In europe, also eagerly anticipating the jobs report fractional losses across the board with the dax down 0. 2 a check on treasury yields, we have yields, the tenyear specifically, the lowest level since november of 2016 1. 96 on the tenyear. The 30year at 2. 47. The countdown to the employment report is on. Forecasters polled say the u. S. Likely added 165,000 nonfarm jobs in june the Unemployment Rate is expected to hold steady at 3. 6 . If those predictions are right, it wont likely be enough to discourage the fed from cutting Interest Rates later this month. Well have a lot of predictions about all of this. A developing story off the coast of gibraltar British Royal marines interce interceptintercep intercepted a super tanker they believed the super tachktar was heading to a syrian oil rig. Iran has demanded the tankers release. U. S. National security adviser john bolton praised the move calling it excellent news. Wti is down a percent. And samsung saying its Second Quarter profit likely fell 56 from a year ago operating profit expected to be 5 5. 5 billion that includes a oneoff reimbursement from apple for missing a sales target final figures are due later this month. Lower prices and demand for semiconductors are the primary reason for the decline experts say lower prices have been driven byemiconductors and u. S. china trade war some predict the sector will not recover until the second half of 2020 a lot to watch there other south korean Tech Companies feeling the pressure look at whats going on. Lg down. Sk down also issuing profit warnings a lot going on there guess who our guest host is . Have you been properly introduced yet yes melissa did it do you listen to what i say do i listen everybody was taking different seats for being becky or joe thats a joe line. Do you listen to what i say. Does he im scared. The other piece of news that has been sort of rumbling around, david faber talked about it earlier this week, the big deal that may or may not get announced next week, which is sprint tmobile finally. Weve been waiting for weeks. The potential sale of assets to dish. Or not how will this work you tell us. Well, a lot of this has been reported the sum is the they need a doj approval the doj is holding back because they want a fourth carrier to exist even after this deal you wonder doesnt that defeat the purpose . They still want a fourth carrier. Along comes dish they own all the spectrum. They have not tapped into it theres a chance that sprint tmobile could sell a portion of their business to dish to create this fourth carrier. Theyre to the really selling part of their system theyre selling access to their system so that dish goes out there, they resell they end up reselling sprint tmobile system its a wholesale deal. The Sticking Point now is the doj wants dish to have access to their full system. If they sell however much of their service they can, you have to open it up to them. Sprint tmobile are like lets cap it keep it at 10 , 15 . That makes sense. You tell me. I dont know what you think the full weight of service would be on a tmobile prisprint networkf dish were to recreate that, they would be running 100 of the its a marketing thing. At that point are you marketing the Service Better than the Actual Service owners . Verizon has a big deal with comcast, the Parent Company of this company apparently its working well for them theyre just reselling Verizon Service under their own badge. Its the same quality, same thing. If thats happening there. Why want it happen with dish at the same time tmobile and sprint will reap the benefit of that longer term, because dish is sitting on so much spectrum, which is what you need, they will convert that to having the service go over their own systems. They still need to build that out. Thats an expensive thing to do. Its one thing to own spectrum you also have to own the infrastructure behind it is there a price cap associated with dish having access to their networks it is less advantageous for tmobile sprint theyre getting less margin so the synergies of the deal would be affected if they had full access. Natheyre trying to cap how much of their system theyre giving to dish the other thing is what would happen if dish turned around and decided they would sell the rights to whatever theyre doing to somebody else right there was conversation at one point that amazon wanted in. It could be interested if google decided they wanted to be a player im not sure if im tmobile or sprint that i would want that. Google could say i would offer free service over your network, well pay for it well subsidize it because well make the money somewhere else. Dish needs other investors to come in and build out this network. They could get an amazon or google or facebook to go in with them and become another reseller on top of what theyre doing across this system if youre tmobile or sprint, you dont want that. You can only sell so much. You can only bring in so many partners dish is led by charlie, hes a strong negotiator. And he walked before. Is there somebody behind him i think it hinges on him. Making sure the doj is cool with this. If they see this creates a legitimate fourth carrier. Youre combining these two but we need another one to support the system support the market around it do you think in this environment, this political environment that a google or an amazon would be ones to step in and make Major Investments i think theyre not allowed to i think its offlimits its not possible. Its offlimits with the regulatory yeah. We talk about privacy all the time most people dont care. The public doesnt care if google offered a subsidized service where your phone service is cheaper how much do you pay for Cell Phone Service . If that dropped by 50 if its cheaper people will go for it. Theyre willing to eat whatever privacy concerns there might be. We have a lot coming up with ed ill be here. Its the reason were all here today the june jobs report is due at 8 30 a. M. Eastern time, well have predictions and what the number could mean. Before we head to break, a look at the premarket winners and losers in the dow. 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. Or trips to mars. 4. 95. Delivery drones or the latest phones. 4. 95. No matter what you trade, at fidelity its just 4. 95 per online u. S. Equity trade. No matter what you trade, at fidelity mno kidding. Rd. But moving your internet and tv . Thats easy. Easy . easy . Easy. Because now xfinity lets you transfer your Service Online in just about a minute with a few simple steps. Really . Really. That was easy. Yup. Plus, with twohour appointment windows, its all on your schedule. Awesome. Now all you have to do is move. That thing. [ sigh ] introducing an easier way to move with xfinity. Its just another way were working to make your life simple, easy, awesome. Go to xfinity. Com moving to get started. June apparel data is due out in about two hours time. Joining us for that is Kevin Clemens and rob martin rob, first of all, predictions here so we think its going to be a decent report. We have 170,000 for this months report there are some risks that it could be on the soft side. The Payroll Survey week is when trade tensions were at peak. Mexican tariffs on the table well lock for average hourly wages. That will be key, correct . Yeah. Earnings we have 0. 3 on the month. No sign of major overheating there. We have had a bit more moderate pace eventually. Whats your total number . Total payrolls, 170,000 so youre the same on headline is the same. Yeah are we are soft of at a bottom will unemployment tick back up from here . I think the jgeneral consensu is for no change going into second half if job growth slows, as we suspect, gdp growth is moderating, quwe could see a ri. We think job Growth Continues in the 200,000 pace over the rest of this year. That will keep the Unemployment Rate moving down steadily. So you think it will go lower. Thats right. We think the fed cuts in july but stays on the fence for the rest of the year what do you see that most companies are not seeing a lot of boutique manufacturing. Manufacturers have opened up over the last couple of years. A lot of the weakness were seeing is still tariff related overmanufacturall manufactur not expecting a strong month not adding much to gdp growth or the top line payroll number we think were in for a period of moderation, closer to sub trend growth of 2 so you expect two cuts . Yes, july and september you are july and never happens again . Thats right. Why go in july . Because theyre locked in . Theyre still looking for this uncertainty shock to weigh on activity right now they think the economy is okay. Theyre worried about the second half so if you were on the fed, you would not be cutting thats right. We think the weakness is in the past the tariffs hit the economy hard i hope youre right, but me too. You are in the minority on this. 80 of s p 500 preannounced for the Second Quarter thats right. Thats not just a q1 q4 phenomenon theres weakness in q2 as well some larger corporations do get hit a little bit, theyre still feeling those effects. I think the uncertainty will loom for quite a bit theres a lot of wait and see. Weve seen a pullback in business investment. Its a misplaced complacency you think politics will play into this . I think in 2020 thats a possible head wind this uncertainty with regard to trade will linger. There will not be a major resolution eventually the slowing we have seen will creep over to the consumer side. Can i ask i want to understand your election prediction my view is unless you told me that Bernie Sanders or if you told me Bernie Sanders o Elizabeth Warren would make a serious run at the president for the second term, and it was going to be close, i would think uncertainty all over every ceo puts their hands under the table and says im doing nothing for the two years. I dont know whats happening to me im going into a bunker. If you dont see that, it looks like not necessarily the Anthony Scaramucci landslide, i assume things will keep going the way theyre going, either way. I know there are people out there who are going to be like what are you talking about thats not a political call its an economic call i would agree with that i think if there is uncertainty with regard to who wins the election and it seems like a much closer race, exactly that businesses and decisionmakers will sit on their hands and youll see a wait and see approach to hiring that will eventually spill over to the household demand. Well see weaker consumer numbers. Same question to you in terms of where the uncertainty is politically. For Political Uncertainty this happens every four years. We have a president ial election. This one feels different we dont have candidates calling for the breakup of Large Technology companies every four years. Thats a fact we dont have candidates calling for medicaid for all theres certain policy positions that a lot of democrats are taking or siding or leaning toward and there are people who say some of those policies longterm would lead to greater growth and greater strength in the economy. We wont debate that here. The issue is the uncertainty issue and the immediate term if you started talking about medicaid for all, Health Care Companies will feel that uncertainty pretty acutely outside of those companies, i dont think its something you want to sit on your hands for a long period of time. Okay. All right well leave it there thank you, guys coming up, took under fire. The company suffered a widespread outage on wednesday i was on instagram, these images were not coming up was it upsetting . Was upsetting frustrating. Its like your cable went out. What will i do with myself thats what it was like. Who are you theres a new crackdown in france on hate speech on its platform. As we head to break, here is President Trumps july 4th celebration featuring a display of military might and a speech at the lincoln memorial. My experience with usaa has been excellent. They really appreciate the military family and it really shows. With all that usaa offers why go with anybody else . We know their rates are good, we know that theyre always going to take care of us. It was an instant savings and i should have changed a long time ago. It was funny because when we would call another Insurance Company, hey would say oh we cant beat usaa were the webber family. Were the tenneys were the hayles, and were usaa members for life. Get your usaa Auto Insurance quote today. Lower carbs. Lower calories. Higher expectations. The light beer youve been waiting for has arrived. Corona premier. Has arrived. Thats what happens in golf nothiand in life. Ily. Im very fortunate i can lean on people, and that for me is what teamwork is all about. You cant do everything yourself. You need someone to guide you and help you make those tough decisions, thats Morgan Stanley. Theyre industry leaders, but the most important thing is they want to do it the right way. Im really excited to be part of the Morgan Stanley team. Im justin rose. We are Morgan Stanley. Welcome back in tech news, the apple icloud experienced an extended outage there was problems with calendars, contacts, reminders i dont use the reminder feature, thats a popular one. Some customers noted the outage impacted services at physical Apple Retail Stores. People were going to Apple Retail Stores yesterday . Were they even open . It was the second widespread outage for apple apple was not the only company dealing with trouble facebook users were locked out of applications for facebook, instagram, that happened on wednesday. The issues were resolved by wednesday evening. I was sitting on instagram, having some fomo, and images were not coming up im thinking whats going on i thought maybe my wifi was out. Im looking to do it on the telephone. What did you do instead of being on instagram for that allotted time . I spent time with my family. My children. You probably went to twitter. You know what i did i went to twitter, and typed in instagram, and there were instagramdown. Interestingly, instagram was kind enough to put out a little notice saying instagram down with their own instagramdown on twitter. Which i thought was sort of when twitter goes down, people go to facebook or instagram to figure out whats going on or go to the open web. The open web as opposed to the dark web but thats how we live now. We live on the internet. Its not just a source of information or commerce, its entertainment. Can we get scary for a second think about if somebody really went down. Facebook going down for an hour is not terrible. But if gmail goes down, the banks good down if the banks go down, thats a bigger problem if gmail or cookal seriously went down, like all of it for a couple of days, think about or even a few hours or aws goes down, thats a meaningful problem all of a sudden if aws goes down its a meaningful problem because its a major contractor for the governmen government a big portion of the internet in terms of what runs on it. Icloud, i use it for the calendar system. He didnt know what to do you had no idea what appointments you had no. On a holiday it doesnt matter, but if the calendar goes down, you have a problem dont you have in your head basically what you need to do every day . I wish i could tell you there are some days where im like wait, what am i doing thats right this is happening in ten minutes. That went down i dont know people would be missing appointments chaos chaos ensues i think its legit. Its a big deal and a real economic issue its sort of like a black swan issue for basically every business in the world right now. Thats why most of the banks fear cyberattacks. Thats representative of what it could be. What could happen more regulation could be coming for facebook. This time from france. French lawmakers approved a measure that would fine Tech Companies including facebook and google if they fail to remove hate speech within 24 hours. The bill still needs to pass the french senate, but president Emmanuel Macron is in favor of the measure. This could mean a lot of types hate speech, how are they defining that exactly . Is it facebooks standard for what that is, that keeps changing and adjusting is it the eu standard or is it country by country standard. Facebook says they will operate within the laws of the country theyre in if enough countries do it, does it come here . How do you do it theyre designing the more stringent requirement is what facebook ultimately has to adhere to. They build it once gdpr happened, theyre saying were using that everywhere. If thats the standard, what does that standard look like these are all the right questions to ask thats where you get in trouble with regulating speech across social platforms is there an economic emplycation to whemmr implication . The gdpr, theres more i accept i accept the cookie ill eat the cookie. Okay this would require humans to go through and take down speech. Thats where theres a bigger infrastructure problem with all these networks. They say they couple algorithms with humans to vet things. It doesnt always work thats where they run into problems if youre on a 24hour time clock, in terms of the economics and business, they may sort of ban whole swaths of things to make sure theyre covered. I need to get this done in the next day or less that could hurt things later this hour well talk more about how social Media Companies are preparing for the 2020 election. Up next, why univision is exploring Strategic Options. Theyve been doing that for a decade. And telecom showdown, well talked about the regulatory hurtles for the sprint and tmobile deal. As we go to break, wednesdays s p 500 winners and losers 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. Welcome back your watching squawk box live from the Nasdaq Market site in times square welcome to squawk box. Happy 4th. Hope everybody had a great fourth yesterday lets look at u. S. Equity futures on this friday morning things are down marginally all of this will change one way or another around 8 30 not around, exactly at 8 30. Dow jones looks like it would open off about 22 points the s p 500 off about 4 points cable stations were going crazy yesterday with this. A powerful earthquake struck Southern California yesterday setting off house fires, damaging buildings the magnitude of the quake was 6. 4. It was centered about 113 miles northeast of l. A. Near the city of ridgecrest. There have been no reports of serious injuries the quake was the largest in Southern California since the 1994 north ridge earthquake. That was centered in a heavily populated area of l. A. Seismologists are warning that there will likely be more earthquakes coming and one more large enough to cause damage we were basically going between cable showing this and the nathans hot dog contest on espn2 yesterday. Those are both different kinds of things. We were trying to stay outdoors, when we were indoors, those were on the television the other day you were saying we should have a hot dog eating contest on the show. I had two hot dogs. Thats far from 71 i like them charred you want to have the grill for that we can talk about this later. I dont understand how the nathans hot dog contest encourages people to eat hot dogs i agree looking at it i cant watch, but i cant turn away. But you still ate two hot dogs yourself. But will i go out and buy nathans hot dogs as a function of this . Lets talk media news. Univision exploring a sale the move would end 12 years of private Equity Ownership the wall street journal says the board is reviewing Strategic Options following a fall in ratings and a failed venture into english language content. This was one of those things that was supposed to be a perfect bet. 12 years ago, remember this . Yes private equity bought this. Huge. Everybody said you cant lose huge trend, Spanish Speaking population in the united states. Its the future. This is it now who will buy them . Theres nobody right now at t is out. They just bought time warner verizon is not doing this. Comcast has telemundo. Telemundo is now winning exactly. What do you do . Theres still shari redstone. Shes looking at being more inquisitive. What is this worth . Has like 7 billion, 8 billion of debt on the books thats not a good thing. Cash flow is 600 million a year. Again, what would you pay for in they went down that strange path of buying digital assets, buying fusion, gawker. They offloaded that yeah. Yeah theyre slimming back down to just being a Spanish Language broadcaster after all these moves is this a money loser in the end for the private equity guys . It will be, yes easily. I think if they get 60 cents, 70 cents on the dollar, that will be nice theyre not. Tough sell thank you General Mills says sales in china fell 12 in the Second Quarter. They were hit by the slowing economy and the u. S. china trade war. It is the fourth straight Quarterly Sales decline for gm in china there was one bright note. Sales of gms luxury cadillac brand rose 36 cadillac is extremely popular in china. Luxury important in china they make more luxurious stretch cadillacs for people with drivers coming up, the latest on the megamerger in telecoms. And later social Media Companies are changing their policies for political content as the 2020 elections heat up. Well bring you the details and controversy over the new rules since my dvt blood clot i was thinking. Could there be another around the corner . Or could it turn out differently . I wanted to help protect myself. My doctor recommended eliquis. Eliquis is proven to treat and help prevent another dvt or pe blood clot. Almost 98 percent of patients on eliquis didnt experience another. And eliquis has significantly less major bleeding than the standard treatment. Eliquis is fda approved and has both. Dont stop eliquis unless your doctor tells you to. Eliquis can cause serious and in rare cases fatal bleeding. Dont take eliquis if you have an artificial heart valve or abnormal bleeding. If you had a spinal injection while on eliquis call your doctor right away if you have tingling, numbness, or muscle weakness. While taking eliquis, you may bruise more easily. And it may take longer than usual for bleeding to stop. Seek immediate medical care for sudden signs of bleeding, like unusual bruising. Eliquis may increase your bleeding risk if you take certain medicines. Tell your doctor about all planned medical or dental procedures. Whats around the corner could be surprising. Ask your doctor about eliquis. I went straight to ctca. After my mastectomy, i felt like part of my identity was being taken away. My team made me feel whole again. Cancer Treatment Centers of america. Appointments available now. Welcome back to squawk box. Deal news expected between sprint and tmobile. For more on that and what else is working in the Telecom Sector we want to bring in jennifer fritche. Good morning to you. We were talking with ed a bit about this potential transaction earlier this morning your sense is this will happen next week . I think its going to happen next week. Yeah or i should qualify that i think well hear from the doj next week. I think they will be leaning towards an approval. We have the 18 states trying to sue to block this mergerment thats what i wanted to ask about. This idea that lets say the doj approves this, its part of a grand settlement not grand maybe, but settlement in washington, then you have the states what happens to that case . I think it depends a lot theres a lot of asterisks to that statement it depends on the concessions that the doj requires. Will there be a spectrum divestiture, a creation of a new synthetically created Fourth International competitor if thats the case, the states arguing four going to three is terrible for the industry goes away because essentially then four will remain four depending on the concessions that may come. In terms of dish being on the other end of this transaction, to the expentent thats the buy, do you think they are a strong fourth competitor . Can they be a real competitor . I think it i think its hard to get in charlies mind in any moment depending on what his plans are, who is behind the black curtain of those plans amazon has been speculated. Is it going to be a consumer driven product i think thats i would be hard pressed to believe that i think an iotlight bill is more of the plan i dont think boost mobile will be a meaningful competitor thats been bantered about i think if theres money behind he them, there could be a real build out that is very good for the Infrastructure Companies and the Wireless Industry in general. Jennifer, its ed here. Im curious, the state ag suit caught me off guard. I think a lot of people who covered this as well is this like a new factor in terms of m a or these big deals where all of a sudden you see state ags going after these deals where it used to be just the two, three Government Agencies that you had to deal with is that something investors should be more aware of . I think it was caught off guard. Its my understanding that the doj was taken off guard. I think there was limited discussions that the ag moved forward quickly. I think its a question of what is theirs ain s ask. Depending on what the concessions call for, that may be a weakened case of four going to three after we hear from the doj. More broadly, the way stocks react or have reacted in the past is that four going to three would be good for pricing for the industry and put a floor under pricing. That would be beneficial to at t and verizon as well. Ultimately, im sure tmobile and sprint wont argue this to get their deal through, ultimately do you think it puts a floor under pricing in i dont again, i hate he to keep bringing up the word concessi concessions, if the doj allows the new tmobile to keep as much spectrum as theyre able to keep especially that coming from the sprint side which is very, very good 5g spectrum, they have a big empty airplane to fill therefore they can be more competitive for pricing. I think ultimately thats good for the consumer that might be bad for the two other ones, at t and verizon my big question is if you were the regulated her, what would you do do you think combining these companies it creates more competition, its better for the consumer or worse . Five years from now, well look at this if it happens and think what i think it will be better for the consumer believe me i fly a lot of airplanes. It will be unlikethe airplane industry which the scary comparison has been. I think it will be good for the consumer, good for innovation and good for job creation. I think its a good thing. Thats an interesting consolidation good for consumers. This is one of those things, especially in the context of 5g and developing it, u. S. Is far behind on that thats the stated aim with this merger do you think thats real thing, this combined company will try to develop Going Forward i do. I think theres a lot of hype around 5g. I will be honest there i think youre right. That was the slides for this original announcement, 5g for all. April of 2018. This will cause a sense of strong urgency of 5g for all players. Real quick. Expand on the view about 5g. I know that youre skeptical why are you so skeptical im skeptical as well in terms of how quickly it rolls out. I think its a lot of talk. 5g pixie dust is everywhere we long its going to come, but i think its hard to live up to the excitement of what we have seen here i do think its very, very good. Weve been on record as saying this is go for infrastructure providers. Jennifer, appreciate it thank you coming up, well dig into the new policies that facebook and twitter have around political content and political advertising including one change at twitter that our next guest says does nothing. And as we look at europe, red arrows across the board. Stay tuned at comcast, we didnt build the nations largest gigspeed network just to make businesses run faster. We built it to help them go beyond. Because beyond risk. Welcome to the neighborhood, guys. There is reward. Beyond work and life. Who else could he be . There is the moment. Beyond technology. There is human ingenuity. Every day, comcast business is helping businesses go beyond the expected, to do the extraordinary. Take your business beyond. With tough food, your dentures may slip and fall. Fixodent ultramax hold gives you the strongest hold ever to lock your dentures. So now you can eat tough food without worry. Fixodent and forget it. Your daily dashboard from fidelity. A visual snapshot of your investments. Key portfolio events. All in one place. Because when its decision time. You need decision tech. Only from fidelity. Options action new opportunities to profit from the markets hottest welcome back to squawk box as we near the 2020 election social Media Companies are making changes to policies to fix mistakes pointed out during the previous election cycle. Facebook announced ending commissions from employees who sell political ads, also banning ads that tell users not to vote. Also working on putting together an independent Oversight Committee with the power to take down any posts twitter announced alerting users on a politicians tweet violating its standards and will be graying out the content the users will still be able to see if the content, if they click on it, and joining us to discuss the preparations and more is a Senior Technology reporter at buzzfeed good morning how much of a difference will this make in washington right now . I think that its going to show that these companies are trying to do something we all know that the federal government is bearing down on the big Tech Companies twitter seemed to have escaped it a little bit, but as we come closer to 2020, thats subject to change. I think this is a chance for them to say, hey, were doing something when lawmakers are going out and trying to make names for themselves being tough on the social Media Companies, and ultimately much does it do from a practical standpoint, very little but something to take to theoffices in washington and say, hey, were trying. Thats whats going on here yeah. This is built all of these programs are built to appease and placate, what can i do to get them off my back exactly. My question is, does it do that, though i think it does a little bit. Its a large increment i agree with alex. Practically speaking i dont know it does a ton longer term, facebook, twitter, these guys really dont want this responsibility. They just dont want this on them curious to get alexs take on this the most interesting thing facebook is doing, the idea of a Supreme Court to, a separate body to decide what is or isnt within their policies and what the policies should be. Why dont they just say we wont accept any of these advertising . Thats what they should do. Im shocked they continue to take political advertising this stuff was initially served as a case study to advertisers to show, hey, this is how effective our political advertising is now we all know how problematic that is. I do think that the only reason theyre continuing to accept political advertising probably two reasons one, ego two, actually a good case study for its aers elsewhere and willing to take the blow. If you said no advertising, flip side, a. , a freedom of speech argument and, b. , online, if facebook, twitter and google said, know what . No mas out of the business. What would you do as a political i want to get to people, a bigger, new generation melissa is right. The bigger context every post on facebook is an ad. As a political entity you can create your own page, distribute them, disseminate them and get followers to share them as much as possible. The activity wont stop on facebook just your ability to boost it, to make it more visible to the general population could go away, and even still, youre going to attract followers, attract that message still gets out there through social media just you wont directly pay for it. Alex, interesting point on the share button on facebook and the last elections that helped proliferate fake news, et cetera its still there an even bigger risk than just political ads . All of these changes we talked about beginning of the segment. The way theyre going to handle advertising, thats just window dressing i think the real issue to look at is whether or not facebook should continue to have that share button maybe doesnt want it on political posts. No share button during the 2012 electi election, there was during the 2016 the quick share, reshare, hit a tap and the content goes to your news feed. If i see a post that says Hillary Clintons a space alien, its going to be much easier for me to just take no thought and hit that share button versus copy and paste the link and decide to share it to followers. The share button removes that hesitation you have before you push content out and why weve seen a proliferation of fake news and outrage doesnt matter all the policies put in place to deal with that in the aftermath you should address the actual machinery that makes it so something we need to have a conversation about heading into this new election is does that share button belong 20 seconds, alex. Do you think that the government is either going to break up or meaningfully regulate facebook or twitter or the other social Media Companies in the next, call it, three years no. I dont have any confidence in the government to do anything meaningful to these companies. We see the size of the ftc find. Its not that big. A lot of people trying to make a name for themselves. No not any breakup tleechat least next three years. Thanks for waking up early. Appreciate it. Nice to see you. Adding chief economist rest of the show previewing todays big jobs report and how the fed should play the rest of the year later, a big growth of cannabis growth, stepping down talk with the ceo of the Worlds Largest Cannabis Fund what is next for the sector. Stay tuned to squawk box on cnbc i had a few good tricks to help hide my bladder leak pad. Like the old tunic tug. But always discreet is less bulky. And it really protects. cause it turns liquid to gel. So i have nothing to hide. Always discreet. Jobs in america. The june employment report just 90 minutes away. Its a potential game changer. What todays job reports marines for the fed, markets and the 2020 president ial campaign. Plus, deal or no deal . Will the tmobilesprint tieup finally get a green light from the government well handicap the odds as the second hour of squawk box begins right now hey, hey announcer live from the beating heart of business, new york, this is squawk box. You cant find the words to say good morning welcome to squawk box right here on cnbc our guest host chief economist at i never pronounce natixes i dont want to say nataxes, gets into a tax debate. You can do it. Cnbc didnt didnt we shall say cnbc contributor ed lee also here hope everybody had a great fourth of july do anything interesting . Golf. Golfed on july fourth. Even with the heat inside. Stayed inside hot dogs how many. Not as many as joey chestnut. Good answer and about to change in an hour and a half when we get the jobs number dow jones off and nasdaq off and s p 500 off about four points and getting ready for todays jobs report in a minute. First, other headlines to bring you. Samsung saying second Second Quarter profit likely fell 66 from a year ago. Main reason lower prices and demand for semiconductors due to the u. S. china trade war and world wye oversupply of chips. Other Tech Companies feeling the same pressure, also issued profit rather thannings in their stocks lg off 5 now. Also talked about this earlier apples icloud back up and running for those who had this problem just yesterday an outage taking it down icloud, that is, a few hours calendars, contacts, reminders affected by all this the second outage, if you will, for icloud this year coming after facebook, instagram and whatsapp had their own outages ruined my day on wednesday, their own outages. Sales in china fell 12 Second Quarter. Automaker hit by the slowing economy and u. S. china trade war and increased competition from midpriced suvs. About 90 minutes away from the june jobs report forecasters polled say the u. S. Likely added 165,000 nonfarm jobs and, you know, employment expected to hold steady at 3. . Indicating quietality the op atd that will change bring in Rick Santelli at the cme. And a host guest and Rick Santelli you first whats the whisper number . I think the whisper numbers darn close to the expected numbers. Somewhere between 160 and 175. I know many analysts and economists thinking were in the late days of an expansion, thinking you know, job cycles peaked, wage cycle may have peaked and numbers from a threemonth moving average will start to ratchet lower thats all possible. The whisper number down among traders and investors is, dont count this expansion out yet i think the whisper number really is right around 175 maybe even a little higher you could see right now that the markets are idling dollar index up a little bit. We saw boom yields not doing much the big story over there is going to figure into our story as well. If kristichristine lagardes ne marpio drago when his term ends. How important the number to potential easing in the u. S. And the continuation of lagarde with regard to draghis policies and high still liss. Thats what it boils down to in the stock market, interested to see the ultimate not knee jerk response especially getting an extreme good or extremely weak number to see if good news is bad news, because if investors think Central Banks can carry the weight of equity markets on theirs shoulders forever theyll be surprised at some point. Joe, way below that whisper now, right, as a firm . Is that going to make it harder . If the number comes in pretty much in that range of the whisper 161, 170 or so, harder for the fed to go ahead with july no. The markets totally priced the summer strong expectations fed always delivered. The issue will be how they change the statement or what they might say about the next meeting. Maybe its like a hawkishee so to speak i dont think they will but thats possible if things turn out better im surprised rick didnt mention adp. Softer and might impart down side risk. Interesting if its a strong number, but i say risks are more to the down side because momentum and the economy is slowing. See it on the stocks earning side with companies guiding lower. 80 of companies preannounced so far on the s p. This, sitting at record highs on the market a weird dynamic. It is, although i think you only have to go back three years to see the exact same dynamic. Bond yields as lows for the cycle. Stock indexes at highs defensive and quality and yield stocks leading the market. The stock market, that way and a pretty poor earnings track. So i think all of that kind of fits together, and when it comes to todays jobs number, the market seems to say, yes the fed kind of has gone beyond the point where it could push back against the markets expectation of a july ease but what kind of ease . One that does qualify as an insurance pro active measure as opposed to something we look like we need if a really bad number today would get people thinking, uhoh. Downside momentum and growth we didnt bargain for but certainly dont know if well get that. Rick, a much weaker number, is bad news good news for markets . A bad number could mean 50 bits in july. You know, if this number was minus 25, i dont think we would have any chance of a minus 50, and listen, my own opinion i just dont think that we are as investors, or the investors class even the analysts that are watching and observing the markets, how they arrive at 50 when central bankers around the globe have used low Interest Rates, negative Interest Rates and overstimulation yet they havent sparked a lot of positives with regard to higher price pressures or some of the issues that theyre trying to get the Central Banks policies to address so i jut dont comprehend why everyone thinks that lowering rates in the u. S. Is going to do anything but just give us a bit of a nitrous surge with investors. I even think that is over optimistic ultimately investors understand that the central bank could give us a little boost, but if this expansion truly is ending and we truly see signs of weaker jobs number over the long haul, they will ease, and i dont think its going to be a good thing and i dont think we see any 50s and if the numbers anywhere near expectations, i think maybe as joe said. If were conditioned to think the next fed futures contract is some kind of a god, theres a surprise in the cards. If its minus 25 and the fed doesnt go 50, ill take rick to his favorite chicago steak restaurant that he wants, on me. Get that wallet ready theyre not going to do a 50 take it to the bank. What are you thinking the chance of nothing this month . Zero. Basically zero . The thing is, a minus 25 the ma market will price it so pavlovian now, the market responds. No. The central bankers cannot afford anymore to give markets what they want, because there are Central Banks thinking easing more with minus 40 deposit rate and theres going to be a dawning here giving the market what they want at some point is not productive for the economy as a whole. Rick, youre right. Theres a price for that. Heres the thing. Theyve conditioned us perpetually under greenspan, bernanke, yellen, now powell, right . There wasnt a powell put last year now there is a powell put. Youre right, just hasnt happened yet im going with the trend. No. I like going with trends, but these times are different. I dont think we see a 50. Even if the numbers weak. Of course, we will see an easing cycle but i think thats not a forgone conclusion until we see this data. The odd piece here, and i have no strong feeling about why they would go 50 right now when the market is not yet fully expecting it, but the short end of the u. S. Treasury curve is the one part of the world where bond yields are, you know, above 2 basically so its one of these odd dynamics here where the fed is kind of holding this one part of the global bond market in its place and if they want to uninvert the curve, maybe do it july, september, or wait and see about september. Do it 25 doesnt do it. Right. Mike what about the argument sake, ricks going to go crazy on this. What for arguments sake the fed went 50 in july and go back to patient . We want to do a little more, get ahead of things. Sure. Then the market could sell off a bit because the market is basically pricing 100. Do 50 and stop what about that . If im reading the mind of people in the fed, they would love to do that, but from december to patience this time lasted seven months, because the market pushed them in a direction they didnt seem to want to go. Do they have confidence to get away with, you know, 50 and then stand pat for a while . I dont know could be. The other lever that we dont hear enough about beyond just the Interest Rate cut is tightening right . Will we see more in terms of pulling back on their portfolio and that thats the factor that good point. Stop in september. The only thing i mike was saying equity market, where we were three years ago the difference is the fed has raised rates in relative terms a lot and the Balance Sheet shrunk a bit, dollar remained robust and Global Growth because the dollar strong, softer. Thats the difference today relative to where we were three years ago. Because go down 50 but on the, on a Balance Sheet sort of not telling you that as much, because they want to have it both ways. We estimate the balancing, tightening roloff worth basis 50 points leave it there thank you. Rick, see you later. Mike, thank you. Ed and joe sticking around rest of the show. Coming up a lot more or squawk. Closing the gender gap more women taking Companies Public this year and why this matters. First, as he head to a break check out the biggest Nasdaq Market moverss stay tuned youre watching squawk box on cnbc moving is hard. No kidding. But moving your internet and tv . Thats easy. Easy . easy . Easy. Because now xfinity lets you transfer your Service Online in just about a minute with a few simple steps. Really . Really. That was easy. Yup. Plus, with twohour appointment windows, its all on your schedule. Awesome. Now all you have to do is move. That thing. [ sigh ] introducing an easier way to move with xfinity. Its just another way were working to make your life simple, easy, awesome. Go to xfinity. Com moving to get started. Welcome back to squawk box. Junes jobs report could change this, this morning looking to be down at the open Bitcoin Trading lower, still up nearly 200 this year separately a new study from the university of cambridge says the cryptocurrency contains more energy than the entire nation of switzerland. Maintaining the networks that support bitcoin. Meantime switzerland uses only about 58 teara watts each year. And coffee, surging. First day of trading, but not all that in common each led by a female ceo leslie picker joins us with the story of women taking more Companies Public. Right a cnbc analysis found more and more companies are going public with women ceos this year. First half of the year, 13 women ceos led their companys ipo representing 15 of the total ipos in 2019 so far and mentioned, each a female ceo at the helm during their ipos in recent months. The proportion of women ceos far higher than any year going back to at least 2014 and triple the percentage of women ceos in russell 3000 and s p 500 if the trend continues it could have potential to boost the percentage of women running publicly traded companies in america. Historically, though, women faced large obstacles in the startup world last Year Companies founded solely by women got only 2. 3 of the total capital invested in startups according to pitchbook and a study by the university of utah found when comparing appleapples to apples, womenled Companies Receive let capital, and if this is the turning point for women ceos startups like rent the runway, glossier led by women could all benefit. We mention how sad and pathetic it is, women running s p 500 companies, how many of these are any of these going into the s p 500 not sure of the ones run by women are going directly into the s p 500. A lot of Companies Went public the extension how to do a class share structure often times preclude entrance into different indexes but at least for the universe of publicly traded companies, it should make a big difference. Are these founders, these women founders also and why yes, exactly. A lot of them are Companies Like the real real for example. Their target demographic is women and theyve been able to capitalize on just this resurgence of women as consumers online and things like that. In 2019 seems to be kind of a unique year for them to capitalize on that. Despite the difficulties that a femaleled startup has in the venture world, seems that relative to the broader landscape of Corporate America its a way for a woman to run a company. Right . To start one right . Definitely, yes. If youre an entrepreneur better to go that route instead of working your way up the ladder in Corporate America . Is that the ultimate, despite the difficult trend in terms of the venture world still a better route right now . A good question and i think when you see women in particular and other minorities that have difficulty obtaining Venture Capital money you get startups bootstrap in nature. Which means essentially theyre able to operate more based on cash flow as opposed to the vc funding in turn could be more attractive to investors down the road if they do succeed over time without that Venture Capital funding and are able to still grow and maintain scale accordingly. Leslie, in the startups, is it across the board in terms of distribution, different types of businesses is it concentrated more in one area, more fashion, apparel, tech how broad . More fashion and apparel but were seeing it in health care as well. Seeing it in consumer with luck and coffee it is spread out ipos in general this year are much more concentrated a good question. Much more concentrated towards tech and biotech of course, we will see more of a skew towards those two sectors this year. Thank you appreciate it. Coming up, consolation brands made a 4 billion bet on cannabis growth. Details on an industry shakeup and outlook for pot stocks next, and first as we head to break check out oil prices this morning. Wti off the lows of the session but down 0. 9 . Brent up just 0. 19 . Stay tuned youre watching squawk box on cnbcen to us no. Thats motorcycle insurance. Slime everywhere . Ughhh nooo, theres no insurance for that. Do they help when i have bills Health Insurance doesnt cover . Yeah thats it aflac gross guys. Get help with expenses Health Insurance doesnt cover. Get to know us at aflac. Com welcome back to squawk box this morning cannabis growth ousting this week and called in to squawk box and had a lot more to say the board decided they wanted a different chair and a different coceo so im out effective immediately, and theres a search to replace the transitioning coceo. Bruce, to be clear, have you been terminated or did you step down on your own and i was terminated. Okay. You were fired . A lot of words for it a lot of words for it the stock dipping a bit on the news, but rallied within a few hours. Joining us now on the squawk news line is ceo and founder of Etf Managers Group and the firm has the largest Cannabis Fund on the new york stock exchange. Cannabis growth in that fund and our guests with us, ed lee and joe as well. Sam, good morning. Good morning, andrew. When you first heard of of bruce getting fired, maybe watching squawk what was your reaction well, i was watching squawk and i was shocked. Ive traveled with bruce bruce is extremely knowledgeable in the Cannabis Space. Very well received by investors and with those of interest so it was surprising to me. Didthe selloff make sense to you do you think he should have been booted what was your take typical kneejerk reaction and actually recovered and was up wednesday right. As far as whether bruce should have been let go or not, i have no insight there. I have read a lot of, the news and even listened to some analysts look, bruce is an entrepreneur, created cannabis in 2013 probably the most knollable ive traveled within the space. I dont think the industry or the company is that mature yet and i really think you need those types of innovators and pioneers but that was the boards decision. At the same time you invite a major shareholder like constellation in and so many other companies, sam, are doing this as well does it make you think in the universe of companies in your etf there could be more Management Changes ahead, if you do believe that the impetus for constellation booting bruce a basically they wanted somebody more stable with more of an execution track record than an entrepreneur like bruce linton i think its the natural progression of any new industry and new company. I think we saw a lot of that in Silicon Valley years ago with the starters and entrepreneurs replaced by more seasoned senior managers, but it doesnt speak to the space i mean, the space is still growing at a tremendous rate mj alone, which is our etf in the Cannabis Space is up almost 28 this year. Were 1. 1 billion in assets its a tremendous growth story, and the reality is bruce was a big part of it and probably will continue to be in some fashion once the noncompete ends i wanted to ask you more about your etf you started 2017 end of the year with 5. 6 million. When i first talked to you when you first started this etf, sam. You mentioned, 1. 1 billion under management when did the inflows come from curious. Mostly Retail Investors . Initially it was tremendous, or majority flow of retail we do have a lot of institutions in it now. So i think its pretty broadly held its its just been the best access for people in the u. S wanting to get rid of the stock risk but wanting access to the space. And pharma, the only and first fda approved cannabisbased pharmaceutical on the market what do you think is a key driver Going Forward for a lot of the companies in this etf in terms of growth . Is it the medical side in your view or the recreational side . I mean, the company is tilted, i should say the etf is tilted towards medical, but all advancements in the space, whether it be recreational or medical, i think will help the visibility and the interest in the space, and mj as an etf. Gw was a great story the number one treatment for childrens epileptic seizures. Fda approves them. Then look at other holdings. The almost 7. 3 of the fund. Its the kind of story people want access to they see there continues to be growing interest globally in the space, acceptance. Right. Of cannabis and its a great way to play it. Sam, are you weed only or are you are you also involved in cbd . We have cbd so in fact, there are great applications of cbd that have also helped the fund and the interest in the fund you know, were looking to gather a portfolio, currently we have 41 stocks that includes everyone that is every Company Important in the space that includes scots miracle grow visible about its investment we wanted to be a comprehensive action to the medicinal side of the Cannabis Space. Sam, appreciate you joining us this morning. Thank you. Thank you, andrew thank you for having me. Talk soon. Coming up, the big question in the m a world, will the government finally give the goahead to the sprinttmobile deal first, u. S. Equity futures slightly down ahead of the jobs report u wchg quk x yoreatinsawbo on cnbcuve dear tech, weve got some work to do. We need tech that helps people understand each other. Tech that understands my business. Tech that works at scale. That works with my existing tools. That helps us help more people. Lets see some more headlines about that. Dear tech, dear tech, dear tech, were using ibm blockchain to help make sure food stays fresh. Were using ai to help create more accessible, affordable healthcare for all. Were using iot to create new kinds of digital wallets. Were exploring quantum to develop nextgeneration energy. Quantum, quantum. Thats the smart tech i need. Lets make a difference in energy. In commerce. In peoples health. In the foods you eat. Lets make a difference in government, business, and society. Lets make a difference in peoples lives. Lets expect more from technology. Lets put smart to work. Talking about a campfire its the simple things in lif like when and where still to come on squawk box a deal called, will the tmobilesprint tieup get the goahead from the Government Plus taxes, jobs, debate the bick issues playing out in the 2020 campaign and continue the countdown to the event of the morning. Of course, the june jobs report due out at 8 30 a. M. Eastern time stay tuned youre watching squawk box on cnbc singing sweet home alabama al summer long welcome back to squawk box. A check on the futures ahead of the jobs report fairly quiet morning. Here pretty much all morning long dow looking to open down 30. S p looking to be down by 4. 5 but the jobs report will change much of this. A powerful earthquake struck yesterday damaging buildings in a desert town northeast of los angeles. Centered about 113 miles northeast of l. A. Near the city of ridgecrest. No reports of serious injuries so far the quake was largest in Southern California since the 1994 northridge earthquake centered in a heavily populated area in los angeles causing billions in damage seismologists warn more earthquakes are coming and probably one more large enough to cause some damage. A couple big media tech stories to talk about now. Sprint and tmobile could be one step closer to a deal approval after tmobile and dish network agreed to a divestiture. See who likes it joining us to talk about this and more on the media landscape exos reporter. Everybody is at the table. Start there and a couple other topics i want to touch on. You think chances are well hear about this next week i think hear about it pretty soon seems the deal has been compromised between Deutsche Telekom and other partners seems can we get the doj onboard. If not theyre going to block the deal. What if doj is onboard but everybody else isnt a complicated problem i dont think its going to stop it from going through. Seen other instances state ags are pushing for action see this in Tech Companies all the time like with facebook. What happens . Not bring our suit or the deal gets closed and agreed to and then the states bring the case anyway i think the nuance is that right now the states filed a suit based off the fcc agreement. Doesnt cut it for us. Doj has a new deal with the parties and the state ags have to look at it. If it doesnt satisfy them they might refile. Say, that doesnt work for us either but right now if the doj agreement, whatever, ends up looking like, effectively neuters the original suit from the state ags. Again, theres a lot of political will here. Right . Even if the doj thing seems to sort of handle a lot of that stuff, the states might just say, screw it. We want to go after them anyway. Asked the question already this morning i want your answer do you think that dish can actually create a viable fourth competitor effectively running wholesale over these other guys networks the deal pans out 100 access it might be possible right now with what Deutsche Telekom is advocating for only 12. 5 no way theyd be able to do it off that the other thing they need, somebody to help finance it. Again, part of the deal cnbc reports that they dont want someone to finance it more than 5 thats going to make it even more difficult. You still think its happening . I think its going to happen. Well see something go through but will they be able to build out a full network. Approve a deal at doj wants 100 . Brokers want 12. 5 thats going to be negotiated. Hoping to get somewhere in the middle. The real question, somewhere in between that capacity is that a real fourth carrier . Is that a viable option for a consumer theres a fourth from a pricing perspective, that theres real competition now time will tell. I think if they can get someone to come in and finance it they have a shot. Is it going to be as big as the other three . Absolutely not we know at t and verizon are way ahead of this combined company and anything when it comes to mobile and 5g. Well see. Do we think the investors will be a strategic investor or a private equity firm . I think somebody who wants to come in, be a Strategic Investors and play for the long game 5g is something a lot of people have business, incentive, to ride on. I think its somewhat strategic. And pivot talk about netflix do netflix. Talk about netflix, because Office Leaving Netflix 2021. Right . Right. Weve got, looking at this. Friday is that today . Today is this the 30th anniversary of seinfeld today is that the case is today the there you go. Im not sure. This friday . Not sure. In the notes. Getting sideeyed maybe im wrong. Close enough. July 5th, right . All of these things are coming off, the big streamers, going back to the warners and everybody doing a new thing. The thing i dont get about this, are people subscribing people are watching these shows on these services but are people subscribing to watch these shows on these services . Ive always thought the new shows are used effectively as a marketing device and advertisement to get people to actually subscribe to the service. Once there they watch Everything Else and all the old stuff but can they turn that model around with some of these kind of programs . Time will tell. What we do know is that most people spend six to seven minutes deciding what to watch if they cant figure out what to watch they resort to something theyve seen in the past whether seinfeld or Something Like the office. What brings them in, the new shows. Someone like netflix youre going to push to have all new shows come out and one of your competitors. Do i care about all of the huge value, though, for some of these shows, the office, seinfeld, but my question, is the value really there i think it is look at the top streamed shows on netflix, theyre all of these old shows. Reruns. But my question where im going with this, do you think thats keeping people from churning its a churn. A churn. The office, friends, seinfeld these are turn mechanism. And not coming up with any new, hot shows talking about what did you do fourth of july hot outside. Stayed indoors what did we do we watched stranger things. Binged the new season all day. Its the new people Netflix Subscriber what youve been waiting for. And millennials, not just millennials. People going on watching handmaids tale on hulu. Shutting it up a hbo, liked game of thrones, then showtime, go to this, want that im not sure theyre watching other things are helpful to keep things going kid shows are helpful if youre a parent, but im not sure i think they are. I think it ep had helps reduce. Its any direct to consumer service. Once youre somebody who uses it you dont just drop. You go from service to service if youre netflix, anything that you can do or hulu, any of the streaming services, to reduce that person from dropping your service once your hit show is over youll invest in. When they lose access to the classics what happens to their ability to keep people from churning first of all going to have to develop their own version of classics seen it now. Orange is the new black, house of cards. These are deepseeded series hundreds of episodes that will become their versions of classics and as have to shoot for bottom of the barrel were seeing this. If youre at t you have a lot of debt sell out classics to reduce the debt netflix will take advantage of that. I told my kids about different strokes. Watch differedifferent strokes thought it was on amazon prime its not the real way to get it is to get starz. Did you sign up for the free trial . No. Thats canceled i my son wanted to watch twins. Said it was one 6 his favorite movies i didnt cancel yet. Thank you for reminding me. Youre going to cancel . I dont need starz, ive got verizon. Netflix wins because theyre the first. Theyve got pricing power. Just anecdotally, the whole friends trnds thihing coming netflix. Op at t service. Talking to, her friends watch friends on netflix all the time every night cue it up. If you have cable tv, a lot of these millennials dont. What will you do now that its on netflix i dont know maybe buy it on amazon instead of buying it on a new service. Interesting. The point, werent thinking of cutting netflix. Ill buy the shows now. Who wants to start an app where i think the business is, that literally turns on and off the subscriptions . When its literally like, turn it on, turn it off. Reminder, even. On one thing. Reminder, finished watching the thing you actually cared about someones going to build that and the games over, right you just broadcast that idea, andrew its out there now. And ill take 10 heard it, heard it here first. Maybe the issue, a dead issue . Going to talk about the betsy ross nike sneakers you know talking about it nonstop. Right. Crazy now its friday and i dont know anybodys talking about it except im raising the issue but has it come and gone jthts come and gone but part of a trend we should Pay Attention to. The cool thing you have people like Colin Kaepernick, once representative of an issue not so main stream to main stream the brand wants to attach themselves to someone like a Colin Kaepernick curious in the future, will more brands adopt spokespeople like that because it helps their business s. He done with football i ask that seriously done with football or wanting to play always wanted to play closer to getting done because hes getting older apparently staying in fantastic shape in hopes of it he sent out a tweet yesterday on july fourth pap quote from Frederick Douglass did you this this . I didnt see it. And really about how Independence Day was not a day he celebrates. Then it was retweeted by it had a lot of momentum on twitter. Very, very interesting worth a look. Doesnt celebrate july fourth does not. Does not and i know that probably causing its own controversial. Anyway, great to see you thank you. Happy fourth appreciate it. Still to come the big economic debate in the early 2020 campaign. Heres a hint. Has to do with taxes and how much were all paying uncle sam. As we head to break check out the free Market Movers big s p winners at this hour stay tuned youre watching squawk box on cnbc [ dogs barking ] what about him . Lets do it. [ sniffing ] come on. This summer, add a new member to the family. Hurry into the mercedesbenz summer event today for exceptional offers. Lease the glc 300 suv for just 419 a month at the mercedesbenz summer event. Going on now. President trump is confident about the countriess Economic Confidence will consumers agree president to the American Action forum former Economic Policy director for john mccains president ial election. He was also chief economist for the council of economic advisers and director of the congressional budget office. Also with us Jared Burnstein former chief economist to Vice President joe biden at the center on budget and policy priorities and also a cnbc contributor. Gentlemen, thanks for joining us the day after july fourth. Appreciate it. Doug, start with you seems like theres a lot of time between now and the 2020 election in terms where the economy could go what is the message right now that the the president obviously says this is the strongest the country has been et cetera, et cetera but what should the message be right now . Well, i think the economys in good shape. There are reasons for concern. Theres no question it was going to slow down during 2019, and it has. The question is, to what are we going back to a trend growth rate that looks like a little under 2 or closer to 2. 5 the latter an enormous success thats the key question. This year, i think we started off kind of poorly the household sector wobbled first quarter. Surprising given low unemployment and wage growth weve seen seems to have stabilized recently 3 growth leaving it up to the Business Community as you know from watching the markets everybody day, the Business Community has a lot of concerns about the outlook, and their performance in 2019 will dictate momentum going into the election. Is the fed, doug before i get to jared, is the fed sort of a, i want to say a running partner i dont want to say that, but a major determinant whether or not the president gets reelected . He doesnt think so. Obviously he doesnt like Jerome Powell in terms of what the fed does could it be a major factor i think the fed is in a good place. I think the hype around this has been vastly overrated. Talk of a 50 basis cut makes no sense to me. Theyre going to keep an eye on the underlying core fundamentals they are in pretty good shape, not perfect. Inflation continues to run low that might give a bias towards easing i dont think he has concerns about the fed. I think its quality of the remainder of policy, and the trade policy, that balance a negative the one he controls in the near term one he should think hard about. How do democrats run against this economy and the stock market, of course, close to at record highs right now the stock markets an easy one for democrats, because theyre going to stress that the bottom half of households, where more of their base resides, holds little or no stock at all. Of course, the booming stock market is from Many Democrats perspective a symptom of inequality if you look how concentrated stock wealth is among those at the very top of the income scale, but i think that for the democrats, the issues are very much what doug teed up in terms of the economy. Its hard to imagine the Unemployment Rate wont be quite low by the time the next election rolls around, but its going to be all about the deltas, the changes in key variables. If gdp growth downshifts and doug is right in the center of the forecast, if the downshift is three or north of three, to something around 2 which is a common forecast, id actually say about the median one, probably put upward pressure on the Unemployment Rate. It will be low but could rise by end of 2020. Fortunately we have another economist here on set. Joe, where do you see the gdp number being around 2020 i a lot depends, melissa, on what happens with the fed this year. I think the fed basically is the straw that stirs the drink Central Banks dominant i hear what doug said. Economy is slowing agree with jared as well from 3something to 2 something. Maybe less historically i can say a wellknown economist attrition says the q gdp is important. Late july if the economy and any quarter, gdp could be whatever it wants the economy will be okay next year especially with fed cuts aggressively as i expect, stabilizing things for a period of time. And a trade deal, psychologically gives the market a lift and might be able to juice things a few quarters to carry us through 2020. Doug, if you had to write how this is all playing 0 ut in terms when we get the trade deal, how many times the fed cuts Interest Rates, et cetera, um to the 2020 election, whats the ideal scenario, in your view i think the thing thats not on the list that should be, get a budget deal. The real threat coming this fall is the fact that they have to raise or suspend the debt ceiling and come to agreement on how to fund the government and at what levels if they go on autopilot and fail to get a deal thats 130 billion cut in spending, big negative head wind on the fiscal policy front something that really needs to be avoided white house should be all over that i think the feds going to have one rate cut between now and the election, and honestly, i dont think theres a real trade deal to be had with china i think this strategy has always been doomed to fail but they need a facesaving deal to get them out of open warfare and i hope they get it soon. Can the president win under those circumstances . Rate cut, not a real deal, et cetera the president can if he winces, as close as last time almost nerve binevitably path to victory is always quite tight. I wanted to say spoken like a true former cbo director, doug, appropriately. Bringing in theistic iffal storstor fiscal story bringing down gdp from 3 to 2 something, were in now, largely a function of the fiscal trade tradeuncertainty in there, yes and shaving some number of basis points off the gdp growth, but the big story is the fade and deficit finance spending and tax cuts that by itself is probably shaving Something Like 75 basis points off the gdp over, say, 2019, second half through 2020 first half guys, wanted your thoughts as we talked about it earlier on the program. Do you have a view about going into 2020 sort of the uncertainty that that will create if it will create uncertainty and what do you think that will actually do in terms of real numbers . So sorry which one of us are you asking doug first. He started. Sure. So i just, going into 2020, just the election itself, producing uncertainty . Will it actually change, have an Economic Impact a number of people came on the program to say look, markets in 2020 going to actually be difficult . Look, this is a standard concern in election years but especially president ial election years. Very different views of the way to go forward on the Economic Policy household and business sector looking thinking, gee, what will happen what do they usually do . They continue doing what they are doing at the moment, and you see maybe a little bit of a slowdown going into the election and the resolution uncertainty helps in late november i guess my view would be all of that pales behind the trade disputes or trade wars if the trade situation continues to create the volatility in markets that i think is bleeding over into the real economy, i think that will, that kind of chaos will swamp the 2020 dynamics you said i think the interesting wrinkle there has to do with Federal Reserve policy the fed is already, i think, looking oesver their shoulder a the trump the pressure from trump, and so, you know, their initiative to cut, lower rates based on the economics theyre observing. Once you get into 2020 eve an fed that isnt badgered by the president doesnt like to fool around with Interest Rates too much before an election. Gentlemen, thank you. Doug and jared, leave it there thank you. Thank you. Coming up in just a moment, the main event the june jobs report is also here a little under a half hour away, or a little over a half hour away futures ahead of that number showing you whats going on. But it could change. Dow off about 28 points. Stay tuned youre watching squawk box on cnbc with a ryve big hour and an important one ahead. People know aflac. Aflac but not when to use it. Do i use aflac when the kids get slime in the plumbing . No. Thats home owners insurance. Slime in my motorcycle. No. Thats motorcycle insurance. Slime everywhere . Ughhh nooo, theres no insurance for that. Do they help when i have bills Health Insurance doesnt cover . Yeah thats it aflac gross guys. Get help with expenses Health Insurance doesnt cover. Get to know us at aflac. Com you still have service . Call the Insurance Company sfx [phone ringing] its them, calling us. Its going to be a week before they can get through on these roads shhh, sorry, i didnt catch that. I said ask how soon they can be here right now . Whats now . He says theyre surveying our property now theyre probably at the wrong house i dont see any hovering his name is hovering . Look up . By automating claims with Machine Learning and analytics, cognizant is helping Insurance Companies advance how they serve even hard to reach customers. Cool announcer the countdown is on whistle just a half hour away from the allimportant jobs number. The anticipation the data the reaction, and the analysis are all straight ahead did you see the memo about this yeah. Announcer as wall street gets set for jobs friday, right here on squawk box. Live from the most powerful city in the world, new york. This is squawk box. Get it on jungle boogie good morning welcome to squawk box right here on cnbc live at the Nasdaq Market site in times square. Andrew sorkin along with melissa and joe and becky off today. Great guests New York Times Corporate Media reporter ed lee is here. And natixis, chief economist joe here both cnbc contributors. Futures, job number coming up in a half hour or so. Almost disregard what im saying, but the dow now looks like it would open off about 33 points nasdaq off about 15 points and s p 500 looking to open off about 5 points show you treasury yields as well allimportant ten year at 1. 970. You can get a decent 30year fixed. What do you think . Mortgage . Oh, yeah nows the time to do it. Nows the tirchlts financing, all of that. Do it all here are the stories investors will talk about today. Crew members of an Iranian Oil Tanker interviewed as witnesses show it being detained a spokesman for the territory. British troops detained the ship in violation of European Union sanctionss in response iran summoned the Britain Ambassador and call the seizure of the ship illegal and unacceptable. Meantime, shares of samsung are down forecasting second operating profit fell more than 50 and the company says revenue likely fell 4 . Chip prices have fallen thanks to a supply glut and u. S. Sanctions. Samsung will report Earnings Figures laters this month. Spanish broadcaster univision reportedly exploring a sale according to the wall street journal. The move would end 12 years of private Equity Ownership the board is reviewing Strategic Options following failing ratings and british content. And due out bottom of the hour, the jobs report. Talking expectations, what the number could mean for the markets and fed this summer and scholar and director of Economic Policy studies at the American Enterprise institute is on the set with us and chief executive officer of the Management Division at wells fargo. And on the squawk newsline, one and only austan goolsbee. On the phone, go to you first. First, good morning. You can hear us . Good morning. I can hear you. Technical issues earlier with us. Yeah. Im down in the Smoky Mountains but they partied too long last night so nobody showed up. Well, were glad you could make it. Were going to save all of the real predictions in terms of numbers for just a little bit later. Just to keep everybody on the hook, but in terms of what you think the fed is looking for this morning, and what, in terms of a goldilocks scenario what does it look like for you . Well, feels to me like the fed has gotten in its head they want to be loose so the goldilocks scenario, anything thats not quite strong i think they will lodge as, yes, this fulfills our narrative. And you think but you think things are going to hell in a hand basket if i could i think its slowing. If not hell, headed to purgatory in a hand basket. Really . Yeah. Look, i just think if you look at the gdp forecast, theyre slowing. Were going along okay, but i just think we need to not be not be cocky about it. We could mess up what is now the longest expansion ever, easily so lets not do that lets hope that these job numbers dont portend the beginning of that. And also getting political. Is that whats really happening . No, i dont think hes getting political. Looking through a political prism channeling him this morning . No. I dont think so theres reasons to be concerned about slowing growth particularly in adp slowed, Manufacturing Survey slowing, concerns over earnings the trade war kearns all of those things add up, but i would remind people, if you look at initial jobless claims, still down 6,000 over the rolling fourweek time period. Ism nonmanufacturing off a twoyear high. Down earlier in the month but a twoyear high. Consumer confidence remains strong i actually think could be a stronger month for jobs this month. Michael, i assume you think things are Getting Better, not worse . I dont know things are Getting Better arguing were headed for purgatory seems a little dire to me you know, i expect that the jobs number will come in well above the rate needed to absorb new entrance into the labor market i expect that we will learn that last month the labor market soaked up additional slack, rather than created additional slack. And so, you know, are things going to slow . Sure i think its looking like were starting to decelerate, but decelerating from a pretty high base, and i think, you know, if we got a number that was, you know, 130, 140, 150, to me that still represents a good month, for the job market even though maybe not as good as weve been used to. Over that 100k number crucial. And for markets to go higher off the jobs number today, what kind of number do you want to see embedded in that question is, if weaker is that actually maybe a good thing, because it paves the way for the fed cut maybe even to 50 . I think if its weaker, materially weaker, like s sub100,000 i think equity markets become concerned about it because labor is such an important piece, again, the calculus what the recovery needs to extend. I think if you get somewhere in the 150 and north, i think equity markets look at that and say recovery chugs on. You know, remember, june is mays usually a soft month june is a good month a lot of graduates coming back into the market. Coming off of college. Historically a stronger month, and you get a lot of travel and leisure people coming in for the summer months. The june payroll number often, if you look historically is a solid, strong month and off of a weak may and revisions we need to watch closely what happens with revisions. What ash this scenario. Say the number is weak, fed moves more aggressively. Ten year note moves down to 150. Possibly the way rates are in europe. 13 trillion debt and doesnt that cushion a pullback in stocks rates moving lower . Absolutely. Scenario basically markets pricing in no recession, no trade war. Right . Lower rates with these dovish pulses coming from carney last week and the ecb lagarde a dove if she gets ahead of the ecb and the president nominating two doves that could join the federal, the Federal Reserve board. So all of those dovish impulses are shoving rates down 150, joe, might be a little low. Sure. Tough to get that. Also i might add china and japan also on the exactly right. Talking about weak jobs numbers sort of potential bad news good news thing, makes it easier for fed to find its way into this rate cut, but at what point does that number how much lower does that number have be to where its fundamentally bad . Regardless of however the fed might react . I have to give awe forecast in a few minutes, but this is a random number generator. You make a very good point about looking at claims. The other series useful, Unemployment Rate. Every postwar real session preceded at inflection points unemployment rises beforehand. Watch that i dont care much about nots the number the rate. Markets not going to care. Few years could be 25 and turn out plus 150 and vice versa. Look at the rate what i like to do austen, i want to know if youre jay powell what you want him to do . I know you think thinks are bad but not so convinced you want him to be do we need to have the most dovish policy in the world right now . Maybe not in the world, but i think that the fed needs to leaning towards dovishness well see what this number is, but if and i dont want it to be. I hope we get a strong number and i hope that gdp forecasts for q2 are better than the actual is better than what the forecasts are, but if it looks like whats happening, which is not its why i said purgatory in a hand basket not hell in a hand basket. Its not all falling apart, but there are austen, heres my thing my question. You have been saying things are going in a wrong direction for quite some time, and have critiqued the trump economy, and then at the same time you critiqued President Trump for wanting to have a dovish policy, and thats the part im trying to square these two ideas. No, i didnt. I didnt no, no i didnt i criticized him for publicly interfering and yelling at the fed. In an unprecedented way. And if you remember, when we talked about six months ago, i said and joe was making fun of me. He said sounds like you agree with trump and i kind of did. I do think that the fed, when it was arguing it was going to be able to raise rates four times in 2019. I kind of thought that was bonkers. I think they need to be oriented towards dovishness i dont think chairman powell is doing the wrong thing. I think that thats the way they should be thinking. Austen, joe, got excited there. I dont think that the president , his criticism of the fed is unprecedented in the sense that we hear lots of stories how nixon went after burns and of course Lyndon Johnson after martin, and baker putting pressure on volker just that the tools that are available now, that information gets disseminated. Also, when bernanke decided to do qe 1, 2, 3 twist do the Balance Sheet extend unconventional policy a long period of time did the fed not think there would be political backlash at some point seems to be a consistent evolution how thing wos have progressed if you told me ten years ago what was going to happen yeah, look. Thats two different issues. On the first one i dont think youre right in each of those cases where the president borders on or starts interfering with the fed, theyre not publicly going out and criticizing or attacking the fed chair. Thats the part thats really disturbing and awful in each of the cases that youre citing where its like one president one time had people behind the scenes call up the fed and try to influence a decision, we look back with gra it criticism and say, that was not appropriate and they shouldnt have done that now were in an environment where the president is literally going out on twitter and saying that he thinks the head of the fed is a loser or whatever he said and anything that undermines the feds credibility were we to get in a crisis in my view is a disaster now, on the qe, i do think its true i mean, the fed did what they did because it was a crisis. They had to know that there was going to be a lot of backlash, and you remember you remember the days when they said, you know, bernanke comes to texas were going to rough him up. There was significant backlash and i do think youre right thats probably to be expected. Okay. Austen, press pause for now bring in michael strain into the conversation in a bit. Were going to take a commercial break and come back with the jobs panel. Coming up, almost that time again. Earnings season around the corner names like pepsi reporting next week. What you need to know when the numbers roll in. Stay tuned youre watching squawk box on cnbc back on squawk box. Futures in the red across the board. Dow off 40 points nasdaq 17 points s p 500 off round up to about 6 points now as weve said all of this may very well change in about 15 minutes. Key corporate earnings on the way next week. Dominic chu joins us with a look what could expect when earnings season kicks off. Next week not the full thrust of that unofficial start of earnings season. Still, big names to keep an eye on tuesday you have pepsico look at that snack and beverage giants mix of products and how theyre growing things levi one of this years best ipos and performers. Bed bathan beyond, and next week remember, following that week we have all the big banks reporting. Citigroup and Goldman Sachs on that following monday and tuesday we have whats happening with jpmorgan and wells fargo as well as dow component johnson johnson. Things coming down expectationswise. Definitive tracks earnings estimates, we could see earnings grow by nothing. Zero percent growth earnings per share when it comes to this particular earnings season coming up in q2. Revenue side, ratcheting down. 3. 6 entering now up for Revenue Growth looking, melissa, just how much expectations are coming down, even ceos and cfos are taking down their expectations. The number of s p 500 companies, theres been about 113 of them issued guidance for earnings, 77 reduced or said they will come in below analysts forecasts. Looking to be more cautious seems everybody, melissa, on wall street is thinking a little less about this particular earnings season coming up. Back to you guys. Dom, thank you. Dominic chu at headquarters. What we can expect when earnings season kicks off, matt and our own mike, migrated down to new york stock exchange. Good to see you both matt, start with you matters, context earnings season happens, correct dom mentioned 80 of companies in s p 500 warned a lot of estimates are coming down going into earnings season and in the month of june most analysts downgraded most number of stocks in 2017. Seens people are bracingal themselves for a weak earnings season what do you expect in terms of Market Reaction to earnings . Interesting, because nobodys focused on earnings recently because of the, of course, what its been going on with the trade deal and with what the fed may or may not do. The one thing is that they always seem to lower earnings estimates enough just to be beaten so that looking for slightly lower earnings for the quarter, slightly down earnings. Probably get beaten. They beat them every quarter the key is going to be the guidance the guidance is always important but even more so this time around because right now con earnings estimate full year 2. 7 much reliant on a strong Fourth Quarter. People looking for almost 7 growth there if we suddenly get guidance for the third and Fourth Quarter that are much lower, thats going to be a very poultry, for the full year. Down to the low single digits, down towards zero even, which is not good relying a lot on multiple expansion with the fed with lower Interest Rates if the earnings arent good, its going to be a problem. Yeah. The Conference Calls, mike, key. When a company can take a free pass, right . Cite china trade war why wouldnt you do that yeah. I do expect it to be noisy and sloppy for that reason, melissa. The idea that, well, the stock markets at a record high as we head into whats likely going to be a pretty, not so great earnings season. I think kind of conceals one aspect of it, which is more than a quarter of the s p 500 companies are down more than 20 from highs if you look at those stocks that are well off their highs its retail, energy, transportation, lots of industrials. The places that are vulnerable to earnings erosion have already been disunt coulded to some degree markets held up by the fact that bond yields corporate and treasury are very low and kind of stocks without variation in earnings power doing well. To me thats going to be the question do we get a little bit of confirmation the second half of the year can hold up okay . That means this is just a plateau in Earnings Growth and not a cliff . Thats going to be, i think, the key. What always happens in earnings season is a lot of offsetting occurs, some stocks up, some down Index Volatility smothered at times but a ton of action under the surface. The big question is, do the cyclicaler yas discounted already by the market get relief at all in the numbers . Smaller impact on the overall markets percentagewise, matt make as great point. If tech comes in great, financials are all right, you know can the markets continue higher . Yeah. I think its going to be obviously technologys very, very important estimates are down, looking for a decline of 11 thats very low and hopefully can beat that. One thing of course you worry about is this whole thing with huawei uncertainty about trade. Looks like a long time before it settles. Even the huawei situation. Nobody knows how many restrictions are lifted, how many are not going to be hard for them to be able to come out with that with a strong comments on those situations thats going to be something to keep an eye on if they can give uncertainty, a problem, give something thats better than the lowered expectations certainly will be helpful. I mention what mike talked about. Transportation stocks. A Group Earnings looked okay not great. Actually a little better than the group acted. If they can come in better than expected, a lagging group takes off, have positive for the market. Leave it there. Thank you both coming up, the governments allimportant jobs number for the month of june. Its been building up to this. Economists expecting 165,000 positions added to nonfarm payal ros last month the number to beat up from just 75,000 in may. We will see if data show as rebound or a down trend going. Plus, plenty of analysis with our jobs panel. Japoll wy weill be watching. Squawk returns in just a momentare you 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. Welcome back jobs predictions coming up ayitusetnsx rur st wh my ideal cloud . It has to work like air traffic control. Its gotta let new data integrate with data from our existing systems. Be able to pull from reservation platforms built 20 years ago. And also be able to use apps to book superpersonalized trips on shiny new phones from the future. Plus, i need freedom to move my workloads wherever, whenever but manage it all from right here. And thats the cloud i want. Simple, right . Expect more from your cloud. Ibm cloud. Announcer coverage of the jobs report is sponsored by Career Builder work and work. Welcome back to squawk box on cnbc. Live at the Nasdaq Market site at times square. Minutes away from the governments june job reports. Predictions from our jobs panel. Michael strain kick it off with you. What do you expect give us the headline number and other numbers youre looking for. Expecting headline number 150, which is right about the threemonth average that clocked in, in may i see some arguments soar softening. I think the economy according to q2 forecasts is growing below potential. Labor supply constraints start binding. Same time i dont think we are anywhere near the point where were going to be adding fewer jobs than are needed to absorb new entrance into the labor marketed i dont think were at that stage in the cycle yet deceleration but a solid month. Austen what do you say . Ill say 119 and unemployment goes up 0. 1. Unemployment slowing and seeing that this morning . 175 with a risk the print is over 200 more so than under 100. Take the tails greater upside stronger june month. Okay. I may have to change them in austens purgatory im 130. 130 okay. Lowest of the bunch. I mean, bodes well for price is right rules. Revisions key yes printed 75,000 jobs in may revised down 75,000. Basically net zero jobs month of may. Get paid back in june. Santelli . 212,000 i think were going to boil on this one. Amazing. Hard on the price is right rules. Right now in washington with the number 224,000 nonfarm payrolls rose by 224,000 jobs in june beating expectations Unemployment Rate did go up just a tad. Its 3. 7 in june versus 3. 6 during the previous month. Now, average Hourly Earnings also rose. 6 cents in june to 27. 90. Thats a slightly smaller gain from the previous month, 8. 2 increase month over month after the past year wages are up 3. 1 . Now, almost every sector of the economy did add jobs in june mays job number was 51,000 for professional and Business Services in june health care added 35,000 jobs. Manufacturing added 17,000 jobs. The Retail Sector lost jobs for the fifth consecutive month. Almost 6,000 jobs were lost in the month of june. Now, previous months jobs numbers were revised downward. The may number revised down from 75,000 to 72,000 jobs created. Aprils number was revised downward as well from 224,000 to 216,000. Together thats 11,000 fewer jobs than previously reported. The threemonth moving average is now 171,000 jobs. Now, labor force participation, that edged up in the month of june from 62. 8 to 62. 9 that added to the labor, and reasons increase in Unemployment Rate the rate for asians, though, at a record low in june of 2. 1 veterans Unemployment Rate also went down from 3. 3 a year ago to 3. 2 in june, and broadest measure of unemployment ticked up from 7. 1 to 7. 2 back to you. Wow a lot to chew on thank you. Thank you for those numbers. Keeps a straight face when she does that. Doesnt react one way or the other but a lot of people reacting over here mike the strain first. Michael, what do you make of this rnltsz i think wh. I think were seeing wage growth accelerated over the last few years, still at a point pulling people in to the labor market so you saw an uptick in participation. There is slack left. That slack is being absorbed and the economys adding jobs at a pace of around 170,000 if you look over the last three months ignore last months noise. Ignore this months noise. Average to about 170 or thereabouts. That represents deceleration from where we were over the last several years but still solid. Still in good shape. And should say Rick Santelli the winner got the number you want. I dont know if its a number investors want given what the fed may think of that. Who cares seriously. If our central bank you know, austen talked about purgatory. I remember reading dantes inferno. The big ert contributor into that level of purgatory was pride. Inordinate amount of selfesteem. That is what central bankers have if they think theyre a transformers that can turn economic straw into gold, that ends up in rising equity cycle without the underpinnings of fundamentals, that really is purgatory. I think that 62. 9 really gives me optimism on bringing people back into the labor force. Wages at 3. 1 stiff hovering at lowest level in recent cycles especially this year but cities holding a free handle. Listen, i think jobs slowing but nearly at the pace many believe and i think there are many uncertainties that will contribute to potentially giving us a tailwind on the jobs scene and i still debate late cycle because i think it was four years including in this tenyear cycle that just dont count. The question how the markets react seeing futures now a slight move to the down side and i do say slight. S p 5 00 lost about 4 on futures and dow down about 54. What do you make of numbers so far . So lighter on wages doesnt surprise me on the headline as ive talked about. I thought the headline could be a 200plus print strong month falling Interest Rates have put a tailwind in home builders. And better manufacturing data than we thought. Surprised on revisions thought wheat get positive lost 11,000 in revisions unemployment ticking up doesnt surprise me. Rounding issue 3. 6, 3. 7 along with Labor Participation rate i dont think it changes the path of the fed, quiets frankte hold on talk to mr. Purgatory himself. You might be in purgatory this morning with your number yeah. Look, rick with the 200 iq point play not only getting the number right and with the revisions if you add those revisions, rick might have been exactly on the number, and then quoting dante knows purgatory, knows what caused purgatory i dont even know what to think. Look, this is a very solid number and im happy to see that i hope this san indicator that maybe the growth projections arent going to be as slowed as what people are saying i think that this is a pretty strong number. I think if the market reacts in a negative way, it says, oh, thats so strong that the fed will change its behavior that would be sad. I dont think it will change what the fed does. I agree with what everybody else said. What the fed will do, cut 25 basis points this month. Theyre cutting. And, rick what did you just say . No rate cut in july is my prediction. No rate cut in july wow. Because the number is so much higher or no. I dont think were that close to begin with, quite honestly. Markets completely offsides on that, then . At some point the markets will have to go to adolescence and grow up. These are not the old days the markets used to be more correct, because i think that our central bank had a better way to leverage its policy into our own economy. Lowering rates here isnt going to cure the ills of what other Central Bank Policies are doing to our economy pull deals minus 100 no amount of fed poems will keep our rates from going down. End of story. If the fed doesnt move on rates, bringing back to early fall of last year. The markets seeing record highs the fed direction in the markets were in option direction, and seeing signs of weakening. That would scare me, because we know what happened then. We know what happened. Eases and both are wrong. I agree i think with rick, it does if theres a risk it puts on the table there isnt a july cut and markets are incorrect here, there may be a cut in the second half of the year depending what happens with growth and gdp growth we have to remember jobs have slowed right . The average job gain in all calendar year 2018 was 223,000 a month. Add 160,000, 170,000 jobs is still a slowing . Right . Its where we should are this point of the cycle. Approaching 2 . The yield. 1. 99 and seeing strong reaction in price of gold down by more than a percent. And the dollar. And the dollar. Thank you. Equity futuring look stable back of the jobs report gold down 1. 6 it has been going into the longest stretch weekly gain since 2011 i believe still hold that brut were s but we are seeing a pullback in gold. I hear what rick is saying. The fed hasnt done anything to convince investors theyll change their behavior. They created this monster and shouldnt have, and all of a sudden come out and not move for them not to move in july, unprecedented. Literally can be proven. Never not moved when the markets you think they should they should a lot of reasons to cut debate about the economy theyve undershot inflation target over this cycle worried about the lag effects from whats happening with trade, and, look, a crazy policy of qe working. The prices are high because of the fed. Also rates arent staying down if the fed doesnt cut mortgage rebuy activity and housing because rates rallied. If the fed wants to keep those rates low they have to validate to some extent market expectations. Joe, is the question here a lot of the should they move or will they move two different things. Sure. I would argue they should have done a lot of what they did. But will they move yes. Thats what matters. What will they do. Talked earlier about the Unemployment Rate, the change, seeing it go up. That signals you got to wait a few more months its creeping up mi michael, a lot of earnings to go before the fed meets. Will that be a determining factor or in the book . The cuts i think it will certainly be a factor look, this reduces the probability of a july cut. I think pretty significantly a lot of the argument for a july cut was based on that 75,000 number that we saw based on the forecasts for q2 or the now casts at that time this is going to increase the forecast ofq forecastq 2, labor market slowing and taking pressure off the fed because the whole goal get that rate a little higher without causing a recession. I think 2019s going to see easing still the question of what they do in july i think is now a much more open question. Okay. All right well leave it there for now. But got a lot more to come thank you to or jobs panel thank you austen for calling in from the smokies yep great to see you. Appreciate it. Coming up, it might not feel like a friday since the markets closed yesterday but it is and the dow setting a new record high in the last session whats in store for stocks from the opening bell rings how will they digest the jobs reported get you ready for the day ahead. Stay tuned youre watching squawk box on cnbc 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. People know aflac. Aflac but not when to use it. Do i use aflac when the kids get slime in the plumbing . No. Thats home owners insurance. Slime in my motorcycle. No. Thats motorcycle insurance. Slime everywhere . Ughhh nooo, theres no insurance for that. Do they help when i have bills Health Insurance doesnt cover . Yeah thats it aflac gross guys. Get help with expenses Health Insurance doesnt cover. Get to know us at aflac. Com you should be mad they gave this guy a promotion. You should be mad at forced camaraderie. And you should be mad at tech that makes things worse. But youre not mad, because you have e trade, whos tech makes life easier by automatically adding technical patterns on charts and helping you understand what they mean. Dont get mad. Get e trades simplified technical analysis. Welcome back to squawk box on this friday pap gain of 224,000 positions added to nonfarm payrolls. Unemployment rate 3. 7 better than anticipated. Look where the markets are now in this perverse the worlds upsidedown situation, good news is bad news what does the fed do about all of this . Concerns now maybe the fed wont move as fast as it had been expected dow off about 100 points nasdaq off about 49 points s p off close to 14 points a quick look at the dollar and ten year as well flip the board around for you to see whats going on there. The dow at 97 well 9721 show the ten year. What most people will be focused on probably so gold, yeah. Exactly. Over 2 now. Insights what the numbers mean for the fed later in the month, bring in a representative from employment management good to have you with us. Thank you, has your view changed with release of these numbers . My view not getting 50 basis points the market was well ahead of itself the july cut i think can be justified on inflation grounds you know, they want to hit their target or go above it, even as someone on the panel early early mentioned hard to disappointment the market after all of this leadin. I do think the feds communication may have added uncertainty, taking out patience and trying to figure out what theyre up to. I expect they will cut, unless you get a big inflation print. As they said, lets not overanalyze any one given number. Do you think this number, this june jobs number, reduces the chance, even, that the fed cuts by 25 i ask you that as we watch futures weaken after this report you have to think so. The number was pretty good 174,000 on a threemonth average is below the 12 month but better than last month. A little bit of bean counting, im afraid as opposed to good solid Monetary Policy. And if you knew the fed would cut rates . Anticipating over the course of the next 12 months rate cuts. I dont think we would. Overanticipating . Too many rate cuts. Yes, too many. Fed funds futures contract. Lowered probability but only 50. Basically taken 50 out, but 25 is still basically 100 priced. Right. Right. Going to take a lot for them not to move at this point. Maybe just give you 25 and the statement says, look, were going to be cautious but if thats all they move the markets going to back off. The problem you have, talking about the yield curve in the u. S. Its basically totally inverted and markets tend to sniff things out before economists are doing. I dont want to fall back on the notion employment is lagging but essentially it is. A good point about inflation under shot reasons to to ease and by the way, your 72, two months ago, 224 this morning next month back at 80 or 90, fighting again in september. 25 is happening. 25 is happening. Markets are pricing in higher. Pricing in over the next year thats correct. Yeah. In termss earnings season, what do you expect out of earnings season . The areas that could, i dont want to say overshoot but could beat expectations . Generally speaking i think the Manufacturing Sector has been hit so much that maybe theres a little upside to that. Yeah. How about Technology Since its so important to the markets overall as a percentage . Youd like to see technology always do well i dont have an expectation on earnings season, though. Not looking for it . You dont have a specific forecast or youre not expecting in the midst of kind of digging that all out okay. Joe, do you think that earnings season will play a role . Earnings season no. No . What happened in september and october, earnings season played a correct role, right . With the fed sounds like us being hyperbolic guidance matters more. Why i like when you look at dukes a great survey, cfos. What theyre planning, expectations, guidance is important. Not earnings for the reasons we talked about, lack of a better Term Companies can massage the estimates. Where e wr goiare we going decelerating inflation consistently undershot its target and Central Banks relied unfortunately propping up asset prices to bring about growth the problem is every time the market corrects the feds in an uncomfort spot feeling it has to do more to try to keep the assets ale vated earnings matter as much as what companies say. What i mean during earnings, Conference Calls get the outlooks this will mostly happen, a big percent of the s p 500 will do that before the next meeting. I like your point Companies Use trade as an excuse for everything china slowing the last couple of years. Trying to offset that. Growth is weak not just a trade story the Global Economy has been soft companies are taking advantage of using trade i think as an excuse a free option. Take it. Why not how could you not . Do you expect a lot of excusemaking during this earnings season in Conference Calls . I tend to agree with what joe said trade is top of mind, driving the manufacturing globally lower, and will take a little bit to figure out the ultimate impact on trade, i will say companies and the economy are going to still be worried trade is still out there and the u. S. Can almost ramp it back up. What happened recently is positive, but this is a little bit of an issue still out there. Because you think were taking a breather then its going to get bad again no, no. If talks dont go well. What im wondering. Wondering whether i agree in one respect, which is that we could be in this sort of low a low meaning, in terms of whats happening we all think a trade deal will be done and then get hard again market sells off thinking shoul concerned and until things are really resolved. The president has been an advocate for a long time for trade restrictions, at least getting his way on it. In terms of manufacturing, being beaten down more than they deserve, are there specific areas of manufacturing or types of manufacturers, multinationals you think are worth looking at right now . I think the you now, the multinationals as i said earlier, everyone has been beaten down. Probably some upside because, you know, we probably overshoot the downside and that gives us upside. I dont do a deal until the fed cuts a few times why do a deal before the fed cuts thats true now manipulate the fed . They put themselves in this spot try to keep housing and then get a trade deal why did a fed deal before you think the fed is supposed to be reacting to the trade deal they told us. Believe it or not, powell told us that last month, yes. Isnt that terrible it is what it is. I dont want to judge whether it is good or bad. The fed is supposed to wait for the trade deal, the trade deal is waiting for the fed to move. There is other reasons to cut. Inflation has been undershooting. A variety of reasons why you could cut. Not just one factor. Because of the productivity mystery that still no one has solved, right . The Global Growth is slowing altogether why . Trade. Trade. It is undercutting that on top of everything. Inflation is undershot for 20 years. Basically. The average is below 2 over 20 years. Thats kind of been the long run. I will say on the fed, i dont really like the idea of the fed validating what i would view as a questionable policy, which is the tariff situation they should have their eyes on Monetary Policy and just dealing with that. Okay. Thank you, tim, appreciate it. Okay. Coming up on squawk box, what to watch in the markets as opening bell approaches. Were going to tell you whats going on in a moment dont miss it, this morning an interview with one of President Trumps new perspective nominees, judy shelton, thats at 11 40 eastern time this sting. Ay tuned youre watching squawk box on cnbc tell him were flexible. Dont worry. My dutch is ok. Just ok . in dutch tell him we need this merger. in dutch its happening. just ok is not ok. Especially when it comes to your network. At t is americas best Wireless Network according to americas biggest test. Now with 5g evolution. The first step to 5g. More for your thing. Thats our thing. Welcome back to squawk box. A look at some of the Market Movers, post the jobs report dom chu joins us again. On the macro side of things, we saw a bit of a move, exacerbated just like the last 10 or 15 minutes or so the s p 500, no doubt where that jobs report number came. You see that sharp move lower in s p 500 futures, down by 9 points given that move in jobs and that particular move in futures. So thats something to watch there. Were also going to watch whats happening with gold prices which have sunk now towards their session lows we did drop by around just 19 per ounce in gold futures in response as Interest Rates tick higher, less likelihood of a possible Interest Rate cut, so were watching gold prices there, currently 14. 50 one other place to watch, across the Interest Rate complex, yields rise. For the two year note yield, above the 2 mark. There a couple of days ago, still, though, that move higher is about four basis points overall yield. So as we watch all these play out, the other place i would watch, andrew, any reaction as regular trading gets going in bank stocks, especially with the Interest Rate higher and earnings coming up in two weeks from now back to you. Dom, thank you for that happy fourth, hope you had a great day yesterday. Back to our guest host, ed lee is here, Corporate Media reporter at the New York Times, chief economist joe larornier. How do you deal with bank stocks now . A yield curve you got regulation, a fed that suppressed volatility and averted yield curve. If you think the economy is weakening and were going back to zero bound on rates and if it is just a few cuts, which is what i believe it will be trickier probably want to be in other area areas. I have a political question oh, my god. Just because im sitting at joes chair . I was avoiding i know joe is watching because im sitting in his chair. No, hes not. The political question is if the fed doesnt move, then does the president get involved, are you going to get into a whole twitter demote get back to your media tech life because you can tell me what jack dorsey should do about the twitter business. Isnt he blanking out can you imagine if twitter started blanking out some of trumps tweets just because it violated their new policies around Political Action on your twitter . That would send the markets crazy, for sure. I think overall given everything with just the trade war, like, tech is driving so much of the s p 500 these days, i think what people fail to realize, not just the hardware stuff, but facebook or twitter or google, a lot of these companies are international companies. Theyre getting their money from overseas so as that starts to sort of seize up, there is less advertising, less money going that way, it becomes a bigger issue. For technology specifically what is interesting is a lot of these components of the tech sector and Communication Services sector, theyre caught up in political wins whether you want to discuss politics, these are all here is the thing, melissa. You look at the Global Economy, the point i made before, growth was slowing before the president made the tariff comments back in march of 18 were conflating what is happening with trade and the fact that the Global Economy has been weakening, which is why europe hasnt been able to take rates from negative to close to zero i dont think as much as people think, i cant prove it, at least in the u. S. , the u. S. Very resilient. The weakest sector is housing. Housing has been the weakest sector in the economy from a gdp perspective. Thats a rate story. Why . Mortgage rates last year got to a near eight year high that gets lost in my opinion in this whole trade discussion, which i still think is ev overhyped. In the end, you think jay powell moves, does a little tip the waiter. 75 basis points, trade deal early next year and the economy will get a lift right around the timing of that trade deal could be key, though, for 2020. Of course i would be advising the president to wait until you mentioned q2 as the most important quarter. Thats when people they may not tell the pollsters what they think but they pretty much made up their minds. Joe, a little scheming there. A little schemy. Steamy or ed, thank you for coming in melissa, thanks for hanging out. Join us next week. Squawk on the street begins right now. Good morning, very warm welcome to squawk on the street. Im wilfred frost with Morgan Brennan and mike santoli at the new york stock exchange. Jim, carl and david have the day off. Futures took a little bit of a dive after we got that nonfarm payrolls number, which was much stronger than expected to the tune of 224,000 jobs added, well above the 165,000 forecast Dow Jones Futures down 100 points nasdaq down 46 were higher by 1. 5 to
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