one is willing to accept its normal currency. Look. These companies are doing incredibly well but weve been saying over and over again on the network, the dollar is too strong. This is why when you get to Earnings Period people are just i think theyre looking and saying its impossible. There must be some reason the company isnt doing well. There is. Its the currency. Jpmorgan, very good. I think j. P. Pmorgan did a lot of things right. The capital build was extraordinary. 6 billion quarterly earnings. That one should be higher. Wells, not as good. But wells has other issues right now. I understand why the stock would be down. I think its a stock that two days later bounced back and maybe back you talk to Warren Buffett and he says i was in there buying it because wells is not a quarter to quarter story. Its a longterm growth story. If rates go higher wells will move the most. I think these instant reactions were wrong, have been wrong and will remain wrong. Jim, thank you so much. Coming up pluto revealed and then another big event coming up on squawk box tomorrow. Youre not going to want to miss this. The delivers alpha conference that kicks off in new york. Well be there to get things started. Our lineup has a big list and it all starts tomorrow at 6 00 a. M. Eastern time. You dont want to miss it. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . So youre a Small Business expert from at t . Yeah, give me a problem and ive got the solution. Well, we have 30 years of customer records. Our cloud can keep them safe and accessible anywhere. My drivers dont have time to fill out forms. Tablets. Keep them all digital. Were looking to double our deliveries. Our fleet apps will find the fastest route. Oh, and your boysenberyy apple scones smell about done. Ahh, youre good. I like to bake. With at t get up to 400 dollars in total savings on tools to manage your business. And 3 billion miles, we are finally getting a sneak peek of pluto. Revealing the first images of pluto. A veteran space journalist and the publisher of universe today joins us via skype and thank you for being here today. Thanks for having me. How important is this . Were seeing pluto for the first time. This is amazing. And im just staring at the image right now. I hope youre seeing it too. This is financialphenomenal. We thought it was a planet then we didnt. Do you think this mission will change that . I dont think it will change the planet hood of pluto but its one of the largest classic example of the kiper belt which is a collection of icy objects in the solar system. Being able to fly by and study it this closely is going to tell us a ton about this group of on sects. Ive been told well be able to tell whats going to break out of the kiper belt from this. Just by flying by it were going to somehow be able to determine the risk of becoming a comet and what isnt . No. Its more like what is it made of. How did these things form . A lot of the objects are so far away that we havent had a chance to look at them closely. Finally, new horizons is going to pass just around 8,000 miles above the surface of pluto. It already did, didnt it . I thought it did. It did it about an hour ago, yeah. We havent gotten were not going to be able to see the closeup images for another half way. There are concerns about that. Apparently it cant be taking impajs and inputting data and sending it at the same time. Some people were concerned it would run into a speck of dust before we got the information back. Sfwlo how long does it take to get back here . It takes about four and a half hours for nine and a half hours to get the information back here. What else are we going to learn . This is one of the mysteries. So whenever we go to any new object in the solar system theres not only the questions were hoping to have answered. In this case theres all the new mysteries that pop up. No one was really expecting to see features like this. Theres a heart on it . Yeah. Pluto loves us. Its a heartshaped formation. Thats what i said. Close to what you said. One of the ideas is that pluto has an atmosphere that freezes out depending on how close it is to the sun. This could be that the atmosphere on pluto is in this process of sort of falling like snow down to the surface of the planet or dwarf planet, sorry. Im still stuck in which i learned as a child. It could very well be that pluto is in the process of changing from one stage to another as the atmosphere moves from sort of being an atmosphere to something thats more like snow on the surface. Again, were just in the early stages of this. We have no idea what were seeing yet. Isnt it little person planet phrasefrazier . Dwarf planet. Its up to you. I thought we had kelsey grammar on today. I had the name first. You probably did. You were born with that name but he was just a character. Yeah. I had it first. And i thought he was talking about the difference between pluto and goofy. What is the difference between those . Do you know . One is a dog and the other is a dog but one owns the other. I dont understand. Its not right. You cant answer any of these questions. Im canadian. I cant help you with any of this stuff. Thanks. That does it for us today. Right now its time for squawk on the street. Good tuesday morning. Welcome to squawk on the street. Im Carl Quintanilla with jamim cramer and carl faber. Got some upgrades of coke sam zon and others but retail sales disappoint. Down for the first time in four months