Transcripts For CNBC Squawk Box 20160812

Continued to percolate higher and higher. Despite everybody being on vacation. Stocks are coming off of a record setting session from yesterday. The dow t s p 500 and the nasdaq all reaching new highs on the same day. Thastz the first time that has happened since december 31 of 1999. Folks this is almost 17 years ago. A little context on that, the top movie at the box office when that happened was football drama, any given sunday starring all pa menechino and maybe this dates me. I remember. I remember watching that movie. Take a look at this, u. S. Equity futures at this hour up 11 points. If youre looking at the dow futures. S p up just over a point and the nasdaq up 2. Overnight in asia, looks likes the shanghai comp was up 1. 6 . The hang sang up us. 8 . The nikkei up 1 . And the early trading in europe right now, see what the markets are mixed, but not Much Movement one direction or the other. The dax is down by about a quarter percent. The cac and the ftse are relatively flat. Take a look at crude oil prices. This is the huge story yesterday saudi arabia the oil minister there making some comments about how they may be meeting next month at another conference. A lot of the oe peck members are out and at this point people are putting faith into the whied th idea they might actually do something to cut prices. You do skr the m saudi arabia deal they trying to set up for potentially next year. They might be more important to them the longer term that the shortterm. Right now, wti is flat at 43. 50. What a great show we have coming up. Hes a guy ive known since the early 90s. Sitting next to you at the wall street journal. We have larry cut low. Kevin oleary. We have jim we have the dow at a record high. Its just amaze ugh and im going on vacation next week. Heres the thing thats the best interesting that i read this morning so far. Did you know the consensus oneyear target for the Dow Jones Industrial average is now more than 20,000. Did you know that . I did know that. I did not know that. I know what youre reading right now. Youre like reading my mind. Two paragraphs later it explains basically that bond prices are pricing in higher multiples and thats whats happening here. Bing go. You can look at 50 different reasons. Thats the rational on wall street journal. Thats a two year to put up a one week chart of the two year, which i didnt tell you. We have gone from 64 back on the fifth to now have 73. Weve had a nice, you know, 10 point i dont know what you call that e. Selloff i guess that is in the two year note to now doing what is that thing . Sell off in prices. And stocks have risen amid that so despite what youre saying, andrew. I still think it all ties back to Central Banks and its all correlated every one of the markets have moved accordingly to on this. Yesterday oil was one of the big motivating prices too. Oil ticked up. Yes. Stocks rose as a result. Was weve always, why only in the last six months is oil truly correlated to the stock market. The whole theory is based on how s p earnings are going to look for the second half. The biggest weakness to the theory that earnings reasonable degree going to go up is if oil prices go down. You if your trying to justify high stock prices, you need earnings from the energy companies. Whats always been wrong where that theory not that it hasnt worked, but theoretically wrong is that whats lost in oil should be gained somewhere else. Bingo. Hasnt worked out. Another reason. It has. Sort of. Its the you cant prove the other side of that. I mean, consumers have been really strong. Thats part of it. It hasnt helped necessarily in the retailers, but it has helped in auto sales. You had lundgren on yesterday. We did. He said we make news all over the world with that donald trump interview, but lundgren had another yoet. He said the consumer is spending just not at our store. Steve that was an amazing admission. Its our turn. Which is another reason to be excited about today. You know what happens at 830. Retail sales. The question is did andrew know. Do we do a tease at 5 50 a. M. Next time youre in. I think you. Im not always this excited about the show. Dan and larry cut low and kevin oleary and retail sales. Its exciting. I think you would have done a better job. In other words, tag, youre it. Im happy to do it for your, andrew, but im not always this excited about the show. Im going to read these stories now. Here are the big stories were watching on todays economic agenda. Reports at 8 30 a. M. Retail sales come out at 8 30 also. 10 00 a. M. Be on the lookout for business inventories. That could influence the gdp outlook and Consumer Sentiment for august. Just one Earnings Report to keep an eye on, jcpenny will release results. Notable comments from San Francisco John Williams in an interview with washington post. Makes the case for raising Interest Rates this year. As the economy gets closer to the goals, we can pull our foot off the gasz a bit and hopefully execute a nice soft landing over the next couple of years as for timing, williams believe a gradual hike should include another increase in rates this year. Williams is not a voting member. I would like to add to that the notion of speaking of a single hike is dubbish. Multiple hikes. I feel like the consensus and well get more of this out of jackson hole has moved from one to two. Thats when you look at the streets, not necessarily expecting anything. It might come as a surprise to trieders. Yeah, i never know. The fed survey average expectation for this year is 0. 9 hikes. If i did a meeting it would be a whole number, but the average expected hike is 0. 99. Thats economists right. Half and very tuned into the fed rather than perhaps the broader street. You make a good point is it offsides for the single high. In corporate news, south korea is investigating google. Violated any of the countries anticompetitive laws after the Korea Fair Trade Commission recently decided to clear google of anticompetition charges involving the preloading of googles apps in the an droidro phones. Carl icahn preparing to buy delek. Own as steak in the company. Trading sharply higher, the retailer posting better than expected earnings and also raising full year profit forecast. While macys may not be beneficiary of some of this low oil prices and interest in retail, these guys seem to have done something right. Macys expectations pretty sharply. Theyre closing all these stores. Over 100 stores. You have to hand it to terry lundgren. He is somebody who moves first. He tried to get ahead of it. He saw the problems with Department Stores which is why he bought so many of them and loaded up fed rated with all these different brands. Turned it into macys overall. For years and years somebody ahead of the trends. The question is going to be in terms of cutting down the retail space, do the other retailers follow. He said here in america, there are over 7 square feet of retail space for every american versus numbers closer to 1. 2 if you look at uk and france and japan. That is the problem. Weve been talking about for decades. Shows how out of whack it is. Hes doing his part. The question is will the others follow. Hes going to refloi dploi a lot of that into is the web and ecommer ecommerce. A disinstant third behind amazon and walmart did you know this was going happen in 1999 when you were a retail reporter. No. No clue. When did you begin to know it was going to change. I remember 1999 may have been the year i wrote a story for the holidays for christmas the first Online Shopping christmas ever and we tried to see if we could do a entire holiday dinner, tree, presence ordered on online. Even though equity did that, i didnt foresee that i would actually myself be doing my entire holidays all online. I have one story more about the tech craze than retail. I had a scoop for the wall street journal. I also covering an 11 billion merger between technician coand kref ron. Chevron. Huge deal. Can i guess the story. Which one. Time warrener . No. Less than that. 250 million deal for web gran. They were going to deliver and that was on the front page i was inside. Thats when you knew. No. Thats when dan the deputy manager put his arm around me and said steve, this will all end badly. He was right about that. The dow and s p nasdaq all closing at record highs. Strong Quarterly Results from retailers. Rich steinberg. Prosecute and chief Investment Officer and lou reid. Are you on board with the headed to 20,000 nothing can stop this train. Its interesting. The youre talking to me, steve . Yes. So its interesting. The december 31, 1999, two weeks later the dow peaked two natural months later. The s p and nasdaq peaked for several years. I think the one thing i find most interesting about this latest rally is i find it to be technical. The market has been held in by the highs. The high made post fed qe for the last several years the market hasnt sustained any gains in the absence of qe. So now this rally is an attempt at doing that. Trying to break away from the pel on the here. Were going the need to see very strong Economic Data in order for the move to sustain itself. As you pointed out yesterday. The economy is clear. On the one hand you have the labor market which shows 4. 9 Unemployment Rate five years running of payrolls over 200,000. On the oernd you have a four quarter and something i like to watch the gdp on the last five years for that is the lowest on record. Now including any fiveyear period that coincides with the great recession. So couple that with the slack growth in productivity youre starting to see her stepping away from the types of rate hikes they were talking so with her focus on the slow productivity you have to pull back where you think the fed was going. Rich, is this just a summertime rally. I have a vision of kids with ago any at the trading desk and the grownups coming practice and saying what did you guys do. I dont know if its a summertime rally, but i do think that the issue of Light Trading on the desks could be a small issue. Its a bigger issue i think in terms of switching from technicals to valuations. We think investors should start to tam on the brakes here. Earnings estimates are way to high. Streets its more than a 13 increase year over year. Even though the rates are crow, the tina issue, theres no alternative to cash. We are raising cash. I have a hedge on our index portfolio and its okay to make a little bit less money. Becky was talking about the progression of earnings and i think the market where it is now, is probably reflecting some of that better news. These are the numbers. This quarter Second Quarter coming in earnings will be down. Year over year. Probably in the range of 3. 5 . Next quarter, they get a little bit better, only down 1. 67 and the Fourth Quarter we start to see a positive turn to plus 5. 7. A lot of that is the oil stocks were really hit by low Energy Prices in the Fourth Quarter. The problem is unless investors are really willing to give a huge multiple increase to the market because of low rates, we think the market has to trend back down to 17. 5 times earnings which would give us a 2,100 target. Were now into a multiple game . Right . You have to make a decision where you think multiples are going land and what degree you think the bond market is actually telling us something about what multiples are supposed to be. Absolutely. Youre right. This is the issue though. If we didnt have uncertainty around politics. If we didnt have uncertainty around europe, it would be easier to justify a higher multiple. Were not overly bearish. We think the market needs a pause here and investors should be focusing on risk. In fft some of the headwinds get out of the way and the fed kicks the can down the road of Interest Rates, maybe the british dont leave the euro, maybe in the election even if theres a democratic in the white house, republicans keep their status where theyre at and theres gridlock in washington, then i think you could start to see higher multiple and thats why were carrying a 2250 to 2300 target for the s p. Lou real quickly, the market is on the offsides here. Is the market offside or the. Thats a freudian slip. Is the market off sides or the fed offsides. I think one rate hike is not a bad bet. One rate hike anticipation is reasonable, but i do think like i was saying earlier you have to kind of reassess. Yellen has reassessed the material rate for the fed funds. Thats lougher because of the slow productivity. The bar to raise rates, the economic bar, thats higher because of the slow productivity and on the other side though its not as close, the bar to easing again, that bar is lower now because of the low productivity and the low gdp growth. All right. Thank you very much. A lot more about the productivity question coming up later on. Great job yesterday on the interview e becky. Absolutely fabulous. Thank you guys we appreciate it. Thanks for watching. Steve, have a good vacation. When we come back were going to talk about the flood of retail earnings this week. Jcpenny is still to come today. Look at Broader Consumer trends in the sector after this. Stick around. Squawk will be right back. We. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. 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Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. Welcome back, everything. Retailers looking fashionable once again. Getting better than expected Quarterly Results. Well be getting results from jcpenny later this morning. Joining us now to talk about what happened this morning and what to expect today is stacey witland. Thanks for coming in today. Good morning. Yesterday was a huge change in the opinion of Department Stores. You have macys and nordstroms coming out with numbers better than the street had been anticipating and talking about how maybe this is a change in the tide. What do you think is happening. The key is its less bad so if you look at the numbers out there, the best news were seeing is that inventories out there are finally under control. Youre looking at nordstroms inventories in line with sales. Kohls who has had an inventory for years is inline. Terry understood grlundgren thing with macys. Last year got stuck with too much inventory. By july they have the sales plans ready. Absolutely. Theyre not going to do that this Holiday Season. Should we be thinking great the consume ser shop tlg again or is that a misconception. I think we had the threeyear period of the street saying this is finally the Holiday Season were going to get it together. A lot of it has been largely self inflicted pain with the execution so yes the Inventory Management finally management teams are coming to the realization that the Consumer Shopping different. Theyre shopping online and you have to control your inventories and pull in your optimism when you head into holiday. Lundgren said Something Else when he was here yesterday. Theyve been buying cars, eating out, now its our turn. Is that an overly optimistic view. I think again, it depends on the sector here. Beauty and shoes are coming back a bit. Tourism effect in the states has been impacted by the strong dollar. We used to have people coming to especially a place like may sis that has Flagship Stores here. Were not seeing the foreign travelers coming here and spending money like they used to. Absolutely were not seeing them come and spend in the huge droves. I dont see the dollar weakening any time soon. Absolutely, but youre copping the really easy cops. Hopefully we get decedent weather this Holiday Season. Margins are looking flat. A how lopositive change. We keep talking about the multiple. Whats an appropriate multiple these days on Companies Like nordstromss and macys this. Companies are flat at best. Closing 15 of stores. A billion will disappear from those stores and we are hoping that they will transfer online or to other stores in the past we have seen much less of those sales transfer when stores close. Turns into what. That billion dollar turns into 300. I mean, maybe 3, 400. And thats what weve seen historically with companies saying were closing all the stores transferring to online. Yes, but at a lower margin and some of those sales need to disappear. Macys is closing 100 stores we have new entrance coming in selling it cheaper, quicker better. Do you think a move like this sparks the industry or do they take advantage of the holes left by macys. Identify been saying for years the retail needs to go on a diet. Macys is going the right thing. Kohls needs to take a lesson from macys. They finally have inventories right and in the Second Quarter of this year, inventory took off 1. 2 of growth. Would have been 2. 4. It is the fifth quarter in a row that inventories, not just retail, business inventories have subtracted from growth. Is it finally at least stable. I think it is. I think its from a retailer perspective youve had this markdown cycle that led you 2, 3, 400 basis points of erosion. Maybe that stopped. We had walmart on. Walmart was tuesday. He was talking about how they have been drawing and reducing their inventories. I think when walmart loses invento inventories, it shows up in the background. I dont know what that number is today, but its a big big number. You tend to see retailers when one does its and right sizes, everybody chases. Yes that will have a big impact. Thank you for coming. Thanks. Good to see you. Coming up it was a big night for team usa in rio. We have highlights. Womens gymnast skpix the tulle in the pool. The end of an era. Arod playing his last game in yankee pin stripes today. Take a look at s p 500 hundred winners and losers. More winners than losers yesterday. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, Infrastructure Investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov welcome back everybody. In is squawk box first in business worldwide. This morning weve been thinking about a lot of things that happened 17 years ago. Were doing that because if you look at the markets yesterday, the dow, s p 500, is nasdaq all closing at record highs on the same day. Thats the first thats happened since december 31 of 1999. Take a look at the u. S. Equity fuchs at this hour. Youre going to see that we do have some green error arrows on again this morning. Its been a stelts rally. Hated rally. People thinking every time the market goes higher thats the time you want to take profits, but check it out this morning, dow up 14 points and the nasdaq up 3. 5. Talk a little olympics. It was another golding night for team usa. Capped off by the dual in the pool and gymnastics dominance. Reporter it was magic and emotional night for team usa. In tears after finishing 12 in the womens final and Simone Manuel first female africanamerican swimmer ever to win an individual medal. Inspired performances continued in the pool. Ryan murphy with gold in the mens 200 backstroke. And meeichael phelps winning th 22 gold of his career. Kayla harrison was a nightmare for opponents wiping second consecutive gold in judo confirming shes the best in the u. S. History. Looking to add more gold to their olympic legacies. Michael phelps and Katie Ledecky will be back in the pool later today. Another high profile olympic sport track and field Getting Started today. Were going to check in with karl in the next hour. Talk to him about everything going on. And all next week ill be bringing you the olympic highlights and ill be headed to rio tonight. Im mostly packed. I still have more packing to do. Always procrastinating. I got some off. Very good. With deed been vacations all week. No mosquitos. We dont see any bugs. Stop worrying about it. A friend of ours saying theyre getting sick from the bracelets, nots the bug. Mari meaning the smell of the bracelet. In the meantime its time for the executive edge. Teamed up to find the top two locations for minority owned businesses. Kate rogers is here. Thats right the list looked at what metros across the country have the most racially diverse set of business owners. Coming in the top spot was sacrament toe california. Then washington, d. C. San Jose California and houston texas. Minority owns businesses are becoming a driving force in the economy. Says in 2012 can which is the northwest recent year available there were 8 million minority owned firms. That is a 30 increase from 2007. Separate data found latino and immigrant entrepreneurs have nearly doubled to 21 and 27. 5 . Diverse Community Launch an opportunities to local resources and the ability to bid on government contracts. However, theres still one major hurdle that exits and that is access to capital. A separate report found that nearly 40 of minority owned firms named funding as the biggest challenge to come. Whats being done to attack that issue . What, the credit access. So all these lenders are coming on the to the aen. The new report from the global entity p minority owned firms are starting to fund their businesses. Theyve definitely opened up new opportunities for them, but the Interest Rates are higher. Credit is generally not very plentiful for people who dont need credit. Its the creditworthy. Always been the case, right . Its more so now. Not available for people who need it the most. The people who need it cant get it. People who dont need it, can. When i look at the Credit Scores of those who get home loans and. Its 700 plus. Its higher than it was before and im wondering is the minority issue, the funding for minority businesses a function of that. Theres two things. Often minority owned firms and women funds have to self fund or go somewhere else. Often launching in places banks havent lent to recently. What kind of Interest Rates. They can be really high. Double digits . Yes, but ive heard them as high as 30 and 40 which is completely insane. That is complete loan sharking, but if you need money and you need it within a week or two, you can get it there so why not. A banker will only hand you an umbrella on a sunny day. Remember that line. I like that line. Where did that come from. A banker. Kate, thank you. Thank you. Its tend of an era. Meanwhile Alex Rodriguez set to play his final game in pin stripes today. Morgan join us us with news that entirely ambivalent. I dont know how to feel about this. A lot of people dont know how to feel about it. Tonight designated hitter Alex Rodriguez will play his last game with the yankees. Over the course of his career, arod has earned the most of any baseball player in history. Thats based on contracts and before sponsorships. Its even higher when you average those in. Whats he worth. Was he really worth it. Big crunch data team looked at surplus value on the field based on pay and accompanying expectations. He delivered for the first tooif seasons topping at a surplus value of 26 medical when he hit. 321, but the last eight seasons its been underperformance bottoming out at 29 million negative value this year. Thats with a dismal. 204 average. Its based on batting average, but meaning what. And how much hes made over the course of his contract with the yankees. But how do you value that . Thats a great statistic. I think theres a lot of different ways to value it. This is one way sort of looking at performance. We had on this show, has made a profession out of it. He takes hes done a lot with football players. It has to do with sales. You make assumptions about the performance of an athlete and what it means for revenue in the team. Theres an assumption in a guy giens exnumber of yards or throws x number of passes. Youll get more ticket sales, more wins. I dont know this particular study. Sounds that like makes sense. The data team im finding out we have that, my guess is theyre using some of this work by guys that translate. Yes. Which by the way comes from the whole money ball concept. On base percentages. And i mean, basically wins over replacement value is sort of the boll line here. We looked at this, overall, he cost the yankees an estimated 9. 4 million. Thats more than they dould have paid on the free market agent for the last eight seasons. This doesnt take into account getting fans into the seats so for that we have another stat, thats ticket prices before sundays announcement. 76. Immediately after the announcement it it soared to 457. This had steadily declined. Those are the ticket skal per who is are getting that money. Yes, still a decedent gain, but by comparison the average ticket price for derek jeters home game. The fan love. Yes. So the get in price, thats the cheapest ticket you can get into the stadium tonight was 16 jumped to 85 now to 21. If you look at the yankees sign right now youll see tickets available. Youre hearing its a sold out game. Youre not extrapolating the last game on to all the prior tickets. Doesnt really you can make the argument with the yankees having their own sports network, the yes, sir network, having a major star player like arod helped with v viewership. The extrapolation of this and why it matters to business out there, youre essentially saying the yankees overpaid for arod. That is the conclusion of that graphic. Yes. That argument could be made off of that data and it would seem that the yankees could say speculate the yangsz are making a similar argument with how quickly they are retiring him a year before the contract. Saying every nfl team overpays for the first round draft pick and best draft pick is the 27th draft pick they always overpay. There you have it. All right. Coming up, were going to talk about one of the big hot ipos. Up 50 since it went public in may. We all miss this one. Unfortunately the company is here to talk about it. First public erns report that blue past analyst expectations as we head to a break. Quick check on whats happening in european markets right now. This car is traveling over 200 miles per hour. To win, every millisecond matters. Both on the track and thousands of miles away. With the help of at t, Red Bull Racing can share critical information about every inch of the car from virtually anywhere. Brakes are getting warm. Confirmed, daniel you need to cool your brakes. Understood, brake bias back 2 clicks. Giving them the agility to have speed precision. Because no one knows like at t. [suspensful music] the first stock index musicwas createdughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Welcome back to squawk box. Acay sha communications up just 50 since may. Been called an optical chip by barns and came out crushing expectations for the first Earnings Report spiking the stock up 22 . Just in after hours yesterday. This is incredible situation. Joining us right now to explain how it all works is raj. The companys prosecute and ceo. Good morning to you. Good morning, andrew. Tell us about the quarter. Youve blown it out and this is your the first round. Everybody wants to know whats going to happen next quarter. So, the demand for band width within the metro continues to be very strong. And we also increase capacity able to support this demand. We had constraints late last year and we were able to scale execute very well to meet that demand so thats why we ended up with a better than expected q2 quarter. Acacia. We are not guiding behind Third Quarter and we expect similar growth into Third Quarter. If you look at the macro level, the demand for band width continues to grow. We are enthusiastic about the growth of the company. Now trading four times the ipo price. This is three months later. Our own jim cramer said he thought you were mispriced. Do you agree. Did you leave money on the table . I am not going to speculate on looking back and when we went out as you know, this was a very fight market for ipos, but we were building the company for the longterm and so for us it was just a blip in time to say we want the get out there. We want to continue the execution weve done over the past few years. So for us it could have been, but were very happy with where we went out and where we are today. For viewers who dont know acacia. You have better performance and better price than all your competitors, but what is the proprietary advantage and how defensible longterm is it . Thats a great question. So we are developing our products in silicon based technology. We have two technologies. One is a silicon based signal processer that processes the light signal and we also have low cost silicon opt i think so which reduces the cost. So we have High Performance. Since everything is in silicon we get High Performance and lower cost and smaller sizes so that makes a big difference in terms of when you start looking at the Data Center Cloud computing, the band width requirements are skyrocketing and were able to satisfy that at the lowest cost per bid. Im sorry to jump in, but can you break this down for dummdum. You make connections faster at these Cloud Computing centers. We have digital processors and these process the light signals gets in and out of routers and other equipment. That makes it years and cheaper for Network Providers to build networks. Becky, theyre sending data over light. Thats cool. Are you splitting that light into different pieces of the spectrum. Yes, we do. It uses the entire spectrum. We put multiple wavelength. The red sector has one set of data. The blue another. And the yellow another. Initially it was one beam of white light. I dont know if it was you or other folks figured out how to split it up into different pieces so you mag fied the light beams ability to carry data. You can do it multiple different ways. Theres other technologies that do it where it is more fast lithium. More coupler as ma cumbersome t silicon goes in the line with optical. Putting it taking a lot of the analog, the light processing into silicon which makes it into two small chips that we have that goes into all these products as opposed to having big bulky kmoent components. Thats probably the biggest difference. Final question, because there is Short Interest we should say in this company. Its up 67 in the last month. How choppy you think the revenue is going to be. If 80 comes from five customers all the big cloud players for the most part. So how choppy is it going to be. Its historically been choppy in the industry. That is indeed true. It is a chop by pizza, bpy busi we are seeing large players. Building inside the cities and were also seeing big demand in emerging countries like china, building out the infrastructure. And the third engine is the data centers and data center as you know because of the cloud and video t traffic is exploding. We have multiple engines of growth to kind of smooth out some of the choppy nns. Will you Customer Base look diverse relative to what it is now. We sell to customers today. We will be adding more customers. We have additional products to sell to the same customers. Yes. Thank you. Appreciate your time this morning. Congratulations on all the success. Thank you, thank you andrew. Coming up, grading Donald Trumps message on housing. The gop spoke to National Association of Home Builders yesterday. Ceo jerry howard is going to join us next. Between life and death. For partners in health, time is life. We have 18,000 people around the world. The microsoft cloud helps our entire staff stay connected and Work Together in real time to help those that need it. The ability to collaborate changes how we work. What we do together changes how we live. Welcome back. Donald trump says its too hard to get a mortgage today and he told the National Association of Home Builders he wants to make things easier for everyone. Joining us now for reaction to trumps speech to the Home Builders association is the organizes ceo jerry howard. Good morning. Good morning. Thanks for having me. Good. So a couple things. Donald trump on this show yesterday talked about the decline of homeownership. How big an issue is that that its now down to 62 . Is that a Bad Development . Yes, we think its a Bad Development. We think that its indicative of the fact that as an overreaction to the financial crisis that a lot of qualified people particularly firsttime home buyers are having trouble getting mortgages. I thought part of it was a supply problem, too, that we havent seen as much built. And Something Like 200,000 homes fewer are being created every year than we would have expected at this point. Theres no question that were still in a supply shortage. And thats a real problem. And its, in fact, in some markets its creating a little bit of a Housing Price bubble. Also hurts the ability of firsttime home buyers to get into the market. Ive also read some commentary, jerry, that said at least some of this is not that bad. Because we have driven it up to 67 . The result of that was bad loans and liar loans and people getting into loans they shouldnt have. How much is sustainable and how much should it be . There was no question during the housing boom that there were a lot of bad loans made. And no one is suggesting that we should go back to that kind of loose underwriting or no underwriting at all, frankly. But what we are suggesting is that there has definitely been and in fact i think both Political Parties have acknowledged theres been an overreaction which is resulting in a sort of slowing of the economic recovery. Clearly it is impeding americans who want to become homeowners, ability to get into a house. Did you hear solutions from mr. Trump on how he would fix this problem . What we heard from mr. Trump is he recognizes the impact of overregulation. In the last five years the Regulatory Burden on Home Building has increased to the point where right now roughly 25 of the cost of an average house or 85,000 goes into the regulatory process before putting a shovel in the ground. But thats all local stuff. Not federal stuff. Its regulation at all three levels, absolutely. Whats one thing we could do right now in terms of trying to unleash homeownership in this country . I suggest two things. Deregulation and also a reevaluation of the mortgage lending process right now. Okay. Thanks, jerry. Appreciate it. When we return, donald trump and Hillary Clinton outlining their competing views on the economy this week. We will break down the differences with kevin hast et and erin kline from brookings. That is next. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Mapping the oceans. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. Your Business Needs Better Technology to drive better performance. So you need it to be reliable and fast. Really fast. Introducing the comcast business Summer Savings event. Fast Internet Speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. Get some of our most advanced products at a great price with over 500 in savings. Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. A record run. The dow, s p, and nasdaq all closing at historic highs for the first time together in 17 years. Is this rally a reason to be cautious . Plus the strength of the shopper giving Market Sentiment a boost. We hear results from jcpenney in just a few minutes. Well have the numbers and reaction straight ahead. Were going to talk platform wars and why she says investors shouldnt underestimate the power of facebook. Crude climbing on hopes of a production freeze by opec and the health of the consumer. Oil expert dan jurgen is here to give us a preview of next months big meeting and talk about where prices are heading as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box right here on cnbc, first in business worldwide. Im Andrew Ross Sorkin along with becky quick. Steve leisman is in for mr. Kernen who will be in next week. Look at the futures a day after we had green arrows across the board for everybody. First time in the move since 1999. But right now youre looking at more green arrows this morning. Dow looks it would be up 8. 5 points higher. And the s p 500 up close to one point. Steve . In the morning headlines, the last trading day of the week is also the busiest one for economic reports. In about 90 minutes well get retail sales and the Producer Price index for july. At 10 00 eastern, the latest Consumer Sentiment index as well as june business inventories. One of the best known Money Managers is moving on. Bill miller leaviing legg mason after three decades. As funds theyve been less successful in recent years. And twitter debunking rumors its planning to shut down next year. I didnt hear this rumor. Did you . It was trending on twitter yesterday. They were saying twitter was trending on twitter. Right. It was basically read this. Its unclear how the story began, but it evolved to the point where the savetwitter was mentioned in more than 100,000 tweets. Twitter yesterday says there is, quote, absolutely no truth to the idea. Did anybody count the number of characters in that statement . No, i didnt. But they think it was probably somebody who was mad at the system for something. So basically the twitter trolls turned on twitter yesterday. And that may be where this came from. Some stocks to watch this morning. Carl icahn reportedly makes an offer to buy delek holdings. May plan to take hold of cvr energy. He owns a controlling stake on that company and sits on its board as well. Look at nordstrom shares. Posting better than expected earnings in same store sales also raising its full year profit forecast. Investors taking more risk in bond funds. With inflows into high yield funds with 1. 7 billion. This comes after two straight weeks of outflows. Stocks are at record levels leading investors to look for better returns in corporate debt. Overall sales for stock funds posted 3. 8 billion in outflows for the latest week. Is that the week were talking about . The market went up. I think so. Also wall street banks are asking the fed to grant them an additional fiveyear grace period to comply with the volcker rule. The extension would give banks more time to exit Fund Investments that are difficult to sell but no longer allowed under the law. In order to try and decide whether to grant wall street more leeway, they are to prove they are illliquid. And notable comments from San Francisco fed president John Williams. Williams making the case for why the central bank should raise Interest Rates this year. Going to get steves view on this. He says as the economy gets closer to its goals, we can pull our foot off the gas a little bit and hopefully execute a nice soft landing over the next couple of years. He believes a gradual hike could increase another increase in rates this year. Williams is not, though, an fomc voting member. Hillary clinton came out swinging at donald trump. Countering his economic proposals with a few of her own. She says hes not out just to help the wealthy but will also add more financial strain to an already lagging u. S. Economy. He counters that his plan is the only one that will jump start the american economy. Yesterday on squawk box mr. Trump shared his views on low Interest Rates saying that right now is the time to borrow. Normally you would say you would to reduce your debt. And id like to reduce debt, too, as much as anybody. The problem is you have a military problem, you have an infrastructure problem, and other problems. And also the asset is your rates are so low. Whats going to happen when the rates eventually will go up and you cant borrow, you absolutely cant borrow because its too expensive . It would destroy our balance sheet. Totally destroy the balance sheet. So youd be paying so little interest right now. This is the time to borrow. Kevin hesset is director of research at the American Enterprise institute. Aaron kline is an economic studies fellow at brookings institute. Welcome to both of you. Kevin, why dont we start with you . What he was just talking about on infrastructure, half a trillion dollars hed like to spend, points out Interest Rates are low. That sounds an awful lot like larrysummers. What do you think of that part of the plan . There should be more bipartisan consensus. Its a good idea. I think what larry says is what donald trump said. With Interest Rates so low, it ought to be easy to borrow money from the chinese and invest in. The one thing i would differ from Larry Summers on, the rate of return being greater than 1. 5 over ten years is limited to Infrastructure Investments. So if you had a tax cut, too, the capital is clearly above that as well. So creating a little bit higher deficit right now to get us out of the situation where were the high Corporate Tax place on earth, thats just as sensible as Infrastructure Investment. Aaron, what do you think . I think investing more in infrastructure is exactly the right way to go. Its not just about investing more. Its about investing more wisely. Whose detailed plan are going to be able to do so so were not building bridges to nowhere. A lot are just blank checks. And a lot of times in that process, money isnt spent more wisely. I think to have the Infrastructure Bank to bring private capital into the market is the more logical of the two plans that will help create a better investment structure so that were building smarter. Go ahead. I was just going to ask kevin im going to ask either of you. Maybe youll understand and i still dont know the answer. This goes to trumps tax plan. Do we believe and the plan yesterday by Hillary Clinton was criticized. This is a trump plan. About in terms of who is going to be the greatest beneficiary of this. Obviously tax rates come down at the high end down to 33 on ordinary income. But there seems to be this larger issue about pass through entities and we talk about carried interest all of the time. What happens to that part of the world . Real estate companies, this isnt just private equity. Whether that is still at 33 or because the business rate comes down to 15 that theres a sort of much larger group of beneficiaries. Can i go first on this one . Sure. Okay. So i think that for me its not something as a tax economist have obsessed over. The idea that the corporate rate which is paid by somebody who registers as a ccorporation needs to be the same as the pass through rate. And the reason is if youre a partnership which is a pass through entity and youre not incorporatinged in paying kevin, back up if we all of a sudden change the corporate rate, then if you like that better, you can just switch. Its not that costly to just switch. Worrying youre going to create an incentive for pass through entities to become ccorps i never spent time on. I think they should get the Corporate Tax rate right. Kevin kevin donald trump yesterday when he joined us said thats something his team is looking at that they are concerned about it. I dont know how you fix that loophole clinton was calling it the trump loophole. He said in two weeks they do expect to come back with some sort of plan. How would you close it . Yeah. And i think that the headline really from what trumps been saying the last two weeks which is quite newsworthy and its been missed by folks is hes more or less embracing the approach of kevin brady and paul ryan on the hill who have put out a sketch of a plan in july thats really quite sensible. Its moving the u. S. Corporate tax code to something thats more like the border adjusted value added taxes of europe. I think its actually a clever plan that brady and ryan have put out. And the fact that trump is now more or less embracing it is good news that those who thought he was going to be rudderless. Aaron, theres concern amongst economists i know that we need to bring down the Corporate Tax rate. Donald trump has a plan to do so. Hes talking about 15 . And by the way, president obama proposed a reduction in the Corporate Tax rate, as did the republican congress. They were at 28 . So theres a difference there. Hillary clinton is not talking about brings down the Corporate Tax rate as i understand. I think she said 28 . She didnt talk about it yesterday but in her tax plan, she comes down. I looked really hard yesterday. Ill ask aaron. Is it there . And then the point i was going to make is that she essentially demagogues trumps tax cuts saying its a giveaway of millions of dollars to corporations. This trump loophole thing is a big problem. Its something to be careful about. Its not gaming the tax code. People try to minimize their taxes. Thats totally acceptable. But creating more loopholes in the system particularly those that benefit certain types of individuals. Look at his plan on the estate tax. Can we just im sorry im going to cut you off. Focus on the corporate rate. Does hillary back a 28 corporate rate . I dont know why its so hard to find if these guys could. Thats one. Two, is she doesnt seem to really understand to create equalization. I think she absolutely gets that. She puts out more detailed comprehensive details on how to change the structure. Shes looking at marrying the Infrastructure Investment to the onetime repatriation. Which is something trump has talked about. We have to move just about raising rates but changing it to a territorial system. But not a onetime break like we saw under the bush administration. What is the corporate rate . I couldnt find it on the internet spp. Kevin, could you not find it . I couldnt either. We searched yesterday and the day before. Do you have it there, andrew . Im working on it. So if you have a corporate rate, would you let me know . Thank you. Aaron, do you know the answer to that . Is it 28 . I dont know the answer to her top corporate rate. I know what she has looked at is she also is looking at key detailed situations not to create accidental loopholes that you have to come back with a fix. You need somebody who fought through the system comprehensively. Let me in here. If i look, the stuff that i can find is shes got lots of increases in taxes on businesses. Right . So this surtax on the rich people. I would say shes more or less taxing on kevin not the serious tax cut somewhere else. But those are higher kevin, youre wrong. Hold on one sec. Steve bb you are correct. She has not put out a Corporate Tax rate. Could you repeat that . She suggested it, but thats guessing. Youre right. Obama of course put out the 28 . She has not. She has made illusions illusions to a Corporate Tax rate but has not talked about it specifically. Very disappointed yesterday in Hillary Clintons speech. I was but let me tell you something, kevin. Which is this. I believe donald trump could be fostering a Massive Movement to the left in this country for the following reason. And thats this. That hillary does not have to pivot to the right here. Because she has this idea out there that donald trump is not fit to be president. And so thats bringing over other people. And shes more worried about the Bernie Sanders shes more worried about bernie. So if she wins, she will win without any pivot to the center. But we want details from the candidates. I would like to see details from all of them. She doesnt think she needs to give them. I think its a fair point, steve. So right now shes bashing trump. Trump appears to be bashing himself at times. And just sitting back and not changing policy and maybe dissenting her base to come out in november is probably good politics. But for economists, what we want is we want proposals theyre going to act on next year. I dont see were seeing from mrs. Clinton. Or from donald trump. No, donald sort of had something. But hes going to come back in two weeks with another version. With no details. His plan doesnt cost aei costed it yesterday. It had been 10 trillion. Donald came on and thought its 3 trillion. So we dont have those numbers. Kevin and aaron, thank you both. Thanks, guys. Thank you. All right. Coming up, will opec freeze oil . Suggesting that the cartel could do something to stabilize prices. Dan jurgen, hell join us after the break to talk oil prices and next months opec meeting in algeria. Look at oil prices this morning. They are up down about 0. 05 . 43. 45 for wti. Well be right back. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Oil prices up more than 4 thursday after comments by the Saudi Oil Minister about possible action to stabilize prices when opec nations meet next month. Dan jurgen is vice market chairman and Pulitzer Prize winner. Good to see you. Thank you. In your famous book the prize, you describe a normal cycle of things which is a new discovery, a crash in the price, a reduction. And then im trying to find the pattern here. I thought when we got down to 20 thered be a great shakeout and theyd come back in a more stable way. Instead it seems it came back too soon and stabilized too soon. Where are we in this postbakken world where all this u. S. Oil came in . Youre quite right. This was a huge you brought together almost 5 billion barrels a day into the supply system. Every time you saw that happen in history, the price went down. I think were kind of moving into the recovery phase. Were seeing the markets come back into balance. U. S. Production is down. 1. 2 Million Barrels a day from its height of april of 2015. So what was the height . 9. 7 million. We were the biggest in the world for awhile there. Saudi was putting out 10 million a day. People said it looked like the u. S. Would take over saudi arabia. Maybe thats going to happen. That is awhile away. So been there, done that. I covered the oil industry when prices crashed. I thought we had to get there and be there for a little bit. And then the opec nations would be brought to heal. The initial focus was this is about u. S. Oil. Thats a very important part of it. But the real thing thats happening is postponement of the big megaprojects around the world. And that will take five to seven years. And you see postponements, delays, and cancellations. So youll see a supply demand balance that will be different over the next couple of years. And now its struggling with price. In three, four, five years, how are we going to 5 Million Barrels of growth. Next month theyre meeting in algeria. What do you expect to happen there . Do you see the saudis agreeing to some limits . Yesterday we got a signal from the petroleum minister. And basically his message if you read it was that the futures markets, the Financial Markets had been too aggressive, that there was such bearishness and pessimism and that has driven down more than the supply demand fundamentals. Saying well get together and talk, suddenly the problem has been that saudi arabia says its not going to agree to limitations until iran does. Iran says not a chance. We want to get back to pumping to where we were before any of the sanctions were put in. Does saudi arabia care more about the longterm price of oil particularly with waiting for saudi aramco to come on the market or do they care more about maintaining market share . Well, i think the preeminent thing is about market share. Maybe theres something to talk about. Is iran near capacity . Irans near capacity. But i think its going to be a very difficult and even when they were talking about this deal a couple of months ago, the language was that every producer could produce the appropriate level which was you know, means whatever you want. So thats the supply side of things. We also constantly look at this and try to figure out the demand side of issues which is part of the reason that stock prices go down when you see oil below 40. Part is the earnings for the companies. The others are concern about demand from china and around the globe. Year over year demand for the u. S. Was zero for oil . The number we have was about 500,000 barrels a day for the quarter. You saw a huge surge of demand. This year there was kind of High Expectations for demand again. This year it would be 1. 1 billion barrels globally. And in particular 1. 1 Million Barrels a day of increased demand . Yes. And you have growth in china and growth in india and so forth. More mild growth here. So before the signal from the saudi minister, what was people looking at . They were looking at gasoline inventories. And that was driving down the price. Dan, i have one more question real quick. One of the stories about the shale plays is they can go offline. But theyre brought back online more easily. So we have this 1. 2 million barrel reduction in output, do they come back online as such theres a cap to how high prices can go . I think theres a range. You see some of the real resilient producers particularly if theyre in the area called the scoop in oklahoma who are saying we could make money in the 40 to 50 range. But probably 50 roughly is what you start to need to really see a balancing and a stabilization in u. S. Supply. Thank you so much for joining us. Coming up when we return, arod ready to hang up the pinstripes. And the whopurrito. And we have them here today. I dont know if dan wants to stick around to eat them. Weve got the taste test coming up. Were back in just a moment. Alex rodriguez will play his final Major League Baseball game. New york yankees face the devil rays today. After the game he will be unconditionally released from the club from this player contract. He will be assigned to work with various players. His new contract will run through december 2017. When we come back, is the cloud playing off for ann winn blad . Were going to talk tech investing and finding out where shes putting her money to work. That is next. Youve got to check this out because ann always brings great ideas. U. S. Equity futures are flat after all three major averages ending at record levels. All three together for the First Time Since 1999. Squawk box will be right back. Hotcakes. This place has hotcakes. So why arent they selling like hotcakes . With comcast Business Internet and wifi pro, they could be. Just add a customized message to your wifi pro splash page and youll reach your customers where their eyes are already on their devices. Order up. Its more than just wifi, it can help grow your business. You dont see that every day. Introducing wifi pro, wifi that helps grow your business. Comcast business. Built for business. Whmade plastics that tmake them lighter . Rs the lubricants that improved fuel economy. Even technology to make engines more efficient. What company does all this . Exxonmobil, thats who. Were working on all these things to make cars better and use less fuel. Helping you save money and reduce emissions. And you thought we just made the gas. Energy lives here. Welcome back to squawk. Among the stories front and center this morning, retail sales will be out for july. Looking for an increase of 0. 5 following a 0. 6 that happened in june. Were going to get consensus for the Producer Price index. After Producer Prices jumped 0. 5 in june. Also check out nordstrom. 67 cents per share, 11 cents above estimates. Nordstrom also raised its yearly guidance. Yesterday on squawk box, donald trump said he intended to stick with his unorthodox Campaign Style even if it meant, quote, taking a very, very nice long vacation after november 8th. Just keep doing the same thing im doing right now. At the end its either going to work or im going to, you know, im going to have a very, very nice, long vacation. Trump travels to battleground pennsylvania where hes struggling in the polls today. My jaw dropped when i heard that. He said it a couple of times. He said, basically, im not i think part of what he said was im a truth teller. Im not going because we were asking him why weve heard from even people who support you, some of your biggest supporters whove come on the air this week that asked you to stick to the economic message and tone the rest down. He said im a truth teller. Im not going to change my ways. All the people that want me to be one of the lying politicians, i wont do it. By the way, i have a nice life to go back to if i dont. Not only the vacation line but the nice life. Said it twice. Thats the first time ive heard admission from him that he thinks hes going to win but is admitting he may not. Twitter went crazy with it. All sorts suggesting, you know, how much he really wants pit. I think he does want it. He wants to win. Heres the question i have. Think about a plane that needs to have air and needs to go forward in order to fly. One of the mystiques trump had going for him was this idea hes a winner. If he starts allowing this idea to take hold that hes not the winner that people thought he was, then i wonder if the decline gets steeper in that case. We saw when he was up in the polls, some people then endorsed him. It wasnt until he got that first postconvention where he had a bunch after that. Then declines in the polls, people abandon him. I dont think thats a trump phenomenon. Thats an everybody phenomenon. But hes the guy out there most of any politician ive heard touting his place in the polls as being significant. Polls matter. If you remember six months ago we used to have ceos, all sorts of people and say tremendously critical things, outrageously critical things. Now you have them come on and nobody is near as critical because theres a better chance hes going to win. When we asked him about the drop in polls particularly among republican women. He said you cant believe all the polls. The polls dont capture the people who are showing up at my rallies. So that was his explanation for that too. Well see. Lets talk a little bit about whats been happening with the markets. The s p 500, the dow, and the nasdaq all closing at another record high. Weve been watching the Technology Stocks that have been leading the way. And to dig into that deeper. Ann winblad joins us this morning. She is from Hummer Winblad venture partner. Thank you for coming into studio. Thanks for having me. Weve been talking about earnings season. Earnings beating expectations. All of a sudden people love Technology Stocks again. Did you see this coming . Youve been holding onto the same stocks all year. Well, its were digitally transforming the world. And its were at the early innings of many of the technology ways. Look at cloud. Cloud is the new operating system. 58 growth for amazon alone in aws. Microsoft turning itself around focused on the cloud. Google a cloud vendor. Amazon. And then with have advertising itself moving digitally. Which drives Companies Like facebook and really a lot of innovation still happening. Amazon has been a company that youve been telling us that we should be owning all year. This has been one of your picks. Again, youre sticking with all of the picks you had at the beginning of the year. You mentioned Cloud Services, this is a big Cloud Company at this point. We had walmarts ceo on earlier this week. Weve given walmart a bit of a hard time because their online sales growth was only 7 for the last quarter. You compare that to amazon sales growth, and theres no comparison. Amazon knocks it out of the park. But how much of that is the Cloud Services and how much is the Online Retail sales . I think you have huge growth in amazon web services. Aws. They just had their new york event here a couple days ago. But you also have innovation happening that drives both the commerce side and the cloud side. Do you like that stock because its a tech stock or because its an Online Retailer or both . I like it because its a tech stock and happens to be a huge Online Retailer. But jeff bezos has a thousand people working on artificial intelligence. The amazon echo, its an intriguing product. Its a tiny piece of the future were going to see in virtual assistance, in just having ambient computing around us. So theres a lot going on at that company. And they love innovating. Where do you think they compare on that stuff relative to where google is, for example . To the deep stuff these guys are doing. All the companies that are doing deep learning like amazon or google or microsoft, they pretty much open source pieces of their deep learning to populate partners in the industry. Everybody pretty much knows what everybodys doing for the most part. So its a fast race right now. Its theres a lot of work to be done. So were really only at Machine Learning and not quite to deep learning. You own all of those stocks. Is that because we dont know which one of those methods are going to pay off or all of them is going to pay off . I think theyll all have payoffs. Theyre all a little bit different. Compare microsoft to amazon. Theyre competing on the operating system of the cloud. But microsofts seeing renewed growth in office. Office 365, moving that to the cloud. You look at google. Googles competing with facebook for advertising. Is the cloud a commodity . In other words, is it just a service or is there real differentiations in the kind of services and the expertise and all the bells and whistles that come with it . Right now there are differentiators and amazons far ahead. Theyve got more software pieces embedded in the cloud itself. So right now people are choosing one cloud. They dont move you think b the technology that amazon has is legitimately better . Ive heard more recently that some of the microsoft and Google Technology is better but that the aws is cheaper. Well, i dont think people are Price Shopping at this point in time. And everybody has if you look at the gartner report, something thats better in their cloud. And they have to differentiate in some ways. But amazon in truth has many more software pieces. Theyve got a better database in the cloud. Theyre taking market share from oracle in this case and even from microsoft with their the one company not on your list is apple. Where are they relative to all of this . Are they not even in this can fr conversation . You know, i dont see apple as a software company. But theyre talking about it constantly. Well everybody has to Talk Services otherwise youre not in any mantra. So you better come up with services quick. You better come up with services. Again, its really about software. And i do think apples a great company. But to me i still think theyre much closer to a Fashion Company than a software company. Thats an interesting point. And the problem with the Fashion Company is youre going to have hits and youre going to have misses in terms of the season thats there. You dont want to bet on a fad. Yeah. Youre going to get an apple watch thrown in in between a new iphone. Would you have said this three or four years ago about apple . Absolutely. Or did you have this on your list . I would have said that three or four years about apple. Cloud you talk about for a little while. Whats the next thing were talking about . A couple years ago talked about data and big data. And thats two innovation cycles ago. We got big data and the internet of things and now were working on as you mentioned smarter data. Were really early here and how do we deal with all of this data and make machines more valuable . And our products are getting much better. Can i ask you quickly about facebook . This is one of the stocks you really like too. Part of that is because theyre such giants in direct advertising. Procter gamble came out this week and said when it made that move to put 40 online and put that advertising dollars into direct advertising, it didnt work out the way it wanted. Does that concern you . Well, video is what theyre talking about. And videos moving around. There were some brands that in the up fronts only bought digital for the first time. And then there were some brands who bought a lot of digital like Procter Gamble whos a big advertiser whos gone back to tv. So video is moving around. I ask because when they made that huge bet online, people thought it was the end of television and the rest of the industry. And this is another change it feels like. Theres never a complete end to anything in technology. Were investors in a Company Called asymmetrice metrics. People are experimenting. Facebook has been a big experimenter here. Theyve had several times of add units in video. None of them have worked that well, but theyll get there. Right. Ann, want to thank you so much for coming in today. Always a pleasure seeing you. Let us know when youre back in town. Great thanks. Thank you. Coming up, jcpenney results just out. Revenue of same store sales did miss forecasts. Well speak to an analyst about the results. And look at shares this morning. They are down about 3 . 9. 65. And then Michael Phelps will go for more gold, number 23 this afternoon when he competes in the 100meter butterfly and what else you need to watch from rio straight ahead. Squawk box coming right back. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, Infrastructure Investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov Michael Phelps swam his way to gold again last night in the 200meter individual. Manuel making history in the pool. The 20yearold and canadian olesyak tied for gold setting the record in the 100meter freestyle. And simone biles dazzled yet again. The 19yearold won her second gold medal. This time in the gymnastics individual allaround competition. More squawk after the break. 3 at citi, our business isnt training athletes. Our products dont keep muscles warm, and we dont design prosthetics. So why do we sponsor the u. S. Paralympic team . Because our business is helping americans everywhere meet the challenges of competing on the global stage. Citi. Proud partner of team usa. Proud sponsor of progress. Welcome back to squawk box. Jcpenney rolling out Quarterly Results with the retailer slightly missing some forecasts. Joining us on the line is dana telsey. Good to hear you this morning. Thank you very having me. Help us here. You look at the headline numbers and think what . You think overall the numbers came in better than expected on the eps side. The Comp Store Sales of 2. 2 were in line with consensus. Sga really drove the earnings beat to come in at a loss of 5 cents compared to the street at a loss of 14. And they reaffirmed guidance for the years with the ebida target. In terms of where you think this stock should be trading in. I think overall stock should be trading up a little bit. Were going to need more color from the earnings call. Given the Department Stores yesterday really only one of them raised their Earnings Guidance for the year. That was nordstrom. The rest of them essentially it was business improved as you went through the quarter. And i think where jcpenney should be trading is moving up from where it is here. Dana, were looking right now as youre speaking and those numbers are just coming out and assuming the numbers are live and i believe they are. The stock actually down a little over 2 in the premarket. If you have to say what people wanted to see, they wanted to see the ebida target of a billion dollars move up a little bit. They wanted to see that the comps, could they come in a little bit better than a 2 comp . Pe penneys is going to have more to compare against in the year. The rollout of appliances are all doing very well. Theyre having an investor day on wednesday. They wouldnt be having an investor day if they didnt have more things to talk about to drive sales. Okay. Dana, at 10 what do you think it should be at christmastime . I think the stock should be around 12 at christmastime. Thanks for joining us this morning. Thank you. Up next, well head to olympic park in rio and catch up with carl. Hes got highlights of yesterdays big events. Also what to expect today from the summer olympics. Thats right after the break. Plus were going to try the whoppurrito. The mix set to debut nationwide. We have them here first. Well try this after the break. This is not on my diet. Squawk box will be right back. H to build a jet engine. Well we thought ge programmed machines to talk. Ge is an Industrial Company that actually builds worldchanging machines. Machines that can talk to each other digitally. Hello . They dont talk to each other like that, ricky. Shhhh, youll anger it. He looks a little ticked off now. Youre here to buy a car. Your Business Needs Better Technology to drive better performance. So you need it to be reliable and fast. Really fast. Introducing the comcast business Summer Savings event. Fast Internet Speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. Get some of our most advanced products at a great price with over 500 in savings. Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. Become back to squawk. Were going to get a check in with carl on the ground. Reporter morning, andrew. Weve made our way to copacabana beach this morning. I know youll enjoy this action next week. But what an unbelievable story of dominance for the u. S. In gymnastics and swimming. Take a look at simone biles last night. As you mentioned, the fifth u. S. Woman to win gold in the all around and the fourth in a row two golds for her so far. Shes on track to being the first u. S. Female gymnast to win five golds at a single games. And shell do the vault on sunday. Amazing performance. And then of course theres mens swimming. The final brodown they called it. Michael phelps winning the 200meter individual medley for the fourth straight time. Ryan lochte finishes fifth. Phelps is only the fourth athlete ever to win in the same individual event four straight times. He talked about his legacy last night. So getting out of the pool might take a little bit more energy, it might be a little bit harder. But its just as sweet standing up on the podium listening to the National Anthem play. And thats hopefully i have the chance to do it again, but thats something that when i do retire i will miss. Reporter medal count looks like this. U. S. Medal count, 30. China, 30. Tonight well get a look at womens track and field. Judo and fencing. So were hoping the rain is going to clear here at copacabana here later on this morning. Maybe we get down to the sand. But day seven is going to have a lot of activity, guys. Carl, so this is the finale for you. Youre coming home this weekend. Tell me what is the one thing i need to do . Reporter no, no, no. Were going to do that in the next hour, andrew. Weve packaged a whole list of must dos as you make your way down to rio this weekend. Im not kidding. Hey, carl. More seriously, there were some initial reports i heard about russian athletes being booed there. Is that still the case . Reporter i havent heard a lot of that. Theres been a broader discussion about brazilian crowds being disruptive, being loud where customarily you would be quiet. Certainly the rivalry between the russians and the americans has been fierce. You know russia came in, got the bronze on the womens allaround last night. So its obviously fierce competition as always. But ive not heard specifically anything regarding russia, no. One of my favorite stories from down there has been following the swimmers because thats been such an awesome rivalry between everybody thats been going on. Then the side stories that come out of it. Like ryan lochte bleaching his hair not realizing that the chlorine might turn it green. Which weve been talking an awful lot about too. Reporter were going to talk to lochte later on this morning, becky. Well ask him about that. And what he said earlier this morning suggesting that maybe he and phelps have more to do in tokyo. That might be some news we could help break later on today. Guys, back to you. Okay. Were going to leave it there. Hope to see you in a little bit, carl. Safe travels back as well. But we will be talking to you before then. This monday burg for king rolling out the whopperrito. We get an early taste test and we get to do it right now. I know this is not on your menu. This is not on my glucose i refused to do alcohol on segments. It is to lure customers who have cut down on fast food. So this is supposed to be a little bit better for you than the burger. What . This is not low carb, low sugar. Heres whats in it. Beef, lettuce, tomatoes, pickles. Queso sauce replace this mayonnaise. What do you think . Tastes like a whopper in a burrito. Its pretty good. All right. One bite only. Im sending the rest back. Man i got to read this . Are you kidding . All right. When we come back, donald trump not backing down after accusing president obama of funding isis. Hillary clinton taking aim at trumps reluctance to release his tax records. Both will be hitting the campaign trail again this week. Coming up in just a bit. Meantime, check out the futures on this friday morning. Yeah, relatively flat. All three indices ended at record levels yesterday. Well be right back. Ray. Amazing is moving like one. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. Theres only one place where real and amazing live. Book a seaworld vacation package and eat free. Breaking economic news. Were just minutes away from key reads on the consumer and the economy. Retail sales and the price index straight ahead. A tale of two economic plans. Hillary clinton firing back at Donald Trumps position on america. Well debate. Move over millennials. Startups are chasing a 7 trillion generation. And business is booming. The final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box, everybody. This is cnbc, first in business worldwide. We are listening to smooth by Carlos Santana this morning because that was the top song on the billboard charts the last week of december 1999. And that was the same time that we last saw the dow, the s p 500, and the nasdaq all set record highs on the same day. Until of course yesterday. Yeah, yesterday all three of them did it again. Rarity. Only happens once every 17 years. This morning futures have been relatively flat. Dow up about seven points. The nasdaq up by two. Lets take a look at the 10year note. Bond yields picked up a little bit. This morning down slightly to 1. 546 . Making headlines this morning, oil prices they were down just a little bit there. 43. There they are. Now theyre up just a bit. 43. 50. Crude climbing yesterday after saudi arabias minister said they would discuss potential acts to stabilize prices during a meeting next month. Key Economic Data out of europe this morning. Eurozone Economic Growth cut in half for the Second Quarter to 0. 3 quarterly expansion or a 1. 6 annual pace. German gdp, though, grew more than expected. Economists say this all the time. Posted no growth at all. And south korea saying its investigating google. Regulators looking into whether the search giant violating any of the anticompetition laws. This comes after the Korea Fair Trade Commission recently decided to clear google of anticompetition charges involving the preloading of googles apps on its android phones. Now we want to get back to rio where carl is joined by a special guest this morning. Reporter we caught up with ryan lochte, joins us here on copacabana beach after that 200meter i. M. Last night. Thank you for having me. Was it the finish you were hoping for in rio . It definitely want. I want to get my hand on the wall first. But sometimes you win some, you lose some. But, you know, i definitely dont want to end my swimming career on that note. Reporter you talked theres a little hint there. Reporter you talked a lot about the fact you havent had a long break for years. Yes. Reporter so is there one coming now . Yeah. I mean, ever since i started swimming at the age of 8, my longest break has been a month. Never tooken a vacation. So, you know, thats definitely in the books. And i dont know how long my break is going to be. It could be a month, it could be two months, two years, who knows. Im definitely going to come back when im ready. Reporter you made some suggestions this morning that maybe this matchup we saw last night, we called it the final brodown. Might not be the last one between you and Michael Phelps. You know, he said he was retiring in 2012 and i said he was going to come back. And he did. So im definitely im saying hes going to come back for 2020. Reporter you think hell be in tokyo . I think so. Reporter and you will be too . If hes there, so will i. Reporter theres so much about the legacy between you two. Is there any doubt hes made you a better swimmer and you made him a better swimmer . Reporter but all means. We make each other better. That rivalry that weve created throughout these past 12 years just have been amazing. And we definitely bring the best out of each other. Reporter and for those who want to sort of create this drama between you two, is that a mistake . Should people not do that. I mean, there is no drama. All it is is were competitors. And were racers. And, you know, outside the pool were friends. So reporter ryan, thanks for stopping by. Congratulations on a great games. Ryan lochte joining us here at the copacabana beach. Guys, back to you. Thank you. Thank ryan. Thats awesome. We appreciate it and well see you in a bit. A few stocks on the move this morning. Jcpenney posting worse than expected. Stock up in the market. Right when the earnings came out they dropped about 2 . Now theyre moving up. Meantime, nordstrom shares posting better than expected earnings in same store sales. Also raising its full year profit forecast. And Department Store dillards reporting same store sales dropped with a bigger decline than expected. Youre looking at that stock down a little over 2 . Separately Planet Fitness posting better than expected results. Also raising its full year guidance. Shares hitting an alltime high on the news. And after eating cha whopperrito we might have to go to Planet Fitness. One bite. One bite. All right. Hillary clinton and donald trump making their economic pitches to pack crowds in michigan this week. They each chose michigan for a very particular reason. Their vision on the health of detroit in the surrounding areas, polar opposites. Heres how they compare. Today detroit has per capita income of under 15,000. About half of the national average. In detroit, weve got new businesses opening. 40 of the citys residents live in poverty. Over two and a half times the national average. Neighborhoods like midtown and Eastern Market are coming back. The Unemployment Rate is more than twice the national average. The Auto Industry just had its best year ever. Half of all detroit residents do not work. Over in ann arbor, hightech firms are thriving. In short, the city of detroit is the living, breathing example of my opponents failed economic agenda. But it is inspiring to see this combination of Old Fashioned hard work and cutting edge innovation. Every policy that has failed this city and so many others is a policy supported by Hillary Clinton. When he visited detroit on monday, he talked only of failure, poverty, and crime. He is missing so much about what makes michigan great that is brought to us via nbc news. They did a great job pulling that entire clip together. Joining us right now to talk about these two candidates and what weve seen from them is cnbc senior contributor larry kudlow. Larry, they did a great job pulling that together because its kind of a microcosm about how these two candidates see the economy at large in america. Theyre both right. They both bring up fair and valid points. But it it gets us to their broader economic plans and what they plan to kind of lay out for their strategy. What do you think . I dont think theyre both right. Let me just start there. I mean, detroit, its a tragic story over the last four, five decades. Tragic story. And i just had a thought as you were going through this. I dont know why i hadnt thought about this when we talked about it yesterday. Old age, probably. You know what we should do in detroit . What . Make it a jack kemp taxfree enterprise zone so investment will pour in there and you wont be taxed on the investment for a good five to ten years. You know, the downtown is doing much better. Dan gilbert bought a huge portion of it. Its the outside circle ive interviewed some of those guys. But the story at large is not a good story. Thats not the point. Its not about detroit. Its about the United States on the verge of a recession, the weakest recovery, all this stuff. I dont have to repeat that. My view not surprisingly, what miss clinton provided us was a hightax, highregulation, class envy prescription for more either sluggishness recession. She did not sound like she was trying to bring in republican moderates. She was trying to lean the left. She was going more left. Not a scintilla which i believe is the biggest obstacle to the the economy. Steve leisman nailed that yesterday. Shes still appealing to the far left. Trump on the other hand an imperfect candidate nonetheless laid out a very strong, lowtax, corporate reform, Energy Reform program which i regard as pro growth. If youre in a slump, however you want to define the slump. 2 growth over the last seven or eight years. Ill go back. Less than 2 growth for 15 years. Let me make this bipartisan. Okay . Fine. Wages havent moved since 2000. Bad. Raising taxes, punishing the socalled rich. I hope we can talk about what is fair. That is not a prescription for Economic Growth. Not a prescription. Trump is hes got really a very strong Economic Growth package, if i do say so myself. Hes not perfect. Theyre both looking at trade protectionism. But theres a difference between growth and nongrowth. Theres a difference between raising taxes across the board, and cutting taxes. And that includes regulations. Theres differences here. And i hope we can get to this in the campaign. Thats my point. I want to see this debate in the campaign. Who started isis is very interesting and all the rest of it. Just talk about the future of the economy. Cant blame anybody but donald trump for having that taken out of the way. Hes not sticking on message with this. Im afraid youre right. I was with him monday. All right . Ive been an informal adviser. I was on the plane. We helped write the speech. My opinion, the speech was very good policies, well delivered. You may not agree with him, but he did good, quote, unquote. And unfortunately well, todays friday. By wednesday or thursday he was already slipping off message. And i think it went into full blown on this isis business. Not that the vacuum in iraq because we moved the troops out too soon. Okay. But thats a Foreign Policy speech. This week was supposed to be an Economic Growth speech. So youre correct you are correct. Hes got to stay on message. Heres the question. To me its not just about message. I could decide that the policies he has are better, for example, than Hillary Clinton. She has not come out with a Corporate Tax plan yet that weve seen in a meaningful way. You could make those policy judgments. I know. Right . I know. But thats not what the public is ultimately in this particular election going to be andrew, the number one issue is economy jobs. Look at every poll. It was true in the primaries. Its true now. Every poll. Come on. People look. I hate to use this word. Ordinary, main street, whatever you wish to call them. Good folk who is are working and have not had the job or wage opportunities follow this stuff carefully. If you say to them as reagan did years ago when i was a kid working for him, im going to give you more takehome pay. Takehome pay nap is a winner if you just stay with us. You saw the stock market yesterday . Yes. You know where the polls are today . Yes. How do you explain that . Oh, lord. I dont know. I have no idea. I actually dont like the stock market right now. Im usually an optimist. To me on that subject the thing that i find its not about politics. Its about profits. Its about Business Investment. Its about good consumer but if you thought the world was going to hell, right . You wouldnt think that the numbers would be where they are. No. I dont think the worlds going to hell, by the way. I just think that we are in some trouble, by the way. I think this is serious. Were in a mild business recession, best i can tell. By which profits, productivity, Business Investment all decline. If that continues, then youre going to see Consumer Spending slow down a lot. And then you will be at the edge of a recession. So im not crazy about stock market right now. At all. But that doesnt issue people are not voting now based on the election. Its way too soon for that stuff to come into play. All im saying is here. Can i go back to this point . What is fair . Can we talk about this . She talks about fairness. The rich dont pay their fair taxes. The corporations dont pay their fair taxes. What do you want out of these people . The top third, 34 of the top 1 , 34 in taxes from the top 1 . You want to look at this stuff . The top 20 , these people are basically paying almost the entire tax burden of the country . Theyre also taking most of the revenue that comes in. What does she want . They dont get any transfer payments. Youre right. Larry tell me what fair means. No, no. Tell me what his tax rate fair is different. Thats like deciding the art of whats decent and whats not decent. You know whats fair . Can i tell you whats fair . 5 Economic Growth is fair. Thats what i want to see. And i want to see wages rising at i will agree with you completely. The Corporate Tax rate needs to come down. It absolutely needs to come down. Obama had a 28 proposal. He gave it lip service. But even he has one. My lord. My pal roger altman which is a dear friend of mine and smart guy, hes adopting this tax the rich stuff. Its crazy. I dont want to take the side of argument that i want to pay more taxes because i dont. But fair is in the eye of the beholder. Look at the politics of that. Hillary clinton found a way to i dont know if you want to use the word demagogue it, whatever you call it. She said, and donald trump wants to give millions in tax breaks to corporations. And how do you from a political standpoint say, you know what . One of the reasons why our companies are leaving this country is because theyre able to go abroad and pay is that something that would sell to the American Public . I do. I think it has to be spelled out, it has to be messaged. Clear points. But they know this. If youre taxed to death here, youre going to move to ireland. Okay . Just make it as simple as we can. And by the way, theyre growing at 7 a year. Do you like the tax holiday opposed to whats the tax holiday . The 10 repatriation. One shot. Ill do repatriation. Its in trumps plan. 10 . I thought it sounds like a one shot deal. It could be one shot. Could be three years. Were not sure. Kevin brady has a similar plan in the house bill which mr. Trump endorsed. Do you have an issue with the pass through issue on the carried interest . Im just curious. Half the companies in this country are scorps. Why shouldnt they get the 13 rate . Business income should be done ra very clearly. Yes, the experts will figure that out. I dont want any cheating and finagling. But the fact is half of our companies are now qualified as scorps and Sole Proprietorships let me finish. Aie scored the trump plan at 10 trillion deficit. When was that . Just the other day. Using their software. I was here the last time douglas holtzeakin said you cant score it because its incomplete. And theyre right. Thats hardly a good defense. No. But its coming. Give me a chance. Its coming. When do you think we might get details . Youre going to get a larger picture mr. Trump is speaking in a couple a weeks. I think he said in two weeks wed get more details. It may happen after labor day, i dont know. But youll get more details. I want to make this point. You cant have a good job, you cant have a goodpaying job unless you have healthy business. Right. If youre taxing that business and regulating that business and making the energy cost of that business sky high, you will not have a good job. And one more point, you cannot have a good business, you cannot have a brand new business startup which is the real jobs creator of this country if you are taxing investment, taxing capital. This is not democrat. This is not republican. This is my opinion as to how america works. And she wants to run on a class envy divisive program with the socalled rich people. Theyre already paying more than their fair share. I dont get it. She didnt have to do this. This was steve leismans can i ask you a question . I want to comment as to why. I talked to people afterwards. I said why hasnt Hillary Clinton pivoted to the right. And the reason is shes got this other potent issue of trump is nuts. She plays that. She doesnt need any help from the other side. So theres no reason for her to pivot. Look, i cant thats her strategy. Youre absolutely right. I personally do not think it will work. Okay . Can i ask look. There are unknowns here, unknown variables. His speech on monday was a very important speech. The question is will he carry it through on a messaging basis. Then we come to the debates that will be heres my personal question for you. How do you separate the policy stuff which you absolutely agree with with whether you want to call it rhetoric, whether you want to call it whatever you want to call it. The other piece i know you dont like. How do you separate that . Whats the other piece . Some of the rhetoric, some of e the things he says. Whether its isis or the other things. I call it the off the cuff mistakes, selfinflicted wounds. You know, its funny. Im reading it like the rest of us. I think he has an important point. Its a little too elliptical. But i feel this should have been the Economic Growth for mr. Trump. And its been diluted. Im not a political guy. I leave that up to whatever Paul Manafort and that group. Theyre pretty smart. But thats my take. His policies, even though wall street journal has come around, the editorial page now theres a whole group of people out there that may agree with his policies but then they look at things he says and they have an issue. That is his challenge. I buy that. If he cant get that done, hes going to lose. If he can convince people of his seriousness, if he can convince people he has good policies and he can put them to work, put them to work, he will win. If he cant, he wont. I agree. Its a fair point. Okay. Larry kudlow, thank you. Still to come this morning, weve got the stocks that are on the move. Squawk returns in just a moment. Announcer alvin and the chipmunks want to remind you bacteria can hide in food and make you ill. Wow announcer but you can keep bacteria from ruining your day with 4 simple steps clean. Im ready for the rinse cycle announcer separate. All woah announcer cook. Fire in the hole announcer and chill. Chipmunk we chipmunks are notoriously tidy. Announcer check your steps the roadchip to food safety starts at foodsafety. Gov. Chipmunk whoo this is awesome welcome back to squawk box on this friday morning, everybody. Weve been watching the futures and remember all three of the major averages setting new highs on the same day yesterday. Today markets look a little hesitant trying to figure out which direction to go. Around the flatline although we have seen positive numbers earlier. Were getting closer to the opening bell. Meantime, we have stocks to watch as well. Kbr buying honeywells Government Services unit. The price tag, 266 million. All right. When we return, a deep dive into the data. Shark tank, well get Kevin Olearys take on the economy. Youre watching cnbc, first in business worldwide. Diving into the data shark tank this morning. What does making cupcakes have to do with overproductivity . I had a conversation with kevin oleary about this. He joins us now from toronto. We were having lunch the other day in the cafeteria. You were eating rabbit food which i was prized about but good for you. You were listening to our debate about whats causing u. S. Productivity to decline and you had a cupcake example. Whats the story . Ive got 32 private companies in my portfolio as a result of what ive done on shark tank over seven years plus others. We dont talk a lot on squawk box about companies doing 5 million to 50 million in america. These are spread out across the states. Geography or sector. We picked cupcakes because its a great example. Lets say youre a family and you start making cupcakes as a commodity. Over time you grow your sales to 5 million. When you started, regular the cost of complying with regulations was about 10,000 a year. Today its over 115,000. Thats two employees that dont exist making cup cakes. Or wages. Or whatever you want. Because the company has to comply with 600 new regulations. My analogy is simple. The arteries of capitalism and entrepreneurialism in america which it was always great at doing Small Companies becomes big ones are slowly getting clogged with the plaque of government regulation at all levels. When that happens in a human being, you get a heart attack. We need someone to put a stent into this now, open it up, reduce these regulations so we can get more job growth. We dont talk about it enough. I accused you of that in our conversation. You like to talk big picture. Well, why dont you take these hundreds of thousands of companies, aggregate them into your thinking and realize we have some why dont i get a guy who owns 32 companies and have him come on squawk box and talk about it . I could do that as well. So kevin, give me an example in your companies of regulations you think that are zapping productivity. You know, what happens is if lets take you want to open a food operation in new york state. And you wanted to do that in the early 1990s, you could get through the process of applying in probably one day. Without the need of a lawyer. Steve, try and do that today. I bet you dont even know that if your rent is more than 500,000, you have to pay tax on it. Neither does anybody else thats running a business. So they have to hire a lawyer to try and comply. And many times cant because since the early 90s, weve burdened these Small Businesses over a thousand regulations in new york. Same in massachusetts. Same in california. If you listen to these entrepreneurs and ask them what their Fastest Growing cost on the income statement is, its compliance. We talk about it in big banks. We talk about it in the financial sector, but not the cupcake guys, not the honey funds. All these little businesses that are now mired down in this process. Im holding up a hand for them. By the way, i was at the floor of the New York Stock Exchange yesterday listening to hundreds of others to hillarys speech because i was going to ring the bell. That was not well received. And of course the bias on the floor are going to be probusiness. But half of them have to be supporters of hillary. That was a fail. If thats her platform, thats not going to work for Small Business or anybody else. What are you hearing from donald trump in terms of the regulation story . He is the only candidate who speaks to those Small Businesses doing 5 million to 50 million when he says hell put a moratorium on regulation. Every one of those companies, they may not admit it. Maybe they dont want their picture taken with them but i can tell you anecdotally, theyre all voting for trump. I dont give a damn what the polls say, theyre buried in regulation. When their number one cost that extrudes capital from their companies is compliance. It doesnt work, steve. Are you comfortable with donald trump being president . Im really concerned that both these candidates are going to throw some horrible mud at each other. You forgot Hillary Clinton because ive lived through her tenure as the first lady has lots and lots of skeletons that havent been thrown at her yet. Remember travelgate and all the stuff that went through when she tried to get health care as bills wife. They havent even done that to her yet. Its going to be the ugliest, divisive, and im not sure its good for the country pep my point is and i think larry said this earlier, why dont we admit both of these are flawed candidates and look at the policies they can bring forward for Small Business and job creation . Because i think at the end of the day, theres only two things that matter in the election. Can i get a job and will you keep me safe . All the rest is crap. Youre not voting, right . Youre still a canadian citizen . Look, im swiss. Im a canadian citizen but when i move to boston, my children were born here. I know you do your businesses down here too. Oh, yeah. Theyre all there. Listen. When i wanted to create wealth for my family and have a shot at growing a business, the only place in the world i wanted to be in was america. Because low regulations, access to capital and markets, thats where the learning company was sold for 4. 2 billion. I wouldnt be here talking to you if it wasnt for america. We need to thank you for your time. Weve got breaking Economic Data just hitting the tape as we speak. Retail sales and Producer Price index. Thats my job. Unexpectedly flat in july is the number i have. Calling up the table right now as we speak. And i have hold on a second. There it is. I got to scroll down a bit and give you the numbers. Zero after a revision upward in june. Not sure that gets rid of the july miss here. Excluding autos down 0. 3 . Up 1. 1 . Thats better than the 0. 5 in june. Lets see. Grocery stores down. Gas stations down big. 2. 7 . Sporting goods hobbies down 2. 2 . This is not a good number here. The core number that feeds into gdp is also a zero. Without a revision upward. So looks like there was some stress and not some terrific purchasing and retail activity at some of the key places like Department Stores, food and drink establishments did not do that well as well. We have one other number here which is the p. I. Did you guys get that . Looks like that was a little hot, perhaps. No, sorry. Down 0. 4 , it looks like. I dont know what the expectation was. Do you know what that number was expected . Its interesting that you point out the retail sales were weak for food and drink. Thats been a its been an issue. We thought that the food and drink establishments were doing great because of low gasoline prices. Then it went the other way. Lets bring in jim paulsen. Good morning to you, jim. I should note, by the way as steve was talking and we got those numbers the futures which had been in the green pretty much across the board after what was a rather surprising spectacular day yesterday have turned around and are now marginally in the red. Actually, frankly, theyre coming back a little bit. But given where we were yesterday and some of these numbers, how are you thinking about the world this morning . Well, i still think i think were moving back towards optimism here, andrew. I still think the markets probably have a little further to go. I think the International Markets will probably do better than the u. S. But i guess im just struck by to me i know the report on retail sales is weak here this morning. But i just think globally not even just the United States but globally to me there seems to be more evidence of economic economies bouncing northward here. For the first time in this recovery, we have every policy official across the globe pushing upward in this recovery. We dont any longer have u. S. Trying to push up while europe is trying to slow it down with fiscal austerity. Or chinas trying to moderate the recovery. We have everyone pushing up. I think that synchronized policy stimulus might result in the synchronized global bounce. I kind of think the markets are reflecting that a little bit. Larry kudlow just told us we are in a mild recession, we have a Political Climate thats all over the place. Hillary clinton given where the polls are, if she were to win, she gave what arguably could be a very leftist style speech just a day ago. Why do you think that the economy and why do you think the markets are liking things so much . Well, look. Look at the look at citigroup surprise indices around the globe. Most of them are up and in positive territory for the first time in awhile. The west global surprise index has moved up by most of the recovery since march to one of its highest levels. Why should multiples be moving up here . Thats the question. Thats why theyre moving is the multiples story. Well, it is right now. I mean, thats how it appears. My point is i believe whats going to happen is youre going to see earnings turn up. So right now theyve gone up because earnings havent come up yet. I think we get to the end of the year, we might have 120 earnings and suddenly the multiple didnt go up that much. Jim, one of the points people make about the recession is a persistent decline in productivity. Say how can this economy be growing when were getting less efficient. But you think maybe the productivity numbers are wrong . I do. And theres Different Things that lead me to that conclusion. One of the biggest things, steve, is if you look historically in the post at wage growth and productivity growth, what youll find up to the start of this when wages were growing faster than normal, productivity was moving faster than normal. They moved closely together. What happened in this recovery is wages have grown faster than average while productivity has continued to grow slower than average. And if you think about what that means, it means that corporations in this country are paying a resource more of their precious sales dollar, more and more and more and theyre getting less and less and less. I dont think thats probably true. I think one of those things are misstated. In my guess, the more difficult thing to measure is productivity and i think its understated. And if productivity has been stronger, then so has growth. Which might explain why profits have done so well. Why auto sales are at record highs. While weve returned to full employment while job creation has been close to 2 . Might explain a lot of things that are tough to explain if were really only growing sub2 . Were going to leave the conversation there. We appreciate it very much. When we come back, its a new for millennials. Betting on an aging market and the payoff could be huge. Details straight ahead. Inic, watson, lets review the Electronic Medical record of the next patient. No problem. Its a pretty huge file. Done. Sorry for the wait. That was quick. As part of our research, i also compared lab results with notes about prior treatments, then cross referenced it with thousands of medical journals. And i get the benefit of much more data, and a lot more time to plan the best treatments. I stay focused 24 7 and never sleep. You sound like a lot of medical students i know. Welcome back to squawk box this morning. Move over millennials. A growing number of startups are tapping into what could be called a gold mine. This is your premiere on squawk box. Hi, didi, how are you . Reporter hi. Good to be with you this morning. They are paying more attention to this demographic. Baby boomers represent nearly 76 Million People in the u. S. And account for 7. 6 trillion in economic activity. And one area theyre spending on is care giving. Its expected to be a 72 million market by 2020. Honor is one of the startups we visited. Its focused on connecting seniors with caregivers through an app. And just this week honor raised 42 million in venture funding to grow its business. Lynn okeefe is a partner at perkins and she says nearly a third of her portfolios target older adults. This is a huge market. And as we think about health care, it is one of the biggest markets that actually spend health care dollars. Reporter scene seniors are also spending on things like companionship. Stitch helps users discover social outlets. Compared to millennials, seniors are more loyal to their brands and willing to pay. And aarp tells us theyre seeing increased interest from entrepreneurs. Applications to startup days have more than doubled since 2012. Guys, back to you. Thank you, aditi. Nice to have you with us. Reporter great being here. Pretty cool. Coming up, the highlights from another big night at the olympics. Plus a checklist for andrew as he gets ready for his week in rio. Squawk box will be right back. I asked my dentist if an electric toothbrush was going to clean better than a manual. He said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. An ordinary experience into an extraordinary one. Get great offers at the lexus golden opportunity sales event. Lease the 2016 es 350 for 329 a month for 36 months and well make your first months payment. See your lexus dealer. What is freedom . Yes, its riding a horse across fields and stuff. But its mostly getting to watch your directv with unlimited data from at t. Were setting families free. So they can stream away and not squabble over whos using how much. So go, family. Watch. Freedom. Ha seize the data get our best unlimited plan ever so you can stream and surf all you want. With unlimited data from at t we have welcome back to squawk box. We have markets moving on that disappointing retail data. You can see here the dow jones now down 15 points on a fair value basis. It had been flat to up a little bit most of the morning until that data came out. The nasdaq would open down about two points. The s p down almost two points as well. And the yield on the 2year, that took a turn lower. Its now 69. It had been trading, i dont know 0. 72 before the number came out. What else were we going to look at . Is there an s p chart . Currencies. Yeah. So euro 1. 12. The yen 101 and the pound 1. 30. Were going to talk a little more olympics. Our good friend carl is down in rio. The u. S. Collecting more gold in rio last night. Carl is there. He joins us now with more. Good morning, carl. Reporter we got a chance for even more tonight, andrew. Katie ledecky is going to take part in the 800meter freestyle. This is her best event. She crushed opponents in the qualifying heat. If she wins, shell be the second person ever to win three individual freestyle events at a single games. She is get this. She has set the world record four times in less than three years. And she has the fastest 12 performances ever. Absolutely amazing. Congratulations to fiji. Fiji gets its first medal ever as they beat Great Britain 437. Rugby is the National Sport in fiji. Finally, womens swimming. Simone manuel, 20 years old, ties for gold in the 100meter freestyle. Sets an olympic record. She is the first africanamerican woman to win an individual swimming medal. Congratulations to her. And speaking of firsts, andrew. I know youre coming to your first olympics this weekend. We decided to collect all of our wisdom among the cruise and put together some advice. Reporter download Google Translate on your phone because english is not widely spoken here and i dont know how your portuguese is. Where is the bathroom [ speaking in Foreign Language ] yeah, what she said. Andrew, youre going to want to bring some comfortable shoes because youre going to be walking a lot around olympic park. For instance, swimming is over there. Basketball and judo over here. Track cycling over here. And diving, you cant even see from here. Whatever you do, andrew, dont forget your credential. You need it to get in and out of the park, and its a vehicle to hold all your pins. Andrew, see these music speakers . Theyre right outside our set. Which means youre going to be listening to the same music set all day every day. Maroon 5, justin bieber, some brazilian samba. Get used to this. Very nice, carl. Reporter yeah. The guys the crew says bring pepper. For some reason pepper is hard to find in restaurants and at tables. Maybe some tabasco. What else can i tell you . Does that scare you enough . I was told by the way, sam wright said bring soap. I want to know what thats about. Reporter soap. I would bring a large bar of shower soap because the ones they give you at the hotel, theyre like a post it stamp. Theyll be gone before youre done with your upper body. So you havent washed the lower part of your body all week . Reporter no. I brought soap. I brought my own soap. Okay, carl. One more question for you. All the pins that you have up and down your lanyard, is that kind of like the beads you get in new orleans . Howd you get those . Reporter theres a big trading game down here. Well do a piece on that in the next hour. The craze people have with these olympic pins. Its a tradition that goes back years and it gets pretty competitive. Hey, carl, i want to ask you a question. Which sport which obscure sport have you now become an expert in judging . Because im getting very good in taking the tenths off for the hop in the gymnastics. Which one are you focused in on now . Like fencing, do you have that down . Reporter im poor at fencing. I saw a list. 538 did a list of the most popular sports. I think swimming was number one, volleyball. At the bottom was equestrian stuff. I think andrew should make it his personal mission to get up to speed on dressage and all the horse stuff. Wow. Horse stuff next week. Thats good. Im on my couch as an expert judge. This happens every four years when the olympics come around, im an expert in the thing im watching now for the first time. Diving. Are you good at diving in. I havent done that yet. When i get to diving, i will immediately be an expert in the value of a splash. Men. Men. Men. Okay. Carl, youve been amazing. Weve loved having you there. Reporter i cant wait for next week. I know. Thank you. Andrew, im going to miss you. But ill see you every day. I got it. Google translates. Sneakers. My credentials. And pepper. And pins. Im going to bring you pins. Anything about the beach in rio or i mean, we just had carl at the beach. Why didnt we talk about the beach . What about a bathing suit . Reporter well, its rainy today. Otherwise i totally would have been in a bathing suit right now. But youre going to have some sun. Youre going to have some sun next week. And look at this. Thats a gorgeous shot right there. That is beautiful. Have you been dancing . Is there any dancing going on . Reporter i think the high for monday is like 82. So bring your speedo. And just to be clear, the one thing i went to buy off with deet and you havent worn it all week. Reporter i brought some and havent used it. Ill leave it for you. And your soap. Thats okay because you dont have soap to wash it off with. Carl, thank you. Weve loved everything you brought us. Thank you for letting us feel like weve been part of it. See you guys soon. Okay. See you. Up next, jim cramer joins us from the New York Stock Exchange. Well get his take on todays top stories and a quick look at the futures, relatively flat all morning long. Dow futures down 21 now. Check it out. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. [music] jess hey look, its those guys. Jess are you good to drive . Shawn im fine. Jess how many did you have . Shawn i should be fine. Jess you should be . Officer go on and step out of the vehicle for me. Bud see ya, buddy. Good luck so, it turns out buzzed driving and drunk driving, theyre the same thing and it costs around 10,000. So not worth it. Lets get down to the New York Stock Exchange. Jim cramer is getting ready for his show coming up in a minute. Jim, we saw retail sales came out a little weaker than expected and got earnings from jc penney that werent in line with what we heard from nordstrom and macys yesterday. What do you think . I have to go with the fact that individual companies from bottoms up are saying pretty great things. Very normal quarter. When i say normal quarter we havent seen a normal quarter in a couple years from these guys. Consumer quite strong. It is kind of a radical read versus the Commerce Department numbers. What it says is that however the Commerce Department is tallying the numbers its not impacting where we think of traditional retail, which was other than gap, very, very strong. You know pretty amazing. St. Loueve liesman brought u good point, ppi weaker than expected, maybe deflationary pressures could be having an impact on retail sales as well . I mean i think its consumer credit. I think the consumer is borrowing more on the credit card. The credit card is back. I have to tell you it was pretty broad. When you have numbers i like the penny number. I thought pennys is going to be good because allison is a great manager. Nordstrom will spend more, kohls will spend more, macys more profitable growth. All situations that made the moves make sense because not that i want well i dont want people to necessarily chase but those were all very Good Conference calls, all confident, i really liked that. Retail analyst earlier that pointed out look, a part of the good news is these retailers have gotten their acts together in terms of inventory and being a little more properly stocked and not having too much stuff like they did last Holiday Season when the weather turned out to be way too warm. Dead right. Backtoschool season, everyone has come in lean. No one has excess or actually things that sold well, denim sold really well, highend perfume sold well. What youre dealing with these guys are coming into a backtoschool and Holiday Season, they havent come in hot in a long time. Remember we had above average warmth winter and that hurt. Theyre lean for the first time in long time. It is no the a promotional environment and i havent said that in ages. Great news for shareholders, not great for consumers, buy your stuff before they run out. Jim, we will see you in a couple minutes. Thank you, becky. Coming up, when we return, a check on the market and the biggest movers ahead of the opening bell. Squawk returns in a moment. How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. Hthis bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade welcome back to squawk box. Lets take a look at a few stocks to watch as we head towards the opening bell. Nordstrom shares trading sharply higher. Retailer posting better than expected earnings and samestore sales and the company raising its full year profit forecast. That stock nordstrom up better than 9 . Acacia communications soaring on better than expected revenue. The stock price up 24 this morning to 83. 92. This is the best performing ipo of the year. We talked to the ceo a little earlier. Yeah. We had walmart and hostess teaming up to bring a state fair favorite to your freezer. Why do they give me these stories . Hostess launching packaged read it, andrew. Deep fried twinkies excrewsively available at walmart. The special variety kept in the freezer, must be baked before you eat them. Although if youre eating deep fried twinkies youre baked already if you get the joke. For those living in colorado. And elsewhere. And elsewhere actually. Now theres washington state. Theres a couple places you can do it now. Yeah. A market there. Quick final check on the markets before we go. Looking at red arrows across the board. Dow off 20 points. Enjoy rio. Thank you. Steve. See you next from jackson hole. Time for squawk on the street. Good morning and welcome to squawk on the street. Im david faber with jim cramer live from the New York Stock Exchange. Carl quintanilla, its his last day, at least for us, live in the olympics at rio. He heads home soon. Were going to hear a lot more from him before that happens. Taking a look at futures this morning, see we are set up for what appears to be a lower open after hitting highs on all three major averages yesterday. Yes, shades of 1999. Well get to that in