Transcripts For CNBC Squawk Box 20170926

51. 94. Coming up on 52 here are the big stories were watching new this morning, defense secretary james mattis responding to north koreas latest threats saying the u. S. Will seek a diplomatic solution. Mattis making those comments at a News Conference in india south korea is reporting that north korea boosted defenses on its east coast after it said it would shoot down u. S. Bombers flying near the peninsula. Shares of apple dropped for a fourth straight session yesterday. Debt klein f the decline follows reports about concerns for demand for the new device on the wall street agenda. The s p caseshiller home prices are out at 9 00 a. M. Eastern august home sales at 10 00 Consumer Confidence also out at 10 chair janet yellen will give the keynote address at the National Association of business economics at 12 45 perm even we will hear from lael brainard, mester and bostic. On the corporate front Carnival Cruise lines and darden report results before the opening bell after the close, we will hear from nike. The gops latest effort to repeal and replace obamacare seems to have received a fatal blow late last night, Susan Collins who has always been was there ever a doubt she made it official she announced she will not support the bill she is the third party no which means they cant get the votes to pass the measure. Ted cruz is a no mike lee, mur cowk i dont thin ever close and trey gowdy has asked the white hous to explain the use of personal email accounts by senior white house officials this follows revolutions that Jared Kushner and other Trump Officials used such accounts for government business the white house has instructed everyone to follow procedure to comply with the rules. Ive always been in compliance because you have no other email address i dont have a private email account. I never had one. So, ive been in compliance. Youre in compliance. Even the Bed Bath Beyond coupons, they go to your work address . Joekernen. Com. The domain is available. 11. 99 on godaddy maybe that should be your present to joe somewhere my credit card. Dont youll put horrible things no. No ill send you our private correspondence i never had a private email. Now you do. Im entering the card continue to the cart one domain selected. You think im joking do you want Privacy Protection its 7. 99 s extra youre paying yes, i want it. Im buying it continue with these options. We have news to get to during the commercial break, joe domingue joe kernen. Com on monday night football, there was a display of team unity before the game. The players and coaches along with jerry jones took a knee the gesture was metwith boos from the crowd both teams stood with arms linked during the anthem dallas beat arizona 2817. Its so weird now that you know, trying to find a middle ground there was not a Single Person not standing during the nash na National Anthem for this game. Now you do it before, that covers your bases with the protest side, also with the you know any way. Alabama republicans i have a question for harwood alabama republicans go to the polls today in a slowly watched runoff for senate between roy moore and Luther Strange john harwood, my biggest question for you, i hope you can answer t youshgs it, because y, how tall is Luther Strange how tall is that man have you seen him . 69. Okay. Never mind im looking at him with trump. Its hes tall. Hes somewhere between a small forward and a Power Forward in the nba even on duke. Hed play in the post for the u. S. Senate team that guy is is tall. He is if it was based on height, hed be winning by 90 but its not unfortunately for him roy moore has been dribbling circles around him in the polls so far what we see going into todays special election runoff is roy moore leading in the average 5242. Now, special elections are very unpredictable. Theyre low turnout races. They dont happen at normal time its possible that strange could pull it out. This is something of big concern to the Business Community. The u. S. Chamber has gone in hard for Luther Strange, and the reason for that is, one, they think its possible that roy moore could lose the election in december, the general election, even though bam mras alabamas conservative everybody remembers what happened with scott brown in massachusetts, todd aiken, when it looked like one party would win it, but then they lose roy moore has been boot the out of office twice for not following court orders on Church State Separation and samesex marriage thats one possibility the second is simplay that he would be another rebellious member of that Republican Caucus you mentioned that republicans do not have the 50 votes they need to pass this grahamkas cad bill that bill is dechltd now theyre going on to tax reform the last thing Mitch Mcconnell wants is another member who will not be a team player roy moore has not given indication to be a team player the crazy thing about this race, President Trump went along with the desire of Mitch Mcconnell and other Republican Leaders and endorsed strange, but at a rally last week, he knew many of his own core supporters and the people at that rally were actually for moore so he got up and said, well, if moore wins, ill campaign for him, too maybe a made a mistake backing strange. Hes not done his side forgavers in terms of helping strange get elected. His chief strategist, former chief strategist, steve bannon what gone down to alabama and is aggressively campaigning for roy moore. Its kind of a mess right now. Certainly the Business Community is hoping Luther Strange can pull this out today. Yeah. Roy moore is very, very socially conservative the left doesnt know what to do they want trump they want his influence not to work for Luther Strange, but that brings in roy moore. Do you think roy moore would be elected if he is the republican nominee . I do. I think its more likely than not. So hell get in but a republican pollster said as unlikely as it sounds, the democrat would have a chance i would give roy moore 75 of winning. But it could be a seat that democrats dont want to lose they only have 52 seats in their caucus they are coming to 2018 elections where they have some vulnerable members and if they have a couple of quirky races that end up changing the equation, thats how democrats might be able to sneak past roy moore is certainly an unusual figure he may be asking these nfl players to hold a bible while theyre at the National Anthem, you know this is a guy who does not follow the 2 1st se century cul line on politics alabama, very conservative. I wouldnt say a throwback hes a throwback. But very to the right thank you. We are joined by semie semien hymien and chris retzler. It seemed like in yesterdays session, we had a tech rotation out of technology. We had facebook being the biggest drag on the nasdaq 100 apple nearing correction territory. In the past every single dip in tech has been one to buy is anything different this time around certainly growth valuations are stretched. The relative price to book to growth is three times, it only got to 4 before the bubble burst in 2000. It will happen, but value wu underperformance can persist for a long time. Tiger went out of business a few months before the tech bubble burst. It does have to happen, but the growth could hang on a little bit longer clearly the valuations are stretched. You would say stick with technology a bit longer . Weve seen brent up 12 in one month. Weve seen Energy Stocks up about 10 in the same month. I think a better option is it makes sense to be worried about growth because value underperformers can persist, choosing quality stocks that have a bit of a better opportunity to participate and protect can be a better approach than just going to value, where you might have a couple more quarters of underperformance. Chris, youre into small caps russell 2000 hit a new high in yesterdays session. Where are we in evaluations . Valuations look fine. What are small caps trading to large caps . We like small caps trading 15 20 bottom line. If theyre trading at a multiple similar to that, theyre pegged at 1 we think thats cheap in a market, when they can outp outperform markets sluggish, the economy growing, but not at levels that we probably want to get to if we were able to get tax reform and repatriation into the economy. So, you know, were still excited about small caps were seasonally in a period where they tend to do better were out of the summer months volumes are picking up we want to watch volatility. That does keep up price earnings ratios with volatility thats been suppressed by the central banks. So well watch that as they begin to unwind some of the stimulus theyve been putting in we saw a jump in the vix, even though still at record lows. Within small caps, which sectors are you valuing favor over growth. We like technology. We see more than four Technology Companies out there. If the large caps are selling off, we think thats cashing in on winners that money could rotate into other sectors. One area weve been bullish on through the years, software security, a company like fireeye which is out there protecting after equifax. Its going to be interesting to see their Earnings Call coming up its a bigger priority for executive suite that they can no longer ignore. Semien, are you worried about being the last man holding the bag when it comes to technology . Weve seen a real Distinct Movement lower when it comes to some large caps that have led the way between facebook and apple. 68 stocks of the s p 500 Technology Sector have seen recent drops of 0 or more 68 stocks in correction territory. Are you concerned youre the last ones at the party saying buy technology i do think one of the challenges this time around is that the global style cycle has become much more correlated. In emerging markets, their correlations have dropped versus developed markets over the past couple of years, but the outperformance of growth versus value, is as exacerbated as the u. S. With regards to the last man standing you have a global issue with technology. But do you have geographic opportunities to be better diversified. Rather than being the last man holding the tech bag globally, make sure you have exposure to developed and emerging markets but be wary about growth across those places in the market you mentioned tax, tax reform. Is that an outlier scenario for you . Is that a real possibility i think there is a real possibility. Whether its 20 , 24 , im more interested in the repatriation you take Companies Like cisco, massive cash hoards, cash overseas, when that comes back or if it does, what it could lead to for small caps is an increased m a environment. We think that activity picks up next year as the Large Cap Companies need to buy higher Growth Opportunities thank you, preesh wrat appre. Republicans are pushing ahead on tax reform. We have jim nussle who will join us next on the possible changes to the tax code. And joe kernens domain. We will show it to you well be right back. Wow your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Its a warm blanket. Its a bottle of clean water. Its a roof and a bed. Its knowing someone cares. Its feeling safe. Its a today thats better than yesterday. Every dollar you can spare helps so much more than you can imagine. Please donate now to help people affected by Hurricane Harvey. Your help is urgently needed. Welcome back to squawk box. U. S. Commerce secretary wilbur ross is in china hes meeting with senior official theres ahead of President Trumps visit to asla later this fall. Ross is pressing beijing on the need to rebalance bilateral trade and guarantee fair treatment force u. Trade and guarantee fair treatment force u. For u. S. Fir. A blackrock executive could have cost the firm 32 million for donating 2700 that donation made to kasichs president ial campaign. The move could prevent blackrock from collecting fees from the state of ohio where kasich is governor blackrock asked the s. E. C. To make an exception to the rule. The s. E. C. Has yet to respond. We dont know who the executive was . Donating to kasich, huh . You think he has money on the line at firm in what you are suggesting from ohio new numbers today on the devastation of Hurricane Maria and these are numbers that are not finals, but catastrophic air worldwide estimates the storm cost between 40 billion and 85 billion in insured losses, more than 85 of that damage was done in puerto rico the numbers are higher than estimates for losses caused by Hurricane Harvey and irma because of the direct hit on that island. And i think theyre still assessing. The pictures are unbelievable. Air was also pointing out 50 of the homes on puerto rico are not insured against wind damage. Which is much higher or lower than in the rest of the United States so when they talk about insured losses, you have to wonder whether theres a wholeother number out there that is just not insured that will be damaged, just absorbed by people because insured losses here dont cover water. So for it to be that high, its mostly wind. Verizon announcing its support for victims of Hurricane Maria in puerto rico pledging 1 million for a fund in relief efforts. They will also match funds from select relief organizations. Andrew i need to take a time out i think, joseph, i need to apologize to you now yeah. While i was paying for your domain yeah. You will be master of your domain mmhmm. You dont have to pay me for that. Appears somebody else may have tried to front run me and jump the line. I thought they would. Because i was about to publish your new website, which i just worked on and then when i went to try you knew they would do that i didnt think they would be faster than my speedy gonzalez fing fingers. Out of the tens of dozens of viewer we have one of them got there before i did. Im kind of glad. I think the average viewer would be nicer you should see. I was making you a beautiful website. It is beautiful. I will show it to you. See, if everybody goes to joekern joekernen godaddysites. Com maybe we will buy him another domain which is similar, but we will not tell the public what that domain is you notice it, i dont have joekernen, for twitter, if i d way too many people would easily follow me i made a beautiful you made that thats beautiful. He is master of your domain. Thats really cool. My skill set he is a bit of a showoff that he was able to do that you can do your own web thing. What was that web company that designed things . You could do that. You think can you see that i dont know if it has that weird thing on it. I had a bachelors degree from the university of colorado i said under skillset, i wrote did you put my masters from m. I. T. I have it there i said my skill set, i possess a sharp eye for detail which i use to find the smallest errors in anything said. My passion is outside the office im an avid golfer, i have three dogs and i love shopping at Bed Bath Beyond. What about my kids and wonderful wife did you put im a family man wasnt a lot of time during the last segment to be doing this he did this in 15 minutes on air. I wondered what he was doing. This is the first nice thing hes ever done for me. Now its not even working the republicans are planning to release the blueprint of their tax reform plan tomorrow joining us now is om bsb directr jim nussle good morning to you, sir i follow both of you on twitter, just so were clear you guys are fun to follow i thought i blocked you tell us, jim, where do you think this tax proposal stands we obviously hear well hear about 20 of the corporate rate. Something coming down on the individual but unclear exactly where its going to land. Its unclear because even the socalled big six, the leaders of the congress that are trying to get together on the republican side and craft a tax bill dont appear to even have Common Ground amongst themselves having actually quarterbacked a tax bill from the beginning to end, including negotiations with the senate and the white house, this is a tough thing to do, especially when you start off with as much disagreement as it appears they have. I also hear tomorrow now, i think this is in the news, that the republicans will take a very different kind of approach theyll ask all of the House Republicans to go to a retreat, a conference a oneday conference and talk about this to try to get any kind of Common Ground i think its going to be a very difficult lift if the starting points is where it is. This is even before they dont have a budget yet for 2018, which they need if this is going to have a chance of going through. That, based on what weve seen in the last few months transpire with healthcare reform, this is going to be a huge lift. But jim, explain this if you are to put this on a timeline, you wanted to be optimist bic it shgic about it,s like youre not, but if you were, when could this get done step one, you have to pass a budget you have to pass a budget for 2018 thats certainly at this point in time looking like its first and foremost dead in the water that would take at least afternoon opportunity in the house to pass and a long process in the senate. So that would just take a month to get a budget passed that sets up the framework, procedural framework that would allow you to consider tax reform certainly the committees could start crafting work, but not one hearing has been asked dschedul. Youre at the end of the year before anything would be ready for the committees to consider, let alone house and senate floor consideration. I would say in the house you certainly could get Something Like that done, lets just say in a couple days to a week in the senate, with the way the senate rules are, even under expedited positions, you would need a full few weeks to a month just to work out all of the kinks to get that to the floor then you have to conference it with the house and senate. This is a q1 at earliest probably april or march at the earliest of next year before anything i can say can get through just the procedural hurdles. And then, as you see it, in terms of the fault lines, both within the gop and within the democrats, to the extent you believe any democrats will sign up for this, how do you see it playing out . Where is the group to the extent we have seen the fault lines within the gop on healthcare, for example, how do you see it play out on the tax front . Im not sure weve seen the fault lines yet. Theres nothing to shoot at. Its possible the big six will come out with a proposal today which will start that discussion, but just coming out of the polls i ran on tax reform. So to be clear, im for tax reform i think many people are for the simplification part. For the part that reduces taxes for growth but when you get beyond that, it becomes very difficult when the polls suggest theres not a lot of concern over the corporate side, which is the biggest lift. Theyre talking about coming out with a Corporate Tax reduction down to 20 , individuals down to 35 i dont think anybody is concerned about those two numbers. Those two numbers are the starting point that the big six are focused on right now thats not where the polls are i think going into an election cycle, that will be a big part of the discussion back home for many of these folks who are very sensitive to what the election atmosphere looks like. How much of it is the rate, meaning when they go loam, if they can say they brought down the rate, versus whatever you think the conversations will be about potentially increasing the debt and the deficit i think its more on the rates. I think the more interest will be on the rates, but again, a situation where theres so much focus now on healthcare, and so many other challenges, that its going to be hard for them. Its the reason why the president is making the pitch he is because theyre trying to raise the profile of the need for tax reform, particularly around job creation and Economic Growth i think thats the right way to go so far, im just saying im just giving you you know these numbers. The polls are not moving so far rank and file people out there, by in large, are not reacting to the rate side of the conversation when it comes to tax reform you have a domain, nussle i do. So twitter is nussle. At rhino. Com . Oh. Hey i was you know, well leave it at that its addre nussle. I was competing with my mother i got it before she did. Did we play the hustl sure there will be ret ri retribution. We did. Its the reason we have you on we just like to play the music been doing this a long time, jim. The Little Things amuse us anyway jim, thank you for that joseph, i just sent you a link to your new website from my private email account you have a private one . Its probably in spam though. I got something from go daddy. I have no idea what to do with it ill show you. Well do it during the break. It says do not reply. Coming up when we return, Investment Adviser ken fisher, one of the industrys 30 most influential people we dont sell annuities i would die and go to hell before i would sell an annuity ken fisher joins us next. As we head to a break, a look at yesterdays s p 500 winners and losers whoo woman class, lets turn to page 136, recessive traits skip generations. molly i reprogrammed the robots to do the inspection. Its running much faster now. See . Its amazing, molly. Thank you. thank you. Im val. The orange money retirement squirrel from voya. I represent the money you save for the future. Whos he . Hes the green money you can spend now. Whats up . Gonna pay some bills, maybe buy a new tennis racket. Hes got a killer backhand. When its time to get organized for retirement, its time to get voya. Welcome back youre watching squawk box live from the Nasdaq Market site in times square. The market was rattled yesterday by some unsettling comments from north koreas foreign minister, accusing the u. S. Of declaring war. Trump said Something Like if he continues with these comments, they may not be around for long. So thats what trump said. Thats a declaration of war. But the stuff north koreas been saying for the past six months, you know, im going to lay waste to every blade of grass across the entire United States, none of that was a declaration. I think this is like arguing with a 4 but im afraid i dont want to make this guy i dont even want him to know who i am in case i ever visit even europe. Joining us to discuss how the markets are responding to the north korea threat is ken fisher, executive chairman, cochief Investment Officer at Fisher Investments that must have been a choice you could be chief Investment Officer if you wanted to you didnt need a co its fisher investment and youre fisher. Im getting old, you know speak for yourself. Got to moderate and give up but 83 billion . 90, but lets not quibble and what, 1 . Yeah. Thats nice thats a great business. Life has been good to me so far. Joe walsh said that. Yeah, thats right. He did Rocky Mountain high. All right. So at this point in the cycle, and youve been through a few cycles, as you said. Youre old where are we in the cycle . Just go back to john temp templeton. Last year we crossed over into optimism were still fighting about the optimism thing we havent yet gotten to yur r euphoria if you think of the optimism, its tempered by things like, oh, my gosh, were hitting new high oh, my gosh, the dollar is weak. Oh, my gosh, north korea, north korea, north korea go back to north korea, weve only had about a billion histories of secondary global conflicts, and we know what the stock market does with them. This time its always different, except it never ends up being different. The fact of the matter is kim jongun has i want to be real clear. I have korean family im very empathetic to everything about korea i think that the way people feel in south korea is misportrayed because theyre not terribly concerned. Theyre hardened to this theyve been living with north korea forever. If there was really a problem, why would the south korean stock market be doing so well . The market knows people dont trust stock markets enough really . People think the market could give the benefit of the doubt to the worstcase scenario not happening until it does happen lets take that for a second, joe. Ill buy that argument the worstcase scenario could happen what happens in the worstcase scenario they destroy a major city, if they can i dont know if they can im not an expert on this. None of us sitting at this table are, right but lets say they do. They destroy a major city. We actually have a history of destroying major cities and seeing what the stock market does in relation to that it blinks, goes over the speed bump, and hardly notices we destroyed San Francisco we destroyed new orleans you can destroy a lot of places. What the market cares about is global gdp the facting of t of the matter d that be tragic absolutely would that be terrible god awful. But the stock market is not kind its not warm and fuzzy. It would go right along. But you cant argue with what it does. We got a long history of this stuff. Euphoria is a slow train coming. Do i know well get there . No, i dont. I absolutely dont i also dont know what the market will do next week of course not. But the reality is all of the hype about north korea is almost identical to what weve done with iraq, what we and theres an age old saying. Sell on the fear, buy on the bombs. Weve been there before. Weve seen this movie. We know how it ends. If kim jongun gets one shot off, its all over have you ever looked at how much of north korea actually has paved roads . Single digit of north koreas total roads are paved at all the rest of them are all dirt roads. If war is not the reason to sell, then what would be it almost sounds like theres no scenario under which you would say markets will pull back significantly. I would never say we couldnt have a correction at any moment in time for any reason or no reason you can have a correction just by somebody yelling fire in a crowded movie theater. Its more or less the same thing. Corrections can come, corrections can go if youre talking about 13 in and out in a couple months, who cares, right were talking about the bull market ending, which is a different topic. In that regard, this stuff doesnt do it. What does that, a whole different set of things. Either something really huge thats a couple trillion dollars of negative global gdp that no one has priced in yet, no one is thinking about you invert the yield curve which is almost happening no, no, no. Lets stop and think about that for a second what matters is the global yield curve not the u. S. Yield curve if you think of the global yield curve, its been steady as a rock take a gdp weighting of yield curves around the world, its steady as a rock its real stable could they do that yeah, i dont think the fed has much power because the fed fundamentally knows that if they do that, three rate rises and all that other stuff they talk about, if they do that, they will invert the yield curve. If that i do that, they will cause problems but why are they afraid of a world thats growing with low inflation . Do you have any anxiety of course i do. No, no, about the rise of passive investing . Meaning you have a trillion dollars thats gone into etfs and all of this, a trillion dollars thats effectively gone out of active management when and if the proverbial you know what hits the fan, what happens . And is it worse . Is it much worse i dont actually know i have a little concern there but not a lot because i actually trust markets to work. But mahas the mark changed i guess the question is has the market fundamentally changed no, because the money can flow out of passive as well as flowing into passive a lot of that passive isnt passive because its people buying collections of passive funds treating them actively let me get a fund that does this theyre all passive, but im managing it with an adviser layered on top but in fact, i dont know thats a terrible thing, but i know a lot of people worry about them ken, thanks thank you for having me dont be a stranger appreciate it. Coming up, a guest host whos never shy about speaking his mind real estate magnet sam zell joins us at the top of the hour. Then the president s cup tees off in new jersey this week. Pro golfers Dustin Johnson and Jonathan Vega will join us next. And later, senator bob corker weighs in on the gops attempt to overhaul taxes and health ayun st ted youre watching squawk box on cnbc todays executive edge is lifting the veil off quantum investing, sparking a war for talent four out of the five biggest hedge funds are now primarily computer driven, yet it remain largely a black box for some of the most sophisticated investors. Leslie joins us now from london. Hey, melissa. Thats right the purpose of this screen behind me is to demystify the quant strategy were here at man group, which has been in quant for 30 years theyve cultivated 40 billion in that strategy, and yet even the most sophisticated lps see this as a black box. The purpose of this screen is just to show a small subset of data that the computers are sifting through and trading by the millisecond. You can see the diversity of markets theyre in futures as well as electronic slippage, which shows the cost theyre incurring on trading i want to take you guys on to the trading floor. I use that term loosely because a lot of people behind me arent actually doing trading theyre doing coding, creating these algorithms and back testing them and letting the computers do the rest. This is a strategy thats become very much invog vogue lately. Thats created a concern among some Industry Experts that this could be the cause of the next financial crisis due to quant funds excessive leverage and side in the markets they participate in but a lot of the people we spoke with here say were going to see a repeat of what happened in 2007 with the unwinding of several quant funds that brought down a lot of other funds with them because its simply different. The technology is different and the diversity of markets is different. Guys leslie, thank you leslie picker in london for us coming up when we return, the ice bucket challenge was a fund raiser thfor als that went viral and raised more than 2 million. Up next, well talk to the author of a new book about the phenomenon that turned clicks into dollars first a quick check on whats happening in european markets right now. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Even if youre not on facebook, you probably remember the ice bucket challenge that went viral in 2014 with roughly ten billion total views. These krips turned into Research Dollars for lou gehrigs disease and helped raise more than 200 million, partially funding the first fda approved drug for als in more than 20 years. Joining us right now is dave wedge, the former Boston Herald reporter the coauthor of a new book about the Viral Campaign how many people ultimately got iced there were ten billion facebook views and over 17 Million People did the actual challenge and counting they still do it every august. Still goes on. How did it start . Ill start with you. Yeah. I mean, the campaign itself, the ice bucket challenge, was kind of floating around the internet before, but a friend of ours, pat quinn, who has als as well, you know, saw it and decided lets turn this thing into something for our disease and challenged my husband and pete kind of has a Great Network of boston supporters, and it just blew up from there do you think the real question, though, sort of longerterm question, talking about turning sort of these viral things into true dollars right is a number of charities and other things that have tried to replicate the success of this, and thus far, nobody has what was it about this was it because this is the first time is this scaleable . Do you think this is something that will happen in other waves . First thing pete did that was genius was he branded the ice bucket challenge for the disease. He created the hash tag ice bucket challenge for als, and he really branded it. The other thing that happened was in 2014 facebook video was pretty new, and so these were, like, the first videos that everyone was seeing on their feeds. Their feeds were being flooded with these videos. I dont know if that can ever be replicated because now facebook is all video you felt like you were part of this big are cause rather than another social media, like, hash tag its more of a what was your favorite ice bucket challenge video is there one that is sort of a highlight for you . Bill gates is definitely the highlight in our house his video was extremely elaborate. He has a whole contraption remember this yeah. That, you know, was kind of the epitome of success for pete to have, you know, reached bill gates. Have you seen any other campaigns since then any other viral efforts that you found inspiring and thought this could maybe catch on i think social media now its you know, thats how i find out about most philanthropic causes that i want to support especially everything going on in our country with hurricanes and, you know, sorts of things its the way to connect us and the way that we can support other people, you know, through social media one of the Big Questions in terms of the als and in particular this charity is you took in an enormous amount of money early on is that something that i know this continues every august. In temz of the ability to make this replicatable on an annual basis, was it a one shot thing our slogan is every august until a cure we hope that every august is, you know, deemed the ice bucket challenge month, and people continue to, you know, create awareness for this cause what was it what was last august what did that look like relative to not nearly as the scope of 2014 in the state of massachusetts, actually. The awareness piece is huge, and that the dollars might not be as significant, but the awareness piece is still there its good to have anything linked to your social media. When this happened, little kids were sending in 5 that they raised in their neighborhood that was what was beautiful about it the organic nature of how it all came together. The book is the ice bucket challenge. Thank you. Thank you for having us were not going youre not icing us now no ice i assumed there was some kind of trick in all this. We can definitely do it theres ice here at the nasdaq coming up, our guest host for the next two hours outspoken real estate magnet samel zl. His take on business, politics, and the markets is straight ahead. Driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. And the wolf huffed like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies child giggles symbicort. Breathe better starting within 5 minutes. Get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. I cant wait for her to have that College Experience that i had. The classes, the friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss when you have the right financial advisor, life can be brilliant. Ameriprise billionaire Real Estate Investor sam zell joins us to talk policy, the markets, and the state of the economy his comments just minutes away ad week is front and center in new york. Oath Ceo Tim Armstrong is here to talk about brand building in the rise of digital advertising. Plus, Companies Taking a stand on protests around the nfl. A look at who is responding and the possible economic consequences as the second hour of squawk box begins right now. Live from the beating heart of business, new york city this is squawk box. Good morning welcome back to jack box here on cnbc were live at the Nasdaq Market site in times square im Andrew Ross Sorkin and melissa lee. Becky is off today we do have green arrows for you. Dow is 31 points higher. S p 500 looking to open about a point and a half higher. The nasdaq would open about 12. 5 points higher. A couple of headlines meganews at this hour wall street is on fed watch today with fed chair janet yellen set to give a speech this afternoon. Shes going be to giving the keynote address at the annual meeting of the National Association for business economics. That speech scheduled from 1 30 eastern time and feel like were going to watch the market literally move during that hour. Also, walt disney is revamping its retail efforts both in its physical stores and online. Its testing the first major redesign of its Retail Stores in seven years. Its introduced a new ecommerce site called shop disney. Com. Disney says it needed to elevate and improve the Shopping Experience both in stores anden on line. Dow component, nike, set to release Quarterly Earnings its supposed to happen it will happen after todays closing bell the Company Expected to report profit up 48 Cents Per Share on revenue of about 9. 1 billion. Those results will be closely watched amid an overall slump, of course, for Athletic Apparel and footwear sellers a couple of stocks were moved this morning, and we kick it off with alibaba. Its taking control of its business and raising they plan to raise 15 billion over the next five years. Alibaba ames to be able to fulfill online orders within 24 hours in china and 72 hours anywhere else in the world red hat reporting better than expected Second Quarter profit on Strong Demand for its Cloud Computing products and technology the company is also raising its full year outlook. That stock was surging 4 this morning. Joining us now is our guest host for the rest of the hour, sam zell, chairman of Equity Group Investments of billionaire Real Estate Investor so many youve had your hands in so many different businesses over the years, and i always bring up i bought itel for my clients back in 1984 or so 1985. Rail leasing car. You have been you probably know the nuts and bolts of the economy as well as anyone. Not Just Real Estate its great to have you i guess ill start out by asking whether the underlying economy has improved enough to where youre more comfortable with where the equity markets are it continues to surprise me its very long in the tooth. The deregulation efforts and the things that are happening in washington off twitter, i think, are positive, and i think that the Business Community understands that, and theres more willingness to commit capital with the longer time frame than was the case a year ago. Which has been one of the reasons for the what some would call muted not horrible Economic Growth, but somewhat muted. There was not a lot of longterm investment people you think people feel more comfortable committing capital longterm . Thats certainly my feeling at the moment. I mean, i feel that way, and i can see i mean, i think that in the previous eight years, we had a very antibusiness administration, and, you know, thats a real bummer thats a real negative although there are many things one can complain about the current administration, the fact that its probusiness is not one of the things you can complain about for a long time, sam, you have incident positived out that the fed and the primary responsibility is probably a Stable Currency, and you question whether staying at emergency levels for so long undermine having a Stable Currency now keshkari is out saying, no, dont raise rates. They have not really gone quickly. Slowly. Very slowly more people are coming around to the idea that its not necessary to go up very quickly right now. It basically creates the possibility of an improved environment. Well, that doesnt need raised Interest Rates to keep inflation at bay i think we might be able should they be afraid weve had someone on that said that the fed has a phobia about low inflation, and then they should embrace it, not be afraid of it. They seem to be well, if you were the fed and you looked at the last 100 years and saw that at every moment where we got the shortages, we got pretty rapid inflation, i wouldnt be ashamed to say that i was scared you seem like youre in a better place the last time i was on was literally after inauguration right and you and i and nobody really had any idea what we were what was in what was coming down the pipe did you like the deregulation that was on the horizon . Just think about that what betsy devos last week about creating the rule of law on College Campuses somehow the Obama Administration thought that the rules that apply in the courts shouldnt apply on the College Campus . You shouldnt be able to, you know, meet your accuser . You shouldnt be able to be represented . You know, theres a lot of people whose lives i think have been materially hurt by things that happen on the College Campus based on the what i would say is a very heavy premise in favor of the victim eight years it can swing a long way yes i wouldnt suggest hard to bring it back, and you see that i was going to say, i would suggest to you that it for sure aint bad. Isnt there inflation that creeps up in the abstract thats inflation, but you have to look at what has fedex done for the last five years . How does 5 relate to the last five years is is it 5 , you know, and there was 5 last year or is it 5 , and theres been four years of no raises . Right again, like everything else, you got to know a little more about what it means. In a vacuum before you jump overall theyre hoping to keep prices lower, right, by sending the amazon packages and youre paying a lot less i dont think theyre hoping to kick prices lower i think theyre facing the reality of competition if you can get beyond worrying, wow, theres a lot of things that probably are pretty positive, so you shouldnt be surprised maybe by if you can have, you know, no pressure on interest, no really sharp pressure on Interest Rates to rise, inflation stays low, that keeps multiples, you know, reasonable because theres no alternatives to stocks at this point, and then you look at Global Growth and maybe tax reform and deregulation, maybe it explains why things are going further than people thought. Is that where you are now . Well, im more optimistic than i was six months ago. You are okay but im not ready to party. Yeah, right so youre not a buyer, and youre not a seller. You have been buying some stuff, though waste and sure. We bought waste. We bought hospitals. You know, were always theres never a scenario that there arent things happening that will alter your view. There are times where you feel like you could buy anything and you would do fine. This is not one of them. Im surprised you brought up what the left what are the most divisivf i divisive figus betsy devos. This cultural war that were in the middle of seems to be worsening every day. How does it ever acffect the Financial Markets . Does it keep getting worse does it reach a peak is there an event that comes in and maybe helps heal all this, or do we just its a civil war. Its really frightening to me its frightening how polarized the country is i dont think theres any question that the level of polarization is beyond the pale. Unfortunately, historically these kinds of periods have required wars or some kind of giant, you know, save the nation to make people forget about, you know, where they were. I mean, you know, as in 1938 when you had the big battle about stuffing the Supreme Court and you certainly had a divisive scenario in this country then. George bush was never popular with the left. W. Right . But it was nothing like this i mean, if this can this continue for the next four years in terms of its anything goes with resist and he doesnt deserve to be there, and Maxine Waters says well decide what impeachment is we just well decide how to go about its never been to this extent. I dont disagree, and, you know, unfortunately, the president s thesis is that sticking everybody in the eye is the way to get their attention and cooperation. Im certain the first is true. Im not certain the second is. You get their attention maybe not their cooperation. Yeah. Its the old story about the army mule. You get his attention by blowing in his ear, but first you hit him over the head with a 2x4 to get him focused. Yeah. Does that work not often just blow in my ear and let me ask a question about that, which is youre relatively optimistic about the economy and relatively optimistic. I think however you describe his leadership of the country in terms of changing the dynamic in terms of how people feel about business, but at the same time i feel like some dwree you have some anxiety about his ability to execute on his plans given the whisper hit people over the head with a 2x4 analogy. How do you square that up . Well, bluntly, the only way that i can square anything is i focus on what gets done, not what gets said okay. And on a measure of what has gotten done, i believe theres been very significant change since trump was elected in november change that is positive. On the economic front, things on the economic front , what points to you about things that have happened thus far just think about the fact that all of a sudden there are no industries that are, you know the pinata of the president. It seems like they all are. I disagree. To say that were going to eliminate coal as a source to adjusting to how coal fits in to our society just like it does in europe and asia and the rest of the world. Andrew, you focus a lot of times on financial deregulation as the only there hasnt been any much that. Theres been the e. P. A. , theres been theres been all kinds of streamlining, and theres been a lot of regulations that were supposed to go into effect that were let me ask you. Telecommunications. Weve also seen the other side of it, and that is that, you know, ten years ago we had a Community Banking system right we dont have one anymore lets speak to this since the election, what economically, sam zwl ell, what has sam zell done with his money . What investments have you made since the election as a function of all this . We made an investment, and we bought a bunch of refineries we bought, you know, hospitals you had bought those refineries under a democratic presidency or is the change in tone towards the fossil fuel industry did that help you make that decision i guess i believe that whichever president is not going to be the arbiter of when fossil fuels get replaced by nonfossil fuels. I dont think anybody can move the dial that fast that quickly. Industry flourished for eight years in spite of an administration eight years is a very long time it is to be preaching one direction, and then reverse it much more to come from sam. He will be here until 9 00 coming up, the company starting to take a stand on the controversy around professional athletes and the National Anthem nike siding with nfl players saying it supports athletes and their right of freedom of speech a look at other companies and where they stand on this issue thats next. Later, ad week underway here in new york city. Oath Ceo Tim Armstrong will talk trends, the market and more. Stay tuned bck xn atching squawbo o cn Companies Like nike, fedex, ford, and are making comments on the battle brewing between the nfl players and the president. Eric joins us now with the latest on this eric thats right. After everything that happened sunday, the big question last night was how the Dallas Cowboys and the Arizona Cardinals would handle the National Anthem cowboys owner jerry jones publicly said he wants people to stabbed for the anthem he and his team took a knee together before the anthem, but they stood up for the song itself the cardinals all stood as well. The president last night and this morning has been tweeting several more times defending his view more interestingly, Major Corporate sponsors have been mostly silent on the issue cnbc reached out to dozens of the nfls top sponsors and only a few companies would give any comment. Most of them have not said a word even social Intelligence Firm brand watch said big brands have stayed silent on the matter on social media the game was aired on espn, who spent a good amount of time explaining each teams plans for the anthem theyre the channel most exposed to a dip in nfl ratings. Compared to broadcast networks who have other products. Before monday nights game, combined ratings for all games this weekend were down 4 versus last year. Analysts expect a high rating for mondays game, though, to bring that number higher note that the pregame shows now all airing the anthem, theyre up 19 from last year. Right airing the anthem. Most of these companies, they would give us they were taking both sides. I think theres no right answer here for a company. Theyre going to offend somebody polarization we were talking about. Its going to be interesting as the season goes on because no one kneeled last night maybe you think i mean rg, for the actual anthem no one kneeled for the anthem if you think thats the fine line, do it before, stand up for the anthem, maybe that makes the problem go away. Sam, you dont like this . Here we are, you know, we believe in patriotism. I think we believe in patriotism i believe in patriotism. The idea that weve allowed the anthem and the flag to get intertwined in protests and different views. If you had to go in and listen to protests or political views, you wouldnt go back to the restaurant you just want to go in and enjoy your food, and its sort of the same with sports where its an escape, and teams are teams. Everybody is together. Not sure locking arms against the flag or against the country. I think theyre locking arms as a symbolic their team. About their team, about i think to some degree maybe its about the first amendment. Maybe its about what the president said there are lots and lots of ways to protest. They dont need to be the it doesnt need to be the flag and the anthem. It just nobody, as far as i know, has objected to anybody to mix patriotism on different views ander its not justified. Have there been any protests against the sponsors who have spoken out were starting to see that on social media, and other people saying im not going to shop at this place thats starting to pick up in various Little Pockets its hard to measure that because companies are so big would that move the neelds you have the whole season to see what will happen there if you are nike, what are you supposed to say . We support our tloouts athletes and their right to expression that was it. They didnt say anything else. Under armor was in the same situation not too long ago, correct . Then again, in this time around with steph curry and he has been part of it. I dont think anything objects to athletes expressing their views at all i just think theres a methodology thats relevant here they get up and say this is how i believe. Thats great if you are lebron james and you go on twitter the way he did and made a video he had a whole press conference and went into it for 20 minutes if you are he is a nike sponsored athlete. Does that how does that shift the dynamic to the degree that there are people who are lebron fans, but are trump fans and maybe now theyre upset with lebron and maybe they dont want to buy the sneakers. Its now were mixing the bowl i think youre giving way too much credit. Ohio went for trump youre in ohio what do you think about that he just kept going with this is what i believe and it didnt matter to him about his fans coming up, you can stay im done. You sure . Ill bring a tie next time. All right ad week kicking off respect the show i have a jacket, though dont dont take a knee ill lend you one sam does it miami vice style. Ad week kicking off in new york that gentleman, oath Ceo Tim Armstrong, will be here to talk about brand building, ad trends, and digital growth, and then got to admit, im pretty psyched about this dj professional golfer Dustin Johnson, number one in the world, hit the ball further than is humanly possible will be and ed strait will be on the show with jonathan in vaks theyre going to be here because of the presidesnt cup the president has always been doing really well, but i look on the at the other guys playing. Well see what happens Flexshares Etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Oath Ceo Tim Armstrong will join us to talk marketing, digital advertising, and trends in the industry, and as we head to break, lets take a look at how the u. S. Equities futures are shaping up nasdaq 17. Alpha, by the way, higher in premarket trade. Stay tuned youre watching squawk box. Your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Another day at the office. Why do you put up with it . Believe it or not you actually like what you do. Even love it. And today, you can do things you never could before. Youre working in millions of places at once with iot sensors. Analyzing social data on the cloud to create new designs. And using blockchain to help prevent fraud. So get back to it and do the best work of your life. Welcome back to squawk box live on cnbc at the Nasdaq Market site in times square. Boeing moving towards building a new midmarket jet. Talking about jets, guys according it a staff memo obtained by reuters, boeing has opened up a Program Office for that jet and moved executive mark jenks who has been running the 787 dream lienor to this new project. A lot of focus on it however, boeing not yet decided whether it will actually build we were talking about that. Midmarket commercial or midmarket commercial. I dn zblsh they do make a boeing business jet thats an incredible plane, but you got to be like a corporate very few individuals. That boeing business jet is really a 737 too big yeah. A lot of places and land it. You cant land it more important theres a lot of places where they dont have the stuff for you to get up and get in and out of the plane in a private airport. Short runway st. Barts, its very difficult you know a lot about this seems like you do. I dont know i know a lot about it well, ad week is in full swing here in new york city. Julia joins us now with more on the role of ai in advertising. Julia. Well, melissa, of course, facebook and google have been in the news for failures of artificial intelligence, but both of those companies are investing more in human oversight to help address those issues on friday they pledged to double its time focus on election integrity. Facebook and google are also counting on ai to better target ads and grow their revenue thanks to aidriven ads to facebooks messenger and whats app, Merrill Lynch estimates that they will have a revenue potential of 20 billion over the next three to five years just last week fandango released a ticket buying messenger bot. To tackle that allimportant brand safety issue on googles youtube, start of zephyr places ads next to appropriate content using what it calls unsupervised and supervised ai systems. People review videos to help inform the algarhythm. Then vintanas new hologram. Its named julie, and its designed for stores and malls. Im hungry. Dhaets a good one give me one second if you are looking for a sitdown meal, head to the Italian Restaurant for their signature pasta dish the holgram company retailers will use this ek it nolg to battle the rise of amazon, and vintana has created holograms for nike, Mercedes Benz and others. Joining us right now for a wider discussion of the state of advertising as more dollars flow into online ads is tim armstrong, ceo for oath on this ad week. We love having you here. So much to talk about in the ad world. You have a new campaign yourself which you launched yesterday about branding yourself. Yeah. Were ad week usually were selling. This week were launching, and we have a campaign thats global in nine markets. Overall its really a combination of putting yahoo together with aol under verizon and oath is the umbrella brand, but really what were promoting this week and starting to advertise on this network, on digital, on mobile is the future of our media brand house of brands. We touch about a billion consumers across the globe every month, and this is the first time in many years that people will see our brands across the spectrum all the way from programming around the Business Community to sports, to entertainment, and its a great chance for us to go out to the world and tell them what were doing. At a base level, what do they all stand for given that they are all so very different in many ways . Our strategy is passionate communities. You see the world thats kind of going horizontal from technology and our brands we did tech crunch disrupt in San Francisco wrv we did the live london game for the nfl on sunday morning wrrng this weak we have Harrison Ford showing up to our studios in new york. We have the Huffington Post bus tour thats going around the u. S. We are a company that believes deeply in passion verticals, passion communities. You talk about the bus tour speak to this issue about whats going on in this country in terms of the tweets on within side from the president and how the country is reacting to it and to the degree that all of these companies and ceos that you talked to are probably asking, i imagine, says what are we supposed to do about this what are you telling them . Yeah, its a really big topic, and i would say theres kind of three spectrums to it. One is, you know, you see on the consumer side we see them on the huff post bus tour and you see the nfl. People want to have a voice, and one of the best things about this country is you can have a voice. You know, thats one spectrum. The second piece is you are seeing people kind of selforganize. Thats happening at the nfl. Charlottesville for me as an american was one of the best events i have ever been to it was getting down there sunday, watching how people were when you say the concert . Charlottesville a concert, which was a followup to charlottesville the incident super positive i would say the last thing is you are getting to see for all the controversy thats going on, you are getting a higher level of engagement. You know, at a Business Community level, people i call it head on a swivel people are paying attention more now than they were at almost any other period i have seen in the last 20 years. Its kind of an interesting time period question about whether the nfl is going to become a political issue and could potentially become too political for tigsers. You just streamed this nfl game. Is this something that you want to continue to invest in and get more sports rights, or do you think that the nfl could become too political . Yeah. No, i think were in the media business, and the media business, as you know, you want to be at the center of what people are talking about you want to be in the middle of controversy, and, you know, the nfl in general is such a powerful sport and force and in the consumer landscape, and i think they end up becoming lightning rod place where issues like this come up. From our standpoint, from a business standpoint, you know, were partners with the nfl. Were going to keep supporting the nfl. We know all the nfl owners i think on the media side of our business, we want to be involved in areas like this because of a conversational good for the media to be part of the conversation, but i can tell you, you know, dare i say when theres a war or a plane crash, thats part of the conversation too, and its good for the media in terms of eyeballs on the news, but advertisers flee right and so the question is sort of where sponsors are going to land on all of this. I think the responsibilitiesors, you know, they typically every sponsor has their individual decisions theyre going toic ma about what to sponsor and what not to sponsor. I think the other thing to recognize is, you know, its been almost a year since trump has been in office i think there hasnt been a week or a day thats gone by that theres not a controversy. These things tend to pass in the individual outputs the larger issue may not pass that quickly i think as a espnor of the nfl people are trying to measure their individual company values, what theyre going to bring to the table in terms of that conversation, but i think the nfl is going to survive. Well, we have you here with tape on the issue of facebook and whats happened over the past several weeks, and especially whether you think regulators are going to step in at some point given this issue of the russian ads and given just the larger issue of just how large a touch point facebook has become also, youre a former google man. Theyre under a bit of regulatory scrutiny as well. I think ive been saying to julia, were at a natural point to some degree where the Technology Keeps scaling, and i think one thing that people dont recognize is the amount of consumers, 3. 5 billion people on oon line or 3. 5 billion people coming the amount of data and information that the companies are using to try to keep up with Consumer Usage and targeting the huge consumer, the Smartphone Consumer and the top segment, theyre on their phones for three hours and 50 minutes a day. All of the ad systems basically have to figure out who those consumers are, help target advertising against them, and i think the technology when you see issues like were seeing with facebook and google, the technology has gotten ahead of the human ability to be able to bring those back into what culture and society wants, and i think thats why you are seeing facebook and google make these announcements. We have a business where were super brand sensitive because we own that portfolio of brands, and we have those passion consumers. Were trying to stay focused i have to ask, should we believe the numbers . I mean, the numbers that facebook puts out to advertisers that you put out to advertisers. In this digital world, we thought that all of this stuff should be very calculatable, and now theres large questions about whether it really is you are assuming that the digital numbers are incorrect and the linear numbers are correct. Digital advertising was up 17 in the first half of the year. Linear was down 5 if i had a bet on one way or the other, i think the digital measurement over time will be more accurate and deeper and more specific than what you are used to in the advertising industry, and digital has got a 20 year, two decade run in front of us of growth overall. There will be bumps, but its all about growth tim armstrong, oath ceo a larger conversation. Come on back next, top players from the u. S. And europe. Were going to theyre teeing off later in the president s cup, which is local. Taking place in new jersey at liberty. Can the u. S. Make it seven in a row . Were going to speak to players onneth bo sides of the pond after the break. Dustin johnson, and jhonathan vega will join us after the break. Are ri which marks the start of our nations first 50mile unmanned flight corridor. And allows us to attract the worlds top drone talent. Here and all across new york state, were building the new new york. To grow your business with us in central new york, visit esd. Ny. Gov. The president s cup tees off in new jersey this week. It pits top u. S. Golfers against the best International Players outside of europe. Were joined now by a key player from each side lets welcome Dustin Johnson, d. J. , from the u. S. Team, and jhonathan vega from the International Team welcome. Im waiting for this its growing in prominence, the president s cup. Not quite to the ryder cup yet, but when i look at the team, europe has great players, obviously, but when you throw in these guys, the australians and south africans, you are fielding, jonathan, an unbelievable team. H hidecki, brandon grace, schwartzel i would give it even odds with these kinds of guys, right i mean, it has not historically been this way, although its been pretty much dominated by the americans, but one of the fun things about this year is i feel like we have a younger team a lot of the guys are young. Weve played against each other against americans a lot on the pga tour. I this i that has made this tournament a little more competitive. Especially last year we have a good one, and it starts this week d. J. , i mean, europe until recently has done really well on the ryder cup thing. Whats the difference between this team, that seems they have great players, and why does the European Team have success on ryder cup . I wish i knew you know, we obviously had a great year last year yeah. It was nice to be on a winning team, finally. You know, the president s cup, its, you know when i was in korea a couple of years ago, i mean, i was really close came down to the last group. Number three. You won three matches. Is that the one where you were 31 . I did pretty well i did okay in the ryder cup. Ive done okay in the last couple of team events. You know, this year the president s cup, you know, Liberty National here being so close to new york city, i think its going to be a lot of fun. I think its going to be very electric out there the fans are out here, and theyre enthusiastic about golf. Its going to be a lot of fun. I just had a flashback to your last duel with jordan where on the final hole in regulation, you kind of played it safe and ended up in the rough, and then you hit it in front of the green and then put it on and sunk that long put from above the hole did you see what he did on the first playoff hole you put your drive where your second shot was on the first how long was that . Was that 360 or something . I dont know. I didnt even look i think somewhere. You dont even think about it it just happens for you. Yeah. Well, i could cover the water, so it wasnt but i still had to hit it in a jordan mad . Or did he say good job he is pretty competitive, isnt he we actually we were actually at the same place the next day playing out at syler ridge and hanging out. You know, its been pointed out that in the past, like, arnie and jack would have never been yucking it up walking down the fairway, giving each other, you know, thumbs up for great job. You guys are all youre all close on the and you congratulate your even jhonathan, even if he is on the opposing team, you would say great shot, and the sportsmanship is amazing in golf these days the guys, were all pretty close. We all know each other pretty well yeah, everyone you know, everyone respects each other you know, when its a good shot, you tell them. Youre the best thing thats happened to venezuela in a long time thank you for pointing that out. They could use a bright spot, something to rally thats something that i guess makes me a little bit happy that a little bit of distraction for the people down there. Obviously, as you have known, its been pretty rough for the past eight years getting people excited about something, and, you know, project something positive over the country. Obviously its good, and it makes me feel good about what im doing here too tiger is going to be there. Just not playing, right . Yes he is assistant captain. Do you foresee have you talked to him . How is the health . How is he feeling . Is it okay to talk about that . We all want him to come back oh, for sure. You know, i talked to him yesterday and, you know, sunday night when he got here yeah, he seems like he is healthy. You know, he is working out again. Seems good i mean, they talk about what golf would be without arnie or jack or what golf would be without tiger. I mean, its you guys have a pretty good thing going right now. We do with the pga, and some of that obviously has to do with tig tiger. I miss him too were definitely better when he is around better when he is around. The format, is it different . Which way is it different from the ryder cup for people that are tuning in . Well, they just changed it last year. They took, what, two matches away, so now theres, what, 32 30 points 30 points i think theres only two more matches in the ryder cup as far as next year, you are going to play in all four majors, but obviously, who is on your radar screen . Jordan justin now i guess, right . Yeah, theyre both playing very, very well. Zblander, where did he come from your guess is as good as mine, but he is obviously a great young player he has been playing really well. His ryder cup is next year too. Yes where is it next year its in france. Is it really . France that should be youll be doing that chant that drives me nuts. Does that fire you up when you hear that stupid chant i try not to listen all right great. You know, its when do you start . Tee time thursday, the first tee time is 1 05, i think its on golf channel, and then on big nbc on the weekend you should know the tv schedule not me andrew. Help me out. Dont look at me. Its thursday and friday 1 00 p. M 11 30. Saturday its on the golf channel. Sunday, noon eastern time only on nbc. Thank you sell it. Say it loud and proud figure out. I got nothing for you. Golf channel nbc. Dustin and jonathan, thank you. Thanks for having us great having you be sure to catch here we go, where going to do it again be sure to catch all the coverage this thursday and friday on the golf channel one of our Sister Networks then over the weekend on nbc okay coming up, we got a lot more from guest host sam zell check out the futures at this hour we have green arrows things are better. Dow looks like it would open up 30 points higher nasdaq up about 16. 5 points. S p 500 up about a point and a half heres the tenyear note 2. 222. Squawk box returns in just a moment with mr. Zell and i get back to business. Tmobiles unlimited now includes netflix on us. Thats right, netflix on us. Another reason why tmobile is americas best unlimited network. Witness katy perry. Witness katy perry become a legal witness. Witness katy perry and left shark. Or a card shark. Grandma . Witness katy perry work. Witness katy perry firework. Witness katy perry swish. Witness katy perry. Aaaaaaw look at that dog katy perry with music videos and behind the scenes footage, xfinity lets you witness all things me. Check out shares of drugmaker axovan sciences. Shares are plunging. Down by about 70 . This after a late stage trial, stage three, as a matter of fact, for alzheimers treatment didnt meet its end goals. Stocks had nearly zubled this year this is a big move for a 2. 6 billion stock and the release was largely seen as a binary event. It was priced into the Options Market it was a drop or a surge of 80 . A drop of 70 here on axivant. Lets take a look at a couple of stocks to watch dard Darden Restaurants matching estimates Comp Store Sales at its olive garden chain fell short of forecast Comp Store Sales at long horn steakhouse were better than expected a similar vein, shake shack was downgraded to neutral from outperform at with the firm expressing concern oh, okay okay concern about cannibalization from a newly opened location cant same cant be said for a recent stores on i dont know if you saw those. The cannibal couple . I did this is not what theyre talking about at shake shack no. You saw it on the teleprompter, concern about cannibalization. Im aware were you you were worried about where we were going too . I wasnt. You were not . No. Coming up, a lot more from our guest host and Real Estate Investor sam zell. Plus, a new report from the hamilton project on wage growth and the Economic Policy factors that are affecting compensation. Weve got the details straight ahead on that, and then later, senator bob corker will join us to talk tax reform, health care, and a lot more another very big hour of squawk box when we return in a moment. A big blow for Health Care Reform the bill to repeal and replace obama care appears to be short of the crucial votes welltalk to senator bob corke straight ahead plus, billionaire sam zell on the record theres more willingness to commit capital with the longer time frame than was the case the real estate titan weighs in on the markets. The trump agenda and where he is putting his money to work as the final hour of squawk box begins right now leave from the most powerful city in the world, new york. This is squawk box. Good morning. Welcome back to squawk box leer on cnbc, live from the Nasdaq Market site times square im joe kernan along with Andrew Ross Sorkin, and melissa lee becky quick is off today sam zell, chairman of Equity Group Investments. More from him. The futures continue to be in positive territory after a pullback yesterday were up 30 points now 29 points on the dow the s p indicated up 1. 49, and then the nasdaq indicated to bounce back. That was tech stocks and the nasdaq that were hashed hit yesterday and bouncing back a little bit more today. Dollar has been strong versus the euro all the way and now under 118 on the euro 117. 87 right now defense secretary james mattis responding to north koreas latest threats saying that the u. S. Will seek a diplomatic solution mattis making those comments during a News Conference in india. South korean media is reporting that north korean has boosted defenses on its east coast after it said it would shoot down u. S. Bombers even in international areas. Not just over north korean airspace anywhere near the peninsula. Yesterday north korea accused President Donald Trump of declaring war. A trip to london to meet with the regulators last week a body chaired londons mayor said that it would revoke ubers license because it deemed the company unfit. Uber can continue to operate while it appeals also, more trouble for facebook. Blocking access to the site yesterday. The social Media Company does not store its data locally that nations laws say that Foreign Companies must keep personal data in russia. It was criticized when it went into effect in 2015 for potentially exposing data to russian intelligence agencies. Just add a little fuel to the fire of all of the regulatory questions around regulating facebook or uber that rise in the premarket, thats really helping the nasdaq this morning it was the bigger pressure on the nasdaq 100 in yesterdays session. Stocks to up away, shares of axovan sciences are tanking. The late stage trial of a treatment for alzheimers disease failed to meet its primary goals. Prior to the drop, which is right now at 70 premarket the stock had nearly doubled this year. Darden restaurants is out with earnings the Company Reported quarterly profit of 99 cents a share comps store sales at olive garden chain fell short of forecast, but comp sales at l g longhorn steakhouse were better than expected. Cheesecake factory falling after a downgrade from neutral to outperform it expects casual dining to remain under pressure due to a decline in store traffic and growth in food delivery. That stock at 4. 6 right now our guest host this morning, sam zell, billionaire Real Estate Investor and entrepreneur, and one of the big things that we have yet to talk about is real estate itself. It is state of resident yag, state of commercial, talking about the future of retail where do you stand its a lot of questions which one do you want to start with lets talk retail first everyone is retail crazy the amazon effect. Do you see what do you see the retail landscape in terms of real estate looking like over the in exfive years . Like a falling knife. I think that, you know, you start with the fact that the u. S. Has four or five times the amount of Square Footage per person of retail as anywhere else in it the world we start with an enormous large inventory of retail. At the very top, the basic, you know, major regional mall is becoming a minidowntown and becoming even much more diverse, and, therefore, is saving itself the local Corner Strip Center is still convenience oriented everything in between is an oxymoron didnt amazons purchase of whole foods, though, and their tieup now with kohls, making them a partner in terms of returning goods, zents that sort of validate in some way the retail model, and maybe slows that falling knife so its not dropping as precipitously . Im i dont mean to be risk disrespectful of amazon, but i dont think amazon reinvented the wheel i dont think that buying whole foods its going to make it easier for amazon to fulfill its objectives, but i dont think its going to change retail. I think its very likely that if i were guessing ten years five years from now, the whole foods stores will probably be half the size they are today maybe even smaller basically amazon is buying depots not retailers. So will there ever be a moment for you to jump in to this space you have famously been called the graveyard dancer is there a moment to dance an area thats in this much disarray with so many weak players is not an area where i would want to deploy capital at this time. Right and im generally a contrarian, and i generally rub my hands together at the opportunity for serious, you know, dislodgement, but i think what were dealing with here is very significant by the way, i think were going to this land isnt going to go away. In many of the retail cases, the locations are fabulous even though the retail objective is not. Are the properties not distressed enough for you to buy the properties and convert them to some other use . Well, first of ll, if you are going to buy them, on what basis do you buy them . Location. Well, but im talking about pricewise you know, three years ago you could buy an 8 mall you buy a b mall, and it was probably an 8 cap rate. The same mall three years later is now selling at 13 and 14 . You see enormous erosion of value. Falling knife. When the knife falls, theres going to be plenty of opportunity for people to step up and say what are alternative uses i also think just like it was the New York Times wrote an article yesterday about the major reas, the agreements among retailers, that control the Shopping Centers its going to be very hard to take that Shopping Center land and redevelop it with all these competing people having rights if you have an apple store thats doing great, why would you sign up to close the Shopping Center . You wouldnt you got all the conflicting elements that are going to make retail less comfortable for the next few years talking about disruption. Wanted to get your thoughts on the we works of the world. This whole development of group work places, if you will, and what do you think is that disrupting the commercial real estate world no, i dont think its disrupting the commercial real estate world i think theres a lot of questions to be asked about approximate we works first of all, we works is nothing new. In the 1950s there was the idea of renting the floor and subdividing it for users we works is that to the multiple degree first question you ask about we works is who pays the rent is the rent the result of profits that are being used to build businesses, or is the Venture Capital money, or is it friends and family money i think the future of we works depends a great deal on where the money is coming from second of all, i mean, im one of the largest owners of multifamily in the country. If you had to pick one theme that was relevant to multifamily thats been going on for 50 years, its everybody wants to live alone. Everybody wants privacy. People are willing to give up space to have it only theirs at the same time were advocating togetherness . Excuse me for being a little skeptical, but i cant believe that normal people have changed so much that instead of a nice quiet offense, they want to sit in the middle of six other people yelling at each other i assume masason didnt come to you before he made his billion dollar investment in this couple . Have you spoken to the we works people ever . Oh, sure. I know masason, and i dont have answers, and this wouldnt be the first time i may be wrong, but i wouldnt i dont think that community we everything is anything other than a shortterm affect the other piece of the commercial real estate trend right now is densification the idea that the desks are going to get smaller, and everybody is going to sit on eep others laps i have a bridge to sell you if you believe that. I could sell you the bridge. Residential yes tell us where its working and also tell us where its not. The demand for residential, particularly rental residential, is very strong you know, for 25 years we built over a million Single Family houses a year at the bottom of the recession. I think we went down to 250,000 or 300,000 despite ten years of recovery, we still arent above 700,000. Were building less Housing Units for a population that keeps growing. By definition, rental demand increases. At the same time currently we have 387,000 units under construction in the United States in the multifamily area. I think the last time we had that number was 1971 or Something Like that. When the country was just beginning to apartmentize. I think supply is a growing issue, and obviously it depends on markets, and depends on how easy supply is to create is it a fools errand to go into a city and invest thinking that amazon is going to build a brand new headquarters there, for instance, or if you hear that elan musk is going to expand the giga factory that you might want to be in reno, nevada is that a strategy you have ever employed is that something you would consider doing no. I want to be responsible for my decisions. I dont want to make my decisions responsible to somebody elses decisions. Yes, there are obviously examples where, i mean, if amazon if we knew where amazon was going to go, one could plot out demand for office space, demand for residential, and look at supply and make a judgment, but as far as i know, i dont know where amazon is going to go. I dont know whether amazon is going to go. Neither does anybody else. Is there any city in america right now that you think is undiscovered or under appreciated where you think theres going to be something going on that were not talking about . Well have dan gilbert on later this week, that has done a remarkable job reinvigorating detroit. I dont know if you have invested in detroit . Ive been there, and i know dan, and i think whats going on in detroit is terrific, but the scale of whats going on relative to the scale of what needs to be done right is staggering i mean, staggering i have i have i take my hat off to what dan has done, and i think its fabulous, but if they need to figure out a methodology of accelerant and you need to accelerate the process. You know, they have more vacant land in detroit than they have, you know, probably in the state of florida sam zell will be sticking around for the rest of the hour, and so much to still talk to him. Still ahead, a status report on jobs in america details from a fresh report on labor coming up. And later, another setback for repeal and replace efforts well Talk Health Care and the trump agenda with senator bob corker at 8 30 a. M. Eastern time stay tuned youre watching squawk box on cnbc is the monolithic view of emerging markets obsolete . At pgim, we see alpa in the trends, driving specific sectors of out performance. Where a rising middle class powers a booming auto industry. A leap into the digital era draws youthful populations to mobile banking and ecommerce. Trade and travel surge between emerging markets. Everyday our 1,100 investment professionals around the world search out opportunities for alpha. Partner with pgim, the Global Investment management businesses of prudential. Followed by august new home sales. That comes at 10 00 a. M. September Consumer Confidence is also out at 10 00 and also will be on the lookout for fed speak, including fed chair janet yellen, who will give the keynote address at the annual meeting of the National Association for business economists is that today . At 12 45 p. M. Eastern. Sneeks up on you, doesnt it andrew, i have tickets then one Earnings Report after the bell today is nike do you have an extra tickets for me maybe we should scalp some im sure they are way up there stub hub. I bet you i bet theyre way up there. It is late. Last minute. Do you think its on stub hub . Do you think they have seats at a price. The way they do for the best value we shouldnt make fun. This is the markets will pay very close attention to this. Liesman is probably going liesman probably cant wait. Probably couldnt sleep last night. Anyway, the hamilton project out with a new report on wage growth in america. Joining us now is jay, the director of the hamilton project and senior fellow at the brookings institute. Jay, great to have you with us thanks for having me. Theres a lot of concern obviously in this country about inequality of wage growth and there are 13 factors for wage growth broadly in this project youve got a few of them thats necessary for shared wage growth can you run us through yeah, sure. We tried to do in this report just to lay out basic facts about whats needed to for basically typical American Worker to get a raise. Because realistically the typical American Worker hasnt been getting much of a raise over the last four decades or so i mean, if you look at the average real wage thats up about 2 a year over the last 45 years. You know, at that rate its going to take about 350 years for real wages to double theyre basically flat the things we tried to look at are the fact that you need productivity growth because workers cant make more stuff. Theyre not going to get paid more you also need to make sure that that productivity growth is being kind of divided both towards workers and towards firms, and then you also need to make sure that if you want the typical American Worker to get a raise, not all the gains going to labor are shifting towards the top end that theyre kind of being spread across. Is productivity not high right now, jay so productivity growth certainly has moved over the last four decades, and so it has grown more than wages, and thats one of the things that we look at. In the last, ay, decade, since around 2004, 2005, productivity growth has slowed down, and we think thats one of the Things Holding back wage growth some in the last decade. Is there a concern that perhaps were in this i dont want to say secular stagnation, because that sounds so dire, but a space where companies with do more with a lot less, do more with a lot fewer workers, and wage growth is just going to be sort of depressed . Well, i think if we thought companies were doing a lot more with fewer workers, then we would see more of it in the product its growth numbers. That would actually in some ways be a positive. You would think that would mean you can pay the workers who have more i think its more a question of were not any adire permanent low productivity growth world, i dont think. I think its just a matter of weve had a major shock. Weve been adjusting to it hopefully just a bunch of sensible policies are needed to try to push productivity growth up in a way that would push wage growth up. I think if you look one of the thungz we point out in the report is i think we often think of the u. S. Economy as this Great Dynamic economy, and it is in a lot of ways, but business dynomism is down the rate of startups is down onethird oh the last few decades, and thats the kind of thing that is both bad for workers, because they have fewer options to switch jobs and things like that, but its really bad for the economy more broadly because it just means were not getting the productivity growth and the Economic Growth we need. Whats the number one Public Policy which can help with all of this . I mean, we have a lot of stage raising. For instance, the minimum wage target just came out and raised its own minimum wage are measures like this what is need snd is that effective i think the reality is theres no one policy for wage growth wages in a sense are the output at the end of the economy. You need sensible policy across the board. Minimum wages can be part of that in temz of trying to make sure youre making sure labor is getting some of the share of whats going on and the real minimum wage the National Minimum wage is actually down a little bit over the last 40 years in real terms, and so when you look at that, theres certainly no pressure on wage growth coming from the bottom there. I think its not just that i think you also need policies aimed at productivity growth you need policies aimed at human capital, education, and training, and, frankly, you need to run the economy in a way that theres enough demand for labor in terms of your broad macropolicy to make sure youre getting some wage growth jay, thanks so much fascinating findings here. Thanks for having me. Coming up, netflix is taking to the skies well tell you what the streaming giant is pitching to airlines next. Im here at the Td Ameritrade trader offices. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. And the wolf huffed like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies child giggles symbicort. Breathe better starting within 5 minutes. Get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. Zpliefrmts welcome back to squawk box. Netflix will start partnering with more airlines im so excited about this. To provide them with its mobile streaming technology in flight streaming is available by a few carriers. The move is part of efforts to get airlines to offer better in Flight Wifi Service the reason is simple you still cant can you download yet on thank you, guys, for putting that up there. You need i lot of that picture you need ear plugs. I need ear plugs and wifi on an airplane. Its terrible. Jetblue, you can stream amazon jetblue is jfk no, no, no thats like getting to jfk is locker than the flight a lot of times from new jersey. Union id has something free for free wifi, on the united app. Yes, on the app they have movies you can get movies. Yes but limited selection. Thats not really running off of wifi, by the way. No, its not, obviously, because it works whats happening is theres a server on the plane. They are downloading all the movies physically on the plane, and theyre sending them out, but not from the ground. Not a server. A server theres service for the food. You are talking about im not talking about, like, in your mind hillarys server. The server is that kind of server i thought you meant Flight Attendant servers. Im talking about the servers that have the movies on them i watch the movie, and i liked it i cant remember what it was i told you that i watched it it was excited about it. I saw something last time i was on im going to come up with it anyway you have wifi, dont you, sam yes he has anything he wants on his plane. Is the streaming good on your plane . I dont know what streaming is can you watch netflix on your plane . I dont know. I never wanted to, so i never did it he is wheeling and dealing. We have internet and wifi where. Fast . Yeah. Very fast. Welcome back. From tax reform to health care also the north korea threat. Well check on the trump agenda. Bob corker joins us after the break. It lets you know where your data lives, down to the very server. It keeps your insights from prying eyes, so theyre used by no one else but you. It is. The cloud. The ibm cloud. The cloud thats built for your business. Designed for your data. Secure to the core. The ibm cloud is the cloud for enterprise. Yours. The ibm cloud is the cloud for enterprise. Sometimes they just drop in. Always obvious. Cme group can help you navigate risks and capture opportunities. We enable you to reach Global Markets and drive forward with broader possibilities. Cme group how the world advances. A catastrophe modelling firm the bulk of that stems we should say from damage in puerto rico well get the latest read on home prices. About 30 minutes out of the monthly kay shiler report. Expected yearoveryear increase in prices another snap of the Housing Market right back out at 10 00 a. M. Eastern time. Governments new home sales report for august expected to show a 3. 5 increase partially reversing julys 9. 4 decline. Melissa. Just a note here that equifax shares are halted for news pending take a look at that decline. That low was hit on just september 14th the previous 52week high was just in july quite a roller coaster for shares of equifax, and this ahead of the ceos testimony in front of the Senate Banking committee on october 4th of course, the massive data breach is what caused that stock to drift lower there now, to politics a fatal blow for the gops latest effort to repeal and replace obama care. Senator Susan Collins late last night announced she will not support the bill shes now the third republican no, which means the party cant get the 50 votes needed to pass the measure by a saturday deadline its unclear whether theyll still vote on that bill. Okay. South korean media announcing that theyve after it said it would shoot down u. S. Bombers flying near the peninsu peninsula. James mattis responding to the threat saying, the u. S. Will seek a diplomatic solution. President trumps tweet rauzing questions on twitter over the weekend. He tweeted that north korea wont be around much longer. Us autoers were calling for his account to be suspended for breaking twitters code of conduct because of its threatening nature now, twitter is finally breaking its silence on why it never suspended President Trumps account. A Company Spokesman saying it considers the tweet newsworthy and potential Public Interest when deciding if a tweet violates its code of conduct twitter cofounder jack dorsey weighing in on the matter. He said were putting significant effort into increasing our transparency as a company and commit to meaningful and fast progress. Will do better dualing headlines of pending tax reform, obama care repeal, and tensions between the u. S. And north korea. Lets bring in senator bob corker of tennessee. Chairman of the Senate Foreign relations committee. Also, sits on the banking and budget committees. Senator, its good to see you. Yesterday there was a lot of conjecture after the Susan Collins news everybody is wondering whether this makes tax reform easier or harder, and i see both sides have some valid points, but i finally came down on i think the winning argument was that this really might force republicans into doing tax reform because they were unsuccessful with obama they got to do it or does it make does it just highlight the divisions in the party . Look, its something we need to do. You guys had this big campaign on cnbc years ago called rise above, and what it said was we needed to figure out a way to create more revenues, more revenues, and also to do entitlement reform to safe our country. Its the number one threat weve got to move ahead and try to deal with the revenue piece had a good meeting with mnuchin. He believes theres a way you can do reform. Were not talking about tax cuts reform that generates more revenues im willing to give him a chance to prove that, but at the end of the day our nation, as we know, is going to end up with a trillion dollar a year deficits in just a few years. We have 20 trillion in debt today. I look forward to this debate, but, joe, personally i think tax reform is harder than health care look, im looking forward to you guys not being able to deduct your state and local taxes soon, and that will generate 1. 2 trillion if were able to do that along with another 2. 8 trillion in broadening the base, with he might get to a place where we can spur our economy, generate more revenues, and help save our country. Do you know if the 396 down to 35, is that really in the plan, senator, and i dont even know if that that might not offset the not deducting new jersey state tax i think high wage earners are going to see their taxes go up then either way. Based on my meetings with the president s team, i think they plan for high wage earners to be paying more in the way of taxes when this is complete. I dont know what happens when it goes through the house and senate were going to do some things on the senate side to allow this to go forward we have some issues that the house does not have. First of all, we cannot use two baselines. I think everyone has agreed that policy is the appropriate baseline under current policy, joe, were going to generate about 43 trillion in revenues over the next ten years the question is theres a difference of policy and law theres 459 billion in tax differences. You add the interest, thats a half a trillion dollars. The question is we also have something called the byrd rule that does not allow for dynamic scoring, and so the question is can they prove that by making some changes, reforming, doing some things with corporate rates, which i think needs to happen, it be on the dealing with territorial issues, with k they generate more than 1 trillion in growth over that 43 trillion base liline over the nt ten years, and thats what our debate is going to be about, but it wont take place unless were willing to really broaden the base, and that base broadening per the Administration Needs to be about 4 trillion weve got a lot of work to do. My whole august, joe, was meeting with people who were saying corker, im all for progrowth tax reform. Im all for it theres just one thing, though theres this one thing we dont need for you to touch. Thats what happened yesterday in the meeting i actually think the difficulty here is greater than with health care, but, look, im all for it. Lets move ahead lets see what we can do i dont know. You cant believe anyone, senator. We had a lot of the nos on obama care the last reelection they ran on repeeling obama care they still have no problem not doing it this time you know yeah, yeah. I voted to repeal it. I know. I think the grand cassidy bill, i know its a god send for the people of tennessee. Our low income citizens would benefit hugely from wouldnt maine citizens benefit too . My understanding is i just have been talking with spb somebody on the floor last night that they would get about 42 more in the way of proceeds over the next ten years whether that is valid or not, i do not know. Somebody from maine would have to talk with you about that. Back to tax reform. This is a sort of philosophical question when you are trying to broaden the base and, you know, when your rationale is that i always think that money is treated better in the private sector and if you can, you know, Grover Norquists idea that if theres less at less to spend, that the government, you know, if they have less to work with, maybe they actually will cut some spending here does it make sense to exclude the top 10 of taxpayers from any tax cuts when thats where you get 60e of the individual revenue . Why is that now in this bill is it because its too hard to pay for the tax cuts for the corporation so you cant go or is it appeasing is it just too hard to sell in this day and age that its another tax cut for the rich well, first of all, there is no bill, okay . Im talking about what the president s team is laying out i have no idea what Senate Finance and house weighs and means is going to do there is no bill at present. All im saying is that in order to achieve the goals that they have laid out, youve got to have 4 trillion in base broadening to make this work they need to show some growth above where we are thats realistic and i think most people here do not want to increase the debt. Joe, part of the problem we have in our country is weve been perfectly happy borrowing 1 trillion a year to pay for things the ndaa goes above the president s budget even. It busts the budget cap by 83 billion. Whats happening in our nation is the opposite of what you just said, and that is that people are willing to spend more money because nobody is paying for it. Okay were borrowing it each year this dough bait will be interesting. I look forward to being very, very active. I am all for progrowth tax reform im all for progrowth tax reform that generates more revenues, which is what mnuchin says this will do. Lets have the debate, and what i want to do in the senate is make sure we can have that debate, but im not about to vote for a bill that will increase deficits here in our nation im just not going to do it. So if rates go up for the top 10 of taxpayers, i mean, most tax cuts you think it makes sense to cut for its just thats the rationale of heritage or aei or any of them. You cut rates, and then you cut them across the board. Yeah. You dont worry that, uhoh, you know, some of the people that might be classified as the wealthy, they may benefit as well thats the overall way you have no shob problem in rates go up on the top 10 thats not what i said. No, im asking. Im just asking. If thats the final bill, is that should it be okay with republicans . To me the most important thing for us to do, joe, is to get corporate rates down where our corporations are able to compete with the industrialized world, and to deal with the territorial system that cost about. Down to 25 thats 50 billion a point thats about 500 billion. I think the most important thing for us to do as a nation is make sure that our corporations are competitive around the world and that people want to envest here. Im not weighing in on the top wage earners i think my understanding is, and you have head it in the wall street journal, yall have, i think, talked about it on your television programs. I think theyre forecasting that at the end of the day by the time you get through with the state and local deductibility being gone, that many high wage earners, actually, net, net, net will be paying more. Im not advocating any position. What im advocating for is that we do something that is progrowth that we grow our economy, that we generate more revenues, that we save our nation im willing to let the Senate Budget committee do something that will clear the way for that, but at the end of the day surely you guys want to make sure that were dealing with the number one threat to our nation, which is deficits. I would think thats what you want to do senator, i wanted to ask you about equifax this morning the stock is halted for news pending, so were still awaiting that the ceo is going to appear before Senate Banking next week. Going into that hearing, do you valedictorian aidea of what should happen with this company or with this industry . I know that so many consumers out there, including myself, because my data was breached, are frustrated because this is an industry in which theyre making money off of our data, and we dont have the right. We cant vote with our steps we cant go to another company here we dont have any right to pull our data from this company they still have it were just vulnerable. Im not going to be waiting for emails from equifax. I told my entire family please do not respond to anything that has equifax on it inle we have some hearings and move through this, its did i will for me to weigh in. Similarly in the same vein, head of the s. E. C. Will be with you today talking about the signer breach thats happened at that agency lets see what he plans to do with it. Its seerts. I told him if im him, im glad its happening on the front end of this tenure this is something that he can deal with and come in and solve. Its not something happening a year in, but lets hear him today. Let me make it slightly more kplilktd if equifax is a liability for losing the data, does the s. E. C. Have the same liability . If i can prove as a company or an individual that my data which was breached within the s. E. C. , if if was a corporation, and i could actually find provable liability, can i bring that suit and would you support that . Joe, always, with every one of your requests, i will look into that. That was a sorkin question, but i want to know whether you are running in 2018 again. I keep worrying about that i cant tell whether you are or not. Can you tell me youre definitely going to run for reelection . Are you just ready to say this is im going, you know, this is crazy. Im leaving. Where are you feeling . I guess every day is probably every day is different its been a tremendous privilege to do what im doing it remains that. I look forward to being in if the center of this tax reform debate so many issues are coming up, as you know iran will likely be in the forefront again in october im busy doing my job, and i will share the plans with you at the right time maybe very soon. Trump wants you to run now. He is begging you. He is saying please run, senator, right now he wants you to. We have a very Good Relationship we both speak very directly, if you will, to each other, but i enjoy that, and well see what happens. Thank you all. Lets get tax reform right okay yall help us, and i appreciate the contribution, joe, youre going to be making per the president s plans. Im urging you to run for reelection. I want that headline on this when i look at corker reelection. I want kernan urges corker to run for reelection. Thank you, senator thank you because, otherwise, he wouldnt be on we might still have you on yes, we would maybe not, though he. Coming up, technology. Microsoft is betting big on and llat says he doesnt understand it. That story is next today, smart planning is pushing the finger lakes forward. Were the number one dairy and apple producers in the eastern United States. Supported by innovative packaging that extends the shelf life of foods. And infrastructure upgrades that help us share our produce with the world. Here and all across new york state, were building the new new york. To grow your business with us in the finger lakes, visit esd. Ny. Gov. From godaddy in fact, 68 of people who have built their. Website using gocentral, did it in under an hour, and you can too. Build a better website in under an hour. With gocentral from godaddy. Mom,on my Car Insurance of money by switching to geico. I should take a closer look at geico. You know, geico can help you save money on your Homeowners Insurance too . Great geico can help insure our mountain chalet how long have we been sawing this log . Um, one hundred and fourteen years. Man i thought my arm would be a lot more jacked by now. Im not even sure this is real wood. Theres no butter in this churn. Do my tris look okay . Take a closer look at geico. Great savings. And a whole lot more. For tech advice. Dell Small Business advisor with one phone call, i get products that suit my needs and i get back to business. Bill gates weighing in on one thing that he still doesnt quite understand, and thats quantum computing. In an interview with the wall street journal, current ceo sadia nodella has difficulty bringing new tools for programmers to begin developing with quantum its really interesting. It could someday lead to computers that are more powerful than todays programming note, john fort will speak to microsoft ceo sadia nadela today he does he is in town. The code im writing is a little different than the normal, you know, when you are doing quantum. Just make a couple of adjustments. Not ruby on rails excuse me exactly doing a High Performance pasquel mixed with a coball commodore computer right. Get back to our the cloud with a twist of lemon i would much rather much rather talk than hear about this nonsense. Block chain so you were talking about real estate before are you confident in Janet Yellens ability to raise rates but not have them spike . Is she going to be able to pull this off as well as she has so far . Im not sure that i necessarily agree with how well that the fed has done it so far. Just in terms of Market Absorption of the fed hike so far. The elephant in the room is the trillions of dollars that theyve claimed that theyre going to dispose of that they have bought for insurance. Start pairing that pool of stuff down thats basically going to take liquidity out of the system. I dont know whether you can do that and raise rates at the same time maybe were about to find out. Should we be concerned about the impact on the Mortgage Market in terms of people being willing to well, i think you have to look at if the cost of capital increases, then the impact on Mortgage Market, every time the Mortgage Market has moved at all in the last few years youve seen a corollary response in housing sales. And i wouldnt know why anything would be any different i mean, you know, people bought houses, yes, for shelter, but they also bought it because from their perspective it represented a way to keep up with inflation. Weve now gone through a period significant period of little or no inflation weve also gone through a period where weve seen less demand for Single Family housing than in the past probably correlated. So i think that, you know, raising rates could have a Significant Impact on economic activity. How much would rates have to go up for you to start rethinking your projects, what you do i think that generally speaking 100 basis points i think is doable and probably without much impact. Not necessarily suggesting it would be a good thing. Yes, i think Interest Rates have been too low for too long. Question is, you know, how much can they raise in any given period of time and how can the economy respond to it. And, you know, in theory if they do it very carefully, well get to find out. Yeah. But the idea that theres going to be no impact or its just going back to normal is definitely not the case. All right, sam. Thank you. Okay weve got a little more from sam before the end of the program. When we return, Disney Stores are getting a makeover the details coming up on that. Check out the futures right now. We are in the green. Dow looks like it would open up about 48 points higher s p 500 up about 4 points. Nasdaq up about 27 and a half points we will be right bacinusa mentk jt baby crying slow jazz music fly me to the moon and let me play bell ring can we at least analyze can we push the offer online . Legacy technology can handcuff any company. But yes is here. The new app will go live monday . Yeah. With hewlettpackard enterprise, were transforming the way we work. With the right mix of hybrid it, everything computes. Test. Test test. [vo] quickbooks introduces jeanette and her new mobile wedding business. At first, getting paid was tough. Until she got quickbooks. Now she sends invoices, sees when theyve been viewed andtadahpaid twice as fast for free. Visit quickbooksdotcom. Welcome back to squawk box. Walt disney revamping its retail efforts in the physical stores and online its testing for the first major design in several years. Its introduced a new ecommerce site disney said it needed to elevate and improve its Shopping Experiences both in stores and online. We dont have any time. But on break we were talking quickly about the monolithic Tech Companies they become a target, dont they, globally youre talking facebook, amazon, google. Google has got 93 of the search market. Yeah. You know, ibm had 25 of the market and they were a target. Thats something to keep an eye on absolute power corrupts absolutely. As far as the radar wow. They are big. Regulators . Thats who e. U. , could be anybody. Ive never said all regulation is bad. Just too much. Sam zell, thank you. Great to see you. Melissa, thank you. See you tomorrow. Andrew, thank you i love my website. Squawk on the street is next good morning and welcome to squawk on the street. Im david with sara eisen and mike santoli live from the New York Stock Exchange jim and carl both doing Different Things today but they will be back tomorrow. Lets give you a look at futures as we get ready to start the trading session 30 minutes from now. You can see we are set up for what appears to be a higher open european markets they have been, well, let me see before i actually answer the question