Shanghai comp lower. European equities were mixed to flat earlier today and still that way. Theyre all flat. I mean hardly any moves worth mentions there. Take a look at the price of crude oil. Higher and wti still above 46, 46. 03. Brent at 48. 63. And dow component home depot out with results. Matched estimates of 1. 97 a share. Revenue essentially in line. Home depot did raise Earnings Guidance for the full year now at 6. 31 a share. Just below the consensus estimate of 6. 32 and analyst will join us to talk home depot. There he is right there. In case youre wondering what he looked like, i can confirm bryan nagel. A lot of these shots we get of people, you dont know what happened. He looked good. Didnt he . Happy. He is going to be on squawk box. And he covers home depot. You remember people used to cover the steel. They would come on and, but home depot, pretty good. By the way, you saw on the teleprompter. They is a Home Improvement retailer. Just in case theres anyone in the world that is wondering, what is that company do . Do you know . Are you familiar with the name is pretty theres some companies that report on it. We need to know what they do. Just in the interest of brevity, i think we can report that you know and then move on. I didnt know you to be interested in brevity. Not if i can get some kind of stick. A lot of data on the agenda today. 8 30 a. M. Eastern time the Consumer Price index. 9 15 we get a report on industrial production. 12 30 another fed talker. Atlanta fed president will speak in tennessee. Thats ahead of the release of feds minutes tomorrow. Dick sporting goods. Did you see this article in the journal comparing pets. Com to sprabers central bank rs. All around the world. Pets. Com in 1999. I left for two weeks and before i left i asked the fed to never talk about whether they were going to they didnt raise in the last two weeks, did they . No. So once again we didnt miss anything. They didnt say a word. Its been eight years since theyve raised once. Cant we just dont say anything and let me know when you raise. I dont need to know anything, but when you finally do raise, i will deal with that quarter point. I dont need any analyst. The analysis has been pretty worth less. We do care when Interest Rates start going up. Thats because of terminal pricing. It already went up a quarter and didnt hurt the stock market. Im talking more about the longterm rates havent gone up even when they did that, right . They havent learned. How many guys today. Every day theyre talking and its all about whether theyre ever going to raise. Just surprise me. Im ready. You go ahead and do it. Thanks to 13 f. Filings we know what big hedge funds Ronald Reagan buying and selling last quarter. Soros sharply cut gold. Raising bearish bet in the s p 500. Berkshire hathaway increased stake in apple. Carl icahn shed the position in the iphone maker. Is that what they do . Yes. Its amazing. Yes, they make iphones. I thought westing house made the iphone. Not anymore. Maybe they were the original. Apple manufacturers. Absolutely. Criticized being sole product company. What no one has really i keep reading this. 55 . So buffet never invests in technology until its not technology. Like ibm final gets into ibm. Apple was a 9 billion market cap and went to 700 billion no buffet. So he finally goes into it. Some might say late, but he raised it 55 to what . And how does it compare. Its still 1. 5 . Still small. I should look. Instead of just asking questions, but is it an actual what you would call a big buffet bed or not . Just dabbling. Its like when hes adding to ibm position. Hes buying like 2,000 shares because when it went from 170 to 120. Hes still buying at 120. If he was really buying, but actually hes looking better on ibm to come back to 160. Berkshire cutting stake in walmart and paulson and company held stake in gold. John paulson sold off shares in allergan, pfizer and increased stake in valeant and rite aid and took a position in johnson and johnson, a Consumer Products company. It also added fedex which does overnight deliveries. Much more whale watching to come. A major Health Insurer is quitting most of the Obamacare Health exchanges siting cost, aetna saying policyholders turned out to be sicker and thus more costlier than expected. Beginning next year, aetna will only remain on the exchanges in four states. Delaware, iowa, nebraska and virginia. It is the first major Health Insurer to make a decision like this. Aetna will still offer individual policies outside of obamacare. And hain slet yell saying it will delay annual Earnings Report due to accounting issues. Shares of the natural food maker tumbling on the news. Hain also says it doesnt expect to reach expected sales and profit levels for the year. In a statement the firm saying its evaluating whether the revenue granted to certain distributors was accounted for. Also va what is the guy im thinking of . It was a tea company and not an underwear company. Rielg. Right now, lets head to rio. Andrew sorkin is there. Reporter hi reporter a lot going on here. Very business day in track and yield. Look at this jid. Finish in the womens 400. United States Allyson Felix nearing the finish when Shaunae Miller of the bahamas dives forward at the finish line to hold her off. Not illegal. Youre allowed to do it. Dangerous nonetheless. Pretty amazing stuff. I want to show you video in gymnastics. You can see it right there. This is simone biles who has become americas sweetheart had a disappointing finish. When you see right there, she didnt fall off the beam, but simply by touching it is the equivalent of falling off. Thats how they judge it. Her teammate took silver in that event. We should tell you biles does have her last chance for one more gold in rio today. The floor exercise where shes going to go head to head with her teammatealisoalison. China in second with 46 medals. That is followed by Great Britain with 41. Just a day after taking gold in mens golf, Great Britains, justin rose, expressing the fact many elite golfers skipped the game in rio. Saying it makes his medal no less successful, but hopes the return will encourage others to play in four years. Very competitive guys which makes them so great. When they see top class competition going on and see such a great reward at the end of it, hopefully its something theyre hungry for in the future. He believes golf is in a healthy spot rights now and hopefully the olympics will further build on attracting a wider audience. When you represent your country a whole nation gets behind you too. Its very important. I believe the tv ratings were great which is helpful too and i think thats what helps grow it. So thats our hope. Thats our aim. Reporter most important, more than anything else, joe, is that justin had a very special message, for you, sir. Joe, justin rose here sitting here with my olympic gold. We managed to get you guys in the golf, but you have Great Britain in the medal table right now. Usa number one, but lucky i was able to reverse that on the golf course. I love being on your show and hopefully we can do that again soon. Nice. There you have it, joe. My wife said, you owe me some money because we had to pay for that. Yes right. I like do you feel comfortable reading those medal tallies. Watching you be the sports guy, you got through and it did it. Its fun to watch. Andrew, justin, by the way, hes not i was pulling for matt kutcher. Hes an island guy and american. My wife said who are you pulling for, stenson, who i love also, or justin. I was so excited for justin rose watching that happen. I knew how much he wanted it. We had gary player on who said i would have gotten in a row boat from south africa if i could have tried to win a gold medal. I was upset with some of Jordan Spieth and dustin johnson. What about rory, rory is not here either. We had kevin plank on. Were going to show you video later because obviously under armour big sponsor. They really lost the great marketing opportunity by jordan not coming here. It did become the other guys were saying i got four gold medals a year with the majors. Matt kutcher said hes never felt so much pride. Jordan you could see the emotion that he had when its bigger about you and bigger about money. I think it was a mistake for them to skip. It worked out well for golf this time. Before i let you go, i was watching, so that makes sense that to do that the olympics in some cities that already have the infrastructure and you mentioned rome. I dont think thats going to work that coliseum. That needs updated. I dont think its big enough. You know, the concession stands, have you been there . Theres no way. I have. That makes no sense to me. Theres a couple of other coliseums that theyre going to have to use there. The seats, ive been there. Were going to talk about that. Uncomfortable like the stone benches. I dont know, andrew. Reporter we should tell you we have Casey Wasserman representing la. Hes going be on the show 7 40 a. M. Were going to talk to him about the la bid along with rome, paris, budapest which are the finalist. I miss that when youre dismissive of my jokes. Its hard toer to hear from e in brazil. Whats your excuse when youre a foot away from me . Anyway. You know, andrew, do you know this ir win simon guy . Do you know him personally. Absolutely. Hes been on and ive gotten into little tiffs with him about gmos and about how anything natural was great and anything thats not is horrible. And so when i read this, i was like, that guy, well see what happens. You saw this news on hain. I saw the news. We have a lot of that food in our home for our kids. You buy into that. All that stuff, kael, arug la. You dont like any chemicals anywhere. Then i tell you everything in the world is based on connechem were all sprayed up here with deet. Thank you andrew. We will be back. See you p in a bit. You didnt have to pay him. I love that guy. Were buds. That was sweet that message to you. Awesome. Great guy. So happy that even i like the u. S. , obviously, but if it had to be anybody else. Another record setting day for the markets, but our next guests are taking a cautious approach. Ed key yan, and samantha Global Market strategist at j. P. Morgan asset management. You have not been negative on the market. Going to grind higher, continue to move up and you would you would rather be in the market than in cash, wouldnt you. Absolutely. Were looking at the market right now. Broad market exposure is maybe not where you want to be while Central Banks are supportive in the medium term. In the longer run we need to see fundamentals come back on line. Thats why were cautious. Were you cautious six months ago. No, we werent. Weve always said stay in the market, just expect lower returns with more vol volatilit youre more cautious now. Were almost at 2200. At 2050 i would hope or 2,000 a lot of people were saying they were cautious there. Saying the fundamentals didnt warrant a move another 150 points on the s p. It didnt warrant it back then either, did it . It didnt. Its still being driven by central bank easing. Im surprised theres still steam left. Were focusing back on fundamentals. The fact is the u. S. Economy is still growing. Were still positive on it. Its been subdued, but consistent. You look at earnings and looks like they may have bottomed. Theyre trending higher which is a positive. Past that, youve been bullish when you needed to be bullish pretty much. In the last year and a half or so, would you say that historically you were less bullish than you had been. A little less bullish. Weve been going back and forth between overweight and underweight stocks. But did it change when you changed jobs, too . Ive been on the buy side for eight years. You got into this Asset Allocation side of things. You used to be purely stocks. Back in the old days. How old is that . Time flies. How long has it been. Its only been nine years, joe. Seems like its flying a little more for you than me. Maybe you can talk to my colorist. Nine years youve been doing this asset stuff. Holy smokes. Hows it going. Pretty well so far. So i interrupted to make a point, you used to be mostly stocks. You have been shifting around in the Asset Classes then. Yes. This is still a bull market. Its an old bull market. Much like myself. We have been much more tactical this year. We have been shading a little over and under. When we have a good run we take some profits, which we did a few weeks ago. We focus a lot on what happens with earnings and earnings expectations in the second half, we were pretty optimistic about it a month ago. Then theyve been coming down rapidly. I thinking this is a bull market, but its not a raging bull market. Its one you have to pick your spots and right now being a little more cautious makes more sense. Do you remember the i was having grownup in the big bull market from 1982, both of us have seen that, about ten years ago when people said youre not going to do better than 6 in the market. Thats going be longterm what you get. Is that what weve done for the past five years or so . We have sort of been we shouldnt be surprised this is all we get. Actually weve had a pretty good year. Its august and weve got 8 . This is. Got nothing last year. Well, thats right. This year has been better than i thought it was going to be. The longterm average, were not going to get 12, 13, 15 anymore consistently. No. I think were going to get around 6 or 7 maybe, but in a low inflation world, thats not that bad and in a world where the return on bonds is probably going to be 1 or 2 , six out of stocks isnt all that bad, but just a flood of money, People Like Us that are trying to use their money to pay for their daily expenses. So as the baby boomers have more assets to put into asset purchases, the prices have gone up. Its hard to find cheap Asset Classes anywhere in the world. Wall street journal highlighting in a different way a question weve asked now on years. They say Central Banks could be this markets pets. Com comparing it to 1999. And talking about were seeing in the bond market as you talked about and youre concerns about the stock market relative to the fact what youre implying is when Interest Rates are so low in the world, when your choices are negative Interest Rates youre willing to pay a lot for for attorneys generwill your r its the way the math works. I think has to. Central banks are manipulating the market in some sense. By design, yes, absolutely. Thats their mission. Theyre trying to manipulate the market. Right. The short end of the curve and the long end of the curve are very disconnected. Even if the fed was to raise rates, the long end didnt go up. It wont likely go up. Youre still going to get money flowing into any asset that has yield. Everybody has decided longterm rates are staying lower for longer a very long time when everybody agrees on something, thats the moment when it all starts to come unravelled. Are we at that point . Its been out quite a few years weve had this debate. I can remember pimco, not getting into the long end of the curve. That was like nine years ago. Five. Its been a long time that people said the long end has to move. No, nobody thinking the long end has to move. Structurally theres reasons for rates to stay anchored on the long end of the curve. One is lower growth. Were not a 3 growth economy anymore. Were probably 1. 5 growth economy. Okay. All right, ladies and gentlemen, thank you. Samantha and ed. Someone asked me to say who it was. People or serious dont know who were talking to. Im not going to go into who you are. I was kidding about the colorist. I swear. Look at this here, when i went away and now i havent had it cut. When i get it cut. You dont color your hair. No, i dont. Im not going to ask you the same question. I swear on my beloved dogs that i do not. I swear. Cant you tell. People they gave up on the wig. People ask me if your hair is real. They gave up on the wig. They got now its supposedly clarol or something. You dont color your hair. No. Women in new york, they color their hair. Home depot reporting earnings on the top and bottom lines with the company raising earnings forecast for the year. Joining us on the phone is bryan nagel. It was very inline kwarquart its a good quarter. What are you looking for next in terms of what theyre telling us about the future. Any disappointments there . The company is going to host Conference Call at 9 00. My sense is that cooler temperatures early in the quarter in may probably weighed on their sales a bit. If we deny if we had more normal weather, sales again would have been better. Trading at the high end of the range in the last year. In premarket we see it going slightly negative here as the numbers have come out. Any reason you see in the numbers people will be disappointed. Just that lack up upside. Kneejerk reaction the market has gotten used to. This was an inline quarter. The keys with home depot and i follow a lot of retailers is retively speaking, especially for a company of this size, to put up 5. 4 comp is very good. Those comps look pretty good. Last quarter was 6 or last month was 6 . 5 not as strong, but at the same time, compared to the rest of the retail space, thats pretty good, right. Im looking at the sheet in the First Quarter. 7. 4 comp. So you went to 5. 4. Again weather noise there because they benefitted from what looked like an early start to spring in the fiscal q1. Got it. Bryan. Thanks. Get on the Conference Call at 9 00. Talk to you later. Donald trump outline plan to deal with terrorist threats including how he would destroy isis as well as the extreme vetting of immigrants. John harwood joins us next. Welcome back to squawk box. A time for an update from the campaign trail. John harwood joins us from washington. This is so weird. This whole campaign. So many things. I dont know whether its the proliferation of social immediate media and cable in general. Hillary stumbled yesterday leave t ing the podium. Biden cracks me up. Its weird to say this guy behind me is carrying the nuclear codes, in case youre wondering. That was weird. Its dissended into i dont know seems like a parody of a president ial campaign. Reporter you are exactly right. Everything about this campaign is bizarre. The one thing constant for the last couple of weeks is donald trump continues to struggle. The new poll out this morning shows him down 9 points. Tried yesterday to refocus around the issue of terrorism and National Security in a speech in ohio. Another swing state hes been behind. He said its time for a whole new regimen for screening people coming into the United States. Heres donald trump. In the cold war, we had an idealogical Screening Test. The time is overdue to develop a new Screening Test for the threats we face today. I call it extreme vetting. Reporter now, as you mentioned, joe biden was on the trail with Hillary Clinton rebutting that argument. Joe biden said his son, beau, who died of kancancer last year but served in iraq previously would have been alarmed by the change in danger for american troops as a result of things donald trump has said. If my son were still in iraq and i say to all those who are there, the threat to their life has gone up a couple clicks. Reporter now, there was one more you talk about the parody element of the campaign, joe, there was one thing odd last night. Donald trump of course has taken policy stances that are pretty close with vladimir putin. Hes got a campaign chairman, Paul Manafort who worked for a p proputin leader of ukraine. Put out a press release trying to counter that story by saying people should look at Hillary Clintons tieing to vladimir putin. He seems to lob the same critique back at Hillary Clinton. He was accuse offend being erratic and unstable. He started calling Hillary Clinton erratic and unstable. See if he makes any headway with that particular charge. Hes got every right to do business in russia. As a businessman, im not sure the state department should be influencing who gets to by uranium companies. Thats not tit for tat. If thats how they base that decision, they would not be a good thing. I know. Thats the other thing. With biden, thank god, i hope i cant imagine if my son had to go like beau biden and fight, but i would have been een uncomfortable sending him over there for the policies of the secretary of state. Theres another tit for tat. Youre welcome to tit for tat all day long. I know you missed me for two weeks. So youre making up for it. Im back and we both smiling. I like that. Love you john and its what do we got . Less than 100 days. Less than 90 days now. Its getting close. Man. I love the olympics. We can agree on that. Can we agree on one things, it is not a good thing for that kid to get disqualified for one false start. Thats agonizing. I know it. Youre absolutely right. Theres a lot of things. This olympics has been. Youre talking about the hurdles last night. I felt so bad for him. Those are the rules. Those are the rules. But i think theyve tightened up those rules. Didnt there used to be a situation where you used to be able to have one false start given to you before you were disqualified, and its just the idea that somebody pours his heart and soul into preparing for the olympics and one false move knocks it out is. Saw him crying and sobbing and sobbing. The diver works as hard as he can and her hands arent together. So she doesnt medal. Its heart breaking. You know, it was a different network, but that was the thrill of victory and agony, purely ag any of defeat. I wouldnt try hurdles anyway. Out of all the things you do. Its impossible you run three steps and thats impossible. I mean, thats like who thought of that . What would be your best, joe what would be your best sprint event . My best sprint event, the 100, 200, or 400. Im not fast. I am not fast. Thats why its so cool to watch a guy. Its only nine seconds and he was behind for six of them and then blows by. Thats so cool to watch. Youre talking about usain bolt. Almost looks super human. Plus he has a pemrfect name. He does. Coming audiotape Defense Industry merger. Reporter more live from rio coming up on squawk in just a moment. What i love about the tempurbreeze bed is its cool. So youre not too hot, too cold, youre just perfect. Sleep cooler, wake more refreshed, discover the new tempur breeze. Learn how you can change your sleep by requesting a free sample of tempur material. Call or click today. 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. speaking japanese oh watson, your japanese is very good. Thank you. speaking japanese exactly. I can understand nuance, context and idiom in seven languages to help companies all over the world with everything from retail solutions, to banking, to cyber security. speaking japanese time now for the executive edge. Becoming the largest pure lay certifies company in the federal market. Joining us now to talk about this and the state of u. S. Defense spending is roger kroen. Hes the chairman and ceo. Youre about to consummate this deal or get it done. Why did you do it . This gives usdy verity in our markets and helps the top line. Gives us operating official sis and getting new employees and want to welcome them. Were really a people company. We deliver goods and certifies through or people and expanding our Employee Base to 33,000 makes us a real global competitor. Youre a defense contractor, essentially; correct. We do 500 million in commercial and 3 billion in civil. Historically we think of defense contractors as hardware people. Thats not what you do. This is services. This is it. Really, we use information to solve really complex customer problems. Thats a set of network, Software Applications and really, really smart people who can think through problems and create solutions. Give me an example of a solution youre doing for the u. S. Government. Were rehosting the Health Care System for the active military through a program called dha genesis. Were install a record system for all the active military in the all the Health Care Facilities across the globe. And why would they want to do that . Does that lead to efficiencies in diagnostics et cetera. It leads to interoperability between Defense Department and commercial providers. Allows a soldier to have an electronic record to fall through the career in the military. Helps take the information when they retire to the va and other providers. We deliver a higher level of care for a lower price. Talking to people within the markets about the two president ial candidates, a lot of them have come to the conclusion that regardless of who wins this election, theyre going to be reflation nare, bigger spenders. Big into infrastructure spending. Can you say the same about defense . Does it matter who becomes . Is there going to more mfs spending as a result of the change in leadership in the United States and who of the two candidates would lead to more spending and would be better for your company. We dont get involved in the National Politics and we dont take sides in a president ial election. Ic i think what weve seen over time is when he or she takes the oath of office and sits behind the desk and get the first threat briefing, theyre role of protecting the Company Becomes extremely important and all president s tend to act the same way when the good of the country and security is involved. Theres been a lot of controversy about nato as a result of some of the things donald trump has said. Its raised the question about u. S. Spending four and a half, five and a half, at times in the history 6 of the gdp on defense spending whereas in western europe, they dont do that. Its measly. Its tiny and as a result we end up being their defenders if theres going to be some kind of war. Do you have any opinion on that or what western europe should be doing in terms of its defense spending. I will tell you nay to is a g customer of ours. We do a lot of work in brussels. They are an important part of the way we defend and keep the world stable. Were a sporter of nato and our client over there. Thanks for joining us. Thanks for having us here and i want to welcome the 13,000 new employees to the company. Great. All right. Great. Coming up were going to head back to rio why andrew has a closer look at olympic sponsorships. You are very effectively combines business and sports. I want to give you some kudos. Thank you. Were trying. Were trying here. So heres what we got coming up later on on squawk box. Were going to talk about the la olympic bid with the ceo Casey Wasserman. Before we do that, were going to show you where the athletes and families go for a little rest and relaxation. Also my conversation with under armour, were going to bring you that on squawk box live from rio when we return. 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. What wouere to buy a car. [ clock titime. ] you only have so much. Thats why we want to make sure you wont have to wait on hold. And you wont have to guess when well turn up. Because after all we should fit into your life. Not the other way around. Welcome back to squawk box. Were keeping an eye on currencies this morning because, listen to this, the yen briefly rose to below 100. I got that right, right . The yen goes up. When the yen strengthens. The dollar fell below 100. Right. So went to 99. 8. Its hard to say the yen rose below 100. When you look at the currency pound t euro coast you 112, the pound will be 1. 29. We say one dollar will get you 100 yen. A few moments ago it would have gotten you like 99. 8 yen. Its a significant level. 100. Hasnt been there since brexit vote. I would get andrew to comment on that, but we had to do a fair value board. Right andrew, lets get back now to rio. Not even going to ask you about the you know what i mean. Its not i cant do the math. Im trying to help the viewer. This is a visual medium. They want to know the numbers. I want to make it easy for people. I always say that. Im like a tech guy, i know what youre saying about the cloud, but for viewers, could you, i use that trick. Exactly. Lets tell you a little of whats going on here in rio, specifically talking a little sponsorship this morning. Of course its hard to miss the athletes running around rio, but its the brand of sportswear everyone is focused on. Nike, adidas, lieu lieu le monogetting in the mix. Also at the table this year is under armour. I sought don with the ceo and asked about doing business here in brazil. Hes ambitious to get his logo on even more athletes. We dont have the ability to walk through the front door in a venue like this so things like olympics takes a long time to get into. You have to take little bites of understanding. Building own team. Building confidence. And Building Consumer confidence in us. Thats a relationship. Rio i wouldnt call it our firsthand shake, but its our first hug. How do you think about sponsoring teams here. Is is there a big buzz thats going to come off of that. Youre not going to sell a extraordinary number of leotards. The brand exposure is great. It speaks to the gut of what the brand is about. We win when the athletes win. With the women taking gold and what phelps has done here. The Canadian Rugby Team taking bronds and have these great underdog stories that continue to play themselves out. It all articulates to the vision of sports. People think about when they want to transact sport theres a trust that comes from the brand. If these athletes trust us, you can trust us as well. Guys, the sponsorship isnt just about apparel here. Many big brands awell as countries have set occupy hospitality houses here. Somewhat of an olympic tradition. Thousands of visitors pour in to soak up the sun and seuds eah day. Also known as the hien can house, was a pioneer in 1992. Since then the number has grown as the size of them. As the swiss house you can climb into a giant snow globe or go skating. A the japan house you can catch a glimpse of what the summer games may feel like. And hershey house throws parties. They come here. Feel a bit of home. Providing smoers. Her have hershey smoers. They can also unwind at nike house. Where the companys latest products are on display. Png family house where they can get their nails done or have a hot shave. Its all the way for countries to promote tourism and companies to sell products. Even before the flame goes out in rio, plans are already in the wrks for the next olympics games. Youve already been to tokyo. So which is four years from now. You need for a great turnout, you need a lot of preparation. There are over 30 of these houses set up around rio. Many are open the public while others are more exclusive. I believe the usa house has a big party this evening. Were going to try to go to the argentina u. S. Basketball game tonight. I dont know if well make it to the party, but houses everywhere. Youre doing all kinds of things that when we go youre doing all kind of things. Trying to make the rounds. You are. Youre working. You cant just go down there between the usa house party or usa argentina basketball game tonight. What would you do . Knowing you, i know what you would do. Im surprised youd go to the basketball game. You go for the First Quarter for the party. I thought you were going to talk about phelps needing to compete in the next olympics. I want him to be successful to that. Tell him to write a check so he will compete next time. This will be does he have Michael Phelps has to get up at 4 00 in the morning and jump in a cold pool and swim laps for six hours. What time do you get up . I dont want jump in a cold pool and sbim laps for six hours. I love kevin plank, great american. Great job creator. Are you discouraging Michael Phelps . Yeah. Im saying take some time off and be with your family and your son. Youve got thats four years. Hes got four years. You jump in the pool every morning. I dont know. If kevin plavrnk writes a big enough. This is the first olympics he trained 100 . There was a woman in the last olympics in her 40s. Its hard work to train that much. You got to work at something. Why not swimming . I dont know. You got to call it quits sometimes. What if he did it and didnt medal. Not that youre supposed to worry about that. What do you think andrew . You think he should do it . I think hes going to do it. How about that . I think hes going to do it. Hes a real competitor. Also hes a maryland boy with plank. Its possible. A lot of baltimore. Something in the water in baltimore. Okay. Thanks, andrew. Coming up, shares of haynes celestial getting hammered. Details are straight ahead. music plays throughout the first stock index was created 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. Announcer are your children in the right car seat for their age and size . It may be too late to check when youre on the road. [blaring car horn and skidding] fortunately, youre on the couch. Welcome back to squawk box. Wilfred frost is here. Hello, wilfred. Good morning, guys. We were discussing game of thrones. Joe likened me to joffrey which im not happy with at all. Who only survived the first couple of seasons. Only survived the first couple of seasons. That was a joke. We were talking about the fed and arbitraging one country versus another. The yen below or above a hundred. You said you wanted to look like the red quinn queen. I would love to. Yeah. Im close, but, you know. Some investors revailing their latest move. Well have the details straight ahead. Squawk box will be right back. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. 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. Another record trifecta for the markets. And new this morning, the dollar falling to a onemonth low against the yen after a dovish call from a top fed official. Billionaires bicker on twitter. Mark cuban and carl icahn duking it out over Donald Trumps plan for the economy. Well get in on the debate. And were going whale watching. I hit my head very hard out there. See how swollen it is. Some of the worlds bilkest investors revealing positions who will have the best bets and the biggest losers. The second hour of squawk box begins right now. Live from the batieating he of business, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with Michelle Carusocabrera and wilfred frost. Andrew ross sorkin is reporting from rio this morning. That was a good nod. Hey, bud. You know, no delay. Really good. Right . Nbc has installed fiber, joseph. Is that what it is . This new technology. Thats what it is. Nbc has fiber from here all the way to new york. Youll see that fiber becomes a very important thing in your life as you get a little bit older. Im not kidding. I knew when i said it that thats what was coming. Im not kidding. It cures a lot of things. And it tastes good. Its like tang. We laugh because we know youre not joking. Thats true. I very rarely am not but lets not dwell on it. Were not. Youre 30. Youre going to live forever. Im 31 now. Youre Michael Phelps age. And his physique. Not quite. Youre going to do fine and live forever. The futures at this hour are indicating a little bit lower. I think last time i saw it was down 14. Now down 30. Down 3 on the nasdaq. The s p is called down just under 3. Oil prices at this hour are back above 46 solidly for wti. In the headlines this morning, were about 90 minutes away from two economic reports. The government is out with the july Consumer Price index as well as Housing Starts. The cpi is expected to be unchanged for the month while Housing Starts are. Expected to be down. Home depot matched estimates with revenue also in line. Home depot also raises full year are earnings to 6. 31 per share from 6. 27. That compares a estimate of 6. 32. Just below flat. Now down 0. 75 . Dont count billionaire investors george soros as a market bull. His latest quarterly filing shows he nearly doubled his bet against the s p 500. He did that by increasing the put options on the fund that tracks the index. Lets head right back to rio. Andrew ross sorkin there covering the olympics for cnbc. Hello,around rue. Hey, michelle. Weve got details for you. Couple of updates. Lets get to some of the highlights yesterday where in the track and field, Allyson Felix took silver in the i dont know if we get to see the jump there. Also in gymnastics, simone biles had a disappointing finish in the balance beam. She fell, but just by touching it thats considered a fall. But is back today with her floor exercise where she will go headtohead with her teammate aly raisman. And also today the semifinals of womens Beach Volleyball. The u. S. Kerri Walsh Jennings and her partner april ross take on brazil. Tonight weve got the quarterfinals in mens basketball. Usa will be taking on argentina. Were hoping to be there live. Later on squawk box, well also have some table tennis or as we call it pingpong where i give an olympian a run for her money. Or well, i at least try. So there we have it. And by the way, i wanted to joe and michelle, you guys were talking in the last hour about the false start rule and that terrible situation last night. So sad with the french guy. Just sobbing and sobbing and sobbing. He had been training for the last four years just to be here and, you know, you miss it just by that second and he was dismissed. The rule changed. So back between 2003 and 2009 if there was a false start, the entire everybody was warned once and it was on the second time that you would be eliminated. They changed the rule and now theres even some talk even overnight about whether the rule should be changed once again. Does seem a bit unfair, i have to say. And andrew, youre doing a bit of table tennis later. What about any other sports . Pole vault we saw there. You going to give that a go . I dont want to tease it too much, but theres some tae kwon do and pictures already on the internet floating around about what we did yesterday. But were going to be showing that later in the week. Unless you want to spoil it for yourself. Well, i do not want to do that. Andrew, thank you very much. The images are its tough. Its tough stuff. I can imagine. I tried to beat somebody up. I might have been beat up along the way. And i wore a funny looking helmet. You tried to beat up somebody . Okay. Well, thats part of the sport. Youll see. Youll see. Oh, wow. That picture. Yeah. Andrew, we look forward to that and much more. Thank you for now. Wall street bucking the summer trend and flying high. But is the low volume worrisome . Joining us now is j. J. Kinneham. Good morning to you both. Brian, lets start with you. That we we just posed. Hitting highs, very low volumes. Is that a reason to be cautious . It is from a textbook perspective. Many people are on vacation. Its august. Its slow. We have not seen the type of volume that we typically see and at the end of the day, i hate to use this word, but the markets are feelinging increasingly complacent. What about at the end of the day . When you dont want to use that either. Im not going to use Going Forward either. Cautiously optimistic . No, i think at the on the onset, we need a bit of a cleansing here to pull back heading into the Fourth Quarter especially considering what weve seen so far this year. One end you have the super defensive areas like utilities and telecom up dramatically. Then the growth areas like materials and energy up a lot. Which one is it . What wed like to see is the hallmark sectors of america meaning Technology Start throwing strength. Were starting to see that with consumer discretionary. Had a great month of july. And financials ticking a butt higher too. I think were close but the rotation back into those sectors could cause some duress in the market. Thats br the pullback comes. The end of last year we saw a decent rally and that unwound pretty quickly with a big global shock. Is there something similar happening at the moment . You know, its always tough to predict Something Like that. I do think the one thing that will kind of end complacency, so to speak, we get to september and people start to take the election cycle a bit more seriously. To believe that the vix is going to stay at this 12 level and volatility is going to stay this low seems hard to believe. One of the things weve seen from our clients is actually in july and early august, people actually taking profits which is kind of interesting to see, you know, from our retail traders who were asking net sellers in july. They missed out on some of the upside. They were selling alibaba at the time selling at 52 week highs. What may keep this rally going at the slow tortoiselike pace were seeing is people are still searching for yield. You see them going back into as brian mentioned the financials. Wells fargo, bank of america, energy stock where theyre paying 5 yields. So i think that what we can continue to see until there is more of a threat of a rate hike is people will go to stocks, particularly those stocks who have a decent yield because they have to try and get it somewhere. Do you agree . Very much so. Weve been wrong from a tracking perspective in the money we manage. But for the end of the day, these types of levels, you want to talk about and prepare for the surprise. Then considering the math, no ones talking about inflation or growth. We could see a bit of a surprise, we think, on cpi and Housing Starts. The fed is the wild card. You have the fed and the election. We are going to elect the leader of the free world. Theres going to be some volatility in december because of that. And because of the debates and everything. The fed is the wild card. We think the fed is behind the curve. Literally. And we think we could be seeing surprising data on the growth side that no one is talking about. But even if they raise rates and weve discussed in the last hour and they did, long end of the curve didnt move. So that choice that we all face, do i buy high yielding stock, higher yielding stock versus some kind of Corporate Bond or treasury remains almost unchanged. The decision that an individual has to make. It really does. However, we think their lax in overall perspective from investors. Weve had a 34year bull market in bonds and a 15year bull market in compliance. At the end of the day, when the fed starts to be more active and takes out policy, takes out monetary policy, takes out liquidity from the market place, we think shorter term investors are going to sell stocks. Thats going to drive bond yields higher. You and the wall street journal compare to the pets. Com of 1999 . I think in general our Biggest Issue with investing the last five or six years, that everyones giving Central Banks way too much power. And we credit. Credit. And weve forgotten how to pick stocks on a fundamental basis. Hey, michelle our financials, consumer discretionary. Brian, thank you very much for joining us. J. J. , also many thanks this morning. When we return, price of crude sitting to a fiveweek high. Stay tuned. Youre watching cnbc, first in business worldwide. Im anne. Im a scientist. Why dont you let me. And me. Help you out . Youre gonna hear what i say. I love taking stuff apart and building new things out of it. Anne pals my most advanced annedroid. [gasps] this is awesome. Oh anne you havent seen anything yet. Announcer give your Cardboard Box another life. Welcome back to squawk box. Lets check the futures. Last checked the dow was down 30. Now down 32. The s p down 3. 2. The nasdaq down just under five. Aetna is quitting much of the Obamacare Exchanges citing costs. Company says policy holders as i just said turned out to be sicker and costlier than expected. Shocked. Im shocked. What a great way to arrange things. Beginning next year aetna will only remain on the exchange in four states. Delaware, iowa, nebraska, and virginia. Oil is rallying. Fueled by talk of producers propping up the market. Joining us is gary evans. Good to see you. Good morning. Thank you for having me. Oil Company Going public in this kind of environment. I mean, yeah, oil is well off the lows. But its well off the highs. Youve been buying properties up, right . At a discount . Tell me what the plan is. The game plan right now, ive always been a contrarian investor. So thats whats going on in our business. Its all about location. We can make money at 46 oil which is where we are today. So where are you buying . Predominantly in the permien basin. It covers a large swath. So you have to be in the right aeros where you can get the returns with todays oil price. Give me an example of something you have purchased when i look at total ling 500 acres at the eagle fort shale and the carnes county. When oil was above a hundred bucks, what were those Properties Trading for and now what are you paying and, you know, is the lesson for keeping your powder dry when commodities fall apart . Of course none of us anticipated the severity of a downturn. But whats happened and i think this is where, you know, opec has made a huge mistake is our business is extremely resilient. The technology thats enabled us to untap these unconventional resourc resources. Youve heard fracture stimulation. Were Getting Better and better at imusing the right way to frac these wells. So everybody is gravitating in our business to the areas with thicker pay thickness. I assume the play here is youre able to buy assets at a discount. You dont want to tell me those prices. No. I can tell you right now, you know, we tend to be kind of junk yard dog guys. We look for things off the radar. Youve got to understand a lot of the Big Companies that are out there today are not drilling some of these areas. Everybodys budget has been cut severely. So were trying to buy things off the radar screen. We typically dont go to data rooms and fight for the same properties everybody else is. Its word of mouth. Ive been in business 35 years knowing the landowners, knowing the bumpers, knowing the people that have the deals. Where do you think oil is going by the end of the year. I would say this year were probably in this 40 to 55 range. Its been very volatile as you well know. We were over 50. Hit down below 40. And it all depends on if opec does anything. I dont believe they are. Good to have you on this morning. Thanks. Thank you. Still to come on squawk box, hain celestial plunging. Details next. And then when we head back, well also be in rio. Years ago, i was starring in a onewoman show about a cat allergic to other cats. Openingslashclosing night it hit me hats for cats. Everyone said i was crazy. When i went online. I got my domain, catswithhats. Com from godaddy. Now these things are feelyin outta here. Got a crazy idea you think you can turn into a success . We know you can and weve got a domain for you. Go you. Godaddy. Were drowning in information. 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. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Welcome back to squawk box. Shares of hain celestial under pressure this morning following word the report will be delayed because of accounting issues. Its like a reunion. After an early morning. Youre understating it by saying under pressure. Check out this dramatic drop in the shares. Hain celestial hammer down 25 in the premarket. If we open there, thats a loss of about 1. 3 billion in market value. Why . Well, the company is delaying its Fourth Quarter Earnings Report because of how and when it reports revenue and on internal controls over financial reporting. Things investors do not like to hear. The company also saying its going to miss this years sales and profit forecast. Translation . There is a whole lot of uncertainty here right now about the outcome and the timing of this accounting review. It comes at a surprise at a time speculation was just starting to ramp up that hain was going to be a prime takeover target. Ever since Fast Growing Company whitewave was bought last month by denone. Theyre up 32 this year and the brands have been in the sweet spots for consumers this year. Earths best baby food. Revenues growing 25 last year. Its hard to find that in the packaged food business. Erwin simon has been a frequent guest on cnbc. Hes been on a number of times to talk about where millennials and food trends are going. But more recently, guys, sales have slowed. Competition has heated up. Bigger packaged Food Companies have been buying Companies Like hain to compete and hain also has exposure in the uk so the weaker pound is not helping. Relevancy was high. So for this morning, boy, the downgrades are piling up. Piper jav ray down to 35. Suntrust to 40. Jpmorgan saying its taking down. Not worry of lack of takeover . No. Its on the huge uncertainty here as to the time frame of how theyre going to announce and huh the revenues are going to be recognized. It has to do when it recognizes sales to its distributors. Its very confusing. Theres not a lot of information out there. As you can see, the market certainly hates that idea of uncertainty. Thank you very much. We wont keep you any longer. Youve got to get back to the cnbc studios. Aig announcing its going to sell its stake in united guaranty. Valued at 3. 4 billion. Moves an effort by the insurer to streamline after coming under scrutiny by carl icahn. And check this out. A michigan couple is suing pokemon. Theyre not actually suing pokemon, himself. Theyre suing pokemon go, the game, for ruining is pokemon an actual character or just the game . I believe its the character. I think it is a character. It is not a character in game of thrones. Definitely not a character in game of thrones. Not yet at least. Theyre talking about blaming them that it ruined their lives. Pokemon go ruined lives . Theyre blaming their unhappiness on a pokemon hot spot with a poke gym located in a park across from their home they said developers and owners have made millions while ruining the quality of life for many americans. But they developed this in the space of a couple of weeks . Because its only been out that long. Its ruined their lives already . Yeah. Wow. I wouldnt say its ruined my life. I would say its very annoying. United states is a litigious society. Im aware of that. This is ridiculous. This is extreme. Pokemon go ruined their lives. This is a pr stunt. Youre saying it ruined your life . No the. Its very annoying. This is here. Your kids make you go places because of pokemon go. This is a rare person that ive got to theres a rare one over here but we got to be there by a certain time. Its bizarre. And you dont get anything for it, i dont think. Satisfaction. You get points. Yeah. You get points. You cant turn them in. Thats pokemon 2. 0. You dont have kids yet. You go to chuck e cheese, you get the tickets. The paper the tickets are printed on are worth more than the prizes you get. Im not kidding. They still have paper tickets . I dont have kids to play with and i dont play it myself. Ive not taken part. Do people in i just cant believe in london theyre playing pokemon. I cant they are. But it launched two or three weeks afterwards. Theyre not taking a tour of the royal muse. Thats what you do when you go there . Have you been . Those carriages. Have you seen those carriages . A lot of detail on those things. You havent been to the royal muse . No. What is that . I cant talk to you. What kind of brit are you . Throughout history one all of the carriages that, you know, that royalty would ride in. I mean, theyre incredible. Theyre unbelievable. Youve been to buckingham palace, right . Yeah. As a guest. I want to tour the guard. I know you do. Ill try to sort it out for you. But its a tough thing to sort out, joe. Dad was the man that could do it. Welcome back to squawk box. Among the stories front and center, Companies Reporting earnings this morning. Retailer Advance Auto Parts earned 1. 90 per share. Well below estimates. Revenue in line but Comparable Store sales fell more than 4 in a performance the company calls, quote, unacceptable. Shares down just over 2 . Volkswagen and the Justice Department have held preliminary settlement talks in the probe to the emissions scandal. Thats according to reuters. It could involve a hefty fine as well as a penalty. John williams says the worlds central bank may have to raise their inflation targets to focus more growth. Currency traders are taking those comments to mean that ultra low rates could last even longer than previously thought. And thats on the dollar in todays trading. You can see significant moves around about a percent against the major currencies. The yens strength today hurt the asian trade. The pound has bounced back following some interesting uk inflation were below a hundred or above a hundred. Depending how you talk about it. Strong yen. So you only get 99 yen for every dollar. Going down so its strong. Right. People wonder why, you know wonder why what . Wonder why theyre doing a quiche or something on one of the other shows. When you got to try to figure out how i mean, its inscrutab inscrutable. When it falls in the oven. Dont make too much noise. Thats why were here. But its rewarding when you finally do one. Ask leisman. But this is going to be big later today. Time now for some whale watching. Biggest names on wall street filing big reports that we wade through. Thats what kate kelly is here to tell us what theyre doing. Thats right. It was a quarter devoid of big themes. A lot of trading on various names here. But one a couple investor moves really stood out. Maybe the biggest one of the day came late in a filing that value act, the activist fund known for its stake in valiant among other things had taken a 38 million share position. Says hes supportive of the bank and the management while at the same time suggesting to scott wapner that the capital, trapped, in the fixed income business might be put to better use. In terms of other big moves, Berkshire Hathaway dove into technology raising apple stake by 55 . Buffetts company also sold a bunch of walmart and suncor as well as a bit of deere and co. George soros moves might be considered bearish if he hadnt at the same tame cut gold position by three quarters and sold the vast majority of his barrett gold share. Appaloosa management got rid of a call during that second quart per. We dont know whether he sold those options or they expired or exercised. We do know, however, that tepper is measured on the market with someone familiar with his thinking telling me yesterday he is on guard at the moment. You dont want to be too long. Dont want to be too short. Not sure what Investment Advice lies therein. What does he mean in terms of Morgan Stanley money being trapped in fixed incomes . I think he made a couple of points. He hasnt spoken as length but base ond what he told scott and a few others, the thinks people are on the thick business. Mohr dan stanley has really been back and forth on that one. Theyve reduced Balance Sheet. They made layoffs in that unit since the crisis and ramped up at other times. People should focus on the advisement banking business. He thinks i dont want to read too much in. But it sounds like maybe they should get rid of it, sell it, or reframe it once again. Id say cost cutting has been one of the big drivers of bank stocks this year in and around earnings. All the banks the last quarter, but more of a job to do on the banking side. Theyve been a real underperformer. And gorman, i think, probably a bit frustrated. Hes been the architect with a purchase of the Wealth Management business from some years ago. And he really has changed the strategy visavis goldman own other competitors. They continue to serve underperform. Some things dont show up in filings. Right . Right. You can sell an etf and buy a future. You want to talk about spdrs for a second . No. Ive been given a heads up that people are have done this when in fact ive moved bigger into Something Else which doesnt show up in the filings so its going to be interpreted i got out and its not true. Two hedges, if you will, tho these reports. Theyre dated june 30th. Anything could have happened between then and now. We dont know the short positions. The options position like the tepper thing i talked about we only deduced because it existed in the First Quarter and not in the second quarter. We dont know if it was sold, if the option expired. Dont want to read too much in. I did some reporting and it sounds like hes taking a somewhat i dont want to say neutral, but cautious approach to the markets. We can assume when Warren Buffett buys more apple, they like apple. Bullish apple. Theyre not going to get too fancy with derivatives which they consider to be weapons of mass destruction. They never found those though. Anyway, donald trump did they . Am i wrong on that . Well, i think youre mixing policy with derivatives. Donald trump and Hillary Clintons were shifting gears. Now in front of voters. But were missing key details from both. Joining us now is robert wolfe. Hillary clinton supporter. And wilbur ross, the chairman of w. L. Ross and company. He has a new oped on cnbc. Com written with uc irvine professor. Youre right. Weve got wilf, wolfe, and wilbur. All right, wolfe, youre an obama guy. You like tpp. Hillary doesnt like tpp. You also were a businessman. You know about corporate taxes. Have you seen hillarys commercial . It shows how were going to make corporations and rich people pay their fair share. Because theyre not paying their fair share. I dont know what fair is, but its not fair. Its going to be fair. A lot more money going to be taxed for corporations and guys like you. Fat cats. Although you look like youve lost some weight. And then shes going to use that money to create government jobs. Or create some kind of jobs somewhere and its all just going to work great. And thats what youre signing onto as a guy that knows about the private sector. For real . So joe, it sounds like you just did a trump commercial. Well, youre going to do a clinton commercial. Thats what i need to do. Ive read your notes. Wait a second. You started out that im for tpp. So you already know that we dont agree on everything. Oh. Do you agree on im asking you do you agree on this part . To tax corporations and to tax people that are producers more so that then youre going to great government jobs. Thats the way to help with unemployment . I dont think its about creating i mean, one, i dont think its about creating government jobs. But certainly we need Business Tax Reform. You would agree with that. She said raise taxes. She said raise taxes on joe, are you going to i know. Joe, are you going to let me talk . Go ahead. So if were going to compare plans, we have to compare plans. So her plan as you know because youve had zandi on. Her plan adds 3. 5 million. Her deficit does she raise taxes on corporations . Thats not me, bob. Thats somebody else interrupting you. By the bay, we should be clear we havent seen her Business Tax Reform yet. Okay . Just to be clear. Bob, we also got to be clear that moodys analytics is in no way, shape, or form associated with the investors. And zandi, i know hes represented both sides but hes been very partisan in terms of recent he loved everything the president s done. I read that. You know, we were reporting that Moodys Moodys analytics is independent. Hes the only one thus far that has done a model comparing the two. Its clear that when you deport 11 million people, okay . We are going to have a tougher gdp. Its going to be tough on wages. Okay, its going to hit the economy. His protectionist aspect for trump that he has is not positive. The secretarys infrastructure plan blows trumps plan away. Okay . I mean, if you look at the depth of her plan which includes social infrastructure, next generation gps, you know, things that this country needs to do. Its a real plan. From that perspective, okay . I would think youd like it. Its less of a deficit and it adds jobs. Im not sure what youre arguing about. Thats a much better plan than trumps. I dont need to make the case. Wilbur can make the case. Good. Supply side or larry kudlow. You dont raise taxes on the producers if youre trying to create jobs, bob. Actually, larry wait a second. First of all, we havent seen her Business Tax Reform. Shes talking about taxing kind of the buffett plan which is north of a million dollars. Okay . At a minimum, 30 . Okay . Lets let wilbur talk. We have not seen her Business Tax Reform. Im not sure where youre getting those numbers from. But obamas business reform you know the president s tax reform had it going down to 25 for manufacturing. All i know is what ive seen in the advertisements. Were going to get corporations are finally going to pay their fair share. Were going to gouge those guys. Trump should hire you for advertising because youre doing a good job. Calls for cutting corporate taxes from 35 to 15 . Thats going to help solve one of our big problems which is our trade deficit. Because it means corporations can cut the tax margin by 20 so theyd be more competitive with overseas. And yet have the same posttax income. Thats one of the ways hes going to deal with the problem of terrible job loss to foreign competition. Second, Hillary Clinton cant tell a good trade deal from a bad one. She was for nafta which has cost lamb million jobs, has taken the trade deficit with mexico up from essentially nothing to 60 billion. She favored the south korea bilateral treaty. In fact, she helped draft it. Thats cost 75,000 jobs instead of the 70,000 gain she promised. But the one she boasted in her economic speech sha that she went against was the Central American free trade agreement. Well, lets see how thats actually worked out. 2014, 4 billion trade surplus for the u. S. With the countries. 2015, 5 billion u. S. Surplus with the countries. Wilbur, you cant trade involves deficits and surfaces. You cant define a trade deal as being successful only if it has a surplus and being a failure only if it has a deficit. Its definitely a failure when you take the deficit from nothing to 60 billion. Thats 700,000 jobs. Am i going to get to respond here . The fact is whether you lead to trade or deficit, you cant say you favor the u. S. Going back to zero trade, no surfaces, no deficits. Nobodys saying u. S. Go back to zero. If i could respond but we need to have trade deals that make sense. Can they hear me or not . I guess they just ignore. Great. So a couple things. Hold on. Lets go with robert. Get wolf back in here. Great. Thank you. So yes, wilbur, if donald trump wants to add to military spending, add to infrastructure spending, reduce taxes to all times low, that is great for someone who ask probably fiscally responsible. We will have a deficit back at like 10 trillion. And im glad you talk about deficit. Then you should be touting what the president s done because hes taken the deficit from 10 of gdp down to under 3 . We cannot have a large factor of that has been reduced interest rate. We should be clear that we need to have okay. We should be clear we need free trade okay. Im sorry. I dont know what hes saying. What is he responding to . The Interest Rates being so low, obviously the deaf sut goes down when the Interest Rates are basically zero. Then you add in the sequester. I guess youre going to credit the president with his Energy Policy for reducing the price of gas at the pump . No. Well, certainly his allon energy approach has been positive. You cant deny that. Okay . His oil and energy approach is the carbon tax which is killing the retail consumers of electricity. Wait. Wilbur, wilbur, the carbon tax didnt get approved. I understand that, but its his policy. Its his policy and it was drafted by john podesta, hillarys campaign manager. Thats not accurate. But thats fine. That didnt get approved the cap and trade. But it was in his proposal . Carbon tax was not in his proposal . I think it was a i think it was a henry waxman proposal out of congress that didnt get passed. Well, i dont remember obama screaming against it. We are clearly more energy dependent today than weve ever been. Thats despite all the new rules wait. Is that a good thing or not a good thing, wilbur . Come on. Youre a guy of facts. You cant deny facts. We are more energy dependent despite Government Policies not because of them. That may be accurate. I brought it up because i thought youd see the irony of saying that the president s policies resulted in it. But youre actually looking in at like baghdad bob telling me that was because of the president. Anyway, well have to end it there. I think hes playing up there. Golf. Joe, always great to come on. You should be working for trump now. And you are working for hillary. So then were even. I am a big supporter. Okay. Congratulations. Thank you. Thanks. Thank you. Coming up next, andrew live in rio. What do you have coming up . Well, weve been enjoying that debate here in rio. But in the meantime, the next hour of squawk, were going to ask athletes about their game day superstitions. Later on i go oneonone with an olympian. When we come back, well talk about the l. A. Olympic bid with the man leading the charge to bring the games back to the u. S. Squawk returns with that live from rio in just a moment. Announcer dont let e. Coli mosh with your food. An estimated 3,000 americans die from a foodborne illness each year. So, always separate raw meat from vegetables. Keep your family safe at foodsafety. Gov champion sprinter Allyson Felix missed out on the gold last night by 0. 07 in the 400meter dash. And Laurie Hernandez earned a silver last night beating out simone biles. Biles wraps up tonight on the floor. In Beach Volleyball, brazil knocked out the americans after two sets. Brazil has claimed the most of any nation in this sport at 11. More squawk after the break. 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 live here in rio. The race for gold not just on the olympic field but among the contending cities currently bidding for the 2024 summer games are paris, rome, budapest, and los angeles. Casey wasserman is here, hes the chair of the l. A. Olympic campaign. So what does it mean for l. A. . Why l. A. . Well, we think its in the Olympic Movement which is at a cross roads. And given the struggles rios had in a games that is low risk in every way. Financially, environmentally, and for the city is the right time at the right place. So in l. A. We have to build one permanent venue. 90 of our venues exist today. L. A. Is already invested in infrastructure and were games ready. We think being games ready which means for seven years we could focus on the experience of the games opposed to constructing and delivering the games. Thats one of the Big Questions about the games broadly. This is costing 12 billion. Rio unto itself or brazil unto itself expected to lose about 4. 6 billion. Is there a way to make this whole model economically viable . Well, when you have to build things with b no. When you have to build an olympic village, it has to host 17,000 athletes. Its about 4,000 units. Thats a large undertaking in any city anywhere. Thats a 5 billion tho 10 billion proposition. Its expensive. A place like los angeles, we have ucla that would house athletes. Were lucky enough to have great venues. We have a 3. 5 billion stadium being constructed for the laez rams we could use. People talking about l. A. And paris being the top two contenders. Rome mayor already saying she doesnt want to have it. Its going to cost too much. And budapest has a bid but well see. In how the u. S. Is perceived, they have lost their two attempts. President obama went and still lost. What do you have to do differently . Well, we have to learn lessons. Chicago came in last place. So the vote that rio won on, chicago came in last. It wasnt because the technical plan wasnt as good as rio. Its we have to be humble and earn their trust and respect. What were asking ioc members to do is give their most important asset for years. Theyre not going to do that for people they dont like and trust. So thats what this process is about being in rio. Thats what the pros for the next 12 months is getting to see those 90 voters. And doing it in a humble way. And we need to be respectful of that. How much do politics play in this . The mayor was asked about trump. Do they care about elections and how were perceived around the world . I do. What they perceive is around the world. If we have one not embracing our place in the world, its tough for us to bring the world to them. So im going to reserve judgment until i see whos actually the president. Im not sure we should be judged on whos running for president but theres no question in my mind. It is without a doubt a question i get from every ioc member. We wish you a lot of luck with it. Given we are the home team. I want to thank you for being here this morning. Good to be here. When we come back, weve got a lot more coming up including home depot getting a boost. Were going to talk about that plus a lot more from rio as well. Back in a moment. Inside everyone is an incredible cook, someone who can cook an amazing meal any night of the week. Farm fresh ingredients, stepbystep recipes, delivered to your door for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. What would hto buy a car. One number 21 in the books. A dog, talked. Were decedent from the mighty wolf. A voice was heard. If you build it, he will come. A girl discovered magic. A revolution began. Welcome, to the wonders that happen, everyday. Welcome, to it all. Comcast. Coming up, a flood of earnings from big box. When we return. Andrea sikon. Medical doctor from cleveland clinic, 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. Summer muleltup. Big box retailers out with quarterly results. Steven saddove will join us straight ahead. Plus andrew is going for gold. Trying his hand olympic style at table tennis. Weve got the best view in the house right here live in rio as quarterback begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with Michelle Carusocabrera and wilfred frost. Reporting live from rio, andrew ross sorkin. Well get to him in just a minute. And andrew, you just youre not youre not worried about laying it all out there. I looked at that picture of you, i dont know what the tae kwon do photo. I would have never told anyone about it. Were getting funny tweets in saying you skipped that legs workout again and it also said something about a dukakis moment and then kazoo. But you rub it all over yourself. You dont moment. Dukakis moment. Its a visual medium. The producers asked for it. Probably not paid enough that guy looks like an animal. That was insane. One of his legs is the entire size of my body. Yeah. But that was a tease. Thats is a good tv tease. Well have it later in the week. Why does he need to know karate when he could just rip us apart limb from limb . Like, why does he need to i mean, he could just shred it. He no s not wearing a helmet in the photo. Wasnt worried about andrew hurting him. Anyway, we look forward to that, andrew. We are less than 90 minutes away now from the opening bell on wall street. The futures right now are piped that music in just for andrew. It sounds i think upbeat and happening. Actually, thats in the background of where he is. Futures are now down 38. The s p down 4. 5. Nasdaq indicated down nine. Lets check out the european markets which have been weak. A blame you for a lot of this, wilf. Its my fault. It is. I apologize. And you had the show before this show where you obviously werent very werent positive on prospects. Actually had some decent german sentiment data out and better than expected uk retail data. Not helping this morning. Maybe it would be after that. Here are the other stories investors will be talking about at this hour. Home depot matched estimates with quarterly profit of 1. 97 per share with revenue also in line. That compares to consensus estimate of 6. 32. Other earnings, Dicks Sporting Goods posting a quarterly profit of 86 cents per share. Thats 13 cents higher than estimates. The full year forecast also topped wall street expectations. We are about 90 minutes away from two key economic reports. The government is out with july Consumer Price index as well as Housing Starts. Housing starts are expected to decline by 0. 8 . Lets head back to rio. Andrews there. You knew that already. Covering the olympics for cnbc. Hey, andrew. Hey. We got a fun one for you now. If you cant compete in the olympics, the next best thing may be designing sneakers and apparel for athletes. We caught up with Toby Hatfield here who has been helping to design and innovate products for some of the best athletes in the world. We asked him what changes he makes in the sneakers they wear before they become products consumers can actually buy. Theyre mostly cosmetic. There are subtle differences in some of the athletes we work with. They might have some unusual size feet. They might have different sized feet. When you work with the worlds best, i mean, sometimes, again, there are some unusual things that are going on that you have to accommodate for that the rest of the world doesnt have to, you know, doesnt have that issue. And hatfield says with millions of eyes watching the games the goal is to get consumer versions into stores as soon as possible. A lot of times we would debut something at an event huge event like the olympics. Then we want to really get it on the market place for that exact reason. People say, hey, if soandso did really great on the track or on the road or wherever it is, then they want a part of that. They want it. It might help them. Guys, one quick note. Our producer was telling me earlier michael jordan, he wears sneakers right off the rack. Also nike is debuting a training sneaker along with a pole vaulting sneaker at the rio games. Of course some of those wearing them have game day superstitions. We decided to find just what they are. Its time now for another installment of what we call ask the athlete. The first thing i do in the morning is walk out, put my coffee cup under my machine and push two shots. I do a little bit of yoga. Ever since i was little i always thought, like, shaving, like, all my legs just like the swimmers do to get the little seconds even though we wear clothes, it doesnt matter for us. Always sit in the same seat. Before my race i always pray. But for this meet i listened to music before my races and thats something i never, ever do. But i think it helped me stay calm when i was in the ready room. Maybe ill try that more often. Im big into lady bugs. I find them lug ki. So i usually have earrings when i play. Before i race, i drink a coke. I dont know why i do that. I have always one of my golf balls with me and of course i grab it always before the competition. But yesterday it didnt help me that much. So there you have it, guys. And i think the world wants to know im going to ask this of joseph. Go around the table though. What is everybodys preshow ritual . Coffee. First thing i do. Precious elixir. I think i know your ritual. Its changed. In terms of food or what i food. Famously for the food. I got tired of the one hard boiled egg. Im doing a little dannon triple protein yogurt with almonds this week. Very nice. This week the one thing of course that you all do without fail is watch the full hour of worldwide exchange. To get prepared. How would i know what to say . Bingo. I want to know what you and sara are reading. Your must reads. You know i read the Financial Times before i read anything else because i think its the best. Youre always referring to opeds. The Financial Times is worse than the New York Times in terms of slant these days, dont you think . Its more balanced than most british papers. Exactly. Andrew, then on the way in, you know, i dont get car sick looking at an iphone. I dont know why. I but i do all the stuff we need to do to prepare for guests. Which ones im going to harass. Which ones im going to be nice to. Anyway, when are we doing the tae kwon do piece . Yeah. We want to see you in the getup. Thursday or friday. We have more fun stuff before that including the pingpong or table tennis later today. You werent trying to slam it. You were just trying to keep the volley going. Youre better than that. You dont lob it over every time, do you . I dont. But youre going to see. Youre going to see. I tried to hold my own for just a very short time. All right. Ill see you later. Thanks, andrew. Department stores have been plagued by reduced foot traffic and a steady migration of sales. Online. You ever heard this song, steve . Whats this . Its called the last mall. And its a steely danza. The reason theyre playing, theyre coming to beacon and im trying to get them on the show. I think those two guys are its dad rock they call it. It is. American boys of a certain age love them. But if you ever listen to all steely dan, you cant appreciate. Phenomenal. Here it is. At the last mall. Because there may be a last mall. Thats why i decided to play this. Nordstrom suggests there could be an improvement in retail. But steven sattove is the former chairman and ive known you for like 20 years. Play golf and everything. Its a hard name to say. It is. Youre italian all of a sudden. Ceo of saks fifth avenue. Former ceo. Cnd malls, its been years. But its still bad. Theyre closing, right . Probably going to get worse. As macys is closing a hundred stores, youve got others closing stores. Theyre going to turn into other venues. Youre going to have health care, probably fitness types of things. Youll have more restaurants. You mean a hospital replaces macys . Could be some kind of an urgent care facility. Youll see different kinds of uses for those. Things that would guarantee traffic . Yeah. Theyre empty space. And this isnt as pure as internet. Its not as pure as amazon. And thats a small piece of the thats not the main problem . What is the main problem . First of all, youve got to start with the consumer. Theyre growing 3 , 4 . Why are they not buying other stuff . Demographically . Theyre buying a lot of electronics. Theyll buy their apple. Different consumers, theyre buying homes. Are they experimental too . Theyre experimental. You should interview him. What is wrong with you people . Millennia millennials. Im not representative of all millennials. I dont think youll get the interview youre after on that. The death of retail is over exaggerated. You just said all these bad things. The consumer is healthy but its based off loan growth snap a concern or something you think koulgd continue . I think consumer savings still rate isnt bad. No. I dont think were late cycle. I think the consumer is going to have a very healthy Holiday Season. Were talk 3 , 4 growth. This week retails great because you saw 15 , 20 jump on all of the Department Store stocks in the last four or five days. The reality is that it was overexaggerated on the downside. And i think youre still probably only halfway there on the upside. Because we havent even taken into account the fact you had a horrible weather last fall. And youre going to get a recovery coming this fall. So it is not that bad. People are shopping differently. They want different stuff and theyre shopping much more online, in store, pick up in store, ship from store. They want the product any way they want to have it. And they want unique stuff. They want differentiated product. They dont want the same stuff everybody else has. I think one of the most interesting facts is that the growth rate of stores that are less than 50 million is twice the growth rate of Big Companies. So they want that unique stuff. They want it to be different than what everybody else has. I am female therefore i shop probably more than men, right . When it comes to clothing, theres nothing to buy. Theres nothing. I mean, the only thing new i see in apparel is mens suits have changed pretty dramatically in the last couple of years. But millennials arent wearing suit zblps theyre not wearing ties. Id hate to be in the tie business. What has changed in mens suits . Much tighter. Much slimmer fit. You put on your fit from three years ago, youre going to look like an old man. Youre going to look really old in it. Youre going to have to get new suits. Hes laughing. I think youre right. Youre 66. Its got nothing to do with you cant be fat at 66. I used to be a fat kid. Really . Yeah. Youre right, relative to fashion cycle, athleisure which was huge big for several years, thats on the wane. You can only have so many yoga pants. You need more innovation. And when you have a big innovative idea, you do well. Take Something Like a warby parker, very innovative how they approached the eyeglass business. Took off, zoomed. When you have something really different, the consumers there to buy. Thats not you. Thats me. Look at him. He is heavy. Does that affect Consumer Behavior . Probably. I think theres a little bit of a a discretionary purpose. But i do think it causes the consumer come degree of pause. Then we dom into the Holiday Season and youre optimistic about that . I think you have this builtin momentum for the Holiday Season because it was so bad last year. Youre going to see some positive numbers. I bet theyre blowout numbers. Can we go back to the malls for a second . All these potentially new types of renters, they have enough money to pay for current rates . Or are we going to have to see more in the malls as well . Courtney reagan did a piece that talked about you have a lot more shortterm renters. If you think about the Department Store, they paid almost no rent, low single digit rent for 20, 30 years. Then all these other guys got they were able to leave the mall if the Department Store left. Now you get a shortterm lease, much higher rents. From a mall developer perspective, you get more money out of some of these other types of opportunities. So it may not be bad, but the problem is that the cnd malls have to find interesting tenants. So it could be an education. It could be a fitness center. But there arent enough of those to fill all those. Something to drive traffic. Have you shown this on no, no. Its not going on there. You just gave it to him. If you do you have to put it on squawk box. You look like the earl of granthums son. He does. Anyway, weve got to go to break. Ive noticed that about its weird with me. My suits are much tighter but theyre the same ones. Its weird. Because i havent changed. Uhhuh. Coming up thank you. It was great to have you. Ford is doubling down in the race to selfdriving cars. Ceo mark fields is going to join us first on cnbc. Squawk box will be right back. [announcer] is it a force of nature . Or a sales event . The summer of audi sales event is here. Get up to a 5,000 bonus on select audi models. Ford doubling down on its bet for autonomous drive vehicles. Phil lebeau joins us. Lets bring in mark fields. He joins us with the latest in an investment that ford is making in the Silicon Valley specifically when it comes to selfdriving vehicles and this next generation of vehicles. You are basically doubling the size of your staff, increasing your footprint, and making investments with partners out in the bay area. Tell us a little bit about it. Oz you know, its an exciting time in the industry and for ford as were expanding our business to be an auto and mobility company. The next decade is dg defined by the automation of the vehicle. Our vee is Autonomous Vehicles could have just as much of an impact as fords Assembly Line did years ago. Were making news about expanding our presence here in Silicon Valley. And were making some news about working with new partners. As you know, weve taken our time to talk about our Autonomous Vehicle plans. Were not in the race to make announcements. But we are in a race to do the right things for our customers. Youre taking your time admitingly but there are people saying youre taking too much time. Whether they are general motors, toyota, partnership with uber and others. That theyre going to be there first and win the race. Well, as i said, were not in a race. Were in a race to do whats right for our customers and as i said our business. So we feel really good where were at. Weve been at Autonomous Vehicle for years now. We were the only maker involved in the original challenge. And were taking the engineering know how and the technical partnerships that were forming and were excited about where were heading Going Forward. Where are we headed, mark . When do we start to see these vehicles more than what the technology thats out there now . That really that next step. Is it 2018 . 2020 . Whats your time frame . We said in the past in the industry somebody by the end of the decade could have a fully Autonomous Vehicle. And well make a little news this afternoon giving a specificity on our plans in that case. But as you think about fully Autonomous Vehicles and im talking where the driver or the customer doesnt have to engage or be prepared to step . You know, probably it wont have wide availability. The beginning of the decade. Maybe probably in cities. And well have more availability later on in the decade. But its coming. And we want to be in the forefront on that. And is it still your perspective that you believe the dreiers want this . Theres a debate out there about whether or not these people want these selfdriving cars. Absolutely. Customers are telling us more and more that theyre interested in this. And importantly, just looking at the societal benefits of this, when you look at a fully autonomous whats known as a level four vehicle, the benefits to society on reducing fatali fatalities so the safety aspects, the ability to give people mobility whether its disabled folks or elderly folks. And then fanlly just the environmental benefits of having less congestion, its compelling and consumers are telling us theyre more and more interested in having in being able to experience and take Autonomous Vehicles. Mark fields, ceo of the Ford Motor Company joining us from the research and Development Center in palo alto on a day where the company is doubling the size of its staff in palo alto. Down to you in rio. Thanks, phil. Coming up on squawk, im going to show off some of my athletic abilities in table tennis. Weve got more squawk after the break. Coming up, we are minutes away from breaking economic data. Cpi and Housing Starts. Well bring owe those numbers and then aigs Doug Dachille will join us with reaction to those numbers. That guys got some crazy hair. Stay tuned. Well be right back. My hygienist said the most random thing. She said i should think of my teeth like an apple. It could be great on the outside. Not so great on the inside. Her advice . Use a toothpaste. And mouthwash that strengthens both. Go pro with crest prohealth advanced. Its uniquely formulated with activestrength technology. To strengthen teeth inside. And is better at strengthening the outside. Than colgate total. Crest toothpaste and mouthwash makes. My whole mouth feel. Amazing. Advance to healthier gums and. Stronger teeth from day one. My checkup was great. Crest. Healthy, beautiful smiles for life. This is if were going to do this, this is great. I got about 50 songs that i could suggest from the dan. This is another of yours . This is a great one. Were just seconds away, and im wasting time, from july housing and price index. The futures have been low all morning. The 10year hunched. Lets get to Rick Santelli with the numbers, tleez. And there are a litany of numbers. Lets start with Housing Starts. Up 2. 1 . Definitely vaulting over any expectation. Were looking for somewhere below 1. 19 . We ended up over 1. 21 . 1. 21 and change. Thats a huge number. Well, huge in the context of you dont look at 05 and 06. But recent huge. Permits. Down 0. 1 . A little less than we were looking for. 1. 152 million. We had a sult revision on starts. Lets get to cpi, shall we . We were looking for a number somewhere in the neighborhood of unchanged. What we ended up with was unchanged. If we strip out food and energy, up 0. 1 instead of 0. 2 . If we look at the year over year number and this is, of course, on core food and energy, up 2. 2 . We were looking for 2. 3 . Why is this significant . Because let me see. We had a two handle now in november. So one, two, three, four, five, six, seven, eight. This is the ninth number in a row where a two handle or the eighth over 2 . Because november was 2 . In order to find a bigger year over year core number, youd have to go to the fall of 2008 when it was 2. 5 . I couldnt find any 2. 4s and of course last month was 2. 3 . But that zone is very important. Because of course, you find higher prices where you look for them. Of course this ask not the area where the fed is looking for. Interest rates havent really moved a lot on it. Weve down ticked a bit to 1. 51. Michelle, back to you. Got it. Thanks so much. Lets get more on the housing data. Lets bring in diana olick. Diana . Reporter what were seeing is a nice jump month to month. We have to remember these numbers are volatile and the permits number is not where wed like to see. Permits are a future indicator of home construction. We are still seeing that year over year drop in multifamily. When you split these out, its important to see a drop in multifamily. Im still looking for the breakdown, though, of the multifamily versus single family. Single family starts are still operating at 25 below historical norms. And that doesnt even make up for the pent up demand. We have a short supply of existing homes for sale. The builder confidence was up. Thats because theres more demands for these homes but they were higher priced. That means were not getting the entry level back in. It was great month to month on Housing Starts. But that permit number needs to be stronger. Builders will tell you what theyre fighting against is high costs of land, labor, and regulation. They talk about how its holding them back on buildable lots and being able to put up more houses. Again, affordability weighing in, Mortgage Rates still near historic lows. Thats a plus for the builder. Again, a good monthly number. Id like to see the permits better. Thanks so much. All right. Lets talk about investing amidst all that da a ta. Doug dachille is aigs investing officer. Thank you very being here. Good to be here. I think youre second only to those of Pension Funds because eventually they have to pay people their pensions and right now the ability to make anything on anything is so brutally hard. Insurance companies, youve seen in the paper last couple of days raising premiums. Where theyre allowed to. Because theyre not getting returns. That they expected on the money that theyre investing. Youre bringing in all these premiums. And its your job to invest that and get a return. So later on when they get paid out. The moneys there. Our job is even harder. Unlike pensions we have much more restrictions about what we can invest in to pay our obligation to policy holders. Pensions have much greater latitude in alternative investments. Where if youre an Insurance Company, you have the core amount of your assets. And so you have much less latitude to invest in riskier investments to generate return. As a result if you cant generate investment returns on the premiums, youre going to have higher do you think they give a darn about the suffering of the Insurance Companies . Well, its i dont think they give a darn about the impact. But i think what theyre think about is the wealth effect. Theyre thinking by lowering rates well increase assets. What theyre missing is from the wealth effect thats only one side of the Balance Sheet of every person. You look at Pension Plans and Insurance Companies, theres two sides to a Balance Sheet. Theres assets and liabilities. And all this reduction and Interest Rates while its certainly been good for the appreciation of the asset side of everybodys Balance Sheet, unfortunately its also increased the liability side of the Balance Sheet. Have we really created a wealth effect . Certainly with Pension Plans, we know we have not created a wealth effect because many of the plans despite the low Interest Rates and the appreciation of the assets with b you really havent seen the net worth of the Pension Plans improve. Youve actually seen them become more underfunded. So the question is is the wealth effect for individuals which really have a similar situation, its just that we dont know the average person doesnt know the implicit liabilities that they have . They know the explicit ones. But they dont know the present value of all the liabilities. How much its going to cost them to live in retirement. So uncertain. People dont like Pension Plans, like Insurance Companies. They dont get to mark the market of the Balance Sheet. They dont know what their position is necessarily. Were not sure theres a wealth effect from putting rates at zero. I was going to ask why would you take this job. But you took the job. So what do you do in such a horrendous environment for somebody like you . Zblifs out to dinner the other day and somebody asked me the exact same question. Its interesting. I feel like im in that episode of seinfeld with George Costanza doing the opposite. Everything i think and my intuition has not made any sense. So prebrexit what did we do . We went through all this analysis to derisk our portfolio for the potential of uk exiting the euro. Youd sell equities. What happened . Equities have skyrocketed. Who would have thought that buying equities would have been a hedge for the vote that the uk was going to leave the euro. I heard you talking about yen today. Who would have thought the flight to quality would have been to a country that spent 20 years trying to get out of low inflation and deflation and has negative Interest Rates. Everybodys going to buy that to earn a negative rate of return. The one thing i thought i knew about which was bonds, you would have said why would i ration a bond for a zero yield . Now theres upside to bonds. Because now yields can go negative. Something that made no sense. So its a very difficult environment for people making investments. You might be talking yourself out of a job now here. Thats an important trend. Will it continue even if the u. S. Does hike again given where yields are around the world, will u. S. Bonds continue to see compression . Thats a function of asset liability management. It used to be in the old days, there used to be this principle that most investors needed that the issuers were issuing bonds further out on the yield curve than the demand. As a result there was this general view that rates in the long end of the yield curve was there were no long buyers of this that were standing. Everybodys looking up to see i have these therefore i need to buy all these bonds and theres a supply of them. You actually now have the liability. How long for what . That were going to see the long end of the curve stay so low . Well, probably as long as im going to be in this job. So what do you do to bring in returns so that way aig can pay off the claims . Theres a number of things. One of the things we have is scale. And we have a strong team of investment folks. And so we look at a number of ways to pick up some extra returns. So one of the things we used to do is we used to buy a lot of securitized product. Its just portfolio of loans. There were lots of reasons for us to do that. Owning the security, had more diversification, liquidity. These are loans with collateral backing. Exactly. They may be underlying mortgage loans. They could be credit card loans, auto loans. They were typically pulled in the form of securities. The benefit of those is you had liquidity. Loans are hard to sell and move. And you had diversification. You could pull them together from all different originators and all over this country. The problem now is the market doesnt really work as well as it used to. The liquidity, the benefits of being able to pick up the phone and sell a product is not as great as it used to be. You question im paying all this extra im giving up all this extra yield to get Something Back in the form of a security. Should i be doing that . Shouldnt i at this point own the loans . When youre an Insurance Company that has maturity liquidity . Why do i need to pick up the phone to sell those securities . Why do i need to give up yield to own it in a form that im not getting the value of . Because there isnt great liquidity in the market . Theres probably a big trend among the insurers to get more into owning the raw loans that they used to own implicitly in security form and just not securitizing them anymore. Interesting. Doug, you got a tough job. Thanks for joining us. Doug dachille. Coming up, well head back to rio. What have you got coming up for us . Weve got a lot. Say hi to doug. When we come back, is it pingpong or table tennis . Either way, id like to think im good at it. Youll see. I try to put my skills to the test after the break. And bond m, 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. Voiceohigh blood pressure,sk all day can cause neck and back pain it even slows your ability to burn calories and lose weight. Man 1 on camera fortunately, theres a solution inmovement, the affordable, standing desk. Woman 1 on camera an inmovement standing desk lets you move effortlessly between standing and sitting throughout your day. Woman 2 on camera inmovement standing desks come fully assembled and fit right on top of your existing desk. Man 1 on camera voiceover inmovement standing desks are heightadjustable. Woman 2 on camera voiceover and, unlike many standing desks, inmovement desks come in a variety of colors man 1 on camera your body gets used to moving between sitting and standing very quickly. 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But when i go up against an olympian, all bets well, they may be off. Listen to this. I will be forest gump today. We are going to play together. All right. Can you let me just have one point, you think . Well see about that. These are like pro. These are serious. Dont break it, dude. I do a thing where i sort of i look there but then i serve it over there. Thats my move. Youre so bouncy. Whoa. Wow. Now that i know what youre capable of all right. Im going to get serious. Okay. This is for real, now, people. You serve first. Okay. All right serve first. Nice. You were lucky. Was that a winner . That was good. Yeah. We could just stop now. Oh. Thank you. Thank you so much. He put up a good fight, i thought. You know . Definitely, you know, got to prepare a lot for that match. I do want to have a chance to go up against her again in tokyo in 2020. So i want to mark it down, this is not the end for me. And, well, our team here in rio thinks she took it easy on me. I dont know. Its very bouncy, guys. You should know that the pingpong youre playing in your garage, the rackets different, everything is different. The ball doesnt come off of it the same way. Andrew, was the press conference afterwards well attended . It was very well intended. We had a couple of people in the front who asked questions. They were all on our payroll. Yeah. That was cute, andrew. That was lilly and she was a sport. She was. Did have you tried to play with the grip like that . Did you see her grip . Its called the whats it called . The pent hold. No. I just do the classic i think its called the hand shake hold. Yeah. I learn she told me im better with back hand than the front hand. That must have been fun trying to return those things. The spin on those. The spin is unbelievable. Unbelievable. Shes nice too. She said it was a good match. It was 111. She said it was really tight. Shes nice. She is. Was the tae kwon do guy nice and close . Youll have to wait for that. Coming up, thank you, andrew. See you tomorrow. Fueling the future. Were going to head to the first never scored. I totally caught that one. The 14yearold girl in me giggled, yes. The offshore wind farm in the u. S. That is next. Here are the futures now. In the wake of the economic data, dow would open lower by 52 points. That is not stealy dan. Trying to stick it to me. Theres some wind blowing in the currency market. Some big moves in the dallas tod dollar today, particularly in trend, which hurt the asian trade. We saw the yen gap up to 1. 6 higher about a half an hour ago. You can see the dollar recovering some of that weakness to be 1 , the yen was below 100, now its above 100. The pound better cpi data out of the uk today. The euro at 1. 1266. Coming up, well talk about the biggest movers, and tomorrow, Joseph Stiglitz at 7 00 a. M. Eastern time. When a moment spontaneously turns romantic, why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card. The first offshore wind farm in the United States has spread it out up off block island, rhode island. Jackie deangelis joins us with more from there, jackie. Reporter good morning to you, michelle. Thats right. The wind farm is about three miles south of block island, completely offshore so its in the water. It costs about 300 million to build and its nearly complete. When it is operational early in the fall, its a 30 megawatt project so thats relatively small, but it is going to provide energy to 17,000 homes. That covers this island and a little bit more than that. Now, the project is unique in that its the first of its kind in the United States. Estimates suggest that its going to reduce Consumer Power costs on the island by roughly 30 . Important to this community because running on diesel power now, its costs are significantly higher than other places in the country. The builder is deep water wind and it says that future is bright for wind power, and projects like these prevent Investment Opportunities fully funded by equity investors, de shaw and several private banks, and will receive a 30 tax credit when its functional. The question with alternatives is how realistic are they . Do they bring costs down enough and make variable power for the option for Energy Industries . Offshore do have advantages of onshore since they capture more wind because of their positionsiposition positioning and result in more power, and the power grid is stressed. So now even as crude prices remain relatively low, this is an important project because it definitely is fueling the future in terms of the debate of these projects and how far we can go with them, guys. Certainly. Well be discussing that for a long time. Jackie deangelis, thanks so much. And after waging war against gawker media, peter teal about his decision to bank roll hulk hogans web site titled the Online Privacy debate wont end with gawker, and tech journalists writing, it is in discrime net to peoples sex lives and is the press is too important for it to let its role undermined the reputation. And gawkers on the block after hulk hogan won a 140 million there legal fight, and teal took issue with the site after it ousted him in a blog post in 2007. Before we go, lets go back out to rio for one last time. Andrew has a preview of whats coming up today and thunderstorms andrew . Reporter thanks. Tomorrow in rio, were going to head to the trump hotel to find out how people here feel about the u. S. Election and joe dont worry, its much more balanced than you might think. Well have another installment of ask the athletes, where were going to try to find out what sport has the best uniforms. The answer might surprise you. Well also have some highlights from tonights big basketball game with team usa taking on argentina in the mens quarterfinal. So there you have it from rio, back to you guys. See you tomorrow. And on the uniform front, do you think you could steal a little bit of team g. B. Stash, ill be very grateful if you could slip it in your bag. I can go they have their house. You saw our segment earlier on the houses, thats where you can purchase the gear, ill get you something. That would be great, andrew, thank you very much. Beach volleyball for the boy. I do want some Beach Volleyball stash. Not to wear. Might be your favorite uniform though. Google is releasing a video calling app called duo, its a direct alternative to apples face time. The difference is googles duo lets users make video calls between android and iphone users unlike face time which only allows for calls between two apple devices. I use face time. I like it. And weve also got skype already, which is kind of similar. Its not as easy, right . Its already embedded in your iphone thing. Duo is obviously new in different face time and all platforms so its not totally unique is my point. All right. Some stocks to watch do you know what were talking about . I have by accident hit face time trying to make and i like panic and i have also seen on my record of incoming calls that face time, but that was using it from the other person. My kids on. Its really hard to look good on face time because you end up with a double chin frequently. The selfies never look like what i thats why women do that what i imagine i look like. You have to tuck in your like that. Im always disappointed the cameras are messed up. Or i look like that, thats the problem. Youve got to practice, and take lots of selfies and then youll get better. You know, i try to get two or three of my chins. If its more than that, i dont final check, is it better like you dont have to do anything. Youre keep it down and. Up . Ok ok okay. Final check on the market this is morning. The dow is down about 50 points, about 5. 95 in the s p and the nasdaq is indicated down 10, and the big action has been in the currency on the boards. The yen is really surging. Theres energy, which is not very interesting. Theres the currencies. Actually, its moderated a little bit but its going up and downright around par on the yen and thats been a big mover today. Thank you again. Well see both of you tomorrow. And andrew will be in rio. Make sure you join us tomorrow, squawk on the street is coming up next. Good Tuesday Morning welcome to squawk on the street, im carl quintanilla, with sara eisen, mark sem toll i, and this is what we call a heavy news day, stories to watch in currencies, m and a, activism, data and earnings, futures are lower after mondays record close. Europes in the red, and