Transcripts For CNBC Squawk Box 20160818

That came off a 14 drop in july exports from a year ago. Part of that story is the strong yen. The dollar weakening across the board after yesterdays release of the minutes show that policymakers were divided on a near term Interest Rate hikes which has led most participates to think, were not going to see anything any time soon. Ive been ranting. Shes privy to all my ranting. Ive decided i got a new view. I want to get a job at the fed. All they need to do is either just spend all the time, what do you think, should we raise, i dont know, what do you think. Im worried, im worried. I dont think we should. I think we should. For years they do that. And they dont have to do anything else. Twidle their thumbs. Now i decide theyre one big composite of hamlet. Hamlet is like, i really should do something. To be or not to be something. Maybe i do, maybe i dont. If i do this would happen, if i dont, and they go through all this hand ringing and we know how hamlet ended. Thats why its called a tragedy. Yes. But these guys. Theyre talking about a quarter plummet. My last was that dont tell me anything else. Just surprise me. When you finally do it, ill deal with it. If its a quarter, month from now, six months from now. Lets not mention it. I have gotten to please stop talking. Every day we read off this list. Theres more today. Dudly speaking again. But i guess given the Global Nature and the nirp, which is a new word. Negative Interest Rate policy. I guess it really does matter. Because depending on our dollar. You know what, talking about how weak the dollar is getting versus the yen and all of a sudden again, they say, maybe we will raise. Not only are they trying to manage stock market, but even managing the currency. Even people like jack wlo said if the collar is too strong, its bad for u. S. Economies. Nirp is more consequence shl. Not to mention what its going to the pension funds. Exactly. Its so brutal. When you think back to the depression of the 1930s, you need expansionary loans. Theres a millennial out there thats going to switch around and see some other channels. Do we talk about nirp or zirp. Its martians. Lets play fun music to trick them into doing stuff their interested in. They were doing that on final count down. I know futures arent doing anything, but im excited about it anyway. Hes young. Hes still doing the tv he does it the right way. What are we playing. We played car yus ruker. What is that place on the garden state. The pnc art center. Thats where hes coming. You said hes coming here to the set. Thats what i thought he said too. Hes been on the set. I know hes a golfer, great guy. Call him while hes here. Maybe hell come up. Im trying to get dan. In the meantime, why dont we take a look at european equities because this is exciting too. Check it out. Youll see the early trading in the markets. Half a percent move for the germany dax. Its all green. Check it out, everybody is in positive territory this morning. Also legts take a look at crude oil prices. If you take a look at wti. 4702. Thats come a long way in a couple of days that i wasnt paying attention. 47. 02. Heres whats on the agenda today. Walmart expected to announce Quarterly Results at 7 00 a. M. Eastern time. Were going to bring you the numbers and reaction from wall street as soon as it happens. Were going to hear from retailer gap. Data due at 8 30 at the same time be on the lookout for the Philadelphia Fed survey. More fed speak today. San francisco fed president John Williams will offer Economic Outlook at 4 00 p. M. Eastern time. In corporate news, watching shares of cisco. Guidance however was cautious. Sees flat revenue in the Current Quarter and earnings outlook is shy of analyst estimates. Also announcing plans to cut 55,000 jobs or 7 of the workforce. Those are good jobs too. Comes as it switches focus from being a hardware maker to higher margin software. Cisco ceo will join squawk on the streert at 9 00 a. M. Later in the hour. You know how i dont like the long reads. Shes had to do all of them. Like if she has this quick int intro, she gets i get the quick intro to andrew. You get this long read to wilfred. And im like, wait a second, youre doing power lunch today too. Three here, thats five hours. Oxygen is haair time. I got that from brian williams. Its me and joe and wilfred shows up at 7 00 and suddenly for the next two hours, the only read have i is lets get to andrew whose in rio. Youre not helping. Just digging deep. You want to read what other people write in some anchor way sdwl why did we get into the business besides the travel. You can have all my reads off the promp ter. So andrew, you were with becky. So this was not like a big deal. It was for me because i Vice President seen her in a while. You were off for two weeks and i was here for two weeks. You were here. Yes, i have seen becky. I have seen becky. Shes good. Shes good. I didnt realize you had you look great. I didnt realize you were already here. Hes been practicing this. You know how he goes youre huge. She looks like she already had the baby. Ive been wearing black or navy the entire time. Andrew has to talk. Sorry so distract you from your job. Go ahead. Sorry, we do have a couple things we wanted to get to this morning only because not only do we have a full day of competition, but we have a lot of controversy going on right here over what really happened to four u. S. Swimmers. Its taking the front page including the new york post. The developing saga over whether ryan lochte and his teammates told the truth of being held at gunpoint taking a bizarre new tender when brazilian authorities removed two of the swimmers from their flight home right at the rio airport. There was some confusion because initially we thought the court order only applied to jimmy fegan. It did, but when we found out james was about to leave the country and had in fact some how checked in and when we found out that the other two were about to leave the country on a plane, hen the judiciary understood that it was the best for the criminal procedure to keep them in the country. Jack conger and hunter were questioned and released with the understanding they could continue the discussions with the officials. This comes matt lawyer speaking to lochte on the phone. We have another report overnight surfacing of Team Great Britain being held at gunpoint and robbed themselves so the security story overwhelming a lot of the news here. We should say despite the headlines, there are hundreds of athletes competing here in rio and a number of bilg highlights the u. S. Sweeping the top three spots marking the first sweep of any track and field event in olympic history. Also in Beach Volleyball holding off brazil. Winning the bronze medal match. In the first game of the knockout round of mens baflkt r basketball, beating argentina. Advancing to the semifinals. They will take on spain tomorrow. That was a big beat. Probably one of the biggest beats theyve had thus far throughout the game. A lot going on here, but this ryan lochte story continuing to overwhelm the conversation pretty much across the board. The papers here the front pages, the papers there the front pages talking about what this means and the go political issue security in rio. We talked so much about the fact that business people, executives, not too many dacame down here in part because of security. Trying to understand who is telling the truth in all of this matters a lot. We talked about it here. It is the cover of everything. Waterga watergate. Something fishy. Got all the tabloid. Its in the interest of the rio authorities to make it seem like it didnt happen. Heres the thing though, when it did happen, and andrew and i had a conversation about it yesterday, where i gave the benefit of the doubt to the swim team, it highlights number one, how bad nobody was surprised. Right . Nobody doubted it because crime is so ramp id. Sometimes the police themselves in brazil are involved in crime. It just highlights how bad an issue security is even if these guys are lying, which would be horrible and wrong and terrible, but remember one of the greatest per capita concentrations of Armored Vehicles in the world, where is it . Brazil. One of the greatest concentration of helicopter continuers per capita, its brazil. You could be demised very easily. Theres all kind of scuttlebutt whether the xray equipment saw the wallet. Didnt have the phones. I would be scared anywhere to be taken off a plane. Andrew, i immediately said midnight express on a bus. You think youre free and clear. Youre referring to how are the local people there reacting because ive heard two different reactions. One that some brazilians are furious. Glad the judge is doing this because they want to prove it didnt happen, if indeed it didnt. The other side is wow, youre making this worse and its become a much bigger news story by continuing to harp on it. I think the overwhelming view here is the first view that you es spoused. Lowball l locally if there was lying and we a we are reserving judgment. If there was, thap feel betrayed. This is their country. Thats the overwhelming feeling. Joe was referring to some video from the daily mail. That video was actually cited by the judge in the order to take those passports. However, those other pieces of some of that reporting has not been confirmed yet. I want to caution everybody about what were looking at here. A lot of moving pieces to to story. That was after the incident. Its hard to say. The point im making in that video for example, theres suggestions that they actually had that i recall waeir wallet. Its unclear. You didnt know whether they actually had the wallets. You could see phones. They had their belts, which by the way, you didnt have on yesterday. It wasnt a suit. They were like causal pants and you were walking into the shot with big you didnt even bring a belt to rio. Did you bring one at all. You know me. I try to avoid im not into i wear the suits with a little tab sgls it was a causal outfit and you had no belt on. Its up to you. I know. The current fashion police. Its not me. Just normal belts. Belts with belt loops. Thats why pants have them. The attitude that they had when they were coming back, they were sort of kidding around with each other. I saw ryan lochte. That was the other thing. Whether there was a wallet there or not. Its hard to prove. They said they were drinking. Exactly. Maybe they wouldnt you have to remember that when the story started, there was controversy almost from moment one because the story broke originally when ryan lochtes mother told the story on television. Then there was a denial that she was telling the truth. Then it was only later that lochte then told the story again on the today show after originally denying it. So now he said he denied it because he thought he was going to get in trouble. As i said, theres a lot of moving pieces. Very unclear right now of what exactly happened. Nobody has said specifically they lied. The government saying they want to continue the investigation and try to understand what happened and thats why they want these players to be here so they can take their testimony. Okay. They want us to move on. This is all we want to talk about. He loves his water cooler. Cisco laying off 5500 people. The world theres other stuff. The fed might go up. They might. Theyre saying that might. They really might this time. Dont push them. Ill do you a favor, well talk more about this over the next couple of hours and throughout the day. Youre so excited. I know. Im glad youre down there for this. Well see you in a little bit, guys. Thanks. In the meantime we have been talking about the markets too. And obviously the stock market enjoying another rally. Joining us right now is michael tyler. Also david joy, chief Market Strategist at aher price financial. Welcome to both of you. Why dont we start off with you and get you take on the fed. The way a lot of us have been reading it is you shouldnt expect anything until december and maybe beyond that. What do you think. I agree with that. I think one rate hike is coming. Inni i think its december. I think the fed really wants to do it. Theyre afraid we lost momentum in the Second Quarter. I think theyre nervous if they move too soon, they could derail whatever strength there is. The other aspect is theyre afraid of a little temper tantrum in the bond market. If they move too quickly, you could see a backup in rates which is not a good move for the stock market. A backup in rates to 1 bnt 6 for the tenyear. We need to get one rate hike and that wont happen until the end of the year. Michael, how about you . Is the fed the only game in town or are there other things we should be paying attention to. One of the key things is the market is being lev at a time l by two other things. The dollar has been weaker and oil is coming back. Both of those is helping earnings. With stronger earnings in the back half of the year, that helps. The other is i think the crushing influx of money from overseas into the u. S. Stock market looking for yield. So the fact that the u. S. Market is yielding 2 give or take is a positive. I dont think a fed hike is going to dramatically affect that one way or the other. What really would affect the u. S. Market would be if europe and japan suddenly adopt different Interest Rate policies. David, if rates were higher, would the market make sense at these levels . Is it something you can support based on fundamentals of what were seeing . We have seen improved earnings outlook. If Oil Prices Stay at this leflg and push higher, people think well get better numbers in the second half. Does that make sense for these levels that weve seen with the new highs. I think it does. If we get it. And thats the big question, but i think the market has already discounted some of that. So if theres any sort of disappointment in the Earnings Growth expectations for the second half, ting market is a little vulnerable here. At the start of the year, we thought we would see positive growth in the Third Quarter for earnings. Thats been postponed to the fourth quarter. Were a little bit suspect. Were hopeful, but suspect were going to see that follow through. What would you do with your plun. Market seems to have drd already what would you do with your money . What would you tell people . To the extent you want to be in equities at all, were well overweighted in the u. S. Were concerned about the political environment and the policy environment in japan doesnt seem to be working by default were overweighted in the u. S. Also trying to find some alpha in nontraditional asset classes. So were a little bit defensive. Were not out of the market, but a little bit defensive here. Gentlemen, i want to thank you both for joins us today. Great to see you. Donald trumps shakeup. Weak poll numbers have establishment members worried. John harwood with more details. Reporter michelle, one of the things that is so concerning to House Republicans and Senate Republicans is that a problem at the top of the ticket is going to pull down their majorities. Lets run through some of the numbers. If you look at the senate, republicans have 54 seats. Democrats when you include the independents like Bernie Sanders have 46. That means that democrats need to carry at least four seats to regain a majority. Of course the Vice President breaks ties if its a 50 50 situation. You have a series of competitive seats being defended by republicans. Ten seats that are in doubt as to the outcome are held by republicans. Now, only one by democrats. Thats the seat of minority leader harry reid. You look at republicans who are fighting the trump tied. Youre talking about people like richard burr in north carolina. Youre talking about kelly ayacht in new hampshire. Marco rubio in florida. Blunt in missouri. Members have to stay ahead to save their seat. If you look at the house, its a different picture. Democrats need to gain 30 seats to gain control of the house. That is aal order. There arent that many competitive seats. Republicans have 31 seats they now hold that are competitive. Democrats just have six. When you talk to republicans, most of them have safe seats, but the competitive seats are in more jeopardy because of whats happening at the top of the ticket and the senate is the one thats really, really in doubt. Republicans now are concerned that they may lose the four seats the democrats need and maybe even more than that, guys. I was reading everybody covers it differently whether its a reset or late in the game, i saw on usa today and i read some of the trump supportersers are saying its a good thing. Kelly ann conway is great. Trump is going to be trump. I was reading some of the other republicans were hammering and i go which one were those it was kevin madden. If only we could get him maybe to help trump, do what he did for romney a couple of years ago. You know what i mean. Get some of the talking points, the advice, some of the stuff that propelled that. I think it was said he was weakening as we got closer to the election or something. Which, you know, john. He would recognize. Exactly. Reporter i tell you one thing, joe, right now a lot of those republican incumbents would wish for mitt romney at the top of the ticket compared to donald trump. Well see how it comes out. Maybe youre right. Those are guys worried about their own job. I dont know too many other just regular people that would wish for that was not a good ending for obviously for the gop last time around. I dont know. Portman seems to be doing fine. Toomey has other problems. Portman is running ahead. Toomey has other problems. Going against tpp. All these guys do what they got to do and thats what is disgusting about a lot of politics. They lick their finger and put it up in the wind. Always about them. Thats the argument. I was surprised the former head of the club for growth came out always about them. They must get good tables or something. What is so great . Why do they have to stay in that job . Its the undert the table stuff. I know biden has some nice vacation houses and stuff. I dont know. Joe, before i go, i just want to point out, if im ever late for a live shot on the show, its because i was held up at gunpoint. And if you were, john, i hope this is another thing were talking about. I hope someone holds me up at gunpoint, i first say, i aint getting down on the ground, pal, if they hold a cocked gun to my forehead, i hope i say. Or in the general direction. I hope i say, okay, whatever. And i get down instead of just completely ruining any shorts, which is probably what would be my you know, hold a cocked gun to my head. You would punch the guy in the face. No way. No he wouldnt. In the past, some hollywood type like christen slater was getting the police were doing something and he went for the policemans they think theyre in a movie. Im not in a movie. Im scared. Im scared talking about it. John, anyway. Youre right. If it happens to you, you were held up i dont know what really happened. The Great Britain report sounds real too. Its going take a while to dig through this. It is. Don, i want to see you with ryan lochtes hair. Coming up, cisco posting an earnings beat and a plan to cut 7 of global work force. Were going to dig through the report with an analyst. Thats coming up next. At ally bank, no branches equals great rates. Its a fact. Kind of like grandkids equals free tech support. Oh, look at you, so great to see you none of this works. Come on in. Cisco posting a upbeat. Company announced going to cut up to 5500 jobs as a restructuring plan. Global head of Technology Hardware and software at drexel and you know what, because of this election, i hear 5500. I immediately want to know, is sit all here . Is it all domestic . It will be on a global basis. How many here. They didnt give any indication. Think about most of the revenue, 60 is in the americas. Thats what i think about now. 5500 jobs that we really cant spare at this point. I think what theyre doing, they had a big restructuring in 2011 and 2014. So they were very similar to what were seeing here. Chuck robins is all about execution. He looks at where the company is going, more software, more security. More iot. He looks at the legacy businesses and theyre taking away. Do you remember what peak employment was and what it will be after this. In terms of what . Peak employment. Was well over 70,000. Now it will be. Youll probably get into the mid 60s. With reinvesting, does that mean theyre going to hire 5500 Software Engineers to come along with this or is this going to be slimming of the ranks. They wont hire as many as theyre letting go. They will invest back into the business. It could be through head count, but in areas like security, iot. Next generation data center. Trade is such an issue in this election and donald trump talking about whether theyre going to be tariffs on china. Cisco has deltd with this issue long before it became an issue within the elections. China has nativist policies. They have been working very hard to eliminate the need for Cisco Companies like cisco. Where are we in that battle. It seems like were fretting over here about this so much where the chinese have already decided what theyre doing. Its a great point. Cisco was very early to get hit by chinese government. Is it because we blocked wall way or this is the way they were always going to go with chinese. It was a big part of it. Cisco has done well. Before all the other Companies Got hit in china, it was cisco. Then what happened, the snoeden ifect. That was a great excuse to hit cisco even harder. They have a partnership they announced last year with inspur. A local chinese company. That was suppose sod ramp this fall. Its a little behind schedule. Saw china revenue fall 12 . Last quarter was up 22. Qualm quarters it was up 60. Tanked in china. Rebounded dha eed sharply now w coming back now. Its strong in places like france. Thats something John Chambers was august about a year ago. Most of the world embraces cisco. Its not just a Networking Company anymore. What is it . Its 150 billion Market Cap Company that was 600 billion at the peak and its not a tech. You dont think of it like facebook. Its not a Growth Tech Company at all. What would you call it . Its low single digit revenue growth. Blue chip . Would you call it a hightech company. Its definitely hightech. Their markets dont grow at the rate of facebook. Is ibm still technology. Definitely. Just because you dont grow at the rate of google or facebook. Blue chip value play at this point. Its exactly right. If you look at like surg water companies. Detergent companies. You put these in a bucket. These guys traded 22 times earnings. Theyve grown eps for five years. Been a 7 grower. So maybe to kind of the next realm of defensive plays are the Big Tech Companies that arent going away, but they dont grow at 30, 40 times earnings. They dont grow at all. They barely grow at all. The low Single Digits. The stock price doesnt grow at all. Cisco is on a rerating trajectory right now. That means translation, lower multiple. A multiple is going to go higher. Year to date, stock up 13 . S p up 7. Its starting to perform great under chuck robins. That will continue. The mind set has to change. It is dirt cheap. Not going anywhere. Whats the multiple. Ten times x cash. 3. 4 dividend. Its going to attract people. Theres a yield. Thats pretty reflective of it not being considered a growth stock. Not a growth stock. I would call it a value stock. Thank you. Yes. Wont ask about apple. Whats your target on apple. 185. Its performed very well. Just so you know. You started 115. It went to 90. Then you were 200. At 120, you didnt change your 185 target as it went to 90. You wanted to downgrade in the 90s. Now its at 110. Youre declaring victory. Im declaring victory. All right. 185. That will happen. New housing data on underwater homes. How many people owe more than their house is worth. Plus were going to check in with Andrew Sorkin in rio. Reporter for the first time in 15 years, vegas is taking bets on the olympics. What sports have the odds to pay out big. Were going to tell you when squawk box returns live from rio. 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. A good car has to maneuver quickly. Thats also true of a good car company. People have always bought cars. But we saw an opportunity in sharing cars. So we moved fast and launched car2go in 29 cities, all around the world. Doing that required dozens of data centers, designed for speed and performance. We built our business on the ibm cloud. Because thats what the ibm cloud is built for. Welcome back to squawk box. Time now for the executive edge. Nearly 6 million borrowers are behind on mortgage. 5. 9 Million People owe more on their mortgages than their home is actually worth. More than half a million borrowers still owe twice as much as their home value. Chicago carried the highest number of inflation. You got the executive edge today. That is a plum. Plum assignment. Plum assignment. Do you want to read this one . I will bequeath it to you. Bequeath it, you dont bequeath. That means youre leaving he in or something. No, im leaving this read to you. Let me see if i can pretend to be interested. I am. Last years graduates landed fewer jobs than any class in the last 20 years. New data from the association for law placement. 86. 7 of last years Law School Grads were hired. Thats the same rate as 2014, but down from 92 in 2007. Good inflection. Median starting salary. I want you to do the knitting. When i get done with this, whoever is next, immediately start. Stitching. Thats why i dont do very well. Starting salary, this is the key point starting salary grew 5 to 100,000. I think all of this would agree theres never, ever enough lawyers. Impossible to stitch. If you ad lib at the end. Read the end again. Ill show them what stitching is. 100,000. Ready. Grew 5 to 100,000. Mcdonalds is voluntarily pulling the Activity Tracker from the happy meal. The fast food giant making concerns over skin irritations that may happen from wearing the band. It sounds like a step it Activity Tracker. Maybe a fake fitbit. I didnt even know they had those. I didnt either. No word on how many customers may have been affected. However one parent complained on facebook her child was burned by the happy meal toy after playing with it for eight minutes. Questioning about whats in the bands and what impact they have on the skin. Theyre gone. Theyre gone. When we come back today, well be talking about dow component walmart. It is expected to report at the top of the hour. Bring you results and action from wall street right away. So far the stock looks up 1. 3 . Were going to talk betting on the olympics for the first time. What sports give you the best odds of winning. Well tell you exactly which ones when squawk box returns for rio in just a moment. 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. Welcome back to squawk box. Right here live from the Olympic Games in rio. In february of last year t nevada betting control board lifted a 15 year ban on placing bets on amateur sporting events. Now with the olympics in full swing, vegas bookkeepers are seeing the action. Reporter in las vegas where Bookmaker William Hill is offering odds on 200 olympic events. Betters favor the familiar. They tend to bet what they know. So without question, we wrote the business on the mens basket team. Soccer and golf also seeing big action, but the lesser known sports like kayak and shooting, less activity, but thats where betters have a chance to beat the house according to william hills, director of trading. The odds could be in your favor on the obscure ports, but you have to do your homework on those. Its very tricky they have as much information as us. Its a cat and mouse game. And the handle on the olympics, we should say, relatively small by vegas standards. Saying that the wagers on two weeks of olympic competition, only going to amount to 10 of the super bowls handle which is 13 million and i think we should bet on pingpong, table tennis is my sport. What happened yesterday . I saw some big deal with the Chinese Table Tennis Team last night . I was thinking of you and wondering if you were watching the whole thing. Infortunateunfortunately, we there. Where they are and where we are is like two different contin continents. Pretty cool event last nightly. Excellent nevada pronunciation. Right at the top of your sdplsh all the way from rio. Thought of you when i thought of saying that. I thought about skipping over it. Talking vegas would be safer. Nevada. Its not difficult. It was really, really good. You didnt see andrews match, did you . No. I didnt. When is taekwondo. Were going to show you taekwondo tomorrow. We have some marathon eating going on in the next hour. I think in the next hour. Maybe in the 8 00 which is a lot of fun. I hope you enjoy that piece. We do have fun stuff on tap today. He loves to eat on camera. He has a hollow leg too. Thanks andrew. Well be back shortly. Were going to go inside the shark tank in a minute with r rivet terror. Makes handbags out of military material and employs military spouses. Company cofounder will join us next. Heres a quick check of whats happening in the european markets. Becky was so excited about the green earlier. Ftse holding on. Got to stay tuned to see how this plays out 6789 great music for this segment. Another shark tank success story. This time a fashion startup creating bags with a mission. Rriveter. Like rosie the riveter, i guess . Repurposes old army tents to make accessories. The products are made by military spouses which creates stable jobs for families that often have to move from post to post. Joining us now the cofounders. They appeared on shark tank earlier this year and struck a deal with mark cuban. Good to have you here. Excited to be here. This is a wonderful story. Show us the bags, first of all. What are they made of . How much do they cost . Great. Well, our handbags are like you mentioned all made by military spouses across the country. Theyre making the parts and pieces. We have different lines. We have the signature line which really supports mobile income for military spouses. Theyre able to make them at home. How much is that bag youre touching right now . This is 240. What i love about this is you have been able to take two underutilized assets and increase the productivity level dramatically. Right . Military spouses, its tough to have a career when youre forced to move every couple of years. Right . Exactly. Absolutely. Youre both military spouses . Yes, we are. So you knew the story. Yes. We both i moved eight times in ten years. Couldnt find a job every place we went. I could see employers taking my resume and putting it at the bottom of the pile. We didnt want to be victims of circumstance. So we decided lets do something about it. And, you know, i think america just wants to support america. Were all in this together. And supporting our military is military spouses, the great men and women behind our Service Members is what were all about. Same story for you . Absolutely. I had just graduated with a masters degree. I moved into the middle of nowhere with my husband who was active duty. Lisa and i, thats where we met in georgia. We were like how are we going to make our lives better and the communities better . If we can do anything to make military spouses lives and their families easier, thats what were about. Second underutilized asset . Leftovers from the military. How do you source these materials . What is this stuff . So our limited Edition Collection is made from recycled military materials. We source sit from anywhere we can find it. Anywhere in peoples closets. We get donations. We have people that find it for us. The stuff is just laying around. If we can turn it into something beautiful and repurpose it, its amazing. How do people buy these things . Do they do it online . Showing up in stores . We do a ton of business online. Then we actually have two of our own retail stories. We just opened outside of d. C. And we have a Flagship Store outside of ft. Bragg. With cuban, what does that help you do . It helped us scale the business. We started the company just over 2,000 each. Because we had limited means as military families. And so there was we grew the company handbag by handbag. Thats really where were marking it. Once you appeared on shark tank, what happened to sales . Its incredible. Can you tell us . Percentage . Around 300,000 the year before. And 1. 3 million now. Wow. How do you must have learned about scaling. Yes. Absolutely. Thats pretty hard, right . It is. To learn how to scale a company that fast, not a lot of companies go through that type of growth in a short amount of time. And to be mothers and husbands being gone, its we really relied on each other. We created our army of military spouses. How many people do you employ . Were a team of over 50. Independent contractors making the parts and pieces and employees in north carolina. Did i make a bad assumption, is it all with im . No. We actually have a mix. Its a majority women, but we do have a handful of male military spouses and employees. Was mark cuban helpful . Mark cubans amazing. Hes there when we need him. But he lets us grow the business and make our own decisions. Hes just a rock. What advice did he give you . Not to wait. Opportunity is now. And thats something that weve really learned from him is dont wait on something. Take action. The bags are beautiful. Thank you so much. Thank you very much. I like this toiletry kit. Can i buy that from you today after the show . Terrific stuff, ladies. Congratulations. Like that music at the beginning. I did. Why . Papas got a brand new bag. Oh, good. You got it. The connection, yes. I didnt know anything yesterday. So hes making fun of me again. I thought you just liked it. I didnt realize you heard papas got a brand new bag. So there was a thank you for coming in, guys. Yesterday was shake it up for trump. And she said why do you keep playing. I might take a little to catch on. Family show. A lot of the music. Well be right back. When we come back, an earnings alert for you. Walmart is set to report in a few minutes. Well bring you the results and the reaction on wall street. That stock up now about a dollar. 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. Walmart earnings set to hit the tape. The numbers and the state of the consumer, that analysis just minutes away. Plus guest host Walter Isaacson is here to talk the fed, the economy, and Cyber Security. Are zika fears overblown . We will speak to the head of the Puerto Rico Hotel and Tourist Association about recent cdc warnings and the Tourism Industry there. And drama in rio. Two u. S. Olympic swimmers pulled from their flight home. Police questioning them about an apparent robbery. More on the developing story and the highlights from yesterdays action. The second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with becky quick and michelle carusocabrera. Andrew is in rio. Were going to catch up with him in a few minutes. Does he look that good when sitting in the studio. Yes. You just dont notice it. Because the camera is very friendly to you down there, andrew. He looks like one of the athletes kind of, doesnt he . Better lighting. Is that what it is . I think it might be better lighting. Awesome, andrew. You dont have to say anything. Theyre telling me to move on. Why cant i compliment andrew . You have a problem with it . The futures at this hour are indicated a little bit lower. Wow. Cant get much more than a little bit. 0. 22 of a point. 22 ticks on the s p. The dow down about seven and the nasdaq down four. The numbers hitting the tape. Looks like walmarts Second Quarter earnings per share was 1 1. 07. Analyst estimates beat. Walmarts also raising its full year outlook for a range between 415 and 435. They had previously guided between 4 and 4. 30. Consensus is 4. 27. There is going to be a 5 cent impact from the jet. Com acquisition which is expected to close in the fourth quarter. Only 5 cents . Thats it. 5 cent impact. Comps, listen to this. U. S. Comps up 1. 6 . Thats really strong. Thats the eighth straight positive quarter. And actually the strongest in two years. There were years when those comps were up 1. 5 . Traffic up 1. 2 in the u. S. Thats a seventh straight quarter of gain there. The inventory in the stores was down 6. 5 . But the in stocks are up. So thats really good news. Ecommerce sales up 11. 8 . Walmart may want that to be stronger but that is an acceleration when it was up 8 . I spoke to walmart cfo brett biggs. And he attributes it to fundamentals like clean stores, improved employee morale. And he doesnt see a market change in the consumer but sees things working in their favor like wages and gas prices. But also perhaps causing a bit more caution. Regarding larger business decisi decision, biggs says they are being leading into jet. Com. But potentially a little bit away from businesses like the example of selling 119 of its mexican clothing chain Suburbia Stores as an example. Leading into the new, deemphasizing older investments. I think that was part of the big question when they came out with the jet acquisition. 3. 3 billion sounds like a number that is a market cap of over 227 billion. So its not a massive bet for them. But the idea this is a 5 cent charge that theyll be taking on earnings, they couldnt give clarity at the time because they were in a quiet period. This is what the streets been waiting to hear. If you check out shares right now, theyre trading up by almost 3. 8 . 75. 70. A gain of 2. 70. That was the one question because they couldnt give more clarity in the quiet period. And the free cash flow, more than 10 billion. Nice little number there. What about the ecommerce numbers . So ecommerce up 11. 8 . Thats better. Last quarter was up 8 . Yeah. Theyve been disappointed in the previous quarters. They would love to see numbers up 30 , 40 . But, you know, i guess theyll take an acceleration. Thats what jet. Com is about, i assume. Improving that. And getting an urban millennium shopper who tends to be jets customers right now. Its to go after the jet customer opposed to using that platform which could be better . Okay. I think its both. Would you agree . Jet has stuff behind the scenes. Some algorithms that theyre interested in. No doubt this is about trying to get millennials in the door. Do we have any idea when its going to be did they say . They did not say. There was a Conference Call today. Maybe well get details then. Got it. All right. Stock looks great over the last year. Those two by the way, we should look at the dow once again. Look at the futures because Walmart A Dow component. A gain like that, it could have an impact on thinkings. You were looking just before we got the numbers down just slightly. Now down by less than one point. So well continue to watch that. Thanks, courtney. Heres what else is making headlines this hour. Following yesterdays indecisive fed minutes, investors will get clues to the economy this morning. Out at 30u8 a. M. Eastern time. Gannett has reportedly raised its build for tronc. Thats according to the journal which says details of the new bid for the publisher couldnt be wlerned. Tronc. I hope they keep that name. Thats an awful name. Hay had to change it. We gave them grief for getting rid of tribune company. They werent allowed to have that name. Theres another name associated with it, too, wasnt there . But tronc it sounds like a movie from the 80s. Tronc battled godzilla. I dont remember who won. But tronc was a formidable opponent . But what about the video game the computer game villain. What was that guy call snd. There was a movie tron. Thats what we were talking about. Interesting what gannett would look like if this goes through. Are they going to be so saddled with debt . What was the gannett spinoff . Whats the name of that . I dont remember. Thats got a crappy name too. They spun off time warner cable, let them keep the game. And poor jeff still gets phone calls when people cant get their cable installed. It has nothing to do with time warner. Between tegna and tronc, the gannett spinoff is tegna. You dont even know how to say it. Walter isaacson is the guest host. I just snuck in. Im sorry, michelle. Right now we should get to the olympics. Team usa continues to collect medals in rio. But away from the games there are questions and controversy continuing to surround four members of the u. S. Swim team who say they were robbed at gunpoint by men posing as police. Andrews there. Hes following this story closely as well. Andrew, right back to you. Hey, thanks, becky. Youre absolutely right. It is the big story here. Theres certainly a number of questions which is why rio authorities are now looking into continue the interviews theyve been holding with the athletes involved. Heres what we know right now. Ryan lochte who has become the face of this controversy standing behind his account of what happened. He spoke to matt lauer about it last night. Meanwhile jack conger and gunnar bentz were released but will continue to provide information as requested. We will follow the story. Its not just a security story, its an economic story. But we want to talk a little bit this morning about the sponsorship of the olympics. Because thats the other piece of this story. When you think about it, the olympics may be one of the biggest popup businesses, if you will, in the world. And this story has a huge impact. There are new 57 suppliers and sponsors of the games from adidas to bridgestone. Top sponsors pay between 100 million to 200 million depending when they entered their contract to the ioc to use the Olympic Rings. That does not include the ads you see and buying air time. There are put multiple tiers to this. Heres whats going on. At the top level, youre going to see Companies Like mcdonalds, coke, visa, samsung, and omega. All those guys have an exclusive marketing right to the games. Theyre the top sponsor. Theyre the ones paying that big number price. Visa, for example, the only card accepted at the venue in these parks. The mcdonalds, the only restaurant, and cocacola the sole beverage provider. They have exclusivity, if you will. Then there are the other tier sponsorships we wanted to explain within the ioc and then within the countries that own olympic organizations. So youre going to see nike, for instance. They outfit usa. Allowing them to display the nike swoosh alongside the Olympic Rings. And usa rings wear nike gear on the medal stand. However, Companies Like under armour have reached deals with specific teams to outfit them during competition. However, nation in the under armour case, for example, they cant display the Olympic Rings or even use the word olympics in the advertisement. And under armour in this case hope people will notice the logos. All of this means big money for the ioc. Brought in billions of eyeballs from sponsors. Whether spending all this money is worth it of course is a perennial question. But this year theres renewed questions because the ioc added rule 40 which allows nonsponsors to run ads with olympic athletes. You probably saw the Michael Phelps under armour ad as long as they dont use the rings and then theres a blackout period during the games. And athletes can be stripped of medals if they or their sponsors violate rule 40. Companies like red bull have tried to take advantage of this rule. Well talk about this in a bit because well have the ceo james weber of brooks. Brooks is against rule 40. They mounted an Advertising Campaign against it. Well talk about that a lot more. When you think about the big business of the olympics, you think about the sponsors and then this lochte story, by the way, and what it means to the Swimming Team and all the money involved behind it, it really isnt just a story of athletics. It is a story about money. Goes back to the adage follow the money. Thank you and well see you in a bit with more on that rule 40. Its something weve been buzzing about too. In the meantime, we have watching shares of cisco this morning. The company posting better than expected earnings and revenue, but the guidance was cautious. Cisco says it sees flat revenue in the Current Quarter. Its earnings outlook was shy of what the street had been expecting. And the company also announcing plans to cut about 5500 jobs nap is 7 of its workforce. This comes as the company is trying to switch its focus from hardware to software. Cisco Ceo Chuck Robbins will join squawk on the street later this morning. The Federal Reserve is deeply divided on when to increase rates. Still talking about this, arent we . Nine years. The market already believed that a rate hike in september would be highly unlikely and yesterdays fomc minutes just reassured them. Joining us now our guest host for the morning walter i. C. Saai. We have you on with guy laba who is fixed income strategist. So we are going to talk about the fed now. But i was thinking what would i talk to walter about. Theres nothing i wouldnt talk to you about. Thats nice of you to say. But you could theoretically you could just sit here every day and whatever were id listen to you. Well, you would like that. Id love it, yeah. Nice. This is nice. But im thinking, you know, so you wrote youre an unbelievable author and writer. You ran cnn. You have the aspen ideas institute. Youre like the definition of a renaissance man. Is that a good thing . You know what im writing now . The definition of a renaissance man. Im doing leonardo da vinci. Are you really . Awesome. Because i want to figure out how you connect art to science which is where that intersection where creativity comes from. Im not even sucking up to you. Even if i come to new orleans youll show us a good time. What i was trying to figure out i like guy. How do i pronounce your first name . Its guy. Guy is cool. All right. Lets talk fed. Walter can weigh in on this too. Were still talking a quarter point. It kind of annoys me that ichk we could handle that. I think rates are so low that all of this conjecture as business journalists we have to be involved with, i get frustrated we talk about it so much and time passes and were still talking about whether theyre going to do anything. I guess it does matter because its a foreign currency effect and a global bond marker right now. Central banks are very important. But should i be frustrated that here we are talking about this . You got any insight you can give us that we havent said . Im just as frustrated as you are were having this discussion. The good news is at least the fed watching process has become less complicated than the olympic sponsorship rules andrew was talking about. And less exciting. But the theory were working on why it still matters, if you will, is that Central Banks across the world, this is not a new story, has pushed down volatility in the Interest Rate markets. And the volatility has popped up in the currency rate markets. China is effectively though not literally on the u. S. Dollar. We get a stronger dollar here, that means a stronger yen and export problems in china which has global effects. And so thats probably the biggest economic connection we have between a slower u. S. Economy. Direct stuff as you referenced, its not going to change Mortgage Rates all that much. Its not going to slow things down on a daytoday basis here. Thats stuff i wasnt thinking about. You found something. Which is harder and harder to do. But doesnt it concern you that what youre talking about is chinas economy rather than the u. S. Economy in terms of what the Federal Reserve is supposed to do . Well, im not saying theyre supposed to take that into account directly. But the feedback effects are really clear. You dont have to go back further than january and february of this year to recognize as the dollar rises its somewhat mysteriously terrible for the u. S. Economy. We saw data deteriorating, markets deteriorating as the dollar was rising. If were going to worry about the entire world you can say that about the entire world when it comes to the dollar, right . Then theyre never going to raise. Theres always a part of the world thats problematic. The theory is at least my running theory is the extent that future rate hikes are priced into the markets. We were in the neighborhood of about 40 chance in december relatively recently, yesterday. Walter the extent that those rate hikes are priced in, it should be effectively priced to the dollar as well. You wont get the same if the talking up is gradual. How does the world escape negative Interest Rates . How does this play out . Thats the question. You need underlying growth. You need profits. You have gotten to the point where the u. S. Economy is close to full employment. But youre not seeing any inflation as far as i can tell. If its still yeah. Were still well below the target, there are officials who say thats what theyre really looking at now. Right. The 2 . You know, 2 inflation, wage growth, everything else, thats what were trying to get back to. How do you in 20 years of, you know, deflationary pressures or something that japans gone through if were now on a race to the bottom, you also need innovation. We had a huge burst of innovation in about the early 1970s when you have the microprocesser, microchip, personal computers, all these things come online. Were maybe on the verge of some Great Innovation with whether its artificial intelligence, data mining, health care. But health care is not going to be reflected in the numbers right away. So what you need is something that would kick the u. S. Economy but also the Global Economy up in the productivity fashion and innovation fashion the way the 70s and 80s did with basically information technology. Guy, what do you think . Whats the shortterm solution to any of this . Sor there one . Im not sure there is a magic solution, frankly. I think that was the Robert Gordon theory there were these great leaps forward in productivity every 50 years or so and then a period of stagnation. I would argue demographic profiles are probably a bigger driver and less changeable in the productivity aspect. Here in e the u. S. The working age population is growing at roughly 0. 6 of a year. You compare that to the 80s and 90s experience, thats a third less dont blame me. Im doing my part. Good job. So i hear. With Interest Rates this low, the other thing we could be doing and im happy to say both president ial candidates are in favor of it, is some Infrastructure Spending where you can look at the airports, you can look at our air Traffic Controls still being way behind. Youre against it, michelle. I am not against infrastructure. Dont get me wrong. We need more infrastructure. But walter, we give money to congress for more infrastructure. We dont get more infrastructure. The transmission mechanism is broken. Until that is fixed, were just throwing money into a hole. Yes. And you could do things by an Infrastructure Bank where you have real people figuring do you have a return on investment if you build this, if you you eliminate congress from that . You try to dont hedge. The answer is yes. The answer is yes like base closings on the military. You give them a yes or no veto but they cant do a line item. Let me push back. In the old days when they had earmarks, you got some things built and it wasnt the worst thing that happened. We had a museum to the edsel, i believe. Lawrence welk museum. You know thanks, guy. Guy, well have you back. Great. Hes a thinker. Certainly do our best around here. Exactly. Because its you know, its hard to find something we havent talked about with the fed. Whether theyre going to go up a quarter point or not. My idea, walter is i keep saying this over and over again. Lets not talk about it again. When we do it, let me know. You need that little red flag. Yeah. When you decide to raise, let me know. Coming up, okay. It says here to read this slowly. Im not sure why. But i will. Investors getting oh. You know, greco . People could see me doing this and ill be the one that gets accused of something else. Misogyny. Yeah. Anyway. Investors can you read this . All right. Investors getting a rise this morning from the l brand. Parent company of victorias secret is a stock to watch at the opening bell this morning. Well reveal the numbers after the break as i objectified an entire class of people. Models. Yeah. Great. We will look at the futures when this video runs out. There it is. Down nine points. Squawk box will be right back. That was not me. Names matt greco. Sic plays thr 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. This clean was like pow. Everything well . It felt like i had just gone to the dentist. It just kind of like, wiped everything clean. My teeth are glowing. They are so white. Crest [hd]. 6x cleaning, 6x whitening. And at two weeks superior sensitivity relief to the leading sensitivity toothpaste. I actually really like the two steps crest [hd]. Step 1 cleans, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. Take a look at some stocks to watch this morning. L brands Beat Estimates by 11 cents with quarterly profits of 70 cents a share. Victorias secret parent also raised its outlook for the full year. We already did the video. No need to revisit that. You know what . This is the video id like to show. Spam, baby. Spamming the globe. Spam and eggs. Hormel foods reported a quarterly profit 1 cent above estimates. For brands like spam, skippy, and muscle milk. Also hormel raised its yearly forecast as well. I think is dinty moore hormel as well . I think it is. You missed it yesterday was that not the highlight of the show . Wilfred normally called it twitter. We got him to speak american. And he goes twitter. Just like that. And he got all kinds of stuff on twitter. People were tweeting about how wilfred because he can do it if he tries. He can speak the normal type of he doesnt want to the. Whats the word he always puts in that we give him grief about . Whilst. With a t . Yes. Hes written it in the script. You know its not mom over there. Its mum. With a u. Spelled with a u. Anyway, twitter was cut to sell from hold at ever corps who says it sees more thats how i say it. Among other factors which to me is accurate competitive concerns such as snapchats move to monetize its own popular service. When we return, well talk more about walmart. We will get the streets reactions to the numbers after the break. But you can see for yourself that component up by 3. 5 . Stick around. Squawk box will be right back. With just days away from the closing ceremonies, the olympics here may be coming to an end but theres still plenty of competition and action. Were going to bring you the latest live from rio when we return right here on squawk box. Welcome back to squawk box, everybody. Among the stories that are front and center this morning, were going to take a look at shares of the dow component walmart. The company was just out with its earnings a little bit ago this morning. Beat forecasts on the top and bottom lines with the numbers. Raised for the full year too. That is helping things out. You see the stocks up by 3. 5 nap is helping the dow. Speak with an analyst in detail in a moment. The Labor Department releases its weekly jobless claims in an hours time. Claims will probably come in around 265,000 for the last week. That will be unchanged from the week before. And mcdonalds is removing a fitness tracker toy that had been included in the happy meals. This comes after the report that the trackers band was causing skin irritation on some children. Mcdonalds says it is investigating the issue. Lets talk more about walmarts results. Joining us now on the phone on the squawk newsline, joe feldman analyst at telsey advisory group. Thanks for calling in. Thanks for having me. How are they getting this right . Well, they drove a lot of incremental sales and traffic to the core walmart u. S. Stores. Theyve done a lot to remerchandise a little bit. And thats been helping to attract customers and theyve been pricing a little better. A bit more competitive in the grocery area. It seems to have worked this quarter. So better execution on the basics, it sounds like. Absolutely. Theyve been doing a much better job. Merchandising within the store does look better. Theres a little bit better leverage of technology within the stores. Shipping times are better. And theyre doing a pretty solid job across the board. This is Walter Isaacson. I was wondering what low transportation, low fuel costs may be doing . Well, i think for the consumer its been lep ihelping. Especially this end of the Consumer Market where they feel theres more money in their pocket. Plus walmart raised wages for their own employees which are some of the their best customers. So that probably helped as well. But, you know, on the transportation side, the gross margin was up a little bit. And thats probably helped by supply chain. I was going to ask, weve seen hikes in the minimum wage in various parts of the country. That a factor here . It actually helps the walmart customer. Traffic was up 1. 6 . You know, the pricings right, the merchandising looks better. The emphasis on fresh and Fresh Produce within the Grocery Department really worked. I mean, grocery was up low Single Digits for them. Youve got a price target of 71 but its trading at 75. Youre going to up that or youre negative on the stock . No, no. Well, i think the valuation is kind of full here at around 17. 5 times even on the high end of the new guidance. It is something that we evaluate as new information coming out like today and the day just started. So well be looking at that. Got a yield of 7. 2 . Interesting in this. All right, joe. Thanks so much. Thank you. Okay. Dont mention it. Its my job. When we return, is it safe to vacation in puerto rico . The cdc handing out warnings of zika virus in the country. This is what puerto rico needed. She says the cdc warnings are overblown. Well ask why. As we head to break, look at the u. S. Equity futures. You know . Im sorry. What happened welcome back, everyone. The u. S. Declaring a Public Health emergency in puerto rico because of the zika virus. More than 10,000 cases have been reported there. But the Tourism Agency is trying to put it in perspective as it works to draw travelers and those on vacation to the island itself. Joining us now is the president and ceo of the Puerto Rico Hotel and tourism association. Also our very own meg tirrell joins us now. Walter isaacson from the Aspen Institute is here as well. Clarissa, thank you for joining us. Thank you. Thank you for the opportunity. Ill admit zika is something im concerned about and digging into. Why do you think the fears are overblown as the cases have been stated from puerto rico . Because from the beginning the numbers that were given were based on projections. The reality is that as of today, less than half of 1 of the population has the virus. The numbers that were given in e the beginning were six digits saying that onefourth of the population would have the virus by this time or by the end of the year. And the reality is that as i mentioned it was the worst Case Scenario. Puerto rico immediately took action. We started following all the suggestions that the cdc has given. Except for spraying, right . Well, one. Because there are some spraying going on with different ingredients that was approve. And as a matter of fact, that is done on a daily basis in different areas of the island. Lets just talk about the detection rates that weve seen. 10,000 is the official number. 10,600, yes. Here in the United States just in miami i think its 25 to 26. Over 30 now. Over 30 cases of local transmission. But what we also know about this disease is that only one in five people display any symptoms of it and the testing mechanisms are not very good at tracking down zika. Which is why they think that the numbers are so much higher than the official reports. Yeah. But the i mean, as i mentioned before, it is the facts is that today only less than half than 1 of the population but, again, were talking about people who have officially tested for it. People dont do go in if theyre not pregnant, if theyre not showing symptoms. And the tests are not great at detecting. But the important thing here that its easy to prevent. From the beginning we started taking all the steps necessary, educating the population of puerto rico as well as our guests. We created microsites. We have trained our people with the cdc, as a matter of fact. We have been doing seminars training the industry to make sure that they understand what needs to be done. The only thing here, theres no need to worry if you use your repellant. If you use loose clothes and light colors. The only issue here is if youre pregnant. And that is totally understandable if youre pregnant, that is a decision that you have, you know, to make. Ive actually heard Public Health officials here say puerto rico is still a great place to visit as long as youre not pregnant. Exactly. What impact have you seen as a result of this . This whole thing started in january. And the month of january was really great for us. We had an 11 increase in occupancy on the island. February, march, and april it went down. And after that when things were starting to move, we have seen things a little bit stabilized right now. Its looking good. We had a really good summer and hopefully well have a good season because things are starting to calm down now. The education continues in the hotels. For example, they have crews every day making sure that the breeding grounds are okay. They are spraying in the areas with the approve ingredients by the cdc and the health department. So we have not stopped educating. Theres really no reason to worry if you follow the suggestions. We dont need this type of v. O. Here with all these mosquitoes and spray. We need some el dorado. What are the nice el dorado is one. The golf courses. Yes. Theres another new is there a four seasons or something . Theres a rich reserve. Beautiful property, yes. But in terms of but could you get a deal . Sorry. I know you want zika, zika. But its probably cheaper right now. Right now its our shorter season. So you have really good deals no matter what. Are you going for christmas . I dont know. Im open. Hes not joking. Hes been asking where to take the family for christmas. We have a tlot of great golf courses. The el dorado ones you mentioned is are international and well known. Its not just pregnant women. Its also anyone who could get pregnant or if your spouse is there, they say they tell you not to get pregnant for six months or not to have sexual relations without protection for that period of time. Wait a minute. You cant have sexual relations . If you are planning their recommendation is if youre planning to have a baby or youre pregnant to try avoiding place where is the virus is. And that is totally understandable. Just to bring it back to the projections, because i think its really important that we couch them accurately. Where the projections came from that a quarter of the population could be infected, ive seen, is from modeling similar to chikungunya which is spread by the same mosquito which did infect a quarter of puerto ricos population. So i think the concern with saying that the cdc is fear mongering is that Puerto Ricans and people considering traveling there wont take zika seriously enough and protect themselves. And weve read story after story saying that people there arent responding enough. So how do you make sure that as you are trying to put the facts out there and tell people its still a great place to vacation and it is, that they also take the adequate measures to protect themselves . I have to disagree with that. Because from the very beginning, everybody, central government, municipalities as well as the private sector took action. So thats why we have been able to keep it at a number not as high as the previous numbers. But arent we still in the middle of the hot season, the rainy season . Yes. Were probably at the beginning. Yes. We are in the rainy season for another month. But the reality is if you spray, you use the repellant, you wear the right clothes, in the homes of people of puerto rico, it is recommended. And this is something that we usually have because we have been dealing with mosquitoes for a long time. The counter to that is anybody whos considering it says is this a risk im willing to take for vacation. Thats the judgment it comes down to. Yeah. Here the only real situation will be if youre pregnant or planning to get pregnant. Then you know you have to decide what you want to do. But if you take all the necessary precautions, wearing your repellant, as you use sun screen. When you come down to the island and you go to the beach or go to play golf you usually put your sun screen on. Just after the sunscreen put the repellant on. Places like florida and other places my doctors have told me not to go to florida for six months. Sure. But if youre lets say youre an early, very early middle aged person and you get zika. Whats my worst Case Scenario . Well, the worst Case Scenario in very, very rare cases has been a paralyzing syndrome. A what . A paralyzing disorder . Thats very rare. And only one out of five experience it. [ overlapping speakers ] shes a big doubter. I tell you. My gosh. I would love to go to puerto rico. I was expecting a gold for a couple of days. Some people have no reaction at all. A little rash others, it depends. But a general precaution, make sure you wear your repellant, wear the right type of clothes and theres really no reason to worry. Thank you so much. Thank you. Coming up, more reaction to walmarts earnings. The stock at this hour is higher in the wake of their numbers. First, though, were going to check in with andrew in rio who is in a zika place . I dont know what this whole conversation implies for your future. I am wearing deet. I should tell you, we have not seen and carl did not see a mosquito the entire time. Good. Take from that what you will. In the meantime, we will talk with jim weber the ceo of brooks. Brooks is not an official sponsor of the olympics but does sponsor certain athletes. Hes not allowed to use the word olympics. Well talk to him about it when we return. Welcome back to squawk box right here in rio. We are live covering the angles of the olympics. For the first time in olympic history, companies that are not official sponsors can feature olympic athletes in advertisements during the games. But theres still a lot of restrictions. Ads cannot mention certain words including the words olympics, rio, summer games, gold, or medal. And need to be approved months ahead of time. Some athletic and Apparel Companies look to end those restrictions which they say hurts them. Ceo of brooks jim weber joins us on set in new york. Its great to see you this morning. Are you allowed to actually say the city that im in right now . Are you allowed to use that words or is it off limits . Andrew, good morning. Its off limits. We im not going there. Youre not joking. Im not joking. So you guys are sponsoring 12 athletes that are here. You can use them in ads in certain cases but theyre blacked out in other cases. Is it worth sponsoring athletes at all given the restrictions . For us it is because running, you know, running is bigger than the sport. Running is health and well lifestyle. Thats our focus. We invest in athletes because it inspires particularly High School Kids to run. If they start running then, theyll be running forever. So its the sole of running. We have two major programs that do middle distance and training. Weve done those over a decade. This is about the athletes because they have to cobble together, support. Look at january. Theyll be looking at 2020 in tokyo and theyre going to be in des moines and boca raton, and new mexico. They have to cobble support for this next cycle. Its about them being able to support themselves. So heres the question, jim. Nike,ncaa 200,000 scholarship benefit out of this. So in an age of social media, they ought to be able to use their name and image as least. The loosening of the rules is because of the blowback in london i saw during the Olympic Games where they werent allowed to do anything. The athletes were so, so angry they would tweet out photos of their hair dryer, they would cover up. It was really ridiculous. The Goodyear Blimp goes over head, they black it out. I dont know if you remember. Michael phelps was in a Louis Vuitton ad that got leaked early. Very nice ad, i might add. And Michael Phelps didnt suffer any retribution for that whatsoever. Not that he should have. It was more that, wow, if youre a really big, important person youre not going to get in trouble but the little guy its just like lobbyists and regulation. When youre the little guy you cant get out of regulation. And these second tier athletes, i dont want to call them that, they may never make the podium but theyre local heroes within their sport. This particular athlete, we sponsored this program for ten years. I cant say her name. I cant talk about and i cant show her image. I can show her shoe which i love. But its about local stories and their communities and within the sport. And track and field, swimming, these second tier sports need that. Its important to the athletes. Its their moment. Can i ask you a quick question . Quick question thats not about the olympics. Whats the difference between focuses on performance and being in the athleisure business . We are a performance Lifestyle Company in run. The neat thing about that is its fitness, health, and wellness. Our opportunity is huge. But it isnt athleisure. The gear we create is for use. Of course people wear it and its identity, its selfexpression. Its always been that. But its how the shoe works at mile 26 thats giving us our reputation for all runners. Jim weber, ceo of brooks running, we want to thank you. And i will say it for you. Olympics, rio. Olympics, rio. Thanks for coming on this morning. Uhoh. Go team usa. Wow. Were on thin ice here, i think. When we come back, more from our guest host Walter Isaacson. Plus black friday in august. Best buy gets ready to celebrate 50 years of business. Squawk box will be right back. Tokyostyle ramen noodles. Fresh ingredients, stepbystep recipies, delivered to your door for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. Igoing to clean betteran electthan a manual. Was he said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. Still to come this morning, we have more from our guest host Walter Isaacson of the Aspen Institute. And then drama in rio. Brazil Police Pulling two u. S. Olympic swimmers off of a flight on their way home to question them about a robbery that apparently took place earlier in the week. Youve heard about a lot of this leading up to it. But we have new details straight ahead from andrew who is covering all the olympic action. In the meantime, check out the futures. After walmart came out with earnings that were better than expected, you did see the dow pick up and almost flatline. But now you can see theres some red arrows once again. Dow futures down by 22. Take a look at walmart though. Its up by better than 3 . Squawk box will be right back. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. 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. Earnings alert. Dow component walmart posting a big beat. Reaction from the street and what it means for the consumer straight ahead. Plus a clean sweep of the hurdles. A record breaking night for the u. S. Track and field team. Live from rio, squawk box live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box, everybody. This is cnbc, first in business worldwide. Im becky quick along with joe kernen and michelle carusocabrera. Andrew is reporting live from the Olympic Games in rio. There he is. Were going to get back to him in just a minute. Lots of music happening there. First lets tell you about some of todays top stories. Walmart posting better than expected revenue also raising first year forecast. That is something the bulls on the street have liked to hear. Right now that stock up by 3. 25 . We are also watching shares of cisco. That company posting better than expected earnings and revenue. But cisco sees flat revenue in the Current Quarter and its earnings outlook is shy of analyst estimates. Also the company laying off 5500 people or planning to lay off 5 5500 people, about 7 of its workforce. Chuck robbins will be joining squawk on the street. Thats coming up just a little later this morning. Lets look at futures. Weve been moderately lower through midweost of the morning. S p futures off by 2. 5. And the nasdaq off close to nine. Lets head back to rio or joe. Im stilling your lines. Thats okay. I do love you know, i miss andrew. And i was gone for two weeks. I havent seen him since before then. Andrew, its me. Nice to see you, sir. Hey, buddy. Whats going on . We continue to follow the developments of what is the biggest story here in rio. Members of the u. S. Swim team being questioned about their accounts of the reported robbery over the weekend. Ryan lochte who has become the face of it tells matt lauer he stands by his account of what happened. Meanwhile swimmers jack conger and gunnar bentz, they were detained last night shortly before their flight was scheduled to depart rio. Theyre released but will remain to stay available to local authorities. Then in another development overnight, Great Britain reporting one of its members was held at gunpoint and robbed last night. Reporting the team has now been issued a memo saying its not worth the risk of leaving the athletes village at night. Were going to bring you more on this developing story as it unfolds. But i should note, you know, we talked to a lot of athletes over the weekend. Many of them said they hardly leave the athletes village at all. Many spend time on their ipads in their room watching tv. Which led us to ask them which shows they like to binge the most. In our ask the athlete segment. Probably law order svu. Its my go to. I dont watch too much tv. Im outdoors most of the time. I like series like supernatural, once upon a time. Of course game of thrones. I just started watching game of thrones. Im on the first season so im probably going to binge watch that. Game of thrones. And daredevil. Game of thrones. Lost some years ago. Yeah. And now i was looking black mirror. I havent been watching tv much lately. Im trying to keep my mind focused. Right now gilmore girls. I used to watch two and a half men before. But not anymore of course. Big bang theory. Love hip hop. And the olympics, a bit of game of thrones here. We all binge on perhaps carls show more than anything. Well bring you more on this ryan lochte story as we get it. Got it. Well look forward to that. Thank you. Walmart shares up nicely this morning. Last of the major retailers to report. If you look at the two results, you wnt think they operated in the same quarter. But they did. Walmart did beat on earnings. 1. 07 compared to 1. 02 estimates. Unlike target, walmart raises its guidance and reports comps up 1. 6 . Thats the strongest level in two years. The eighth straight increase on traffic of 1. 2 . Target, though, saw its lowest traffic in 1. 5 years and its First Quarterly comp sales drop in two years. Almost exactly opposite. I spoke to walmarts ceo brett biggs. He doesnt actually see a market change in the consumer for good or for bad. But he does think there are things working in the consumers favor like wages and gas prizes. Then regarding the larger business decisions, biggs says theyre being thoughtful about the capital. Less into others like selling 119 stores of its mexican clothing chain suburbia. Remember walmart has grocery and that is very important. A very big chunk of their sales come from grocery. Thats where likely they get a lot of the traffic. Grocery is something target wants to get better at. Its not quite where it would like to be there. And walmart is doing fresh a lot. Thats right. Making a big push into organic and keeping prices relatively low. Perhaps thats helping. And whats the difference between walmart and target in terms of why they diverge like that . Well, the consumer profile is a little bit different. A target consumer is has a little bit more affluent, perhaps. But the grocery is a big differentiator. Targets signature category are things like style and baby. Health and wellness but not grocery so much yet. They hope to be because, again, its easier if you get into the store to buy milk than also to pick up some shoes. But if youre not doing that, its harder to sell those shoes. Thank you. Lets bring in managing director at raymond james. Bud, your reaction to the numbers from walmart today. They were better than expected. They were better than we were expecting too and i believe we were up above the consensus. So very pleased with the very solid performance. And as you go through all the details of the financials, they look pretty good. Inventory was another notable callout because that was down. And the u. S. Comp was down 6. 5 . Payables overall were up. Accounts payable was at a 92 level which is near the top of where its been in a very long time. So all the metrics were quite good with walmart. Courtney said raising guidance was another pleasing development that we were very happy with. Whats your price target . Because that stock is now trading above 75. Well, its 80 and we will address that as we do in every written comment. So i cant make any comments about that. What i can point you to sounds like you might raise, though. I read between the lines. I didnt say that, becky. You can read between the lines. I cant say between the lines. Got it. But i can tell you if you look at my written work we do a fairly angdic evaluation. And the top end of that valuation in 12 months was 86. So you can take whatever you wish to. You can infer whatever you wish to from those comments. Lets compare walmart to a target. Walmart to some of the competitors theyre going up against. I dont believe you cover amazon but that seems lately its been the biggest competitor for walmart. Well, it is. Certainly online. And walmarts online business, their ecommerce business accelerated from the First Quarter with the gross merchandise value being up 13 and being up 11 or so. And with the u. S. Actually growing faster than the overall. So its accelerating but it is a focus. And amazon is clearly the big dog in that particular arena. Remember walmarts got 4,000 stores or so in the u. S. So its a very big deal to make sure the stores are really the performance. And that as doug would say, having the transaction be a seamless transaction is really their competitive advantage. Regarding target, target had some issues. Theyve called out on their call yesterday on the issue with apple which was not good for them. Theyve gone through a major change in the last quarter with outsourcing their pharmacy business. And so theyve had some changes and well see how those develop over time. Great. I want to thank you for joining us today. Thank you, becky. See you soon. All right. Coming up, are the doves ruling the roost at the fed . Minutes from the latest fomc meeting suggests a split view on a rate hike. Were going to talk to a strategist next. Plus well check in again with andrew in rio. The Olympic Games may be taking place here in the olympic park. But i went out to go on a food marathon and i went for gold. When we come back, ill show you a bit of my food race here on squawk box. Boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade amazing sleep stays with you all day and all night. Sleep number beds with Sleepiq Technology give you the knowledge to adjust for the best sleep ever. The time is now for the biggest sale of the year, where all beds are on sale save 50 on the labor Day Limited Edition bed. Know better sleep. Only at a sleep number store. You cant come to rio without going to a traditional ria. Theyre going a limit given the olympics. Maybe some of the healthy stuff first. Avocado and shrimp. Who doesnt love a fried banana . You want one . I dont know if i love this fried banana. Bring on the meat. This is filet mignon . Yes, please. Im not a sauce guy. Can we talk about sauces for a second . A little bit more, yeah . So condiments are always complicated. Wed love some ribs. In the meantime, a cheese puff. Eating here is like a marathon. Its a slow and steady game. Sprinting a out of the question. Usain bolt could not do well here. Bingo. Thank you. Do i or do i use a fork . Not as good a visual. As this food marathon comes to a close, lets review. We had the ribs, several versions of filet mignon, we had the ribeye plus the cheese puffs. Weve got to end this. White flag. Im done. Guys, were not done. Were still eating breakfast this morning. But the food, we have to say weve had great food here, guys, right . Pretty much across the board the foods been out of control. That is a particular brazilian specialty. We wanted to bring you that experience so you could have how do you not weigh more . Andrew, how do you not weigh more . You know, its i dont know. Metabolism, maybe. Im not sure. Yes. Age. Im so glad youve tried that. I love it. Its delicious. Really great. Yeah. See you later, andrew. Keep eating. Yeah. Our next guest says the recent market highs are not being driven by Earnings Growth and are not sustainability. Which means we could be in for correction come the fall. Hans olsen for the wealth and Investment Management business. Good to have you here. Thanks. Great to be here. Youre bearish. Make the case. Im not bearish. I think that we have hit all the returns that i expected that wed get this year. Weve done it through the essentially the first eight months. And when you look at the things that we needed to see in order to sustain the rise in prices, its just not happening. One, we would expect to see earnings start to turn, right . That doesnt look like its going to happen. I thought it is happening. Were finally hitting a trough when it comes to earnings. Well, weve had five consecutive earnings of declining quarters. Looks like next quarter will be another quarter where we see earnings fall as well. Maybe well see a turn in sales. Okay. So you have a different view on earnings, okay. Got it. And basically the entire run has been multiple driven. Right . Expansion driven. And its increasingly these new highs are being hit on very low volume, indeed. Look, august, is a seasonally slow time of year. When you account for that, were experiencing below average volumes here. So i dont think its sustainable. Youre right about the multiple expansion. Right . Its because the average person sits there and says, god, i cant get anything in the bank. I cant get anything in treasuries. I can barely get anything in corporates. Im going to buy something that has a dividend yield. And when Interest Rates are lower than they are, you are far more willing to pay a higher price because what else are you going to do . What brings that to an end . To your michelle, to your good point, its the t. I. N. A. Principle. There is no alternative. To me its a great reason. Im getting income. Right . But what are you paying for that income . Right . If youre paying close to 20 times historically when you get to 20 times or more for earnings if im going to hold for a long time, why wouldnt i own an ibm stock that yields more than its debt . Because you might get capital appreciation. You might not. But i have time. But thats a subsection of the market. Right . So when youre buying the market if youre buying utf, youre buying the entire market. Youre buying the entire earnings stream which isnt there. To your good point, if youre buying subsections of the market which is the dividend payers or like that, that is the last refuge in all of this. So what undoes this is if we see yields go up. And i dont mean the fed raising rates a the long end. The raem tight linkage there is not Interest Rates but its inflation. If you start to see a surprise in inflation, it starts to move up. Thats when multiples really move. The correlation is with Interest Rates. Interestingly enough. With the feds hand. In theory . Theyve always got an excuse. Thats right. And we dont expect much from the fed. All right. Thank you. Good to have you on. Good to be here. Walter is sticking around. You didnt get a question in, im sorry. Im a hog like that. Thats very interesting. Nice to see you. Coming up, major power players set to return to the stage at cnbcs delivering alpha summit. Including paul zinger and carl icahn. Well see how their funds have faired since last year. Squawk box will be right back. 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. Announcer dont let salmonella get funky with your chicken. On average, one in 6 americans will get a foodborne illness this year. So, learn the right temperature to cook each type of meat. Keep your family safe at foodsafety. Gov. Carl icahn and paul zinger will take stage at delivering alpha next month. Thought it was going to be at some type of trump rally. The theyre both trumpites arent they . No paul is in the never trump move. Interesting together like that. Its the annual conference that brings everyone together and is put together by cnbc and institutional investor. Kate kelly joins us with a look at how funds run by icahn and zinger are performing since their last appearance. Key figures from last year you just mentioned returning this year included carl icahn and paul zinger of elliot management which manages about 28 million. Paul just issued one in recent weeks. He believes many having distorted. But in the latest he was as bleak as ever. In this market he said everyone is in the dark. Experience doesnt count for much and extreme confidence may be fatal. He also noted were in the biggest bond bubble in world history. Thats a quote. And that the global bond market is broken. Likening the current picture to the runup of 2008. Just in the sense that a reversal was inevitable and who knew when it was going to happen. He talked about the possibility of uncontrollable inflation. And he said while nobody knows when preparedness i. E. Hedging in his world is going to be as important as ever. Singers fund is up about 6 through late july thanks in part to a settlement with the argentine government. While being dinged among other things by event arbitrage. Carl icahn in contrast is down 18 through late june in his privately held hedge fund thanks to short positions. Speaking of shorts, he said etfs would blow up in the future without giving a specific time frame. Since that event the junk bond index is down about 5 troughing earlier this year and bouncing back a little bit since then. But its still down. Both singer and icahn back this year. Should be interesting by politics as much as anything given the views there on donald trump. And on well. And many other things. And views on the other candidate as well. Maybe not media, but in some places there are some there might be some disparate views they might agree that this dislike hillary clinton. Yes, they might agree on that. I was hearing about how worried people were yesterday that trump was getting some classified info. As if we dont need to worry when the other candidate gets some you know, shes been so careful with the classified info prior to this, right . Could you believe that yesterday . Oh, my god, no. Dont tell him anything. He might not he may be careless with it. Where someone else might be able to find out, you know, who our operatives are. But she was exonerated wasnt she . Thats right. I forgot. I was surprised there werent more jokes on whether she would be sending private emails. But in all seriousness she does have the experience of diplomacy behind her, right . Which trump doesnt. Diplomacy is assumed to be good diplomacy or does that include bad diplomacy . Well, im talking about the experience of running the state department. Into the into hell or . Careful. Youre not going to get anywhere with me on this. I dont know. I got you. Kate, thank you. Thank you. Looking forward to delivering alpha. Its going to be great. Lets stick to that. Yeah. All the big names. When we return, we are just a few minutes away from breaking economic data. Weve got weekly jobless claims coming and we will bring you those numbers as they hit. And then billionaire entrepreneur John Paul Dejoria will be joining us. Stick around. Squawk box will be right back. Welcome back, everybody. We are talking with our guest host today Walter Isaacson. Were waiting on numbers from the weekly jobless claims that are minutes away. Weve been talking about productivity and about jobs and what the picture looks like right now. What do you think overall . A broader perspective on how were doing when it comes to jobs in this country . The big question is whether technology and trade reduce the number of jobs in this country or increase it. And thats the big debate were having politically. Now it seems that both sides of the aisle are opposed to trade pacts we put in place over the last two or three decades. Exactly. The whole notion of free minds, market, trade is taking a hit. But i do think that there are ways of saying, okay, this will actually increase productivity, but what it does is displace people so we got to deal with that. Weve got to make sure that, you know, we can look at these things through a jobs lens. Making sure that theyre good jobs, good wages. We have 45 seconds. Give us an indepth answer on how we fix that. Michelle and i have been having this colloquy. I do think with 0 almost, you should have infrastructure spend. Its hard to do it as michelle will push back, sometimes the government can squander that money. But if you have a really bad air Traffic Control system, airport, roads, bridges, everything else, its useful to put people back to work on things that will give a return on investment. And there has been talk about Public Private partnerships. Or Infrastructure Bank or something not just squandered spending. Thats easier said in 45 seconds than explaining it in an hour or two. Sure. Lets get a read on the immediate picture. Rick santelli is standing by at the cme in chicago. Take it away. All right. Lets check it out. Yes. Were getting claims well, not a huge move. But a drop of 4,000 nonetheless. And there were not even a subtle change last weeks 266 so it brings us down to 262,000. Continuing claims on the other hand, you know, a little revision. 2. 16 million and then that moved up to 2. 175 million. Of course i am anxiously awaiting the philly fed. I like it because its an august read, but i have to tell you maybe its snowing in philadelphia baa i dont see anything coming out yet. Of course this read there it is. Exactly as expected. Rarely happens. Especially with philadelphia. It makes durable goods look normal. And we know thats volatile. So up 2 . Now, if you look at up 2 in the context of sequential, last look was down 2. 9 . So an improve. This is a wild series of numbers. You get big ups, you get big downs. So as expected. The aftermath of yesterdays meeting, though, is much more important. Of course the markets are the boss now. I dont know. I dont know that its a good way for the fed to operate at this point. This deep into still basically crisis rate. But the dollar index says it all. Were approaching the 94 handle. Weve been down pretty much for the year, most of the year. The dollar index, if the investors signal was really that there was a tightening. We couldnt be debating. The dollar index would be screaming the answer. Also hot off the presses, the employment component was down 20 versus down 1. 6 . Thats big. And new orders down 7. 2 versus our last look of 11. 8 . The more you dig into philly, the less good it looks. Back to you. Rick, thank you. Thank you, rick. We were paying attention and listening although we do have a pretty special guest. I might have been picking his brain about margaritas. Famously signing the billionaires pledge, our next guest is an entrepreneur experienced in building brands and he has a new bet that he suz will be worth a billion dollars. John paul dejoria is cofounder of patron spirits and cofounder of the new Beauty Company abio life sciences. I forgot about Paul Mitchell. I mean, i knew Paul Mitchell, but i immediately started talking about patron. Because who thinks of lets take tequila and get a name like patron and make a high end tequila. That is worth how much is patron worth . Its in the billions. I think the important thing is in 20 years . 25 years, to be exact. But the world is ready for something high end that came from plants. Lean Paul Mitchell from other ingredients. So we ended up making the finest premium tequila and introducing to it the United States happily. We were showing how to make the perfect patron margarita. I wasnt going to tell anyone that. Its a secret. Pine app apple, ive tried a little. Orange juice. You hear that too. Half an ounce of this, half an ounce of that. You mix it with your patron. Its smooth and easy. Dont think you need a mixer part of the tequila. It is the true part. No. You dont want those sugars and such in there. Maybe agave in there. Walters is here. We just released it. Its called roco. Its patron roco. Very slow process. Bring us some . I didnt because its early. If it was later i would have brought you guys a few bottles of patron. Hes from new orleans. Thats right. Its always late. You can get silver. You have a presence . I like the silver. Maybe an ounce and a half. A half an ounce of lime juice, half ounce of pineapple use. Shake it up freezing cold. You cant wait. Six months from now. I cant do any of this. Try three. I have something for you. For my hair . Makeup. I need that now. This comes here from aubil. What it is is this. 3. 8 billion people, thats twothirds of the entire population of the world suffer from the cold sore virus. Okay. Wait, i dont need this. But they do. I do have a rash but its not herpes. Youd be amazed what this works on. Okay . But its all from plants. And someone feels a tingle coming on, they have a rash coming on, they put it on there. Theres a good chance it wont come out. If the cold sore came out, you put it on and in 93 of all cases its gone in two days. All plant. What does it do for, say, a rash contact dermatitis brought on as a reaction to sunscreen . Thats a long one. I can only tell you this. Were in studies right now because we couldnt believe it. On things like pimples and acne which is another condition not even related to cold sores. Weve been testing it on that and were blown away on what it does. You have my complete attention. You have no adverse effects. I want you to take this, i want you to use it. We also have a lip balm. Ill leave this with you. Is this a whole makeup line or skin care line . This is strictly now for the cold sore virus. But we are working now on skin care line that were trying to get approved now for pimples and acne. So its before the fda right now . What we do is fdatype studies. This is over the counter. Thats why its only 29. If you went to target or you went to rite aid or went to cvs. Go to aubil. Com, 29. Thats it. But you want to get it before you need it. Off cold sore, you dont want to run around looking for it. 29. Cant beat it. All the businesses where youre making money. Liquor, shampoo, makeup. These are all i mean, you got to be good at marketing, right . You are. Youre great at it. We make money but we give it all away with john paul pet. I started that a few years ago. We put it right into pet programs. Because we dont take the checks. We adopt pets. We just do unbelievable things. Thats why i started the company, for pets. You can start a company that you make money but you put in that much more and more if you wanted to helping a good cause out. What do you look for when youre identifying a billion dollar brand . What does it have to have . Something that benefits a lot of people, high quality, and priced right. Very important. You want to quality. You dont want to be in the selling business. The world should be in the reorder business. Your product or service is so good, people want to reorder it or reuse it. So i look at that also. Look at the need. Aubil, twothirds of the population have the cold sore virus. Patron, the world was ready to treat themselves to ultra premium. Paul mitchell, made with hairdressers that works every time you news use it where the hairdresser can recommend it. So we look at that quality, that repeat business and price properly. Yes, all three are premium products. But theyre all priced realistically. How many pets do you have . Four. I have four golden retrievers. Really . I love golden retrievers. I had a golden retriever. I have two German Shepherds and a maltipoo. Youve never had a German Shepherd . I had a chow. And a bull mastiff. Theyre really big. Now im a sucker. I see somebody that needs to be adopted and im thinking four. I saw a German Shepherd that needed a face. Theyre like people. They really are. My gosh. Smart. Can i get i dont think we can have four. Because the two right now, the way they play is not conducive to lamps or furniture. But they give you love. If anyones ever lonely, go get an animal. Yes. Ones going to be 140 pounds and one is 110. I live with animals. I almost live in a place where theres always hot breath on me. So you shop for several people. Oh yeah. And you got to get into that business. You know what these big ears cost or what the lamb lungs john paul pet is the best grooming products. Send you some. Give me an address. This has been profitable. Margaritas and pet products. When we come back, were going to head back to andrew in rio. What do you have for us next . Weve got donny jones and bloom the guys behind the new original primetime show adventure capitalist. Theyve also spent time in the athletes village. More from rio in a moment. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Announcer theyll test you. Try to break your will. But however loud the loudness gets. However many cheese puffs may fly. Youre the driver. The one in control. Stand firm. Just wait. [click] and move only when you hear the click that says theyre buckled in for the drive. Never give up till they buckle up. Enepeople want power. Hallenge. And power plants account for more than a third of energyrelated carbon emissions. The challenge is to capture the emissions before theyre released into the atmosphere. Exxonmobil is a leader in carbon capture. Our team is working to make this technology better, more affordable so it can reduce emissions around the world. Thats what were working on right now. Energy lives here. Welcome back to squawk box live here in rio. Nbc hasnt released social media metrics around the olympics but its partners with snapchat and instagram appearing to pay off with the platforms. Julia boorstin joins us with a look at whos winning. Thats right. Partnerships with facebook, instagram, and snapchat have helped drive a record 2 billion live streamed minutes of the olympics which means the games are driving massive social engagement too. Now, snapchat tells us a third of its 150 million monthly active users watched the first week of olympics content on snapchat. Thats helping it draw blue chip brands including walmart, hersheys and ford across snapchats olympics content. Now, facebook which partnered with the International Olympic committee, nbc, and others is distributing recap videos and drawing viewers to the Facebook Live platform with the likes of this Michael Phelps video with 4 million views. Twitter is not an official partner so it cannot share highlights. But it is capitalizing on the highlights section. Highlighting medal counts and headlines. And offering 200 olympicsrelated emojis. The top tweeted moment was usain bolt winning the 100meter gold followed by Michael Phelps winning one of his gold medals. Perhaps most popular on twitter, comedian leslie jones tweets about the games were so important that they invited her to rio and to keep up her tweeting. The platt form has also come under attack for failing to crack down on twitter bullying of star athletes including gabby douglas. Andrew . Hey, julia. Thank you for that. In the meantime were joined by special guests this morning. Theres physical risk and financial risk. And the question this morning is which ones tougher. A new group of thrill seekers look for the next Game Changing product. Joining us is dhani jones and jeremy bloom, two of the hosts of cnbcs new series adventure capitalists. Youve got to watch it starting on monday night, guys. Youre an olympian, we should say, before we even get started. Youve won two . I went to two olympics. You went to two different olympics. Winter olympics. Winter. Its winter down here in rio. A lot of people dont realize that. And you both played football together. Yeah. We were teammates at the eagles. We go way back. Way back. Too far back, actually. Tell us about the new show and what this is about. Its like shark tank meets the great outdoors. So investors come pitch us in the environment that they created the products for to disrupt whatever survival space. So we get to hear about the pitch, hear about the product, and test in the environment. Really fun show. Coolest place you guys have gone . Coolest place was in the sierras nevada. Bahamas were great. We want to be able to meet these people in their environment. We want to try the products. Thats whats so great. A lot of time people are board room investors. They take a phone call and just talk on the phone. We want to be with them. I was literally talking about chinese distribution with one of the ceo and founders under the water. We were scuba diving under a wrecked ship and talking about distribution. Its got a unique angle to it. Its also testing the products and taking a chance with the products. Because they dont necessarily always work the way you think theyre going to work. Thats whats great about it. Since were at the olympics, got to ask olympic questions. Ryan lochte is the story this morning. You guys spent time in the athletic village. I know ryan. We competed at similar olympics although hes summer. I want to give him the benefit of the doubt but losing confidence every day. Seems like the story is changing. And ill just say this. If it comes out that it was completely fabricated and made up, Scott Blackmon should ban him from the ioc from life. He should never be allowed to compete for the United States. If its true. Benefit of the doubt. What about the other guys . You got to go back and take care of your teammates. Regardless if its an individual sport or not. He was with somebody. So my position is, we dont know whats actually going to happen if the future. But we do know that there are some people that are left behind. And i think that he has a responsibility to make sure hes taking care of them. Always talking about the business of the olympics, and the sponsorships. You were looking at the cover of Sports Illustrated with Michael Phelps there. He has a nike swoosh on him even though hes sponsored by under armour. There are rules with athletes you cannot violate or you can lose your olympic privilege. Companies like nike pay a lot of money to represent team usa. So i understand michaels predicament. I know hes an under armour athlete. I was an under armour athlete. Big fan. But when youre at the olympics, you have to represent the brands that pay to be here. We have the ceo of brooks on earlier. They were not an official sponsor but sponsor certain athletes. He says the system is unfair to the athletes. If youre phelps, its one thing. But there are so many other athletes that e the economics dont work for them and they need the sponsorship and the rules should change. Do you think it should . Think of those fighting tooth and nail day in and day out to train and they sometimes have a secondary job to offset that. Its important for them to garner as much capital as possible to sustain their career. Its a tricky situation. The usoc is not government funded. So our olympic team, theres no government funding. It all comes through sponsorships like nike. So those sponsorships are super important for the athletes and the olympic movement. But at the same time youre right. I mean, most athletes unless youre in the top 5 , youre working second and third jobs to live out your dream. I want to thank you guys. Adventure capitalists starts on monday night right after the olympics. Thap is absolutely right. So thank you for that. And im going to send it back to new york. But in the meantime, i should tell you when you get back to new york, when we return, millions of borrowers are still under water on their mortgages five years since the housing recovery began. Were going to talk about it. Daw technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Welcome back. It has been five years since the Housing Market hit bottom, but many homeowners still find themselves in the red when it comes to their mortgages. Diana olick joins us with that story. Diana, good morning. Good morning, becky. Its amazing 5. 9 million borrowers still owe more on their mortgages than their homes are worth. The socalled negative equity rate in the u. S. Is falling, now at 12 of all mortgaged homeowners according to zillow, down 30 at the worst of the crisis but the numbers are still very high. It should be around 2 . Theyre equally spread across both urban and suburban communities. It would seem like negative equity should have evaporated by now, given how fast home prices have been rising, but it hasnt been enough to lift all borrowers. Markets in the west like san francisco, portland, denver and dallas, have the least borrowers in a negative equity position and thats due to strong employment and competitive Housing Markets. But others like cleveland and detroit have more bifurcated markets, negative equity downtown and lower in suburban neighborhoods. Detroits urban rate is twice of the suburban rate. Chicago and las vegas share the honor of carrying the highest negative equity rate in the nation and that problem is one of the driving factors of higher home prices. Homeowners in this position are unlikely to sell at a loss so they stay put which in turn lowers the number of homes available for sale. Fewer listings mean more competition which only drives prices higher. We just got a report from red fin saying that inventory dropped by the most in july that theyve seen all year, still no help on that front. Back to you guys. All right. Interesting. Thank you, diana. Coming up more from Walter Isaacson, a big project coming up on Cyber Security and dont miss ciscos Ceo Chuck Robbins on squawk on the street later at 9 00 a. M. Eastern time. Coming up. Well be back here on squawk box. [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. Can an established bank move like a startup . Its a question we get from some of our largest banking clients. The face of their business was tellers. Then atms. Today its their mobile app running on the ibm cloud. Across every transaction, the hybrid cloud helps their data move quickly and securely. Our clients are building out features and pushing updates faster, on five continents. With the ibm cloud, they can move at the speed of any startup. Welcome back, everybody. Our guest host this morning is Walter Isaacson president and ceo of the Aspen Institute and also a cnbc contributor and by the way, Aspen Institute is partnering with m. I. T. And cnbc for a Cyber Security summit on october 5th. Cyber security is the hot topic right now, walter. Its really important. I mean we have an internet now thats basically insecure. It has been driven it has driven productivity and innovation for the past 50 years. But now so many bad things are happening so many hacks, the notion that our electricity grid or our electoral system can be hacked, so i think, you know, were trying to put together cnbc, working with the Aspen Institute and m. I. T. On october 5th the summit which will be interesting because were bringing in the government, industry, academic people to say what can we do to make the internet more secure. Is your view of the whole apple saga changed . Because i was i got converted by privacy people that i mean its going to have to be unencrypted. Some things we will have things that arent saved to there is no way to find the record. Might as well prepare for it now and not assume we could stop the stuff. You could create verified identity for people who want it. The type of internet where people dont have pure anonymity, you can leave the rest of the internet the way it is. If i want to deal with my bank or take an email from people you havent changed from how you think i dont think anonymity, sometimes described as privacy, is a be all and end all. People should have choice. What about the with it the whole its been a year now since apple, right. Almost a year. Do we look at it is differently now as technology continues to move ahead or do you still this is the apple issue is a complicated one that deals with, you know, your iphone, should government be able to open it. Weve had in this country sort of policies for 250 years on whats reasonable search and unreasonable search and we got to figure it out in the cyber world. Its different now, isnt it . Because everything its different but theres certain underlying principles that we have in our society and havent figured out how to apply them in the cyber age. Conference on october 5th. You can discuss that. At my school. Go back to your favorite place. Tell me your m. I. T. Connection. Graduate school. For two years. Yeah. Come back. Molecular biology. Well have biological computing. I know the singularity is coming. Thank you, walter. Thank you. Before we go andrew, tell us what you have coming up tomorrow . Okay. Live from rio tomorrow, whats going to happen to the brand new apartment complex thats housing almost 10,000 olympians once they move out. We will tell you. Also, the moment you might have been waiting for, i go one on one with one of team usas tae kwon do athletes and spoiler alert, i am still here. Cant speak for the other guy. So we will show you that tomorrow. Weve been waiting for that video. Better than pingpong. How come youre wearing a helmet and hes not. Theres a reason for that. A reason for that. Oh, my goodness. Ouch. All right. Thats a good tease, andrew. We like it. Enjoy. That was good. Thanks ill see you tomorrow. You did that on purpose but looked real. Running late. No. Final check on the markets, quickly, check out the futures, which are now down about 14 points not a lot happening premarket. Who knows how well close the day. Join us tomorrow, are you here tomorrow . Im here tomorrow. All right. Joins us tomorrow. And youll be back. I am. Yeah. Join us tomorrow. Squawk on the street is next. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with sara eisen and scott wapner at the new york stock exchange. Big names dominating the news flow as walmart and cisco post earnings, dudley speaks in an hour, futures shy of the flat line after yesterdays late day surge keeps that streak alive. 12 days of alternating gains and losses on the dow. Europe steady, oil up six straight