Transcripts For CNBC Squawk Box 20170720

Percentage point the shanghai up by 0. 4 . In europe in the early trading, you will see green arrows across most of the major indices. The dax is up by a half percentage point, the cac in france up by a quarter percentage point crude oil prices which were up sharply yesterday, are down by two cents. Wti about 47. A couple big stories were watching this morning. Shares of tmobile are moving higher the Company Reported earnings of 67 Cents Per Share beating estimates of 29 cents. Revenue Beat Estimates tmobile added 1. 9 million new cust nomers in the quarter. Facebook confirming its working on a subscription feature to let publishers charge for stories on the social media site this could take pressure off of them in terms of the battle with the news industry. The pay wall will be available through instant articles starting in october. It would likely kick in after a user reads ten articles in a month. Facebook shares up 15 . On the wall street agenda another flood of Earnings Report abbott labs, travelers, union pacific, bank of new york melon and blackstone well lear from hear from ebay and microsoft after the close. And the ecb will announce the latest Interest Rate decision at 7 40 mario draghi will hold a News Conference at 8 30 also at k 38 30, weekly jobless claims and the philly fed survey im surprised, andrew, you threw in the towel about your skepticism about the market. The train and all that stuff i didnt. Yeah, exactly he has to act on it. Then you know its over give us a heads up. My favorite thing now though is that this 20 gain since the election, he attributed it yesterday, very animated, to the fed. He did that. As opposed to the previous administration, where the sound policies of president obama andrew did that yesterday i wasnt here yesterday thats right. The previous gains were due to the sound policies of president obama and the global leadership, but now since President Trump got in, its the fed. Even though the fed is in tightening mode. This is all fed induced now, sort of. You still think tina is going on you do. But the Inflection Point has been hit actually, ill be more generous than that whoever the president is should get you can get the credit during that period okay. Now youre working on me ill have to admit that. That might be your thing im just suggesting okay. Who appoints these fed chairs thats the piece of it if you if you go to bed early i saw all this yesterday. Things happen after 5 00 do they not . Did you see the New York Times interview . Great interview fascinating. Then this was sad news about not necessarily, because maybe they they said when they fixed the blood clot talking about john mccain they saw some of the affected area they thought they removed as much as they saw so who knows senator mccain, as you probably know, has been diagnosed with brain cancer it was at the mayo clinic. Doctors removed that blood clot from above the senators left eye on friday. Then i guess you do a biopsy at this point the mayo clinic learned yesterday, i think it took three, four days that subsequent tissue pathology revealed a brain tumor associated with the blood clot the senator is looking at perhaps a combination of chemotherapy and radiation Meghan Mccain said the cancer may inflict him in many ways, but it wont make him surrender. President trump tweeting melania and i send our thoughts and prayers to senator mccain, cindy and their entire family. Get well soon. They expect him back in the senate soon. And hopefully thats true. We wish him a speedy recovery. Gleoblastoma is tricky, because theres microscopic pieces that can be attached to the nerves but hes a huge fighter, warrior. Aggressive, i guess it is probably no better place to be than the mayo clinic different than president carter he seems to be he made a miraculous recovery yeah. Lets talk about political news. President trump having some buyers remorse over his pick for attorney general criticizing Jeff Sessions in an interview with the New York Times. Eamon javers joins us with more on this. Good morning good morning. This is an astonishing interview the president gave to the New York Times. In it he talks about Jeff Sessions who he says gave bad answers in his confirmation hearings on whether or not he met with the russians, when he met with the ambassador to russia a number of times the president venting his frustration. Here is how he put it yesterday. Sessions should have never recused himself. If he would, he should have told me before he took the job, i would have picked somebody else. The president saying she have told him before that he would be recusing himself and then he would have picked somebody else. The president also talked about com comey, the fbi director at the time, the meeting they had he said he felt comey brought up the dirty dossier inappropriately, and that it was done so that he would think sorry, he said in my opinion he shared it so i think he would have it out there. So he thinks comey used it as leverage against the president of the United States he also said that he described his dinner with Vladimir Putin, that undisclosed meeting session that was reportedly up to an hour long with Vladimir Putin. Here is how he described that meeting with Vladimir Putin in which the president said nothing inappropriate happened i went down to say hello to melania. While there i said hello to putin. Really pleasantries more than anything else. Was not a long conversation, but could be 15 minutes, just talked about things so the president saying it was not a long conversation, just pleasantries more than anything else. They just talked about things. He also suggested that the topic of adoption came up, thats a similar topic that came up with don junior and russians last year at trump power. Thats one of the topics on the minds of russian officials as they met with trump. I thought it was in a separate room. Watching some of the coverage. So all the people were still around it was at that big table, they were all milling around. Yeah. The way its described is he and putin were sitting at a long table with lots of spouses, they were diagonally across from each other, at some point trump goes around and sits next to putin. Thats when they have the facetoface conversation. It was either up to an hour or 15 minutes depending on which account you believe. I was i cant i cant exist only in my bubble, my eco chamber. Theres times i have to by accident, i see some of this other stuff. At the gym at the treadmill what were you reading i wasnt reading. I was looking up all the kcable channels are up there. I looked and said wow, theyre they are they like this story at that point i guess i knew it wasnt in a private sound proof room, spy versus spy it was just watching the coverage they love this story wow. A lot. Do you have an opinion on it, joe . Do you think this is the right call for the president i was thinking about the open today actually i was looking at that. Well have no, i havent been i dont have an opinion on it. It hasnt been a its not like in the top ten for what im focusing on today. I saw padraig harings rington wo there last time is in the mix. Ian poulter is 1 under eamon, i have one for you i was also at the gym, but i started reading People Magazine you guys are regularly physically fit People Magazine People Magazine which has the trumps on the cover. Fascinating story about the family mmhmm. Claiming that don jr. Is miserable and cant wait for the presidency to be over because he says this is like ruining his life i was curious as somebody who spends their day at the white house, how happy or unhappy you think the family is doing this its hard to tell from inside the white house. You rarely see the family. I see ivanka trump frequently at various events, but we never see don jr. There. Because obviously hes not involved in the way that ivanka is or Jared Kushner is there is a level of sort of royal family intrigue with this presidency that we have not had with other presidencies. We have not had all the children so deeply involved in the politics and business. We never had coverage like this of any other president. How would feel if you were a trump . You have to go back to the kennedys before you find a family that was this involved. Michelle obama hated some of this stuff that went on. Its true being the child of a president is difficult its hard to be in the fish bowl but this fish bowl, it just has been a worse fish bowl to be in. Youve seen it you watch. All right. I wouldnt want to be involved are you miserable, eamon are you good you all right . Im good. Ill tell you what, its a little hot out there on the north lawn these days. All right other than that, im good youre hot. Youre hot thanks. I have a suggestion for you hit the jim seersucker. There you go its big in washington this is an old southern town kyle, come over here and get his pants. What are you wearing . I want to make a recommendation see whats going on here we have seersucker not complete without the jacket the tennis shoes, that makes it no belt i figured its the summer you are a vision of summer, a andrew underneath is a thong, im told im wearing a dark suit you walked in it was more for joe joe and i were joking yesterday about seersucker you have to give people the whole look i have never seen anything like it who is that guy, the monkeys throw doodoo at, tom wolf he walked around like that i couldnt even i couldnt go out in public, number one. I dont think i could walk by a mirror in my house i dont know how you make it past mirrors now good one. That was quick. Actually, my image doesnt appear in mirrors. Oh. Major indexes coming off record closes. For more lets bring in jurian timer and Andres Garcia zamaya jurien, earnings front and center, not bad. Earnings growth not bad. A couple outliers, but in general the earnings weve seen have justified some of the move in the market, is that correct for sure. Q1 earnings are up, q2 earnings being reported now the estimate was about 7. 5 usually you get a downward drift into the earnings season that did not really happen with the q2 numbers theres a resilient tone to earnings now the same happens to the calendar year 2017. Thats been steady at a 12 growth rate. Clearly good tailwinds, not only in the u. S. But globally that allows the markets to keep valuations higher than maybe what i would like to see but without an earnings catalyst to the down side, valuations can stay up there. Theres very little rocking the boat now for the markets shouldbe. You have not just the possibility that tax reform is just as difficult as obamacare repeal, but you also got the specter of this whole Mueller Investigation and Everything Else it would seem theres things that a market that was less sanguine, that theres some things that they would be worried about. Is tax reform not essential . Is obama repeal and replacement not essential . For the markets they are not essential. They would be nice to have, if you will the key factor is the global cycle turned up about a year and three months ago. Really led by china. China reflating again. The global underpinning is strong and that kind of removes the physical side in the u. S. As an veept initi event initissential thing we nee i think the market is driven by the global cycle if you go underneath the market and look at small caps, small caps relative to large caps, you have a letter view of the domestic agenda versus the global cycle looking at the s p 500, pretty much a global index, thats driving things what do you think shgyou think,r thoughts valuation, when you look at year out, it doesnt tell you anything about what will happen next five years out it predicts close to half of or explains half of what drives the market. Looking year out, yes, the market is expensive. You have earnings momentum, you have price momentum, and you have a fed thats boring you were talking about policy in washington, but the fed is as boring as it could be now. That, the market loves the fed is in tightening mode, reduce the Balance Sheet ever so slightly they might raise again. Going the opposite of the way they were going for eight years. Thats true, but starting from low levels. Very low levels, which makes you wonder what is the terminal point where they stop raising rates. What is the new normal 3 good number we have two hours to discuss, thats a big one for sure lower than it used to be, but not a lot of people think 1 is the number closer to 2 , maybe 3 used to be between 3 and 4 we can discuss that range. But 1 still seems low, considering inflation is closer to 2 . You could argue that makes multiples maybe permanently if it used to be 16 to 20, maybe its now 18 to 22 . Thats when you can get into trouble playing that game. Even if it is above average, i dont think valuation tells me anything at this point you were talking yesterday about some of our commercials, if you watch, the some thin sock thing the sock thing. And we have one where people say silver, its my favorite if i had one thing to invest in, its silver. Silver is as dead as anything in the water, and the market is up 20 . Why would i listen to you . Not to knock our advisers that was on fox okay. Bitcoin i dont watch us. Kidding. I got a call for bitcoin ira. Really . Yeah. Andrew already has that, dont you . Jurrien, thanks when we come back, talks between december kovry and sdis, we will talk about the Industries Likely to see merger activity in the second half. And the three of us too an Emotional Intelligence test that is used to determine leadership strengths and weaknesses well show you the results at the bottom of the hourand tell you how you can improve your Emotional Intelligence squawk box will be right back. Most etfs only track a benchmark. Flexshares etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Thats why at comcast were continuing to make4 7. Our services more reliable than ever. Like technology that can update itself. An advanced fibernetwork infrustructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. Welcome back wait until you get these eq tests. Spanish language broadcaster univision has held early stage talks with Liberty Media according to a reuters report that said theres no certainty that malone would pursue the talks further. This wouldnt be the first time univision has explored a sale. Its been in talks with cbs and time warner in the past. Lets talk about some deal making and other potential media deals. Discovery and scripps said to be in merger talks as the industry contends with rapid change jo as we look back on the past quarter and try to look forward, where do you think we are . The last time we were talking, we talked a little bit about what seemed like political uncertainty. But you said you thought we would break through any way. Well, yeah. I do because the fundamentals are very good. And the Industries Like telecom and media, whats tomorrow for those industries they have to do something. So, there will be a fair amount of activity. One thing about us is that were looking at the president and saying things are down theyre down compared to 2015 when they were extraordinary theyre still very solid and the macro conditions are there. You got, you know, take Media Industry what is it where is it going . How long are we going to blockbuster . Now you have amazon prime, you have everything. Let me ask you, on the media front, do you think people feel like they need to wait to see what happens with time warner and at t is that one of those dominos that you need to wait for the regulators to approve it so you know whether these transactions of that size can get done . Thats a different deal its gigantic. Its not for most deals, its not comparability. Plus its a vertical deal. Not really just adding to what you got. Malone and univision would be different. Its a horizontal deal univision is focused on a particular audience. I dont flow about that. At least in the deal community, maybe were seeing what we want to see but theres a sense that the Trump Administration will be more accommodating on mergers. Even in media the president himself as a candidate he made a comment about that during a pretty intense period in the campaign its hard to see that being blocked. Its pretty unique i dont think its going to let me ask you one pore questimore question about that. There was a piece asking about whether cnn should get spun off because it ultimately would create headaches for a company like at t. Theres been rumors of a plan already in place for this. Though its gotten knocked down. Well, it anything is possible when you mixup all that many assets, you will realign things. That happens all the time. I dont really its hard to speculate on that sort of thing. But when you think about the world today, and you got all of this pressure, whether its in media or retail or all that sort of thing, you have to have consolidation. You have to have survival of the fittest. Guessing where things are going is hard. But people have to consolidate if you dont consolidate in these businesses, youre standing still thats a pretty attractive asset to anybody yeah. Cnn yeah. Thats like a crown jewel no question very rare any news S Organization would n it i bet at t, from what i gather, i think they would want to keep it. Thats what i would think i wonder if in this political context, this world, in the same way im curious whether you think the politics of an amazon whole foods, given where jeff bezos is and where the president is and what he said, do you think these things matter . They do matter. It matters to some degree. Politics ultimately doesnt really drive the regulatory train. Yeah, people give speeches sometimes theres even hearings. To some degree were honored when congress picks the topic up fundamentally regulators regulate one thing you hear from the bankers today is looking at transactions that would effectively eliminate major parts of the work force. The old synergy. You want a Cost Reduction number, that in that political environment you cant do that. I dont agree with that you dont agree with that no plenty of deals have plenty of synergies as part of it very few dael deals are driveny synergies. You reduce costs by 100 billion and capitalize that, give it to shareholders very few deals are driven by synergies. Theyre part of it, though bob, appreciate it. Always great to see you. Recent coverage is infuriating. I will acknowledge, but birds got to fly they got to do what they got to do you can see them they cant help themselves coming up, Delta Air Lines is using facial recognition to help speed up the bag check process. Thats just one example of biometric security thats being used to protect your identity from hackers well tell you how your body could replace your password. As we head to break, heres yesterdays s p 500 winners and losers [brother] any last words . [boy] karma, danny. Karma [vo] progress is seizing the moment. Your summer moment awaits you, now that the summer of audi sales event is here. Audi will cover your first months lease payment on select models during the summer of audi sales event. Welcome back youre watching squawk box live from the Nasdaq Market site in times square. Welcome back to squawk box. Good morning u. S. Equity futures at this hour, look at whats happening as we speak. Looking at the dow jones, looks like it would open up higher again. 23 points higher nasdaq looks to open up higher s p 500 about 2. 5 points intel now reportedly axed the group working on fitness trackers and health wearables. It had been pulling back from that group after the basis fit watch had not panned out we used to talk about that watch. Intel has notwearab wearables on its earnings calls since 2014 jawbone is in the process of liquidation. I used to wear one of those all the time pebble watch i have one im not wearing. Fitbit stock itself has been declining, down 7 0 since the ipo in june of 2015. People are thinking these things are more like toys i liked it when i wore t bs , but it started irritating my skin i liked it until he figure out my sleep patterns. Cybersecurity experts say security hyper vigilance can prevent hacks, but using your own body is the way to do it tom grissen is ceo of daon tom, explain what daon does. Its a Software Product company. Woe use biometrics which are Human Factors uniquely you, your face, fingerprint, voice to establish trust. People have their finger points with them all the time, voice, face, nine out of ten consumers approve of it. What does experion do with this information it helps protect against fraud, and for us we need to provide the best Fraud Protection we can for our clients and provide that seamless Customer Experience how long do you think it will be before passwords are a thing of the past . They will be around for a while. Theyre easy, cheap, inextensive inexpensive to use but theyre frustrating for consumers. All the special rules, to use special characters or not. Theres better ways to provide security protection. How many people at this table have a list of passwords because you cant remember them all . Me too i have a list of hundreds of them you said cheaper how long before what you do gets to the point where it can sh readi readily used on just about everything very soon we are meeting with banks, health, insurance, it will be adopted in other industries. The market force is that our customers love it. It starts as a way to combat fraud. But then what happens is if Companies Find out it makes it easier for consumers, consumer scores go up a third of shopping carts are filled online and then abandoned because people forget the password i still get frustrated sometimes. I love my iphone, but it doesnt always recognize my thumb print. Whats wrong with that its interesting. Our philosophy would be that customers should be able to choose any biometric type, voice, face, fingerprint to get access. Ations come into play with biometrics how easily can you fool something, like Voice Recognition . Joe does some Good Impressions its very difficult what weve seen with millions of customers every day, near zero account or fraud takeover. So while passwords could be spoofed, the facts are in the market with biometrics you remember people used to say nobody hacks an apple, thats because they had such a small percentage of the marketplace. Biometrics im sure are a small part of the marketplace. If you try to get into it, how easy or difficult it is . It is very difficult. What would it take to pry to impersonate somebodys biometrics would have to steal the device we create a double lock. Then you would have to defeat the locking mechanism, finger print, then you would have to you authenticate yourself again. So a fingerprint, eye or something . Sure. Those are something that companies could set. Those are much more convenient than typing in small characters or passwords on a screen how long before we are using this for just about everything we do . Like atms, how long before it gets to that point the marketplace is using a variety of different technologies to provide that securi security we wish there was a Silver Bullet that could solve fraud everywhere there isnt. So facial recognition, biometrics in combination with onetime passwords and email notification, we think that layered approach works best. Which sector will benefit the most is it banking . The atms, Technology Like the cell phone certainly everything digital benefits from this the same way you want to be recognized when you walk into the coffee store, you want toshito b recognized online. Thats getting a new cell phone, signing up for utilities any way youre interacting digitally, you need authentication thank you very much for coming in. Great to be here. I dont think people could ever find out what my birthday is can they, sorkin guess, in your middle name are you joking . They could probably do it on google now you can you can. Some of them have me as younger. I cant believe it you want me to say it out lo loud its right there okay. Stocks to watch today. Unilever posting better than expected earnings and revenue. The Consumer Goods Company lifting its fullyear margin target after seeing a big improvement in the first half. Unilevers ceo spoke about the results this morning on cnbc a combination of our strong top line growth and the work were doing behind the organizational chains, connected for growth which we already announced forever next fall, makes the company more agile, closer to th markets, better in innovation, and you see these effects coming through. We feel confident to say we will at least improve the operating margins as a result for the whole year by 100 basis points and qualcomm is warning that Fourth Quarter profits will come in below analyst estimates. The patent battle with apple is taking a toll on its licensing revenue. Shares of American Express are trading lower. The companys profit declining 33 in the latest quarter. That was hurt by higher expenses as the card company spent heavily on what they are calling customer rewards coming up, weve been talking about this all morning hr managers use Emotional Intelligence tests to help identify leadership traits in employees. A ceo tested us this time. Well break down our results and do it right after the break. The ceo of the American Enterprise institute, Arthur Brooks, will be our guest host at the top of the hour youre watching squawk box. Our eq test results when we return your muscles look good, but we should be seeing more range of motion. Im fine. Okay, well lets see you get up from the couch. Im sorry, what . Grandpa come. At cognizant, were uniting doctors, insurers and patients on a collaborative care platform, making it easier to do whats best for everyones health, every step of the way. You may need more physical therapy. Ugh. Am i covered for that . Yep. Look. Grandpa catch grandpa duck woah ha there you go grandpa. Keep doing that. Get ready, because were helping leading Companies Lead with digital. Welcome back to squawk box. Its called eq or Emotional Intelligence experts say it can be more indicative of job successthan the better known iq. Joe, becky and i took down the test here to break down the results is dr. Steven stein. I read about you and thought, wow, this could be fascinating and you sent this out to all of us mmhmm. Here we are tell us about ourselves. All right and what this means Emotional Intelligence is three things your ability to be aware of your own emotions, aware of other peoples emotions, manage your own emotions, manage people around you, and your ability to use emotions to get things done, to make decisions, to deal with stress thats kind of what it is in a nutshell you give this test to companies. Yeah. Around the world sure absolutely im curious before we begin, the best leaders that are famed, that we often talk about or may be guests on the show, do they all score high on this or no not all of them but most of the successful ones would score high on this okay. Tell us, you know break it down how you did who do you want to start with . I have a low emotional i dont care about people. What is i wanted nuance in some of the questions. They say do you care about yourself or other people if its if its my son, my daughter, my wife, Something Like that, i care deeply right less so about andrew or somebody exactly does that give me a low eq . It does lower your score. So i would be a better leader if i cared about andrew . You would becky cares about andrew, you dont. We never met dr. Stein before read this, if you read this stuff, i thought it got all of us it does i tried to be honest, but i can see how a lot of people, im motioning towards andrew, might be able to tell what the right answer is to feel like youre a good person, and then they would say what they think they need to say. Joe is questioning whether andrew answered right. He thinks i gamed the test. When you answer at the end, how honestly did you answer this test did you say a couple times or no, always or often often was next to seldom. There are other items in there that catch you if you try to game the test lets go through each person. Yes you can do me your strength, number one strength is assertiveness as you have just shown us you tell it like it is i was thinking about that its good when subjective truth matches with objective truth thats me. Everything i think is right any way, so what difference does it matter whether theres theres no difference between subjective and objective the next strength is optimism you look at the Positive Side of the things overall you tend to be a positive guy. You mentioned your challenge is empathy. You care about certain people, but you dont care about other people im cold, doc i dont give a impulse control i dont give a crap what you think, no. Thanks for validation exactly impulse control is another one oh bull bull shihtzu. I have great impulse. What about flexibility for him . Thats your lowest. Your lowest is on flexibility. You tend to be a ridged guy. You dont like to change routine. You stay with the same thing i dont like change either. Really . Yeah. When we go to a new building becky now becky, youre number one on emotional expression we can read you. We know where youre coming from in terms of emotions thats a great skill to have however my weakness you want to do your weakness . Might as well jump right in im not assertive enough yeah. And thats something you can work on. You can always benefit that. That would be benefiting for you. Ive been sitting next to these guys forever you might think i can learn. Ask quayle who is over there. This test isnt worth a damn you can game these guys well if youre assertive. Shes not assertive you would only have one pant leg. Me. Yes. Number one is self actualization. You are really engaged in what you do you love the work that youre doing. Thats true yeah. What else tell me some more good things. The good things that was it youre pretty emotionally selfaware you know what youre feeling, where its coming from thats a good one. Empathy pretty good for empathy you can read people, know where theyre coming from. Keep going. We were going to do your weaknesses does his empathy rise to bleeding heart i think at in many cases it does can it . Does it no. Its not really thats sympathy its not sympathy, its just knowing. Knowing understanding where theyre coming from. He thinks im overconfident you say i have low self regard yourself regard is low. Youre not as confident as he thinks i dont believe that. Hes sort of hes got billions, deal books, New York Times, squawk box. Thats what surprised me about the score. Sits in for charlie rose. Thats not true. East so confident. Faux humility. You cant pick faux humility he knows hes playing you, doc. I dont think he is hes driven. Thats true he doesnt reach to get ahead, thats true on other peoples backs hes climbing. Doesnt matter absolutely thats true. Absolutely he thinks he has a long way to go. He loves the track hes on im amazed by what he accomplished i like this guy i like this guy more now telling it like it is you offer shrink services as well very limited. Once people get this test, then what happens . They get a feedback session, an hour or so. We focus on strengths an challenges fixing your challenges, right . And improving your strengths. We find it leads to better leadership better work. Do people take this test before they get a job . Would a company use this as a gating factor . We have about 170 employees, everyone takes itas part of th onboarding and selection process. So you cant get hired if you have a lousy eq score . I wouldnt say you cant get hired. We put you into training to improve your assertiveness if you are good at a specific gill and we wanted you we does a study with the air force. Where that empathy for this job was really important. They got the people they wanted, trained them in empathy and saw a huge improvement in performance. Maybe you dont want very high empathy or eq levels if you were a drone pilot. But that wasnt the position. But sometimesyou want low e scores. Certain kinds of sales because youre getting rejected a lot. We did stuff on collection agents they dont have really high empathy. So the profiles depend on the occupation that were looking at. This is fascinating. Interesting. Doctor, thank you. Thank you. Really, really appreciate this this is fascinating. Great to be with you. Thanks, doctor. Thanks, doctor. Coming up, big Energy Producer thats been under pressure this year analysts will closely watch the quarterly reports and tell you what to expect next as we head to break heres a quick check on whats happening in the european markets right now. Rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. She cant become a guitar legend just by playing air guitar. The babys room wont build itself. And her paw wont heal on its own. Were all working forward to something. Synchrony financial can help your customers make it happen sooner. So she can plug into her dreams. And theyll have a new addition for their new addition. Whatever youre working forward to, even if its chasing squirrels, Synchrony Financial can help you get there. Wheres jack . Hes on holiday. What do you need . I need the temperature for pipe five. Ask the new guy. The new guy . Jack trained him. Jacks guidance would be to maintain the temperature at negative 160 degrees celsius. That doesnt sound like jack. Actually, jack would say, hey mate, just cool it to minus 160 and were set. Good on ya. Oh yeah. Thats jack. Its earnings season and some of the most anticipated results for the Second Quarter it didnt. No, it didnt. If it went out, its true so its not a lie. Jackie deangelis is here with a look at what to expect. A difficult leadin yeah, lets take a look at Energy Earnings. Next week is the week and its important. So far the s p 500 Energy Sector is down about 13 year to date its actually the second worst performing sector. So what big oil tells us will be crucial for the market to continue on this march higher. Now, Goldman Sachs makes the point that the Second Quarter average price for brent was 8 higher than a year ago, so thats good. But when you take into account the most recent drop from 56 to 45 in june, companies could run into a little trouble, or at least it leaves the door open for some Downside Risk because of that price drop, estimates for Energy Earnings have been cut. Looking ahead well get halliburton and an dark owe on monday, conoco phillips, shell, Marathon Petroleum on thursday, we finish on friday with exxon and chevron. Analysts are a little cautious theres a school of thought that we could see some surprises here that price drop to the 45 level while not ideal is not necessarily a danger zone for Many Companies if they continue to manage costs, they may beat expectations and certainly that would boost the stock market, guys yeah. I like i like that kind of analysis, though but i you know, the oil prices are dead in the water right now, arent they right now they are. They have got a little support i still think theres going to be a little trouble going ahead, but weve had the conversation that it may not have as much of an impact on the stock market as it once did, but certainly i think if Energy Companies come out with strong numbers it will be a boon and a boost to get us higher from here. The other day i was trying to park somewhere i parked in an open space and i had to move because it had a frickin plug there for someone. For their tesla. Yeah, so i wasnt allowed to park there because i wasnt plugging my there are people who say in ten years youll see that everywhere and the price of oil will come down to 10 because we have so much of it and were not going to need it thats a little bit of an argument thats a way out but something to think about. Thank you. Thank you. Forget everything you heard before this segment. A little bit of Entertainment News the creators of game of thrones have something new up their sleeves. They are teaming up once again to write and produce a new series called confederate. It takes place in an alternative timeline in which the south successively secedes from the union with a new american war looming. It looks like it should be interesting. Should be fun. Coming up, dow component travelers is set to report in the next few minutes we will bring you the numbers and the reaction on wall street. And our guest host for the next two hours is author brooks. Eranntpre resident of the amic eerisinstitute. Squawk box will be right back. The power of innovative thinking. The power of 100 of the worlds top companies. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. New this morning, the cbo out with new numbers on the gops latest plan to repeal obamacare. We have the details straight ahead. Washington watch well talk to a congresswoman thats responsible for helping set the gop agenda on capitol hill. Plus markets now u. S. Equity futures are point to a higher open as we wait for an ecb decision and more Earnings Reports. Theres a Big Conversation taking place behind me the second hour of squawk box begins right now live from the beating heart of business, new york city, this is squawk box. Good morning, welcome back to squawk box right here on cnbc were live at the Nasdaq Market center in times square rules of the eq test, well talk about that im sure more today checking out the futures, take a look at what is going on the dow looks like it would open up higher again, up 17 points, nasdaq up 4 points and the s p 500 up about a point and a half. Three dow components in the headlines to tell you about. Earnings just coming in from travellers they earn eed 1. 92 a share revenue beat street forecast travelers was hurt by hotter weather, losses and lower results from underwriting. Nike moving higher in premarket trading. The athletic footwear and apparel maker upgraded to equal weight meaning that growth has bottomed out were also watching shares of American Express they reported a profit of 1. 47 per share. It Beat Estimates by four cents. The company saw a surge in expenses related to its rewards programs joseph. Yes, andrew i want to start working on some of my shortfalls too after seeing that. Yeah . You work on your confidence, ill work on my empathy, you work on your assertiveness. Liar. Im working on my assertiveness right now. Youre a liar. Believe it or not, how empathetic is this dude . Very. More compassionate. For a right winger too, you are so compassionate. Its surprising, i have to say. Its counterintuitive. Peter come on, peter. You have a great wife. I do. Thats true. One redeeming quality. People say that a lot of times. You have a great wife. Well, thank you. Congressional Budget Office released its score of the republican plan to repeal many of the provisions of obamacare Kayla Tausche joins us now with more but it supposedly would put Something Else in within a couple years and this does not take that into account, right, kayla . Yes, thats correct, joe. This is basically the score thats identical to the one that was produced in january on the repeal exercise that the senate did back in 2015 on this very issue. The cbo found the deficit would fall 473 billion due to less money spent on Medicaid Expansion. 32 Million People would have insurance. We believe the cbos methodology is flawed but it continued the fullcourt press into the night. Administration officials holding a threehour meeting with gop senators, that did not include susan collins. But that meeting followed the president s lunch to sell republicans after which he told the New York Times that health care is a brutal process and said he would prefer to do the replacement at the same time but that meeting late on capitol hill took a somber turn when senator john mccains office said his surgery last week revealed a brain cancer diagnosis and that he is reviewing his Treatment Options, which may include chemotherapy and radiation. But they said that he was in Amazing Health and that is Underlying Health is good. But leader Mitch Mcconnell said yesterday afternoon before that diagnosis there will be a vote next week, but last night on the hill senator bob corker told reuters that although their thoughts are with the mccain family, he had to acknowledge that the math on this, becky, is going to be difficult Going Forward. Yeah, kayla, math is going to be difficult Going Forward it just adds to all kinds of confusion around this and i guess makes it that much tougher to figure out what happens next week and in the weeks to come. It does becky, its unclear exactly what the president wants and what the leader feels that he is willing to put on the floor regardless of the outcome at this point youve now heard the president in the space of just a couple days say that if they cant get a replacement done, they ought to just repeal but then telling the New York Times and telling senators yesterday we cant just repeal if we dont have a replacement that follows immediately behind it and leader mcconnell said yesterday outside the west wing that they had difficulty getting to the votes on the replacement, but that he reserves the right to hold a vote on either if he feels he can get there. Kayla, thank you very much. Kayla will be with us a little later today as well. Joining us right now is former omb director under president obama and now cohead of health care hour guest host for the rest of the morning is author brooks American Enterprise institutes president. Gentlemen, welcome to both of you. Thank you. That is a big job thats nice. Thats awesome congratulations. It keeps me busy. It does lets talk about health care, where things stand peter, at this point how would you game this out . What do you think is the most likely scenario . It seems unlikely but not impossible that well have any legislation pass the senate and that leaves us in this state of significant uncertainty because the question becomes what does the administration then do with a system that they didnt want but i think will become their responsibility we have open season coming up for next year. There are a lot of other things that have to happen, so i think thats the most likely scenario, which is the administration is sort of stuck with this thing that they didnt want. Right and as a result of the uncertainty, more things have played out there were pieces that were breaking before, there are pieces that became more broken as insurers waited to see what washington does with this. You actually analyzed the numbers and said that there are 40 counties right now out of about 3,000 in the country that have zero Insurance Options on these exchanges and a thousand of them, a third of them, only have one option. So what does that tell you about the state of the exchanges right now . That they need some support now, i do want to emphasize only 4 of americans under the age of 65 get their insurance through exchanges. Thats so weird so this is basically Senior Citizens exchanges we spend half our time talking about the exchanges and thats important, but theres a lot going on in health care outside of that. But on the exchanges, yes, there are issues we will make them worse by continuing to kind of dangle this question of whether were going to make the socalled costsharing rebate payments to insurers there are issues that on the counties where theres either zero or only one insurer that should be addressed, so there are definitely issues that are out there. All of the uncertainty, including about the costsharing rebates and whether were going to enforce the mandate just make that worse. So medicaid medicaid is medicaid is the biggest single insurer in the United States. Yeah. So its in some states its one out of four people, so thats where you see the real the people that obamacare put on the insurance rolls, the lions share are on more came from medicaid and i think one of the lessons from what weve just lived through is medicaid has proven to be more politically durable and popular, frankly, even among governors than you would have thought 20 years ago. But they get 98 reimbursement. Why wouldnt it be, peter . They had to take it. But it does get pared back eventually, doesnt it what are they going to do then. Actually with no change to the law, it gets pared back slightly. To what to 90 . The expansion populations, if we leave this law in place, i would expect what youre going to see is more Waiver Authority but do we feel bad with doctors that dont do as well with medicaid . Its still better to have a patient insured than not insured. To get some money. Insurance doesnt mean access, though, either. Insurance doesnt mean access but being uninsured is the worst of all possible outcomes. Arthur. The medicaid issue is always one that was going to be intractable. As soon as Medicaid Expansion started and republican governors felt like they had to take it, it was something we knew was going to be a ratchet. There are a lot of poor people and working poor people that were not insured in places like ohio where john kasich has literally 20 of people in ohio are on medicaid, thats just not going to go backwards. You have to find a better way to streamline the system without pretending that were going back to the way it was 15 years ago you have to live with reality at this point. Not to be cynical, but did they know that thats what they were doing, that it was going to be something that you could never reverse . If you were looking at it logically, if they were listening to us at aei, sure. You say that as if thats a bad thing. What is the compassion and empathetic Arthur Brooks say look, we need a system in which look, from the very beginning the compassionate empathetic Arthur Brooks im more compassionate than empathetic. Thats interesting. It gets back to more fundamentals we can talk about how were trying to change the welfare system such that the permanently poor will be taken care of. Locking people in that position is not compassionate. Medicaid is not locking people, though. There may be a better way to do it. They keep looking for that. Then lets just do single payer medicaid for everybody and see if thats compassionate when our Health Care System ends up in what some people would say is not as responsive, theres not as much access, you wait much longer ironically, joe, i think if we went to you are probably a single payer guy. No, no, im not hold on, if we went to the per capita caps that are in the house and senate legislation, i think the result would be exactly what you fear, which is rationing and price controls at the state level because instead of having ten cents on the dollar when a newinnovation came along that was expensive, they would not clamp down. Because they would be looking at shortterm issues, not longterm issues. You dont want it to get to the point where a state cant afford anything except medicaid. This is why the big agenda on hold for six months is a shame what we need to be doing is moving toward better delivery system, better care, higher value. Theres a whole agenda that is just completely absent from this debate. Arthur, you think you do think that there are ways to work across the aisle, that this does not have to be a oneparty solution when you look at health care is there a way that you see democrats and republicans potentially getting together because to this point that has been a complete nonstarter. The really interesting political thing is the realization that having a 52vote majority is weaker than having a 48vote minority. Because every senator holds the entire when youre 48, youre going to vote as a bloc. Thats what the republicans did and the charges peter was making to the Obama Administration and i understand that. The republicans are experiencing that in reverse. When they took the straight repeal vote in 2015 and the republicans passed that straight through, its because it wasnt a reality, it was an expression of their discontent with obamacare. Now when theyre having to deal with it and it would affect peoples lives, theyre not so sure thats what happens when the majority is a multiparty democracy and the minority is a solid voting bloc. The democrats in the senate are more powerful than the republicans in the senate right now and thats a real challenge for a very good leader like Mitch Mcconnell who is dealing with this fragmented party. And the reason thats happening is because of pol polarization and the system becoming bimodal which means you dont get any cooperation from the other side its going to happen on tax, maybe on the debt limit. Weve got lots of other things coming up where this basic governing problem is going to manifest itself. Lets get back to what you think would fix the system and find out if you think republicans could support that peter, boil it down to the most vanilla sort of issue thats not a right or a left sort of solution that you can see that might actually draw support from both sides. This is where there is bipartisan support, which is coming back to the point of we need to get more for our dollars in health care, moving away from fee for Service Payment where we pay for each unit of care, and towards paying for quality and value. Thats an idea that i suggest this on twitter the other day, that and transparency so people could price shop ive got so many people who fought back and said, wait a second, how can you pay for outcome . Why would anybody ever choose to take on the toughest cancers you absolutely need to adjust for the severity of the patient and thats part of the system and its imperfect but were Getting Better at it ill give you another thing over the next few years where there may be bipartisan support. Roughly a third of Medicare Beneficiaries currently get their care through private insurance plans, Medicare Advantage. Thats been growing. I think thats an area there could be bipartisan agreement on how to further strengthen, improve beef up Medicare Advantage. Modify. The whole system was supposed to be the tail. Even the way we pay these plans. Is that the doughnut hole no, thats a little different. Thats part d. Didnt the Obama Administration try to completely undercut Medicare Advantage . The criticisms of the congressional Budget Office are largely misplaced but the one area there was a very big prediction error was when the obamacare cut back payments to Medicare Advantage, everyone thought that was going to basically kill the sector. Instead weve seen this massive rise. But there was a concerted effort to try to kill it there was a concerted effort to reduce overpayments. Do you think that these are areas yeah, what i actually think is the most likely scenario. If the republicans cant come together, and so far theres been no indication theyre going to be able to come together. They met for three hours last night and perhaps the president of the United States can exert some executive authority and try to corral republicans. Assuming they cant, theyre going to take a vote so everybody is on record and go home to vacation, face voters and face their families and whatever you do during vacation, come back and then through regular order theyre going to part out the different parts of obamacare to try to get fixes with some bipartisan support so youre going to start seeing it become a bunch of little problems and then we turning to other big things like the next big super easy thing, which is tax reform. It just gets easier and easier. Arthur, this is one of andrews questions, but whats your sense, thats a good one, it always works. But whats your sense, im curious, whats your sense when Shelly Moore Capito goes back to West Virginia. Do people say i cant people are calling her ive seen the word traitor thrown around or do they say thank you for standing firm, for not hurting people and protecting my family what do you think she hears more of both. Republicans are really caught between a rock and a hard place. On the one hand they have a bloc of voters thats highly ideological. Theyre supporting the president and real stalwarts of President Trump. On the other hand, you have people who dont see it. President trumps numbers in a place like West Virginia are higher than other parts of the country. So youll see town Hall Meetings where these politicians who have effectively exercised a veto on a lot of the Health Care Legislation going through, theyre not going to be able to make a large group of people happy. But hey, thats leadership thats the way it works. Thats what you have to face she has to burn some capital by saying what she thinks is actually right and fighting for it, which is something weve gotten away from in the way we do politics these days arthur is going to be with us for the rest of the show peter, thank you so much for coming. Thanks for having me. Its great to see you. Youre empathetic and compassionate and have a great wife. He got both you dont want to be empathetic, you just want to be compassionate. Thats right. Which are you . Empathetic. Thats the difference between right and left empathetic versus compassionate. I feel your pain versus im going to do the right thing for you. Exactly weve got to talk about that. I just dont like the way you define that. Coming up, when we returning well talk about a company that wants to turn every vehicle into a smart car. They think there could be a big business in the data it collects about drivers. First, though, as we head to a break take a look at futures this morning were up again dow looks like it would open up 14 points higher stay tuned, youre watching squawk box right here on cnbc. Ckn mont ork stat think again. This is the new new york. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov the power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. When a fire destroyedwith us everything in our living room. We replaced it all without touching our savings. Yeah, our insurance wont do that. No. You can leave worry behind when liberty stands with you™. Liberty mutual insurance. Tthats why at comcast,t to be connected 24 7. Were always working to make our services more reliable. With technology that can update itself. And advanced Fiber Network infrastructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. Welcome back to squawk box, everybody. We are watching shares of blackstone economic net income, which is the preferred metric for blackstone came in at 59 cents a share. That was three cents below estimates. Revenue was very slightly below forecasts, however, the chairman and ceo notes that assets under management are at an alltime high and results are up by double digits. The stock is down by 2. 25 . Transforming your older car into a smart car may be as easy as a plug and play device made by auto brain. The tech Company Thinks the real value behind their product is the data it collects behind the wheel, phil lebeau joins us to explain. This is auto brain. You put this into the port that has all the diagnostic readouts for your vehicle right underneath the Steering Wheel and that allows you along with an app, you or a third party can then monitor how your vehicle is performing it can alert you if, for instance, the vehicle is idling and theres no responsiveness within the car, things like that you can also monitor where the vehicle is in realtime traffic now, the whole idea here when this goes on sale, and its now going on sale for 20 bucks at walmart and then a Monthly Subscription fee of 9. 97 allows you to get the data from the vehicle. The whole idea here is that this data allows the company as well as third parties who have this app connected with their car to then say, okay, perhaps our car needs x, y and z and it will guide you to a particular retailer knowing the behavior and understanding what customers want, we could drive them back to the retailer. If we know when a car hits 10,000 miles and needs that oil change, we could offer them a discounting on an oil change or if their tires need to be changed, we could offer them a discounting on that as well. The whole idea here is also to make these older cars, and there are more than 265 million out on the road, theyre essentially dumb cars. They dont have a whole lot of capability to share information either with their owners, third parties or with others, to give them a little bit of brains and perhaps allow parents or others to monitor how somebody is driving. Think of this similar to what verizon offers with its hum service which allows you to monitor how a vehicle is performing, where its being driven, how that driver is handling that vehicle. Well show you the chart of car max and the reason were showing this is because the used market is rife with potential opportunities. You have autobrain and other companies saying if we could tap into the diagnostics of these vehicles and share that information, either with owners or the third party or collect that data, theres a real gold mine there so far, guys, nobody has been able to do that and thats really what a lot of companies, including autobrain are chasing, that information and that data and that connectivity with drivers of these older vehicles. Yeah, okay, phil. Phil lebeau, thank you good to see you again today. Like that interview yesterday we had with munoz our guest host this morning, Arthur Brooks. Where to start youve made some great points already. Didnt make me feel real good about a lot of the points. Theres so much to be optimistic about in washington these days its just going so well. Thank god the market sarcasm. A little bit of that. Not everything in the Financial Markets is dependent on these guys doing the right thing or doing their job. Although i have to say, you saw the thing about the smart car just now do you have teenagers yet, joe i do. I have three teenage kids the idea of having a brain in the car when the car is being driven by a teenager, its a crazy idea, right . Yeah. To have at least one brain in the car. Exactly no. Age is or youth is a wonderful thing but, you know not behind the wheel, though. Why waste it on the young for an aei person, in fact youre in charge ive been president for almost ten years now, as a matter of fact time flies. What is trump in terms of how you view him as someone that obviously im sure the trade policies arent something that the aei would endorse, but overall youve seen him govern now or attempt to for six months what is the aei what are your thoughts well, aei is a place thats not the weather of politics but more to the climate of ideas you dont need a think tank that actually does politics were not an Advocacy Organization so whether a democrat or republican gets elected, well try to have good ideas and feet them to leaders in business and politics and media and academia and all that. Is he open to new ideas the propensity of every president is different to this and there are different avenues to get to different president s in different ways. We did not have that much in the Obama Administration but still we were able to have a lot of impact on the hill we do more congressional testimony than any think tank in the world and that hasnt changed and thats good. During the time of trump, some people like him, some people dont like his policies. Its way more important to remember that where most peoples lives are impacted are at the state and local level this is an intensity state and local country. Right now we have 33 republica governors, for example, many of whom are pretty visionary and working really hard with good policies and are willing to experiment so when people are depressed about whats going on in washington, whether they dont like the republicans or wish the republicans were more successful, remember that in your own state, it can really make a big difference whats going on thats the way the founders set it up. Its very strange to have the president of aei talk about washington with a republican white house, republican senate, Republican House and say you can look to the state level to get things done. Are you dancing around whether you can count on traditional republican or conservative things happening in this washington i think that its actually a reality check on everybody theres a tendency to say that when people more or less agree with me that you can get a ton done the system was not designed to be able to massively change the country overnight because of where all the power resides in washington, d. C. Anybody like me or anybody with strong ideology has to recognize thats not where we should because you have a strong ideology and because you talk about sort of a moral compass with which everything seems to be attached, how do you think about the white house for real on the moral front. So its a complicated business to be sure. As opposed to the Clinton White house. There are many policies that i disagreed with, for example, on trade and a lot of the way they talked about immigration. But let me tell you something i really like. For the first time in a long time there was an emphasis on the second income quintile the near poor, the working poor and these are the people most likely to be addicted to drugs, et cetera, weve got to be talking about them and they are. Well continue this conversation in just a moment. Still ahead we are waiting on a Monetary Policy decision from the ecb. Well talk about the high stakes for the markets. Stick around, well be right back i think we should do that meeting tomorrow. Well wait. What did you think about her . Its definitely a new idea, but theres no business track record. Well, have you seen her work . No. Is it good . Good . At cognizant, were helping todays leading banks make better lending decisions with new sources of data so, multiply that by her followers, speaking engagements, work experience. Credit history. That more accurately assess a business chances of success. This is a good investment. Shes a good investment. Get ready, because were helping leading Companies Lead with digital. Gives you a front look of whats happening in times square as if youre walking through it yourself welcome back to squawk box here on cnbc among the stories that are front and center this morning, dow component travelers reporting quarterly profit of 1. 92 a share. That missed estimates of 2. 11 revenue did beat the estimates, however. Travelers had record premiums and higher Investment Income but was hit by higher weatherrelated costs. There was a lot of bad weather throughout the midwest not all of it qualifying for catastrophic weather but it did make them pay out on a lot of issues well get ready for the initial read on jobless claims in about an hour. Economists of expecting a total of 244,000 jobs. Just a few minutes from now we will be hearing from the European Central bank. Its expected to leave rates unchanged but lay the groundwork for possible policy shifts later this year. Central banks and policymakers will take note of any action by mario draghi joining us right now is rick rieder she overs he oversees 1. 3 trillion in assets i dont know how you sleep at night. I avoid it. You avoid sleeping at all times. And also covering the equities angle is chris hize from Merrill Lynch management and u. S. Trust. Were going to hear from draghi. We keep watching the equity market go up but what do you think the bond market says about the equity market right now . By the way, i think theyre completely interrelated. The fact is we have whether he plays out his plan, were going to have low Interest Rates for a long time. The dynamic and why the equity market will drift higher is the discount rate in the world will be held down by the Central Banks, even while the ecb normalizes we hear from the bank of japan today. Its going to be a very long time before they normalize well be in a low Interest Rates for a long time. Therefore, fundamentals dont matter fundamentals certainly matter you need to have the fundamental base there, but at the end of the day if liquidity is there, if valuations are decent, not out of whack, and at the end of the day if you have profits as your base still rising, you get a long and very large huge bull marathon and thats what were in. Whats so surprising about this particular rally is that everything is rallying its not its not we talk about like the fang stocks thats one thing but when clorox and p g are trading at 24 and 26 times multiples, thats a different world. Theres a couple of reasons for why certain stocks or certain sectors of the actual market get overvalued. Theres something called atfs that have a lot of these large cap names in them that get an overwhelmingly large flow of money coming into them and its indiscriminate so those valuations go up not saying that thats right, wrong or indifferent but thats just happening if you dig through the overall market itself, the good news about whats going on this last couple of weeks is the fact youre seeing new highs across the board in the russell 2, youre seeing it in nasdaq, the suspected, the dow, et cetera. Youve got weak dollar, youve got easy financial conditions, a lot of liquidity and valuations are decent. Can i throw one additional point. Theres a stat that i think blows people away. If you think about where Interest Rates are today, if you take the Top Five Companies in the s p and take their cash from operations, it equals all the coupon flow, treasuries, bunds, jgbs globally. Demographics are driving a demand for income and the equity market has the income today, so you see this unbelievable people think valuations are full by the way, i dont think on a Free Cash Flow basis the equity market is too high, but youre not getting any cash flow in the fixed income market so its got to flow into equities. How much are you watching what is going to happen at the fed in the next, what are we at now, we only have about six months for janet yellen to who do you want to see in that role and how much ask that matter im curious. A couple of thing we talked about this last time we were on its unclear at this point who thats going to be but i will say one thing whoever it is, the dynamic around the institution of the fed, its different than when somebody comes in, a new president , new senator it tends to be a normal transition quite frankly part of why the fed is executing this reduction of the balance, youre getting ready for the new fed chair. I also think whoever is appointed, the dynamic of if youre going to execute fiscal policy, you need to keep rates low for a long time. So this fed is going to keep it consistent in terms of the path that theyre on and youre not going to see a tangible change, significant change, certainly over the first few months. You know, rick is dead on central bankers want that window half open. They dont want it all the open and they certainly dont want it closed they want it half open so they can slowly remove the great experiment around the world and possibly over a very long time not this year, not next year, but over years did you want to get in there and Say Something . Just wondering whether rick has met his Artificial Intelligence replacement yet do the robots actually walk through the office yet we have a few no, i mean the dynamic, we are on an extraordinary path towards making sure technology is a full part of your investment process. Larry talked about big data. We are going down the road of big data efficient portfolio construction, how you think about diversifying your portfolios, technology will be incredibly incorporate in that rega important in that regard. Youre good but youre human. A computer has to be a lot smarter than you eventually. Five years from now. There are a lot of humans a lot smarter than me as well. Listen, i think that there are when you talk about parts of the fixed income markets, its an extraordinarily heterogenous market. When you can about gm, they have over 400 different securities. Its hard to figure out whether its a securisecuretized produc. Rick, chris, thank you. Blackrock, gotta talk robots. Robots. What was it yesterday . Oh, the senator with the accent. Never gets old. It does actually. Coming up, the washington agenda from health care to tax reform well talk about the issues that are most important to your money. Congresswoman Cathy Mcmorris rodgers helps us decide on gop priorities she will join us next. Then at the top of the hour, the democratic perspective House Minority whip steny hoyer will join us at 8 00 eastern stay tuned, youre watching squawk box on cnbc hey youve gotta see this. Cmon. No. Alright, see you down there. Mmm, fine. Okay, what do we got . Okay, watch this. Do the thing we talked about. What do we say . Its going to be great. Watch. Remember what we were just saying . Go irish see that . Yes im gonna just go back to doing what i was doing. Find your awesome with the xfinity x1 voice remote. Welcome back to squawk box, we are right here on cnbc in times square. Take a look at the futures right now, they are up again it just continues. The dow looks like it would open up about 12 points higher, nasdaq up 6 points and the s p 500 looking to open up close to 2 points higher. Cardinal Health Reportedly put its China Business up for sale the potential deal could be worth up to 1. 5 billion the stock right now unchanged. Now to Washington News democrats and republicans are both calling for an end to the political stalemate on capitol hill joining us now republican conference chair congresswoman Cathy Mcmorris rodgers i wish you had been here earlier, congresswoman, because arthur, i think, made some points that were accurate but a little bit, i dont know, didnt make me feel real optimistic about the split in the Republican Party right now and how it can actually be more you can be more powerful at 48 as far as the democrats go in the senate than even if youre 52 because theyll Stay Together with 52, youve got all these other factions is there any reason for optimism anywhere in your view . Yes republicans have an amazing moment we recognize that. We have the majorities in the house and the senate and the presidency its a time for action and from the beginning of the year, we laid out a very ambitious agenda we wanted to offer relief to americans that are seeing a failed Health Care System. We want tax reform we think its one of the best things that we can do to get our economy growing, improve peoples lives, give them greater opportunity. The regulatory relief. Weve been working hard. Theres a lot of work to be done and were committed to getting things done, getting results. Youre in the house the house was finally able by hook or crook or whatever it was, wranglingand it finally happened there in health care. Yes. Do you think thats it right now even an optimist would say that in the senate its either dead or on life support or you dont view it that way . People recognize that we must take action. Thats where i would encourage people people that are even watching right now across the country that live in some of these key Senate States to reach out to their senators, implore them to take action. You know, people that are seeing them lose their choices, people that have come down to one plan available in their counties are facing the doubledigit premium increases. I think they need to be reaching out and impressing upon senators the importance of taking action. We need a Better Health care future in this country for everyone. Youre saying that people see that we need to do that. Theres eight to ten senators that do not see at this point that we need to do that it seems like. The senate what i hear is that people recognize that we need to take action. Its a matter of agreeing on the details and doing the big things are always is always tough. This is part of the legislative process. But i do believe that at the end of the day we will come up with a legislative fix. Because the future that the democrats are offering, what they want is single payer where the federal government is the one thats actually making medical decisions and the republicans, we can agree around some foundational principles where we want freedom, opportunity, innovation in our Health Care System and it may take a little bit longer, but we must get this done hey, cathy, its Arthur Brooks, im guest hosting my favorite show today. I wanted to ask you a question about how you see the conversation in washington, d. C. One of the things i really admire about you is the fact that you have a strong ideology, just like i do you see free markets in American Leadership just the way i do, but you dont talk hatefully about people who disagree with you. You dont talk hatefully about democrats or riepublicans that disagree with you either youre so important as a voice in leadership. What can we do to cure this contempt in washington we see today. I think we need to respect each other, take the time to listen i believe we get a better outcome when we take that time, gain an understanding from people from different perspectives, different parts of this country but at the end of the day we must act we are leaders we are sent here to get things done this is a tremendous opportunity to tackle some of the biggest issues that impact peoples lives, give them more opportunity, more freedom to even dream bigger in this country and thats my goal. Very briefly, everybody, the ecb has decided to leave rates unchanged, not a huge surprise but just making note of that news cathy, i really appreciate your comments about that a lot, but i think that theres a real danger in the way this Health Care Legislation is going and a way that a lot of the policy is going that people feel that theyre kind of empowered to talk about their fellow citizens, their fellow americans in a way thats very contemptuous and im wondering if theres a way that you can have influence on not just your fellow republicans but democrats as well and maybe on the white house. Is there some suggestion you could make about some big change we could make in this country today. I appreciate the efforts of the white house to reach out to republicans and democrats, the president , the vice president. Im reaching out ive reached out to some democrat colleagues of mine even on monday night. Were bringing a group together, its going to be women for dinner republicans and democrats. Debbie dingell, democrat in michigan and i, are bringing that together to talk about how we come together, how we as leaders in congress tackle some of these most difficult issues ive been doing this as home since the beginning of the year, recognizing that people, you know, are very concerned about the divisiveness and so ive hosted unity dinners all along this year. We have a Community Roundtable coming together to talk about spokane, our priorities. What kind of a community we want i think we have a responsibility each one of us to be doing our part, to be a part of a constructive solution and not just talking about whats wrong, but to be really bringing people together to say, okay, were going to take care of our own house. The unity efforts, im sure it was well received unfortunately, it was all republicans trying to unify republicans. The idea that any democrats would show youve got lets work on republicans to start, get them unified. And then maybe, i dont know if you ever think about trying to get the trump derangement syndrome types theyre never coming around. Theres only one option and thats impeachment this guy is thats why ive never seen anything like this before people hated george bush, w. , but not to this extent and theres enablers in the media and everywhere else and its just getting worse, so i dont know how that i hear what you are saying. On health care, we have a very different vision for this future the conversations that i have with democrats here on capitol hill, democrats back home, is that, you know, we need to keep talking about health care, we need to figure out how to move forward, but theres a whole host of other issues you think about our issues on tax reform, on the budget. You know, we have some big issues that are going to require 60 votes in the senate we will have to come together. And a lot of times we get a better outcome when we do so. I just wonder whether tax reform, whether you have the same problem in the senate with the conservatives on one side and the moderates on the other and we could end up bogged down in the same mess, whether its paid for or whether its dynamic. Lets hope not. Why wouldnt people want tax reform in this country i can name a couple andrew why wouldnt they want anyway, congresswoman, thank you. Ive got a list, a long list of why they wouldnt. Anyw anyway, we appreciate it thank you. Coming up, two decades ago jane wells spent months covering the o. J. Trial fast forward to today and we find that she is in a small nevada town talking about the former nfl star once again jane. Reporter i havent changed a bit, becky o. J. Simpson could find out today whether he will be a free man in october if he is, he will walk out into america which is suddenly reinterested in his story. Up next, the business of the simpson saga when we returning 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. And the wolf huffed like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies child giggles symbicort. Breathe better starting within 5 minutes. Get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. Welcome back to squawk box. Dont be surprised if a lot of people at the office are talking about o. J. Simpson at the water cooler today he has a parole hearing today where hes going to ask for an Early Release from prison, jane wells joins us now. Reporter yes, camp o. J. Has moved to northern nevada o. J. Simpson will learn whether he could be paroled as soon as october 1st. That would be the day before the 22nd anniversary of when a los angeles jury acquitted him of murder and the suit he wore that day in court is one of the objects he was trying to take back by force in las vegas a decade ago, which sent him to this prison, something he spoke about in his first parole hearing four years ago. My crime was trying to retrieve for my family my own property, property that had been stolen from me and property that since ive been here, the state of california judiciary has ruled was my stuff and i have it back now. Reporter now that hearing was barely covered so why has the business of covering the saga gone into overdrive . Because simpson is hot again after fx won an emmy for the people versus o. J. Simpson followed by an oscar for espns incredibly successful and lucrative 30 for 30 documentary, o. J. , made in america. Here there isnt a hotel room to be had and both the prison and the community have tried to prepare and possibly profit. It gives us an opportunity to promote our town and make people realize there are small towns like this all across the country really theres a reason to get off the freeway. Reporter if simpson is freed, does he have any juice left well, pensions total about 300,000 a year. Thats money the goldman and brown families cannot touch by law. His debts may now top 80 million for the civil judgment which has doubled with interest plus tax liens and attorneys fees the hearing is at 10 00 a. M. Local. Its going to be streamed and aired live by several networks and outlets. The parole board expects to make a decision today, guys we could get that decisionas soon as 11 00 a. M. Local back to you. If he is paroled, can he leave the state . Where would he normally be living at this point i know he had that home in florida because of the bankruptcy laws. Right and also because a home in florida cannot be attached to a civil judgment thats another reason he moved there. He lost that home in foreclosure. Friends reportedly say hed like to move back to florida, but that would have to be approved by the parole board here. And in terms of work that he can do, there was remember, there was a moment in which he was going to write a book that then got pulled. Reporter yes, the goldmans went to court to get the rights to that. Would any profits from anything like that, he would not be able to keep at this point . Reporter if he was unless he was able to hide them you know whats very interesting, andrew, is he says he has gotten that memorabilia back you heard him in that parole hearing saying he has that suit back that is exactly the sort of thing that the goldman and brown families could go after to try to attach and then sell. Not because they wanted to make money off this but kim goldman told me they just dont want him to have anything until her dying breath, she will try to grab every penny he tries to make once he leaves prison. Jane, its a story that always seems to continue we appreciate it this morning. Thanks so much. Coming up later this morning, weve got todays top stories, plus House Minority whip steny hoyer will join us. Were going to talk about health care, tax reform, get his take on the washington stories most important to wall street right now. First as we head to break, check out the euro following the ecb decision stay tuned, youre watching squawk box right here on cnbc. Your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. So it only made sense to create a network that keeps up. Introducing xfinity mobile. It combines americas largest, most reliable 4g lte with the most wifi hotspots nationwide. Saving you money wherever you check your phone. Yeah, even there. See how much you can save when you choose by the gig or unlimited. Call, or go to xfinitymobile. Com. Xfinity mobile. Its a new kind of network designed to save you money. Breaking news. Ecb president mario draghi holds a News Conference after the Central Banks latest Rate Decision we bring you the highlights and the market reaction. The numbers are in the cbo estimates the impact of repealing obamacare, lawmakers from both sides of the aisle weigh in on the next step. That is straight ahead. Plus is Marissa Mayer dusting off her resume the former yahoo ceo wants a new corporate gig. Details about where shes looking to land as the final hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york this is squawk box. Good morning and welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square im joe kern an along with becky quick and Andrew Ross Sorkin our guest host this morning, Arthur Brooks. Well have more from him in a couple of minutes. The futures most of the morning have been up again across the board, but just a little dow jones up 14 now, 14. 25 points s p indicated up 3, the nasdaq indicated up 12. News out just in the last couple of minutes, the ecb leaving rates unchanged. It expects to hold rates steady for an extended period if the outlook becomes less favorable, they stand ready to increase quantitative easing we saw a drop in the german tenyear bund after that announcement and the euro dipping to a twoday low against the dollar mario draghi will hold a News Conference in 30 minutes we will monitor that and bring you the highlights couple of earnings news to bring you as well. Dow component travelers reported this morning the Insurance Company missed on the bottom line. Revenue beat forecasts the company did see record premiums and higher Investment Income also blackstone came in three cents below estimates with economic with new income of 59 Cents Per Share the asset managements revenue also shy of forecasts. Assets under management are at an alltime high. Senator john mccain has been diagnosed with brain cancer. Doctors at the mayo clinic removed a blood clot from above mccains left eye on friday. The mayo clinic releasing a statement saying subsequent tissue pathology revealed that a primary brain tumor known as a glioblastoma was associated with that blood clot. The senator is reviewing further Treatment Options with the medical team which include a combination of chemotherapy and radiation. President trump tweeting melania and i send our thoughts to senator mccain, cindy and their entire family. Get well soon. Its been something people have been talking about, just what a warrior he is, what a fighter he is and how many good wishes are being sent to him from around the country. President trump also speaking out about attorney general Jeff Sessions in a wideranging interview with the New York Times. The president said he would never have appointed sessions as attorney general had he known that sessions would recuse himself from the russia investigation. Gets the job. Right after he gets the job, he recuses himself. Was that a mistake . Well, sessions should have never recused himself. And if he would if he was going to recuse himself, he should have told me before he took the job and i would have picked somebody else. He gave you no heads up at all . Zero. So Jeff Sessions takes the job, gets into the job, recuses himse himself. I then have which, frankly, i think is very unfair to the president. How do you take a job and then recuse yourself . If he would have recused himself before the job, i would have said thanks, jeff, but i cant im not going to take you. Its extremely unfair, and thats a mild word, to the president. So he recuses himself. I then end up with a second man, whos a deputy President Trump also described a newly disclosed informal conversation he had with putin at the g20 summit this month he said the two leaders spoke for about 15 minutes about pleasantries and adoption. Steve, if we were going to do an interview, wed probably bring a camera the New York Times, they have this crappy audio. Is it that bad over there . How much does a camera cost. Would you have one of those do you have a reel tape recorder, one of those things that still has hold on let me say this i think that they get wheres the camera. I think that Maggie Haberman and that team get more out of him than most people on tv ever do i would make him the argument one of the reasons he speaks mow openly. Was it surreptitious . Everybody is more straight up when theres no camera. Eisenberg theory. You could have the New York Times could have afforded a camera, so its not as bad as people say okay look at how well the stock is doing . Touche. Almost a billion dollar company. Closer to a 2 billion company. Microcap. This guy is unbelievable. Unbelievable youve got comcast now, dont you . Yeah. Youre happy. Stock, im talking about. Or we can convert that to the New York Times stock if you want to keep that. Im happy to hold on to both. See, we have cameras. We do have cameras. Which is why were so stilted. Congressional Budget Office out with new numbers on the impact of the gops plan to repeal obamacare while the party works out a replacement. The Nonpartisan Group estimates that it would reduce the deficit by 473 billion over the next nine years not 474 billion or 472 billion. The cbo has been very accurate the number of uninsured do you want them to round up to 500 billion . They have no idea this is like liesmans work. Hes been pretty close. Hes been close because he used to be far enough. Anyway, the uninsured would increase by 32 million during that same time frame and premiums would double by 2026. Responding to those new projections, the white house told cnbc that it continues to believe that the methodology of the cbo is flawed. Lets bring in congressman steny hoyer of maryland. He is the House Minority whip and a member of the Democratic Steering Committee congressman, thank you for being here today. Good to be with you. All right so lets say where you think we stand on health care, where you think we could actually get if the two sides were to Work Together let me throw that out saying be as realistic as possible whats a plan that you think both sides could actually try and Work Together on well, i think its difficult to know that because im not sure exactly what the republicans are willing to do. But senator mcconnell made it clear that if in fact they fail to pass a replacement bill, that he thought the alternative was to Work Together with democrats. I think thats the right way to go i dont think it was a bad alternative. I think its the preferable alternative. I think we need to deal with the small markets, we need to deal with costs we need to make sure that counties everywhere throughout america have access to an insurance policy so i think all of those things ought to be on the table i think we ought to make sure that we can stabilize the market reinsurance provisions that we undercut because the republicans wouldnt appropriate the money that was set forth in the bill to do and undermined increased prices an undermined the market stability i think we could accomplish all of those things if we Work Together thats what we ought to do well see whether or not the republicans will either next week or sometime in the future repeal i think the cbo is right on target with what the ramifications of that would be when i talk to my small hospitals or i talk to other providers or i talk to docs, frankly you talk to insurance companies, if they repeal, the market will be substantially disrupted and millions and millions of people, far more than repeal and replace, would be adversely affected. Congressman, we were speaking with peter orszag an hour ago and he pointed out a Statistical Analysis of these things he pointed out there are 40 out of 3,000 counties that have zero providers for the exchanges. There are 1,000 out of the 3,000 that have only one and obviously that needs to be addressed but he also said when you really Start Talking about the exchanges, only 4 of the exchanges are for people who are under the age of 65. So mostly its a Senior Citizen plan that you have there really he said the huge issue is the Medicaid Expansion. Right. That is the issue that needs to be tackled in one form or another, that needs to be discussed, that needs to come around to. Is there any sort of middle ground that you can find when it comes to just the Medicaid Expansion, because that has the potential to really be a massive bill but at the same time if you dont have that, you are not going to have nearly as Many Americans covered . I think thats absolutely correct. Of course the cbo said if you eliminate the Medicaid Expansion, 15 Million People lose their insurance in 2018 alone and more Going Forward so clearly youve got to deal with that and thats, for instance, what republican governor sandoval in nevada, kasich in ohio, other republican governors have expressed such deep concern about, that they have got to find a way to deal with those people and make sure they have access to health care insurance. What we ought to do responsibly is sit down at the table you and i both know that there were no hearings, no witnesses, no amendments to anyof these bills and there has not even been a chance for republicans in a Committee Setting to have hearings or offer amendments so if we start to do that, i think good ideas will percolate up well see whether or not there is Common Ground if there is Common Ground, and hopefully there would be, then we can move forward. Thats what we ought to do thats the legislative process i think thats what americans expect us to do. Congressman hoyer, this is Arthur Brooks from aei. Hi, how are you, sir . Good. How are you . Good, thanks. You and i are both residents of the great state of maryland we have a big problem in maryland so i want to take you in a slightly Different Health care direction you know we have a very good governor in larry hogan, a republican whos able to Work Across Party Lines very successfully one of the things thats most keeping him up at night is the fact that maryland has the highest percentage of people dying of opiate overdoses of any state in the country per capita. Right. But this is a nationwide problem. 60,000 americans will die of drug overdoses this year its a real epidemic i would love to hear whats on your mind in the congress and just you personally, what you think some of the things we could do to try to get our minds around this problem and start passing lentiligislation that w save some lives. We put some funds toward it in the last Congress Governor hogan and all maryland policy makers and all marylanders are concerned about the opioid crisis, which is very, very substantial, as you point out in our state thats one of the reasons governor hogan, as you know, has opposed the repeal of the Affordable Care act in the forms that the republicans have so far put on the table because he believes it would substantially undermine marylands ability to respond to the crisis. But we need legislation Going Forward, we need to have a bipartisan agreement on how we work with the medical community on the overprescription of opioids, access to opioids, and education for the public but clearly it is an epidemic in every part of the country, so its not just maryland you talk to anybody i talk to of my colleagues, whatever state they come from, they are very worried about the Opioid Epidemic that is occurring and the deaths that are occurring at such high levels so again, this is an issue that cries out for bipartisan response congressman hoyer, majority leader mccarthy just said last night that the house is going to go ahead with the budget but look at just four areas of the budget because they couldntge enough support within the gop for all 12 areas. I think hes talking about the appropriations as opposed to the budget. Youre right. What do you think about this progression, doing things piecemeal like this . I think its unfortunate. I think that the budget that is being proposed is unfortunate, but the appropriations process, they have had months to markup bills. They have spent the last three days working well past midnight to pass their bills in a real hurry. Theyre probably going to finish i think all 12 of the appropriation bills but theyre only going to push forward with four the reason theyre only going to push forward with four, they dont have the votes to do the omnibus that they were talking about with all 12 appropriation bills. As a matter of fact, nor should they move forward. We ought to consider these bills individually so members have the opportunity to review them, digest them and make rational decisions on them. I frankly think that the numbers that are in these bills are unrealistic, but what is really unrealistic is there is no budget yet, which says what our discretionary number is going to be, how much we can spend discretionary dollars, so that when you vote for four bills and they are substantially over those dollars, it means the remaining eight bills will be cut very, very substantially in fact its a plan for disinvestment in the domestic side of our budget we think thats bad policy and bad for our national security. You need to deal both with our defense capabilities, our homeland Protection Capabilities but also deal with education, transportation, Infrastructure Investment and other parts of our society. Leader hoyer, if you keep asking kind of the latest gotcha question they ask any democrat they can who the leader of the party is and no one ever says anyone. Ive been asking that for the past three days. Its a gotcha question. Even andrew asks it so i called you leader hoyer why dont just raise your hand and say i am the leader, im in charge, like hague. Youre the leader. You just keep calling me leader and ill keep responding, thank you very much. Fine. So now we have an answer steny hoyer. There you go. All right thank you. Thank you, leader. Thank you, leader still ahead, we just wrapped up our conversation with House Minority whip steny hoyer. Up next, we will hear from the other side of the aisle. Congressman dave brat will join us right after the break back in a moment the power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. Welcome back to squawk box. Stocks to watch this morning, abbott labs is trading higher in premarket trading. The drug maker Beat Estimates by a penny, earned profits of 62 cents a share and raised its forecast on that success and the integration of st. Jude medical, which as i recall it bought, but maybe you dont, bought back in january. And a big premarket jump for sears who struck an agreement with amazon to sell its kenmore line of products as well as integrating alexa into kenmore smart appliances. Pepisco has filled the role of president which Ramon Laguarta who runs the european and african businesses he did tell dow jones despite filling that number two role she intends to run the firm for the foreseeable future and there is for heir apparent. Hmm. They need to know yesterday was like the last day of that diet and they never sent any chili cheese fritos. Hows the scarsdale diet going, okay . Hows the grapefruit diuretics are something but as far as i can tell they never cause any diarrhea. They cut your appetite. Grapefruit cuts your appetite it tastes so terrible, your entire mouth puckers up and you cant eat anything for the rest of the day. You put sweet and low on it. Or just brown sugar and honey. Never take antibiotics and drink grapefruit juice. Why, what happens it cancels it does a very bad thing. Good to know. Youre kidding. So if you have zpack, if you think grapefruit juice would be good to drink like orange juice, not. Hopefully congressman brat is listening because thats news everybody could use. I learned it the hard way. We just had congressman steny hoyer a few minutes ago. Lets go to the other side of the aisle, dave brat, member of the Budget Committee and House Freedom caucus you made a mental note, congressman . Yeah, you had me laughing early, i needed that that was funny. You know what, i bet you do need a laugh once in a while. I do need one. Whenever we have either side on, its just nuts down there. So i hate to keep youre in the house. I hate to keep asking you about the senate, but thats what were talking about lately i guess my first question just to get right to it, do you think the factions that we saw in this obamacare debacle, are there going to be factions like that in tax reform that pit the moderates against the conservatives and get it all bogged down . Is that what were looking at . I dont think so on the tax reform theres just one major piece, its that border adjustable piece. The white house has signalled theyre no on it, the senate has signalled no on it and half the house is against it. Thats the major piece so i want to settle that right now. Thats a trillion dollars. If you dont sort that out, youre not going to get tax rates down as far as we need to get them, right . The white house yesterday put out a note the corporate rate might not be going down to 15 after all, it might be going up to the 20, 25 range in my view thats not optimal. So thats the major piece in dispute. Then theres a few other trillion dollar problems theres a trillion dollars locked up in the Senate Health care piece and so weve got to resolve that one i think its going to be more unifying most everybody wants to get taxes low and get the business incentives going and get everybody jobs coming out of high school and college and wage rates up again the whole country is a little cranky right now because wages have been flat for 40 years. Steny hoyer had the filet knife out on the last segment a little bit. I like him, but they dont have any policy alternatives to increase productivity. So weve got some good policies to incentivize business and get this economy revved up and the market is already up on just the expectations of that announcement so hopefully we get that momentum going right now. Do you think that the president got anywhere yesterday . I guess if he got anywhere, it would have to be i dont know if hes trying to get anywhere with the straight repeal we heard you know, we heard from anecdotally that theres not even 40 there so i guess hes back to repeal and replace, which is what he wanted to do in the first place. Do you think that what does that have as far as chances go right now, 10 of being back on track . I think a little higher than that when the president puts on the full sales mode, hes pretty good, so he came over to the house and met with us individually and said, hey, what do we have to do to get this done i heard mike lee on some of the shows this morning hes got some practical stuff. Theres just a philosophical divide some of these republicans in the republican platform, its very clear were for repeal when theyre running for office, all these senators put it in their clip so they get elected, they want repeal an then when the vote comes, theyre hiding under their desk. So that is its not really about factions, its just Pretty Simple youve got to do what you told the American People youre going to do. But is the public changed you saw some of the obamacare has never been so popular. Yeah. Now that it might get taken away is it now that a lot of the constituents that voted for these people because they were going to repeal, have those constituents now changed their mind and now have they said we want you do they want obamacare fixed now . Not really. Youve got a smart guy, art brooks is on the show, the grand inquisitor what do people wanting, freedom or security. Youve got china and india going from a thousand bucks a year to 10,000 bucks a year in the last 20 years because they chose free markets, right so thats the most massive Human Welfare gain in all of Human History by far and now you think theyre going to turn around and say, hey, government, please run things for us again no they have finally been liberated. So the u. S. , we know better than to put the federal government in charge of our lives. Thats what you get. All of Human History is that tragedy. We finally got freedom and now were saying, oh, i might want a little more security please run my life for me. Well, you go back down that road, its all reversible and thats not a good story in the history of nations. Hey, dave, ive got a quick question for you this is Arthur Brooks. Thanks for the shoutout. Im going to ask you an economics question because youve got a ph. D. In economics. We both suffered through that in a similar way and weve got that in common. When we talk about Economic Growth, and youre a real hawk on Economic Growth and i appreciate that a lot. Its terrific. The big problem that we have in this country is not slow growth per se, its uneven growth the top 20 has appropriated 100 of the growth and the bottom 80 has seen north pone t whats the best idea that you can come up with for that second income quintile, the working poor and people really getting hammered by not having insurance and have basically seen no Income Growth in 25 years. So what can we do about that, starting right now well, ill confuse everybody listening, but youll know this. Deidre mccloskey are values are what matter. Youre working on that issue we dont teach ethics and morality and being pro business and pro work in the schools. The kids graduate, they dont know what a profit or a revenue or a price is. And they dont know any system of ethics. And so i mean my answer is at that very deep cultural level, weve got to turn around that around give the kids some hope and tell them business is a good worthwhile endeavor for their lives. That is the solution but fortunately, thats a 10 or 20year lag probably so in the meantime, hopefully we do these tax cuts and just get some short run, 4 growth again and get us out of the ditch. Just the Regulatory Burden has been lifted somewhat a lot of businesses back home are saying the government is not coming after me at least so theyre feeling much better. Congress n mman, i just wantt go back to the health care for one second those congressmen that ran on repealing and replacing obamacare, that then ultimately have not supported it, do you think they will be held accountable in the next election yeah. No, i mean thats for sure. But its going to be too late if we dont get this straight an our leadership, we had seven years to line this up. So we got fancy white papers but nobody asked anybody how theyre going to vote. So thats the problem. Youve got to line up those ducks ahead of time. Thats what i want to do on taxes now as well. Weve got to make sure we ask where are you at on this border adjustable piece, whats going to happen on health care were 2 trillion short. Thats 2,000 billion and were debating 20 billion dollar plusups its not the relevant range. So weve got to get those big trillion dollar pieces in order and then move. We get tax relief through and thats the prize, right . Everybody is happy if we do that one. Thank you for your time today, we appreciate it. You bet thank you, guys. Well talk more about grapefruit jui, drceanew is right. Jobless claims are about to hit the table. Well bring you those number chances are, the last time you got a home loan, you got robbed. I know i got a loan 20 years ago, and i got robbed. Thats why i started lendingtree the only place you can compare up to 5 real offers side by side, for free. Its like shopping for hotels online, but our average customer can save twenty thousand dollars. At lendingtree, you know youre getting the best deal. So take the power back and come to lendingtree. Com, because at lendingtree when banks compete, you win. We are just seconds away from weekly jobless claims Rick Santelli is standing by at the cme in chicago rick well, numbers will be out shortly. Mario draghi probably not excited about making the market ever get a little unruly, which means theres an issue their rates went down, our rates went down, jobless claims went down 233,000, the most recent read, and thats from a slightly revised 248,000. So were down 15, 15k. 977 milli 9. 77 million on continuing claims philly fed index will be coming out today at some point in time. We also want to draw everybodys attention to the Euro Currency ill tell you what, 114. 91 sounds like a big break to me. 19. 5 on the july read on philly. Its light based on the 23 we were expecting, sequentially lower than the unrevised 27. 6. You think durable goods is volatile, this number really is volatile not a great read, weve been lower. The dollar index is up a third of a cent because the euro is taking a few steps backward, but all in all the Euro Currency is probably the epicenter of all of your trading you should keep a close eye on it its kind of like the oil of the Financial Markets. Andrew, back to you. Thank you, rick, appreciate it very much. Media mogul Jeffrey Katzenberg launching his new venture called new tv. Joining us is the coeditor in chief of variety magazine and he wrote the story about it. Good morning. Good morning. So tell us about this and what jeffrey is up to. Well, lets start with what short form entertainment is on mobile screens we all watch the proverbial cats on skateboards, last nights baseball highlights. What Jeffrey Katzenberg is doing is lets take the production value, stars, writers, that do 30minute, 60minute tv shows and lets make twominute, fiveminute, tenminute tv shows that are more conducive to that onthego, snackable way that we all conduct ourselves with mobile video. And so when you think about that, i mean you can handicap it right here, what do you think the prospect is for success . I think jeffrey faces some tough headwinds here if you think about the fact that the Creative Community has never done this kind of content before, that hes going to be calling on madison avenue to not deliver the usual 30second spots but customized integrations and the fact that the audience has never seen this kind of content before, i think those are odds but lets also not forget this is Jeffrey Katzenberg. This guy has a track record in this business that is second to none and hes always been about mainstreaming innovation. You read through the article. Some remarkable quotes from bob eiger, les moonves, a lot of people looking at perhaps doing production deals with him. What has to happen for this to work i think they have got to get the right deal and i think from what ive heard from jeffrey directly, hes ready to not only pay the perminute rate that would be on par with what the best people would make in television and film, but heres something extra. He is going to give these people ownership of their content and in this very fastmoving ott world, that is something that leading producers and creators are looking for. So this is to a large degree a big bet on mobile. Could you see people watching this in any context on the big screen or rather, i should say, on tv . Yeah, that is the big question im sure katzenberg would love nothing more than for these videos to have a second life in other media, other regions but i think first and foremost its about delivering on a kind of consumption that just isnt there. Hes trying to raise 2 billion . Yeah. Hes looking to get that much money because hes trying to get the best creators, writers and talent hes looking for a Distribution Partner to deliver that money. So whether thats a facebook or one of the telcos. Yes, a whole lot of money. Hes compared this to James Patterson, the idea in terms of how James Patterson writes a novel these days, which is to say that the chapters are very short. That people want to sort of watch tv in this sort of snackable format do you think from a storytelling perspective that can work well, look, its not as if this has not been tried before certainly at different budget levels i think at the end of the day if he can find the creators who are going to be able to crack the code on a new form of entertainment, you know, the quality will speak for itself. The audience will come if they are delivered something that is good. Andrew, we thank you for waking up early. You have a great name. You too. And a great magazine. Thanks, appreciate it. Lets get back to our guest host today, aeis president , Arthur Brooks. Arthur, weve talked a lot about a lot of different issues. Youre an optimistic person. What is it that draws that optimism im hopeful the United States has gone through really tough times and bitter Political Polarization and getting bogged down when it looks like theres no hope in policy in the United States. Never bet against the country. The thing that im most worried about right now is the fact that were talking about sort of big issues, not focusing on why is it that donald trump was elected president of the United States and the answer is that there are huge parts of the the russians. Huge parts of the country that are suffering real despair. Theres a really wonderful study that came out of two economic professor professs at princeton showed everybody is living longer with Better Health. Except one group has been in decline. And thats white men, 45 to 54 without a college education. Well, guess what, that was the heart and soul of the voter base that elected donald trump president of the United States the reason theyre dying younger is 50 increase in cirrhosis of the liver, 80 increase in suicide and 325 increase in deaths from drug overdoses these are guys that look like me and joe and theyre dying around this country its really an economy of despair out there. Until policy makers think what are we going to do to replace that with dignity, vocational and Technical Education and jobs in the second income quintile and drug rehabilitation that takes this on its face, family life, criminal justice reform, were not going to solve the problem. Youve been talking about this for as long as ive known you. Are we making any progress are we doing anything right . These are not fixes that can be put in place overnight. Right now were spinning our wheels we talk simply about trying to get some Economic Growth number at the macro level under the current structure of the economy, all of that growth will go to the four of us and thats not right i mean weve had look, all the way through the obama years, a lot of our viewers think obama was great, others think not so much i can tell you through the obama years, 80 of the Income Distribution saw no Income Growth it was asymmetric the entire time and thats what led to this desperation. He cared a lot about those people. Let me go to the tax debate if you look at the way the tax cuts may or may not happen, but way they may be proposed, we all here would be the grand beneficiaries of that for the most part. You have to pay taxes to get a tax cut, andrew. Im not being dismissive of that. But those taxes are going to pay for things to help people you were talking with. We need to create incentives so there will be Economic Growth for people that are not on the coast and not the high income earners. Theres a lot of good regulatory going on, dave brat mentioned this this is under the radar because a lot of this can happen by president ial decree and its actually going on and thats really good. What we need the most right now is Corporate Tax reform in this country that will create more incentives for advanced and flexible manufacturing. I want to know the world cant agree on that. I just want to understand where you stand on individual tax reform. Individual, i think that its a really bad idea to show thats where the money is, by the way. Lets be honest, the Corporate Tax issue is marginal on a relative basis. So the money is in the top 10 . Individual tax reform, we need deduction reform in this country and were probably going to get it. I think that we have to close loopholes, lower the rates, we have to broaden the base and move from when you say broaden the base, does that then include some of the people who are not paying taxes right now who you also argue you want to protect yeah, i do. Theres a reason i dont think that people should have a punitive tax rate that are poor but i do believe everybody shuffle they have some skin in the game 50 of people have no Tax Liability other than payroll tax. I think we could cut payroll taxes but have cutting payroll taxes, thats interesting. Would you expand the earned Income Credit . The dumbest thing that politicians are talking about is increasing the minimum wage. That will price poor people out of the market, it will be great for my teenage kids and horrible for the people that for three generations in their families have not seen work if anything, lower the minimum wage, but increase the earn income tax credit, spend even more money than that to actually give people to make work pay. By the way, both sides say thats something where you can find Common Ground. But you would lower the individual tax rate and allo passthroughs for corporations payroll taxes. What about pass through. Pass through to what . You own a Small Business or, by the way, you own a private equity firm. Should they pay 15 . Should they pay the same income rate that you do. My view is that income is income income is income we have to treat we have to treat income alike or were actually going to get into disparities and distortions in the American Economy that have been creating problems all this time. Up next, golfs original major, the open, teed off this morning. Well tell you about the leaderboard with golf channel analyst Brandel Chamblee i know some of you are checking so you know jordan is tied for the lead, right afr e eatethbrk. Its all yours. Wow record time. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading Companies Lead with digital. Its so. Quiet. Is it, too quiet . Its awful. Yeah. Feel at home, pretty much wherever you are. Tmobile is americas best unlimited network. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Your bbut as you get older,ing. It naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. To keep our community safe. Before you do any project big or small, pg e will come out and mark your gas and electric lines so you dont hit them when you dig. Call 811 before you dig, and make sure that you and your neighbors are safe. 811 is available to any business our or homeownerfe. To make sure that you identify where your utilities are if you are gonna do any kind of excavation no matter how small or large before you dig, call 811. Keep yourself safe. Golfs original major, the open, teeing off earlier this morning at Royal Birkdale in northwest england. Joining us now from the course, golf channel analyst Brandel Chamblee id like to tell you that ive just been reading some summaries of whats going on and i dont have any of it live on my screen here because im watching the markets, but i cant say that. Youve seen jordan, the stroke that may have been not quite what it was a couple years ago, it looks like its back today, does it not, or adoes it . I think the Business World will forgive you for being interested because Jordan Spieth does that to all of us Jordan Spieth has sort of had that walkoff hole out at travelers. Maybe that was the spark because he hasnt had a top ten in a major championship since the masters last year, but hes in brilliant form right here. A lot of people picked him to win this event because it didnt put a lot of emphasis on the driver off the tee he is by far the best iron player on the pga tour and he is looking very much like that right now. I was just saying, let me just ask you this. Now, he hasnt played since, but if Brooks Koepka has the same game he had at erin hills, can anyone keep up with him . No. No, they cannot. Brooks koepka is, again, one of those monumental stories maybe thats the biggest story here in the history of the u. S. Open and the open championship, there has only been five men to win the u. S. Open and the open in the same year. Of course those are the mt. Everest basically of golf. Tiger woods did it in 2000, tom watson did it in 1982, lee trevino did it in 1972 with backtoback wins, ben hogan in that great season in 53 and bobby jones did it twice so youre looking at a guy, Brooks Koepka, who was flying under the radar, what, a month and a half ago and right now the whole world is abuzz with, my goodness, what can this guy do. Brandel, i played that course, erin hills, and watching Brooks Koepka play that course, its like i didnt recognize anything that i went through with what went on there with him. It looked like a par 3 course to him. And it wasnt. I couldnt agree more with you. You know, statistically, and they have only been keeping statistics since 1980 in the u. S. Open, what he did there had never been done, not by jack nicklaus, not by tiger woods it was that impressive and i sat there on the set and thought, my goodness, golf is not supposed to be this easy he was hitting 370yard drives right on the button. Of course just had pitch shots left to those greens he made what is meant to be the most difficult test in golf look like just a hohum pga tour event. What else is on your mind whats the weather supposed to be like . I see jordan has a big under armour vest on, so its 60 degrees . And hell need it if you were out here this morning, you would have seen the beanies and the bonnets and the woollies and the wellies and just about Everything Else but Mother Nature has been a little bit more agreeable here this afternoon but the Weather Forecast tomorrow is exactly what youd expect at an open championship its going to be wet and windy and so forth but the players going off this afternoon, and again some exceptional players going off in the afternoon here jon rahm, Rickie Fowler just teed off, sergio garcia, phil mickelson, dustin johnson, theyll all be out on the golf course today golf channel, nbc from the first tee shot today to the final putt on sunday will have it covered oh, yeah, a little bonus extra coverage because we will show the claret jug being given out to the champion golfer of the year. Excellent, brandel, thanks again. Thanks for coming on and updating us. Its an nbc see, i didnt realize that. Back to the markets. I didnt realize this was on nbc so this actually helped. No, i did know that. Brandel, thank you there you go. Were here for you. I might not miss a swing all weekend, but that doesnt make me very popular with the family. Anyway, thanks, see you. Ecb president mario draghi has been speaking right now and Steve Liesman has a few of the highlights steve. Good morning, andrew. Ecb president mario draghi not giving an inch on his accommodative or highly accommodative policy saying a highly accommodative policy is necessary, remains necessary, sees no signs of inflation picking up and expects headline inflation to remain subdued in the coming months. He just said this in answer to a question first of all, they did not discuss the idea of when they would reduce their stimulus. He said we discussed no precise date for when to discuss the change and, quote, we arent there yet. So while the u. S. Federal reserve seems to be moving towards a tightening policy, mario draghi not giving an inch. Theres an expectation out there that perhaps in september theyll announce what theyll do after december, 2017, when their qe is supposed to run out. Right now he is saying it is full steam ahead on qe and maintaining this bias towards essentially doing more if the situation turns badly for them not saying, hey, wed do less if it goes good so its a symmetrical bias theyre calling it. When we come back, folks, appear le is teaming up with a highend designer for some new beats headphones. Plus jim cramer will join us chge from the new york stock exan squawk box will be right back. If you could book a flight, then add a hotel, or car, or activity in one place and save, where would you go . Expedia. Welcome back looking for or at least interested in a new gig. The former yahoo ceo telling Business Insider she wants another ceo role as far as the rumors that shes in the running to fill the vacant chief executive spot at uber she would not comment on whether or not she wanted to tackle the challenge she did say the Ride Sharing Company had not reached out to her yet. What was the headline Marissa Mayer likes to strangle cats how did they get it going . Well, the quick bait in this case would be she wants a job. I just wonder how they distorted and completely turned around whatever was in the body of it. They do a good job. All right apple. Hes done a good job. God bless the man. Apple, an american come back story right there. Or a sociopath. I love henry. Apple is gearing its newest lines of beats. Takes one to know one. I took the test and it says im not optimistic and youre optimistic. Im optimistic about life in america and the american dream. I want to be optimistic about people. I can take it or leave it. At least hes honest. The tech giant, naked emperors i will call out that they have no clothes. They keep trying to roll this video. The special edition head phone price starting at 250 goes as high as 600 depending on the style and the color. Okay were going to the new york stock exchange. Who is the naked temperature error today. This is for real at 50 they start selling it again. They have to have cash flow to be able to do the drilling if you go back there was almost nobody that said that this could happen and this is a sign once again that whether it be retail because of amazon, whether it be oil because of the technicians and the commodity guys and the analysts you cant write off any sector in this market. The sectors just keep coming back. Would you hire Marissa Mayer to run yahoo or uber. I wouldnt hire her to run anything i think she should go spend much more time with her family. Extended period. Honestly. Never holding back. Wheres your optimism and empathy. Everyone should spend more time with their family maybe she should garden. I garden its very ghandilike. Is there something wrong with that jim lets host the show from your garden. Well, i would love that you should see the zuccinis theyre going nuts killing the piece. Well see you later on the closing bell you dont want to miss this. Mole has an interview with tbi ceo at 4 00 p. M. Eastern time well be back in a moment. baby crying slow jazz music fly me to the moon and let me play bell ring what are you going to leave with us with we were just listening to cramer and investing again and, you know, its an interesting thing. And can all weld on an oil pipeline and the biggest problem in American Communities today is were going to leave this place in West Virginia and go to north dakota and weld an oil pipeline and they dont have the skills to do it the real solution that we need is not just tax reform although thats important its actually the Education System in this country although locational and technical in trade. Not even part of the conversation right now. President trump does that then im hopeful in the next five years we wont be having the same stupid discussion about people being permanantly on welfare and people left behind and well have dignity that comes from hard work when is that conversation going to happen . I hope it happens now my buddies and me were beating this drum as hard as we can. We can look at the current environment whether you like whats going on politically or not this is an tount Start Talking about dignity in the country. Dwroud have to have half of the country admit that trump serves his entire term theyre not there yet. A lot of people just say look, this has got to end. Were not doing anything until we get rid of this guy. We had a decade and a half now of one side always resisting the president in the white house. Thank you so much great to see you. Thank you. Right now its time for squawk on the street the premarket is packed with news whether its earning from amex, qualcomm,