Transcripts For CNBC Squawk On The Street 20240714

Was checking in around 6 00 a. M. To squawk box but still looking up road map this morning, it starts with a potential trade boost, stocks as you saw pointing to what would be a pretty good open at least if youre long after treasury secretary mnuchin said there is a path to a deal with china. Plus, trade head winds hitting home, fedex saying the ongoing disputes are creating, quote, significant uncertainty for its business outlook. Micron surging this morning, this on strong Quarterly Results. The chipmaker also resuming some sales to huawei and forecasting demand recovery this year. Stocks are looking to rebound this morning, this after treasury secretary Steven Mnuchin expressed optimism about trade talks in a cnbc interview. Here is what he told hadley gamble in bahrain. Im hopeful we see a deal there needs to be the right efforts in place this isnt a deal for having the sake of a deal we were about 90 of the way there. There is a path to complete this but well see where we get. Quote, we were 90 of the way there. If that sounds familiar, take a listen to the treasury secretary on june 9th with our own nancy hungerford. I think we had a deal, almost 90 done, china wanted to go backwards on certain things. We stopped negotiating if china doesnt want to move forward, then President Trump is perfectly happy to move forward with tariffs to rebalance the relationship and way back on may 6th, secretary mnuchin briefed reporters on the record that a deal was, you guessed it, 90 complete the point being there seems to have been a rally this morning in part on this 90 number this is what he keeps talking about. We were 90 of the way there it is that 10 that we arent. Mild bounce, kind of took back yesterday afternoons slide, partially, at the highs for the morning, and it seems to me that the one swing factor in the very near term is will the new round of tariffs go on or not . So if the treasury secretary is essentially reiterating a hopeful take on how these things might go and the fact there is a path, does that also mean that there is not a hard line on tariffs going into this weekend, i dont know if thats the case. It is very difficult right now with the market already kind of at a hesitant moment after reaching a new high and figuring out, you know what the next ingredient is for the subsequent move. The data comes in mixed and some of it is related to trade this morning we got the durable goods read. It was a miss on the headline number, down 1. 3 in may. A lot of that can be chucked up to the fact that civilian aircraft components were down sharply, 28 in may from april we know the grounding of the boeing 737 max if you look at the core shipments of capital goods, key gauge, they were up. 7 . And they were revised up from the previous month not terrible, but due somewhat on the miss on the headline fit this narrative that the Manufacturing Sector is getting hit by the trade head winds and bit uncertainty over whether those tariffs will go into effect youre seeing it in the data, in the regional survey, well look at the ism next week thats the fundamental backdrop of this stock story. And, you know, it is difficult to know how much certainly trade is the big one out there. Maybe keeping people from spending more. But were also probably trying to figure out exactly how much some business spending was pulled forward into last year. Were stepping down from 20 corporate earnings down to something flattish in the first half of this year. And so i think you have a general loss of momentum that would have probably been there anyway that now the tariffs are on top of and i think the markets are now fully kind of enveloped in the lowdown story if you look at where bond yields are trading, anchored where they have been the past several days, which means that, you know, the direction of surprise would probably to be you got strengthening numbers, but we havent got unequivocally strong ones trade news this morning, the president did an interview on another network, he did indicate a potential for going to 10 on the additional 300 billion in chinese imports as opposed to 25 . Often is the case, it is well see what happens that is maybe a Little Something positive this morning as opposed to the reiteration from secretary he said china devalues the currency like a pingpong ball he said china wants to make a deal more than he does he said substantial additional tariffs if no china deal and china deal must have it protection opening the Chinese Market i thought it was tough he went after vietnam as per some of your comments yesterday. I knew this would happen. I dont think he mentioned the currency specifically. Thats one way to go after vietnam, the treasury did flag vietnam as a potential manipulator in the report they pegged their currency which means they intervene in the market, which means hes got an opening if he wants to go after that this is what happens when you get a ballooning trade deficit when youre where do we send carl next . That could be a problem. Yeah. It could be a little disruptive to markets eventually, leading to some sort of sanctions, though were not there yet. He said he wishes he had draghi running the central bank in this country, forget the fact that they have a single mandate for inflation. And their inflation is missing more than our inflation is, which is why draghi has been a lot easier than powell has been. Sounds like hes continuing on that on that refrain. Yes, he is. Lets clarify and get up to speed on what secretary munnuchn did say to cnbc. Hadley gamble in bahrain who has more from her interview. Youre right. My exclusive interview with secretary Steven Mnuchin, a lot of headlines out of that, he talked about the g20 as you mentioned, but he also had a major focus on the conference were here to attend now, the brain child of Jared Kushner, the soninlaw of the president. The peace to prosperity conference, here talking about moving the dial forward on middle east peace and doing it with an economic plan for the region i also asked him about all of the noise, all of the tit for tat between washington and tehran over the last several days i asked him to respond to the following comments from hassan rouhani. He called u. S. Sanctions on iran outrageous, idiotic and doomed to failure listen to what the treasury secretary had to say. That must mean theyre working if theyre this upset about the sanctions. Thats an acknowledgement theyre working. I want to be very clear, our issue is not with the people of iran our issue is there is really bad behavior they are sponsoring terrorism throughout the region. They are creating instability in this region. They are endangering our partners and allies and our interests. And we will not stand for that the treasury secretary essentially telling me, hey, at least this mean the sanks sthe seem to be working i asked him about the prospects for peace here in the middle east a lot of questions surrounding this conference about how much this is going to move the dial forward. He said to me, we think that Prime Minister Benjamin Netanyahu is doing a great job in leading from israel he said there is opportunity in terms of the economic side of things, questions, of course, raised again and again about what will happen next year whether this will lead to any on the ground changes for the palestinians he said it is going to be very dependent on the leadership. So a lot of headlines out of that interview and as you can see behind me, a lot of movement in bahrain at this peace to prosperity conference. Great to get him on the record, thank you. Hadley gamble in bahrain fedex moving higher in premarket quarterly profit did Beat Estimates with revenue coming in slightly above consensus, the company also warned that the u. S. China trade dispute would hurt fiscal 2020 results ceo fred smith criticizing trade policy on earnings call. Listen. Clearly we have been very disappointed over the last few years with the assumptions that we made on the growth and international trade, particularly with the Trump Administration and now we have a huge dispute where the United States is basically become protectionist, defined as ill make everything i need in my own borders clearly trade is hurting them, but guys, they also got other issues and mentioned amazon not by name at least at first, that was going to have drag on profits. Theyre dealing with the fact that consumers are changing, theyre opting for cheaper and slower, i guess, delivery options. Thats hurting express that was the weak point in the report so, yes, obviously trade hurts, theyre being investigated by the chinese. Lets not leave that alone there are other factors. There have been the fedex and u. P. S. Were quite weak, even before this latest intensification, the stocks were in the trade dispute so i do think thats absolutely the case the idea that fedex just is not set up profitably to kind of, you know, reap great benefit from this ecommerce boom has been an impression for a while i dont think that was kind of countered by what the Conference Call said yesterday. Driving to residential is not necessarily ideal for fedex and express for different businesses thats why you have a beaten down cheap stock that is bouncing 2 when nobody can see a lot of resolution on what is happening, just because it has really taken a lot of punishment and looks cheaper than it has in a long time. They did in answer to some of the questions about ecommerce say it continues to be a driving force of total u. S. Domestic market growth. They want to be able to serve thousands of retailers, of course and they are going to differentia differentiate, launching the Fedex Service in 2020, seven days a week, 80 of the u. S. Gdp. But youre right, International Ecommerce Small Business continues to be what they say their laser focus. And saying the u. S. Has taken a protectionist stance is relatively vivid way of characterizing what is going o also suing the u. S. Over the huawei, how they have to be somehow who is sending what where. I wonder if theyre appealing to the chinese at all. On that front. The chinese are investigating them and the issue of two misdirected packages who knows it complicated fedex is caught in the cross hair, the stock lost a third of its value over the last 12 months and this is the first i think projected decline in adjusted profits that fedex is seeing. Whole premise of the company is send Everything Everywhere all over the world and by the way, the Services Surplus that we have with the rest of the world is things like air freight. It is not just about the goods that we count. Anyway, fedex getting a bounce, well watch the rest of the transports, weak spot in this market. When we return, a new chapter in the 2020 race for the white house. Democratic candidates for president to engage in their first debate tonight, well have a live report from miami. Another look at futures here, theyre higher dow futures are up 80 points, s p up 8 as david said earlier, though not as high as they were earlier this morning on hopes of a u. S. china trade truce more squawk on the street from post nine when we return is this ride safe . I assembled it myself last night. I think i did an ok job. Just ok . What if something bad happens . We just move to the next town. Just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Plus buy one of our most popular smartphones and get one free. More for your thing. Thats our thing. The ai i want . Well, insurance its all about trust and speed. I need it to guide this analyst to customize Flood Coverage for this house. So that this team, can inform this couple, that their payment will arrive faster than this guy. Hey. So whether im processing claims due to this fine gentleman. car engine starting or suggesting premiums for this young lady. Ai can help change everything at this company. Expect more from ai. Ibm watson. Tonight, Democratic Candidates for the 2020 president ial election are going to kick off their first two evenings of debates for the primary season ylan mui is in miami with a look at what to expect this evening there are 20 candidates, two nights of debates, theyre going to cover a lot of ground tonight Elizabeth Warren is the frontrunner in the polls among the candidates who will be on stage. But, of course, cory booker and beto orourke will be hoping to change that dynamic. Tomorrow night will be all about who can steal the spotlight from joe biden, Bernie Sanders and Pete Buttigieg on stage with him trying to do just that what do voters want to hear . What issues are going to resonate with them we talked to a couple of people ahead of these debates to find out. Campaign finance reform i think would be one of the big issues health care, for people my age. How they take care of the elderly people. I would be interested to hear their positions on Climate Change and environmental regulation Climate Change is the most important issue to democratic voters 63 of democrats in the latest Morning Consult poll said that issue is very important for the candidates to address tonight. At the top of the list not far behind that was implementing medicare for all. 54 of democratic voters said that one is important. What wasnt important, apparently, taking on donald trump. Less than half of democratic voters said they want it hear candidates talk about the president and that puts him just about on par with canceling student loan debt. As for the economy, it barely cracked the list trade tensions with mexico, with china were at the bottom of the list of democratic voters wanted to hear about. And things like taxes, breaking up big tech, those things didnt register among the specific issues on the agenda for tonight. At least from a voter standpoint what that suggests to me is that perhaps with the economy chugging along, maybe this is going to be at least a nomination battle that hinges more on social issues rather than economic ones back over to you. Well be watching, watching closely tonight. Ylan, thank you. Should point out shares of micron are up sharply this morning in the premarket well mention it now look at that, almost 10 the company did post better than expected Quarterly Results and it added as well, it expects demand for ships to rebound this year stay tuned well have an interview with micron ceo thats later this morning, on squawk alley this has been all over the map i dont know where the multiple is, still well below 5 if you believe the earnings forecast. Very similar to fedex you had this broken growth story, this stock beaten down, looks cheap Big Questions about whether there will be some kind of china truce and then what demand looks like going beyond that i do think it is mildly encouraging if you wanted to see this market as having the potential to sort of rotate away from the defensive, bond yield beneficiaries and into cheaper cyclical stocks, at least this morning youre getting a little bounce in two of those rebound candidates i thought the knnews out of micron and huawei was interesting. 13 of the revenue from huawei in 2019. They said they stopped shipments immediately when the u. S. Black listed huawei. Then they figure out a legal way to resume shipments. I wonder if youll see more Semiconductors Get around that. 11 billion that huawei was rely on in terms of sales from huawei a big number i talked earlier about a couple of different bankers i spo eke spoke to a big supplier to huawei another was trying to understand its own implications for actually sourcing from huawei. There is so many Different Things going on here. There is an exception in the rule from foreign made products that include less than 25 right. Yeah you can conceivably do it. It makes things very difficult again. A lot of things that are fairly complex here whether it is fedex, and to your point suppliers to huawei as well. That stock is has 43 off the highs, should get a nice boost. Up next, art cashin on what to expect from todays trading session as we count you down to the opening bell futures at this hour, pointing higher across the board. Dow features up 86 s p up 9 nasdaq up 49 more squawk on the street live from the nyse straight ahead as your life grows, so do your needs. And with bank of america and merrill, the benefits you get can grow, too. As a preferred rewards member, you can enjoy Priority Service and exclusive discounts. So your growing life can be more rewarding, too. What would you like the power to do . Lets bring in art cashin with ubs feels like this market is desperate to gloom on to any positive news as it relates to this trade meeting between the u. S. And china yeah, well, they tended to hear in the present tense, which sounded like something in the past tense and you know mnuchin said we had a deal that was 90 done the market took it as is 90 done oops. What they failed to look at was, yeah, we had a deal 90 done and they walked away from what was 90 done. So it means we have possibilities. But not a heck of a lot more than that. You can see how nervous the shorts are they came running right in they havent really backed off much since then, even though people have come to the realization that were doing present tense versus past tense. We made the point at the very top of the show, there was nothing new here 6th, june 9th, now yesterday, it is the same. 90 done it was and have to get other 10 . Where do you stand on your thoughts about what is coming up later this week in terms of xi and trump . I think youll see some pleasant overtures i dont think anybody is going to steal ahead on it i think the president will want to encourage actually both of them will want to Say Something encouraging. But if it gets beyond, we have agreed to resume, then the markets will take a good deal more out of it you see by the bounce this morning, with the shorts as nervous as they are, anything upbeat will help move the markets higher again, we still have the thing that concerned you and me, david, the iranian situation. Yes. Always the risk of a military accident coming up so i think you want to walk a little cautiously. Friday could be very interesting. It is going to be end of month, end of quarter, end of half, and going to get a rebalancing so things could get a little disruptive there i dont assume that trump and xi will meet before saturday. And so well be walking into that but the market probably wants to rally here wants to break out to significant new highs. For now, as we he said earlier, it is still consolidated. Thank you my pleasure. Opening bell just five minutes away stay with us Johnson Johnson is a baby company. But were also a company that controls hiv, fights cancer, repairs shattered bones, relieves depression, restores heart rhythms, helps you back from strokes, and keeps you healthy your whole life. From the day youre born we never stop taking care of you. From the day youre born is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. Every day, invesco combines ideas with technology, data with inspiration, investors with solutions. Because the possibilities of life and investing are greater when we come together. You are watching cnbcs squawk on the street. Were live from the Financial Capital of the world we have an opening bell for you. We refer to this as hump day, middle of the week, you get it. Youre the only ones who use that term. I know we are well keep using it. Particularly i think it annoys you, im not sure it does. Oil is up. Yes. Yet again i think were getting the highest level back to may 30th almost a month ago continued concerns about tensions in the middle east, namely iran versus the u. S it has been market positive, interestingly enough for now, it is sort of giving a lift to one of the areas that have been left behind in the market and were not yet up to levels where it seems like it will pinch thats probably the most optimistic way of viewing, you know he what know, whats going on. No real process were handicapping here, watching oil lift and give a break to Energy Companies without squeezing consumers. Giving a break to Energy Companies. Oil is up 10 in a week. Energy stocks as the sector and the s p 500 are up a percent theyre lagging this price move in oil thats been the trend for a long time. They you know, the ideas that the supplies are go to be sensitive to price changes, it is a steady amount of supply, energy is less than 5 of the s p now. Something structural is going on talking about production for a while. And 5 , was, what, 10, not that long ago yeah. Yeah. It is the only sector in the s p that is down for the quarter. Down 5 . Everybody else is up a lot of excitement there opening bell, s p real time exchange, there is the big board link, brazil, celebrating the initial Public Offering today. Over at the nasdaq, the provider of wireless broadband Networking Infrastructure as we get started with trading here. Markets tries to sort out what were not necessarily new headlines in terms of what we might expect were getting close now, g20 in osaka, when it comes to trade between or talks between china and the u. S. Secretary mnuchin reiterating what he has said before in an interview with cnbc, we were 90 of the way there when everything kind of fell apart and now well see if they can put it back. The president did say in an interview this morning that it is possible going to 10 as opposed to 25 on the remaining 300 billion. Very few expect that were going to get a deal anytime soon 10 versus 20, the president constantly preserving optionality and making it his sole discretion. Thats the other report this week, the u. S. Would not accept the kind of elimination of tariffs as an option, as a prerequisite for further talks i think the market is going to essentially say were not going to overanticipate a result here. Were going to see what happens. Were hovering near new highs. But it came on the strength of the kinds of stocks that dont depend on the trade deal thats that is the bottom today, the micron results forecast and the positive stock pop is feeding into more broadly into the semiconductor space, i think thats a pocket of a little bit of strength early on. You see things like Texas Instruments up 1. 8 , nvidia a bounce a little bit of legs to this semiconductor lift. On the other side of the coin, you got staples doing the worst today, they have been very strong lately. General mills not helping that group out, the biggest loser down a little more than 5 reporting earnings this morning. So earnings was a beat 83 cents was a 6 cents beat. Margins in line. The story here is that it is the core business of food. It is snacks and cereals it is just not growing that key north american retail segment for General Mills, organic Revenue Growth there, down 2 on flat volumes. Head sales, they bought blue buffalo for 8 billion last year, still doing quite well, 38 in terms of sales. You know the stock has come off bottoms that it saw late last year 40 this year 4 dividend. That helps in the low yielding world. It has been taking share in cereal, a declining category, thanks to new marketing and really sacrificing market share from kellogg, the main competitor cinnamon toast crunch just killing it lately. I dont know what is with that i guess sugary cereal. Really good thats whats with it. We have some all coming out with inif inf new varieties. What is working is the cereals that dont pretend to be Something Else the frosted flakes, the honey nut cheerios, they dont pretend to be protein and healthy and just the old school tasty stuff, thats working in cereal. Life cereal. I couldnt help but notice travis scott has a new collaboration with General Mills, i dont know why this didnt move the stock. Theyre selling 50 limited edition reeses cups cases i dont know, boxes. There is something there. That stock continues to no, no. Apple is having a good morning and more so than the rest that it would seem of tech. Not sure why, i havent seen any particular news, up 1. 6 couple hundred million dollars. My guess is that it is it is china stuff. The president did say we should be suing facebook and google and all the rest, didnt name apple there. So you would have to think it would probably be a reflex on sentiment toward china, whether apple remains relatively insulated in that. Also, yesterday, did have a big d drop in the Big Tech Companies that had been outperforms. Microsoft led the dow and the nasdaq down. Ground grade, lower price target yesterday. Now up 1. 25 that seemed look a one day shakeout of the recent winners it is worth watching. Alphabet and facebook both are opening higher here. Exact quote was the president said we should be suing google and facebook and perhaps we will im not sure if hes angry that he thinks that theyre blocking, you know, conservative tweets or content. Not sure the why, whether it was antitrust kind of comment, but stocks are shaking it off. The why is difficult to discern. In the past, he said, europe sees google and gets a check written to it all the time maybe well just take the we should point out, of course, there are are those ongoing investigations at both the ftc and the department of justice into potential anticompetitive implications of their business models, that does not mean in any way that theyre going to be lawsuits one would expect it will be some time until either one of those regulatory agencies makes a decision as to whether they would want to bring a case. True. Unrelated, but also just a pile on today, 10 00 a. M. , a hearing, House Financial Services task force hearing on ai where there will be representatives from facebook, twitter, and google to talk about perspectives on artificial intelligence, where we are might also look into online terror content and misinformation yeah. I was going to mention slack got initiation today positive rating. Baird was pretty bullish on it, just talking about the general opportunity. And stock traded lower from that opening little pop, however going to characterize it up toward 42. Down to around 35. It is up 3. 7 today. Really one of the first voices on the street saying, you know, this could be a core holding in enterprise software. Well see as the rest of the street comes out, you dont have the typical post ipo cadence of underwriters have to write a certain amount of time and, you know, have an incentive to maybe have a positive rating here you have people wanting to weigh in on a big new stock. Right newell brands, a company we used to cover closely we spent a lot of time talking about it in the past, given its great difficulties, of course. Newell, talking paper mate, mr. Coffee, grayco, coleman, elmers. The candle company. Yankee candle, yeah, they so many things martin franklins company and this company got together. And then you had carl icahn earlier extolling, mr. Icahn, he did well in caesars, newell has not been the case. Both of which were involved actively there ceos leaving, the end of june, michael poke the news we got this morning is that the cfo Christopher Peterson will be the interim ceo. Poke, we knew he was leaving for a while. They say in the press release, though, the board expects to be in a position to announce an external hire as the permanent ceo in the upcoming weeks. And were were taking the right steps to execute our transformation drive growth and increase shareholder value down 42. 6 over the last 12 months speaking of stocks that have been down, we had two large deals this year. This week, excuse me caesars not nearly as large as the one that we got yesterday. But what is interesting is, of course, the decline in shares of eldorado on day one and yesterday that shellacking that abbvie took. Looking at both of them. Lets start with abbvie. Down over 16 yesterday. Thats not the way you want it to go when you announce a deal and lose 16 of your market value, not ideal in this one, though, no shareholder vote for abbvie. Bristolmyers got hit pretty hard, cigna got hit hard as well when it announced its deal remember on express some time back a look at the rebounding a bit this morning shareholder votes and that put them in some question and in bristolmyers, starboard came out, didnt go anywhere at all in this case, just a lot of people still questioning sort of the choice of purchase yes we had jared holtz, the analyst from jeffries on closing bell yesterday, he said he feels like he was the only one who thought it was a really good idea fred assante came on too. A fan hes always hes always he cant he is still ceo. Always going to be cheerleading. This whole idea that it solves two problems for both companies, especially for abbvie and the hue miraa and diversifying the revenue base, well see if the stock rebounds from here. Is it just an expensive cumbersome solution to that problem . And you have a lot of the Shareholder Base that was in there because it is health care, it is big, it is safe. Dividend. And then you have a big strategic move where it is going to be kind of expensive and diluted and changes things. Eldorado also up this morning, up 3. 2 this after also dabbing down sharply after it announced its deal to acquire caesars. And both deals getting impacted in terms of the overall value given they do include components of stock as well few nonrelated stock items that Equity Investors are watching today to check. Bitcoin, close to 13,000, hitting 17month high, up eight days in a row. It has been a pretty spectacular rally for bitcoin so far this year, up 250 . Dont forget, bitcoin got shellacked in 2018 down 70 over the course of the year always volatile. People are always paying attention also to why, why now the dollar started weakening, is it a hedge against uncertainty in the u. S. China trade war, that facebook is creating libra and that legitimizes the whole space . Who knows . Nobody knows why no one can read the flows. It is interesting that is rallying, gold has been rallying, were now looking at a threeyear high on gold prices i would also just note today this has been so important for the trade, the ten year treasury yield is up 2 yesterday, we closed below it, that was significant were back above that. There are questions about whether the fed is still going to cut rates, especially 50 basis points when jim bullard who is super dovish, the one ount froou front saying it is time for a rate cut that was a little disappointing to the markets two hopes of the fed and the g20 getting a little shaken here. Yeah. I think the market, it is not in a very different place than what we thought coming into the week. Didnt get kind of that exactly what it was looking for from either the trade leadup or the fed. But i think it is interesting, you mentioned the yields lifting a bit today. We are seeing a rotation, all the staples names for sale today. And some of the industrials and energy and semis are to the upside utilities down too. The makings of some kind of a shift underlying the market. My daily update on the talks between tmobile and its Parent Company Deutsche Telekom and dish and the department of justice. Not much to offer. There has been a lot of focus on the difficulty perhaps that charlie irgan would present in terms of a negotiation here where hes trying to cobble together divested assets that will satisfy the doj and also create what conceivably will be a fourth competitor. But what im hearing is not so much difficulty created by him, but by Deutsche Telekom and in turn tmobile in terms of not really wanting to give that much so that you can straight jacket that potential fourth competitor where does it all end up at least it appears it is going to extend into next week, these continued conversations, designed to get to an end result that will both satisfy regulators at the doj, unclear whether it will satisfy the states who have separately sued to stop the deal and satisfy both dishs requirements and tmobile and its parent dont forget the germans here, they got a big Important Role to play going to mention, among the faang stocks, netflix up 1. 7 , the best performer, despite the confirmation it is losing the office in a couple of years 2021 good test of whether people are in fact subscribing to netflix for that kind of familiar background neverending reruns. They dispute the nielsen numbers, will never give us their own, 72 of their viewing is actually library and not original content it raised the question, the cumulative spend of 50 billion on content and yet your most watched stuff is, you know, old network series. Yeah. All right. Lets get to bob pisani, more on whats moving this morning. Up and down on trade talk, little bit of talk about powell here if you look at the futures, we moved up 10 points before the open and heres where mr. Mnuchin said almost 90 done on the trade talk we heard that before over here, president says hes happy where we are now with or without a deal also said he had the right to fire powell. Market moves down ten points the market giveth and trade talk taketh away. The sectors that are moving, bounce in Energy Stocks, we had this nice move in oil throughout the week Energy Stocks are moving a little bit today semis as well. Utilities, staples lower a little inflation in the gold mine it got a little silly the moves in the gold and the gold mining stocks oil stocks, nice rally in oil. These these big names that are in the oil services havent done anything all week despite the move up in oil and gasoline. Little move today. Remember, Global Oil Production has slowed down and thats one of the reasons these oil Service Names dont really bounce much anymore. Were ending the quarter, getting right near it, up 3 but i want to emphasize this has been a big cap rally, a really super cap rally overall. Look at this were up 3 . Microsoft, facebook, amazon and disney and apple, microsoft 15 the reason the s p is up facebook, 5 , amazon, 5 five stocks are 30 of the gains of the s p 500 thats what i mean when i say super caps are moving the markets in i was they never have before look at what we have been doing here for the month here. Were talking about basically a rally that the s p is up 3 . But all of the other sectors here equal weight, only up 2 . Midcaps only up fractionally and small caps down. The super cap stocks are really moving the market overall. Thats the big thing here. I want to give you a thought experiment here. What would happen if the top 50 stocks in the s p 500 were up 1 , for the quarter, and the other 450 were down 1 you would say, what would the s p do 50 up 450, down, the s p would be down. Thats not true. The s p 500 would be flat if the top 50 stocks were up and the bottom 450 were down thats what i mean when i say super cap stocks have come to dominate the market. It is no longer, sara, growth at a reasonable price guard, it is growth at any price and theyll pay anything for the big cap stocks. Thank you nasdaq looks like the early winner here out of the gate. More on the movers there Bertha Coombs is uptown. This is a micron story today. Micron seeing its best one day gain since december of 2016 saying that it does have a work around on the huawei ban and optimistic about working around the china trade. The stock is down 13 since the beginning of these real trade wars back on may 3rd same thing for the chip sector overall. Off 6. 5 today, we are getting a lift on the chip secretary, strong day the semiconductor etf is just out of construction this morning, not so for the philly Semiconductor Index but it has come a long way. Were also seeing some of the ip oxs today bouncing back up, beyond meat, once again, still up about 500 since its ipo. This stock is in bear market down 25 from its june 18th high that is the volatility we have seen we have an ipo here at the nasdaq, it priced below the range, was expected to go 13 to 15 it has been a very strong ipo season here for the first half at the nasdaq. Back to you guys. Thank you very much time for a closer look at oil prices dom chu at the commodity desk. It is early, but green so far. Crude prices trying to crreclai 50 bucks brent crude, 66. 29, up almost 2 there. For wti, talking about seven Straight Days worth of gains up 9 out of the last 10 days there is some optimism given the u. S. China trade headlines it is supply data in the u. S on the one hand, private sector Oil Inventory data last night from the American Petroleum institute showed a bigger than expected drop in u. S. Supplies a 7. 5 million barrel drawdown and analysts looking for 2. 5 Million Barrels of supply reduction. Remember, we get official Government Weekly Inventory Data 10 30 a. M. Eastern time today. Prices also factoring in a bit the Philadelphia Energy solutions refinery outage given that explosion last week reports that it may look to permanently shut the refinery down so all of those oil prices, well see if wti can reclaim that 60 mark. Back over to you. Dom, thank you. Coming up, micron getting a big lift from its earnings beat and guidance is the worst over for the chipmaker . Ing it stay tuned for an exclusive interview with the ceo. Movement in treasuries this morning. We mentioned the ten year yield, back above 2 after yesterday, hitting the lowest level since november 2016. Dollar is stronger as well squawk on the street will be right back through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From using feedback to innovate. To introducing products faster. To managing website inventory. And network bandwidth. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Shares of apple having a very good first 20 minutes of trading. Up 2. 3 . By the way, 4. 60, thats over 21 billion in Additional Market value for a Company Whose stock is up almost 27 year to date. Were back right after this. Dy. I called reputation defender. They were able to restore my good name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. Hey i live on my own now ive got xfinity, because i like to live life in the fast lane. Unlike my parents. You rambling about xfinity again . Youre so cute when you get excited. Anyways. Ive got their app right here, i can troubleshoot. I can schedule a time for them to call me back, its great you have our number programmed in . Ya i dont even know your phone anymore. Excuse me . what . I dont know your phone number. Aw well. He doesnt know our phone number you have our fax number, obviously. Todays xfinity service. Simple. Easy. Awesome. Ill pass. Bitcoin continuing to rally this morning more from the nasdaq. Good morning. Watching bitcoin getting close to 13,000, a level it hasnt traded at since january of 2018. Its not only up triple digits this year, but worth noting up 200 since early april thats when the momentum really started to build its unclear whether bitcoins move this time around is different than the parabolic move we saw this 2017, which was followed by a bruising 70 drop last year. In focus today is ledger x, winning cfdc proposal, a u. S. Regulated bitcoin derivative exchange it could gave smaller u. S. Retail investors a mechanism to buy derivatives that pay out in bitcoin. Square rolling outbitcoin deposits for the mobile cash app. Analysts say both of these developments are a sign that the market ecosystem for cryptocurrencies is slowly being built out. Meantime, the dominance of bitcoin has reached 61 of the total crypto market. That actually touches on one difference between this year and 2017, which is fewer initial coin offings fewer pitches about new coins. David, back to you. Thank you se coming up, d. C. s bipartisan tech lash. President trump saying we should be suing google and facebook this as the social networks or one of them prepares to testify in a house hearing next hour we wilbrk wnl eado the headwinds that Big Technology is facing. . Had a coach in high school. Really helped me up my game. I had a coach. Math. Ooh. So, why dont traders have coaches . Who says they dont . Coach mcadoo you know, at td ameritrade, we offer free access to coaches and a full education curriculum just to help you improve your skills. Boom mad skills. Education to take your trading to the next level. Only with td ameritrade. Good morning welcome back to squawk on the street. Im sara eisen with david faber. Live from post nine at the New York Stock Exchange. Lets take a look at the markets. Stronger today we are up across the board s p 500 up 0. 25 the outside strength in the nasdaq, up almost 1 technology is in the lead. Micron is lifting the semi stocks after a warm reception to the earnings report. Energy consumer industrials also strong its the defensives under pressure as treasury yields popped back above 2 on the ten year our roadmap for the hour starts with, quote, there is a path secretary mnuchin comments on a potential trade deal. Shares on fedex after a warning of headwinds in the coming year under trade uncertainty and macro weakness. And tech lash representatives from facebook, twitter and google facing House Homeland Security over online terror content thats this hour we begin with hadley gamble after that market moving interview with treasury secretary Steven Mnuchin clarify what he told you. Hey, good morning so as you say, we had an exclusive interview with the treasury secreta treasury secretary off the back of this conference we talked about President Trump. We talked about sanctions. We talked about the future of the middle east peace process. As you say, we focused a great deal on whats going to happen at the g20 a little later in the week and whether or not there was a path to getting that trade deal listen in. Im hopeful that we see a deal, but there needs to be the right efforts in place this isnt, you know, a deal for having the sake of a deal. We were about 90 of the way there. I think there is a path to complete this, but well see where we get he said he is hopeful he said there is a path to complete this. He said we were 90 of the way there. He says that he is hopeful and i thought this was really interesting as well. I followed on to that question about whats going to happen next, i followed on to whether or not these china talks were really closely bound, not just whats going to happen next in terms of the trade front but the relationship between the United States and north korea he seemed to agree with me he seemed to understand as well that whatever happens next with these china trade talks has a major impact on the policy with regards to north korea so i thought that was really interesting as well. He also addressed iran i read off some of the comments we have heard, these controversial statements from the iranian government lately. Outrageous, idiotic, doomed to failure, all the things they said about the u. S. Sanctions. Listen in to what he had to say. That must mean they are working. If they are this upset about the sanctions, thats an acknowledgment that they are working. Again, i want to be very clear our issue is not with the people of iran. Our issue is there is really bad behavior they are sponsoring terrorism throughout the region. They are creating instability in this regional. They are endangering our partners and our allies and our interests, and we will not stand for that. Remember, of course, these sanctions already we have seen are the iranian Supreme Leader targeted, the top officials from the Iranian Revolutionary guard. We are expecting some further u. S. Sanctions at least by tomorrow or friday when it comes to whats happening with the iranian real, its dropped 60 on the year. These sanctions targeting 80 to 100 confirmed by mr. Mnuchin of the iranian economy. He said we are not going to stand for anything more from that government. Guys. Hadley, thank you. Joining us now to discuss what all this means for the market, advisors investments chief Investment Officer victim lowell how do you position for a key v event risk like g20 and a lot of hopes about a Federal Reserve next move . Can you be bullish you take a balanced approach. None of the issues that the fed is concerned of what they refer to as cross currents we are ware of the importance of the g20 meeting. We know that earnings are coming down the pike. We know that iran hovers over this market ever more closely in terms of tensions there. We also know now, july 17th, Mueller Investigation testimony will probably reignite some uncertainty, some volatility all of that is very near term and uncertain in terms of the outcome. So we take a risk ware approach. We are very balanced in terms of capitalization we are balanced in terms of region we are balanced in terms of asset classes. Our growth oriented portfolios we have buffers in place as we continue to expect uncertainty and gnome really trump at least in the short term market fundamentals. What does that mean practical terms as far as the sectors and the stocks you like . Pay close attention to your overall portfolio. Your longterm investments those which would be in the Technology Side of the ledger, for example, as long as they are in the hands of a good manager who knows how to be selective in that group, you are probably in reasonably good shape as longa you offset them with one of the underlooked, underappreciated sectors this year, the Health Care Sector. We are getting not just reasonable growth, reasonable returns, but we are getting them at reasonably good valuations on good dips. We also think that the International Market has some opportunities, in ticket small, the midcap space in both the established foreign and the emerging markets those Companies Sell goods and services out their back door to their locale, to their region, less troubled by currency concerns an also by things like trade wars the way u. S. Multinationals are jim, who do you advise . Advisors investments who are you actually advising . Individual investors across the nation some even overseas who are, have done a great job of building their assets, their savings, and they turn to us as an independent advisor for that fiduciary standard of putting their interests first. Chief among those interests tends to be safeguard be assets that they spent a lifetime building. Its funny. I ask that because safeguarding those assets, what do you tell people looking at a 2 tenyear who have saved, who have done right in terms of at least their financial future, and now we are trying to live off of ordeal with did we lose jim . I think we lost him. I was just getting started, too. A good question. I know. Thank you. Jim, youre back i was going on and on. You know the point of the question, which is what do you do when you are relying on a fixed income at this point or at least trying to save and dealing with incredibly low Interest Rates . Even their diversification matters, david, as you know. Not just building ladders of u. S. Treasury bonds which are not yielding all that much, relative to sovereign debt they look like a windfall and looking at emerging markets, looking at other areas of the market that deliver dividends, whether its dividend growing stocks or reits nested inside some of the managers portfolio. It is a difficult landscape if you are only interested in safeguarding your assets and not taking any risks it definitely has been a long, low grind in terms of low yields persisting for longer than even we thought they would. So are you positioning your clients for economic weakness or a potential recession . Well, we dont know whether we are going to get a recession or not we pay a lot of attention to earnings we Pay Attention to the Economic Data and to Interest Rates i say one of the things that we are a little bit concerned about is the toll that tariffs may take on the emotional spending habits of the u. S. Consumer. We think its awfully hard to keep the driver not just of our economy, but in effect the global economy, away from spending if they are fully employed and still reasonably confident. We are watching the jobs data, the income data, and we are also watching the fed, which we think is doing a phenomenal job in terms of walking this tightrope of event driven news, which is very unsettling, versus fundamentals which continue to point to slow growth, not know growth at least here at home. Jim lowell, thanks for joining us thank you fedex is out with its Fourth Quarter results. Frank collins has the details. Stock is up a bit this morning, frank . Absolutely right. Fedex shares up is after this line revenues and an eps beat. The Company Giving lower guidance for next year saying profits would fall by mid Single Digits the ceo using colorful language to talk about the companys weakness in express and international business. It reminds me a little bit about, you know, that old adage of mike tyson. You know, everybody has a plan until they get hit in the mouth. Clearly, we have been very disappointed over the last few years with the assumptions that we made on the growth in international trade, particularly with the Trump Administration the company saying ending its contract with amazon will also impact express revenues, maybe not quite a mike tyson shot. Smith adding tariffs are bad for business he addressed the lawsuit against the Commerce Department saying the u. S. Blacklist restrictions unfairly force the company to know whats in every package or face fines in q4 express was flat while ground grew by 10 fedex says it expects that to continue as it transitions to sevenday a week delivery in the third quarter, in sourcing delivery that was handled by the post office, and expanding retail partnerships where customers with can pick up parcels at Dollar General and other stores they will spend to increase automation at two key hubs, including memphis. Analysts say that is a bright spot by 2026 they expect one out of four ecommerce shipments to originate out of ecommerce stores. Did you get anything in the call or in the comments about what they expect in terms of where the trade fight goes and how it impacts the economy and their bottom line, or is this guidance built in on whats happening right now . You know what they spoke about just the disappointment with the way that trade has been going there is a little bit more colorful language in there ceo fred smith said the trade policy is like is t1934 administration they expect things softer Going Forward because of a global slowdown and a lot of potential tension with the u. S. And china shipments. Frank colin, thank you. When we come back, Silicon Valley on the hill this morning. Hou House Homeland Security holding a hearing examining social medias efforts to counter misinformation plus, we will speak with a former fdc commissioner rosell thompson dow is up 48 points. Squawk on the street will be squawk on the street will be right back thats why we would suggest the powerful, portable Lenovo Thinkpad t480. To let your people stay productive from anywhere. Wow, i feel really great about this. [ sneeze ] its probably nothing. Or something, really bad. You need it orchestration by cdw and lenovo. Featuring the intel 8th generation core processor. The flexible class schedules me tremendously. Allowed me to go to work full time, run my catering business and be a mom and parent. When i reached this accomplishment, it was like, its here, its happening, its now. We at Southern New Hampshire university are the ones who succeed. We are the ones who break through. Movers to mention. Micron soaring after the smartphone chip maker topped analyst estimates in the third quarter. They see a solid rebound in memory demand the second half of the year that stock surging more than 12 . The ceo of micron will be joining squawk on the street next hour. And General Mills is an earnings mover this morning down. Beating estimates by six cents it was the sales picture that missed sales hurt by lower snack demand in that key north American Market it had been a winner this year, up 40 its outperforming kraft heinz or kellogg, more direct competitors, especially in cereal they cant find organic Revenue Growth unlike the beverage makers and household product makers which have managed to turn it around through innovation there was hope for topline growth you point to the fact that the stock has had a good year even with todays decline what was behind that the fact that its had such a good year . Yeah. It has a 4 dividend. And among the food producers, it has blue buffalo it paid 8 billion for the pet food maker 38 sales growth today as long as it keeps up the doubledigit gains as it integrates that company and takes it a little more mainstream, that has been a driver of growth however, its the core food business yogurt not turning around. Cereal, better than kellogg, still a declining category salty snacks not getting it done thats the problem they have to focus on innovation they have to focus on marketing like so many other food companies. At the same time they have to keep their costs in line to keep wall street happy which drove the bottom line beat. All right. It is debate night Democratic Candidates for the 2020 president ial election are kicking off the first of two evenings of debates. John harwood is with us. He is in miami where the first of those two will take place this evening good morning, john we saw an earlier graphic that 64 of the voters at least want to hear about Climate Change as their number one issue are we going to hear a lot about Climate Change tonight or is it going to be more economic concerns that take the stage well, we will definitely hear about Climate Change from jay inslee, the governor of wisconsin who has made it the centerpiece of his campaign. But i would expect that this debate will revolve somewhat more around Economic Issues because this debate will revolve around Elizabeth Warren. She has led the field in populous economic proposal she has her wealth tax, which pays for a lot of things, including universal child care and relief of a whole lot of college debt she happens to be the highest ranked candidate on this stage tonight. Youve got moderate candidates in the democratic context like beto orourke, amy klobuchar, co cory booker, all who have struggled to break through they have some incentive to tangle with her on those issues and set themselves apart of course, the two leaders in the race nationally, joe biden and Bernie Sanders, are going on thursday night john, i wonder how the candidates will distinguish themselves and distinguish themselves from President Trump on trade well, thats a very hard one because the Democratic Party has been trending more, certainly at the president ial level, more into a pro trade direction we saw that under bill clinton and barack obama republicans, with donald trump, have gone in the opposite direction. I think what you are going to see from democrats is a reluctance to embrace free trade and trade deals explicitly, but criticize the way that President Trump has pursued his tariff agenda against china, against the e. U. , against canada and mexico even though he has pulled back some of those tariffs lautly i think they are going to cast donald trump as somebody who is a chaotic architect of policy, who is creating uncertainty in the Business Community and harming Economic Growth as a result. Yawn, how much interest do john, how much interest in these two debates at this point . We are still a long way from the first primary, let alone the election well, this is a point where a lot of democrats who have not tuned in are going to tune in. There is a small group of people, the twitter people, People Like Us who cover this constantly, the people most intensely involved, activists who have been following the debate, but many of these candidates are almost completely unknown to the National Audience there are a whole lot of democrats who are casual consumers of politics. This is a chance for those candidates to try to introduce themselves and get some traction so far we have seen a race that joe biden and Bernie Sanders have led with some movement. Pete buttigieg, who is going on thursday night, has had a rise beto has had a fall. Lately warren has been rising. But a lot of people havent had a chance to speak to the American People and they have to grab peoples attention right now. If not, they are not going to be able to raise money, they are not going to be able to make the debate stage for the next stage of the process which requires a whole lot more signatures, a whole lot more individual small contributions, higher poll standing all of that is going to make this a critical for people to say dont quick me out of this party just yet john, thank you you bet. All right. Lets move on now. Lets talk about some geopolitical issues ahead of tonights debate and the upcoming g20 meetings in japan for that were joined by former under secretary of state alan larson he is now a policy advisor at covington. Nice to have you, mr. Larson they are not going to spend a lot of time one would expect talking about foreign affairs. Trade certainly perhaps. I would love to start there. You have advised a number of corporations, i know, on regulatory issues involving sanctions on iran, for example that continues to be a great concern in the market given the very heightened tensions between our country and iran what is your sense in teps of the sanctions and the damage they may be doing to the iranian economy . Thank you good morning i think the sanctions have had a very strongly negative effect on the iranian economy. I think iran is struggling to meet the needs of its people i think one of the things that President Trump and the Trump Administration will try to do at this g20 meeting is to rally more support from the largest economies for a tough line on iran do you think he can be successful in that i mean, clearly the europeans, who are a party to the iran accord that we pulled out of, dont appear to be particularly pleased with whats occurred sense . No, i think its the lead countries have different opinions, but i think where they are together is that they see the importance of the u. S. Economy. They are concerned about the threat that iran plays in the region they see the threat that a nuclear weaponscapable iran would have they dont like to see iran disrupting shipping in the gulf. And so even though there are differences about tactics, i think they wire will be supportr the notion that iran needs to be disciplined and strong messages need to be sent to iran to avoid disruptive behavior. What would you be advising companies and boards, alan, right now on china and especially ones that are doing a lot of business there . Well, you know, i think our relationship with china is going to change. It has changed its going to change in a significant way. At this moment i think that both countries and both president s see a need to try to stabilize the relationship so im hopeful that the two president s will agree to relaunch trade negotiations and that that could lead in the months ahead to a new arrangement, but companies should understand, first of all, that will just be the first of many because we are going to have to continue to work at this relationship secondly, we are going to need to address some of the fundamental differences in our economy. China is a statemanaged economy. China is going to be both an economic collaborator, but also an economic competitor and so the two countries are going to have to reset and rebalance the economic relationship in a way that meets both countries core objectives. Companies are going to have to adjust to what will be some changes in their supply chains you know, i know you are a firm and you specifically advise companies how you comply with sanctions and different regulations. I mean, just this morning we are dealing with fedex suing the government because its saying how can you expect us to police the contents of all of our packages to comply with the ban an huawei . Similarly, a number of suppliers to huawei are taking a look and figuring out ways that they can still sell to that company has it just become that much more complex for Corporate America these days to pcomply with all of these different issues it really has become more complex and its a real challenge for companies. I just heard fred smith on your show i think the key thing here is, one, recognizing that on some of the big issues you just talked about, including huawei, that there is going to be a strong need for the United States to do the things necessary to protect our national security. At the same time that probably doesnt mean that no u. S. Company can do any kind of business with leading chinese Technological Companies like that and so i think there is going to need to be an effort to work out the details of some of these measures so that there can be claurty about what companies can do and cannot do in respect to their trade relations. Do you think thats coming . Are we going to get to that point, or is that not even being discussed right now . Well, i think that is something that could emerge from the meetings this weekend. Weve gone through a period over the last six weeks where there has been a little bit of a test of strength. The countries have showed that they are prepared, if necessary, to walk away from negotiations but there is also a time to try to strike deals and strike arrangements for working with each other and i think that time has come i think both countries have a need to reassure their domestic commission a economies and leaders and political systems that they can do business. And so im hopeful that there can be progress on a number of matters. The trade, restarting the trade relations, and also rebalancing the broader economic relationship mr. Larson, thanks for joining us this morning. Appreciate it. My pleasure alan larson, former undersecretary of state, currently Senior International policy advisor. When we come back a group of billionaires are calling for the rich to pay more well tell you who it is and why. A check on the major averages at this hour. Off of session highs, nasdaq still doing the best thanks to micron and its beat, lifting all semiconductor ocstks dows up 43 points well be right back. Rather than worry about how to pay for longterm care. Brighthouse smartcare℠ is a hybrid Life Insurance and longterm care product. It protects your family while providing longterm care coverage, should you need it. So you can explore all the Amazing Things ahead. Talk to your advisor about brighthouse smartcare. Brighthouse financial. Build for whats ahead℠ brighthouse financial. Dear tech, lets talk. You blaze trails. But you have the power to do so much more. Lets not just develop apps, lets develop apps that help save lives. Lets make open Source Software the standard. Lets create new plastics that are highly recyclable. Its going to take input from everyone. So lets do it all, together. Lets expect more from technology. Lets put smart to work. Welcome back time for etf spotlight a look wti crude hitting the highest level of the month going back to its may 30th high and on pace for the seventh consecutive day of gains, trading under 60 a barrel the xle Energy Stocks down 5 the past three months. Iranian tensions contributing to the volatility conocophillips up about 4 overall, the story has been stocks lagging the overall price in the underlying commodity future lets go to courtney reagan. She has a cnbc news update at this hour. Good morning, david here is your cnbc news update. Secretary of state mike pompeo meeting with indian Prime Minister modi in new delhi he health a joint News Conference with his indian counterpart, downplaying their disagreements over trade tariffs and counter tariffs we said we are going to do our best to make sure that all the people are in the right places and work through these problem to get on with the business of growing our commission. Bahrains king led by treasury secretary Steven Mnuchin and white house advisor Jared Kushner unveiled their 50 billion middle east peace plan and are trying to gain support for it at a workshop in the countrys capital. A mystery buyer snapped up a painting that was discovered five years ago in a french attic. It was said to be auctioned off tomorrow the painting has been estimated to be worth 170 million the price along with the buyers identity was not revealed. A treasure to find in your attic. Thats the cnbc update for this hour back to you, david. Okay. Thank you, courtney. When we come back, d. C. Tech lash representatives from google, twitter and facebook on the hill we are going to speak with two insiders about thempcaon ilitis of that testimony. Squawk on the street will be back right after this. Is where people first gathered to form the stock exchangeee, which brought people together to invest in all the things that move us forward. Every day, invesco combines ideas with technology, data with inspiration, investors with solutions. Because the possibilities of life and investing are greater when we come together. Call it d. C. s bipartisan techlash President Trump saying this morning that we should be suing google and facebook. Over on capitol hill this hour, two hearings taking place tackling a. I. And efforts by social networks to counter misinformation online with representatives from google, facebook, and twitter all appearing. Joining us here is former fdc commissioner and advisor to facebook mozelle thompson. Also is washingtonbased tech advisor whose clients include twitter and lyft bruce medical anyone bruce, if you are currently advising twitter, how do you prepare them for a hearing like this today the concerns with tech are brder than washington, broader than republicans or deputies the populism of the left has met the populism of the right. These companies have been very successful creating products a lot of people want the challenge is these days big is bad and both sides are looking to take down the giants of the economy when you have a president who says we should sue facebook and google, and i dont know what the context was, whether there was anything additional to that, but how do you, from a perspective of rule of law, ftc, doj, anticompetition, what should they be doing one of the problems is exactly what you described what would you sue them for . You have to figure out what that is now, there is a whole bunch of people who are concerned about content, whether they are putting on right content, how they make decisions about content, whether they are fast enough thats one of the hearings and, unfortunately, the legislative process is a static solution to an evolving problem. So hopefully they will get to the point where you can see some Real Coalition building between government and industry to figure out what the right answers are, and that has to be a moving target. At the same time you may begin to see differences between how each of these companies wants to approach this problem. Are the companies doing a good job responding . It feels like the response has been, you know, were sorry, we need to be regulated, we are going to help be a part of the solution is that cutting it well, the problem is that even if you they have a perception problem even if you create new mechanisms, you have to you are dealing with realtime problems you are dealing with people posting immediately, and there is never going to be a perfect solution there may be Different Things that people can do to respond more quickly one of the things that is a challenge for these companies is they also have to respond to questions and scrutiny more quickly. That means they need more transparency hopefully, you will see more of that today. Bruce, are we going to see more transparency in general is that part of what you are advising them to proceed with . Thats been the trend towards Greater Transparency the content moderation issue is challenging. You have republicans on the right criticizing them for censoring too much, and democrats on the left criticizing for not censoring enough the reality is there are hundreds of millions or billions per day, per month, per week of tweets, of facebook posts, and their ability to screen and to knock down vast sums of bad tweets, of bad content is really extraordinary. The challenges are when 0. 1 gets through and the 0. 1 of dangerous people, everybody is mad. Its harder than antitrust, harder than privacy that the tech platforms face. Bruce, we are going to have a democratic debate starting tonight. What do you expect how much bashing will there be of your clients . Gosh, they only have about ten minutes apiece they need to punch the president. They probably want to get a lick in on joe biden, which makes shooting at tech maybe your third aside. But again the populism on the left, big is bad, global is to be concerned, the unchecked power of billionaires is to be feared, that all fits, picking on the tech companies. I think you will see starting with senator warren a decent amount tonight and a decent amount tomorrow night of suggestions of who is going to be more aggressive in regulating the new big players. Well, mozelle, we have investigations underway, both the department of justice and the ftc. In terms of timelinek given you were at the ftc, how long before we know its going to lead to anything its going to take a while. First of all, there has been to be an agreement about what is the scope of the investigation then we have to collect data not only from the companies but people around the companies. Then they have to make a decision they have to present a decision to the commissioners the commissioners have to decide whether they want to sue if ne decide to sue they have to win a case and then there has to be a remedy. One of the interesting things about today, too, there is someone missing from the table youre talkingabout a lot of these issues dealing with censorship and terrorism and threats. The security people, the Homeland Security people have to be at the table, too, because they have a hand on both sides of the equation. Not only they dont want to see these things posted, but they also need to know where they are to figure out who the terrorists are. So they have to be working in this mix, too. I hope that we hear something about that today. I mean, is there a pucks fixo this ahead of the 2020 election . Its going to be interesting. You talked about what we are going to hear tonight. I would be curious to hear what some candidates might be talking about thats not really about the companies, but about a change in the regulatory system of the United States to be something more intrusive you know, the ftc is an Enforcement Agency they enforce people who break the law, but they are not sitting there and they are not regulating a public utility or the Nuclear Regulatory commission who sits down and monitors every single thing the internet does. Im curious to see whether some people are advocating a change to how we look at regulation if so, whats their solution right bruce, do you agree . Does there need to be a change overall in regulation . Well, i agree with mozelle that will be the topic of the debate and of a lot of the democratic primary with probably universal agreement among democrats that there is excessive concentration, too much power among a select few companies, a select few executives whether or not i think thats necessary, it depends. It depends which area you are taking a look. Sometimes enforcement can get things done. Sometimes the pressure i think these hearings on a. I. And the ethics of a. I. Are terrificly healthy and are fairly early in the development and deployment of a. I. , that perhaps a. I. Can be deployed in a more responsible way with less externalities than social media ones. Bruce and mozelle, well leave it there thank you. Thank you. And when we come back closing the gap. A new report says there is one place where women are making more money than men. Weve got the details. Getting a quick check of the major averages at this hour. Technology leading the charge here with the nasdaq up three quarters of 1 health care and staples not so much s p a little less than 0. 25 squawk on the street will be right back at your phones. The design thinking, the digital engineering, security, blockchain, and we will be first to market yes. When we do we launch . Unfortunately, in 2 or 3, hours. Why the delay . Cognizant is helping banks use Digital Technologies at scale to advance speed to market. Csaid alice. D curiouser, the rabbithole went straight on like a tunnel for some way. Ive seen a cat without a gri, but a grin without a cat. Hey, mercedes, end audio. Change lighting to soft blue. The completely reimagined 2020 gle. With Intelligent Voice control and available third row. Your adventure awaits. Visit your local mercedesbenz dealer for exceptional lease and financing offers. Mercedesbenz. The best or nothing. Chinese internet stocks have gotten crushed one market watcher sees a comeback afoot find out whana hist mee watching on tradingnation. Cnbc. Com more squawk on the street is coming up. In these turbulent times, do you focus on todays headwinds . Or plan for tomorrow . At kpmg, we believe success requires both. With our broad range of services and industry expertise, kpmg can help you anticipate tomorrow and deliver today. Kpmg welcome back stocks rebounding from yesterdays losses but trading off their best levels of the early session, relative strength in technology and Energy Stocks as Oil Prices Extend their gains following that much bigger than expected drawdown in u. S. Crude stockpiles lets drill down on one of the other underperforming groups, the Health Care Sector as you can see here, on pace for the Third Straight day of losses, up fractionally over the course of the past three months. Among the names dragging lower, eli lilly, merck and Johnson Johnson as well down around 2 to 4 . Health care still a focus on the heels of that abbvie deal. I will send it back downtown to you guys at the New York Stock Exchange thank you, dom. Well, eli bro, the founder of kb homes, and others, yeah, its a large group of billionaires their calling for a wealth tax they are saying the rich should pay more robert frank has that story for us i bet he starts the story . Yes, how did you guess . Ill pick it up from here. Indeed, the billionaire founder of kb homes says its time for rich people like him to pay a lot more taxes he said the system of opportunity that made America Great and create his 7 billion fortune is no longer working for Many Americans he says its time for a wealth tax. Dont give me wrong, he says im not advocating an end to the capital system i simply believe its time for those of us with great wealth to commit to reducing income inequality, starting with the demand to be taxed at a higher rate than everyone else. Now, he didnt give specifics or endorse any candidate or plan, but he invited other onepercenters to join the movement during the democratic debates. 18 other millionaires and billionaires published an open letter this week saying a wealth tax is patriotic and strengthens American Freedom and democracy that included george soros, cre chris hughes and mollie munger certainly going to get a lot of attention tonight and storm. Senator Elizabeth Warren has been getting her biggest cheers for, quote, tax their diamonds, yachts, and recommembrandts that would affect 75,000 households Pete Buttigieg endorsing a reasonable wealth tax. And Bernie Sanders proposing a higher estate tax. Every day a new proposal from a new democratic to tax the wealthy more. The wealth tax is not an income tax it is always interesting soros, most of his money, if not all, robert, is in the foundation at this point. And similar with broed. He has pledged to give away 75 of his wealth. He has given away 2 billion of that 7 billion. A wealth tax wouldnt affect him much because soon it will be in a foundation, the rest probably in some kind of family trust he probably wouldnt end up paying a full amount of tax on his full wealth. And i think thats true with a lot of the people at the billionaire level. Are these all democrats that are billionaires calling for wealth taxes yes but i would say eli broad has been a longtime democratic, fundraiser fork Democratic Candidates in california he is the bane of the California Democrats because he has spent a lot of money reforming education through Charter Schools and private schools, which is not part of the democratic orthodox is so i would say he is a moderate democrat youre right everyone who signed the letters is a longtime democratic. A Beautiful Museum in los angeles. Robert, thank you. Thank you, guys. Robert frank. Time to send it over to john a look at whats coming up on squawk alley. I dont know if you know this, but micron stock is up more than 12 so far this morning. That is after earnings, a couple reasons for that they are selling some stuff to flaw way, for one, and their wetht 20timate for finalis20 lor an the street expected we are going to talk to the ceo coming up on squawk alley. Dear tech, lets talk. You blaze trails. But you have the power to do so much more. Lets not just develop apps, lets develop apps that help save lives. Lets make open Source Software the standard. Lets create new plastics that are highly recyclable. Its going to take input from everyone. So lets do it all, together. Lets expect more from technology. Lets put smart to work. Welcome back to squawk on the street. There is a new report out on ceo pay trends its signaling an area where wom women are making more money than men. Where is it . Thats right. There is at least one place where women are making more than men, and that is in the c suite. Womens ceos took home a median pay of more than 13 million in 2018 that compared with the 12 million that men took home in fact, by that measure women chief executives made more than their male counterparts over the last five years according to a study which looked at base salary, bonus, stockbased compensation and benefits, but there are several factors that skew those numbers and tip the compensation scale more in favor of women for one, sample size is quite small. The study looked at the 500 Largest Companies by revenue and there were only 21 female ceos other 4 of the data set women tend to run larger companies. In 2018 the median cap was 22. 5 billion. For 16 billion. And lastly, compared with the median male ceo, women tend to have a slightly greater portion of their compensation tied to performance. So it would make sense that any rising market environment, women would take home more money overall. Compensation has kbroen 25 over the last five years in part due to that rising tide phenomenal now, only one women cracked the top ten list of the highest paid ceos last year of oracle, who made more than 100 million. That was behind teslas elon musk, david zaslav and mark hurd. I would spend the performance point a little differently do their stocks outperform malerun Ceo Companies according to the study, they didnt last year they actually underperformed both men and women saw declines last year for their companies. Women just tended to underperform more. I want to say the numbers were about negative 11 for women and negativ negative 9 for men. But we did see that gap because women, of course, make more than men, but that gap between women and men narrowed last year in part due to the fact that the stock market declined in 2018. Im always amazed when we put it at the bottom there, 4 . 4 . Only 4 right. Going backwards. Right you almost cant look at it as a complete study because 21 people, its hard to generate statistically significant information from that, especially relative to the 470 something men that were included in the study so its difficult in terms of comparison unless you go way, way back and look at people who were ceos that no longer are but then its not relevant because we are looking at compensation from 2018. Leslie, thank you. San francisco has become the first u. S. City to ban ecigarettes that ban will take effect seven months after san franciscos mayor signs the measure passed by lawmakers yesterday speaking of ecigarettes, do not mist vaporized. Americas ecigarette addiction premiering july 15th an investigation into ecigarettes are they a curse or a cure . In between vietnam trips, of course, carl quintanilla. Fascinating that the city chose to crack down there. All right. Sara, we are counting down to the closing bell already we are. What are you going to have on sadly, you wont be on. We have an interview with senator mark warner. We will hear about his plan to make big tech, put a price on your data. Does that mean average revenue per user in more transparency . Two hearings on the topic today going on plus, we will speak yexclusivel with Carly Fiorina about regulating tech, the trade war and money issues that could coming up at the democratic debates. She has been there squawk alley is up next. Dows up 55 points an exclusive with the ceo of micron stock of the day having its best in years. When it comes to feelings, its more like five million. Theres everything from happy to extremely happy. Theres also angry. Im really angry, clive actually, really angry. Thank you. And seat 36b angry. Youre clive owen. And youre barefoot. Yeah. Theres also apprehension. Regret. Relief. Oh and theres empathy. Ah, i got this in zurich actually, whats the opposite of empathy . But what if your business could understand what your customers are feeling. And then do something about it. You can turn disappointment into gratitude. Clive, you got to try this. I cant im working. Turn problems into opportunities. Thanks drone. Change the future of your business change the whole experience. Alright who wants to go again . I do i do i have a really good feeling about this. Man stand up if you are a First Generation College student. Stand up if youre a mother. If you are actively deployed, a veteran, or youre in a military family, please stand. The world in which we live equally distributes talent. But it doesnt equally distribute opportunity, and paths are not always the same. Im so proud of you, dad man i will tell you this, Southern New Hampshire university can change the whole trajectory of your life. It is 9 00 a. M. At micron headquarters in boise, idaho 11 00 a. M. Here on wall street squawk alley is live good wednesday morning welcome to squawk alley. Live from post nine, the New York Stock Exchange. Great to have you, andrew. Nice to see you. Carl quintanilla is on assignment we begin today with social media. The first democratic debate set to air tonight with Companies Like facebook and twitter in the spotlight. The president just this morning claiming Big Tech Companies are, quote, all democrats and are purposely repressing his reach julia joins us from los angele