Transcripts For CNBC Squawk Box 20240622

Kate upton has gotten involved. Ashton kucher got involved. But kate upton got involved. Lets bring up pictures of Ashton Kutcher for andrew. Kate upton got involved. You didnt see the paper yet . I didnt see the physical version. Uber. Is that what they . Come on. Buber boom. They got in trouble. Did you see the nerve that twitter had a party and they had plastic cups with like i dont know animal house type of thing. I guess. Nobody has any fun. I understand. Welcome back. She had a family reunion. There were some complaints. Congestion. It was your family. No we had a great time. Serve there. Most of them are still there. It wasnt an actual revival. No. They had a good time. We had a lot more to talk about today but we had 30 people there in two houses. That sowns fun. Especially for kids. It was. Movie watching at night. Out on the beach all day. Did anyone say hold this beer while i do this . No. No. You know that one right. Hey, guys watch this. Someone in your family died after saying hold this beer and watch this. No, that did not happen. We have more to talk about this week but first before we get to this lets talk about the market news of the morning. We have been watching the u. S. Equity futures and they have been higher this morning. Dow futures indicated up by close to 50 points. Nasdaq up by 16 points and the s p futures are up by close to 5. We have also been watching many other markets and well talk about those in a moment. We have a couple of stories were watching this morning. I just spilled a big cup of coffee on the table here. Just water. Earnings central among the names you can watch us as we do this. Among the names reporting before the bell caterpillar, mcdonalds, General Motors comcast and southwest air. On the data front weekly jobless claims hitting the tape at 8 30 eastern time and later in the morning theres a lot going on here and the Kansas City Fed survey and then in Corporate News this morning bank of america replacing its cfo. He will be taking over from Bruce Thompson on august first. Sorry theres so much can you get the camera on here so we can see whats going on here . Thank you. There we go. I apologize. Becoming ceo. He is now the cfo of Consumer Bank and Wealth Management. Theyll be replacing the Wealth Management chief and well talk to a financial analyst about all of this later in this hour. Stocks to watch this morning American Express posted better than expected earnings. The revenues fell a bit short. Down 1. 44 on that. Revenue has been the thing to watch. Again, especially with the dollar. You can play around with earnings per share. Do this do that revenue doesnt lie. Sandisk shares jumping. Reporting earnings nearly double the average estimate for analysts. They are set to launch several new Product Offerings as the new driver and qualcomms revenue falling short of estimates. It will eliminate about 15 of the work force as part of the strategic realignment. This plan is expected to save the company about 1. 4 billion of spending per year. A mixed quarter for Texas Instruments earnings met estimates but the chip maker posted lower than expected sales in its current forecast is falling below protection. Shares of Cheesecake Factory, Cheesecake Factory rising this morning. The casual signing chains profits coming in stronger than expected. Are you ready . Its a whole series. My computer isnt working so the laptop were trying to get set up. Your computer isnt working. Thats why that is here. Ill still work on the paper towels. Were good but we should tell you about some deal news today as well. Anthem is getting closer to acquiring cigna. We have known the talks were in progress but the price tag was the big question mark. Now that number is said to be about 188 a share. Thats roughly 48 billion. Reports say that a deal could be announced as early as today. Lets check on the markets. The futures are indicated higher this morning. The dow is up about 47 points by fair value. The nasdaq is up by 16 and the s p 500 is up by close to five but youre still talking about declines weve seen in recent days. Check out europe the dax is up by a quarter point. Similar gains through many of the other major indices and overnight in asia take a look overnight in asia looks like the nikkei was up by about. 4 . Hang seng had a similar gain and the shanghai composite was up by 2. 5 . Thats the lowest settlement and thing versus fairly changed. A gain to 49. 23. If youre watching the bond market, ten year note yielding 2. 316 . The dollar right now looks like its down against the euro which is at 10994. Its down against the yen as well. Gold prices the other huge story, gold dropped another 1 . It fell for the 10th day in a row. Thats the longest losing streak since september of 1996. This morning its up by about 9 to 1,100. Sitting at 1,100 an hounsounce. Hedge fund bridgewater is flipping its view on china. Its been one of the strongest and most outspoken voices on the economy there but in a letter hes changing his tune warning in his words theres no safe places to invest. He argues that chinas recent stock market route will likely have broad negative repercussions. And my question is is it that this is a sign that the underlying economy isnt as good or is he seeing that the wealth effect as we go down that the animal spirits you know which came first . The chicken or the egg . Does the sell off in the market effect the economy or reflect whats already happening in the economy . I think hes saying it sounds like he is saying that you know a lot of people got into the market in the last couple of years and some of the people with money to invest and if they lose it the actual economy could be hurt. If it happened here the fed orchestrated a recovery based on people feeling better because of their stock portfolio and if it goes the other way, if we were to lose 25 we could see a feedback on our economy. Absolutely, right. Thats been the big concern why they havent raised rates sooner i would guess. Theyre going to raise in september i decided. Quarter point . Then do nothing for the rest of the year. Maybe one more. Lets get going. Lets move forward with our life. Lets bring back the american dream. Lets get things back to normal okay. Lets get going. Were on our way. Were not charging 10 . Its just money. Its morning in america. It is morning in america. Youre missing a word. Always. Always morning in america. Shining city on a hill. Shining city on a hill. Hes going to come back in after this swing that weve seen. When you cant say that all eyes matter without apologizing, something is screwy. Gone too far. Dont you think. Im just saying i wouldnt ask you to take a stand. Uber is buber i believe. Ashton cooper. Why not. Sticking with that. Why don we talk a little bit more about the wave of Quarterly Results keeping the markets plenty busy this week. Lets find out how the markets are absorbing all the news thus far. Were joined by the chief Market Strategist at jeffreys. Also jonathan thats chief u. S. Market strategist at rbc capital markets. Welcome to both of you. Jonathan, lets Start Talking about this so far. Watching what happened with apple, watching apple get blamed for part of the reason the market is seeing a pull back here does that make sense to you . The market pulled back by a quarter of a point but were beating by almost 5. 5 this earnings season even including t you know a what happened with tech stocks in the last day or two this is a fantastic earnings season. Last quarter we beat by 7 . Analysts are underestimating how strong earnings are. That sounds great but if youre look for the markets for the year weve gone nowhere. Were down again. Were up small. S p is up is a couple of percent. Its not very exciting i agree and i think the story for the u. S. Is less focused on earnings and more on what joe was talking about which is the next rate hike and its hard to say lets pile into stocks before the fed is about to hike rates. Thats not been a great trade. Even though the fed is warning and warning that rates will stay low for an extended period of time you might not be looking at rates returning to normal for a couple of years. Thats fair and they will be pretty slow and they are going to go. I like the september idea but i also like the idea of telling the market most likely we wont go in december so they can get that built into the market but this is hard to do. They probably wont do it in september. They disappointed plenty of tiles. They have and its a badge of dishonor to have a zero rate after the suckcess we had. Nine years since zero Interest Rate. It really is we should be celebrating a 5. 3 Unemployment Rate. Celebrating 200,000 jobs a month and one and three quarter to 2 growth. Its been fantastic. They did a great job. They should get off zero. I agree. The market is wrong that it should have been climbing through the year. No we have been saying this is the year for europe. Focus on europe. Dont focus on the u. S. U. S. Exit and removal of accommodation too hard to figure out when janet is going to go what theyre going to do and how the market is going to react to that. We like the qe playbook. When you do a bunch of qe stocks go up in your currency weekend and you guys have been talking about the european stock market this year and its up about 20 . I think dax for the year and thats a great trade. I couldnt disagree more. I think the fed is telling you right now we have a broken economy and we cant get to a quarter point without fear that this thing is going to fall over. The economy is stronger than that and when the fed finally says yes we are confident and they get to a quarter point and the market celebrates it youre going to see stocks pop on this. If you look at the trend, when Interest Rates are ultra low rising rates are good for the market because they signal health not failure. Thats what were going to see and the back half of the year will be a big one and the earnings are coming through fine. The only area youre seeing weak earnings is the Energy Sector which is a one off. Its not a sign of Corporate America america. And in greece, when people were waiting to see what happened during that time it was the financial banks and big institutions got out. The people now holding the bag on this are the taxpayers. The sovereign debt thats gotten in taken the place of the banks. Started thinking about that with the u. S. Stock market. What the fed has done is allowed a lot of the big players to recoop their losses and get back to where they were. You wonder if theyll pull out and small investors will be left holding the bag again. I dont think so. If you look at the way the math works the fed is printing money but the velocity of money collapsed. Sitting in the banking system. The fed is not the run this thing is being propped up and if you look at where Interest Rates are they look far more normal. We have a low growth low inflation environment but not fragile and the market is going to shrug when the fed starts moving out of the way and that will be a surprise and positive one. Any of you want to take on china . Its kind of interesting because hes been the other way for so long and i think the china story is actually just getting started. I like the china story. Im getting more excited about it by the day. The reason he is probably nervous and i would hold this nervousness is you just dont like to see officials come in and close half the market stocks and say you cant sell them anymore. Thats going to be for a trader a very very difficult period but these guys are growing. Theyll have growing pains in how they build out of market. They have been very methodical on how they bring markets to a nonmarket based economy but theyll not have a 4 trillion stock market. I think youre going to see a weaker china than we all think. Its Business Investment and not their consumer. They have to slow because they have way too much excess capacity. They need to rebalance that. They tried to do that by playing around with markets. That doesnt make any sense. They stopped buying foreign sovereigns because they dont have the ability to do it. This is the canary in the coal mine. Home prices sizzle higher than 2006. Adjusted for inflation, still 20 below the peak. This is with 30 years that have been with the three handle for the last however long. With Interest Rates where they are. Jobs picture back in. Its 7 years at least six and still 20 below. It took 15 years to get them back. They were just crazy levels. Its going to take a long time to get them back. The majority of families have the economy. Its a phenomenal high. At least youre seeing some good action in housing because thats a key thats the number one thing for the consumer. Much more than nasdaq stocks. Thank you for coming in today. Thank you for having us. So im just wondering. Is he saying get out of the shanghai stock market or that china is going to slow and effect the other countries in the area and the Property Values are going down . Is he saying shanghai is going further down or is he saying the country itself probably . I dont know. Coming up, a mixed quarter for American Express plus a management shake up at bank of america. Well talk financials next. Weird because they were saying he was just starting to pay off. Didnt they say that . First as we head to break, heres a look back at this date in history. Blach 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. Buzz this morning about a possible sale of the financial times. It calls it a potential disposal of ft group but in a statement there is no certainty that the discussions will lead to a transaction. A lot of people speculating about who may want to own the newspaper. How much do you think i mean, what kind of prices are we talking about . The daily news is like 1. The asking price was 1. Thats too much for the daily news. Thats overpriced. I assume at least a half billion newspaper. Maybe a billion dollar newspaper. Could be 2 billion i dont know. Cigna is 48 billion. What is the market cap . We will look. Its just the point is you know, its like go ahead, buy it. Content is still king. Content is still king. Right. We should tell you about other Global Corporate ratnews as well. Walmart taking ownership of a ecommerce firm. Buying out the 40 stake it didnt own. Last month china said it will allow some full ownership of ecommerce business. Bank of america is replacing its cfo. Joining us with a break down of the results is david hilder. Also talk to you about American Express as well but lets go with b of a first. What do you make of the shake up . Look i think its very clear that one of the toughest jobs in the world right now is to be the cfo of a very large bank. It is a killer job and i dont mean that in a good way. Its a very very tough job and if you look at what cfos of very large banks did before the crisis since then you have now added the whole stress test process every year. Why did he screw it up so royally so many times . Well i dont think thats the explanation. I think regulators are clearly demanding more and more every year and there are certainly some people its the regulators fault or their fault . In the end if youre a large bank you have to deal with your regulators on their terms. One of the problems is theyre changing the terms every year and every year the regulators seem to have decided to make an example of one large bank. And he has now been on the job i want to say six years. Came in 2009 2010. Ceo. So five years. How long do you think hes going to be there and now do you have any sense of who might replace him . Given that the cfo is now the former cfo. Hes a5. That could mean another ten years or more in that job. Would you like to see him in that job in. Yes. Hes very capable. He worked in every part of that business. Its been a long fix. Probably taken longer to fix as ceo than i thought it would but he made an enormous amount of progress. American express did beat on the top line rather they beat on the bottom line but not on the top line. Right. So above expectations by about 10 cents above consensus. The Foreign Exchange adjusted revenue was up about 5 when you do an apples to ams comparison and their Business Growth is about 6 year over year. Thats a little bit less than the First Quarter when it was 7 but it still shows that the franchise continues to grow. The big issue is that Marketing Spending for the second half. Does this still exist . The stock is being priced as if theres something broken in the franchise. I think the franchise is not broken and i think they will be able to replace some maybe all of the earnings but its going to take some time. The other issue you have is not just the earnings and revenue coming in but now theres the change in the rules that will allow retailers and stock keepers to go ahead and say we prefer you use visa because American Express costs us more. How does that change . Will they cut their margins in order to compete with the visas and mastercards. Its only been in place for a week or so and it came as a result of a Court Decision that may ultimately be reversed. Well see. I havent run into my merchants so far that have said will you please give me another card instead of your American Express. If you get to the point, retailers already do it. They try to force you to use your debit card credit versus debit. Your debit card versus credit because it costs them less when you wruz ituse it as a debit instead of a credit. They know that American Express customers spend more. But the default causes you to jump through i know it only because i hate giving out my debit card. I will not give my four different pin number but most use the default and thats the debit card situation and its that way because its beneficial to the retailer. Again, American Express has a very large and very well imbedded franchise and i really dont expect that change to have a big Economic Impact on them though well see. Its going to play out over the next few months. Okay. Thank you for coming in this morning. We really appreciate it. Coming up the cost of care. More than 100 oncologists are joining forces to object to high cancer doctor drug prices. First as we head to break a look at yesterdays s p 500 winners and losers. Every Auto Insurance policy has a number. But not every Insurance Company understands the life behind it. Those who have served our nation. Have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. More and more, data is visual. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. There it is. That was a video thats gone viral of Lindsey Graham responding to donald trump. Trump gave out grahams personal cell phone during a speech in South Carolina slamming the senator as a light weight. Call me maybe as the song in the background there. Lindsey graham finally got some coverage. Based on donald trump. Welcome to the world. You take what you can get. Is it illustrative . Donald trump is a 501 for president. Right now hes not. Whatever pick a number. So hes 21. Lindsey graham is 20,000 to 1. So i would be saying thank you mr. Trump for saying anything about me. He may be that video. Youre welcome. What else we got going on. I saw a story in the wall street journal today. We have been auking about how the pharmacy benefit managers have been pushing back at the high prices for cancer drugs. Now theres a new story that says the doctors themselves are coming back and theyre on the attack for this. Theres more than 100 oncologists around the world, places like the mayo clinic that have come out and said that the soaring cancer drug prices are outrageous. Theyre calling for new regulations to try to control some of these prices. The doctors see themselves on a firsthand basis. Theyre watching their patients that have cancer and are trying to battle the cancer and going through the costs that bankrupt them. These are are drugs that cost 100,000 a year or more being pushed on people in their most perilous time. Its going to go up too. What peoples you know responsibility for how much they have to pay. When youre looking at the increases in health insurance, the increases may come down according to some studies but theyre not accounting for the cost. So whats the right answer . You could ask you know my brother is an oncology. So im not going to slam surgeons but have you ever looked at what some of the procedures cost and doctors do all right . If you were going to really try to hold down costs everywhere everybody is involved. What do you do with the generics situation . Would you cap it . I wouldnt cap it. Across the board is that a better will there be more or less innovation and Capital Expenditure . With utilities or without. A bigger part of the problem is the idea that so many costs are not covered without insurance. Well know it was getting to that problem and we know whats causing all of these mergers too. I have decided by the way because well probably talk more about this deal later we should also be worried about the blues. Thats where the real concentration is. I was talking about how theres antitrust issues and there will be on some of these transitions but the real issue of where the competition is is the blues. Uber one, progressives zero. De blasio screwed this up. And then in the post it points out that during his campaign he had 52 uber rides. Didnt like yellow cabs very much during his campaign and then the last quote here until journal is meanwhile savor another illustration that the highest priority of progressive politics is to use the power of government to serve the power powerful. I dont understand the valuations sometimes but the way its worked and what it is opened up in terms of a way of thinking about doing it and its such a big example of as we move forward, once again, this is your guy, de blasio. Hold on. How is it possible that were having this conversation. Hes not your guy but the paragon of progressivism. Dont look at me. Progressivism hes the guy and can you name one thing that hes done that helped new york city. As someone that knows about progressivism is there anything that you will say . Dont play dumb here. But okay should it be regressivism. Dont avoid the question. Is that a better name . Ill tell you what happened that is very progressive yesterday that is minimum wage in new york city. Thats going to end up being regressive too. You can call it regressive if youre a fast food chain in the city. That was real news yesterday. Theres a lot of 18 and 19 years old and trying to move up in the world an learn how to work. It was your buddy Ashton Kutcher that said the first time and then you move forward. You don stay in if theres less entry level jobs because of this because they have to pay more then its countier productive. Well have don on in a moment from audible. You go over and spend any time in newark at some of those highrises where there are people working total minimum wage and doing it not just as a starting job but for life and there are slums in america and it is there. You go up north do you know what i was thinking about this morning, though, just how in my lifetime how much our society has changed. The idea that you are saying that this is not a living wage. That was understood. These are jobs that people had when they were in high school at my age. Now you dont have kids in high school doing some of these jobs and you don have people moving up from these jobs. We all point out heartbreaking examples of things that happen in this country but if the end result is that theres more people hurt and more people that reason able to get into the work force and more people that have a zero minimum wage because they dont have jobs. Then what good is it to say i feel virtuous. Its not about virtue. Its about a number of these studies. Modest increase. Modest increase. Which isnt going to help people that much anyway. The bipartisan cpo study said while you will see some people moving above the poverty number what are the exact number of people losing jobs. If youre living in one of those highrises where else has a wage control or price control not caused something that is im not trying to argue theres poor people that work in highrises that dont get paid enough. We understand that but what if a lot of other people all around the world get better high paying jobs because you dont mess up the labor situation with something countier productive. Im not disagreeing. Its dealing with the symptoms and not the problem is the bigger issue. Better training better education. I think you can do both. Its just against logic. You think its against logic. Yes. It goes against logic but you feel good about it. 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. When you get up to 50 off thousands of hotels with travelocity it means you can also afford to get up to 50 epicer epic rides. Making it the place to find a place for summer escapes. Go and smell the roses. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Two manufacturers snap on posting results this morning. Earnings beat the street but revenue fell short. Trying to marry technology with its tool business. We dont always think of snap on as multinational but ill bet revenues were hurt in large part by some of the business you do outside of the United States. Sure. Its 40 of the business outside the United States but if you look at organic growth it was up 8. 4 and so we think thats an encouraging, encouraging result. U. S. Business is going gang busters and europe and asia pacific while mid Single Digits are still mixed. Its interesting watching how your Company Transforms its as we all of us have seen the good and bad aspects of technology and what it means to the Auto Industry and we saw a car driven into a ditch by someone that got hacked the other day. But it does illustrate that if youre a technician or someone that works with snapon you got to move fast into the future with all the technology that goes into cars and that snapon has been at the forefront. Yeah thats a true situation. If you ask yourself this one of the great tail winds behind our business is the vehicle fleets are aging, the aircraft fleets are aging but the technologies are changing. We make hand tools and guarentee them for life. How is it that we have any business because we keep innovating around that. This quarters earnings were 17. 7 and overcame 40 basis points of currency. We were encouraged by the fact that were able to shake off currency and hit a new high in profitability because of that technology. Well talk more hopefully about the results and stocks been doing great but you are outspoken in your efforts to try to bring manufacturing back because unlike minimum wage jobs, manufacturing jobs provide someone with a descent living and were not doing what we need to do training people to technically do these jobs but while we fixate on raising entry level minimum wage which isnt really going to it may help two or 3 of the people many of them teenagers but what we need are good paying jobs that create middle class standards of living and thats manufacturing. I couldnt agree more actually. One of the things when i read the paper and people say the middle class are shrinking i say no kidding sherlock. Havent heard that expression. Is it no kidding sherlock. Sorry, go away. Youve heard that before right . Is it kidding . No kidding. No kidding sherlock. If you havent heard that before, you heard it first today. Anyway yeah but what can we do . Anyway the point is that middle class jobs are linked to manufacturing and one of the things about manufacturing is they basically become the amply identifier of ideas and the work force in the United States is generally in competition with other work forces around the world to be the am ply identifier of those ideas and it cuts directly to training and it has to do with upscaling the American Work force. We restart manufacturing. We expand the middle class. These are the jobs which created america as it is. Thats one factor of the training. The other factor is really frankly joe that these jobs are viewed today some what as the consolation prize of our society but actually theyre a national calling. Theyre the jobs that have created the society we enjoy and what we need to do i feel passionately about it and snapon sees it happen in our company. We need to restart the manufacturing engine and we wont have to worry about front line jobs or minimum wage jobs. Exactly. If there were enough good high paying jobs to go around takes our eye off the ball and what we should really be doing. Go ahead. If you ask the National Association of manufacturers what the most important characteristic of where to locate sy factory is it is the skill of the work force and if you ask anybody thats done work in china theyll say what makes a chinese factory rise or fall is where you chose to put your factory and how good the work force is. Were working on it and things might be moving in the right direction soon. Anyway, we appreciate it. Thank you for your time. When we come back this morning, move over silicon valley. Why at least one start up is betting big on newark new jersey as a future technology hub. And later eli lily ceo beating the street this morning and raising its guidance too. Shares are up sharply on the news. Take a look at that. More than 5. 5 gain for the stock. Stay tuned squawk box thereby right back. 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. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Automobile. Com announcing a partnership to bring the fastest public wifi to newark, new jersey. Audible is a prime example of a company puts roots in new york and hoping to bring life back to the community. Don katz is here with us this morning. First audible is now a unit. How long have you been part of amazon . 2008 we started being a subsidiary of amazon. They moved the company to newark in 2007. We got more press out of curiosity than we did when we got taken over by amazon. Why did you move to newark . We wanted to see what a very Successful Company could do to accelerate the comeback of a city. It was as much as that. And how much people are you employeeing now . Well have 800, 900 by the end of the year. Weve grown large. One of 13 dploebl centers forglobal center. We have mentoring programs where people go out and use our technology to help kids in the fifth and sixth grade. And this venture fund is another step to defines the company. Hundreds of millennials come from brooklyn because they want to be part of a company thats trying to figure out how to create change. Of course the big question is are they coming from newark . We have a lot of people employed from newark. But the truth is were only 18 minutes where were sitting from newark. A lot of companies are out in bushwick 50 minutes away and triple the rents. Nothing like the band width that people describe what you have done in terms of wifi. Thats a huge part. So were going to be announced with cory booker and all sorts of other politicians, newark venture funds. Part of that is an accelerator. Were 18 minutes away with rutgers in the bottom floor an accelerator with 10 gigabytes to the floor. Meaning the kind of stuff whole buildings around here dont have. And then weve made a wifi system newark fire bolt that is the fastest in the world. Literally you can stand on broad street in newark and download multiple movies at the same time at 400 megabytes per second down. And if you buy comcast for 90 you get maybe 90. So its a fascinating thing. Its based on the fact newark sits on a massive fiber hub below it. Its like a natural resource. We grew it out and its part of just waking everybody up to the fact that newark is a cool place. The more companies that have come, the more tax strain that would put on that system. It worked so well because no ones using it right now . No about 18,000 people including people taking terabytes down. Its been in beta for awhile. But the point is its the idea is Early Stage Companies should join audible. Its a fantastic place to grow a business. And this venture fund uses this mature accelerator model. One of the questions, we were just having a debate about minimum wage fast food in new york city. I said you were going to come on and can you have a minimum wage thats a lifetime wage. And i made the argument that there are some People Living in the highrises and public projects in newark. So my question is what youre doing, does it impact those people . Absolutely. In fact theres academic corroboration. If you look at the multiplier effect, every engineering job creating five Service Level entry level jobs. And so connecting this is what you go to berlin where artists, engineers have come together. The Service Level economy. It was a poor city a few years ago. Now its not. Its a rich city. And theres turnarounds going on. As long as you connect to early stage tech you have this multiplier effect. Its where Wealth Creation happens. You dont even pay everybody makes more than minimum wage at your company, right . Oh, yeah. But now working at audible is a better thing now because everybody can be the mentors to startups that are an elevator away. Flipping burgers probably the skill required probably not worth 15 an hour. But and theres a lot of people who will have entrylevel jobs and be happy to make whatever it is theyre going to make and move up in the world. Its sad people in the world that skill levels only allow them to get that type of job. The question is and its tragic but theres other ways of trying to help people like that probably. But to takeaway if theres fewer entrylevel jobs. Flipping burgers is not worth 15 an hour. If it takes away from people that want to work up it takes it away from the people. And this is a great way to do it. Lets focus on this instead of that. Its all about early stage tech. Theres so many people. Interns get paid nothing. Does that mean you shouldnt have interns . Theyre playing us out. Come on back. Congratulations. Thank you. Coming up this mornings top stories plus nasdaq ceo bob greifeld on the numbers and what they tell us about trading. 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. What do you got to offer us today . Balance transfer thats my game bank you never heard of, thats my name haa thank you. Uh, next. Watch me make your Interest Rate. Disappear. Theres gotta be a better way to find the right card. Whatever kind youre searching for, creditcards. Com lets you compare hundreds of cards to find the one thats right for you. Just search, compare, and apply at creditcards. Com. A one, a two, a three percent cash back its one of the busiest days of the year for earnings. This hour comcast, caterpillar, 3m General Motors dow chemical, and under armour. All here to talk earnings and what are impacting their businesses. And the worlds Biggest Hedge Fund turning bearish on china. There are now no safe places to invest. 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 joe kernen along with becky quick and andrew ross sorkin. And i understand that whats the name of this company . Comcast. Parent company. Do you know the symbol . Csx . Csa. Two symbols. Comcast is reporting and i just saw one number. 84 cents. In line with expectations. That isnt the number for comcast. No. Generally look at operating cash flow and free cash flow. Those tend to be more important than what they go along with. It looks like they were in line with cable operating cash flow. But exceeded expectations on a lot of metrics including consolidated cable and Nbc Universal revenue. Consolidated operating cash flow and video customer results. Ive tried to you can see on the very righthand side of that that if youve watched the stock and we dont watch it closely. But if you do watch the stock, even in down markets its showing some strength. Im trying to figure out was it ron meyer with jurassic world, the movie studio was up 95 . That probably helps. I was trying to figure out why the stock has been strong. When the deal fell apart, it was about 57. Now its 64. 50. Couple things happened. Tell me. Couple things happened. First you had the charter Time Warner Cable deal and the multiple applied. You had the movies in jurassic world, minions, success of those. I think there was a little bit of an overhang on the stock right after the deal as to what was going to happen next. There was the buybacks which did happen. Wasnt there the move to the city by squawk box to the new studio . That was a big piece of the puzzle. People have overlooked that component. On a per share basis. The squawk piece has made a big difference in terms of what these earnings look like. I dont see it mentioned specifically there. And Mike Cavanaugh this is his first outing. Later today on the call. Hes got a cool job. He does. Going to be doing new ventures. I looked at some of the other metrics. In terms of you know we always talk about cord cutting. You look at how video and its holding up. And adding new triple play customers was the best quarter Second Quarter tends to be a tougher quarter. You have College Students leaving and going out this time actually showing significant improvement. Last quarter a year ago, Second Quarter a year ago it was down 25,000. This time there was additions of 31,000. You dont always think of it with Domestic Companies. Wasnt it 18. 1 or something . I think it was 18. 1. They did 18. 7. So revenue well above expectations. And in consolidated revenue, up 11. 3 . Greifelds here. Only Domestic Companies are doing this. Big number. Bob greifeld is here and we should point out nasdaq earnings pretty strong too. 83 cents. Street was looking for 80 cents. Take a look at lusting services. 70 win rate. I guess its being character iessed as smart beta revenue. Is that . Passive indexing has been quite popular. A subset of that is smart beta. We put some rules into how you manage the money. So we made a focused effort on that. We now have 108 billion under management. Were proud of the progress weve made there. Hey, joe, can you disclose this . The nbc revenue up to 7. 2 billion. How much do you want to ascribe to squawk . I cant. But i will Say Something more important. Getting nbc the network out of the dumps in a huge you know heavy lift. Second year in a row number one between 18 and 49. I dont think a lot of people thought that was possible. The cable business you can see is tough. Yep. You can see operating cash flow with the networks. Down 4. 6 . I was trying to put a smiley face on that. Squawk component of it. Lower revenue increases and other operating at administrative expenses. Remember when they bought this, the whole plan was to get rid of the theme parks. And the theme parks have turned out to be one of the bright spots. Cash flow up 44. 9 . I dont know why these guys always talk about comcast. Its just another company. Just another company. Its really something. This big building here. It looks much nicer now. Did you notice that with the peacock . Yes. Its an enhanced view of the skyline. Much nicer. We should also point out another company out with earnings right now. Dow chemical is out. Well i dont know that anybody phrased dow. Dow beating the street. Adjusted eps tops consensus of 83 cents. The big driver raw material costs to make plastics. We should tell you revenues were a bit short. As we mentioned, nasdaq beating wall streets expectations. The worlds second Largest Stock Exchange with revenue of 18 billion. Lets get back to bob greifeld. He is the president and ceo of nasdaq. Thanks for being here. My pleasure. We have a lot to discuss. Lets talk about why things are better than the street expected. What happened . Record earnings for us. I would say the equity market has been strong. We set alltime records with respect to ipos and volume traded. In the states we had a great ipo quarter where we have now 86 listings come to nasdaq. Just yesterday we had blue buffalo. We see the equity in the marketplace is relatively healthy. Is that a return of volatility . If you look at the markets, theyve gone just about nowhere this year. I think its just good merchandise, good product coming into the marketplace with the number of ipos driving a lot of that volume. Who do you think is doing a lot of the trading is this the average retailer . I think its a bit of both. I think you see some increased retail participation in the market. I think you see an increase in managed mutual funds. I think theyre having the best quarter theyve had in quite some time. And the general increase in passive investing. The wall street journal has a story about how you and the new york Stock Exchange is going to be backing up each other. We compete with them quite vigorously. But there are times when competition is not the right path and we need to cooperate. And this was it. For the benefit of the industry we want to make sure we bring additional resiliency to the process. So working with jeff and tom, we said let us back you up and you can back us up. And that really is one o the single points of possible failure in the financial infrastructure. And were happy to do it. This is a result of problems we saw a few weeks ago. I think that was the trigger. We knew it was there. But when the problems happened we said this is the time. They said this is the time. So well make our filings to the fcc. Do you understand what happened with that trading shutdown . Its really for them to speak to that. But software is a complicated environment. When and i think they in particular have certain issued left from their legacy administrations theyre working through. You know, we looked at it. And at the time they said they did not think it was a cyber attack. Thats a conclusion a lot of people jumped to because it happened on the same day united saw a shutdown. Has people trying to figure out how vulnerable we are. What do you think . Well its really a constant concern. So when you have any sort of issue, your cyber people are on hyper alert and have to ascertain the situation. Its important to recognize that we get attacked every day. So it could be a thousand times a day somebodys trying to penetrate our systems. Then we have defenses in place to repel that attack. So its always a cyber attack. Youre successful but that doesnt guarantee you the next day you will be successful. So you have to be ever vigilant. You have to understand the threat factors change on a constant basis. How much worse is it in the past two or three years . Let me say whats better. You have more Vendor Solutions today that you can buy than you had three years ago. A lot have become public on the market. So we have better tools available to us but i think its as bad if not worse. The hackers are more sophisticated than they were. In a real sense, we gain ground. How many times in a week or a month does somebody come to you and say were dealing with this. Were dealing with some security a potential breach somebody trying to breach us. And youre having to then i think the assumption is theyre always trying nap is the working assumption. If somebodys not trying that would be unusual. Do you get regular briefings . Definitely. We have a large number of people always trying to penetrate our systems. Obviously some more advanced than others. But thats a state of being. You have to accept it and be ever vigilant. Is there a way you can engage the individual investor participation at this point . Or is there so much going on with computers we dont even know . Whats your feeling on how engaged they are . Your question is direct investor participation yeah. And the nasdaq should know. We know the direct participation by looking at where the flow is coming from our customers. The indirect we have a retailer investor investing in a mutual fund. Will it be actively passive. Theres an ability to that. Obviously in large part of the dollar. Are we overheated underheated . Back to the bullish levels that portend, you know some when they get theyre buying for a downturn. Are we there yet . Heres the comparison ive used. Back in the dotcom era, the average priced multiple was about 180 on nasdaq. Today its in the 20s. So its nowhere near that. Its also interesting to me is Nasdaq Companies in 2014 paid about 80 billion in dividends. And this year will top that. So back in the dotcom era, there were no dividends because there wasnt that kind of cash flow. Clearly the market has appreciated, but you cannot in any way shape or form really parrot to what existed back in the early 2000s. And a long road back. I love seeing the nasdaq back above 5,000. I brought my old hats out. Theyre kind of old. They still fit though right . Still fit. Exactly. Thanks so much for coming in. Appreciate your time. Coming up eli lilly coming out with earnings in the last hour. Ceo John Lechleiter will join us. And then earnings for caterpillar and 3m and gm. Plus Southwest Airlines Ceo Gary Kelly joins us to break down his companys latest quarter. It is a hectic morning for earnings. Stick with squawk box for the latest news and interviews with so many of the ceos and cfos about them. Were back in a moment. But not every Insurance Company understands the life behind it. Those who have served our nation. Have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. Welcome back to squawk box this morning. Bank of america replacing its cfo. Paul denofrio will be taking over for Bruce Thompson. Now the ceo of the bank and Wealth Management group. B of a also going to replace the Wealth Management chief. We should tell you new york citys uber fight is over today. At least for now. Mayor de blasio dropping his proposal to cap growth of the ride sharing company. The city will conduct a fourmonth study of congestion traffic, and pollution. The mayor could revisit the cap in the future. One comment on this. It is possible that de blasio succeeded in some odd degree to force ooub tore hand over some of the data. Thats an issue in terms of what that study was going to look like. In any normal environment or time period i think people should justifiably just be flabbergasted at the words putting a cap on ubers expansion. That its normal in todays world and environment. And its not just new york city. Right. But you can see it happens where theres entrenched just like it always happens. In france. Remember how the guy there that have the taxis, the unions that are already entrenched and for whatever really you can see it in greece. This is part of the problem. No one will allow changes to allow more pharmacists. We never seem to learn. Anyway eli lilly posting Quarterly Results. Revenue better than expected. The companys raising its forecast. Joining us with more color on the quarter is John Lechleiter president and ceo of eli lilly. Its been a long journey. Youre probably pretty pleased. Skroe, well take it. We said in january when we gave investors our longer term outlook that we expect to return to growth after weathering a series of patent expirations that began back in 2011. So were very pleased today. Nongap growth was a negative 4 . But we were hit by eight Percentage Points of downdraft from a strengthening dollar. So we did see good topline growth. Were starting to get revenue now from those three products weve launched in the last year. Weve got two more under fda reviews. So it was a good quarter for lilly. And if we use the nongap number for earnings per share, i dont see how analysts miss by i mean you were ahead of analyst expectations by 16 cents. Is that meaning were better than you thought . Or were they not factoring something into their consensus . We dont guide for the quarter. When you look at what the analyst assumptions were and where we came out, it was a lot of Little Things adding up. Higher on the revenue line. We did better in gross margin. We controlled operating ex. Enss a little bit better than what they analysts had in their model. It all kind of added up to get to that 16 cent beat. You do give some guidance though. You just beat by 16 cents. Are you going up 10. Is that just conservative . We raised to 3. 30 on the nongap basis. That reflects the different dynamic, second half of the year versus the first half of the year. Keep in mind as were launching products and were bringing drugs through our late stage pipeline. You know that drives a certain amount of expense. We want to launch our products well. We want to invest in these pipeline products. All in all, even though we beat by 16 we think increasing a dime is a prudent thing to do. And rough place to get a job. You have to live in san diego to work for your biotech center. Yeah thats rough. Maybe you can pay enough to attract people to that. But 130 new positions. What do you think the average salary per year for these positions is . These are good jobs arent they . These are good jobs. Reremind people our industry employees about 800,000 directly and a couple million more indirectly. These are good jobs. Were employing scientists mainly in san diego. Thats where we do a lot of biotechnology research. Weve been out there about a decade now. That labs been productive. Were going to double the side. We watched phase one, phase two, phase three. So youve got some paying off now. All the way into phase three. Could you just summarize the most promising products . If youre phase three, you expect them the year after to hit the market . Sure. Weve got two drugs under regulatory review. To treat lung cancer. When we acquired back in 2008. We also have a drug to treat psoriasis. Its now been filed in the u. S. And in europe. When you look at phase three, we have seven drugs in that. We have a drug to treat to lower cholesterol and raise good cholesterol. This is the cardiovascular drug also in phase three. And we have an interesting cancer drug. Were studying that to treat Breast Cancer and lung cancer. And we have two drugs for pain conditions. Were developing that with pfizer. Another is called our cgrp anti antibody to treat migraine headaches. We hopefully have more behind that. While we have you here we talked earlier about onkolgscologists who are in a different position than basic Science Research and trying to get, you know approval for drugs. But if you were an oncologist where youre with patients every day and you see some of them struggling to pay for cancer treatment, you think about what that person thinks. Then you see someone like you that nine out of ten compounds fail and you you know youre just hemorrhaging money going through all these clinical trials. Its a weird dynamic. Both sides have a lot of merit in their argument. You need to be able to charge what you need to charge to recoup your investment, but then youve got the Compassionate Care issues for the oncologists. Whats the right balance . Joe, look. I think both are right. It does cost a lot of money. Im pleased to say in cancer in particular were making Great Strides with some new medicines that have been introduced lately. Were also on the other hand very concerned that patients who need these medicines be able to gain access to medicines and afford these medicines. But look, medicines are a small fraction of what the total cost of cancer care comprises. And yet whoever heard of paying out of pocket for a hospital stay . We need an insurance system that provides adequate coverage for all the elements of care including medicines that patients need. Is it going to get worse . Is obamacare going to help or hurt in terms of more out of patient personal expense . Well i think some of the insurance policies weve seen through the exchanges while premiums are low, the copay or the coinsurance or the deductible associated with gaining access to medicine is too high for many people. So we need insurance that enables people to access these miracle drugs. Right. So thats what weve heard about health care in some other places. Everybodys got it. But no one can get any health care. I dont know what the answer is. Anyway, john well be working on that as we move forward and see what happens in 2016. Thanks. Appreciate your time. Thank you. Thanks a lot very quickly under armour shares of that company are trading higher. Came in with earnings of 7 cents a share. Street was looking for 5 cents. Company is also raising its revenue expectations for the full year. Well talk more about that a little later. We also have results coming from caterpillar, 3m and gm. Stick around. Squawk box will be right back. Ah aflac . Aflac i thought you said this guy was the best . Oh, hes a horrible stylist. Gah . But hes the best at paying claims fast really. Mmhmm. Paid mine in just one day. One day . Yea. Aaaflaaaac in just one day, we approve and pay. One day pay, only from aflac. 40 of the streetlights in detroit, at one point, did not work. You had some blocks and you had major thoroughfares and corridors that were just totally pitch black. Those things had to change. We wanted to restore our lighting system in the city. You can have the greatest dreams in the world, but unless you can finance those dreams, it doesnt happen. At the time that the bankruptcy filing was done, the Public Lighting Authority had a hard time of finding a bank. Citi did not run away from the table like some other bankers did. Citi had the strength to help us go to the credit markets and raise the money. Its a brighter day in detroit. People can see better when theyre out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. And folks are making investments and the community is moving forward. 40 of the lights were out, but theyre not out for long. Theyre coming back. In the us, three in ten College Students drop out. But how can you spot whos at risk . The one who lives far from campus . The one who works the night shift . The one with new responsibilities . One thing cant tell you, but the right combination can. Universities are using ibm analytics to understand pressures in and out of the classroom some expect to cut dropout rates by twentyfive percent. Ibm analytics is working to make education smarter every day. 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. Coming up with, weve got Quarterly Results from caterpillar, 3m and gm. Then we have Southwest Airlines ceo joining us after the break. And the incredible rush of the mercedesbenz youve always wanted. But you better get here fast. Yay, daddys here here you go, honey. Thank you. Becau se a good thing ke this wont last forever. See your authorized dealer for an incredible offer on the exhilarating c300 sport sedan. But hurry, offers end soon. Share your summer moments in your mercedesbenz with us. 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. Xco0 we got earnings news just breaking. Lets get over to phil lebeau. Hes got results on General Motors. Phil, good morning. Hi andrew. Better than departmented numbers from General Motors. When you look at earnings per share, they beat by a wide margin. Excluding special items, a profit of 1. 29 per share. But revenue is going to get a fair amount of attention. Came in at 38. 2 billion. Well below the streetest estimate. So that explains a little bit of why revenue came in lighter than expected there. Overall for the quarter gm made 2. 9 billion with overall operating margin of 7. 5 . Second best quarter since going public. The two big markets for gm were very strong. North america, a record quarter earning 2. 8 billion with 10. 5 operating margins. And remember theyve committed to getting to 10 operating margins in north america by next year. And in china where theres been concern about the market slowing down gm made 503 million with margins being at 10. 2 . They lost money in europe although not as much as in past quarters as well as in south america and in asia. Dont forget were going to talk with Chuck Stevens, the cfo coming up in about 15 minutes. But again, General Motors better than expected numbers earning 1. 29 per share. Well above the street estimate of 1. 08 per share. Thank you. Looking at caterpillar and getting kind of depressed. The company is reporting 1. 27 which is in line with expectations. So thats okay. Last year the Company Earned 1. 69. The revenue number for caterpillar was 14 im sorry. 12. 3 billion which is below the 12. 6 billion estimate. And down 13 from the year ago quarter when the Company Earned 14. 2 billion. Just looking at the state of the company and what its expected to earn 4. 97 for the year. Last year 6. 38. Back in 2012 8. 90. So 8. 90, 2012. 4. 97 expected this year. Theres the stock. Down from a 52week high of 109. 98. Whether its attributed to china or the strong dollar or whatever well have doug on to talk about Commodity Prices. They got in the mining business. Just as many commodity metals were falling off a cliff. Although that lately hasnt been quite as much of a headwind. Well have a lot to talk about. Its not this is what you call a cyclical. It is. Its a very similar story from 3m. Because its facing the same currency headwinds that theyre facing. 2 cents above what the street had been expecting. But the revenue line was light. Theyre now looking for 7. 80. Their prior range had been 7. 80 to 8. 10. They say theyre doing this because what they say is a mixed economic environment. They do expect if you look at what happened with the currency headwinds theyre facing that cut sales by 7. 3 year over year. If you are looking at things just for the quarter, organic local currency sales were up. Theyre counting that as a win. Mixed economic environment, they deliver positive organic growth in all geographic areas while expanding the worldwide margins by a full point. If you look at 3m shares right now, the bids at 153. 06. Also just going back to this for a second. Cutting revenue to 49 billion. But it continues to back the adjusted 4. 70 to 5 for earnings per share. But 4. 97 is where the street is. So they would have to get close to the high end of what their forecast is. Also cap spending about flat with fiscal year 14. A year year and a half ago. And it was much higher. So there has been the business has not been positive. Doug will tell us whats going on with the prospects and what happened. Okay. In the meantime lets talk about southwest. Their results just out this morning. Earnings beating the street by a penny. Joining us now to talk about it gary kelly. He is the ceo of Southwest Airlines. Were happy to have him this morning. Good morning to you. Walk us through the earnings and in particular weve all been talking about fuel prices how you hedge it. And the money youre saving in terms of the margin. Good morning. Delighted to be with you. What a great quarter. Its an alltime record quarter. Certainly alltime record for a Second Quarter. Our return for the last 12 months just over 28 . So were delighted. Fuel prices were down on a pergallon basis. 33 and that was of course huge for the quarter. A lot of talk about the revenue environment. Our revenue production actually was pretty solid. And the real exciting news for us, of course is we announced weve signed an extension with Jpmorgan Chase to extend our credit card. And that will bring 400 million too. So fuel prices Going Forward we think are going to be pretty benign. So were taking a light hedging strategy and trying to manage our previous hedge before prices fell. Right now i think the outlook looks quite good. What are you seeing in terms of the consumer when you look out over the next six months rest of the year in terms of filling up seats . I think its pretty strong. You know, theres probably a little bit of softness that weve seen in the Second Quarter like much of the economy. But we grew our seats year over year about 2 . But our customers grew 5. 6 . So we had record load factors. And i wouldnt be surprised to see that continuing. Were going to have to do a good job of keeping our fares low and serving our customers well. But otherwise i think its just continuing to manage our growth and hopefully looking forward to continuation of very strong earnings. And youre looking at a margin now of 22. 5 . Do you worry, is there any race to the bottom in terms of your competitors . In terms of economic softness in our revenues i would put us down about 1 . Our unit revenues were literally down 4. 7 year over year. And even thats not horrible. But most of that is attributed to tough comps from a year ago flying longer. So we dont get the same arithmetic on a long flight we get on a short flight. Take that into account, its a good environment. But especially looking forward, i would expect those comparisons to improve. And were looking at probably unit revenues down in the neighborhood of 1 . And if you adjust for some of these comparison issues well actually be up in the Third Quarter if those predictions come true. So i think the environment is solid. Looking forward to a really strong year. And were settling up on our plans for next year. Do you imagine, though theres going to be added capacity either by southwest or your competitors over the next year and what that means to the business . Our plans for this year of course, set. Weve got our schedules published by the end of this year into early next year. Well be growing over 7 . And the carryover effect just by continuing to add flights this year, if we dont add any more in 2016 well be growing at least 4 to 5 next year. So i would put our growth next year in the 5 to 6 range. And although those plans arent totally set yet. But thats just dependent upon demand. Right now demand is pretty good. Reports out over the past month. Justice department has sent out to assess the competitive nature of whats going on in the industry right now. When it comes to capacity. Have you received one of those letters . Oh yeah. Of course. And weve thats all public. And were cooperating with their investigation and obviously fully compliant with the ni trust laws and all the security laws and still try our best to be transparent with our shareholders. Why do you think that no airline has really added a lot more capacity to take market share at this point . Theres some physical constraints to that. Ill just take us as an example. If we wanted to add an airplane in 2015 i dont know that we could do that. Its not like going to the used car lot. So theres a long cycle involved with planning capacity changes and then once we have the airplane we can choose to fly it more or less on a basis. Weve got nice opportunities to improve our utilization of our aircraft this year and even next year. So we can move the needle a little bit with capacity. But not a great deal. But i cant speak for the rest of the industry. Right now their earnings are very good. We have opportunities that are unique for southwest to grow. Were taking full advantage of those. Dallas love field is an enormous success for us. And we wouldnt have these kind of record results without the profitability of our new routes out of dallas. Real quick, you see Companies Like jetblue and others doing flat beds and other things that are midservice in the front. Trying to look for margin and growth. Is that something you would ever consider . Id never say never. But its nothing were considering right now. Very pleased with our product. Southwest carries more customers in the United States than any other airline and until the american u. S. Merger that was by far. So we have a popular product. And i think its very extendible into transporter and the rest of north america. All with the 737. So we dont have any plans to change our product in any material way any time soon. Gary its great to have you on the program. Congratulations on the earnings this quarter. Thank you so much. Thank you. Talk to you soon. Among the other stories were watching this morning, apple is cutting its annual spending forecast by 8 or about a billion dollars. This is according to a regulatory filing. The Technology Giant now plans to spend about 12 billion on things like purchasing manufacturing equipment, building retail centers, and stores. Ferrari has filed with a u. S. Ipo with a plan to list on the u. S. Stock exchange. Theyre being spun off from fiatchrysler. Also under armour beating the street. Jumping 29 in revenue. Came in with earnings at 7 cents a share versus the 5 cents the street was looking for. Raising guidance as well. That stock looks up about 1. 5 . When we come back this morning, well have a recap of the major Earnings Report out this morning. Stocks to watch is next. And still ahead today, gm cfo Chuck Stevens will join us first on cnbc. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . Are you moving forward fast enough . Everywhere you look, it strategy is now business strategy. And a partnership with hp can help you accelerate down a path created by people, technology and ideas. To move your company from what it is now. To what it needs to become. Every Auto Insurance policy has a number. But not every Insurance Company understands the life behind it. Those who have served our nation. Have earned the very best service in return. Usaa. We know what it means to serve. Get an Auto Insurance quote and see why 92 of our members plan to stay for life. A couple of stocks to watch this morning that weve been talking about. Caterpillar, check the quote now. Revenue was short of expectations. Dow component also cut its full year revenue forecast. Now down about 2. 5 . 3m topped consensus on the top line. Same story though. Revenue missed the mark. As a result basically flat on the session. Up three cents. Eli lilly beating on both. Raising its forecast. That is being well received. And dow chemical posted better than expected profits. This was in large part due to lower raw material costs that are used to make plastics. Revenue a little bit shy of expectations. That stock up 30 cents or so. When we come back gm just out with Quarterly Results. Weve got the cfo Chuck Stevens who will join us on cnbc to break down the report. Then at the top of the hour weve got caterpillar ceo Doug Oberhelman oberhelman. Were back in a moment. Want bladder leak underwear that moves like you do . Try always discreet underwear and move, groove, wiggle giggle, swerve, curve. Lift, shift, ride, glide hit your stride. Only always discreet underwear has soft dual leak guard barriers to help stop leaks where they happen most and a discreet fit that hugs your curves you barely feel it. Always discreet underwear so bladder leaks can feel like no big deal. Because hey, pee happens. Get your free pair and valuable coupons at always discreet. Com welcome back everyone. U. S. Health Insurer Anthem is close to finalizing to acquireing cigna. And it could be announced as soon as today. Earlier this month rival etna agreed to acquire humana. The Insurance Companies would be reduced to five to three from five. That of course would draw some antitrust scrutiny wed expect. The ceo of sin jen ta saying they have ruled out with rival monsanto. He called the offer woefully short. Syngenta called off a bid back in may saying it undervalued syngenta and didnt account for regulatory risks. We had hugh grant join us last week telling us why he was making that bid. He is the ceo of monsanto. And bridgewater is sending a letter to investors saying their views on china have changed. But chinas stock market in the last few months battered mom and pop investors and hedge funds. The drop in china stocks will have a depressive effect on Economic Activity there. There are now no safe places to invest they say. Meantime back to phil lebeau. He joins us with a special guest now. Lets bring in Chuck Stevens who is the cfo of General Motors. He joins us on a day when the Company Reported very strong numbers for the Second Quarter, beat the street earning 1. 29 versus the estimate of 1. 08. I want to ask you about the revenue. 38. 2 billion. Well blow what analysts expected at 40. 6 billion. Explain a little bit about how much of an impact the currency was. The translation of nonu. S. Based currency was 2. 2 billion. Our revenue was up close to a billion dollars year over year. And Great Results in the quarter. May have surprised some people. But strength importantly in north america and china. Very much on plan as expected. We would expect the second half to be better than the first half. Lot of things were going to talk about. Lets start off with china. A number of auto makers have been reporting their earnings over the last couple of days. Theyve come out and said look the market is slowing down. Yet you increased your earnings in the Second Quarter there. What are you seeing in china . Were seeing a more moderate Industry Growth more challenging macro environment in china. Despite that our Second Quarter and First Half Results continue to be strong. Half a billion dollars of Equity Income greater than 10 margins. We have been proactively addressing the market issues in china by suv better mix and better cost efficiency. And we would expect to sustain our performance through the rest of the year in a more challenging environment. Is this a couple of month slowdown or is this a prolonged slowdown in china . At least when you look at the auto markets. Our view for the year is that china is going to grow the industry will grow in the low single digit mark level. Industry grew in the first half. So we do expect to see some improvement in the second half of the year driven by launch seasonality, and our own launch products. Lets talk about north america. Record quarter here in north america earning 2. 8 billion. I know your transaction prices continue to climb at a pretty impressive clip. Are you seeing any resistance at all from the consumer where theyre saying its a little too rich for me . Demand remained very strong Second Quarter. U. S. Industry was well north of 17 million. I think the north american results speak for themselves. And were very optimistic for the rest of the year of continued strength in north america. No resistance at all from the consumer in terms of these prices especially when you look at pickup trucks. Yeah. Our pickup share in the Second Quarter was up 3 . So we continue to see, you know a lot of Strong Demand for full size pickups, suvs and crossovers. And we should note that you guys right now when you combine both the silverado and the sierra you put those two together outselling the fseries. Do you hold that for the remainder of this year . Do you outsell the fseries . What we have phil is a threetruck strategy. And we think that that advantage, that opportunity will continue to play out the rest of the year. The midsize trucks are doing fantastic. We continue to see strength in full size pickups. And we expect to see that continue for the balance of the year. Didnt want to leave out the krolss. The midsize which is doing well. Chuck stevens, cfo of General Motors on a day when they reported better than expected earnings. Earning 1. 29 per share. 21 cents better than what the estimates were on the street. Back to you. Thank you so much. When we come back this morning, mcdonalds set to report as well. Plus the ceo parade on squawk box continues. Ceo Doug Oberhelman of caterpillar is here. This one is right outside our studio. Stick around. Squawk box will be right back. 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. When youre not confident you have complete 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. Seven out of ten Power Outages in the us are caused by weather. But utilities can now predict where the power will go out, within a few city blocks. Working with ibm theyre combining micro weather forecasts with detailed data from local sensors. To predict where outages are likely to occur. And send crews exactly where theyre needed, when theyre needed. Ibm analytics from the internet of things is making energy smarter every day. Digging into caterpillars earnings. Ceo Doug Oberhelman will be on. Breaking right now. Earnings news from mcdonalds. Well go inside the numbers. Plus get the latest on Steve Easterbrooks turnaround plan and the coming of the allday egg mcmuffin. And well check out the slingshot. The polaris invention thats changing sales. The ceo talks the industry as we kick start the final hour of squawk box right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc first in business worldwide. Were now less than 90 minutes away from the opening bell on wall street. You can see the futures right there. Dow looks it would open up higher. Nasdaq up about 11 points. Lets check out markets in europe at this hour. A lot of earnings thus far this morning and more coming. Youre looking at call it almost much across the board. Meantime weve got mcdonalds numbers crossing the staptape. Earnings of 1. 26. If you listen to the new ceo, he is calling this disappointing earn bings results. They say that reflects negative guest traffic on all major segments. That is disappointing. The consolidated revenues were down by about 10 . Although that is really Foreign Exchange currencies. It was an increase of 1 . And above expectations with that too. Now, easterbrook does say theyve made meaningful progress since planned in early may. Theyre looking for longterm results. Theyve undergone significant change and are streamlining the effectness. If you look at that the traffic in all major segments thats an issue theyve been dealing with in which if youre looking for a miracle cure youre not getting it just yet. Im confident it will create the transformation necessary for mcdonalds to i dont know what this is. But for mcdonalds for become a modern progressive Burger Company. Okay. Delivering a contemporary business. Looks like a lot of the things theyre doing is going back to the old stuff they did. Which again shows you that the word progressive actually means regressive. Because youre normally going backwards if you have a progressive agenda. But to do something so it just irritates me just to jump on. Youre mcdonalds. You dont need to do the same dance everybody else is doing with the theyre calling it a Burger Company though. They are. Progressive Burger Company is on oxy moron. Some were hurt in making that burger. But it tastes good. If you want to understand just how difficult of a turnaround this is in the United States they say Second Quarter comp sales were down 2 . And that reflects negative guest traffic as the featured products and promotions did not achieve expected consumer response. And ongoing competitive activity. So some of these initial changes arent picking up quite the way they expected. Im guessing thats the new asian Chicken Salad that i like. Ive had it a couple of times. But my guess is its not taking off the way they hoped. Its early. Hes got a little more time. Why do you get the plum ie signment mere . You know occasionally i get one. Well have an analyst on in a minute to talk about mcdonalds. But in the meantime its an honor for me to broadcast this morning cnbcs parent companys earnings. Comcast reporting 84 cents per share. Thats in line with analyst estimates. Revenue came in above expectations. Thats as far as im going to go joe. We went through it last hour. Enough said. There are wonderful things happening. Good things happened. Thats all we need to say. Solid management across the board. Its been a busy morning already on squawk box. Lots of big earnings all the way down to our managers here. Each and every one of them as you just go right up the chain. Wouldnt you say . Sure. Just quality. Eli lilly beating the street handily. Up for cancer and diabetes treatments in the acquisition of Novartis Health business. Heres what ceo John Lechleiter said about the companys outlook. As were laurgeing products and were bringing drugs through our late stage pipeline you know, that drives a certain amount of expense. We want to launch our products well. We want to invest in the pipeline products. All in all even though we beat by 16 we think increasing a dime is the prudent thing to do. Southwest also on the program this morning talking about its quarter. Beating expectations by a penny. Gary kelly joins us a short time ago with his outlook on fuel prices and on the companys rapid rewards program. Down on a gallon basis 33 . And that was of course huge for the quarter. A lot of talk about the revenue environment. Our revenue production actually was pretty solid. Real exciting news for us is weve signed an extension with Jpmorgan Chase to extend our credit card. And that will bring 400 million in recognized revenue in the second half of this year too. Check out this chart this morning. Tool manufacturer snapon posting results this morning. Earnings beating the street but revenues fell a bit short. The decades old company is trying to attract new customers by marrying technology to what it is trying to do. There you see it. Check out this shark . Chart. I was going to wait until the you were . Until the sound bite rolled before saying anything. Chart. I said chart. At first you said shart. I said chart. I know my ears. Its possible but, you know this was brought to you by we were going to wait until the sound bite to say it. We dont need to call it out. Stock on the chart, snapon chairman and ceo spoke to us about whats his name . In the last hour. Okay. He did. This quarters earnings were 17. 7 . Up 100 basis points. That overcame 40 basis points of currency. So were able really we were encouraged by the fact were able to shake off currency and hit a new high in profitability. Its a chart. Chart. Caterpillar cutting revenue forecast. Joining us is chairman and ceo Doug Oberhelman. The last five years youve been hit a lot of different ways. And im trying to figure out what most significantly has been your headwind. And would it be along with Interest Rates. The fact that shows Commodity Prices have come down. So a lot of the Mining Operations have not come in . I mean earnings are about half what they were about five years ago. Well good morning, everyone. And yes, youre right. All of those and probably some more. But i think its a function of really a Global Growth rate of 2 to 2. 5 . For us to drive sales and employment, we really need 2. 5 to 3 . We havent had that. Having said that, were doing an awful lot of things internally to make sure were strong and strengthening for the future when it does turn. And it will turn at some point. Weve got to be strong and ready. But its all those things you talked about. Weve got an oil price cut in half. Commodities are at their lowest for quite a few years at this point in time. And Global Growth is slow. So all those things kind of combine for a lot of winds buffeting around in front of us. Ive got to ask you about the buybacks over the past year. You look at some of the prices i imagine you were paying. I think the last time we saw you, the stock was about 105 and you think about that. What were you thinking at the time you were buying back that stock . Was that a mistake in your mind . When you do a buyback at an Industrial Company like us we have a lot of cash in our Balance Sheet. Our Balance Sheet is strong. Our debt to cap ratio is as strong as its been in decades. Having cash just sit on the Balance Sheet doesnt do anybody good. Were looking for acquisitions. Most of them are in a very small tacked on bolt on things weve done over the last several years. We dont have a lot of demand for capx right now. We try to return to shareholders. We increase the dividend 10 in june. Were going to do another buyback about 1 billion in the quarter. Im absolutely convinced at some point probably not the too distant future those will look cheap. Theyll look cheap today. You look at this as the longterm basis. Is the so the Intrinsic Value of the company to you is what then . Right now relative to where the shares are. Well it all depends on the forecast. I think its a lot higher than it is, but thatll be debated over time. The fact of the matter is weve got a lot of cash strong Balance Sheet. We need to return some of that to shareholders and thats what were doing. Doug the im trying to figure out infrastructurewise, what would the best environment be for you . I would think, you know we got zerp around the world basically. That would seem to be the time to do it. You know . But it allows companies to do a bunch of other stuff, a bunch of financial, you know, engineering with mergers and acquisitions. Im almost wondering what you really need for infrastructure is growth and growth in demand. It doesnt help that Interest Rates are zero. You need the Global Economy to start growing more than it has in the last five years. And caterpillar would be a huge beneficiary as an infrastructure play of what we know is going to happen eventually in e the future. So i dont think id sell all your businesses and heavy equipment. You can a cyclical and you have lived the cyclical you know you live by the sword die by the sword. Youve died by it for the last five years. Well weve lived by it as well. When things are really boiling. Weve seen that over the years. Itll happen again at some point. But youre exactly right on infrastructure. If you look at the u. S. Right now, were active in promoting that. Brazil right now talking about a huge Infrastructure Spending plan to revitalize that economy. Typically thats been used. A lot of these countries and economies are strangled with debt and how they raise the money to get it done. I suspect theyll find a way through that. Were seeing more states in the United States fund road programs. Thats helping us. Weve seen moderate growth in e the u. S. Because of that. At some point it will turn our goal here in the meantime and the down part of the cycle to make our country as strong as we can. Our market share has printed up over the past five years. Its up year over year a little bit from last year. Our quality of our products have never been better. Our Balance Sheet is strong as ever. Were investing in things like innovation and Technology Getting set for the term whenever that happens. And holding on in the meantime. Doug do you see things like the concern about greece and the talks of a possible greek exit from the eurozone does that have an impact on europe and beyond . It doesnt have an impact on us at all. We have a very very small exposure to greece. But overall i think its part of the overall uncertainty in the world. Its just one more thing that gets in the way of confidence of how we invest to grow faster in the economy and so on. Theres a number of those things around it. The china slowdown our industry has been cut in half for the last year as they stabilize that economy. And at some point it will stabilize china yeah. It was too hot in 2012. And too slow right now. So somewhere in between is where well be. But until that happens, were caught in this period where we have to hunker down and do things internally day to day. I dont know if anyone knows. I guess the other thing, we think about where we are in this country. 5. 4 unemployment. Seems like weve recovered from 2008. That would say, wow. Were back down in total recovery. Why arent you participating . But maybe it explains why were still at zero. The economy is a zero Interest Rate caterpillar at half the profits it was making five years ago. Thats the real state of this economy in this country and around the world. Its way below where it should be. The fact of the matter is its a 2 growth economy. And 2 doesnt allow Companies Like Us Industrial companies, and a lot of others to invest and grow employment. We have a strong correlation around 2. 5 to 3 growth. When we see that in almost any economy in the world, we see higher top line. We add people. We start to spend capx. We havent seen in in the world for quite a while. That is the fundamental problem. Thats debated every day. But thats what were grappleing with. Focusing on the internal things that weve got to get right, let the external things play out and deal with them. But weve really got to get through this in a way. Were doing it in my opinion better than weve done it in the past. Fact is weve got slow growth. You think china is closer to a bottom than trying to its than just halfway there. Its been through the rough patch already or is there one ahead of it . I think theyre closer to the bottom but its hard to say. The news there is mixed. I know the chinese leadership is really trying to reform that economy which it needs to be done. They manage it pretty well in the past. Will they do so in the future . It remains to be seen. Its closer to the end than the beginning. The forecast will bear out whatever it is. All right. Thanks. Once again, thanks for showing up today. No matter what. And, you know, get metal prices back up and some infrastructure and who knows. Better news in the future hopefully. Thank you. Appreciate it. Im all for that. Thank you. Thank you. Good luck. When we come back today, mcdonalds just serving up Quarterly Results. Well break down the numbers and talk fast food with an analyst right after this. And later sales continue to climb at polaris. The company is expected to announce a new Battery Powered bike in the near future. Ceo scott wine will be here in a bit. Squawk box is back in after a quick break. Welcome back to squawk box, everyone. Lets take a look at the futures this morning. We started out with the dow looking like it was up by 50 points this morning. Since then weve heard from mcdonalds, 3m and caterpillar. Right now it looks like the dow futures are indicated lower. Theyre down by about eight points. S p futures hanging in by just over 2 points. Nasdaq by 9. Nasdaq reporting higher Second Quarter earnings earlier this morning. Cost cutting and a strong ipo market helped offset the negative effects of the stronger dollar. We had a great ipo quarter where we have now 86 listings coming to the nasdaq just yesterday we had blue buffalo. And we see the equity volume in the market place is relatively healthy. I think people were not expecting that. And mcdonalds reporting this morning earnings and revenue topping expectations. To talk about it a little bit joining us is Nicole Miller at piper jaffray. Weve been sort of going through these numbers. Mr. Easterbrook doesnt seem happy about these numbers. Are you happy about these numbers . Not completely disappointing. Right. Expect this to take time to take a lot of time. What i think is they want to try a lot of things. And what i hope where they end up is true to who they are. Lets do cheese burgers and fries, milk shakes. Keep it mcdonalds simple. When he says that certain things are not working, some of the new products are not working, you speculate its the asian salad. The only thing new on the menu ive seen is the asian salad. There have been some salads and sandwiches. I think the higher end burger. Oh, right. Its got to be it could be some of those things as well. Theres been a push towards higher priced items. How long does he have to actually make this transition . 12 months longer . What does he get . I think he gets 12 to 18 months. I say that because a menu pipeline and marketing pipeline its 12 to 18 months. So hes still living on the prior regimes results to some degree. So we can only hold him accountable for so much. That being said, the first thing he could do is buy him more time. He should go out and see what are they doing in local market sets. So they try to push a plan with a lot of strategies and multiple tactics behind it to them. I think that can seem overwhelming. Is that what youre hearing . Well i think its overwhelming. I dont think its a Clear Strategy at this point. And if you could go out and find out whats working and kind of bring some of that back to the system that would buy him time. Right. When do you think you will finally see a transition if one is coming . And what does where does the stock go if it works . I think wed see a transition that would show up in flat comps. Thats the first thing. Lets be careful. Were not going back to positive territory. Stem the losses basically . Yes. I still think its a couple quarters out. So that should help. If its nothing short of that. In the stock i think would at least the same thing flat. Maybe it can start working. Mcdonalds cafe wont work. But in every city in europe i mean mcdonalds cafe which is an upscale, like a beautiful, clean, its always next to mcdonalds. And theyre totally crowded. And people in europe arent thinking im going to this horrible place mcdonalds. Its a totally different thing. They cant do that here, i dont think, can they . I dont think they can. But ive been in a lot of those stores youre talking about and theyre still ordering core menu items. I know. And theyre not embarrassed to do it. Everybody walks around hiding their mcdonalds bags or their cups. And these are the europeans that are so superior to us in cultural ways at least theyll tell us that. Theyre not embarrassed. I dont know how you get that mindset back in this country where if you go to mcdonalds, its like authenticity. As long as its authentic. You look at chipotle and people go there and you want to say its so good for you. You still have to think about sodium and calories. Thats what you have to think about. They are who they are and its not for everybody. Mcdonalds can be really is for the masses. If they could stick to burgers and fries, we just want them fast and convenient. Yesterday we were talking about should they have held onto chipotle and would it have succeeded as good as it has . Its better for both of them. Its hard to run two brands. Thank you for coming in. Appreciate it. Coming up we break down all the moves this morning and there are a lot of them. Then polaris taking the riding experience to a new level. This thing is called a slingshot. Went on sale earlier this year. Well find out how much it costs, also talk motorcycle trends. I think it kind of is a moisture with a its like a bat mobile. When we talked about getting one together we need a side car. And we want to know what has you squawking this morning. Send us the stories that you think we should be talking about. Go to our Facebook Page or tweet us your ideas. Remember to use the number sign. Hash tag. Okay. Hash tag. Well share them in a bit. Well be back. Its a fact. Kind of like shopping hungry equals overshopping. Being a keen observer of the world has gotten you far but what if you could see more of what you wanted to know . With fidelitys new active trader pro investing platform, the information thats important to you is all in one place, so finding more insight is easier. Its your idea powered by active trader pro. Another way fidelity gives you a more powerful investing experience. Call our specialists today to get up and running. 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. Many many things happening. Shares of General Motors up nicely from remember it was hitting some lows since the ipo. But stock now up what is that . Is that 5 . 6 . Hard to see. Almost 6 . Beating estimates by 21 cents. Revenues were well below forecast. Check out the shares of under armour. Revenue coming in well above forecast. Under armour saw Strong Demand for its steph curry branded shoes and its training apparel. When we come back this morning, jobless claims data. The ceo of polaris and the stories youve been buzzing about this morning. Stick around. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. 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. Time for jobless claims. Rick santelli, take it away. Well no revision to last week. Thats a bit unusual. So 281,000 now drops to 255,000. Thats a 26,000 drop. That is a big one. And im sure that postfourth of july, things are getting back on track. We could probably contemplate the average and other smooth factors may move. But this is a big deal for some. Because obviously less jobless claims isnt a bad thing. I guess it really becomes a question of how much better of an issue is this. What are the positive efbts going to be . Are we going to see more moves in Labor Force Participation . All the key metrics. Weve seen a decent drop in continuing claims. Always a week difference on the timeline. Slightly under 2. 2 million to 2. 207 million. Not huge but its something. The other story, six year sessions in a row, between 232 and 237. Yesterday looked like we were going to break that record. Maybe dip under 230. About the same place we are right now. But we didnt. So were in a consolidation mode. The dollar is the big change today. Its actually going down. I know the dollar index is euro centric. But once we closed under 110 about seven trading sessions ago, we havent closed back above it. Were now trading above it today so we want to see how that fares. Didnt seem to be as much push through when it violated that 110 on a closing basis range. But do keep in mind whether its issues in europe or the upcoming notion of the fed potentially snugging up rates while much of the worlds either slowing more or easing rates, that event probably starting in august will really start to get the markets attention in a more significant fashion. Back to you. All right, rick. Thank you so much. Steves here and has more on the numbers. Youre saying the same thing rick was. Be careful this time of year. You had a spike in the beginning of july because this is the season of autoshutdowns. They shut down some plants. Sometimes they do. Sometimes they dont. I would say just as surely as it had spiked above, take it with a grain of salt. This decline probably not indicative of the case of whats going on in jobless claims. At this 280 level though which is probably the running average right now, and where it is this is still indicative of a strong job market. You would still create a scattered thought chart and youd see that this would show job growth around 250,000. And the thing some economists are starting to puzzle out is what does job growth look like next year . The numbers they come up with are below 200,000. You think about the idea coming down. And then you have this debate on the side which weve had for i dont know how many years now. How much slack is there really in the economy . In any event, 205,000 is probable too hot next year. Where do they need to be . Were starting to get our questions together. Were going to ask that question where does it need to be . Whats the right number for the fed not to look and not to be worried about inflation and thats so crazy to say that as long as theres one person that cant find work were going to stay at zero and then to say that they can switch to uhoh, its too hot already within three months. Its too much. Probably a year. Not three months. Its just crazy. Right now they can say, all right bb were in the 5. 4 unemployment. But were going to stay at zero because its not telling the whole story. Then to say theyre going to shift immediately to were adding too much jobs now for wage pressure. Thats too Peter Boockvar and also tony the fed yellen is waiting for too perfect a scenario to hike. Exactly. Everything has to be just right. The goldilocks rate hike environment. And some of the things to get along in part because of what theyre talking about which is look. If you end up if you need 70,000 or 80,000 jobs to lower the Unemployment Rate which is what the underlying trend might be, then you could have a situation every month if you come in at 200, youre ticking down and down until you get to a 4 Unemployment Rate. Did you see us talk to Doug Oberhelman, because we decided half the earnings they had four or five years ago. This is well recovered. And a 5 Unemployment Rate. And its really difficult. Its almost recessionary type results. Which makes and we decided that the growth rate or that zero is with the fed is mandated by the Global Growth rate being so low. To describe this economy. I couldnt hear the whole interview, but i was told caterpillar would be doing good because of the Housing Market . They invested in mining. So thats the oil and gas thing. Thats right. And commodities. Theres a downdraft there. What people think is that this is a there was a big supply of commodities that were came on when prices were high. This is the downdraft of that. People think this is the tail end of that. Doug also said look at china. China was too hot back in 2012. Its probably a little too slow now. And he thinks it will line up in the middle. China hordearded. Lets bring in jim iuorio. You have plenty to comment on. You listen all the time. Yes. And one week ago was on the show we were talking about potentially the grexit in europe. We were talking about china potentially imploding on itself. Its a week later and now were talking about too many jobs and getting too high and the fed might be behind the curve in tightening. I think things have moved a little too quickly for me. There is some things to worry about. When you look at the high yield bond market and look in the etfs. They are giving a bit of a risk off signal. I would say another thing, too, in the last week we pushed greece and china to the back pages from the front. Weve had earnings that were pretty good. Actually earnings that were very good. Revenues that were okay. And we havent been able to push out of this range in the stock market that weve been in for a years time. To me theres plenty of things to worry a about is all im saying. Hey jimmy yeah . Real quick, im looking at the one year at 33 basis points. Which is actually believe it or not, a threeyear high. Is it getting more surgeon the fed is going to move in september . I think they think more december than september. I think theres one rate hike this year. Theyre not even sure if its not symbolic. Its like the fed flexing its muscles and saying were not dictated by this. The fed a week ago like i was just saying things that were nondomestic. I do think theres probably going to be a base point rate hike this year. Then its going to adopt a policy of lets see if there was reverberations because of that maneuver. If there wasnt, it will be in the future. You with me on september . Im september. Im september. Im december. I think yellen changed her language at the Humphrey Hawkins hearing. She said need and tolerate the rate hike. Jim, you said she can show she doesnt have to move. I think she shows her power by showing she can move. I do too. I think thats what she wants do. But we also said in this same conversation that shes waiting for a scenario that almost seems too perfect. And a lot can happen in e the next couple years. The markets with jim of a rate hike in september. And well see and the talk about next week is does july set the table for september . Does the fed need to move the market if even to get the flexibility to hike sfp. You see the markets. The 19 , is that the fed funds . Exactly. Thanks. But the thing is do they want to hike into a market that has a 19 probability of a hike . They dont want that. Thats a temper tantrum ready to happen. Thats a signal. You need the number to be what . If they want to do that thats a good question. I think in the 50s. In the 50s. Okay. Steve thank you. Jim, thank you for joining us. When we come back this morning, its not a car. Its not a motorcycle either. This is called the slingshot. 173 horsepower to get you to 60 miles an hour in less than 5 seconds. Just 47 inches off the ground. The ceo will join us to talk trends. 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. These two oil rigs look the same. Can you tell what makes them so different . Did you hear that sound . Of course you didnt. Youre not using ge Software Like the rig on the right. Its listening and learning how to prevent equipment failures, predict maintenance needs, and avoid problems before they happen. You dont even need a cerebral cortex to understand which is better. Now, two things that are exactly the same have never been more different. Ge software. Get connected. Get insights. Get optimized. Welcome back. Check out shares of General Motors up sharply on strong north american results. Chuck stevens was on the program earlier and spoke about the outlook for china and the companys plans to execute them. We have been proactively addressing the issues in china. The market issues in china by suv better mix and better cost efficiency. We would expect to sustain our performance through the rest of the year in a more challenging environment. Polaris slingshot is something that looks like it came out of a batman movie. We have one behind us right now. Its been a pretty cool introduction. However, its been a rough ride for the slick trike early on. It was banned for sale in some states because it didnt fit into any existing Motor Vehicle categories. Now most of those bans have been lifted. Sales are revving forward. The Company Reported an 80 increase of the retail sales for the new roadster and the indian motorcycles it sells. Scott wine is the ceo of polaris and he joins us now. Thanks for joining us. Good morning. Thanks for having me. Get us up to speed on where things stand right now with the slingshot. What state wills not allow it at this point and which ones will . You know we had a big breakthrough in the Second Quarter as we were able to bring texas and indiana and some of the states that were important to us. Right now theres only maryland and hawaii left and a couple of provinces in canada. So weve got a really Good Government affairs team working the issues. Well knock these last hurdles down. As we bring new states online texas was important to us. Were seeing that market overall turn around for our business and nice to have slingshot leading the way. We have andrew and steve sitting in the slingshot outside. While they look good in their suits, im guessing guys in suits like that not necessarily the target audience. Who is buying these . Well, you know i was flying back from new york last week and Brian Sullivan was on my plane. Brian is kind of our target audience. Guys with that like to ride. But what were finding is that its typically a customer that has ridden a motorcycle or offroad vehicle before. They like the excitement. They dont mind being viewed. Because people cannot help but look at this vehicle. Were finding a much broader demographic than we thought. We targeted males in the 35 to 45 range. But what were finding is that just anybody that likes excitement likes this vehicle. Is that part of the reason youve run into problems in terms of keeping up with demand . I know there were some painting issues. You had to outsource some work and as a result that cost you a little bit. You had to spend about 9 million for additional manufacturing costs in inefficiencies. What happened . Yeah there was a drag on earnings in the Second Quarter. We still had record sales up 11 , earnings up 5 . We did have a i would call it a disappointing if not failed paint system implementation. We recognized that motorcycle demand overall was up. Retail demand up 80 in the Second Quarter. We recognized that and tried to implement a brand new paint system and really probably went too fast tried to do it a little bit too inexpensively. It has not come up. And were trying to spend money to make sure to meet the strong consumer demand while we bring the new paint system online. Weve got some issues to work through but really feel like weve got the right team the right knowledge to get this right as we move through the Second Quarter and into 2016. Sorry if you said this. Whats the top speed . Well ive only had it up to 122. I think it goes a little bit faster than that. Are you kidding . Ing . Ding . Really . No. Im not kidding. I kind of like the speed of our vehicles. But the best thing about the vehicle is not the top speed. No i know. But one rear wheel, no air bags. And youre going 122. You need some key insurance. Well its a motorcycle. So most of our motorcycles are meant to be tested out at top speeds. So it really does ride quite well. But the most fun in that vehicle is taking it around turns. With the stability control and as becky pointed out, five inches off the ground you can have a lot of fun with the slingshot on any kind of road. There were some recall issues on the slingshot though. It had to do with ball bearings but also about a faulty real stack bearings and what that would mean if you lost control. We did have a couple of issues early on when a supplier didnt follow the right spec for our design. Whenever you develop an innovative product like this youre introducing new designs to suppliers. We did have a couple of issues early on. I was proud of the team how quickly they worked through that to make sure we could meet consumer demand and really have the growth we expected from the product. Were still seeing that demand even six months in. Would be extremely strong throughout 2015. And regular clutch . And how much gears . Its a five speed. And really the most fun is really first through third gear. You can really have a lot of fun driving pretty aggressively with the vehicle. But you wouldnt suggest that. Weve really oh no. I would actually. It is a vehicle meant to be driven hard. Thats the consumer were selling to. Obviously staying within all of the speed limits and never violating any rules, but we do expect our consumers to drive this and have a lot of fun. All right. Scott, thank you. I that is cool looking. It looks very much like one of the batman one of the Christian Bale ones i think. Appreciate it. There it is. Those two guys. Not sure what those two look like in there. When we return jim cramer from but its all legal now from the new york Stock Exchange. Here are the futures right now. Squawk box will be right back. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Did you fit in there easily . Yeah i could fit in. The clutch. The big size 13s fit in there. Absolutely. I didnt want to move it. You were supposed to be wearing a helmet. In new york and new jersey it is considered a motorcycle so you have to wear a helmet. Thats good. Lets get down to the new york stoke exchange. Jim cramer joins us now. You have your pick. We talked about caterpillar. I dont know how to read it. It is a cyclical obviously. I thought we were kind of in recovery. It is kind of acting like it is still in a slow growth world. This is really linked to mining. They have a lot involved with oil and shell. They have a lot involved with nonresidential construction which i was surprised wasnt that strong. They also said there were some issues there. I was hearkened by the fact that they have a lot of cash. It is just a very disappointing situation right now. I sugarcoated it some because he is a nice man. Are you happy he is spending the cash . Would you prefer a dividend . What do you want him to do with all that sdmash. Wait until the stock goes down and then start buying. Geez, bob buyinger comes in on the ebola scare at disney and 82 a bit for every single share. Chipotle comes in when the stock is low 600 and this guy just buys. Hey, could we wait until the business stabilizes and buy. You dont need to just buy. You have to be smart about buying. Thats in hindsight. Well see how smart ibm is. Thats a problematic situation. When you just buy to satisfy share holders, as opposed to satisfy the market. Buy correctly. How about mickey ds. I think thats good. Simplified menu is what we need. Buy mcdonalds z what else did we see today we were talking . U. A. . You know kevin plank, what can i tell you, a great competitor. He seems to back every single athlete before they ever happen. I want to do fan base and draft for that guy. I want to put money on. It is incredible how great kevin plank is. Those are two of the greatest ceos in the world. Kevin and mark. Gary kelly was also great. Is he ever money, that guy . Just like that airline, it doesnt matter what the legacy guys are doing. He does the same thing. They just keep doing and doing and doing. Kelly is disciplined. Plank is disciplined. We have some great ceos in this country. Wow. They deliver. When we return we have the stories that have you buzzing this morning. We are going to go through your tweets and pick a couple of the stories that you think we should be talking about. You still have a couple of minutes to get them to us. Squawk box returns in just a moment. What if there were only one kind of dog . Then it would be easy to know everything about that one breed. But in fact, there are over three hundred breeds of dogs. Because no one can be an expert in every one. An app powered by ibm watson will help vets tap Specialized Knowledge in the cloud for every breed. And whatever else walks, flies or slithers through the door. Ibm watson is working to make medicine smarter every day. This is a great place to work. Not because they have yoga meetings and a juice bar. Because theyre getting comcast business internet. Comcast business offers convenient installation appointments that work around your schedule. And it takes done. About an hour. Get reliable internet thats up to five times faster than dsl from the phone company. Call 8005016000 to switch today. Perks are nice. But the best thing you can give your business is comcast business. Comcast business. Built for business. Welcome back to squawk. We asked you to share stories. There happens to be a controversy in the hotdog world. Retailers like 7eleven are cutting prices to 1. Here is the catch. The president of the National Hotdog and Sausage Council say National Hotdog day was jed. One year it was held on july 23rd and everybody mistakenly believes thats the date but the real date is the 22nd. Either way, cheap hotdogs today at 7eleven for 1. Many of our loyal viewers are tweeting in their plans. Stan woo headed to nay thans and lew struse is going to abes hotdog in pennsylvania. We have upgraded. We get the Hebrew National all beef. I go with the applegate organic. I do like them blackened. Organic, uncured, they dont have preservatives in them. We have been talking about uber. Big win for the company in its fight with new york city mayor bill de blasio postponing a vote that would have limited the number of uber cars allowed to compete with taxis. Instead, the city says it will wait and study the impact of the uber app on traffic. So it is a win for uber. A win for uber customers. The drivers, every car i have gotten into they all talk about it. They were worried the length of time for a wait which could have happened would put so many people off. It is going to be 20 minutes, so i will go and get a cab. They were worried. There is a whole sort of uber economy. We have one more story to tell you about. Starbucks is teaming us with the competing ride share service, lift, to try and expand its loyalty program. Riders and drivers that use lifts mobile app will be able to use starbucks loyalty stars and can be redeemed for food and drink at starbucks. It is an interesting sort of connection between the two and maybe a way for lift to try and make sure it becomes morrell vanity. It seems we talk about uber constantly and lift not so much. Were you one of the celebrities that saved uber . They didnt mention me but i like it. You have a high rating. I also love lift. Lift is founded by a cornellian. Byebye. Good thursday morning, welcome to squawk on the street. Im Carl Quintanilla with jim cramer and david faber. It is a busy day. Cramer is ready for a lightning round this morning. Watch bonds. Claims at 255, the lowest in 40 years and crude oil fell below 50