Transcripts For CNBC Squawk Box 20170726

So tastes like a guinness. A little early. Im Andrew Ross Sorkin. Joe kernen is here becky has the day off. A lot of news to get to. Dow up about 26 points nasdaq up about 5, s p 500 up about 2 1 2. Lets show you overnight in a a asia, green arrows across the board. And european equities well also show you, its green, green, green. And if youre buying wti crude by the barrel, oil is moving higher on news of a sharp drop in u. S. Oil supplies wti crude right now at 48. 29 today well get an Interest Rate decision from the fed this afternoon. Wall street is widely expecting policymakers to keep rates unchanged. Big focus is what the fed says about inflation. Well have full coverage beginning at 2 00 pchl we have 175 s p 500 Companies Reporting this week. Today its boeing, cocacola, ford and among all the names youre seeing there. But well get that before the opening bell and then we hear from facebook, gilead, whole foods after the close. And viacom looking to make a cash bid discovery also said to be bidding but not cash offer Scripps Family wants 50 of the deal in cash and the deal could come soon. President trump says that apple ceo tim cook promised to build three big plants in the United States. Trump made that comment in an interview with the wall street journal. Apple doesnt do much of its manufacturing, but one of its major suppliers fox con is expected to mike aun announcement about u. S. Based manufacturing as soon as today in other news, President Trump giving mixed signals on who he height pick to be the next fed chair. The president said he might renominate janet yellen to a second term, but is also considering gary cohn. Trump said yellen has done a good job he also said he likes her because shes a low Interest Rate person. The president said he would likely announce his peck at the end of the year. If i remember correctly, he hated low Interest Rates for a very long time no, he just said that he used to say he liked it as a real he is say ty thestate guy and he was saying the narrative that a lot of people say, that we were no longer in a divergence situation gary cohn told me that he thought trump would be the kind of guy that would want to keep yellen in place because of her relative dovishness. So that was his insight long before he was working for the president. Name dropper. He was just talking about charles schultz. By the way, i just read this im the name dropper. Im just trying to explain the interesting turn of events now that were talking about the two of them together by the way, do you want one no. Enjoy it while you can because that machine in there that i use is like the most expensive coffee machine and it makes great coffee its fine. When cord cutting and Everything Else that comcast when it gets to the point, if we ever go into a slow period in this economy i think my nitro is going people start saving paper clips when times get tough you will not be drinking your little nitrogen oxide 8 two of those. Im clipping coupons. I dont know if this is true, but i just read a note from a ubs guy saying once the president afternoon possibilities a fed chair, that person can the no be not be fired. Which is interesting that the fed wants to make sure they are on autono be not be fired. Which is interesting that the fed wants to make sure they are on auto guy lot in case he puts someone super dovish in place. So we have to check and see if that is true or not. Really youre not supposed to fire he supposedly serves the blind lady with the, you know blindfolded blindfolded lady, right that is supposedly who he interesting piece in the journal today. This is all im going to say i watched some of the president s speech in youngstown last night and he talked about a lot of the accomplishments with immigration and how things are going this is all Jeff Sessions. Jeff sessions is doing a lot of the president s bidding as attorney general so there was a weird disconnect that he was talking about how great everything is going. Isnt that why breitbart was getting upset . A lot of people getting upset. Lets get to washington this morning. Senate republicans narrowly agreeing to open debate on a bill to end obamacare, you about the first effort to repeal and replace failing 4357. Kayla is in washington with more on that news good morning. Well, after the vote last night to move to proceed, lawmakers are beginning an uphill climb toward an agreement on health care but securing yesterdays senate vote to proceed with the debate was touted at a rally in ohio despite the fact that the vote failed sfw failed the senate is working not only to repeal obamacare, but to deliver Great Health Care for the American People. Any senator who votes against repeal and replace is telling america that they are fine with the obamacare nightmare. And i predict they will have a lot of problems. There were two senators who voted no on the motion to proceed, nine who voted no on the senates replacement bill. Now a vote on the standalone repeal so the bill from 2015, that will take place around noon today. The house also though voting to approve a new sanctions package partly on russia that allows lawmakers to reject moves by the white house to loosen them remains to be seen whether the white house will sign the bill when it arrives. This has been an issue throughout the week. Sarah Huckabee Sanders in a Statement Last night said while the president supports tough sanctions on north korea, iran and russia, the white house is reviewing the house legislation and awaits a final legislative package for the president s desk and the are ush srussia investin itself moves forward with Paul Manafort reaching a deal with the Senate Judiciary committee after hours of back and forth to provide documents to the committee. Leaders of the committee saying faced with issuance of a subpoena, we are happy that mr. Manafort has started producing documents to the committee and we have agreed to continue negotiating over a transcribed interview. The chair of that Committee Earlier had threatened to subpoena manafort after the talks broke down, but clearly they have now reached a deal meanwhile the heavy lifting of the president ial economic agenda is largely happening on capitol hill, but i do see that on the white house schedule there is a jobs announcement slated for 5 00 p. M. Today. And were continuing to watch health care which is most closely in focus kayla, we have tom price and kevin brady on, so were where its at. So you need to watch us although well watch you, too about the health care thing, the Huffington Post gets very nervous if it looks like something positive for republicans is happening you can just admit you like it anyway, today, this is gross, they have like a syringe that is leaking blood and its like any way, it says code red, repeal gaining steam so they may be talking about the skinny repeal. There is a skinny bundle but now i thought actual repeal is more of the repeal and then the two years to replace. Youve heard of a skin any g margarita. So this is similar to that the mandates go and the medical device tax goes. And that might go, right the fear is that this skinny repeal would have a little bit of a worse hangover for lawmakers. So excuse the pun there. So they are going to vote on the standalone repeal, that will happen around noon today but the expectation is that that wont pass because it does not have the support similar to right, but getting the vote for the skinny repeal. And then they have to work toward something that mimics both a replacement and repeal and skinny repeal would repeal the mandates but keep the taxes and regulations in place not the medical device . Not the medical device tax. That is the only one that would be repealed. The rest would stay. That is seen as something that at least on the senate side could get enough support to pass but still face issues in the house. So we have the first step down, but there are about ten more steps to go. And some people saying that was the hardest step and now that they got through that, that they will do this repeal and send to the house and then they will handler hammer something out. Its important to note that nothing but the skinny repealdlg out. Its important to note that nothing but the skinny repeal had anything about replacement it simply retracts fewer funds so that is why some senators are more comfortable with it, but it doesnt do anything to provide a plan or tenants of a plan going forward. They would 12i8 hastill have too that i ran into corker and did he not vote for this because it was not moderate enough or not tough enough im not really sure because hes worried about the budget hes worried about what things cost but then i think everyone said do you know what his rationale was . I dont i havent spoken to him personally hopefully well run into him on the hill today but he had been critical of the replacement bill on the hill ast it he was definitely outspoken in that way but was optimistic that they would reach an agreement on a replacement. Obviously they didnt and it was still nearly the exact same bill with a couple amendments that didnt have a cbo score. All right kayla, thanks. Well move on to at t. Shares are rising, Company Posted earnings of 79 cents a share. Revenue also beat. At t lost 199,000 subscribers, but the loss was offset by gains in its direct tv now online streaming service. Jennifer fritz, seen yonior anxs list at wells fargo. Bundled services was a positive, is that the way to read this yeah, joe, i would say the headline here is the bundling strategy is gaining its sea legs under it this was really the driver with direct tv merger two years ago and then another driver driving time warner to add layer content on it. But the Second Quarter showed some nice traction in both those categories i think i have a bundle from comcast. That is just where you have the phone, internet, you have everything in one package and it may not cost as much as some of the parts, right right but comcast doesnt have wireless theyre working on that, yeah exactly so wireless is a key part of this and as you noted, wireless net ads were actual will you less than we thought they would be losing. So that is actually a less bad good scenario. In terms of where at t would like to be a year or two from now, will they be all things to all people by then if they are able to do the time warner deal . Yes i mean, all things to all people is a big statement, but i think that they will be a multifaceted communication player that owns kept and if you really believe content is king, they are buying very good content and we do believe there is very little risk to that deal getting done and i expect to be done probably a few months before the year ends jennifer, rich greenfield is always outspoken in his reports and on twitter last night writing at t direct tochlt v sale blossoms, accelerating even with the benefit of direct tv now. He writes seven times worse year over year without direct tv now, four times worse including it. Good luck bundle. Well, i would debate that point. Would you do good luck at t or not i would say good luck others. I think that the bundling strategy linear tv trend is what it is but at t more video is being consumed than ever and the reason for that is while linear tv declines are indeed happening, hes correct in that statement, more videos being watched over the top or wireless and in that case at t is switzerland because they have their hand in each honey pot so as they are able to touch that video consumer, however that person is consuming that individual i dont axwro video and layering content on top of it with time warner, i think they are going where the puck is going versus reacting to the here and now and i think that will prove to be the right strategy where does this leave verizon . How much heat does it put on them to do deals i think verizon has talked about eachly that they dont feel they need to use own traditional content. So well see if that happens i think verizon pressure that they will face on thursday will be more on the Wireless Services margin or revenue pressure we estimate 7 versus less than 2 for at t this year. So there have been a bit more in a transition but i wouldnt underestimate verizon here i dont think they will be forced in a corner to do a deal and i would very much focus on the Network Strategy that they have in place with the fine abe buildout the stock itself has been tough to move that higher. The yield is 5. 4 , so that is Pretty Amazing but its almost like the time warner deal was necessary, snag almost had to be done. And that might be the answer to moving the stock higher too . And i think i heard the prior reporter talking about washington, and i think washington has been so gridlocked on health care, once we get to tax reformdont forget these two stocks. At t is the largest capital spender of any u. S. Company and right behind it is verizon so if were given any sort of tax relief, in many ways these stocks are like bonds, they will move on that net neutrality, too correct okay. Jennifer, thank you. Thanks a lot. Lets talk chipotle. Chipotle posting earnings of 2. 32 per share beating estimates by 14 cents. Revenue in same store sales fell 140r9 though company said an investigation of the new years day row v neurovirus outbreak found a staff member was working while sick and the restaurants leadership was not folk safety protocols. You will recall the report just of that Outbreak Company lost about a billion of value one sick guy cost a billion good morning. So i want to talk about the earnings, but why does this keep happening to chipotle . Is there is a problem at chipotle to these things happen at the other restaurants and we just dont hear about it . Yes, the latter there are 20 million cases of neurovirus a year in the u. S. And the fact is that chipotle is a lightning rod for these kinds of things now. So the e coal l. Coli incident spotlight on chipotle and there are clearly people waiting for them to fly too close for the sun and fall so there was a little bit of scrutiny beyond even what you might expect from a typical restaurant and so now every time anything pops up with respect to supply chain or in this case highly contagious thing like norovirus, the response will be amplified and revenue still come ka in low. There is always a disconnect between street consensus and where investors might be and you can see that, the stock has pulled back. I think 8. 1 same tore sastore s in line with what people were expecting. And that included a drag from an impact of a data breach that they disclosed i dont know what the promised lachnd is, but i know they are testing out drivethroughs what is the evolution of this company . I think evolution is the right word and in some ways its been accelerated. If there is a silver lining, its that they are doing things to drive the business forward that historically they never would have even contemplated drivethru is certainly one. Clearly people want them to do that in the same vein, people want menu innovation. They are launching queso you look at social media, queso outspiked some of the negative news when they talked about the launch so they are doing those kinds of things do you want them spending more money on marketing . There are two views. Some investors think that they should be just throwing money at the problem right now to try to remake the image and get people in the store and others who think that it wont work. I want them spending better money on marketing we saw that in the quarter they kind of did a mea culpa that some of the content that they used in their Marketing Campaign didnt really have that kind of traffic driving motivation for consumers and that is what we always say in restaurants there are two truisms to advertising. One is National Television advertising is still the best way to get a broad reach and, two, you have to show pictures of the food and they did National Television advertising, but the pictures were a little late in coming in terms of competitors, Steve Easterbrook seems to be doing well for himself and for mcdonalds shareholders and i hent for tmeant for th shareholders i see why you wondered, though ceos are paid a lot. Where do you put chipotle in your universe in terms of your favorites . Were recommending mcdonalds, as well. That is one where i feel like there is a very good risk reward. Chipotle id put at the other end of the spectrum. High risk, but high reward we have probably the most up side to our target price for that one clearly they have to execute very well. Who come you ndo you not lik screen i like strauntd restaurantsy we are more cautious on casual diners its just a lot more wood to chop sarah, thank you. And a quick programming note you want f to catch Steve Easterbrook on squawk on the street 9 00 eastern this comes just a day after the fast food giant reported better than expected Second Quarter results doing well for himself and the shareholders no less and the dow jones yesterday comin coming, Earnings Reports and fed announce chlt. And a full market rundown straight ahead dow implied to open up 17. Who knew that phones would start doing everything . Entertaining us, getting us back on track and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing xfinity mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. 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. Earnings continue to push the markets higher joining us is Michael Tyler along with matt toms they have 134 billion in fixed income assets. So well could to you both. And lets just begin with you, matt fixed income, bond yields, felt like its not all the story this year were focused so much on equity prices what do you expect out of the fed today . We were calling this the jersey shore version of the fed meeting. So its on autopilot we expect a setup for the Balance Sheet reduction in september and then the decision were all waiting for in december if they hike one more time we believe they ultimately will, but very few surprises expected today. Ink you think youre saying are so vacation because snookie and the othether idiots that not what youre talking about . Not trying to denigrate the fed. Just saying there is a more relaxed tone the shore is beautiful. Some spots are iffy, but in general i mean andrew is not going to the jersey shore anytime soon you go east young man. I like jersey you go east michael, do you want to make a hamptons reference . Yeah, keep it fair. Im not that creative stock market is on autopilot, too. As long as earnings keep coming in and were halfway through a very good Earnings Period right now and were looking at another fairly good second half of the year maybe not as torrid as the first half, it may well slow down from the 12 in the First Quarter and maybe get 8 , 9 Earnings Growth the rest of the year but that is still pretty good, enough to keep the stock market aflo afloat i hadnt realized that the s p 500 earnings had been stuck around 118 and all of a sudden were talking about the 120s and 130s next year yeah, thats right. What is driving all that . I think what is driving it is a couple things. One is that the underlying consumer demand continues to be pretty strong. And we are finally seeing resumption in did your onurables orders and capital goods orders coming in. And the other thing that is a big thing people arent talking about of the dollar down about 8 this year against most other currencies that is really powerful. Europe is reviving the weaker dollar is helping u. S. Exports but the other thing that is really cool is that the weaker dollar is also causing some import Price Inflation and if that can get passed through to consumers, we might see a wee bit more inflation that Pricing Power is good for earnings and also gdp growth but we dont want people losing their real spending power. The idea that the whole price level increases. Is the wage piece there . The wage piece is there increasingly at the hlower end and that is key. The lower end segment is gaining momentum and i degree the weaker dollar, stronger earning earnings, let continue its construction difference news longer term what about the dollar though . Can yields lets take the ten year i think its around 2. 3 can that go higher on this positive story youre telling or does the dollar keep a lid on it the dollar had to not strengthen so we see the dollar in a channel for two years. The dollar is the speed limiter to the fed hike pace and we think the recent desclin of decn ever of 6 to 8 is very constructive they need to get the Balance Sheet down they might have to accelerate that Balance Sheet runoff, very slow pace anticipated right now. That might speed up in 2018, 2019 so the last time janet yellen spoke, she seemed to back off a little bit and say maybe there is something more to this low inflation and we saw a positive response in equity markets so ifare more hawkish, does that spark a market selloff . If shes so hawkish that people worry about inverting the yield curve is the only thing that sparks a selloff. Thats why they want to roll up the Balance Sheet. They want to effect long term rates. But the way they are doing it will be too slow to make a difference so i agree they have to speed it up well see what happens throughout the day thank you both coming up, republicans taking a step toward repealing and replacing obamacare. But still as you know murder dems ahead max baucus will join us. And our news maker this morning is also talking health care. Hhs secretary tom price will join us at 8 00 a. M. Eastern here is a look at yesterdays zch s p winners and losers so you miss the big city . I dont miss much. Definitely not the traffic. Excuse me, doctor. The genomic data came in. Thank you. You can do that kind of analysis . Yeah, watson. I can quickly analyze millions of clinical and scientific reports to help you tailor Treatment Options for the patients genomic profile. You can do that . Even way out here . Yes. Even way out here. Good morning welcome back to squawk box. Take a look at u. S. Equity futures. We are in the green. Dow about 20 1 2 points. Nasdaq up about 6 1 2 and s p 500 up a little over 2 points. A couple stocks for you to watch. Amd shares are soaring after they topped forecasts on the top and bottom lines chip maker raising full year guidance as it ramps up chip production and then shares of u. S. Steel are also sharply higher following a blowout quarter. The company ceo pointing to higher volumes nintendo swinging back to a profit this quarter on the back of strength ever its recently launched switch console. Sold nearly 2 million switch consoles and maintains its forecast selling 10 Million Units this fiscal year those shares up a little over 1. 3 Senate Republicans narrowly agreeing to open debate on a bill to end obamacare. But the first effort to actually repeal and replace it failed 4357. Joining us now, max baucus, former u. S. Ambassador to china and also former u. S. 12340r fse from montana it says here i should call you ambassador, senator. Good to see you. Good to be here you saw senator mccain with that impassioned speech talking about going back to the way it used to be where you actually talked to everyone in the senate to try to put something together that benefits the American People i listened to that and i thought you know the genie is out of the bottle i dont know if you can put it back or toothpaste is left in the tube animals haalready left the barn. Do you think its possible that this senate can Work Together and what is the likelihood senator mccain can usher in a new era . Well, i wish that key individually personally i doubt that he can. Basically at this point the senate is not capable. In the past weve talked and sort of butted heads about whether it was an open and bipartisan process the first time around with obamacare and youve said that you did talk to republicans, you did listen to what they said you heard even mccain yesterday saying yeah, were thinking about doing the same things democrats did, lets not do that so he has a different view than you that it was a bipartisan effort the first time around when we first tried to pass the Affordable Care act, it took several months, almost six months very hard bipartisan but then it became political from my judgment, the other side felt it could make political hay by opposing it because it was obama who was president. Sure. I frankly think it might have to get worse before it gets better the world is run by deadlines. Were not quite at that bottom line yet where we have to Work Together were getting close. In the amendment process, it keeps being pointed out that there is i dont know how many democratic senators, Something Like 10 or 12 or 13 where 2ru6r78 wtrump won 80 of the counties in thartd respe their respective states. Do you think any of those individuals would try to be part of the process well, on the surface, yes but only when mcconnell says okay, wave the white flag, lets Work Together. Mcconnell has to do that first but if he did that, schumer would say all right, lets start taking steps to single payor and price controls yes when you try to ram something down somebodys throats, the other side gets way ticked off you have to Work Together. Youre not saying anything that makes me think there is a possibility. So 15 minutes of it was nice listening to that, but were not returning to that anytime soon well, again, it comes down to the country. If enough people in the country are so ticked off that finally look, if they want to get reelected, they will listen to the people but the country is a microcosm of what is happening in the senate and some people calling are saying you better repeal this thing because i told you two nld and the other people are say yg conditions you Work Together so i dont know. So lets solve something much simpler. North korea. That is simpler since you were ambassador to china, youve seen the reports that china is now taking steps almost acknowledging that something may eventually inevitably happen. Is that an indication that they have done all they can and they are just these are contingencies for the worst Case Scenario for them . It is concerning when they start to amass troops. And they dont want the Korean Peninsula to collapse, so they are very concerned about north Korean Refugees coming over. Its concerning. They may be thinking to themselves, gee, President Trump might actually commence a military action and that will cause problem in north korea and its difficult for china so i think that is why they are doing that can i ask an investment question, which is i think a lot of people out there are trying to handicap or figure out how they can assess the risk of what is going on in north korea and therefore figure out how they should be investing around it. Some investors will say its a binary event, you cant even try to handicap it and try to nothing you can do what would you do . Frankly, im more bullish in all this in the sense that there is not going to be a war there cant be a war and you think that the leader of north korea deep down feels the same way yes, i do i think hes not a nut case. Hes very calculating. Hes very smart. Hes playing all this very, very well hes not going to push the button because then hes gone. But he will play now they are within a year supposedly it could be next year, icbm next year that is true. And that is more concerning, but hes very calculating, hes not a nut case interesting just watching again, this is not necessarily your expert tease, but watching President Trump last night talk about iran after certifying the deal last week or the week before, he went back into the saber rattling that if they do the slightest thing, were going after them and then the red lines in syria. My deeper concern is generally, not just iran lots of other countries, as well its inconsistency and its causing a lot of leaders to say what is american policy here because it keeps changing. Do you have any insight into Rex Tillerson and his current state of mind . I think secretary tillerson is very solid, hes very good. But hes on vacation. Hes in texas. After they say that hes disillusioned, he says im going back to texas. Well, i could go farther and say hes been on vacation since hes arrived in the sense that sounds very partisan. No, no, im saying as the white house often calls the shots in foreign policy, that was my experience. And this white house is doing the same but he was one of the that was again pointed out that even critics of the Trump Administration point to some of his cabinet picks as being, you know, look at the great cabinet. Tillerson is a great now you wonder maybe there is Jeff Sessions, what do you think of that . Youre a senator i dont know how much to discounts what all the senators say about Jeff Sessions because there iss is a collegiality, al like a code that they all adhere to, so they willdefend him, but Jeff Sessions is in a very tough spot personally just out of self respect, that alone should be reason i think if i were Jeff Sessions to say im sorry, i have to resign look at the people in the Justice Department the president has so undermined him as attorney general, it causes morale problems do you think hes trying to staun for t staun up f stand up for the right thing for the country . Jeff is a decent guy. I know him really well hes a good soldier. So what is the right thing for him to do . If he resigns to some degree hes capitulating. And so that is true. Hes in a tough spot washington is a tough town. Do you remember the sessions hearings during confirmation, what the democrats were saying about him then but then the minute hes an enemy of my enemy, now east all Jeff Sessions is just a wonderful hes very smarts. A very good man. And i just think i thought he was a racist, twe defending the kkk . Now they love him. Look at the mooch, all hes changing you wonder why people get disillusioned. Senator, ambassador, good to see you. Coming up, our guest host at the top of the hour former Senate Majority leader George Mitchell will join us and his take on health reform, taxes and more and then hhs secretary tom price will join us at 8 00 a. M he will be helping lead the push for Health Care Reform a lot to talk to him about and then later kevin brady will join us, hes chairman of the influential house ways and means committee. He will take the lead on tax reform so health care, taxes and George Mitchell a used car, welcome back time for the executive edge. Meg whitman reportedly on the short list for ubers open ceo job. She hasnt been formally approached yet and shes unlikely to take the gig. Whitman was an early investor this uber and is said to have quietly been consulting for the company. Hp says whitman is fully committed to hpe and plans to say with the company until her work is done you know my pick i havent heard it. Ann finucan vp at bank evof america i think shes the number two or three person in all of bank of america but if you think about it, shes been dealing with regulators for the past decade. What does this company need . Operations maybe they like the discipline that wall street can she was on last week. Were you out when she was on i missed that she was sitting right next to me, yeah we were talking about water. She was here with gary white that is a thing of mine. Water is a thing of yours if you want to feel good about yourself environmentally, focus on the people that have no access to water instead of this other phantom menace so you dont think of meg whitman . Im not could happen pretty telling. How about marissa . That will get him going. Coming up, International Relief organizations are teaming up with wellknown companies to help more than 20 Million People facing the threat of starvation. Tethorrit that sty gh afr is 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. 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. Theextreme risk of burstd a pipes and water damage. Y. Soon, Insurance Companies wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back to squawk box. 20 million feel in africa are at risk of starvation in the coming months but eight International Relief organizations are teaming up to try to help them the ceo of c. A. R. E. Usa. Good morning to you, heather good morning. What is it going to take in terms of funding to even begin to try to fix this problem well, such an important problem. As you said weve got 20 Million People who are on the brink of famine and the American People just arent really aware of whats going on in africa and the middle east. So as you said, eight aid organizations have come together to form a coalition to raise awareness, and donations and weve partnered with some great companies, like google and twitter, and visa. We have pepsi and blackrock committing to match donations up to 1 million. But its going to take a lot of contributions to really meet the needs. United nations has called this the largest humanitarian crisis since 1945 i hate to make this political, but as you know, the recent cuts inside the state department, what does that mean for the funding for these types of issues . Well the proposed budget that was submitted would devastate humanitarian Funding Congress responded, and just a few months ago they allocated 990 million for famine relief, desperately needed and were urging the administration to process those funds and get them out the door as quickly as possible so we can get aid to people but the reality is thats just not nearly enough. Even with the contributions that the u. S. Government has made, and other governments, were only about a third funding so what the United Nations says is necessary. And as you go and visit some of these communities and places, i was recently in uganda with south sudanese refugees, you see that there just simply isnt enough food, water and shelter for people who are very, very desperate to survive right you have collected a lot of donations from Corporate America. Question, still going on in Corporate America about charity. Charity in Corporate America where charity should come from if you will. How easy have you found it in terms of raising money from companies . Well, weve got some great partnerships and thats terrific but i think one of the Biggest Challenges we have right now, candidly, is to break through this media climate that were in the recent poll done by one of our partner organizations, less than onefifth of voters are aware of whats going on in africa and the middle east and what we know from history is that when the American People are aware, and this is community, Corporate America, of whats going on and theyre paying attention and these issues are covered we see a response that happened in 2011 when somalia was declared a famine and we need it to happen now the American People have an incredible history and legacy of being generous and leaders in humanitarian relief. But we need that story to get out and thats whats so important about this coalition where does America First fit into that . I think that americas legacy in leadership of helping people who are truly in need, desperately in need of surviving, is what makes this country so critical. What we know from history and past crises is that when you ask the American People lead, when the u. S. Government leads, others follow. And thats the moment in front of us. The largest humanitarian crisis since 1945 requires u. S. Leadership and i know when the American People hear the stories that ive heard, of women and children fleeing violence and desperate for food and water and basic shelter, they want to help but right now its really hard to get that story out. Heather, we are glad to have you to help get that story out we appreciate you coming on the program this morning thank you. Thank you so much and you can learn more and donate at globalemergencyresponse. Org. Thanks again. Appreciate it. She was talking about pepsi, but Cocacola Cocacola just moments ago reporting 59 cents a share thats the adjusted number the estimate was 57 cents. So thats two cents ahead. Revenue also topping estimates at 9. 7 billion a little bit above 9. 65. The company is raising its forecast, and as you can see the stock is up 1. 5 and well have much more analysis on cocacola report, and all the Global Metrics that people that trade this stock key off of at the top of the hour. Meantime rick perry falling victim to some russian pranksters the Energy Secretary thought he was speaking by phone to the ukrainian Prime Minister about energy policy. Instead he was being pranked and was asked about pig manure after being told about a fuel created by the ukrainian president from a mix of home brewed alcohol and manure perry responded positively to the idea the same pranksters make fake calls to politicians and celebrities including elton john have they called you, joe . Anyway, coming up, more Earnings Reports on the way. Were going to hear from ford and bogue in the next hour and then later a newsmaker, hhs secretary tom price and also kevin brady. Pick your poison health care or tax reform. Hell join us at 8 00. Tom price will health care. But first our guest host for the next hour is former Senate Majority leader George Mitchell. Tax reform squawk box will be right back. Are you ok . What happened . Dad kinda walked into my swing. Huh . Dont you mean dad kind of ruined our hawaii fund . I thud go to the thothpital. There goes the airfair. I dont think Health Insurance will cover all. Of that. Buth my fathe without that cash from aflac we might have to choose between hawaii or your face. Hawaii what . Haha. Hawaii you might have less coverage than you think. Visit aflac. Com and keep your lifestyle healthy. Aflac hey youve gotta see this. Cno. N. 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. We are smack dab in the middle of earnings season. A parade of conditions romming out Quarterly Results this morning, including dow components cocacola and boeing. Well have numbers and analysis coming up. Its decision day at the fed plus could President Trump keep janet yellen as central bank chief after all. Well tell you what hes saying about the prospects. And from health care to russia sanctions, a ton of headlines coming out of washington insight on them all from a special guest host, former Senate Majority leader George Mitchell as 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 to squawk box right here on cnbc live at the nasdaq marketsite in times square im Andrew Ross Sorkin along with joe kernen and kelly evans today. Nice to see you. Good morning. Becky has the day off the futures at this hour are looking up theyre in the green right now dow jones looks like it would open up about 27. 5 points higher s p 500 about three points nasdaq up close to ten points. Well also show you whats going on in the oil world. Weve been keying off the Energy Markets for quite awhile now wti crude at 48. 22 dow component cocacola is just out with its Second Quarter earnings its a beat on the top and bottom lines sarah eisen just got off the phone with the companys coo what more did they have to say its actually the companys new ceo james quincy he was just elevated to that position he called this a good, solid overall result and just to review the numbers that joe hit and ill get into a little more detail, earnings per share, 59 cents for the dow component. That was better than the 57 cent estimate 9. 7 billion in revenues that was better than the 9. 6 analysts expected as far as what we were looking for inside these results, organic Revenue Growth, which strips out currencies and is a good measure, 3 and that was what the company was targeting. So that was seen as good news. And veryone always looks at volumes, unit case volume for cocacola. It was flat. It was something that i talked to james quincy about. He said actually it was slightly higher in the developed markets. Thats the u. S. , and europe. But, weakness in some emerging markets kept some of the pressure on volumes and on sales. And that was the big head line from my conversation with quincy he said, continued strong results in developed markets specifically europe and north america. Still seeing headwinds from brazil, veil la and other emerging markets we bounce back in china. Within the actual portfolio, no surprise tend growth in juice and dairy. Thats away from the carbonated beverages. And within the carbonating or sparkling beverages as coke calls it, the standout, according to quincy was actually coke zero sugar and we talked about some of the declining diet numbers which are still falling but he actually said for every diet case that is falling we are adding two coke zero case. So making up for that losing of diet coke sales with growth in the coke zero sales. That was a point that quincy wanted to make this is a Company Going through a big transition were refranchising to try to become leaner and more profitable he called that process smooth. He said its going almost remarkably smooth. It should be done by the end of 2017 at least in the United States. And then finally, guys, i did ask him about some of President Trumps economic policies, and whats going on in congress, and what stood out to him the most he said hes most intrigued about seeing a change in tax reform wed be encouraged if progress is made there. We talked a little about the about repatriation coke has a lot of earnings overseas and he just said going to a territorial based system would be a positive. Something that congress is talking about. Whether they can get it done, obviously, guys is another story. And joe, finally, as for that guidance raise that was on the basis of more favorable Foreign Exchange rates the dollars been super weak the euro is at an almost two year low and thats helped Companies Like cocacola which gets most of its revenues from overseas should help a lot of companies. Thanks, sarah. Thank you quarterly numbers just out from ford. And our auto man, our auto dude phil lebeau joins us now with the details im your auto dude, joe fords Quarterly Earnings and this is a company that beat the street in terms of earnings per share coming in at 56 cents a share. The street was expecting 43 cents. Though we should point out that there are some foreign tax credits that are part of the benefit here automotive revenue for the quarter coming in reveille in line with estimates at 37. 1 billion dollars. Pretax profit of 2. 5 billion dollars. Thats down about 500 Million Dollars compared to the Second Quarter of last year north American Auto just a little bit lower down about 500 Million Dollars but ford credit coming in better than previously expected at 619 Million Dollars thats the best since 2011, i believe, in terms of the growth in Ford Motor Credit margin of 5. 9 but its the guidance and what were going to hear in the Conference Call thats going to get the most attention there was a change in their methodology as far as lower tax rate that theyre moving towards. As a result, theyre raising their fullyear earnings expectation to 1. 65 to 1. 85 per share. The street was expecting 1. 58 so there will be some adjustments on the estimates there. I mention the Conference Call, we have not heard much from jim hackett the new ceo at ford since he took over from mark fields he will be on the Conference Call today well be on the Conference Call, as well. Well let you know what he has to say as hes doing this 100day review of fords business before he lays out his Strategic Vision ford beating the street at 56 cents a share, 13 cents above estimates. All right, thank you, phil. Well see you later. Phil lebeau. Elsewhere in the news this morning shares of chipotle are higher in the premarket. The restaurant chain Beat Estimates last night by 14 cents with a quarterly profit of 2. 32 a share. Separately, the company says its gotten a followup subpoena requesting information on a recent Health Incident at a virginia restaurant. Chipotle says it cannot determine if that will result in a penalty of any sort. The Federal Reserve concludes twoday policy meeting today with an Interest Rate decision and policy statement that will come at 2 00 p. M. Eastern time the fed not expected to raise rates this time around the language on inflation will be closely watched and President Trump says apple has promised to build three manufacturing plants in the u. S. The president made his comments to the wall street journal yesterday, saying those promises came directly from ceo tim cook. Apple has so far declined to comment on the story in other news, from that wall street journal interview, President Trump giving some mixed signals on who he might pick to be the next fed chair. President said he might renominate janet yellen. To a second term thats not her that, in fact, is another person thats being considered, his economic adviser gary cohn trump told the journal that fed chair yellen has done a good job. He also said he likes her because shes a low Interest Rate person. President said hell likely announce his pick at the end of the year in other Washington News Senate Republicans facing another setback in their attempt to overhaul obamacare and a vote of 4357 senate failed to pass a beefed up version of thebetter care act 60 votes were needed, to partially repeal and replace the Current Health care law. Speaking at a rally last night in ohio, President Trump had a big warning for any republican senator who plans to vote against an obamacare overhaul. The senate is working not only to repeal obamacare, but to deliver Great Health Care for the American People. Any senator who votes against repeal and replace is telling america that they are fine with the obamacare nightmare. And i predict theyll have a lot of problems. Last nights defeat, though, of maybe some of the senators will have problems he says now, comes just hours after Senate Republicans eked out enough votes to move forward with a debate on the bill and then later this Morning Health and Human Services secretary tom price we should mention is going to join us live at 8 00 a. M. Eastern time i mean that to talk all about this. That 5150 john mccain, ron johnson, that was yesterday. So today the head line that we write Senate Republicans faced another setback in their attempts to overhaul obamacare i might have said i might have said well that was late last night. Its online. But that was never going to be a repeal. You knew the votes werent there for that but the overall lead of what happened yesterday was that somehow mcconnell cobbled together 51 votes, with wrangling, and right its just you know we can like you said, its i dont know who wrote it but if i were at home listening, i would then like shake my head. But whatever significant enough that the Huffington Post is worried yeah, significant enough that theyve got a syringe with blood all over spilled blood all over a table your Huffington Post, andrew so first of all, its not my Huffington Post. Dont take the bait i know that. I think the head line is right. I know you do at the moment and i dont so thats why youre there thats why im here. And thats why every day we do this was obamacare repealed last night . It is not dead because now that its not dead but what happened . Whats going to happen to the senators we dont know now all we know is yesterday that was a big win for mcconnell and it was a major win you can just read politico it was not another setback it was that the lead yesterday was that they cobbled together those 51 votes we have a guy here who i think will give us some really smart analysis all right, let me do this right next to me. I know. Our guest host for the morning George Mitchell, former Senate Majority leader from the state of maine, former u. S. Special envoy for mideast, author of a path to pace, senator mitchell, leader mitchell, i we already talked to max bachus and i know you did, too, because we caught you on camera consorting with him and getting your talking points all together. You guys sound like a bunch of senators, actually, about the mornings coverage thats what i want to talk about. Because mccain came in and you saw that, the speech, the impassioned speech and it almost to me just sounded like, i mean, its those are great words. And it makes sense, but it almost sounds like happy talk. It almost sounds so divorced from reality that its nice to say it but i think the chances of anything like that happening in this current environment are slim to nil. Do you agree well, i would say slim, but not nil. And there is an opening, i think, that may occur through the course of events senator mcconnell has said that if the republicans fail in the senate to repeal obamacare, there will have to be a negotiation with democrats on steps we dont know what he was sure we dont know whether he was massaging, threatening, throwing down a gauntlet, saying if you dont do this he may have been doing all of those things at the same time. But it seems to me that is inevitable in the event of failure in the senate. And so, although it wont be with the right motivation, it will be the product of a loss, nonetheless, it might be a step forward. Joe, i said from the very beginning that i felt the president s best course would have been early in his tenure to select those subjects on which there was a real possibility of bipartisan support infrastructure and Corporate Tax reform right both parties absolutely favor them why should he begin with that, knowing that he might only have this majority in congress for the first couple years of his term, knowing what happened when the democrats had to choose to do health care, over even econ related stuff during the crisis because they also knew what a unique opportunity it was. Doesnt it make more sense to go when you know you at least have the gop congress to try to roll the thing back but theyre not going to be able to roll it back, i dont think. And they spent nearly nine months doing it, and not moved on the others. And increased the bipartisan divide starting in any negotiation, i think you begin with the areas where you may have some agreement. Right you build up a relationship with the other side. You Work Together. You get something done and maybe that enables you to do other things right how do we get here, though . I mean, the iraq war didnt help, obviously. That poisoned well probably was stuff before that but then, the way obamacare was handled, i mean, the thing was underwater until it looked like and talking about public opinion, until it looked like it was going to be taken away it wasnt fop lar for seven solid years from the way that it was passed i mean does everyone have to take full responsibility like a lot of things in life, joe, that arent popular until you consider the alternative and thats whats happened to the public now it was not popular in part because of a very unfortunate rollout, which i think was a disaster for the administration right secondly by the relentless opposition of those who opposed it senator, are you, at this point, a proponent of single payer . A lot of the world is single payer. There are people in the Democratic Party that that has been their wholly grail for a long time. Im not im not sure that the country, if they knew everything about single payer im not sure the country is there yet but a lot of democrats are are you . I degree that they are not there yet. Are you i think eventually it will happen not in my lifetime probably perhaps in yours, youre a young, healthy guy but i dont think its going to happen in the future but its clearly moving in that direction. Look, the arguments against it were made against Social Security it became deeply embedded. You cant find a republican, ill stand up and say, i favor abolishing Social Security or medicare they were made against medicare its clearly moving there. But it takes a long time and i think it will take a long time but dwawatching the way that medicaid is going to, the way that its already grown in the past five or six years right and the future growth if we leave obamacare as it is, is that what you think the right way to manage our health care . No, i think it ought to be a unitary system you do think . Because Medicare Medicaid the way that its happening, its almost like a supplemental medicare as close as you can get to single payer without actually doing it youre sort of sneaking it in there in the way that its well, you have three different systems. You have Social Security, which gives in part with health care to the disability provision. Right you have medicare, which deals with health care based on age. And then you have medicaid, which is a partial federal state, its a mixed federal state program. Differences in different states which gives based on another set of metrics i think eventually, it will merge into a Single National system but i think it will take a very long time to get there. Heres the problem, joe, if i could just make a comment. Sure, uhhuh. Every country in the world struggles to meet the Health Care Needs of their people the objectives are all the same. High quality, low cost, universal coverage its not difficult to get any two of the three but its proven nearly impossible anywhere to get all three. Sometimes coverage doesnt mean access. Thats the problem coverage means coverage not access right and it gets to the point where you want to see someone and you get an apointment nine months down the road. Its true coverage is not access but believe me, not having coverage doesnt help you get access its a step. Coverage is a step toward access we talk about the system in the uk, and then whenever anybody and with a straight face theyll say we love it, and then theyll say, if they are the wherewithal, theyve got private insurance. Private insurance thats right. And i but thats still i would still make the argument its better than the alternative. Thats exactly the point. But theres not a lot of innovation in places where its almost a because its i dont want to say because expenses are capped, theres much less innovation we still have theres a reason people come here still for but we still have the best system in terms of innovation and technology and Everything Else people may wealthy people from elsewhere may come here but in Overall Health outcomes, population, population you cant look at that in a vacuum youve got obesity weve got drug problems. Weve got i mean theres a lot of extraneous factors that cause our health, you know, numbers to be skewed to make it look like our Health Care System but joe other countries have their own health problems. No no country i was in portugal, nobody nobodys fat everybody eats fish. Im telling you, we are we have a unique set of lifestyle issues, here, too, that make and ive got my own problems well, but every society has problems nobody has a perfect fit on the system right but i think what were moving toward universally is a unified National System supplemented, supplemented by dont want to do it that way. Private system longtime democrat a lot of people do not want single payer meanwhile did you read this head line, were going to go to break. 90 of american men are called overfat overfat . Take your height take your waist size if its less than half, youre fine if tis more than half youre fat. Ive never heard that term before its around today overfat is a bmi, body mass index if youre overfat so youre fine. Youre 62, right yep so youre what is that . Six times 12 is 74 your waist is about 34. So youre well below youre my idol im like right on. Im 70 right on the cusp 7336 and 36 is when i dont breathe its a very strict metric, joe. But you have accurately described one of many Health Issues in our country. Which leads me to the argument that we have to make a much greater investment in Preventive Health care. I agree and we dont want we want to keep pharmaceutical prices down but sometimes its the best deal in town taking a pill instead of going to the hospital. We dont want to hurt innovation for things like alzheimers or chronic like Everything Else in life, joe, its finding the right balance. Balance okay still to come we should say tom price is going to be on. Were going to talk much more about health care with the man of the hour. A flood of earnings, as well stocks hit alltime highs we get ready for the trading day ahead. In the next half hour, taxes and budgets with democratic senator chris coons and health and human secretary tom price at the top of the 8 00 hour 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. You myour joints. Thing for your heart. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. 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 to squawk box, lets get a check on the markets. Earnings from where were sitting the nasdaq is coming in. We have a lot of results to get through. We also have a fed decision coming later today joining us on set are sean matthews, ceo of Cantor Fitzgerald and jeremy dearen chief u. S. Equity strategist for Wealth Management at ubs welcome, guys. Much to get through, sean. Earnings this morning are things jumping out to you about the sort of health of Corporate America, the effect of the weak dollar, whats going on here certainly if you look at earnings, theyve been relatively strong. And the back drop with the marketplace is, you have low Interest Rates for an extended period of time, which has allowed multiples to continue to grow and now you have earnings power, as well. So the markets are in pretty good shape overall the question is really, you got to look at credit spreads to determine whats going to happen in the future and credit spreads are pretty tight and benign at this point theyre unbelievably tight. I mean some of the behavior of some of these Bond Offerings are really hot ipos. There is no hot ipo market this year its all in the Corporate Bond market, right . Absolutely. You started to see some post reorg issues having some problems which is kind of the low end of the credit structure. The very low end but the high end of high yield is doing incredibly well so everything is relatively benign jeremy, when you have companies blaming the equity markets for providing capital to continued production in the oil and across the energy space, you know, again, thats the flip side of the coin which is talking about the positive momentum weve seen this year. We still see positive earnings momentum. This quarter were tracking towards 9 , 10 Earnings Growth. The markets doing well. But theres nothing to suggest that a bull market is showing signs of aging right . Were still seeing Earnings Growth probably going to be in the 10 range this year. We think its going to be in the 10 range next year. And you know, the economy is gaining a bit of momentum and importantly, inflation data has been very soft that means the fed can go slow, continue to support equity valuations and i guess this kind of gets into the fed issue are you seeing signs weve talked about how high corporate profits are. Theres lots of different theories going around about why thats the case right now. Is Wage Inflation starting to put a dent in that at all . Not at all. Wage inflation right now is still at around 2. 5 in the peak of the last cycle we saw wage growth in 3. 5 to 4 range 2. 5 range even if it rises to 3 its still not going to lead to, you know, a fed thats going to be overly aggressive. Thats exactly the question, sean we had aguest earlier say look youre starting to see that. The wane inflation among the lower income levels especially its a good sign and thats why they think the fed could start to tilt a little more hawkishly the fed is becoming a little more hawkish because theyre at zero as they move up theyre normalizing the curve. And if you look now, under 100 basis points, thats in a normal world, 100 basis points the last 20 years seem to be normal so i really think now its about, how does the economy continue to grow, with technology, because now we have the next five to ten years are going to be real pressure from at least the perspective of workers. How many jobs are going to be lost over those ten years from the technological fine were going to have in that time frame . Look at how much advancement we have over the last ten years and the Unemployment Rate is basically a record low i know theres people outside the workforce. But you know, you wouldnt guess if you saw everything that was already happening that we would necessarily be doing so well on that front well, eventually, technology has a replacement angle, as well so, as people have talked about whats going to happen in the future, certainly, maybe the work week is going to have to change maybe how we think about our job is going to have to change are you saying thats going to be pressure over time. Three, four days a week because we could do Something Like that. Four is fine. Jeremy, same question, i mean theres been a lot of talk from elon musk and some others about, you know, how much risk there is from some of this technology today. How do you guys think through that i think one thing you have to consider is how big the Technology Sector is for the u. S. Equity market its up to 22 of the market cap of the market so the better the tech sector does in general, the better the markets going to do as well just given the contributions. Just invest you can invest in the market, youll gain from it, job impact we see unemployment go from 10 to 4. 4 over the last six years. So we are seeing positive trends were not seeing any weakness in the pace of job creation were seeing a bit of a mixed shift out of manufacturing, into the Service Sector, but were not seeing, you know, a radical paradigm shift into, you know, robotics replacing the Service Sector that is leading to Unemployment Rates to spike and causing vast levels of joblessness. All right anything you want to add, joe . No, i about the future im not worried about losing my job im worried about the machines turning off my life support, according to elon musk i mean right . Thats the argument. What about the ava tar. Thats 1940 senator mitchell and i are holding onto try to get to 1940s for the singularity, right were going to download ourselves and continue the discussion coming up were waiting on Quarterly Results from 1940 . 2040. Living in the past yeah, when i was boeing results just crossing the tape phil lebeau is digging through the numbers. The auto dude is also our aerospace dude phil and weve got numbers from boeing for the Second Quarter. This is a beat in terms of earnings per share coming in 25 cents better than the street was expecting. Boeing earning 2. 55 a share now i said this 25 cents better than the street was expecting. Keep in mind that theres about 14 krepts of that beat that is due in part to a tax benefit lower tax rate due to the share based compensation so, that said, its still a beat here by a sizable margin from boeing revenue coming in just a smidge light of expectations at 22. 7 billion. Part of that due to the defense side of the business there was no c17 delivery a few fewer deliveries on the satellite side of the business operating cash flow, this will get some attention here. 4. 95 billion dollars, most were expecting operating cash flow of 2. 5 billion and then whats really going to get some attention here, boeing is now raising its guidance for fullyear core eps by 60 cents up to 9. 80 a share to 10 a share. That is the expectation now for the fullyear. It was 9. 20 to 9. 40. The street expectation was for 9. 39 the operating cash flow is being raised by 1. 5 billion to 12. 25 billion. Some of that is due to the way they are changing the pension, and paying off some of that risk early. What youve got here is higher guidance on a Second Quarter earnings per share beat by 25 cents from boeing. Guys, back to you. Phil, thank you for that. In the meantime, corporate earns front and center this morning weve got a couple of different names to watch hershey reported froft of 1. 09. Revenue also beat forecasts. Hersheys bottom line was helped by strong u. S. Demand, as well as cost cutting and all those hershey kisses that the sorkin family loves to eat. Hilton earned 51 Cents Per Share for the Second Quarter one cent above estimates it also raised its fullyear forecast, customers booked more rooms and paid higher prierss. And home builder d. R. Horton Beat Estimates by a penny with profit of 76 Cents Per Share new orders up 11 from a year earlier. Guess whos here the queen of the nasdaq. Nasdaq earnings beat this morning beating estimates on both the top and bottom lines. Joining us is nasdaqs ceo Adina Friedman good morning. You get to just walk downstairs it really is very convenient. You beat on the top and the bottom line. What does that say about where we are i certainly can toy from nasdaqs perspective, were doing quite well in terms of the growth of our business from our data business, our index business, and even though volatility is at almost alltime lows we continue to have very Strong Performance across all of the things that we do as an exchange, and as a technology company. Were feeling pretty good about how the economy is helping us drive our business forward so thats real economy . Not just the market thats true i think that basically if you look at the overall feeling around the financial industry, and certainly from our clients, how theyre driving their businesses forward, we benefit from them having growth in their businesses and we certainly are seeing that thats being we certainly are seeing that theres some strong i know youre not a market prognosticator but you watch the markets every single day i sure do and you see whats going on does this make sense to you. Well when i look at the nasdaq composite and some of the Technology Companies that are on our market, we certainly see some Amazing Technology coming in and impacting the economy and having certainly spectacular growth as they continue to drive their businesses further into the economy. Right and i think that investors are reacting to that i think that theyre seeing a lot of optimism that comes from that nasdaq known, obviously, for being tech heavy nasdaq. You just bought an a. I. Company. We did. What is that about . We just bought a Company Called cybernetics theyre a Machine Intelligence company that really focuses on behavioral analytics in surveillance so one of the great things about one of our great products is our surveillance product we are the world leading product, provider of market surveillance for a broker dealers and for the markets. And cybernetics also serves the buy side so were very excited about integrate some of this machine sfwels into our products, and offering it out to a Broader Group including the Asset Management industry. The big existential question about the Public Markets these days has been the fact that so Many Private Companies still dont want to go public. And you have been now an advocate and the s. E. C. Has been all over this, for keeping the information, before you go private, before you go public, rather, keeping your information private. Mmhmm. Why is that a good thing . I know its interesting, because i was the cfo of carlyle when we went pub like and what was amazing was eight months before we went public we had to disclose everything about ourselves. Right way before we even made a final decision to go public, the whole world and all of our competitors had all the information they needed to compete effectively against us even before we tapped the Public Market so our view is allow those companies to keep that information confidential up until a few weeks before they go public, before they really made a final decision to take the company public, and while theyre working their way through the s. E. C. Process the s. E. C. Comes back with a lot of comments. So allow that disclosure process to be done in private. But historically, the idea was, and the reason that the s. E. C. And others had forced companies to make this information public, was to give investors a public opportunity to understand the company, to also ask questions so not only for the s. E. C. To flag issues, but for but to effectively use the market, if you will, the marketplace to flag questions when you take that off the table, does that make the system better does it make it more transparent . And what does it do to the credibility of it all . Well, first of all, i think that the real process is, they do have plenty of time to understand the Financial Performance and understand the Business Performance of the company before it goes public. Because once the s. E. C. Has approved it and its moving towards the Public Markets, investors have plenty of time to look at it plenty of time being like three weeks though now and they can make their own decision yes but back then everything was done on paper and do everything is done by computer so they dont need as much time. Theres instant access to that information. Okay. All of you make sure that the whole world knows everything about the companies in plenty of time before they go public she knows how to butter us up i think that was a dig. But i think three weeks is a good amount of time for investors to dig in, understand the company, before theyre making an investment decision. Okay. Adena friedman congratulations on the earnings. Thanks for coming doining downss thank you coming up Health Care Reform taxes and the budget well speak with more chris coons and get his take next. Later this morning catch mcdonalds chooe Steve Easterbrook on squawk on the street at 9 00 eastern. Stay tuned so thats the idea. What do you think . Hate to play devils advocate but. I kind of feel like its a game changer. I wouldnt go that far. Are you there . Hes probably on mute. Yeah. Gary wont like it. Why . Because hes gary. phone ringing what . Keep going yeah. laughs voice on phone its not millennial enough. There are a lot of ways to say no. Thank you so much. Thank you so were doing it. Yes start saying yes to your companys best ideas. Let us help with money and knowhow, so you can get business done. American express open. Im the one clocking in. When youre clocking out. Sensing your every move and automatically adjusting to help you stay effortlessly comfortable. There. I can even warm these to help you fall asleep faster. Does your bed do that . Oh. I dont actually talk. Though im smart enough to. Im the new sleep number 360 smart bed. Lets meet at a sleep number store. I had a feeling. You know they just reported earnings welcome back to squawk box. We are keeping on eye on shares of cocacola and citi this morning. The ceo said yesterday that the restructuring is over and the company is at an inflection point. The Company Announced plans to return more than 20 billion to shareholders in each of the next three years. In a show of confidence, corbett mentioned the possibility of a 100 stock price target. Shares are around 68 right now. And a half percent rally preopen. Mike corbat will sit down with jim cramer at 6 00 p. M. Eastern and were looking forward to it. Treasury secretary Steve Mnuchin set to testify before a Senate Appropriations subcommittee this morning. Hell be discussing a wide range of financial issues. And a treasury departments budget joining us now senator chris coons ranking democrat on the appropriations subcommittee on Financial Services in general government and were going to talk about the 10 00 a. M. Meeting but weve got senator mitchell here weve been talking a lot about health care, senator coons so, i know the senator wants to talk to you about that so we can start with that, or would you like to get out what youd like to say on the tax reform or Something Else that youll be the budget, Something Else at 10 00 a. M. Pick your poison what do you want to talk about ill simply say im thrilled to be on with senator mitchell and i look forward to his questions. Okay. Go for it, senator chris, senator mcconnell has said that if the republican fail to enact repeal, that it will be inevitable theyll have to sit down with democrats, and attry o work out ways to shore up the Current System and correct deficiencies in obamacare. Are you and other democrats ready to do that are you now formulating proposals and planning for that discussion yes, we are, senator. Ive got a number of bills that ive either sponsored or cosponsored that would address some of the challenges that the Affordable Care act markets are now facing theres a reinsurance proposal that would provide for the exchanges, the same sort of stability that weve seen in Medicare Part d. Theres also two bills that i carried forward in the last congress that would reduce some of the reporting and Regulatory Burden and expand the Small Business tax credit. As we heard from senator mccain last night, in a riveting speech on the floor of the senate, the process thats been followed to get us to this point in the republican majoritys efforts to repeal and replace the Affordable Care act has lacked public input, has lacked hearings and bipartisan conversation, and i think that is the path we should be following. We should have hearings where weve got leaders in health care, and in the Insurance Industry coming and working with us to identify which of the challenges or shortcoming weve got in the marketplace that we need to address and what we can do to meet President Trumps Campaign Promises that will have Higher Quality insurance at a more affordable cost for a larger number of merps right now were heading in the opposite direction all right senator, senator mitchell also talked about that it might have been a better idea to start with tax reform, because there was some bipartisan interest but i look at some of your comments in the past, the tax reform is going to be very, very difficult, as well, because of the current environment, and then you kind of talk about the senate that the senate i think youre saying that the senates not quite as partisan as the house youre more insulated. That but then i, i dont know, i have a different view of the senate its like, you guys talk and each senator, you know, you do represent the entire state, and sometimes i think its even harder to move in the senate than it is in the house. And theres certain reasons why it seems more collegial, but sometimes that bogs things down even more. For whatever reason the publics frustrated with both houses at this point thats right. I think the general public is frustrated with all of washington but what im going to be bringing up this morning with secretary mnuchin is a few important issues first is making sure that were able to move forward, that we get our appropriations process done this year im the ranking democrat on the subcommittee that has all of treasury including the irs more americans interact with the irs than any other federal agency and i want to make sure that we have good levels of swabt service that when folks call in to an irs hotline or seek advice from an irs tax adviser theyre able to get a response second, the president s budget proposed eliminating something cdfis that have broad bipartisan support. And i expect youll see both the chair and i asking questions about why not have Community Development financed institutions because theyve really helped lead local Economic Development last, something that i degree on with the secretary, is the importance of terrorism financing. The administrations asking for more investment in the unit in treasury that investigates sanctions violations, whether by iran or russia or north korea and i think they need more resources, and they want to focus more on some of the challenges we have in the middle east in terms of terrorism financing. A key topic will also be the debt ceiling secretary mnuchin has called for a clean debt ceiling raise since the republicans control the house and the senate its my expectation that theyre leadership will take up delivering that clean vote something that ive long supported as well. I dont know. I think youre out of touch. I mean, i had an interaction with the irs about 15 years ago, it was one of the worst experiences of my life you think thats the agency that most americans interact with the most thats like the last thing any american wants to do is interact with the irs, senator. I didnt say people want to interact with the irs. I meant thats like your heart stops when you see it in the mail right the fact let me be clear. Okay. Over the last seven years, there have been cuts year over year in terms of the number of personnel at the irs so that at some points three, four, five years ago, half of all people who called the irs helpline never got an answer oh, i see what youre thats frustrating people who want to pay their taxes, or who nobody wants to pay their taxes. Thats frustrating good citizens who are trying to get clarity on our complex tax codes. Yep while we are waiting for the comprehensive tax reform that would make our code easier to understand, and to follow, i think we should provide the staffing for the helpline for the hundreds of thousands of folks who call in and try and get help thats what i was saying theyre wonderful people. Oh, yeah. Theyre great public servants, and theyre very necessary. And i give them nothing but kudos and respect. Yes, senator joe, the senate was intended to slow things down. Right you succeeded. The rules thats right the rules of the senate are unique in the world and they give individual senators enormous ability to slow things down, and obstruct things from happening. And weve seen that carried out to near perfection in recent years. Exactly senator coons, thank you thank you and good luck good luck this morning i would say godspeed but i guess its god slow. Slow it down easy easy does it coming up when we return this morning, stocks to watch, including two dow components posting Quarterly Results. The streets take on coke and boeing still ahead plus at the top of the hour, squawk box newsmaker health and Human Services secretary tom price is going to be our very special guest in the midst of this health care debate. We will talk to him in just a moment lets get back to our guest host this morning, former Senate Majority leader George Mitchell. And one of the things i wanted to ask you about was actually mr. Tillerson. Rex tillerson. Do you think he i dont know if you saw yesterday this news that hes gone to texas they didnt say he was going on vacation they said that he needed a break from washington. Do you think hes coming back . I hope so i think hes been a stabilizing factor in the administration when the crisis broke and the dispute among the gulf arab countries, his reaction was absolutely the right one the United States has to get involved to try to resolve that in a manner because theyre all friends and allies of ours and we dont want them disputing with each other. And i think on in many other areas, hes exhibited what i think is a positive and calming influence in the administration. If you were Jeff Sessions, what would you do . I dont know attorney general sessions ive never met him and i dont agree with his politics. But i think this is an awkward and embarrassing, and humiliating moment for him and i just dont understand the motivation for it. But is there more honor, if you will, for him to resign . Or is there more honor for him to stay . Well, you left out the third option, which which is . To be fired and i think theres more honor for him to resign than be fired. And i think its inevitable that one of those two will occur, because the comments the president made have been so dramatic, and so harsh, in a public manner, that i think its made sessions position untenable. Right let me ask you just another its a political question but its a business question you saw pelosi and schumer came out and the democrats came out with a new plan earlier this week that effectively attacked, to some degree, big business, monopolies, that was sort of i dont want to it was populist it was sort of a populist approach but i didnt even think it was a straight populist approach it was really big business, pharma, monopolies, et cetera. Do you think that that is a winning message in this environment right now . Not by itself its a start its a response, an effort to respond to the criticism that has been no affirmative program. And what happens in politics, as in all of life, is that at one time you have a very positive program, and then times and circumstances change, some is implemented. Some is defeated you have to constantly renew it. And this i think is the beginning of a renewal of a program by itself its not a complete program but its an effort to respond to an immediate need can i ask you just internationally for a moment, the violence weve seen in temple mount over the past week, has israel properly handled that issue . Now that the Trump Administration is trying, i guess, to do something with syria, maybe change their policy when it comes to dealing with the rebels and so forth, that being, you know, right next to them in the region, what concerns do you have about some sort of conflagration, either, you know, arabisraeli or that the syria issue, you know, kind of continues to fester well, first on the issue of jerusalem, jerusalem is not simply an Israeli Palestinian issue. It is a muslim issue it is the one issue on which the palestinians do not have a free hand to negotiate any deal that they want. It requires approval saudi arabia, jordan, morocco, and the whole host of other muslim countries. So i think the most recent action, the removing the monitors, is the right step to take to calm things down secondly i commend the administration for making the effort with respect to that issue. Very difficult unlikely to produce immediate success, but the history of the region is when there is no ongoing effort, violence and frustration are the result and so a continuing effort does make sense thirdly, it is a mistake to regard the Israeli Palestinian issue in isolation from the other events in the region right, which is why i was mentioning syria had the lebanese Prime Minister here yesterday it is affected by outside events and it in turn effects those events i do think that i welcome to the president s statement yesterday making clear that whatever changes we are making with respect to syria, it is not going to result in assad continuing in office it would be just simply completely contrary to american interests and american principles to be part of any effort to maintain him in office over time. Okay. Senator mitchell thank you. Thank you, andrew great to see you. Thank you, as always. Thank you, joe. Leader. Leader bring us peace leader with a path to peace maybe resolve it on set here. Thats right. Well i could learn a lot listening to andrew and joe duke it out yeah . Yeah. We you could and so i think some of the political bodies could, too, because when it comes right down to time, theres love and respect. I think i saw a hug this morning. Theres a hug this morning. There was a hug the love part i understand. And you got kelly as a mediator right here. With the blindfold . The balance okay we got a lot coming up you dont want to miss whats coming up on squawk this morning. Scales of justice the state of the health care rvesecta talth and human seic sreryom price making news right here hes going to be our special guest. Well talk to him in just a moment ruined our hawaii fund . I thud go to the thothpital. There goes the airfair. I dont think Health Insurance will cover all. Of that. Buth my fathe without that cash from aflac we might have to choose between hawaii or your face. Hawaii what . Haha. Hawaii you might have less coverage than you think. Visit aflac. Com and keep your lifestyle healthy. Aflac yeah, and i can watch thee bgame with directv now. . Oh, sorry, most broadcast and sports channels arent included. And you can only stream on two devices at once. This is fun, were having fun. Yeah, we are. No, youre not jimmy. Dont let directv now limit your entertainment. Xfinity gives you more to stream to more screens. Earnings, earnings everywhere a parade of results hitting the tape including dow components cocacola and boeing reaction from the street is straight ahead obamacare overhaul the senate set for another showdown on Health Care Reform any senator who votes against repeal and replace is telling america that they are fine with the obamacare nightmare. And i predict theyll have a lot of problems. Our special guest this hour, hhs secretary tom price. Plus the british are hiring. A linkedin post by the royal family has the internet buzzing. Dust off your resume the final hour of squawk box begins right now 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 marketsite in times square. Where we are hosting a live in studio audience today which i think love it good morning. Yeah. Because we we were thinking laugh track or something. Why get a laugh track when we could have weve got to get them seats, though do we only have a couple of seats . Because a laugh track you know youll get laughs here we go. Yeah. We need one of those signs like you know how class right before and the sign. When we go to break, lets do it which will be in about 15 minutes. Stick around im joe kernen along with Andrew Ross Sorkin and kelly evans. Becky is off today the futures right now are indicated up again up 58 points new highs yesterday. S p indicated up 4 and the nasdaq indicated up look at the dow now were up 60 we were up 17 earlier. Funny the way it works some days yesterday you could watch it happen caterpillar opened up five points higher and you just do the deviser on the dow stocks. Who is it, coke maybe coke maybe today. Although let me take a quick look we can see where its indicated. Theres treasury yields 2. 319 coke. Coke is not adding very much its up about 10, 15 cents so far this morning okay it is a very busy morning for earnings want to get you caught up on whats been going on so far. Cocacola beating forecasts by two cents with quarterly profit of 59 Cents Per Share. Revenue came in above estimates. The Beverage Company raised its full year forecast in part because of growth in newer prurkts. Were also going to be talking to an analyst about all this in just a couple minutes. Take a look at ford. Ford earnings at 56 Cents Per Share. Thats 13 cents above consensus. The automakers revenue was in line with estimates. Another company, boeing the jetmaker earned 2. 55 a share for its latest quarter 25 cents above estimates revenue, though, was slightly below consensus. Joining us now on the squawk newsline is howard rubell. A gentleman we frequently go to for aerospace. Bear with me, howard, because boeing is in large part responsible for whats happening in the dow closed at 2. 12 did we show it why would we do that when its up 6. Lets show that really fool little phone thing there which helps a lot with understanding the story. There it is. So thats the key thing. Thats the price component we dont need howard. Howard if revenues were light what was it that was so great to cause the stock to jump 3 operating performance and cash flow outlook. And, the companys putting some money in the pension plan so that they can they can help future cash flows. Its hard, howard, for the average person to interpret boeings results because its such a long theres such a long time between orders, and has deliveries, and a lot of times were told that oh, they delivered a few a couple fewer planes than they were supposed to and that can matter. How do we gauge whether demand is strong for or stronger or less strong for boeing parts what do we look at whats the key metric . Traffic growth. Pretty simple. Global air traffic, and were looking for that to be up about 7. 4 this year which is a couple points better than trend the other thing thats important, joe, is boeing continues to drive down the cost of building the 787. It now has improved that cost over 16 million in the last twelve months. All right so there is two sides to every equation. Sales and what it costs you to produce, more than two, but what it costs you to produce something. If we see operating efficiencies and we see a well managed company in terms of building these planes, that can boost profits, as well that can be more important than the number that they actually sell oh, no. Eventually you have to sell airplanes. Theres not a question about it. I mean, they they had a terrific launch at the Paris Air Show of the new version of the 737. Its called the max10 a little bit bigger. A little more efficient. And it had great reception all right so the 27 billion of net new orders during the quarter, is that a good number oh, its terrific i mean, if you think about a 60 to 65 billion dollar a year commercial business, youve got a booktobill better than one, and it makes us feel like 18 and 19 revenues are going to be higher than 17 so investors have visibility how about the dollar . Well you know, it has changed, and it does make boeing a little more competitive. Because but they do it differently than most multinationals, dont they it doesnt help as much. Well, you know, a weaker dollar means that costs are cheaper relative costs to their competitor its not purely a that they sell abroad they sell abroad, i mean, they take care of that, because theres no currency fluctuations, right . Correct so that you cant use so how do they increase cash flow guidance . What is it that helps there . That has to do with Capital Expenditures actually, its productivity i mean the learning curve on the 787 and the cost reductions that theyve been able to implement is pretty remarkable weve seen the line, and its speed, its quality, its all the things that you want, you know, with a manufacturing company. So if there is tax reform, this is one of our i mean, as far as american manufacturers, this is one of the greatest that we have, right so would there be a benefit to boeing if the if the senate and house get their act together and do something it all depends on what the tax reform is. If its a lower rate, the answer is absolutely. Howard, quickly, you mention that theyre funding theyre putting more money towards their pensions is that cash or are they borrowing to do that its cash. Theyre putting stock in first and then theyre going in to the market, and buying that stock back over time so that theres no dilution. Okay. Howard rubel, thanks were going to move on to another dow component. This is one of the reasons the dow is up so much all of a sudden thank you check out shares of cocacola, which are also edging higher this morning, after the bench giant reported Second Quarter results. They had earnings of 59 cents a share. Thats a two cent beat revenues also topping estimates about a half percent gain right now. Joining us on the squawk news line is nic modi, analyst at rbc capital markets. Looks like the weak dollar is helping there . Yeah, lets remember 900 basis points of Earnings Growth has come out of cocacolas earnings every year for the past three to four years. So this is obviously a huge relief the more important thing from my perspective is theyre really starting to see improvements in their Share Performance and volumes and getting pricing, as well so i think, you know, theyre on track with their transformation and i think james quincy has had a very positive impact and its very early innings sarah spoke with him earlier. She mentioned they had organ growth of 3 but when it comes to unit case volumes, there was weakness in emerging markets, and some strength in u. S. And europe whats going on in emerging markets for coke isnt that their most significant future growth base yeah, for most Consumer Staples companies, it is latin america has been a huge problem, obviously, brazil, argentina, venezuela, where coke has significant exposure keep in mind coke had flat volume growth. Kimberlyclark had down volume growth, same with colgate, pepsi had global volumes down 1 so within this kind of backdrop were in today, i think cokes results are actually quite promising. So this would also seem to, you know, when you look at pepsi and the performance theyve had in snacks and the way they defended that strategy, does this kind of quarter, you know, say that cokes on the right track . They mention they have nice results in juice and dairy as well yeah, and the most important thing to understand is as coke refranchises, as they kind of hide out all of their bottling operations to independent operators, were seeing an improvement in volume just from better execution but the other important thing is coke was historically very focused on csds or carbonated soft drinks. Now theyre taking a more total beverage approach. That in addition to better execution is starting to weigh on pepsis results they also said territorial tax system will be a positive. For now, thank you very much thanks. All right were going to break cameron is everybody ready now i mean, do you think will they you guys cooperate . Cheering and all sorts of stuff . Coming up on youll know when to clap coming up on squawk box, our newsmaker of the morning were going to talk to hhs secretary tom price right after the break. Not yet. Plus, from health care to a tax code overhaul were going to talk to the man leading the way for reform house weighs and means chair kevin brady at 8 30 a. M. Eastern time not yet. Not yet. Not yet. And then later the royal family is hiring and you wont believe how easy it is to apply. Well have the details all right get ready. Stay tuned youre watching squawk box right here on cnbc thank you. Thank you. Thank you. Beautiful hey, ive got the trend analysis. Hey. Hi. Hi. You guys going to the Company Picnic this weekend . Picnics are delightful. Oh, wish we could. But were stuck here catching up on claims. But we just compared historical claims to coverages. But we have those new audits. My natural language api can help us score those by noon. Great. See you guys there. We would not miss it. Watson, you gotta learn how to take a hint. I love to learn. Welcome back to squawk box. Making headlines this morning, viacom has reportedly told scripps its willing to make an allstash offer to buy the tv Network Operator Discovery Communications is also said to be bidding but is not expected to make an allcash offer. Yesterday david faber reported the Scripps Family wants 50 of the deal in cash viacom shares edging higher, scripps up 1 . A deal could come soon meg whitman is reportedly on the short list for ubers open ceo job. This according to re code. The Hp Enterprise ceo hasnt been formally approached yet and shes unlikely to take the gig whitman was an early investor in uber and is said to be quietly consulting for the ride share company. She is fully the economied to hp and plans to stay with the company until her work is done chipotle Beat Estimates by 14 cents with a quarterly profit of 2. 32. Separately the company says its gotten a followup subpoena requesting information on the recent Health Incident at a virginia restaurant. Chipotle says it cannot determine whether that will result in a penalty. And another big Earnings Report to watch later today facebook the social Media Company out with Quarterly Results after the bell joining us right now with a preview is cfras deputy head of equity research. Good morning good morning. What are you expecting . And is there anything we should have taken away at all from what took place with google or rather alphabet earlier this week not necessarily when you think about the growth that these companies are generating, still very impressive i think the street consensus is for around 43 Revenue Growth and thats really the most important number for facebook and in addition to that. The additional metrics like earnings and users and engagement were all going to be digging in to instagram. Because everybodys trying to figure out, and to snap and sort of the success of instagram versus snap. What are you looking for Instagram Stories has obviously been the big head line as it pertains to snap and they announced relatively recently 250 million daily active users thats already higher than snap and that product was announced and i think launched just about a year ago the fact that theres so much momentum there and facebook and a variety of context is adding these features not only to instagram but to facebook and messenger, its really provided a serious problem id say for snap and snap needs to address that obviously Google Alphabet has this eu or larger sort of regulatory overhang. What about facebook . I think that is the single Biggest Issue for a lot of these mega cap Technology Companies. Including facebook and facebook has gotten into the cross hairs as it pertains to personal data. Right whats used whats at risk . What do you put on the table here to me the biggest single risk in terms of the quarter is probably just people getting overly enthusiastic. If you look at the number of bye recommendations if you look at the number of people that rt owning this stock already. There arent a lot of incremental positives from that perspective. So there could be disappointment artificial intelligence, is elon musk right or is Mark Zuckerberg right who has a more robust or limited knowledge . They were teasing far be it for me to suggest that i know more about a. I. Than either of those two people but i think at this point a. I. Has to be perceived as an opportunity for many okay. You could know more than them dont be shy i dont think so, joe you dont know more about a. I. Because he started facebook and dropped out of harvard . You couldnt possibly know more about dont sell yourself short we are going to talk a little politics right now health care, which could eventually enter the conversation about taxes in the future right now the showdown is on lawmakers will begin to debate the items going into the gop bill joining us heat and Human Services secretary tom price good morning, mr. Secretary. Good morning. Wonderful to be with you this morning. Wonderful to have you on the broadcast. Help us try to understand what you think is about to happen next given what took place last night and the new conversation about perhaps passing a skinny version of this bill yesterday what the senate did was to pass a procedural motion to make certain that they could get to debate and then vote on various aspects of Health Care Reform understanding that the situation that were in right now is untenable. And so what will come up is a series of amendments a series of substitutions for the house bill and then theyll work through that over the next day or two or three. And the end product of that will be what passes the senate and that will go into conversation likely with the house of representatives to come up with a final piece of legislation to try to move us forward in the direction of patient centered health care where patients and families and doctors are making decisions and not your federal government two questions the skinny bill the people are talking about has not been scored by the cbo yet. But similar bills have been scored to such a agree that the head line is there could be 15 million fewer people with Health Insurance and perhaps 20 premium increases. Do you think thats accurate no. Again, the question is compared to what. And if youre comparing it to or if the cbo, the Congressional Budget Office is comparing it to where we are right now, we believe their numbers are significantly now flawed what the Congressional Budget Office says even though there are only 10 Million People on the exchange right now next year there will be miraculously 18 million and thats what think score their number off of. Their coverage estimates we believe are significantly in error. That when they work on the numbers on how much something costs, they do a pretty dog gone good job but the coverage estimates are widely variable. But the fact of the matter remains that where we are right now isnt good we got 28 Million People in this nation that dont have Health Insurance coverage, 28 million we got 20 million folks whove said to the federal government, phooey, im not interested in your program, 6. 5 million of them paid penalties of over 3 billion for the privilege of not even purchasing coverage so, this is a system thats not working for people its not working for patients and thats why we need to improve it mr. Secretary, explain this where do you see the fault lines within the Republican Party . Because even to the degree that the senate could pass a skinny version of this you talk to some of the folks of the Freedom Caucus of the house and they want nothing to do with this what we need to do in the senate is figure out the lowest common denominator what gets us to 50 votes so we can move forward on a Health Care Reform legislation because thats what needs to happen. Again the status quo isnt working for folks out there in the real world and so the senate needs to act and were proud of the fact that they moved forward yesterday to get to this debate this is legislation is one step athe a time. So well see what the next step is and move on from there. Mr. Secretary, why do you think the polls have swung such that clearly the american public, when they voted for the president , voted in part to repeal and replace obamacare yet here we are right now when you look at the polls, at least that reflect the enthusiasm if you will or not, for obamacare and it has shifted how do you think that happened well, youve got the opponents of any reform, the folks who were satisfied with the status quo, where weve got 40 of the counties in this nation that will only have one insurance choice on the exchange next year, those proponents have opponents of any reform have spent tens of millions of dollars trashing whats going on and they dont say oh, i support 40 of the counties not having an insurance support i support an increase in premiums of over 2500 dollars. I support the fact that deductibles are outrageous and so folks have an insurance card but they dont have care thats not what they say they its all boiled down to one simple question, do you support obamacare or not if you ask people do you want to be able to choose your doctor. Yes. Everybody wants to be able to choose their doctor. Do you want your premiums to come down . Yes. Everybody wants their premiums to come down the consequence of where we are right now is that you cant choose your doctor and premiums are going up so depends how you ask the question, and in the middle of a debate you all know this well in the middle of a debate, its just hard to gauge where folks sentiment is mr. Secretary, in the old days i dont think democrats really came out and said it that they want single payer but theyre comfortable saying that now, we have senator mitchell on, and almost everyone on the set was just sort of assuming that we need to get there. Thats what compassionate countries do and thats just the way that it works and anything short of that youre just delaying the inevitab inevitable how do people, both of which i think people on both sides of this issue that want the best for the people in this country, how do you explain not wanting single payer without being hard hearted, and without not wanting everyone to have health care whats your rationale to not just succumb to what the inevitability of what democrats say were going to do . Yeah, well two quick points one is that having single payer and wanting everybody to have health care are two completely Different Things we want everybody to have health care we simply want the question about who decides, which is the question that single payer really raises, who decides what kind of health care you get . Who decides whether you can select your doctor who decides whether you are able to get a kind of Coverage Plan that you want, not that the Government Forces you to buy the folks who on the left tend to want to answer that question, who decides, the government. They want the government to decide who you can see, where youre treated, what youre treated for, whether or not youre treated at all, as weve seen in certain places we believe that its important for patients and families and doctors to decide. We want everybody to have health care, want to make certain its quality care, want to make certain that its Affordable Care and make certain at the end of the day that its patients and families and doctors answering that question who decides, not washington, d. C the pr battle is very difficult when it is so easy for the other side to say that all these people are not going to have insurance not that theyre not that theyre escaping the mandate, because they dont want it, but that youre pulling the rug out from underneath people who need it, that, you know, that are going to be severely affected. That their lives are going to be severely affected because they do not have insurance. And thats what youre up against. Its almost been i dont know how you overcome it. Theres no doubt about it you overcome it by truth by honesty, by sincerity. What the president has said is that he wants to make certain that every single american has access to the kind of coverage that they want, not that the Government Forces them to buy. Were not interested in pulling the rug out from under anybody were not interested in anybody falling through the cracks we want to improve a system of health care so that, again, its patients and families and doctors making these decisions, not the federal government which is where most individuals dont want those decisions made. Real quickly, mr. Secretary speaking of pulling the rug out would you support making the cost sharing reduction payments to ensurers as this process goes along to the extent that there is no answer kind of coming right now from washington ons issue of health care well its a great question. But its a house v. Price. Its a matter in court and so im not able to opine on that. What i will tell you is that we want to make certain that individuals have access to the kind of coverage that they want, the only way that happens is that if you have a market for insurance coverage, that individuals can select different kinds of plans that suit them. Again not that the Government Forces them to by. Mr. Secretary before we let you go, the president made some comments he sounded like he was joking earlier this week down in west virginia, but i wanted to ask you about him. He says, are you going to get the votes . He better get them otherwise im going to say tom, youre fired do you feel like your jobs on the line here . One of the things that many folks dont know about this president is that he has a great sense of humor and that was an incredible event there were 40,000 or 45,000 scouts out in front of us. He was in his element. He was having a great time and i think that it was a joking comment. All right he said something bad about president obama, though. I mean, that was you saw the lefts reaction to that. Theyre still unhappy. Still unhappy about that well, the president is a great communicator he understands how to reach the American People in ways that nobody ever dreamed about. So this president as it relates to health care is resolved to make certain that we get action. That we relieve the pressure on the American People of the incredible burden of the aca of obamacare. Mr. Secretary, we always appreciate you coming on the broadcast. Especially in the midst of all of this and we look forward to talking to you again soon. Thanks so much. Thank you and coming up, President Trump speaking out on a tax code overhaul thats next. Or maybe its first. Well see. Were going to talk to the gops top tax writer congresan kinsmev brady who will join us right after the break. Good morning and welcome back to squawk box right here on cnbc live at the nasdaq marketsite in times square among the stories front and center at this hour, were now about 90 minutes away from the governments june report on new home sales the census forecast calling for a 1. 5 increase. That number coming out at 10 00 a. M. Else wr, Mortgage Applications edged higher by 0. 4 last week according to the Mortgage Bankers association. Entirely driven by refinancing activity with new purchase applications falling during the week the average 30year Mortgage Rate fell to 4. 17 fed policymakers set to release their latest interest decision and policy statement no Interest Rate hike expected this time around statement will be issued at 2 00 p. M. Eastern time. Amazon is hiring the ecommerce giant is looking to fill 50,000 new open positions in the u. S the good oldfashioned way, by hosting a huge job fair. That event will be held in early august in a dozen locations around the country and amazon will be extending offers on the spot its part of the companys pledge to hire 130,000 full and parttime workers by mid 2018. And if that doesnt do it for you, the British Royal family, well theyre hiring, too they are using linkedin to find a worthy candidate prince harry, Prince William and the duchess of cambridge, kate middleton, are seeking a new Senior Communications officer for their quote unquote Royal Foundation the job was posted about two weeks ago but as of yesterday nearly 1,000 people have applied via linkedin according to the application the gig will focus on creating and implementing communication plan for the royal familys philanthropic efforts. As the Senate Continues on the health care front, the house is hitting the ground running on tax reform joining us now, ways and means chairman congressman kevin brady. Whenever youre on, you are really focused on what youre trying to accomplish are you privy to anything that happened yesterday, chairman brady . Did you notice there was some stuff happen over in the senate. Youre aware of what was going on, right . We did. Im not completely in a tax bubble were just laser focused i think its encouraging they started the consideration. I think its important the Senate Republicans deliver some solution out of that chamber we can figure out in conference if it was really start begin restoring more state control and more of a free market, get more choices and lower premiums i think it was encouraging day all in all some members, parts of the Democratic Party saying this health care thing is a nogo, why dont we talk about something we might agree on, and that would be tax reform can we please move on to that . I hear them saying that. Do you expect any cooperation. When when it actually does get time to do this. Do you expect some help from the other side of the aisle . I dont know. I dont know i would love to see it because frankly, democrats have in the house the area i know the best, look weve got democrats with some very good ideas on tax reform. Were having those discussions with them. Just learning what their priorities are and i think it is grow this economy, make sure theres a middleclass tax cut and dont blow a whole in the budget look, i think theres some Common Ground in all that. And so i dont know how it ends up, joe, over time whether they engage all the way through this but look, i think it helps to have these discussions the latest, i guess, version is that you do Corporate Taxes lower, and im still hearing people, i guess as the goal 15 , you make it passthroughs as well you give deductions to the middle class, but basically, you leave taxes on the wealthy where they are is that whats the current framework that youre working with not necessarily i think obviously focus on middle class tax cuts, dramatically lower rates for businesses, whether they are corporations or structured otherwise. Being more competitive worldwide. Weve got to simplify the code on the family side, as well. And so look, remember were always going for growth. In every aspect of this. And so, look, lowering tax rates at every level helps grow the economy in a big way in fact, for middle class, youve got lower rates for them, you protect more of the first dollars they earn, and then, on top of that, the earnings, wages, and higher growth that comes from a stronger economy, you know, Tax Foundation estimates for a middleclass family thats an aftertax increase of 5,000 for a family of four so wages and growth really factor into middleclass families so if its a skinny reform, or skinny repeal, excuse me, skinny repeal on obamacare, doesnt that leave you in the same place as if nothing was done in terms of freeing up some tax dollars to help get more tax reform thats the same thing, isnt it . It is makes it harder to get to 15. Which means youre going to have to have a bigger component of dynamic scoring, or arguing that the growth is going to offset if its not paid for. So youre smart to have found the link between health care and tax reform it really is on that tax side. Theres a trillion dollars there we want on the economy i think the biggest impact isnt necessarily on the business rates. Its how low we can get rates on savings, and investment down that net interest investment, thats just punishing investment not just for wealthy but for Small Business people, as well that really needs to get out of this economy in a big way if were going to grow it the challenge is, thats about 175 billion hit that makes tax reform and lowering those rates more challenging. Not that its not doable its just more challenging chairman, big question. Should the corporate rate in the passthrough rate be the same . Dont know yet. But i think in the house side we lowered those rates equally, about 43 whether youre a Small Business or youre exxonmobil. I know when the discussions with the white house and the senate, as well, we really focused on significant rates for both so i think, you know, getting them close, but making sure these are significant cuts how about retro active to 2017 well, i think the later in the year we go, i think that becomes less likely. You want to have all the growth factors hit right away so i think the changes we do on full, and immediate expenses or some derivative of that needs to occur immediately, as well so i think thats going to be part of the discussion when you look at the makeup of the republicans in the house and the senate, prettyamazing, seeing, you know, how big the gap is between the moderates, and the real conservatives is the dynamic aspect of what youre trying to do, is that going to be are we going to run into the same thing . Is there going to be a problem with conservatives if its too dynamic, and if its the opposite for the moderates have you talked to these people . Yes, we have. And i think, look, weve not worked only five well now six years to be ready for tax reform weve worked nearly that long with the joint committee on taxation to make sure theyve got the latest models on scoring the real Economic Impact of this and im as i look at what theyre producing, theyre not only showing us more dynamic growth, theyre showing us how this passes through to help the average worker in a big way. Look i think dynamic scoring is accepted by all wings of the Republican Party there is some disagreement about how much of tax cutsdoes that recover. But thats a good debate to have all right id ask you about border adjustment but i dont know thats not even on the table. Really, really, we couldnt go through one interview without that brady adjustment tax. No. No its border you guys. Dont even start that. What about carried interest we havent talked about that either i know. So discussions ongoing on that. Look were really focused on the bigger parts of this, and as you know, look tax reform is like a rubiks cube, every turn you make here has big impacts around it the discussions were having with the president , his team and the senate, theyre on all the issues you want us to be having discussions on i heard someone say its a rubiks cube saying it was impossible to do you know you can do a rubiks cube yes, you can. It gets done. And tax reform, absolutely you can. Okay. All right. There is a possibility i cant. But someone i cannot. But someone can you almost got out of this they were wrapping me in my ear before i did the brady adjustment tax border adjustment tax. Please wrap it up all right, chairman, thank you. Good to see you all right thanks. Okay still ahead, the fed kicking off the final day of its twoday policy meeting were going to check in with Steve Liesman in d. C. This morning. Plus, a cohn yellen showdown what President Trump said about his top economic aides future at the fed stay tuned youre watching squawk box right here on cnbc. Because, when you really, really want to be there, but you cant. At cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready, because were helping leading companies see it and see it throughwith digital. 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. Welcome back to squawk box. President trump giving some mixed signals on who he might pick to be the next fed chair. In an interview with the wall street journal, the president said he might renominate janet yellen to a second term but is also considering his economic adviser gary cohn. Trump told the fed told the journal fed chair yellen has done a good job. He also said he likes her because shes a quote low Interest Rate person the president said hell likely announce his pick at the end of the year well get an Interest Rate decision from the fed this afternoon, in fact and our Steve Liesman is in washington for that. He joins us now. Steve . Good morning, kelly you know, theres a slight chance of a surprise this afternoon if the fed were to announce reducing its Balance Sheet now rather than as expected in september. People bring that up as a possible surprise but most fed watchers think the fed has no reason to take the markets by surprise with quantitative tightening or q. T. , reducing the Balance Sheet. Fed chair yellen has said it would begin relatively soon. Thats because of concern over inflation, which continues to run below the feds 2 objective. Would be seen as hawkish since it would open the way for two more rate hikes this year and the fed doesnt seem to be especially hawkish right now the fed continues to believe it will move up, the rate will move up, but some officials have said they want more evidence before hiking rates again when it comes to stocks, the fed continues to keep a close eye on congress more progress towards tax reform, and stimulus could mean more rate hikes from the fed but right now that doesnt seem to be the oddson bet. The survey shows concern markets are overestimating the possibilities of the trump agenda and increasingly pushing back their expectations for reform so, guys, were right on this Health Care Story all over it. It is the key to tax reform. And tax reform is ultimately a key to how aggressive the fed is going to be in the coming year or so and both seem pretty uncertain right now. Steve, let me ask you about something. Reading the ubs note from paul donovan this morning he said the president cannot fire the chair once the chair is in office. So precommitting to a quantitative policy tightening path would give the fed some insurance against an inappropriate choice of chair. Thats interesting. But there really is no precommitment. The fed can come back and redo it usually the fed has shied away from that precommitment idea i remember maybe even bernanke saying you cant tell a future fed what its going to do. You cant tie a future feds hands. But i will say this, you know, he may say that yellen is still in the running i personally find it hard to think that President Trump would pass up on the opportunity to put his own person in there. Because is that true, steve, that he cant fire that person during their term . Right that is correct. I believe they can be impeached but im not really sure about that ive never really considered that but they come in, and its a is there a risk, then, steve, if this is the president s one opportunity to make sure he gets somebody dovish in place that thats going to be the outcome and all of a sudden were back to the bad old days of inflation and so forth i think thats i think thats right but i dont think that President Trump is considering people who are right now sort of what i call off the reservation there were some people whose names were mentioned that were kind of like Gold Standard folks and there was some concern that these folks would not support the current overall way that Monetary Policy is created but generally, if you look at what our survey, most people think that somebody that President Trump will nominate somebody whos sort of in line with current Monetary Policy and you look at folks who are out there and theres a spectrum you know, hubbard, taylor, warsh, those three folks and cohn are all seen maybe a little bit more dovish, a little bit more hawkish but its hard to think right now how lets say you appointed somebody now how would they change policy maybe joe has some ideas on how he would do it differently would you hike rates every meeting . Is that what you want right now . Nobody wants that. Nobody thinks thats appropriate. All right i mean, like im looking at Something Else, steve. I was marvelling at boeing to be honest with you. And if you listen ill show you why, because weve got dom chu to talk about the futures. The dow is way up, dom, because boeing, you see the dawe is up 75, boeing is up like 8 7 or 8 and its going to trade at an alltime high of almost 220 and why is that interesting . Because in 2016, it was at 1 so wow at one point. So its doubled in less than in less than two years and its market cap is now so high that its almost a third of facebooks market cap. Now explain that to me, dom chu. Im not sure why would i rather own shares of boeing than some because im old. I guess i dont understand this new anyway. Its going to be 130 billion. Facebook is almost 400 billion for people looking at each others vacation pictures. Im going to put it in golf terms because i think its something that we can both identify with. These are all stocks that play roms, i guess. You know one of them is a pitching wedge, one of them is a pewter, one of them is a driver. Theres a reason why some people would want to buy boeing and facebook and some of these other stocks instead but if you look at the picture overall i mean that boeing move is going to be about 48 to 50 points for the dow right off the bat if it holds into the opening bell so thats a pretty big deal. But boeings not the only stock that a lot of people are looking at right now some people are trying to find at least some values in the overall scheme of the market, with stocks at record highs. So we tried to stake a stab at maybe doing something some traders are looking at which is try to find value and momentum in the market at the same time we ran a screen on the s p 500 to look for stocks that maybe could be due for a bounce. S p 500 stocks trading within 1 of their 50day average price and have pulled back at least 5 from their recent highs. And, are still positive yeartodate so they still have a near medium to longterm uptrend in place. 27 stocks passed that test among them are some of the highlights here. Disney shares are one of them. If you take a look at disney stock, those shares have pulled back from their recent highs but they pass all of those tests. So you wonder if this media darling in the past could be due for at least a little bit of a bounce also looking at shares of Hotel Operator marriott. Those shares have also seen a nice uptrend as of late, and have pulled back by more than 5 in recent times. Sitting right around their 50day average price maybe levels of support, and then one of the more dramatic ones is health care i. T. Provider called serner they recently lost tragically their cofounder and ceo. So, this company here has also pulled back from its recent highs, as well but overall, joe, boeings certainly going to be the talk of the town today because of that move in the dow but there are a lot of other traders out there looking for possible opportunities, i wish i could tell you all these stocks are going to go higher but these are some of the screening elements traders and Portfolio Managers are using to try to see whether or not they can find at least some pops for the near and shortterm in this market, guys. These numbers arent comparable but First Quarter earnings at boeing 230, First Quarter earnings at facebook, 1. 13 so, i get it theres 2 billion users. I got it i understand i know facebook is worth three times as much fine fine thats just it is what it is, dom. It is what it is. And i would say that there is a reason why some of these stocks are doing a lot more work than others but you never know maybe boeing does become that you came on to talk about value. I mean that is, at least illustrative of what you know what boeing has, joe, that facebook really doesnt . A real product . A dividend yield. A dividend yield, too it does. Right. I could do without facebook. I dont think i can live without boeing i dont think i could, either okay. Without boeing. I dont think i could either. In fact i live without facebook. She lives without twitter. And facebook. She is antisocial media. I like it. She is antisocial media and antisocial all right. Thank you. You gottic. When we return jim cramer is going to join us live from the new york stock exchange. Be sure to catch mcdonalds ceo on squawk on the street today at 9 00 eastern before we head to break, emmet smith is in the house today. He was over there. I ran right through him. Hes not like in the shape, i ran right over him when i went over there anyway thats not true. He brought friends along with him as part of a Charity Event its a program specifically a multicurriculum for underserved students accessing and funding opportunities such as summer camp mentorship and unique experiences like watching ua x d we want to thank them for coming out were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Its just such a longterm prospect when you get an order you make one of those things and i dont know how you know whether its going to beat or not why is it up today i felt theres a lot of people that felt there was a problem with too many wide bodies when you listen to say a delta theyre always saying we dont need a lot of plaens, we need planes the Airline Companies are good at trying to get the most out of boeing but boeing has got great demand and a ten yearbook and they had an order book that could last a lifetime because people cant get enough football its the best manufacturer of planes in the world. Every Single Airline Company Wants them and what boeing says to them is get in line its a great company. You got your survival covered and housing covered and with leisure time you want to travel and you dont want to spend 16 hours doing it and youre going to fly people. I think when you hear a plane its tightly packed should be thinking boeing and not the air lines. The airlines might have problems with fares but the reason your plane is packed because they need more planes but boeing is the key and boeing is taking it to chinese plane companies were going to get involved. No i would never want to be one of those guys. Boeing delivered and has fabulous relationships with the supply yes, sir. He shouldnt be able to fly theyre huge they really should every time it happens i still cant believe it. The 787 remember how many years we had to deal with the 787 being bad now you have many many years where its good. Thats what is going to happen. All right new high on boeing well see you in a couple of minutes. Tonight on mad ney modont miss jims exclusive interview with mike corbat squawk box is right back 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. Tap one little bumper and up go your rates. What good is having insurance if you get punished for using it . For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Liberty mutual insurance. 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. After consultation with my generals and military experts please be advised that the United States government will not accept or allow now this is like a game show. Its like family feud. Its a reality show. It is. Survey says north korea to develop an icbm. Do you think thats im going with that. Im going will not allow any more immigrants of any kind. It could be syria. Oh do we know what sit . We dont have it yet. Hold on. What else would he say after consultation with my generals. Time is up. Make sure you join us tomorrow well have the answer on squawk on the street. A big day of earnings with coke. Europe is green. Oil is coming off the biggest one day rally of the year. Begins one beat earnings givin