Minute look at quick u. S. Equity futures at this hour show you how things look to be opening up in about 3 1 2 hours from now dow would be off about 20 points nasdaq looking to open up 15 points s p 500 looking to open off a little off well call it 3 1 2 points right now and also show you whats happening overnight in asia right now as we speak. Youre looking at red arrows across the board but well call it marginal except for the hang sang take a quick look at european equities as well as we flip that board around youre looking at mostly red picture, except the ftse 100 looking up 1 right now and finally treasury yields, tenyear notes unless youre looking for a 30year fixed right now the tenyear note is at 2. 060 joe . Big deal of the morning. Big. Big. Mylan, potential pharma deal to tell you about. Unit of pfizer with mylan. Thats right. Were expecting this news to be announced sometime this morning. What were hearing is that pfizer plans to spin off a unit called up john, off patent br d branded drugs to combine with mylan. This will be a combined company, new company that could have more than 20 billion in annual sales. It will be majority owned by pfizer 60 and about 40 from mylan shareholders its a unit that pfizer calls up john brought in about 3 billion in First Quarter sales its 20 brand that you know well, viagra, lipitor. With mylans epipen. In terms of management, mylan chairman Robert Courey will be the chairman of the new company, Heather Bresch is going to depart and pfizer executive who currently leads up john will be the ceo of the new company it will be domiciled in the u. S. And will get a new name which we dont know yet and mylan shares are up quite a bit this morning. If you look at whats happened to that stock over the last few years, quite a demise. Im excited that its going to be based in the United States because this was one of the great tax dodgers in the world right . They moved they were one of the great mylan is domiciled in if you think about why is this happening, the tax policy is working on the corporate side i told you i would surprise you this morning, thats what im excited about. Thats something we have heard from a lot of pharmaceutical executives. Allergen is overseas and inverted theyre coming back to america, people. They are. See, joe. You should be excited. I am. I can say a lot of nasty things on certain days, this i can Say Something nice about. You know Heather Breschs father, too. I do. Which is bizarre the whole epipen joe mansion, the democrat deno he is. No, he is. Here i am throwing you a bone im throwing you a bone deno or die know im throwing you a bone. Im just saying tax policy. Companies are coming back. Its weird that shes joe manchins daughter right but up john at one point was i think so way back yeah so pharmacia bought it. Pfizer bought that company. But really pfizer only started breaking out this unit earlier this year and calling it up john. Its kind of a whos who of drugs that were huge before they went off patent. Its kind of depressing. Huge. These are some of the biggest names, yeah. The biggest drugs in the world lipitor at bun point was the biggest drug in the world. You can see from pfizers perspective, a lot of very Large Companies that have an older slow growth division, they want to clean up their story and hive it off spinoffs make sense in this context, i guess now you get do it in a way that has scale with mylan, i suppose. Whats going to be the story with what remains of pfizer . What will be the things that drive that company thats a great question theres a new ceo who has been pushing to move the company to sort of streamline into a more traditional bio pharma driven company. They bought a cancer drug company array earlier this year. So really trying to focus in on those highly inknow vainovativiy priced vaccines. You remember the epipen controversy. I do. Heather bresch got hammered and her father is on the other side of the aisle trying to get drug pricing under control and shes you know, thats whats interesting about this those are the dynamics that you dont want to talk about. Whats going to be the legacy of Heather Bresch . Thats a really good question i mean, most of the public probably associates Heather Bresch with the epipen pricing. 60 minutes story and all the things. Yeah. Of course mylan is its most visible product but the Company Sells a lot of generic drugs part of the reason the stock has been doing so poorly in addition to other issues is that generic drug prices in the United States has been going down quite a lot. So the company does sell a lot of very cheap medicines in addition to the epipen it got dinged ding is a light term. More and more women coming into the s p 500 Running Companies. Vertex. But this will take one off the list. Its unfortunate. There are very few women. Every time i write these articles about women Running Companies and you sort of keeping a tally because sadly the tally is so small. So any time one comes off even though a number have come on in the past year. Yeah. We just got a new ceo announced for Vertex Pharmaceuticals is a woman and thats exciting. Automation. Auto nation and the defense industry. Autonation a s p 500 company . No, its not. Remember the day we had them on. It was in 2003 right. It became an s p 500. No. I just looked it up that day because i was going to say for you, since youre always talking about it, i was going to say the ceo of fortune 500 i was going to say it to make sure i didnt say it in error. I looked it up and it exited the s p in 2017 and became a mid cap, what is it, 400 and bright side financial replaced auto nation theres all the do you remember mylan and king i do mylan and king. Carl icahn. Carl was watching this show shaving, watching this show, shaving and he heard that. What is this thats ridiculous. He made his mind up that quickly. And actually thwarted the okay. We have another deal to talk about this morning yes, this is very interesting and deals with a competitor of ours, joe. The London Stock Exchange says its now in talks to buy Financial Data firm refinitiv. The old thompson roitders would include debt blackstone bought a majority stake in refinitiv less than a year ago which valued the firm back then at 20 billion when i say it has to do with a competitor of ours it would put the London Stock Exchange directly into the line of sight with bloomberg. How much debt are we talking about . A lot. So its not really worth that much were hyping were not hyping. You dont use transaction value. Yeah, you are what is the debt actually in this we actual factor out the debt. Enterprise value of the company includes the debt. We never use enterprise value when we talk about mergers. The total price which we can do, hopefully the folks who are doing the deal know the price, the larger issue is, a, is it worth this b, having a Stock Exchange effectively in the business of bloomberg, does it force bloomberg to actually do something . Thats sort of the larger piece of this. You remember the news operation of refinitiv has now been spun off as a separate piece. I cant really say were in fullon competition with them, but given that the terminalings are a big deal also, joe, you happen to use this service i thought you would care. Tell me, when. Thompson. Thompson. You use ichan in there on your system . Its not called that. You mean the where we have the scripts, the rundown and everything no, no, no, no, no. You always look at the wires, right . I have all news is what i look at. When theres earnings reports on the computer. Usually i have them memorized. First of all, fascinating that it would be such a quick flip from blackstone, right, that this was a deal thats not that old but also underscores that exchanges are just data platforms and information being exchain exchanged. Youre right, in terms of distribution of it, Stock Exchange and member firms. Find out how much debt i will find out during the commercial break maybe well get see whether this is she can talk to us about exchanges to see whether this is its data. Nasdaq is actually data we look here and you think about ipos but thats not business. It is. Its part of the business. Coming up, buckle up for a busy week from a bierage of earnings how long do we go back me and you, 25 years yeah. I thought we were talking these kind of numbers. No, were not i said your old name its michelle girard, but im entitled to mess that up. We go long ago you get grandfathered in. Well get you ready for it all right after the break. Right now here is a look at the biggest premarket winners and losers dear tech, lets talk. We have a pretty good relationship. Youve done a lot of good for the world. But i feel like you have the potential to do so much more. Can we build ai without bias . How do we bake security into everything we do . We need tech that helps people understand each other. That understands my business. Weve got some work to do. And we need your help. We need your support. Lets expect more from technology. Lets put smart to work. It will be the biggest week in the summer for the markets on the earnings front well hear from nearly anird of the s p 500 companies, including apple, exxon, chevron, merk, pfizer and gamble, verizon. Trade talks are resuming between the u. S. And china Robert Lighthizer and Steven Mnuchin are set to arrive in shanghai tomorrow to meet with chinas top negotiator the Federal Reserve kicks off a twoday policy meeting tomorrow. Its expected to cut Interest Rates for the First Time Since the financial crisis and its also jobs week. Polled forecasters expect an increase of 166,000 nonpharm jobs in july and decrease in the unplace of employment rate at 3. 6 bad jobs number and most recent one which seems like its just like couple days ago but it wasnt apparently. Any way, joining us now, a fed rated investors and our guest host, michelle girard. All this is happening in the backdrop of the summer, rj when i read its going to be a big week, it is. But im not sure its going to feel like that because you just cant, you know, late july, early august you just everybody is just kind of ah, sleepy but, pick the biggest data point, pick the development this week that the markets could key off of, r. J. Well, interestingly enough were heading into a Federal Reserve meeting week and it feels like the conclusion is baked in usually fed meetings are in a pretty high profile. This certainly is, but the spotlight on the fed now is whether or not theyll deliver and meet the markets expectations, not whether theyll ease or not. I think everybody expects that theres still some question of 25 versus 50 basis cut in terms of size of the cut maybe more important is what do they say our view here is we think theyll cut 25 and insurance ease, calibration of Monetary Policy given they probably tightened a little too much at the end of last year what do they say clearly the main focus is beyond our shores the u. S. Economy is in pretty good shape people wouldnt complain about inflation below 2 its just not that bad we have brexit to a clear global deceleration and Global Growth the fed is huge. I think the jobs data would be the second thing i would focus on jobs have been a bit saw tooth of late. They have been strong but up strong one month and a little softer the next. I dont think any one jobs numbers is going to change the feds mind however Economic Movement in the u. S. Is good the focus is abroad. So the whole reason for the new transparent shed is so were not never surprised. Theyre telling us 25. Its not going to be 15 or 0, right . I still talk to a lot of people and you still have people betting on 50 in the market. That surprises me because i feel like the fed has been clear in sort of telegraphing why 25 makes sense, but yet you still see the markets betting on 50. A lot of people looking at some of the signals that the fed has sent and suggesting that maybe they back the market off to expect 25 so they can deliver 50 so there is speculation about a larger number. The thing that is interesting and r. J. , i would be curious to get exactly what youre talking about. The other question is what do they say and will they be able to outdove the markets as they have done in previous meetings thats really the question can they do enough given what the market is expecting to actually meet or exceed expectations i think they can. When you look at the Federal Reserve under powell, they havent been wed to their position, to put it lightly. It wasnt that long ago that i was on this show talking about fed tightening its been a complete 180 chairman powell has been clear walking in a darkroom with respect to the fomc use of Interest Rates to try to find our star, te quill librium Interest Rate. He doesnt know where the chair is in that darkroom, hes pretty modest in terms of his profile and how confident they are about where theyre going next right now inflation is 1 5, 1 6. The target is two. They cant hit it with any sustained. They can be asymmetrically progrowth and asymmetrically focussed growth even though the u. S. Economy is right. What he says up at the press conference, his terminology, can say, look, were going to react. Were focussing on what the Global Economy is doing and not just the u. S they can be dovish enough even if they just do 25 they never do just one. Its always a series of rates. Its like if you got an infection and give you a half dose of penicillin maybe it will work if not, well give you the other one. Just knock it out. The new york fed president had stated which got the markets excited for 50 when you see the lower bound in view, you want to act more aggressively exactly. People would say, oh my god the world is ending. I think were beyond that time when people actually say, oh the fed must know something we know they know nothing. This is not a bigger sign leaning toward 50 could just be if this is a technical adjustment to get the short end yields down to where it makes sense relative to the rest of the world, thats why 50 and say now were patient, now were on hold. Does the market like 50 and a signal that thats it . Or do they want 25 with expectations and signals theyre going to do more r. J. , thank you michelle will be here. You know nothing, jay powell. Ill be watching all that. Im getting close, sorkin. Season 5 episode number 6, i think. When we return, were going to talk about the impacts impact of the grounded boeing 737 max on airline earnings. Phil lebeau is digging through the Quarterly Results for a look at what it will mean for airlines back in a moment were changing whats possible every single day. , and if you run a business, that means a lot. We create Financing Options for your customers. To help them get the things they love instantly. Our data provides insights into what your shoppers have already bought. So you can offer them what they might consider buying next. Our financial and Tech Solutions are changing whats possible in all sorts of ways. So, how can we change whats possible for you . Can the past help you write the future . Can you feel calm in the eye of a storm . Can you do more with less . Can you raise the bar while reducing your footprint . For our 100 years weve been answering the questions of today to meet the energy needs of tomorrow. Southern Company Ryanair out with Quarterly Results this morning phil lebeau joins with us a look at the impact of the grounding 737 max. Good morning, phil good morning, mike. And remember ryanair like southwest flies a 737 lineup so the impact of the max at it is supposed to filter in those planes thats going to be felt and they noticed it in Quarterly Results in the most recent quarter. Overall profits down 21 revenue per passenger simply because their Load Capacity is close to 97 it was up 11 . But with regard to the max, the ceo of ryanair never wanted to pull punches basically saying, look, its january at the earliest that we get the first of our 737 maxes and even then he has said in recent interviews its questionable whether or not thats going to be delivered at that time. They have about 30 maxes due to filter in to the fleet next year theyre saying, look, were only expecting to get maybe, maybe half of those in 2020 and then in terms of savings from those 737 maxes because theyre much more fuel efficient, they do not expect those savings to filter into the bottom line until 2021. So as you take a look at shares of ryanair and the Conference Call is going on right now, guys not surprising to see this kind of a chart remember, theres so much capacity in europe as well right now. Thats the other issue thats weighing on shares of ryanair given whats going on in germany. Thats their second largest market and theres just its a capacity war and theyre just flooding the market with seats the whole industry is right now in germany thats partially weighing on the results as well. Okay. Hey, phil, stick with us because we have another big story on your beat thats breaking right now. Clear has a new stake holder united following deltas lead bringing clear kiosks to all of its hubs including right here at new york liberty this will help joe kernen only likes to go to teterboro you are a clear member. A big fan big fan. Early adopter. Im an envious nonmember who wants to be a member i was sitting in a line at atlanta and was watching all those people go through clear and i was sitting there even in the tsa line dying effectively. Because the tsa lines are getting long clear to be able to go in, not pull out your drivers license, fullabling around, its fantastic. We have a good ad right here. United is getting around delta was the first to do it i thought maybe there was an exclusive arrangement here not so much . So we signed exclusive with delta for the first three years and now United Airlines has joined the party focussed on bringing innovation to transform the travel experience. Room for everybody. Room for everybody. And can other airlines now jump in are we going to be seeing a handful of these deals we hope that all Airlines Want to bring this to their customers to drive a predictable, consistent experience. During the commercial break i said the deal for delta if you were a late comer like myself, you can get a discount im also a united guy as well. Yes is there a discount coming for me there is a discount for united members on parody with delta. Its a substantial discount. Its less than 10 a month and you can use it in more and more places. Here is the real question right now we all talk about the benefit being in the airlines at airports bauds youcan hopefull fly through the line if you can. One of the things youre doing is opening up at sports stadiums, msg and so many other places where does this go longterm so we believe that biometrics, fingerprint, face, voice can change the Customer Experience in so many different places where youre pulling out your wallet, credit card, building access, health care id. So its to change the way people live, work and travel. You are you so we make experiences more secure and frictionless and so getting into a sports stadium, you are your ticket at the mets its citi field, you can buy beer with it. You have your drivers license and your credit card, think about health care, but biometrics, first of all its about protecting privacy thats really important in job one in building that trust but driving that experience everywhere. Phil, jump in. Karen, that was going to be my next question i know you have this biometric screening Payment Method but you have it already being used at t mobile park out in seattle. When do we start to see that being used in airports i think thats the number one complaint or frustration i see from travelers, those who travel a lot and i do travel a lot, i see people who are like, i have to go through my wallet when im at mcdonalds or restaurant or anywhere when does that start to filter into the restaurants and services in airports i believe that comes in the next 12 months i was in l. A. X. Getting magazines and finding your wallet, finding your credit card and none of them are good Customer Experiences and painful when you have big bags like me the next 12 months it will be here for plain payment and payment with age validation which is also still important because youre still taking out your drivers license. Whats the big challenge, is it getting the vendors to sign up or is it getting people to actually enroll because theyre concerned about privacy in the expansion of the product so the subscriber growth has really been explosive over the last few years took us seven years to get million customers. Now 8 1 2, 6 1 2 as long as your driving trust, securing data, we have flashing lights saying we do not sell or share your data. Once you do that and other customers are liking it, it definitely goes viral. Its been about bringing on the partners who want to use it and delta was an early adopter united has now come on and so excited about changing their Customer Service from curb to gate how do you think about an apple or samsung or any of these other devices people are using them for payment, for other things it know its not biometric yet but sort of is because they have the face id and will start doing things like this are they competition i really think you can Work Together were rolling out a mobile app to do mobile enrollment because today you have to enroll on the pod for uses outside the Security Check point but i also think that the best thing is that you are you and you walk around with nothing. Karen, very cool. Thank you. Thank you. Appreciate it congratulations. Thanks. Are you going to use it yeah. Were going to sign you up, joe. It will be great. I actually should sign up if i can do a quick signup. I will bring the pod to you guys. I want to do a sign up. I was thinking of that recently. Its time. You made a sale coming up, the fed expected to cut Interest Rates for the First Time Since the financial crisis janet yellen, the fed chair who began hiking rates back in 2015 speaking out about a potential rate cut well show you what she said next as we head to break, here is a look at yesterdays 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 finding out whats selling best. To managing your fleet. To collaborating remotely with your teams. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Can i get some help. Watch his head. Im so happy. Whatever they went through, they went through together. Welcome guys. Life well planned. See what a Raymond James Financial Advisor can do for you. Lets cowboy up exhilarating speed. Woo precision control. Woo maximum reliability. Access denied. [ repeats ] access denied. If its not xfinity xfi, its not good enough. For wifi with super powers, get xfinity xfi. And go see, fast furious presents, hobbs shaw. August 2. Announcer welcome back yourewatching squawk box, live from the Nasdaq Market site in times square. Good morning welcome back to squawk box. Take a look at u. S. Equity futures at that mour lets show you whats going on dow looks like it will open off little over 11 point nasdaq down about 12 points. S p 500 down well call it i hate to round up when its down but well round up to 3. Central bank widely expected to announce its first Interest Rate cut since the financial crisis former fed chair janet yellen says shes in favor of a 25 bases cut point. Speaking at the Aspen Economic Strategy Group meeting in colorado last night, yellen said that the trade war has created an uncertain Global Environment for business while the u. S. Economy is still going strong. Here is what she had to say. Although the u. S. Is doing well, i would be focussed on wanting to keep it doing well, to keep the expansion on track and i think in light of the risks, i would be inclined to cut a bit. I wouldnt see this as the beginning unless things change of a major easing cycle. A rate cut on wednesday would be the first as we mentioned in more than a decade yellen was fed chair in december of 2015 when the fed raised rated for the first time in nearly a decade. So going in the opposite direction. And after that, i think its relevant to this current situation, after that december, 2015, rate increase, markets were unsettled the economy was slowing down yields were very low and she backed off the fed kind of went on hold for a year and before that they were anticipating another hike. So, you know, the flexibility has precedent, i guess coming up, whats new on the china trade front . Secretary mnuchin and lighthizer travel to shanghai to resume negotiations a live report from washington next. Later, busiest week of earnings with Companies Like apple, beyond meat, is that already after apple in our lines . Mastercard and pfizer all set to report well tell you what you need to know u wchg quk x yoreatinsawbo on cnbc what do advisors look for in an etf . I tell clients, etfs can follow an index, but which ones target your goals . Its not about quantity. Its about quality. No trendy stuff. I want etfs backed by research. Is it built for the longterm . My reputation depends on it. Flexshares etfs are designed and managed around investor objectives. So you can advise with confidence. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Treasury sec stair Steven Mnuchin and u. S. Trade representative lighthizer traveling to shanghai, china, to resume trade negotiations this week i want to get over to kayla who joins us with more of the details of where these talks are headed good morning. Good morning. A month after the two sides reached a truce at the g20, the trade representative and treasury secretary will sit down with chinese counterparts to Reach Agreement on some shortterm deliverables that are expected to clear the way to revisit the text of any underlying agreement the u. S. Has been discussing how to carve out business for Chinas Huawei to conduct outside the scope of National Security while china in return has been expected to buy u. S. Farm products. Chinese state media are suggesting some of those purchases started ramping up july 19th; but that its only temporary. The hawkish global times writes, china again restarted purchases and might exempt the tariffs imposed on these products. A clear sign of chinas goodwill and such goodwill is expected to produce good outcomes. But if the trade continues, u. S. Farmers will have to face the dilemma of relying on the Chinese Market or making a structural adjustment, end quote. President trump on friday suggested that reaching a broader deal, though, could take much longer. China will probably say, lets wait its 14, 15 months until te election lets see if one of these people that give the United States away, lets see if one of them could possibly get elected ill tell you what, when i win, like almost immediately, theyre all going to sign deals. That is the same stall tactic china employed ahead of the 2018 midterms you may recall a truce came just weeks later. Andrew okay. Thanks kayla for more on what we can expect from the next round of trade talks i want to welcome ambassador wendy cutler, she is now Vice President of the Asia Society Policy institute ambassador, good morning and thank you for joining us what do you think the chances are we actually get Something Real here . Well, again, theres going to be no breakthrough at this current round of talks this is going to be a meeting thats taking place four weeks after the g20 i think both sides will want to confirm that agricultural purchases are Going Forward, that relaxation of huawei licenses are Going Forward and then theyll really need to get down to the dirty and that is try to figure out which text will be the basis for moving forward and then in future rounds start getting back to the substance of these issues, trying to break the deadlocks. But you just mentioned two things that i imagine are gaining factors before you even get to the taxes and the tariff issue, which is to say huawei i dont think has been resolved and maybe you could argue that the agriculture issue has been resolved, at least temporarily speak to the huawei issue. That seems to be sort of the ultimate pawn or chess piece in this negotiation before we even get to the others. I think for now what china wants to see is some licenses given to u. S. Companies to sell their components to huawei and presumably lighthizer and mnuchin can give the chinese some assurance that that process is Going Forward but do you think that they should be doing that look, there are advocates or political advocates on both sides of the aisle, Chuck Schumer on one, others who say we should not be doing business with them at all well, my view is we need to sort out whats National Security and what isnt National Security is selling some semiconductors to huawei for their hand sets that if the u. S. Doesnt provide those semiconductors other countries do i dont think thats National Security that might be okay to go forward with you know, wendy, can i ask you in terms of the timing, the president obviously saying that it was in chinas best interest to hold out. I hear a lot of people here speculating that even if administration isnt going to be that anxious to make a deal because it would sure be nice to announce something next year ahead of the elections how do you think all of this factors in in terms of timing on both sides well, i think both sides dont want a deal right now. It means they need to keep meeting but i dont think the meetings will be as intensive as they were last fall. However, i think ultimately both sides will reach a deal. But the timing and trade negotiations is so important, so all the work theyre doing now will help lay the ground work for when both sides are ready to make the deal. Ambassador, longer this goes on in a way maybe the urgency goes down for both sides, in the sense that one year after the tariffs were imposed, i mean, you kind of adjust to it or the year other year change is not that dramatic, the chinese economy not doing great but also kind of in this steady state right now. What are the chances this is status quo well what you havent mentioned is that the president is threatening another slew of tariffs that would hit 300 billion worth of u. S. Imports which would hit our consumers very squarely and directly so i think if the president hints that hes going to be moving forward on those tariffs, both sides may find that its in their interest to try and reach a deal okay. Ambassador, really appreciate your time this morning thank you. Thank you you bet. The deal we told you about earlier this morning is now official meg joins us now with more meg . Hi, guys. That deal of course is pfizer combining its off patent medicines business with mylan. This just crossing the wire, getting some Additional Details. This company is expected to have revenues in 2020 of 19 to 20 billion. Earnings in that year of 7. 5 to 8 billion so this is going to be a pretty big company. Its going to receive a new name its going to be domiciled in the United States. Pfizer is structuring this as whats known as a reverse mortgage trusts where it die vests or spins out its unit it calls up john and will combine that with mylan. Were getting more details on the Management Structure we knew that mylans current chairman robert coury would be the new head and that pfizer ceo would be the company we knew that Heather Bresch is going to depart. This is her retiring from mylan. We have gotten Additional Details that the current president of mylan is going to be the president of the new combined company where as mylancfo is planning to depart. 13 directors in the board. 8 of the new Board Members will be selected by mylan, 3 by pfizer in terms of ownership, pfizer shareholders will own 57 of the new company, mylan 43 mylan shares up 26 . Pfizer was up this morning the feedback i have been hearing over the weekend, the wall street reported on saturday and we confirmed yesterday that pfizer shareholders were mixed on this deal they are streamlining their business to focus more on higher priced innovative medicines. This gets rid of maybe 20 of the company. Up john had about 3 billion in the First Quarter revenue. So interesting to see. Well get a brand new drug company here in the United States. Yeah. Theres also some language in the release about how they expect this new company to be kind of a cash cow business, right . Theyre going to initiate a dividend 28 of cash flow and put some leverage on the company, so it seems like its mature cash flow kind of harvesting business and will initiate a generous dividend. Yeah. One of the reasons people might be mixed on the deal this could be delutive to pfizer over the near term because of that cash generation and the profitability of the up john business. These are some of the worlds best known brands, viagra, lipitor. They are off patent but they were big moneymakers for pfizer. Still important. It will be interesting to see how this shakes out. Okay. Meg, thank you. Coming up, taking a bite out of apple we used every single way of saying something about apple core and peeling and falling from the tree. Any way, the company is set to report tuesday after the bell. Stocks up more than 30 this year its the apple of investors eyes going to keep on rolling well have a preview of what to expect next. As we head to break, here is a quick look at whats happening in european markets right now. The mix, not much except the ftse looks pretty good were carvana, the company who invented car vending machines and buying a car 100 online. Now weve created a brand new way for you to sell your car. Whether its a year old or a few years old, we want to buy your car. So go to carvana and enter your license plate, answer a few questions, and our technowizardry calculates your cars value and gives you a real offer in seconds. When youre ready, well come to you, pay you on the spot, and pick up your car. Thats it. So ditch the old way of selling your car, and say hello to the new way at carvana. There will be no relief on apple parts in china joining us, dan morgan for a preview before we get to whats expected out of the results and how the stock looks, apple has stopped trading to some degree. Do you think thats a risk covering out there i think it is. The china situation is difficult. You have threats of sensors from the u. S. Back into china i think its out there it doesnt seem like the stock is trading in regard to those concerns i think it is something out there. Probably well learn more here tomorrow when they come out with numbers. Obviously, it could be one of the reasons that apples shares are 10 below from last year big comeback from early january. But the market is working through a flattening out over Apple Earnings its gone sideways in net income the storyline has changed and lets watch services what do you think is in the numbers . What are you expecting to hear on tuesday the two numbers, obviously, as you mention were going to focus on his iphone revenues. It will be about a 10 drop from a year ago this will be the thirdconsecuti thirdconsecutive quarter in iphone growth. If youre an apple bear or bull, youre going to talk about Gross Margins in the Service Segment should be 64 . Should do 11. 8 billion in revenues should be an 18 increase. The big challenge for apple is, you have a deaccelerating iphone market, smartphone business. And youre trying to counter for the service side can the services offset the fact that your core business is slowing down thats where the challenge comes from apple well see more this quarter. Thats probably one of the things that apple appears relatively inexpensive as a stock. Its well below a market multiple right now keep buying back a lot of staoc. They announce an acquisition of intels smartphone chip business last week. That highlights the runup to a 5g version of iphone and how big the stakes are for apple. How is that playing out . And what are we going to hear tomorrow thats huge we dont expect a 5g foldable this year but next year. Not only on 5g, they pick up the modem business from intel. Its about 1 billion they pay for that the road map to get to 6g. Thats a big race for apple. They have to come out with phones that will get people to have a catalyst to move on and put away their old phones. Theres talk of this fall, an iphone 11 coming out we have 30 seconds. You said foldable phone. Is that what you said . Well you think they will have a foldable phone . Yeah. Qualcomm, do you think this has any impact on that transaction . I think it puts risk for qualcomm down the road that apple will selfengineer that modem and they wont need qualcomm right now, theyre leaning on qualcomm for the next 5g migration. Bottom line, in terms of where the stock is set up for earnings, or no . We are still bullish. The stock purchase is 15 billion. Very low multiple, about 15times earnings. We have to let it work out dan, thank you very much. Coming up, when we return, two, big hours of squawk ahead. Were going to get you caught up on the markets and how it can impact your money. Later, the business of esports with the first fortnite world cup. What lies ahead in Online Gaming should you tell your kid not to play games i dont know after this weekend. 3 million worth thats happening on squawk box. Back in a moment oh, wow. You two are going to have such a great trip. Thanks to you, we will. This is why voya helps reach todays goals. All while helping you to and through retirement. Can you help with these . Were more of the plan, invest and protect kind of help. Voya. Helping you to and through retirement. 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. You need decision tech. [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. A huge week ahead on wall street u. S. china trade talks and dont forget, fridays job reports. Pfizer combining its drug unit with milen. The next time you tell your kids to put away the video game, just remember this a major sports stadium and a 3 million prize. Well take you inside the firstever fortnite world cup. Bow down to your fortnite World Champion as the second hour of squawk box starts right now. Life, from the beating heart of business, new york, this is squawk box. I feel like back in the 80s. Good morning welcome back to squawk box. Im trying to maintain u. S. Equity futures down about 18 points. Well have to wait for this week were in the beginning of a big week nothing has happened yet we have the milen deal with pfizer theres a lot to look forward to lets tell you about the headlines. Pfizer mylan, moments ago. Pfizer combining its offpatten drug business. Youre looking at mylan shares up about 22 thats not the only pharma deal. Exact science, buying Genomic Health for about 2. 8 billion. It would boost its cancer testing product line, close to 11 on that news one of the days most widely watched quarterly reports. It comes after the closing bell. It is beyond meat. It is still losing money and is expected to post another loss this time around well see if it holds up i dont think the 14 billion market value thats been assigned right now is hinging on what happened the last three months can you grow into this valuation . Is that the idea here . Thats the only way to do it it trades like a video game were going to talk video games in a little bit. Its amazing separately, the feds twoday policy meeting kicking off tomorrow just another part of this very superbusy week for the markets and the one and only steve liesman, has arrived dont they know its summertime cant we take a break here you have to go all the way down to d. C. I have to go to d. C bank of japan. Bank of england. And its july. Its 98 degrees out. 98 humidity a huge week, around the world and the fed. Its a curious case of the court coming before the house. The data has come after the fed decided on its policy. Tuesday, we get income and spending, not a big deal adp comes wednesday, followed by the fed decision you have jobless claims. The ism, which has become one of the more important indicators because of the importance of manufacturing through the whole idea of a slowdown and friday, we get jobs. Lets look closely at jobs adp estimate, 145. Payroll is 166, thats the friday government report thats off of a 160 the prior month. Unemployment rate, 3. 6 , coming down a tick. Its one of the more we say here one of the controversial rate moves by the fed with many not sold on the need for it. But there could be more than just a cut hfe writes this morning, the title of the piece, whether needed or not. Along with a 25 basis point rate cut, this weeks fomc statement will likely include the announcement of balance shrinkage. An 18point chance of and 82 chance of a 25 and bank of japan, i dont know if they meet they are meeting monday and tuesday its monday in new york. I dont know when they meet. We get back to england and they have low inflation, low growth theyve been at zero you think if we didnt cover all of this, it will still get out. Like an empty force. It is its like august. Im exhausted already. Im going on vacation. Are you going soon . Friday, after the show. Overseas . No. Well stay local do we need to they take august off. Jackson hole. Youre going to give it the college try. But youre tired and its hot. He has to make if you look at the table. You get a wide shot. We have seven people speaking of summer, thats the number of people on a Water Polo Team did you know that i googled it. Its correct i would play water polo, but in a fivefoot pool. You can pretend youre treading water thats why we have seven. Its summer. Fed, water polo. Are you too board to talk about this its hard in midsummers i think the latest job report is not four weeks between it must have been a late one and now, an early one. I think shes 9. Bring in the ceo app and we know what theyre going to do its going to be anticlimatic i would find it very exciting yes they have to articulate what the driver of all of this is whether its 25 or 50 basis points, it doesnt matter. They are rolling back the tightening they did last year, at least second half of last year and what is the logic behind that thats important that tells you what the future path is going to be for quite some time. The most important thing right now, the fact that they are easing, ensures they wont be tightening for 12 to 24 months thats the most important thing for the markets. Our concern is we expect 25 basis points. Back in december, it was move towards tightening we think this is a symbolic. The growth in credit and the quality of credit being pushed into the public markets, is the ticking time bomb in the market. The numbers are good you go back to august 1968, you see 3 1 2 unemployment. When it shifts, it will spike. And were just were just waiting on that right now. The concern about growth and credit is important. One thing that we have to remember is the fact that without growth and credit, there would be no growth thats true that goes together. The quality of credit growth is something to be concerned about. When you look at for the majority of the Corporate Bond market, the coverage ratios are decent its something to be worried about but not to go overboard. What about the other side of it we talk about the fed cutting rates. The concern is, youre going to continue to push asset prices up and the Credit Sector is an area, that people point to as one of the more vulnerable sectors of the market. People have been forced to get yield. And thats a liquid. Is that the angle in terms of the Corporate Credit concerns . More than the leverage and the ability to service a debt, thats afecter where you see overheating. Its the investment credit that looks good. It es the middle pact of the market thats been yushed off of the Balance Sheet into the markets. Were seeing the deterioration and the quality. I would say again on that particular point, also, we have to maintain a little bit of perspective the growth in the private credit market isnt just about bad credit getting bad credit getting loans. Its more about mediation. As the banks pulled back, and as people were looking for higher yield, it provided other intermediaries away from banks and lend to people, after the banks wont lend after the financial crisis the Federal Reserve in 1998 and again in 2007, cited international concerns, when it cut rates. Its hard for me its not impossible but its hard to see similarities between 1998, the lcm blowup. 07, you know what happened on there after. Between those times when the fed cut and whats going on today, i get that we have a global slowdown in manufacturing, but i dont see a global crisis. Well, and in 98 in particular, not only did they cite international concerns, but they cited the tightening of Financial Conditions thats not the situation right now. The angle, though, i think is important that i think well hear about this week, is the low inflation numbers. I think thats something that the fed in trying to thread the needle about why you move when the economy is strong without sending an alarm that youre concerned or more concerned about the economy. You talk about the inflation impetus. Thats a significant drive, as much as the growth concerns. I think when we kind of think in just plain and simple economic terms, it becomes challenging to see why the fed is doing what they are doing the fed didnt say it was dat dat datadependent exactly we are saying that we are unwinding what they should say, is we are effectively unwinding the tightening that we did last year, which, given the market conditions, specifically, with respect to inflation, really wasnt warranted. I think that pivot in december eased Financial Conditions without that, we would be in a very tight Financial Condition situation. And growth would slow down precipitously. Very wide move on the part of the fed. The fed has to put it through the lanz ens of inflation we have in an inflationary world. Are markets priced for this scenario exactly do we know whats going to happen market closes, s p at an alltime high. The volatility index at 12 theres no stress in the credit markets right now. Can you build upon that when we get just an expected rate cut . Its going to be hard the markets are priced to perfection look at historic returns, just yeartodate these are phenomenal returns for fixed income were looking at Single Digits thats the challenge for investors now. I think a lot of it depends on the guidance we get thats where theres a big question mark. Do they cut 25 and say, now, were going to hang out for the rest of the summer or the fall, too . Or do they say 25 and more to come its 25 this. What they do in jackson hole is actually quite important in terms of what future policy path is going to be and thirdly, what happens with respect to growth. Our expectations of growth probably picks up somewhat as a result, the markets can probably go higher we heard they need to be dovish the reason i brought it up is because i heard people talking about it the cut and then stopping the Balance Sheet reduction. Im not sure thats priced in by the market i like what we said earlier. If they cut, its hard to think of them possibly tightening again, for 12 months i dont know if thats in the market this idea that theyre not going to do a triple axle, right they cut, they hike and they cut and go around. Or a double axle you see him asking about the dollar will weaken the dollar doesnt like to talk about that i know. Meanwhile, they were talking about that that was unbelievable they had a meeting about weakening the dollar they did. I think weakening of the dollar is a domestic economy focusing on the dollar doesnt do you go. Thats never number one they did it. Number two, they admitted that they talked about it but they said theyre not doing it for now but the idea that navarro had a powerpoint presentation. They talked about capital controls that would be something they talked about it. Never say never they talked about it. Thank you a lot more to come on squawk this morning. The story of three ceos with a lot in common. Relatively new on their jobs, running fast food chains and serving up major returns for shareholders well bring you that story when squawk box returns here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Welcome back to squawk box this morning three Restaurant Brands have new results. New ceos injecting some life into their brands. Kay rogers joins us with the numbers and that story all three ceos are successfully transforming the businesses Steve Easterbrook has been taking the brand through a dramatic turnaround. During his run, the stock has gained 118 . He added allday breakfast, and updated restaurants. Now, uber eats and door dash, set to bring in 4 billion globally overat starbucks, Kevin Johnson has been foe cussing on driving sales in two, key markets, the u. S. And china since johnson took over in april of 2017, that stock is up 70 . Hes grown through the nestle coffee alliance. But the biggest gains have come from brian niccol, who took over at chipotle. That stock has rallied 140 . Niccol came on and added a loyalty program. Grown the Digital Business dramatically and sped up service in restaurants with things like second make lines for digital orders all three of the stocks are seeing big gains this year, chipotle in particular, up 80 thats the best performer in the restaurant space back over to you all right, kate thank you. Hes done a great job. We dont call mcdonalds and say, they have, the blah, blah, blah were talking about the same stuff. Remember, they couldnt keep the ceos they had Health Issues i dont know if it was cancer or what coming up, remember when your mother said video games would rot your brain well, she made, in my case, Space Invaders thats how long ago that was you may not have known about our next story details of a prize for playing fortnite, when squawk box comes back and you should be mad your smart fridge is unnecessarily complicated. But youre not mad, because you have e trade which isnt complicated. Their tools make trading quicker and simpler. So you can take on the markets with confidence. Dont get mad. Get e trade and start trading today. Its one of the most popular games on the planet. Millions play fortnite and this weekend, a historic first. The fortnite world cup josh lipton joins us with more hey, josh. Joe, thats right fortnite players battling in new york city, at the Arthur Ashe Stadium thousands attending. Millions more watching online with epic games. Fortnites owner streaming the competition on youtube and twitch channels. Your champion, kyle deersdorf. 3 million fortnite is a powerhouse the game boasts s 250 million players. And the game forced publishers like e. A. And act vision to respond. Updating their games more frequently a direct answer to fortnite. In june, people spent 78 million hours watching other people play fortnite live on amazons twitch thats down from a peak of 149 million hours last july. But Michael Pachter says viewership spent ingame, wax and wayne, depending on seasonality. And he says fortnite remains a powerhouse thank you for that report it was fascinating to watch, viral all over i dont know if you saw. Joining us to talk about the market opportunity, john costas, chairman of global esports brand. And johnn yow heck of a weekend. I should tell my children to play fortnite. Is that the lesson of all this 31 million exchanged hands it was a pretty exciting weekend. Early on in esports. People were going to have teams. It was going to be a teambased situation. Im thinking of what act vision blizzard was doing the more time seeing this, its about individuals. Its about the Michael Jordans of this, rather than the teams how do you think about that . Its a little bit of both youre going to get jordan and barkley. But they reside around teams people think about success, they think about the patriots, the lakers, the bulls, et cetera you will get very strong franchises are the franchises geographic but in this virtual world, doesnt matter where you are theyre global. Onis on a plane, lives at 24 7 first thing i ask, which continecan continent are you on, john this fortnite game is much more focused on individual players, where the Team Competitions literally have a team bitted against another team i think the fortnite was skewed a little more towards individuals. Are you convinced that fortnite will be the game . In terms of the game well be talking about five years from now. I think so fortnite has something that no other game has its pushed esports to the mainstream all of the gaming enthusiasts were involved in esports. But fortnite put it in the forefront. I think that has really changed the dynamic. We see the hours on the platforms. Is that people finding things . Or is there going to be a time when theres rights to these things and its like other sports all these questions, the evolution and the movement in this space is unbelievable i find it interesting and fascinating to be part of it theres a game, apex legends, did not exist months ago, and 50 Million People playing it today. To both of your points, the migration of where the value is derived in participating in this space, our goal is to discern where the correct path will be to build the team. Your Parent Company is building a physical place in philadelphia that will be a massive scale for their team theres cafes in europe and participation on twitch and other forums thats the fun of it trying to understand, a lot like the internet in the late 90s, most of the opportunities from the investment perspective, do you want to own the gamemakers or the physical places where the games are being played do you want to own the media or the Distribution Companies how do you think about that . First of all, all of the above. What percentage and how you allocate resources 4 billion raised just an esports team space. The valuations and i put that in quotes, are 20 to 50times revenues theyre option premiums to have a space on the table our approach is going to be, john is out there, thinking what is the ultimate path is there a david bowie situation, where certain players that will be able to monetize themselves is that how this is going to go . How much are you paying players to join the team we do pay salaries. The teams have a very big role whats the minimum salary it depends on the market. We have seven teams across 15 different countries. On the high end some players can make 500,000 a year, at the age of 16, 18 when you talk about participation, is it kids that are playing it are we seeing older individuals getting involved women getting involved the athletes are younger. Fortnite, you have kids as young as 13 playing it our oldest player is 27. Thats the range 27 is old you have to retire do you think is it a thumb situation . What are we talking about . Mechanically, you age out a little bit you know, the younger kids are faster this is a longer conversation we appreciate you both coming in we have to do this again thank you thanks for having us. You bet coming up, polaris makes everything from atvs to boats. Its rebranding itself appealing to more women, minorities and millennials. Veuscompanys ceo will join li still to come on squawk box, top u. S. And chinese trade officials will resume talks. Well talk expectations. Then, the ceo of polaris will join us. And real estate in the hamptons is typically tied to the stock market but not this year. Well tell you why n instant savd i should have changed a long time ago. Were the tenneys and were usaa members for life. Call usaa to start saving on insurance today. I felt completely helpless. Trashed online. And were usaa members for life. My entire career and business were in jeopardy. I called reputation defender. They were able to restore my good name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. They have businesses to grow customers to care for lives to get home to they use stamps. Com print discounted postage for any letter any package any time right from your computer all the Amazing Services of the post office only cheaper get our special tv offer a 4week trial plus postage and a digital scale go to stamps. Com tv and never go to the post office again welcome back to squawk box. Officials from the u. S. And china, will resume highlevel trade talks. It will happen this week we go to washington with more. Good morning. A month after the two sides reached a truce, the treasury secretary and the trade representative will sit down to try to Reach Agreement on shortterm deliverables to relive the text of the underlying agreement the u. S. Is discussing how to carve out business for china ease huawei to dispute Chinese Security china restarted purchases and might resume the tariffs on those products, a clear signal of chinas goodwill. If the trade row continues, the u. S. Farmers will have to face the dilemma of relying on the Chinese Market, or making a structural adjustment. President trump suggested that reaching the broader deal could take much longer china will probably say, lets wait its 14, 15 months until the election lets see if one of these people that give the United States away, lets see if one of them could get elected. Ill tell you what, when i win, almost immediately, theyre all going to sign deals. Thats the same tactic china employed during the midterm last year a truce came just weeks after that mike kayla, thank you very much. Brian sullivan has a guest that knows all about the trade war. Thank you for having us joining us is scott, the ceo of polaris. We were supposed to be there thanks for being cool and coming on squawk box. So many of your motorcycles and your atvs, and boats, they are made in the u. S. But a lot of the steel and aluminum are imparted. The tariffs were 10 and theyre 25 now. You were able to raise the guidance on the year is this a pass through to the consumer . Or is it tightening up or buttoning up the procurement and manufacturing . I asked a question and the feed goes down. Amazing how we do that i thought he was having a really considered answer wow. Give me time to think about it i think were going to work scott back the reason that polaris is an important story, by they are a Consumer Company the stuff they make, is not the stuff you need, mike but the stuff you want, right . The motorcycles and the atvs very discretionary. And you asked the question we want to know what does a company do in that circumstance are they able to pass the cost on through or are they forced to cut costs to keep margins . I was going to ask the exact question how much can we pass the higher costs to the consumer on an idea they dont necessarily need. The polaris story is interesting because they raise the lower end of their guidance. Some of the things, the fourwheelers, joe, they cost 25,000 bucks sometimes, just t go riding down a dirt road fun. But not necessarily a musthave. And i think the polaris story is key there. We want to see we went down, remember, last year. In huntsville to their manufacturing facility in september. They have to squeeze the suppliers and tighten up the manufacturing. And we will have to pass on the costs to consumers away from the tariff story, we talk about the company. And youre talking about a discretionary product, and the fact that you have demand in a company thats doing well, it underscores the real help to the u. S. Consumer. Hopefully we get scott back up soon. Were efforting that. Coming up, stocks are trading at record highs why are real estate prices in one of the most summer soughtafter resorts suffering e hamptons theres only one road that goes out there. Squawk box, when we come back. Its show time. Lets cowboy up exhilarating speed. Woo precision control. Woo maximum reliability. Access denied. [ repeats ] access denied. If its not xfinity xfi, its not good enough. For wifi with super powers, get xfinity xfi. And go see, fast furious presents, hobbs shaw. August 2. All right. Welcome back we are back, now joined by scott wine of polaris. Scott, we have you back up we had a discussion. I dont know if you can hear it here how are you dealing with tariffs that have gone from 10 to 25 are you eating the costs or are you able to pass them on to the consume center. Brian, good morning we had raised races almost a 3 price increase we led the industry in price that hurt market share the big issue for us with tariffs, while we support the administrations goal in trade with china, we have the most manufacturing here, were paying 110 million in tariff costs where most of our competitors dont pay any. Were working with the administration to get relief they dont want to penalize companies for investing and manufacturing in america we bring our products to our consumers. We launched a lot of great products i wish you could have been here for the show our team has the worked so hard for the year to deal with tariffs. When it went from 10 to 25 , we covered that all not with price increases but mitigation efforts, changing the country of origin or pushing back on our chinese suppliers, really taking a multipronged approach, to make sure that didnt impact our investors. How are you working with the administration youre the guy they want youre making the stuff in iowa and minnesota and huntsville, alabama. And youre almost penalized for that because you have to bring in all of the steel and alumi m aluminum how are you talking with and dealing with the administration, scott . The administrations been open to meeting with us and understanding the fact that we have 9,000 u. S. Employees. We just invested in a 60 million facility in nevada, to be able to serve our customers on the west coast faster our competitors are investing in mexico and avoiding the tariffs. They are working with us, trying to get relief. Were going to keep fighting that battle until it happens i know they want us to continue to invest in our american workforce. Thats our goal, as well how much is the how strong are they are they Strong Enough to deal with the price increases, scott, that you talked about . We lead the industry in innovation at the high end, our consumers are continuing to buy us more than our competitors at the low end, where the prices are more sensitive, we saw some market share losses. Thats what were trying to make sure to balance out more the consumer is strong right now. Weav were encouraged where the industry is. Recognizing where we went up and our competitors didnt, puts us in our competitive position. Andrew mentioned, getting more women involved in the polaris scheme how do you do that i see the monster thing, the jackedup razor that you got how do you bring in 50 of the spending power in the United States, into the polaris showrooms . Thats one of our mud machines if you look across the portfolio, we really do offer products that many people, not just our core consumer, can participate in and we reevaluated where our brand should be. The new logo and the think outside, opens us up to be a more Inclusive Company were giving peoples more opportunities to embrace the sport of powersports and the products we make maybe talk to musk. Im ready to fly, dude you got anything yet lets get going on that. You know, even better than that, is the fact that the drone that went down in the strait of hormuz was on the back of a polaris razor on top warship. Did you see the french soldier . He looked like the green goblin. Did you see that french soldier flying around on the elevated platform did you see that the green goblin. Come on i just youre going to get into that sooner or later at polaris, are you not i have to pay you a commission i know you have secrets when it happens i know you have secret research make it safe or just fly it like three feet you look at this, scott were in times square. You have sixseaters why not retro fit some of your stuff for urban environments we see people jumping on the dirt roads can you see polaris in manhattan, replacing cars. No doors easy its interesting you say that. In four cities across the states, our e6 vehicles provide Autonomous Vehicle transportation we are in that market. We think its a place we continue to play and apply the brand. Were done. Thank you. Scott wine, joining us from the dealer day have a great one there good luck today. Thanks, brian thank you real estate in the hamptons, typically tied to the stock market robert frank joins us with that story. It feels all on sale now the stock market up 30 , the hamptons has posted sixstraight quarters of falling sales. The Second Quarter was the worst spring in eight years. Its unable to rebound theres a Record Number of homes with inventory up 85 over the last year. The weakest segment, the very high end theres a threeyear supply of luxury homes for sale. And 10 to 20 price cuts are becoming increasingly common the ten most expensive homes last year, spent an average of two years sitting on the market. Brokers say, theres a few signs of hope. That remains strong. The rental market is holding up. And theres buyers out there they are sitting on the sidelines until prices become more realistic and bargains in the hamptons, as i mentioned, all relative. The average sale price in the hamptons, 1. 7 million. For city dwellers if you have a place here, you need a place out in, you know, where youre not in the city but if you have a Beautiful House around here, you dont need a house in the hamptons, do you . Whats that road montauk highway is this a reflection the only road there whats interesting, yes a lot of people are blaming it on the tax changes this started before the salt tax was imposed. It accelerated the downturn. It started when the market was strong you go back to the 80s. This is a market going back to wall street. This is a movie because 80 of the buyers are financed in wall street, and the hamptons, its been closely tied. Thats the mystery right now things are so good on wall street, at least in the stock market but the hamptons is down you need a polaris drone to get out there. Joining us now, a Real Estate Broker with the atlantic team. What will be the bottom and cause the turn, do you think we have to see how it plays out. We see some excited about the market and what the price value are. I think it will get better coming into the third and Fourth Quarter. You look at the hamptons. Its segment specific. How do you see that playing out . What is working for you . When you say, things are Getting Better, will we see a stronger third quarter. Is that on the low end or the high end thats going to have to depend on the sellers. A lot of them have priced their houses aggressive. Theyre not extremely motivated to sell. If they come into a price point, to where buyers see the value, that product will move under 2 million, theres a lot of people that can afford that they want to get into that market those values seem to be doing really well. But the high end really needs to focus on a number that buyers see as a value you did see a difference after tax reform, huh . They have a home in the hamptons and in florida. Had too much on their plate. A lot of them reached out to us to list their homes. And it just really flooded the invento inventory, making it very competitive. One of the things, to that point, i heard that new york state tax authorities are tougher on you if you have a big place in the hamptons, as well as a police statilace in new yo. If youre tax domiciled in florida, is that a good reason to sell in the hamptons . Thats exactly whats happening. It seems like the hamptons house is the one they want to get rid of before anything else they have good golf courses three of the best. Right on the same plot of land out there. Coming up, another big hour ahead. Ryanairs ceo, what many are saying in private about the 737 max. The words you needo ar the to believe. We have that story when we return the heat is on a fed decision july jobs and much more. Were kicking off the hottest week of the summer for the markets. Pharma investors take note pfizer and mylan upend the markets. And the war for brainpower Silicon Valley versus silicon alley. Our final hour of squawk box begins right now live, from the most powerful city in the world, new york, this is squawk box. Start spreading the news welcome back to squawk box. Becky is off this morning. Our guest host is michelle girard, managing director at natwest markets. The s p is down marginally and the nasdaq, off about three. Treasury yields are hovering a couple of big stories that investors will be looking at today. Pfizer, looking to devest its market and sharing it with mylan. Its an allstock deal each mylan share, would be converted to the new company you look at mylan up, 14 . Pfizer is down a little bit. But in terms of giving it new life, that may be helpful, as well talk about tax inversions, mylan is coming back to the usa. Not only the only pharma deal in the works. Exact sciences is buying Genomic Health we should show you that. Genomic health, up 2 . Big day for the hottest ipos beyond meat, after the close of the bell the company is losing money and expected to post another loss this time. The stock is up 800 since it started trading on may 2nd yeah. You have to grow into that the fishing markets we had an update on boeing 737 max. Ryanair sounding off about the grounded plane phil lebeau joins us about those details. God bless Michael Oleary that happened on the ryanair earnings call. Let me set this up youre hearing his response to an rianalyst, saying what is yor plan for receiving the 737 max in the summer of 2020 . They were scheduled to receive 58 ill make Michael Oleary take it from there. We were expecting 58 aircraft for the summer of 2020 thats 30, at best it may well move to 20 it could move to ten and it could well move to zero, if boeing dont get their [ bleep ] pretty quickly together with the regulators hes saying what you hear from a lot of executives in the Airline Industry publicly, they say, we know that boeing is working hard on this and, yes, boeing is working on resolving the 737 max. What you heard from Michael Oleary, not only that comment, but a lot of others on the Conference Call. He goes on to say in this Conference Call, he thought they would file the 737 max Software Update by the end of september over the weekend, he was told, it wont happen until october. Thats the frustration thats coming through and you heard it there from Michael Oleary. Phil, big story on the front page of the new york times, the role of the faa and how little they knew and how compromised they even were, in terms of how much oversight they had given over to boeing how do you think that changes in the future do you think this will have a Lasting Impact or do you think it will be business as usual . Yes youre seeing it with the new aaa 777x they say, we expect first flight to happen some time, maybe in the fall now, it wont be until next year thats the schedule right now. Look, nobody will come out and say that its because the faa is going to be more stringent, more strident, about certifying aspects of that airplane but theres no doubt it has to be the way we look at the faa and its relationship, not only with boeing but also with airbus, as they theyve got to figure out a way of working with the aircraft manufactures at the same time, it has to be more rigorous than it was. Can you imagine the faa will hire more people to oversee thats the challenge. You heard dan elwell, the acting faa administrator, before the new administrator was approved in the last week when dan elwell was asked about this on capitol hill, he said, you want to give me x billion dollars. I will hire these guys will Congress Give the faa that money . Theres a long track record on capitol hill of congress shortchanging the faa, so to speak. Not giving them the resources or the air Traffic Control systems, the resources that it needs. And that will have to be resolved one other question, buried in that story if you read deep enough into the story, was what seemed to be an anecdote about a fight on another issue, related to the 737 max. That was these cables. There was a worry that if there was a blowout of the engine, they could ricochet and hit one of the cables. There were people that wanted a separate set of cables or wanted a software fix it sounds like boeing won that fight. The faa lost that fight. Now, that the fight is public, do you think that will be revisited . If it is revisited, are these planes going to sit on the ground for a lot longer . Im not sure if it may be revisited. Im not sure its going to lead to the planes being grounded longer this gets to the heart of the tension between faa regulators, those who are with the faa, and the aircraft manufacturers, who have designated certain employees to selfcertify aspects of airplanes theres been this tension. I think that tension, may have gone too far look it did go too far, toward the aircraft manufacturers you can see with the certification, look at the 777x they have an airplane they will bring out, you can bet the time line will be mixed further do you remember how long ago that was there was an engine that came apart and lost steering completely i dont know the exact timeframe for when that happened i thought they got around that once it happened, you wouldnt want it to happen again. That is emblematic, of the tension between the faa and the aircraft manufacturers the temperatures may be down slightly here in new york. This week could be the hottest of the summer for the markets. Dom joins us now it will be a sizzling week. That stock is riding a sevenday win streak going into today. And its up 35 in the last five trading days this week is massive look at the companies behind me. Ryanair, and apple is tomorrow and qualcomm and gm, and the energy companies, as well. We will be more than halfway through earnings season, by the time tomorrow comes around lets talk about the sizzling parts of this summer in addition to it being the busiest week of earnings, for the s p 500, about 155 to 157 companies, are expected to report throughout the course of the week you have that going. Seven dow components in that mix. That big fed decision day on wednesday, when the markets are pricing in almost a certainty of a 25 basis rate cut some seeing a 50 cut. But the commentary is going to be key it all ends up on friday, with the grandaddy of them all in terms of economic reports. Thats the jobs number, 8 30 a. M. On friday all this comes when the stock markets are on record highs, an Interest Rate cut needed from the fed and how the Corporate Health of america really is. A massive, massive week. Of course, with stock markets at record highs, it makes it that much more interesting. Is the grandaddy more than the mother i argue that the grandaddy is more than the mother of all. Im not sure thats true. Do you know . Its usually the grandaddy is older than the mother. Older but i think its intended to convey bigger. The rose bowl the mother of all Economic Indicators remember the m. O. A. B. , the mother of all bombs. I think mother might be above grandaddies. All of that market moving, might be why theres hedging going on last week were going to talk about that right now. Also, about how investors are preparing in general for the busy week. Katherine, so sh, we have an overwhelming indication that the fed will cut rates and how does it react to the ways the fed might characterize that move . The market is pricing in way more than they are going to deliver. Record hayekty markets seems beyond what the fed is likely to deliver. In which case, one has to ask, what will the reaction be in the markets. That will be to the downsood thats why im recommending put options on guys who are ready to forfeit 3 1 2 of the return year to date thats a good call if they do a one and one they dont do 3 to 25 basis point cuts, it would be a good time to get in when you see the retracement in markets if you say its sensible to spend about 3 2 to protect against the downside, what kind of event do you think this might be sure. If we get a repricing in the markets, instead of three to five, one to two, i think you get 5 and if we get a hard brexit, were going to get more than that protecting your portfolio is a very smart thing to do looking for opportunities, which i think will come about to reentry or to accumulate in the Fourth Quarter of this year. Can we talk about the earnings season . Theres some question about the economic outlook, globally were looking for the earnings, is there investnenervousness th should be looking at equity prices how are you seeing the earnings coming in . Does that give you confidence, in the longer run, we can continue to see equity markets move higher . Sure. Theres three things we heard repeatedly one is the u. S. Recession. And three is trade war now, were looking at an environment, where none of those are coming to fruition theres been a s p 500 of nearly 3,000. If you compare to q2 last year, earnings are posting an extraordinary expansion, given that the Earnings Growth was about 25 . Were at 3. 5 , 4 , at the moment i think Earnings Growth is very strong if we get one cut that is a boost of economic growth, is a positive for the session i dont think that it will get worse before the election. So, all of that is positive. I think the market will have to reprice the extent and the velocity of the cuts we sit here with the s p around 2035. Thank you very much. My pleasure thank you. Coming up, making the case against the trump economy. Democrats at this weeks president ial debates are hoping to win over the economic with their economic arguments how do they do that in an economy that seems to be in the group . Were going to preview this weeks political showdown. Here, it all starts with a simple. Hello hi how can i help . A data plan for everyone. Everyone . Everyone. Lets send to everyone [ camera clicking ] wifi up there . Ahhh. Sure, why not . Howd he get out . a camera might figure it out. That was easy glad i could help. At xfinity, were here to make life simple. Easy. Awesome. So come ask, shop, discover at your xfinity store today. Welcome back to squawk box this morning democrats will be back for a second round of president ial debates to handle trump and his economy. Joining us now, terry mcauliffe, the former governor of virginia. He wrote a book called beyond charlottesville. Youre with us here in person. Im going to go to you first what do you expect to see in theres a big question about biden being the frontrunner and who is behind him now . I think biden is the frontrunner and the polls have him higher than the first debate. He has to have a good debate every poll shows he is most likely to beat donald trump badly in most of the states. He has to show on the debate stage that he can take on donald trump. In the first debate, it didnt look that way. They want to show him coming out with strength. Is there any lesson of what happened during the last election Hillary Clinton ran as a candidate that was not donald trump. That was like, im not him thats the biden strategy. He is laying out health care propos proposals. We have issues today that, we have to deal with i didnt hear development, or Cyber Security i want the debate to be about the future you have to deal with racism he came out as a fullledged ray sis in charlottesville horrible people, telling jewish people they wanted to burn them alive. Is it that hard to come out and condemn them he would not do it that day, after i begged him you see what hes trying to do, double down on his insanity. I dont think it works senator gregg, you want to respond to that . Whether you think that puts President Trump in jeopardy at all. If you add up the proposals theyre putting forward, theres over 1 160 trillion of new spending on all of the socialist drivel theyre putting out you have paying peoples rent when they earn less than 30,000. Giving people downpayments on their home in the inner city areas. Its beyond comprehension the am their talking about. Nobody is talking about the defic deficit. Theyre talking about it exploding, this debt this country has. We have 22 trillion dollar in debt 10 of what theyre proposing on that youre bankrupting this country. How are you just getting religion on this snow . Me . Ive always had religion on this i dont think you cant accuse me of not having religion on the debt ive been fighting this battle for a long, long time. I dont think were at a revenue problem. Were in a spending problem. A massive expansion, that are being proposed, youre going to make the government the only player in town theres no way you can pay for it you have to inflate the currency or drive the debt up to a point that is totally unable governor what do you say this is why a governor should be president no offense to senate aend membes of the congress. I had to act every day i said that governors ought to be president s. This is what we do every day the deficit spending is unsustainable. Look at the party look at the Democratic Party thats not saying they dont want to spend it, either most of the democrats say, we will get rid of the horrible tax cuts of two years ago. That tax cut did nothing but help the rich. It went for stock buybacks we have an infrastructure problem in this country we have to deal with nobody talks about that. The democrats will lay out a plan its hard for donald trump to win an election. Is there an economic argument that you can make for donald trump right now . In the midst of what looks like a very good economy. Im not going to tell you a lot of things. Theres lots of issues but on a relative basis weve had a tenyear recovery we were on a fiscal clip i was the first to give obama credit when the economy was Getting Better you give credit to the person in the seat we had a sugar rush because of the tax cut there were things done i dont like the president on his tariffs. We have to be tough with china soybean farmers are getting crushed. Farmers are losing their farms the costs of our goods are going up he doesnt have a clue what hes doing with the tariffs we have a lot of issues. We have income inequality today. Your argument is going to be stronger getting away from the economy. Thats what i dont understand running on the economy, that seems like a hard way to go. Im not going to diswade you we have a great argument on the economy. A tenyear run what do we do to prepare us for the next 20 or 30 years. We cannot continue to spend. We cannot do that. It will not affect me. We have open jobs in this country. Building an Education System that trains folks to match the skills needed today. Thats what i did as a governor. Number one state Cyber Security. Building an economy for the future but racism and dividing people is not the answer. I recall that trump did say some negative things about charles. I also remember he was talking about the people that didnt want to tear down the robert e. Lee statue did you think it was wrong at charlottesville at all i think go ahead im not the guest youre the guest as a nation, weve gotten off track. Both sides are shouting at each other, in terms that are really diminishing the debate theres issues that are social issues but youre not going to solve them by shouting at each other, saying this person is a racist hold on can you condemn the comments of the president . Which ones, andrew . Do the comments about baltimore over the weekend even if you dont think the president is a racist, can you not see or appreciate the issue that large parts of this country do or worry that those comments are inciting a larger conflict i think theyre being incited by both sides. When i read the new york tim times, i find it inciteful against people that are conservative lets get back to dialogue that creates action bipartisan dialogue. Arthur brooks you got a copy, too, sorkin. Love thy enemy. I said, im not going to read this because i cant its impossible for me i tried reading it disagreeing with policies, not necessarily who people are theyre wellintentioned on both sides. Im trying, terry, aim i didnt think i could i love his books the conservative heart, and road to freedom. Theres some im going to bring it in for you. Im not going to pay you 1 a page, like i did that other one. I paid him 1 a page have you read my book yet and the appendix. Have you read my book yet i just heard your comments on that and i think open yourself up. Try it, read it. How hard is it to condemn neonazis . The quote is there when he condemned them that day. Its in the body of what youre talking about, that exact speech there are good people on both sides . He was talking about the people with the statues. These people, they didnt know they with one of our reporters, his name was robert lee. He was not allowed to cover a Football Game in virginia because of where we are right now in this country. Your side has taken it the neonazis came to spew hatred the guys with the torches, no doubt. You agree on the antifa said, that werent the most upstanding citizens, as well. I know theyre there for different reasons. You were the guest, judd. And im trying to hold up your side of things thank you there should be no its been a pleasure to be a guest, joe thank you yeah. Im going to get the, you know, the hate mail. Did a great job senator gregg, governor, very good to see you. Coming up, Silicon Valley versus silicon alley despite amazons breakup with new york this year, the big apple can still make a play to be americas next tech capital and it could be short llg sein coming up. When i was diagnosed with breast cancer, 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. Im not really a, i thought wall street guy. Ns. Merica. Whats the hesitation . Eh, it just feels too complicated, you know . Well sure, at first, but jj can help you with that. Jj, will you break it down for this gentleman . Hey, ian. You know, at Td Ameritrade, we can walk you through your options trades step by step until youre comfortable. I could be up for that. Thats taking options trading from wall st. To main st. Hey guys, wanna play some pool . Eh, im not really a pool guy. Whats the hesitation . Its just complicated. Stepbystep options trading support from Td Ameritrade welcome back to squawk box on cnbc live from the Nasdaq Market site in times square. Gasoline prices are edging lower. The latest lundburg survey shows 2. 81 a gallon down 2 cents over the last two weeks. Janet yellen said she would endorse a quarterpoint rate cut. Ye yellen said she wouldnt see this as a major easing cycle we can go below zero, i guess. But says its appropriate with inflation running below target and disneys the lion king took in 75 million. It brings the domestic total to 358 million, after four days of results. Our next guest thinks that the best could be to come for startups in new york. He wrote an oped in the new york post, how new york can do it without Silicon Valley greet great to see you this morning. Theres been headlines, just in the past couple weeks, from aoc, de blasio. Saying new york is doing just great. Look at the companies coming to manhattan. And this is crazy talk nobody is going to Long Island City, which is where the goal of that project was or what the whole project was really all about. I think youre right. Its sad for Long Island City that the amazon deal fell through. We would love to have them there. The reason i wrote the piece is there was a lot of depression, dejected folks saying tech had top ticked in new york that is not the case but building startups is a long game and it takes five, six, ten years even if we want to start now, we have to do it the oldfashioned way investing in companies there was it a mistake to offer the tax incentives to amazon not at all. It was a Public Partnership that fell through for sad reasons you think we will do it again . Sure. Is that where the focus should be . I think new york made an intention al decision to make itself into a tech hub. We should be using private partnerships and government money. We have 9,000, maybe 20,000, startups here in new york when i was a kid and the yankees started winning world series, we grew our own players and supplemented with folks from the outside. What does that look like . Everybody is happy to sit on this island. This is a popular place to be. Nobody is going to brooklyn. Some are, but not enough youre going to tell me about etsy and others. When you say nobody is going, none of the big firms has located an office there. Who is going is founders i think one of the things that is a huge opportunity for us, we dont have major tech hubs we have vast access to talent and capital. This is happening here we dont have a big west coast name in the outer boroughs, doesnt mean we need it to happen right now its a highcost place to be the Software Engineering talent or the schools or whatever here, it seems like the startup culture in tech, with financial, things like that is that the lane that new york continues to travel in what can be done to beef up the depth of the resources weve seen in our firm, startup proposals from all sorts of industries. Do your point, every stay has natural strengths. If i were to bet on strengths, i would bet on new york. As you pointed out, you can list five or six or seven or ten strengths off of the bat this is a great place to start off a business were seeing that play out what about the tax picture . We have high taxes. And the salt issue makes it harder particularly for investors. One of the hardest thing for startups is getting initial capital. Why wouldnt you start in texas right now . You have housing at lower prices, taxes are lower. You can get to california pretty easily two things on that. A lot of people are. And its great that tech is diversifying through the country. This is an incredibly strong city on so many market areas the customers are just outside these windows. Right . What a great place to start a business, even with the tax situation, it could be a lot better and we can focus on that oliver, thank you this morning. Come on back coming up, were kicking off the busiest week of earning seasons. How have companies measured up so far and wall street, ready to sink its teeth into beyond meet earnings and preview what could be a week for orsht sellers when squawk box comes right back. Woman my reputation was trashed online. I felt completely helpless. My entire career and business were in jeopardy. I called reputation defender. They were able to restore my good name. If you are under attack, i recommend calling reputation defender. Vo theres more negativity online than ever. Reputation defender ensures that when people check you out, theyll find more of the truth, not trash. If you have search results that are wrong or unfair, visit reputationdefender. Com or call 18778668555. Under an hour until the opening bell on wall street. Dominic chu joins us to look at some of the biggest stock movers good morning again we get ready for the busiest week some of the movers are tied to recent releases. Well start with shares of u. P. S. , lower around a percent or so. Roughly 3,000 shares of premarket volume part of that is from analysts to a prior buy, after a 24 run of the stock yeartodate they passed the target price they have tempered expectations from u. P. S. Management, about the challenging environment. They are looking at a lower entry price to get back into the shares then, there are shares of starbucks which are lower around a percent or so. The coffee giant after a wellreceived earnings report. It goes to a neutral, to a prior overweight they say voluatialuation becomea stretch. Well watch those shares, as well and apple, up fractionally and over 60,000 chairs the giant reports earnings reports tomorrow they have upped their target price to keep the buy rating they are low expectations for iphones in the quarter and later on this fall they say interestingly, that july and august, are historically, the best months to buy apple stock for threemonth returns. Speaking of the returnings, as of friday, 220 companies in the s p, about 40 of them, if every Company Reports for the rest of the season, earnings will be up 1 1 2 , and both are an improvement over expectations at the beginning of july. Thanks. To look at key technical indicators in the markets ahead of the open, is katie stockton, Founding Partner at Fairlead Strategies i remember you being pretty constructive all along in our darkest hours. The s p is above 3000. And you were constructive. You think the week might be ripe for a pullback thats right. Downside volatility would be natural here we have a bbuy signal in the vi. That has implications for maybe two weeks. I want to focus beyond that. Its not overly bullish. Theres players, ready to see exposure i know we have gotten your levels that will cause problems. Whats the next target the 2000 index because you know that small caps have lagged but the large cap indices have broken out to new highs. Thats a Bullish Development those former assistance levels Going Forward, they are 2 to 2 1 2 below current levels. That tells me that Downside Risk is limited to a pullback or consolidation. Momentum is positive, intermediate and long term and breadth is healthy, meaning that stocks are rallying on updays what kind of s p 500 targets are unrealistic . The breakout we saw in 2016 yielded a measured move after 3280 that means that it will maintain its trajectory that seems realistic, within the next year or so. We had a bye signal in november 2016, from one of the longterm momentum gauges. This month, it is sending its first new buy signal since that one. That is compelling to me, too. Mac d. That sounds like a musician. Conovvergenceconvergence. Earlier, we were talking about the disappointment, buying options, for pullback, that would be a great buying opportunity, setting up for the kinds of levels youre talking about. Thats right. We had a massive oversold condition after that may pullback that was an intermediate term basis. You see that two or three times a year the proceeding once was in december of 2018 the market is favorable for the interimmedia interyat and the long term big question has been whether certain other groups more cyclical groups, financials acting better. Is there going to be a longerterm transition under way . Or going to be of more particip the up side . Well, i stay with existing trends and of course, technology, Consumer Discretionary and, i guess more recently, communications services, have really established themselves as the market leaders and have remained so when were seeing the market rally the newfound participation and breakouts in the financial sectors compelling to me, and i think thats only a good thing for the Broader Market small cap underperformance to me is not a big concern its not new its been the case since february i would love to see it spread out to that region you know, it would show that we have more riskon positioning under way. But i think on the sector front that well see more of sort of the same. Can i ask the question the other way . If we were to see disappointment from the fed this week and the markets started to recalibrate, how much fed easing we may ultimately see are there levels on the down side that would make you say, okay, this is not just a shortterm pullback but something that calls into question my longerterm optimism theres always breakdown points, right . I think, hopefully, before we see any kind of major breakdown, say the s p back below its 200day moving average, Something Like that we would see a real loss of market breadth or that participation and also overbought sell signals. So, we have ways of getting ahead of that breakdown such that thats not in and of itself the only thing were looking for. So its not just any level if we fall below that it would make you think thats right. She does your stuff, too. I mean, whats that whats the tenyear indicating for yields oh, i was going to say oh, yeah, so tell us. Youre asking about the stock market just go ahead i was trying to look to see go ahead and ask. Can i ask where tenyear yields could be . Its interesting. Were obviously in a downtrend in yield terms and we have seen the tenyear stabilize around very important psychological support of about 2 . If we were to see them take that out, the next support is 1. 4 , so that would be a really big deal. Wow thats an air pocket. Exactly we do see a loss of Downside Momentum in the intermediateterm gauges, but not until you see it clear about 2. 3 to 2 on the tenyear do you actually have a reversal i would say neutral bias is probably appropriate as long as these levels are intact. And bitcoin, the next halving is may of t2020 and do you have an indication of 55,000 oh, gosh, is that right its dropped now under 10. Its a major base breakout on the chart, so you look at stock flow im just saying bitcoin believers. Yeah, yeah. Maximalists but yep, 55 after the next halving, which would be around may of 2020. What are you laughing about . Sounds im just laughing at how this just seems like this is the rule its just the way it goes. The cuts gets cut in half and then it goes up i was kidding about asking katie about that. Then 10x ill send you some stuff about. The best way to evaluate it is looking at the chart. Its in demand. Its highly correlated to the break do you know how long it would take to produce with what we produce of gold every year, it would take 62 years to produce that much gold. Goodness. So, if you do the same kind of analysis using bitcoin or silver or anything, you can come up with some of these flow metrics that are highly correlated and gold has broken out, too. Yes, exactly. Silver i think is 22 years and i think gold is so, the next halving, bitcoin all of a sudden gets up close to where golds well see. Anyway. We shall see. Katie, thank you. All right, beyond meat expected to report results after the bell today the stock has been soaring since going public earlier this year aditi roy joins us now with a preview. Hi, aditi. Hi, mike. Beyond meat shares have been on a tear, up a whopping 840 since it went public, making it the bestperforming ipo this year, despite the skyrocketing stock price, Short Interest in the company is high and many traders will be keeping an eye on the numbers after the bell today, which could be a makeorbreak time for short sellers Short Interest in beyond meat is 16 of the float, but keep in mind, that figure is likely inflated since the companys still in its lockup period. Still, that puts the firm near the top of the list for Short Interest in the major companies, which have gone public this year ahead of pinterest, lyft, and uber, but behind zoom. Data Analytics Firm s3 partners put out a note recently saying short sellers are getting squeezed by three factors the rising stock price and stock borrow costs, which the note says are up 80 since may 31st, and increasing stock recalls the note says if beyond stock price continues to rise after earnings, some believe we will see a quote epic beyond short squeeze in the near future back to you guys. Okay. Meantime, we want to get down to the new york Stock Exchange where our good friend jim cramer is. We have so much to talk about and a very big week of earnings, and of course, the fed whats your take, my friend . Well, look, i think the feds built in a quarter thank you, janet yellen, for giving fed chief powell a little cover. Yes, i know its a big week for earnings, but im really focused on apple because there are a lot of thought that maybe apple, people are so bearish about it that it can rally even on a subpar number. That would be interesting because thats been the theme. When you have this better than feared like illinois toolworks last week, better than feared mcdonalds, much better than feared starbucks, the stocks go higher and i think that even though we see these numbers which says that earnings year over year arent that big and the bump and the sales not that big, its all about better than feared people really feared this earnings period, and it turns out that that fear was not justified. And what do you think the feds going to do . Where are you . Are you on the janet yellen version of the world quarter point with a good statement, blaming tariffs if you blame tariffs, then powells able to say, hey, i am really independent of President Trump because what i am is blaming tariffs. Now, i have to tell you that i think thats true, but i also think that thats kind of comes with the territory the president wants very much to be able to stop china. Hes got great unemployment. This is the time if youre ever going to do it, do it now. And pfizer mylan. You want to own pfizer this morning . Well, mylan no. No . Pfizer offloaded some stuff, but i dont think pfizers that great. We have so many good Drug Companies reporting this week. Eli lilly is good, merck is really good, but good for milean, because they have mylan was in a permanent downtrend its kind of a wakeup call. But pfizer, i thought if they offloaded this, people would like it, but no one seems to care. Okay. Jim cramer, well see you in just four minutes from now. Thank you. And dont miss squawk on the street tomorrow well be joined by mohamed el erian, chief economic adviser at allianz, on set to discuss much with him tomorrow. Back in a moment t not when to u. 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 final check on the markets, flat up about 2. 5 on the dow, the s p down a little over a point, nasdaq down 295. A big week in terms of corporate reports. Weve got the big jobs number on friday and the fomc meeting on tuesday and wednesday and then as you heard cramer talk about, we have apples earnings, which people will be watching closely. Make sure you join us tomorrow thanks, michelle, for being here the whole time thanks, michelle. Squawk on the street is next good monday morning welcome to squawk on the street. Im Carl Quintanilla with jim cramer at the new york Stock Exchange david faber has the morning off. Quiet futures, but dont let it fool you, it is a big week with a fed meeting, u. S. china trade talks resume, a jobs number on friday, a third of the s p reporting, europe mostly green the tenyears right around 2. 05 our roadmaps going to begin with earnings, fed, trade and jobs wall street in waiting mode ahead of a major marketmoving