Board. Cac is the biggest gainer of the three major averages up by 1. 1 the dax, up by 0. 9 . The dollar, take a look. Youll see that the dollar is up against the euro, trading at 1. 17 up against the yen at 110. You can check out crude oil prices yesterday a down day for oil you saw oil stocks come under significant pressure this morning wti up by 33 cents to 47. 88 a couple of big stories were watching in the business world, well get to the politics of it all in a second, wells fargo announcing big changes to its board after a tumultuous year for the company. The chairman, Stephen Sanger will be stepping down at the end of this year former fed governor Elizabeth Duke will replace him. Wells fargos two longest serving Board Members are also stepping down. Last night wilfred frost asked incoming chair Elizabeth Duke whether she was confident the banks recent turmoil was over she said its hard to say but what were finding is the better we get at Digging Deeper and looking at various processes the better we get at risk management, the more issues we might identify overtime the new information revealed will lessen, but its not the time to say weve found everything and its all behind us a lot of people reading into that, that that means theres more to come re code reporting early uber investor calling on benchmark capital to leave ubers board. Pishevar is accused of working with another major investor to remove kalanick and huffington from the board pishevar is suing kalanick and then in earnings news, shares of Urban Outfitters moving higher. The retailer posting earnings of 44 cents per share, compared to 33 cents samestore sales fell 4. 9 that was better than the 6. 4 drop that wall street expected that stock up close to 18 off the lows. On the agenda july Housing Starts and building permits, both out at 8 30 a. M. Eastern. At 2 00, well get the minutes from the fed meeting on the earnings front. Target is expected to report at about 6 30 a. M i have no idea what to expect there with target. Theyre in malls some standalones, but some malls. Do you think theyre okay . Are they multi channel thank youing up ithumbs up target according to the sorkin family feel, its Getting Better thats our own good place to go. Their estimate is 1. 19 versus 1. 23 a year ago. And i should tell you theyre moving to the upper west side. Just like you youre already there all right. After the close well hear from cisco with a c. Sysco is the other one. And l brands. President trump doubling down yesterday on his initial response to charlottesville during an explosive back and forth with reporters late yesterday. Eamon javers is with us on set in person. He was there yesterday good morning. The president dramatically reversal here yesterday from where he was the day before. You remember that the weekend qai came, the president was criticized for saying there were blame on many sides for that violent rally over the weekend then he specifically called out the kkk and White Supremacists yesterday at a press con freps at trump tower the president went back to both sides rhetoric that he was criticized for over the weekend. Heres what he said yesterday. I think theres blame on both sides. I have no doubt about it you dont have any doubt about it either. Only and if you reported it accurately, you would say it you can see the frustration, emotion in the president s face there. This was an angry President Trump who felt like hes been criticized hes been fed up had enough of that criticism, lashing out at some of the ceos who left his Manufacturing Council over the way he handled events in charlottesville. He said they were grandstanders. Yesterday he offered another explanation for why some of them left his council some of the folks will leave, theyre leaving out of embarrassment because they make their products outside ive been lecturing them about you have to brick it back to this country you cant do it necessarily in ireland, all of these other places you have to bring this work back to this country. Thats what i want the president s remarks including remarks he made about robert e. Lee were widely criticized by republicans on all sides of the aisle in the house the Senate Paul Ryan saying we must be clear, White Supremacy is repulsive. This bigotry is counter to all this country stands for. There can be no moral ambiguity. Well see where the rest of those ceos who were on the Manufacturing Council will go. A number said they will stay on the council. A number said they will withdraw the larger bulk said they had no comment whatsoever the number of emails i received from ceos, in part because i think i had written the column the day before, most off the record, people writing this is beyond the pale, the whole lot of it. Any of them from people staying on the council unfortunately yes at least at the moment they have not pulled their names off of some of the councils i should say theres a variety of councils now. I dont want to mix them up. Theres the Manufacturing Council. Innovation. Im people who emailed, they were on some other councils. Nonetheless, you have david duke supporting what the president says whats going on inside the whits house . You see reports that some of the staffers were perplexed, stunned. This press conference was supposed to be about manufacturing, infrastructure in the United States. They had a topic that they wanted to discuss. The president was prepared with hearts to discuss it but he wanted this he wanted people to ask questions. He said are there any questions, if anybody has any questions, please go ahead. He knew he would get questions about the ceos resigning you could see the anger. This is something he feels deeply about he had a statement in his breast pocket, in large letters the original statement by the way, we had trumka, we had andrew liveros hes staying. Trumka is out is there any sense that the people inside the white house are going to say anything . I was watching gary cohn. Gary cohn and Steve Mnuchin standing right next to him all the screen shots of general kelly. They made a big deal out of that i dont know what was in his mind they said his body language was obviously anging i was watching gary cohn closely. Watching his body language he is the one most taxed with tax reform he was looking down, looking to the side i couldnt get a good read on where he stood to this elaine chao, shes married to Mitch Mcconnell who the president has been attacking she said she stands by both her men. Im not sure if well see statements of protests, riz z resignations, but the damage he did to his own political standing, when he talked about there being fine people on both sides of the debate. There were people marching with swastikas at that rally, people chanting about the jews at that rally. Its a tremendously difficult thing for the president of the United States to say there were very fine people marching alongside the White Supremacists the daily news lays this out. Sim sympathy for the devils. The New York Post says they were not all nazis, calling it out. Is this. Reporter the Republican Party wants to be . Do they want to litigate robert e. Lee versus George Washington . Do the ceos and mainstream Business Community want to be here all these businesses have to deal with a broad swath. After north korean and the news that could have been positive, why did trum want to relitigate any of this yesterday . How in his mind does he feel what he did yesterday serves his own cause in any way, i dont know very defensive. Weve seen it again and again. But yesterday was a day when you could have focused on infrastructure say i finished what i was saying yesterday. Im on the record saying theres no ambiguity here. This is ambiguity bringing this back up thats what im saying. He should have said theres no defense of White Supremacy then gone on to they blinked in north korea because i was showing a sign not a single question on north korea. Not a single question on north korea. He wants to talk about robert e lee fshg t lee, the confederate general, and mention him in the same sentence as George Washington. Where do you think he ultimately will land on steve bannon sounds like he will land on steve bannon yesterday he called him mr. Bannon three times he very much distanced himself from steve bannon. Saying he came in late he already cleared the republican field he said well see what happens with mr. Bannon. Bannons departure would be something that people who are critical of the president s links to the all the rigtright is alt right based on White Nationalism . Ill have to look that up to see if there was fine individual there inherent in all the altright stuff, is na is nationalism. Steve bannon has been the chief strategist, so did we really have a good feel for what the altright stands for i dont know. I dont know what is in Steve Bannons heart the president came to bannons defense in that defense. I thought it was populism, americanism, nationalism. Itits a spectrum with 0 shades of gray along the way when you have people carrying torches and giving nazi salutes and youre doing anything if youre anywhere near that. Right youre in very, very tough moral territory. We were talking about this earlier. Im not sure i would fire him. Youre very machiavellian just hear me out. Keep your enemies close yes there would be headlines in the shortterm, but i think for him litical icalpolitically in m it would be difficult for him. They already fired Reince Priebus. Would you be afraid of Reince Priebus versus steve bannon . Theres an old phrase in politics, would rather have them inside the tent looking out rather than outside the tent looking in theyre not talking about looking in that statement. Do you want steve bannon inside the tebt or outsitent or outsid tent and you are embracing something that is getting dark every by the day the president is awake, lehes tweeting you see this no. Ill read it. Prp ju President Trump just tweeting amazon doing great damage to tax paying retailers, towns, cities states throughout the u. S. Being hurt many jobs being lost jeff bezos, not a new target, but a target nonetheless i did not see the headline in the Washington Post. Jeff bezos personally owns the Washington Post. If youre a president who is concerned with jobs, you have to be looking at the Retail Sector now. The Retail Sector has been taking it on the chin. An enormous amount of loss there. I dont know how the president comes back from what he did yesterday. I dont know why he chose to do what he hose to do yesterday the anger and emotion is there his idea was cocondendemn vie on both sides, then you get into a crack mire quagmire. It doesnt mean mean everybody on the left side was a person you want to associate with either i dont think they were all pushing back against racism, if they were, protesting racism, thats clearly good verse evil i dont know if there were fine people on the over side. Thats a tough one if david duke really believed that he was getting defended, you have a problem which is what john oliver said nazis are like cats, if they like you, its because theyre feeding you. So anything that looks like an endorsement, theyll grasp at straws why would an american president want to be there this goes back to something we talked about on the show yesterday. The two sides of the country pulling each other apart t and traditionally you run in the middle were seeing two sides pulling further apart. The extremes are getting larger on both sides, this president has cast his lot with the far right. He did it again yesterday. He will govern from there. We have never seen that in our lifetimes from an american president. We will see what happens the effect of it on corporations and people in boardrooms across the country is theyre being forced to make a decision about where they stand we saw a statement from walmart yesterday, which i have never seen anything like that. Putting out a statement criticizing the president for the way he handled that racist violence in charlottesville. Was there reporting where bannon said dont go tough on these guys there was some reporting i cant rer verify that. I tonight know if we seen reports of that. Nazis vote, too dont be too tough on these guys effectively that was the reported message. I dont think you can put this on steve bannon, there are also reports that the presiden has not talked to steve bannon has him in the dog house so to speak. This is the president of the United States saying what he wanted to say in front of a microphone, in front of the cameras and in front of the world. This is what he chose to say just stuck with condemning violence on both sides, just stick with that. This was a layup politically. Ceos do care about this issue, the markets not so much its personal you canter pret the marke cae markets. Spiro agnew had to retire for tax things nixon was left markets got nervous. Now people are saying pence is waiting in the wings whats different now, too, the country was divided in 1968, in watergate weve seen this movie before i feel we havent. That was in an era of centralized mass media now we are seeing a part sb pli partisan politicized media. Especially with social media. But the markets are up big. Up again today sharply you look at the coverage last night, maybe these guys know something. What the president said has nothing to do with earnings. No, but if your country is being pulled apart at the seams, you would think at some point it would affect the zeitgeist of the stock market joining us now is doug cote. Nuclear destruction is not imminent maybe we got that going for us Steve Whiting also joins us. We didnt even talk about iran they said they would restart their Program Within hours didnt see that comment yeah. Why are you bullish today absolutely. Why Global Economy. We are in a synchronized global expansion. 4 gdp for japan when have we seen that they were the highest Second Quarter gdp of any of the g7 Europe Europe the consumer breaking records. All thetime record high retail sales for europe germany, Second Quarter gdp high manufacturing, europe is the big surprise story big contributor to Global Growth the u. S. , retail sales yesterday, knocked the cover off the ball lets get into earnings. Earnings corporate earnings on the s p 500, half the revenue is from overseas thats the canary in the coal mine that says the Global Economy is very good this is what the markets are reacting to. Many investors are getting confuseded between politics and economics. Fundamentals drive markets thats the end of the story. At this point in time, what im seeing in corporate earnings, consumer, manufacturing is investors should be fully invested one thing that tax reform and these things were not necessari necessarily it had to happen for the market look this does seem to lessen the problem. This is great to have these comments we are in the fastest Global Growth rate we dont need tax reform. Mexican peso is up 20 this year were seeing eamericans market, equity returns up double digits. In the United States, were up as much as earnings. This is a strong Global Growth rate equities are following up corporate profits. Were starting with a low Interest Rate level. And earnings are going up. These are the things that are driving markets. Now, if it was entirely dependent on the effectiveness of congress, we wouldnt be here its not just the effectiveness of congress. At this point theyll be bogged down in either we havent mentioned ru e ed russia today r at some point maybe 2018 does loom, maybe some of these guys, you know, are less elections the 2018 is looming we could have some people in the president s own party not going to work as hard. Which sectors, which groups, we were Strong Enough to get through this with all those strong policy expectations for the United States fading. There was enough strength in the World Economy and the United States i think few poem would have belie people would have believed that. There are not going to be risks that are going to occur. This was a meaningful effect on markets last week and into the rebound this week. Its amazing, after that two, threeday pull back, were back to why today . Another 70 points. Youre still hitchhiking at tua at the turnpike. We had a stealth tax cut. Whats the prospect of health regizati regulation zero when you look at the future tax and health regulation, its downwards. You shouldnt have expected tax cuts to go through this quickly, but it will happen tepper said its not overvalued nothing close to 99 thats right. 30 times is not 90 times for nasdaq 100 right back then there were no nasdaq earnings any way right you see Failing Companies underperform steven, doug, thank you both. When we come back, Business Leaders departing President Trumps Manufacturing Council after his response to the violence in charlottesville last weekend. We will talk Crisis Communications after this break. What powers the digital world. Communication. Thats why a cutting Edge University counts on centurylink to keep their global campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. The dinosaurs extinction. You outnumbered. Dont listen to them. Not appropriate. Now im mashing these potatoes with my stick of butter. Why dont you sit over here. Find your awesome with the Xfinity Stream app. Included with xfinity tv. More to stream to every screen. Welcome back our top story, the fallout from President Trumps News Conference yesterday eric desenhall is a crisis Communication Specialist to describe this as a crisis in terms of his words yesterday may be an understatement what would you do if youre him now . On the corporate side, corporations just want to make and sell stuff thats all they want to do anything that takes them out of that space is a trauma as for trump, one of the problems you have, i look at this as someone who advises ceos, the great lessons of trumps career is whatever goes around does not go around. Trump does not learn the same lessons that the rest of us learn. He has basically stamped the passport of corporations into the world of rates i cannot think of one issue that corporations less want to be around than race because race as a Crisis Management issue is basically the cyanide pill of Crisis Management nobody ever really gets out of racial controversies in ga shape. Its an unforced error, but i dont see trump retreating from it. Tom fannon will be here from 7 00 to 8 00 we will ask him what does he think of the president , and what the president said what would you recommend he says or frankly any ceo that comes on television or asked this very question let me seize on your comment, any ceo. The way you advise Different Companies is different if youre a consumer facing company, you may have no choice but to Say Something if you are a heavy Industry Company that doesnt really deal with the consumer public and boycotts, its a different thing. I advied addeed adviseded consd companies that they may have to Say Something. Walmart is coming out condemning the president. But you also see heavy Industry Companies to the dropping out from his various councils. Do you think that the people who are working with him in the white house, the people standing next to the president yesterday, whether it be gary cohn, Steve Mnuchin or elaine chao are damaging their own brand by not saying anything . I think so. My career began in washington as a young aide in the Reagan Communications white house we were ap po apoplectic when he would say trees cause pollution. It didnt happen often and it was considered benign. Trump disabled the disabled, he insulted mccain. There were misogynous comments about megyn kelly. None of it had a blip. What makes this didnt, fferent really is different. I dont know anybody who is brave enough to say, you know something . I do want to fight that. You dont look at that iconic photograph of black and white limbs hurdling through the air in that car but say, y let me explain the other side of that issue. I dwell in the world of emotion, its difficult to say, yes, theres another side of all of this the president has done that. What kind of value would he have for getting rid of steve bannon i dont know what the value is were assuming that steve bannon is behind this one thing you see when you work in a white house is people feel a need to assign geniuses who master mine things and morons who screw things up regardless of whether or not they actually did it trumps lesson is what goes around does not come around. The way hes processing things is why would i get rid of steve bannon now i dont think that pays him the dividend that one would think it does eric, its a longer conversation, i imagine well have more of it with you look forward to it thanks for coming on targets trading higher we dont have time for all the details. 1. 23 above the estimate of 1. 19 revenue, 16. 43 was above 16. 296. The samestore sales up 1. 3 all this has the stock up about 2 right now the company does forecast Third Quarter and Fourth Quarter samestore sales growth in the same range as the first and Second Quarter fullyear samestore sales growth flat to plus or minus 1 . Third quarter adjusted number, somewhere between 75 and 95 cents. This is upside for the street, which was 77 cents thats it 75 to 95 broad range, but at least theyre saying theres upside potential. The ab list analysts might hd some work. The adjusted basis comes in line with a year ago we were expecting the quarter to be down to 119 in terms of earnings if they can hold steady and say theres potential upside for the quarter, thats better thats a pretty bullish forecast theres the estimate for comp stores, this was 0. 7 so 1. 3 above that. Also said traffic was up 2. 1 what does that mean more people in the stores, but you only got 1. 3 sales so more people coming in and not spending as much 4. 39, the range the high end of the range is well above where the street is. Coming up, nafta negotiationegotiatio s kick off today well talk to james jones, former u. S. Ambassador to mexico who helped pass and implement nafta in the 90s. Before we go to break, a look at yesterdays winners and losers whoooo. Looking for a hotel that fits. Your budget . Tripadvisor now searches over. 200 sites to find you the. Hotel you want at the lowest price. Grazi, gino find a price that fits. Tripadvisor. Welcome back we are live from the Nasdaq Market site in times square. Nafta renegotiations are set to kick off today our next guest helped to lead the effort to pass and implement the trade agreement when it was created in the 1990s we are joined by james jones, former u. S. Ambassador to mexico, also former u. S. Congressman from oklahoma, currently the chairman and cofounder of marnot Global Strategies ambassador jones, thanks for being here today thank you we are talking about renegotiationing this. As somebody who worked on it from the beginning, do you think theres room for renegotiation theres certainly room for renegotiation. 25 years ago when this negotiated, we didnt have cell phones so the digital trade was not known. That area needs to be covered. A lot of other areas can be improved agricultural access, dispute resolution, various things like that 25 years ago, the labor and environmental parts were made side agreements, not part of the treaty itself. I think we can put those into the treaty improve both of those areas. So theres a lot of things that can be done to improve the treaty its very important that we do it correctly this is our largest these are our largest trading partners we have more exports into mexico and canada than any other area of the world they sport 6 million plus jobs in the United States its an important set of negotiations starting. We know the United States has put its wish list out there. At the top of that list is the idea that they want to try and cut the trade deficit with mexico its like 60 billion a month. A year. A year. Do you think thats something that can get sliced down from what theyre proposal i dont see how that affects the trade deficit. For example we have a trade deficit when foreign interests invest directly into the United States build plants, what have you. That goes into the deficit side of trading yet it creates jobs in the United States. The markets, when we buy from mexico or canada, it improves our ability to compete on a worldwide basis. So that really is a nonissue there is an article, oped in the Washington Post yesterday by a very conservative senator from oklahoma who basically said this is not anything that ought to be negotiated it wont be resolved by what were negotiating. I know President Trump made that a pop issue. I dont think it will be resolved by a trade agreement. Do you think this is something where all three countries can walk out and claim victory . Absolutely. In fact, thats the whole purpose of it. We ought to be thinking north america. If you look at canada, u. S. , mexico, we have more resources than any other part of the world. We have more ability to manufacture and produce service jobs than any other part of the world. We trade with each other in a way that creates jobs in all three countries. We ought to think about how do we improve this trade agreement so that it increases jobs even more that sounds like a layup is that what you think will happen the wildcard is what the president may or may not do. I think we have we start with a good trade agreement we can build on that we have experience in all three countries. We have experienced trade negotiators. We know the value of trade among all three countries. So, if we let this experience take us to the next step, i think it can be a win, win, win for all three countries if we try to interfere in a way that doesnt make sense, it could ab downfall and more costly to the United States than the other two countries. Mexico actually can do without the trade agreement in many respects, because they have more free trade agreements with other nations, than any other country in the world the United States could lose a huge amount of jobs if we dont do this correctly. Ambassador jones, thank you for your time. Thank you very much coming up, football season right around the corner. Its prime time for fantasy sport sites like draftkings. The companys ceo will join us at the bottom of the hour, then at the bottom of the hour, then a cnbc oh no. Schwab, again . Index investing for that low . S less than fidelity. Bostic whats next, no minimums . No minimums. Schwab has lowered the cost of investing again. Introducing the lowest cost index funds in the industry with no minimums. I bet theyre calling about the schwab news. Schwab. A modern approach to wealth management. Saying that the ecbs president time for the executive edge. Starting with President Trumps new executive order streamlining the approval process for infrastructure projects. Joining us with a look at the stocks poised to benefit is dom chu. If we look at the infrastructure stocks, theres been a handful in certain specific parts of infrastructure that reacted the most to the trump agenda well take you through three of them thatindicative of tha trade. First you look at some of the stocks tied the most to construction aggregates, asphalt, concrete, that sort of thing then you talk about names like Martin Marietta materials and volka materials. These stocks have gone huge to the upside Martin Marietta about 20 gain and then lost about 15 and a steady drop since then a realtime handicapper of whats happening with that infrastructure plan. Another one to focus on, steel companies. U. S. Steel is win of those u. S. Steel went up huge, almost doubling in value and having lost about half of its value since. Its been a fairly steady decline since. Construction and Engineering Services companies, like jacobs engineering. That stock, again, a huge move to the upside, then has kind of drifted all the way down since i would also point this out, one place where many people are looking for infrastructure exposure is in the etf market. Ishares has a Global Infrastructure igf its not like what youre thinking of when you think of infrastructure many of these stocks are Utility Companies and Many International in nature. Before you go into infrastructure etfs, make sure you know what youre doing they may not all be part of the trump agenda. When we return, the merger between draftkings and fanduel was called off theyll continue to compete for 3 billion per year spent by customers. The ceo of draftkings will join us to talk about all of that when we return trust this birds words. Tripadvisor. [car tires screech] [bell rings] if youve got a life, you gotta swiffer welcome back to squawk box this morning were just a few weeks away from the official kickoff of the regular nfl season this year daily fans of sports site draftkings is going to go it alone, calling off its plan to team up with rival fan duel joining us jason robins, ceo of draft kings. Before we get into you, what happened with fan duel explain for those uninitiated. Well, we had tried to get a merger done. And unfortunately the federal trade commission decided that they wanted to try to challenge it right and, so, you know, we talked about it, and we decided to call it off strategically what does it mean for you meaning longterm when you think about going it alone, versus being part of a larger media company, dare i say, or finding another competitor to merge with i mean, i think part of what led to the decision to not really try to fight it in court is we feel really good about where our business is at our growth rates are back up north of 30 year over year. Were seeing more and more new Customers Join and we have some incredible things plan for nfl season including this huge billion dollar promotion right so we feel pretty good about our position and decided that the best thing to do i like any competition thats worth at least a billion dollars. Hows it work . The way it works, totally free to enter. And youre giving a billion dollars away well, if somebody hits a perfect we arent, theres insurance. This is like the Warren Buffett deal the same idea, basically, yeah does he get a royalty for the idea no. Its not i dont even know if its his idea but the same basic idea having an insuranced backed billion dollar prize or something. Right you know, for us it was something that well certainly, you know, its very difficult to hit the perfect lineup and will take a lot of real skill, and something that, you know, its a thing that probably wont happen theres enough of a chance that it could happen that we wanted to have insurance. What does the Insurance Company charge you for that . I dont think i can disclose. But its a lot its enough where if you saw it youd say all right, if they really thought this could happen they wouldnt have paid for this what Insurance Company takes it, is that like a lloyds of london kind of thing theres a bunch of them that do it was split between a number of Insurance Companies. Surprisingly no individual company wanted to back the entire billion itself. Interesting interesting. So were separately, were talking about ratings of sports and whats going to happen this year versus what was happening last year, and also just the politics of the moment, and whether politics has entered sports you know, i think that last year, a lot of people were focused on the election. And certainly theres still a lot of focus on politics in the news now there always will be but last year, i think, because there was an election, because the unprecedented media coverage, i saw some stats that even during the nfl games ratings were way off on a lot of the news stations which tells me people were watching that instead of the news. Right so hopefully for sports this year it will be more like its been in normal years theres no political headlines coming out now yeah, exactly what is the regular sort of risk for your business Going Forward . Meaning theres still some outstanding issues all over the country that have not been all figured out completely well, weve had 16 states now regulate fantasy sports. Right and weve seen pretty much all of the noise that we experienced a couple years ago completely dissipate and its been a great job by the team of really focusing on educating about what our game is about, i think theres a lot of misinformation out there, at first. And now that its sort of more, you know, known and that theres actualregulations around it, including in new york, and in new york it is completely regulated, i think people just feel a lot more comfortable with the business and weve been really, i think, working hard to show that we take it seriously and that we are making sure that we do everything we possibly can to create the best product for customers. Okay. Jason, thank you appreciate it very, very much. Thank you we should mention that nbc universal, Parent Company comcast is an investor in the competitor fanduel, which was going to merge with you. So, maybe that deal will still come back. You never know. Never know. When we come back, United Health getting a new ceo we have the details right after the break. Plus, an exclusive interview with the new atlanta fed president rafael bostic. He will join us on the set with our guest host for the hour, Southern Companys tom fanning squawk box will be right back. Your brain is an amazing thing. But as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Finding the best hotel price is whoooo. Now a safe bet. Because tripadvisor searches. Over 200 booking sites so you save up to 30 on the. Hotelock it in. Tripadvisor. Stocks higher opening on wall street as investors await a key update from the fed. Now, special guest atlanta fed president Raphael Bostic is here on set and joins us in the first on cnbc interview. The fallout. More Business Leaders distancing themselves from President Trump after he doubled down on his response to charlottesville. More on yesterdays Wild Press Conference just ahead. Plus to talk taxes, infrastructure, spending, and the president s policies 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 back to squawk box right here on cnbc, live at the Nasdaq Marketsite in times square im Andrew Ross Sorkin along with becky quick and joe kernen in studio this morning to talk business in washington is tom fanning, chairman and ceo of Southern Company take a quick look at the futures this hour. Lots going on here to tell you about, things are still in the green this morning looking up, dow looks like it would open up higher, 62 points higher s p 500 up six points. Nasdaq up 16. 5 points. Lets get through whats making headlines. I imagine well talk about politics in just a moment. A couple of corporate headlines to tell you about. Target shares jumping in premarket trading. The retailer beating estimates at the top and bottom line and upbeat outlook Courtney Regan has a lot more on targets quarter in just a moment i also want to ask her about Donald Trumps tweets about amazon literally within the past hour investors looking to 2 00 p. M. When the fed is going to be releasing the minutes of its most recent meeting. Among the other things the streets looking for is more details on when and how the fed might begin reducing its Balance Sheet. And the government is now set to release its latest data on Housing Starts. Thats going to happen in about 90 minutes 8 30 this morning. Forecast called for an increase of 0. 4 in july following an 8. 3 jump in june. Some news just in from United HealthGroup PresidentDavid Wickman is going to be succeeding Stephen Hemsley. He will be the new ceo come september 1st. Hemsley is going to be taking on a newly created role of executive chairman and the current board chair Richard Burke will become the lead independent director hemsley, the current ceo, is 65, and says it is time for him to look for his replacement President Trump meanwhile doubling down on his initial response to charlottesville during an explosive back and forth with reporters late yesterday. Speaking from the lobby of trump tower, the president once again said that all sides are to blame for saturdays violence in virginia i do think that blame i think theres blame on both sides. You look at both sides, i think theres blame on both sides. And i have no doubt about it, and you dont have any doubt about it either. Only and if you reported it accurately, you would say it yesterdays comments were a reversal of that carefully crafted statement he made earlier this week denouncing the kkk, and neonazi groups and the president s comments coming as more Corporate Leaders distancing themselves from the white house. Late yesterday the head of the aflcio resigned from the president s Manufacturing Council, and in a tweet said i cannot sit on a council for a president that tolerates bigotry and domestic terrorism i resign Effective Immediately he joins the ceos of merck, under armour and intel, as well as the head of at liance for American Manufacturing theyve all stepped down from the president s council this week as i mentioned a number of ceos yesterday, a number of them who are still on some of the councils but outraged and furious and trying to figure out what they should say and again whether being at the table, i know we talk about walmart, but you know, staying on that council, but having spoken out, you know, what the right balance is in in fact, walmarts Doug Mcmillan is giving a letter to his employees in which he said, as we watch the events and response from President Trump over the weekend, we, too, felt that he missed acritical opportunity to help bring our country together by unequivocally rejecting the appalling actions of White Supremacists its worth noting that walmart is americas largest private employer with 1. 5 million u. S. Workers. Former treasury secretary Larry Summers says all ceos should quit trumps advisory council. Were going to hear more from him, and hes going to join the gang on squawk on the street at 10 30 eastern time this morning. Back to Corporate News target releasing earnings just a short time ago joining us right now to break down the numbers is Courtney Regan. Good morning. So target actually putting up a pretty good quarter beating across the board for earnings and revenues comp sales particularly impressive up 1. 3 the street had been expecting 0. 7 growth and that was even after target had upped its guidance in july 32 growth for digital the company, when i spoke to them, said it was pretty broadbased in many of the categories in the stores but when you look at what happened online, styles sold well, and some functionality and enhancements made it to the website. Simple things like search, and merchandising, showingfull outfits or giving suggestions really helped there. Now, grocery was flat. That was one of the categories that we talk about a lot its about 20 of target sales but its an important traffic driver the company, though, says flat is actually a pretty good improvement for what they had seen in the past it opened nine Small Format Stores in the quarter. And again, that format was pretty even not only across categories, but also time, and geography. So other retailers have spoken to traffic, sales increase being as the quarter went on target said it was actually pretty even throughout shares have been down about 20 so far this year you can see them popping right now this morning ahead of this news well see if they can hold onto this, because as weve seen in recent days and weeks, good news sometimes isnt good enough. And you look at home depot yesterday, which had a really quite stellar quarter and shares are still under pressure because of the pessimism in the market surrounding retail in general. Can i ask you real quick . Yeah. You saw Donald Trumps comments this morning on amazon. We were trying to look through the Washington Post this morning to understand. Where they came from . What might have instigated that what do you think the real risk is to amazons business . Its a really difficult one because amazon, of course, is a company unlike i think weve seen in quite some time. Because they cover and compete in so many different sectors i think this is a challenge that amazon has in a different way than what we saw with walmart. When walmart came in and was in its heyday of growth, you could see it coming in to a town, building a store amazon you cant see as easily but its a little different. In some ways im surprised more of this conversation hasnt started earlier. The president actually just saying for those that havent seen it, amazons doing great damage to tax paying retailers, towns, cities and states throughout the u. S. Are being hurt many jobs are being lost and we know that amazons been trying to hold these job fairs, hire many people in their Distribution Centers trying, it seems at least, to come out in front of any potential backlash about jobs at the very least im not sure where this came from okay. We will keep on that and thank you for the perspective this morning sure. In our special guest this morning, and the squawk box exclusive, Raphael Bostic, president and ceo of the Federal Reserve bank of atlanta. Our guest host, tom fanning is Southern Companys chairman, president , ceo hes also chairman of the board of the atlanta fed have you do you hang around with this guy . Have you been warned about this . They didnt warn me before i took the job great guy, personal character and tom, great president , and great to have you on today you know the atlanta fed, i Pay Attention to their gdp numbers more than anyone why do you guys gdp now they do a great job when i took over the job at the fed, what struck out to me was how good a staff it was. The Research Department there is really solid theyre very strong. And they built this model in a way that we havent seen before. Its like a Realtime Data point to data point updating its really captured the attention of a lot of business folks. And, i mean, i see a flash, usually might come from atlanta fed says this, says that ahead of a lot of the other prognosticators and a lot of times the consensus estimate comes down to where the atlanta fed was, sometimes bearishly i walk the house of congress doing my business they often reference this gdp now so its influence is pretty far where are you now for the Current Quarter . I think the latest number is a 3. 7 gdp, which, you know, it moves on a daytoday basis. But our models are saying that the economy is actually looking to be much stronger in the second half. And were going to keep our eye out to make sure that as things evolve well be in a much andrew, a chance this i mean, you can come down from that, right . I mean, 3. 7, thats the last thing we need. What would you do good. You are look i want if we get 3 tops on the second floor i hope i dont want you to just hurt yourself we do 3 you will would it be spectacular it would be more spectacular if it was sustained, right . Thats what hes saying it would be more spectacular if it was anything if it was a one of the things thats so interesting about raphael when we were considering different people, and hes just been on the job a short while. Two months. Is this idea of this guy is a terrific bridge between policy and people given his background dual major harvard, with economics and psychology and housing economics and then with markets experience and housing is a great market. Talk about kind of relevance of that to how youre thinking about your job theres housing in every community, right people have to have housing. And it is an important part of every household Balance Sheet. So when housing doesnt work, when housing breaks down, a bunch of other things are going to be much more difficult. So for me, it was really an interesting revelation because i came to the Macro Economy in a different way, coming through housing rather than starting at the macro and going to housing i think, though, it has helped me think about the economy at a household level. Very transactional, like how are households thinking about the economy, and what sorts of things are going to make them worried, as opposed to where are they going to see opportunities . President bostic, you have some concerns about the economy, just based on what youre seeing household spending, even though we look at people being very optimistic consumers being very optimistic. Businesses being very optimistic its not necessarily translating into what we might anticipate or historically what that has meant. I think thats exactly right. Theres a disconnect between the data that were seeing, Consumer Confidence is extremely high, its as high as it usually is in huge economic booms but were not seeing behavior on the part of consumers in terms of their spending were not seeing investment by businesses and tom talked about my psychology background. I think theres a psychology going on here, where the Great Recession was so deep, and it scarred people so significantly, that theyre reluctant to really trust in longterm investments, and so part of where weve got to get to is a place where people see the future in a very much more optimistic way. Becky, over the years, you and i have talked about this notion of how important confidence and certainty is to the, you know, the predisposition of business to make longterm capital investments. I think its exactly what were seeing we talk about certainty, and obviously theres never any true certainty, but if you can get some sort of guidance out of washington, where you feel like youre looking, at conversations weve had as business youre looking to make investments for 20, 30, 40 years 60 years. You need to know what the rules of the road are. Look at the big issues on the table right now. So have we gotten any clarity with it yeah. Look i think there was great hope coming out of the election, and now, you know, weve kind of stumbled around a little bit i think were still hoping that we can get anagenda done that will really help the longterm health of the economy move forward. Tom, theres one thing i want to add on this, which is when we talk to our contacts in the sixth district what we hear is that businesses were optimistic, but they didnt change their plans. They didnt start to forecast and plan on investing at Different Levels they really took a wait and see attitude i think with what happened in the congress over the previous six to eight years created some skepticism. So while theyre optimistic, they were taking the wait and see. So the confidence, the change in perspective is not im not expecting it will really change what we see in terms of business i think that splans what weve seen in the market, as the market has advanced in such a profound way relative to the growth in the economy and the lack of longterm investment that explains that difference. Do we need a change in business behavior to request to 3 sustainable, as we were just drns 3. 7, 2. 6 is 3 that average is 3 we havent averaged 3 for a year in the last 10 or so so, can it just happen without businesses changing their behavior like youre saying though, is it possible to stay at 3 i think to get to robust growth we need a lot of people in the economy to make decisions to be optimistic i wouldnt anchor personally on a number like do we really get to 3, then everythings wonderful, we all can go home. Or if were at 2. 8 what i want what i would like to see in the economy is businesses making investments to try to improve productivity, improve output and if it winds up at 3 at the end of the calendar year, thats great. But i want us to have an environment where businesses feel like they can make profits, and that they can serve consumers. As we said before a lot of times, you know, the formula we use in business is value is a function of risk and return. Return is the proxy for 3 gdp growth or whatever we need to drive risk down and that goes back to the certainty question and a stable laeger to environment. Stable legislative environment the markets made it to these levels without anything happening that weve been on the table for years. None of thats happened yet just the possibility of it happening. Can you get to 3 with any of the or not 3, but can you get to higher than the 1. 5 to 2 weve been doing without any policy that gets enacted i think on a sustained basis were going to need tax reform simplify streamline make more proinvestment kind of how much do you think about that, though, in terms of in your estimates, or even thought process about whats going to happen in the future what do you mean in terms of fiscal policy in washington. We monitor it. Our job is to take the economy as it currently is right so we take the data, the policy environment, and we take projections on the economy if that stuff doesnt happen then we just dont incorporate that into our models right now, you know, our staff does is not adding any of those things as we do our projections of how the economy is performing we need, i think, prudently taking, lets take the economic environment that we have today, and do our projection based on that without speculation of whats going to happen next month. So the fed with the recent increases in the projected increases that were seeing, even though inflation is very low, these are all positive things youre seeing, 3. 7 retail sales number. So they need to keep going but, are they behind the curve or are they just right right now with inflation as low as it is in your view so, you know, i actually am worried about the inflation. So to me i think the jobs market, the labor market is performing extremely strongly. Were starting to see some the confidence is at a good level. Were starting to see some movement in terms of Consumer Spending in the retail numbers that have come out recently. But it has not translated into the sustained level of inflation that all of our economic models say should exist so if we dont see that kind of inflation, my view is that we should try to be somewhat more hesitant in moving stridently in any direction. Lets wait and see and make sure we understand do you think something is broken why arent we seeing those Inflation Numbers yet . I dont know. You know, thats a question that, you know, i have my staff on basically every day you know, what are some of the explanations that are out there . Right now we dont have a single model that explains why the economy is not performing the way it should be or expect it to be given the signals in the labor market i do think psychology is important. I do think some of the issues that are going on in washington are important. And shaping peoples perspectives on how they plug into an economy and how they might be what issues do you think are important . I think the uncertainty about tax palsy whether it gets passed or not . The Health Care Issue and what thats going to many for businesses Balance Sheet in terms of how theyre going to spend on a quarter to quarter basis and all those issues, theyre adding uncertainty in a significant way. Can i ask you, as a as the leader of the fed and as the leader of business, and what you represent, you comment on what you saw yesterday with the president . Or how you think thats going to affect all these policies . So i i wouldnt say im a leader of business so, for me, i view i leave one bank trying to provide information you leave a bank that represents a lot of businesses in the south sure, so that is true but i dont lead those businesses but what i would say is this, every business has got to figure out for themselves what makes sense in terms of what they what councils they participate on and all those sorts of factors. Im not in their board rooms i dont talk to their leadership is im going to respect theyre going to do whats best for them and well move forward from there. I think the fed is pretty renowned for being apolitical and kind of rising above the datetoday tactics, the real issue that the fed is concerned with is keeping their eye on the ball, longterm policy, sustainable economic performance, that kind of thing. Why dont you want to get into a conversation about this im just curious why i think its a distraction from what my mission is so my mission is to think about how is this economy performing, and you know, what how should our policy contribute to a stable price level, and to sustainable do you think you have a responsibility to call it out if you see it as a leader i think there are times when thats appropriate in this case its not so, when you said yesterday i thought you were talking about President Trumps press conference right the press conference, i didnt see it. The reporting ive seen did not suggest that he was espousing hate per se. All right if youre talking about the stuff that happened in charlottesville, for me, that was troubling. And i dont think that thats a difficult thing to get up front and say. I think the question is, given my institution, how should we theres a fundamental point should we plug into those and thats what im asking you, should you be plugging into this conversation . I dont think that the Federal Reserve i dont think thats their role as an institution. There are plenty of other institutions that do that. And so well leave it to them. You know, people as private citizens are welcome to do what they want to do. But as the fed, you know, thats not really our position. Okay. Were going to put tom in the hot seat in just a minute. He can do that. I dont know about well get yeah, youre in trouble. President boston, thank you very much. My pleasure and tom will be with us, maybe for the rest of the hour exactly when we get back from commercial break when we come back tom fanning is going to talk taxes, infrastructure and the Nations Energy policy and later President Trump criticized by ceos for his response to the violence in charlottesville, virginia, over the weekend former white house aide and republican strategist joe watkins will join us to talk about how he thinks the president should be handling the situation. Stay tuned you are watching quk x. Is this a phone . Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost, so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Lets get back to our guest host tom fanning, the ceo of Southern Company thanks so much for being here. Great being here with you guys again i said right before the break i would ask you about your thoughts on this you have been with the president and met with him on these issues, all kinds of issues about business hearing the remarks and the reaction, and the second round of reaction, and the third round of reaction, to what happened in charlottesville, whats your take on this what do you think . Look, its really important for Business Leaders, now more than ever, i think, to engage positively in the big issues of the day. I think we can get so divisive around a lot of these events, i think what weve got to do as Business Leaders, not be red, blue, not be right, left, and all that stuff, weve got to think about identifying where our influence can best be brought to bear on things like the economy, on National Security, on Energy Policy thats what im focused on, those three things and really focus on engaging in a positive way in that look, we are a company that is renowned now for over a century on what we call the whats in the house. The whats are making and selling electricity, the hows are how we engage with each other, customers, employees, external public it is really important for us to leave the Community Better off because were there. The events in charlottesville are repugnant. Nobody would say that thats good and we stand for everything that is good for americans. Really making our communities better off staying focused on the big game is kind of something that im engaged in, and remain engaged in what do you think about the president s comments, directly you know, andrew, i dont think thats productive. His comments or you commenting on his comments me commenting on his comments whats productive for me is to keep my eye on the ball. And that is Energy Policy, its National Security issues, especially related to cyber and physical terrorism and things related to the economy. Understand completely but the criticism has been that some of these meetings are just photoops for the president. Do you feel like theres actual things that get accomplished in these meetings do you feel like your Voice Matters so i dont engage in the big, broad meetings i engage in a smaller scale private setting. For example, recently, weve been very focused on the whole notion of how do we think about pulling together the private sector, in a publish private partnership. Right to help prepare for and respond to joint events related to cyber terrorism, or physical terrorism. And right now ive been recruiting other ceos, to perform what we call strategic infrastructure coordinating council. Right so were finance, electricity, telecom, probably the big three. Right will prevent an existential threat from being visited on america. Which is how realistic, and how big of an issue right now . Its an enormous issue. Okay im not interested in punks, thugs and criminals. But i am interested in making sure that american commerce can continue the way it should be a lot of ceos say privately and i know were live on tv now, but they say privately to me, i would like to Say Something, i feel personally offended by what the president said, but im scared, frankly, that if i go out and Say Something, that is negative and condemn the president s words, that he is going to come after me on twitter or im not going to get the meeting that i want, or from a perspective, im not going to have this table that i want. Do you feel that way no. And we talked on a variety of other shows and other forums, ive been really focused recently on trying to decide whether to go forward with this Nuclear Plant in georgia yeah. Because its years behind schedule and went bankrupt and the whole thing and now were trying to figure out do we pick up those pieces and go forward or not . I can tell you that this cabinet, broadly, whether its, you know, the commerce secretary, or whether its energy secretary, Vice President , all of those people have been extraordinaryly engaged and helpful. So i would get these guys terrific marks on this issue and there are other issues that if we focus on, and not get distracted, i think we can really move America Forward. Why do you think some of your peers and colleagues feel the way they do . I dont know. Have you had that conversation with them, ever youve never had a peer say to you, i want to Say Something, or could i Say Something, what would happen if i said something or no, honestly, i havent okay. Fascinating to know. Yeah. No, i havent. Were going to come back. Weve got a lot more to talk to you about. Coming up, President Trump doubling down on his initial response to charlottesville during that explosive back and forth with reporters late yesterday. What about the alt left that came charging, as you say, the altright . Do they have any semblance of guilt . Were going to ask republican strategist joe watkins about the press conference, the criticism the president s been receiving on both sides of the aisle, as we head to a break, take a look at u. S. Equity futures were in the green dow looks like it would open up 64 points higher good morning again and welcome back to squawk box here on cnbc live from the Nasdaq Marketsite in times square. Among the stories front and center today, Mortgage Applications rose by 0. 1 last week according to new figures just out from the Mortgage Bankers association. New purchase applications fell by 1. 5 but that was negated by a 1. 6 rise in refinancing activity the average 30year Mortgage Rate fell by two basis points to 4. 12 . That is a ninemonth low apple is reportedly set to make a big splash in original Television Programming the wall street journal is reporting that apple has set aside a roughly 1 billion budget to buy both original content, and produce shows on its own. The paper says that apple plans to either buy or make as many as 10 different shows and today marks the kickoff of negotiations to update the nafta trade agreement. The first round of talks will be focusing on examining proposals from all three participants. The United States, canada, and mexico President Trump has blamed the original nafta agreement for sending u. S. Jobs to mexico and shutting down u. S. Factories President Trump fired back against criticism of his late response to violence in charlottesville, virginia. This time he backed up his original comments, claiming both sides again for an atmosphere that led to the car attack yes, i think theres blame on both sides. You look at you look at both sides, i think theres blame on both sides and i have no doubt about it and you dont have any doubt about it, either and, and if you reported it accurately, you would say it joining us right now to talk about the criticism President Trump is receiving joe watkins, former white house aide to president george h. W. Bush good morning to you. Were all trying to understand the president s comments, what they mean, and perhaps most importantly, what it means for policy yeah, well, his comments yesterday undid the comments that he made on monday, sadly. And the comments that he made on monday were two days too late. He should have made those comments on saturday because, america looks for its president s to exercise moral authority and to show moral leadership in times like this. President reagan did it in 981 i know president george h. W. Bush, with whom i worked with, did it as well when he was president of the United States and president barack obama did it and george w. Bush did it. Other president s have done it. Theyve stepped up to the plate and exercised the kind of moral authority and leadership that we expect of our american president s to say this is wrong, and to call it what it is to call it racism. To call the white nationalists and the kkk and the nazis for who they are and to say its wrong and as a country we stand against that kind of thing and to say as president of the United States, im not going to tolerate that on my watch. And thats what americans were looking for him to say sadly, the discussion yesterday really undid whatever remarks he made on monday and really kind of, well for the most part, they clouded certainly the legislative path Going Forward, as well because as long as go ahead thats what i wanted to ask you about. Which is the practicality of what this does in terms of his ability to be effective when it comes to tax policy and some of these other big issues that are on his agenda . Well it makes it hard for every republican because, the president needs republicans in the house and the senate to march with him to get his legislative agenda accomplished we want to get tax reform done certainly we havent gotten health care done yet if we want to get infrastructure done all of this is going to take the strong support of republicans in the house and the senate and right now, republicans in the house and senate have to scramble, especially members of the house, because every one of them is up for reelection in 2018 a host of senators are up for reelection in 2018 and theyve got to explain to their constituents that this is not where they stand that they are against racism, that they dont stand with the klan, that they stand against nazis. Theyve got to say that. Where do you think the American Public stands, though, in terms of where they stand on the moral issue that were talking about, but that versus the policy and are they all well, theyre not all wrapped up into one, but clearly as long as this issue takes center stage, and it has taken center stage for right now, the raise issue is an important issue still to discuss with america, it makes it hard to move forward on the policy, because republicans have to fend themselves and the republican brand has been tanished. Republicans have to say well im a republican, but im against. You look at john kasich, the governor of ohio, he issued a statement right away a number of governors, marco rubio from florida, a number of senators and members of congress and governors have issued strong statements saying where they stand because they have to tell their constituents where they stand on this. Right tom fanning is here. I want to ask you one more question related to this theres an article out in the daily caller, head line corporations becoming new ash bitter of public morality. Do you feel like you have a responsibility to be the arbiter of public morality in your role as a Business Leader these days . As i said before, this notion of whats and hows. Look the hows go to our behaviors and how we interact with the public, our community we have an absolute responsibility to treat people ethically, to make sure that communities are better off because were there. Part of it is growing the economy and doing our jobs well, but also working kind of bigger than our bottom line is the word we say yeah, as an institution, we must have ethics associated with making, moving and selling electricity. Right joe, what do you think about that just the role that businesses are playing in this larger debate i think that businesses are smart to protect their brand, by showing the communities they care and by saying, you know what were sticking to our core role, what were what weve set out to do but at the same time were doing the right thing by the people that we serve do you think that ceos should jump in to this debate in the way that some of them have by either jumping on or off of the council . I mean the issue in part is because a lot of these ceos jumped into the debate, became political by joining the councils in the first place. Well, yes, for those members, for those ceos who are on president ial council, yeah, i think its appropriate for them to respond, and to define who they are and what they believe, and so say why they think they should stay or go. I think its appropriate to do that yeah. What were you going to say . The way you characterize it, i dont degree with. Arbiters of morality i dont believe in that. But andrew no, no, no. The daler caller. Right heres my thing. The best thing we can do is to provide energy, in our case, that gross the economy, that treats people well, that grows wages, creates opportunity for everybody. Right it really moves the agenda of America Forward. Its much bigger than, say, protect our brand. Right thats so parochial in thinking right the bigger issue is, what can we do to raise all of those . What can we do to really drive America Forward . And i think now more than ever, with the red and the blue and all this divisiveness going on, i think i think businesses in america can play a really Important Role right in filling in that middle space. And creating Real Solutions to make america better. Do you feel like youre in a different place i mean youre a brand, but its not like a coke or a pepsi, necessarily that although, although its one of the great brands in america Georgia Power recently was named the most trusted i think Energy Company in america joe, you have a lot of businesses that are clients . I have some businesses that are cliepts. Yes, i do. What are you telling them to say or do right about now . Just im telling them do the right thing. Do the right thing by your clients. What does that mean and well what it means is, show the community that you care even above and beyond what you do so, whether youre in the Financial Services industry, or youre in information technology, make sure that your customers know that you care about them that you care about everything that they do and, its okay to take a stand i think when you take a stand and say okay im on the side of right. America took a strong stand curing the Second World War and said they were against nazism, they didnt like that philosophy, they were willing to fight against. Its okay for americans, still, even in the 21st century to say the same thing we dont stand for that. Were against that were against nazis. Were against the kkk. Were against white nationalists we care about our customers. Were serving our customers well and were involved with our communities. I think its okay for them to do that joe watkins, thank you. Tom fanning is sticking around thank you. When we come back this morning, a deal in the energy space. We happen to have the ceo of one of the Companies Involved as our guest host this morning. Were going to hear about the tieup and talk fuel cells right after this break in the next hour well be focusing on nafta renegotiations with former deputy trade representy robert holliman stick around, squawk box will be right back. Welcome back, everybody. Southern Company Announcing a Clean Energy Deal this morning Data Center Company equinex is partnering with Southern Company and bloom energy to install 12 Data Centers Across the United States the ceo of bloom energy is a cnbc disruptor steve smith is the ceo of equinex and our guest host tom fanning from Southern Company. Tom, why dont you lay out exactly what this does bloom energy uses fuel cells to convert natural gas into electric youve got equinex which is a Data Center Company. This is just another example of breaking up a 100yearold Business Model in the old days you make, move, and sell energy up to a meter, and then on the other side of the meter, customer does something with the electrons what were seeing right now, because technology is enabling it, and because customers are requiring it, particularly in a new digital age, were moving that infrastructure, making the cell, on the other side of the meter for the customer premises, providing pristine reliability, green power at a reasonable price. And holy smokes, this is another example. Weve been on before with home depot, now we have another one so steve talk about this. Why the fuel Cell Technology why do you think it works . Well, its a technology that feeds our agenda to become 100 clean, Renewable Energy. We power 182 data centers in 44 of the biggest markets in the world in 22, 23 countries and weve made a commitment to our customers and the market to be 100 clean renewable and this technology is a big step in that direction to help us were 56 to 60 down the journey today. And this is a big investment a big step how does it work . So, this is our great example of the land and expanse strategy that tom and i believe in when we formed the partnership. Saying as businesses go from analog to digital will come along and the customer is going to need Something Different from what theyve been getting so far, collectively we can offer that differentiation and serve the customer better. What happens here is, as you know in the digital world, customers demand the very high bar of reliability the lifeblood of the data center theres electricity going into it and its clean, not just from but from a quality point of view and it is one of the leading costs for a data center. If we can offer value, and reliability benefits, on top of the corporate sustainability requirement is the reliability the new phase of this . Is that whats gotten so much better in this where is the new development that is allowing you to pick up additional corporate customers when youre a distributor and when youre local and youve been youre not going to be disrupted by Everything Else going on around you, inherently you will get better quality, as long as you have the backup infrastructure also available. Then it does tend to splinter the approach to it thats wonderful for a customer. And in this case, you know, its distributed generation. When we use the phrase distributed infrastructure, it goes to storage second tolj, switch gear, a variety of things this is just another example of Creative Destruction a industry whose Business Model is being turned upside down for the benefit of customers and when you think about the importance of your business youre the vunerable industry thats getting turned upside down thats right. You can try and keep the waves off the beach or you can try and influence how this new business will evolve. And thats what were doing in this kind of partnership yeah, this partnership for us means a lot for we well help validate this, because, you know, we have 10,000 big corporate customers all over the world that use our data centers, and they are demanding clean, Renewable Energy it is the next step for us to, you know, invest in that and move down that path for them what is the cost comparison for Something Like this, versus oh, its cost efficient we wouldnt make a decision like this these are big, multiMillion Dollar, 100 Million Dollar investments. And theyre very cost efficient, High Performance it gets rid of huge emissions for us so we avoid hundreds of thousands of tons of bad emissions. We avoid many, many gallons of water that we would use, its big benefits that we can present to our customers in fact the size of the initial partnership we had was nearly half a billion dollars through our subsidiaries whats the reason that its cost efficient at this point the reason its cost efficient is, we developed the technology that with time our Technology Gets better and cheaper. Both just like you saw on the computer chip. And it is possible because its a solid state technology, and you know, thanks to natural gas evolution in this country thats another very big part of this whole story. The low prices for natural gas. Yeah. And the presence of natural gas. Im sorry the technology advances, particularly in natural gas, you know, has gone from kind of, you know, kind of brawn to brain now to bytes this is a whole Digital Technology thats evolving in energy and now its translating into benefits for customers and if you look at this, i think the big story is the following, right weve been talking about innovation in the space. For the first time youre seeing real innovation happening with the leader who is in the forefront of the digital revolution, steve smith but then if you look at tom, it takes somebody to say, either im going to disrupt myself, or somebody else is going to disrupt me and so you have two great leaders wanting to push this, so we now go on a kr, thank you very much for joining us steve thank you. Thank you steve coming up, we wrap up our special hour with tom fanning. Futures at this hour, have been strong all morning long. Up 60 points or so we had some news out from United Health 65 why such a young hes going on as the onto the board as the chairman of the board. But they got a complete young man to take over hes like 54 hes like a kid. Anyway at the top of the hour were going to break down the latest market moves and n ruyou through this mornings big corporate stories. Squawk box will be right back. I know when i hand them the keys to their first car its gonna be scary. But i also know that were gonna have usaa insurance for both my boys. Its something that theyre not even gonna have to think of. Its just gonna be in the family. Were the tenneys and were usaa members for life. Lets get some final thoughts from our guest host this hour. Tom fanning, 7 53. I expect, once the day gets going that youre going to see more ceos, probably, succumb to pressure and leave this one of the councils, whether its the Manufacturing Council. Theres a couple other ones that what other ones are there, andrew . You probably know the names on all of these by now, right theres probably 30 or 40 around that are going to have to decide what to do right . Whether you want to remain on the council. You agree and can you thread the needle and do what Doug Mcmillans done which is condemn not only the hate and the violence but the president s reaction, and yet say, i want to keep my seat at the table. See the interesting part is can you keep your seat at the table, or i mean, you technically because some guys have already come out and said theyre staying. They can come back after yesterday, im not staying either, that wouldnt surprise me i think thats a little bit of a false choice. Okay. You can certainly look at the events in charlottesville and say that was awful right thats not good for america, under any circumstance and at the same time, i can remain engaged in the big issues of the day, and make sure that business plays an appropriate role, action not rhetoric, to make america better. And drive the economy forward. Right to really push for, whether its legislatively or any administration what are we going to do . Right dont get distracted by this stuff. I know its important. Right and i know what we stand for. And i know what america stands for. We get that. Now lets get back to the business right the there probably werent a whole lot of good people on the one side of the police line, right . So thats a problem. Thats going to be an issue. The president but he he needs to err on the side of zero tolerance. Thats right. For that. Well of course. But how frustrating is it to have this conversation, this was like an unforced error, steps back into this and turns the agenda away from what you were talking about bshs so whats my job as a ceo of a company make sure everyone understands what we stand for and get back to the big business what about that power plant in georgia you touched on this earlier. Oh, yeah. Where does it stand look, when raphael was talking about how the economy may grow, i think about energy security, breeding National Security, breeding Economic Security when you think about a ways america can play offense, Energy Policy is one of them. And weve talked about all the above. This issue is whether or not we finish a Nuclear Plant that has been under construction for some years, where westinghouse, a subsidiary of toshiba, was the prime contractor, and went bankrupt and so now were left with a deck of cards and were trying to figure out how do we play those cards . Do we go forward on our own . Or do we abandon the plan . Recently the summer plant, South Carolina corporation decided to abandon construction were trying to decide whether we go forward or not to me this is an issue that is not just about kind of the economics, and all the above, it almost goes to National Security america, i think, as a national priority, must have nuclear in the portfolio Going Forward. And so its really important and i think for all the good stuff in gas we need to go forward on nuclear whether we do it or not well see. Okay. Thanks so he very much. G tus thnoerwi ath bihour we have a question about your brokerage fees. Fees . What did you have in mind . I dont know. 4. 95 per trade . Uhhh and i was wondering if your brokerage offers some sort of guarantee . Guarantee . Where we can get our fees and commissions back if were not happy. So can you offer me what schwab is offering . Whats with all the questions . Ask your broker if theyre offering 4. 95 online equity trades and a satisfaction guarantee. If you dont like their answer, ask again at schwab. Back lash from the ceo brain trust. Another round of executives quit President Trumps council after his response to the violence in charlottesville. Some of the folks that will leave, theyre leaving out of embarrassment, because they make their products outside markets now stocks trading higher as wall street gears up for an update from the fed plus apples hollywood war chest. Were going to tell you how much the tech giant plans to spend on tv programming as 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 just need to laugh at that thing. Live from the its just all sad. Anyway the Nasdaq Marketsite in times square, im joe kernen along with becky quick and Andrew Ross Sorkin the futures right now, they seem to be sort of laughing all the way to the bank. Up 56 points again. You know, theres a nuclear bomb headed for guam. Futures are up its not headed for guam, futures are up its incredible that the market seems to be shrugging off just about anything these days. And maybe thats a positive for the underlying Global Economy. Maybe that explains it lets take a quick look at treasury yields. Treasury yields have been moderating they were 2. 5 earlier. 2. 27 there is no yesterday it got totally lost it got totally lost that that was pretty positive, wasnt it weve been really worried about that yes, theres been a bit of a drop in the tensions surrounding that we have it wrong now. And the futures are up. Target out with quarterly results. The retailer came in with earnings and revenue and samestore sales that beat street expectations. They were feud by Online Transactions shares of target had been up by as much as 5 . Still up by better than 5 also the guidance for the Current Quarter came in with some pretty broad upside from where the street was already expecting things and again that stock is up by 2. 80. Apple is reportedly set a 1 billion budget to try and secure and produce original content over the next year thats a sign that the iphonemaker is seniors about making a splash in hollywood according to the wall street journal the Technology Company could acquire and produce as many as Ten Television shows the fed minutes are due out at 2 00 p. M. Eastern time today investors will be looking for any details on when and how the fed might start to reduce its Balance Sheet. President trump criticizing ecommerce giant amazon in a tweet this morning amazon, you can see here, it says, is doing great damage to tax paying retailers towns, cities and states throughout the u. S. Are being hurt, many jobs being lost andrew that tweet coming after the president s Fiery Press Conference yesterday where he criticized the ceos of Companies Like under armour, intel and merck for leaving his Manufacturing Council. Some of the folks that will leave, theyre leaving out of embarrassment because they make their products outside and ive been lecturing them, including the gentleman that youre referring to about you have to bring it back to this country. You cant do it necessarily in ireland and all of these other places, you have to bring this work back to this country. Thats what i want and the president doubling down on his initial response to charlottesville, saying all sides are to blame for saturdays violence in virginia. I do think theres blame yes, i think theres blame on both sides you look at you look at both sides, i think theres blame on both sides and i have no doubt about it and you dont have any doubt about it, either and, and, if you reported it accurately, you would say it after the press conference aflcio Richard Trumka resigning from the president s council and in a tweet said quote, i cannot sit on a council for a president that tolerates bigotry and domestic terrorism i resign, Effective Immediately. And we should bring your attention to a tweet going out this morning, this from the New York Times reporting that gary cohn, the nec chair who is jewish was quote disgusted and quote upset by trumps comments on white nationalists, citing three people with knowledge of that i imagine one of them may very well be gary cohn. Ive also seen similar tweets saying gary cohn is an adult if he feels these things, why doesnt he say them. Publicly, right there was some fallout from the events in charlottesville. President trumps chief economic adviser who weve been talking about, gary cohn, says that tax reform is still on track and heres what he said to reporters yesterday. We hope we can get taxes done between now and thanksgiving wed like to get infrastructure going as soon as tax comes out of the house and goes to the senate well put infrastructure into the house. Cohn said weve got a great skeleton for tax reform. He also said he wasnt sure where health care would end up lets get back to the broader markets. Weve been watching the futures this morning they have been higher through the entire session today, although off the highs at one point i saw we were up by more than 73 points. Now the dow futures are indicated up by about 56 points. Nasdaq up by 11. Joining us is pimcos global strategic adviser, also tom lee, who is fund strath Global Advisers founder, managing partner and head of research and welcome to both of you so, you heard what joe said at the top about all of these incredibly bad headlines coming out of washington, coming out of new york, or wherever the president is, and yet the futures continue to climb. Why is that . What do you think . I think part of it is the goldilocks story, which is the economys chugging along its not exciting but its consistent inflations below target so people arent too afraid about a hawkish fed, and of course as you know, and we learned from cnbc, earnings have been strong, and so essentially i agree im a little bit more than a little surprised, as one ofmy friends said, you know, the markets arent worried about korea and neither is south korea. The korean markets at an alltime high, too just the world that were in and tom, do you think that this continues if you look at these goldilocks sort of situations, how far do you see that kind of carrying out . I mean, i think theres a few things to be optimistic about. I think one is the way the markets are really strong. And i think you can play labor shortage we think theres going to be as many as 8 million fewer workers needed versus demand over the next ten years and the other is the housing i think theres a couple of things underpinning u. S. Expansion. But i think valuations are attractive its pretty tough to say you sure, rich we can say this is a goldilocks scenario, but what about 2 00 when we get these fed minutes where the fed starts talking about how theyre going to start shrinking the Balance Sheet . Is that the type of thing that could throw things off no, becky, i dont think so in the near term the fed went out of its way to design and theyve articulated this, how they want to shrink the Balance Sheet. Theyve done it in such a way as to try to minimize market disruption theyve telegraphed a pace theyre going to continue to buy. Youre going to be surprised even after the Balance Sheet shrinks theyre going to keep buying for about a year. So i dont think that Balance Sheet reduction in and of itself is a big deal for markets. Longerterm the fed still has to resolve how big a Balance Sheet they want and how much its going to have to shrink. But i think nearterm its pretty well priced in. Tom, we have the new atlanta fed president here earlier this morning, and he said one of the things that concerns him is how we have not seen more inflation. That is really something that suggests theres something broken along the way cant figure out quite what it is neither can anybody else what do you think . I mean, weve got low unemployment, and yet Wage Inflation hasnt picked up you know, weve done a lot of work on this area. And i think its actually just a matter of time before Wage Inflation starts because we are so unusually low in terms of using up [ inaudible what would you be telling people to do right now we keep seeing new highs every day. People keep getting for the pull back, what would you tell people to do . What were seeing becky is we think these are markets that look pretty stable, but there are some insecurities in the background, and as a result were maintaining somewhat higher levels of liquidity, keeping more cash than you might think at this stage in the cycle and youre not telling people to sell stocks no but were saying at the margin you might allocate more to cash in the future than you would just looking at the dow or the s p right now. Because you think a bigger pullback is on the horizon or potentially, these uncertainties are building, whether or not its the transition at the fed, whether or not its the u. S. China trade relationships. Three to five years out there are things to worry about. So we keep more cash tom, what do you think . I mean, i think its tough to buy the s p here but i think its easy to buy f. A. N. G. , because theres real growth there. And i think theres still some banks and telecoms and in energy some areas we like tom, rich, thank you both thank you coming up, the first round of nafta negotiations begins today. The ambassador Robert Holleyman joins us right after the break and then later following the altright money trail. Our own Contessa Brewer dug into the economics behind the movement that story, at 8 15 a. M. Eastern time stay tuned youre watching squawk box on cnbc i think that shes a very nice girl. You never got the brakes looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Welcome back to squawk box this morning a change in leadership at United Health david wicmmaine is going to be succeeded by Stephen Hemsley as ceo as of september 1st hemsley will then take the newly created role of executive chairman Richard Burke will become lead independent. Pretty good run there we go back more than negotiates from canada, mexico and the u. S. Will meet today in washington from the first round of nafta talks former deputy trade representatives, ambassador Robert Holleyman, president and ceo of C N International can something good come of this, ambassador can we actually improve on or take away some of the negatives of the original agreement, do you think . Yes something can be approved, on. All three of the countries degree that 1990 nafta needs to be updated theres broad agreement among the three about how to do that the question is, how do the three countries address some of the wild cards that have been thrown into the mix by each of the three countries. But on the fundamentals, there is agreement that nafta needs to be updated i just think by definition, as an american, we think were in the drivers seat on, you know, all these things, you know, much bigger, and they need us more than we need them. But ive heard the case made that mexico has so many other trade deals that were not necessarily, we dont necessarily have a lot of leverage on how this comes out is that true well it is true. Both mexico and canada are making the trade deals quickly thus improving the access of their products in the foreign markets. The eu just did a big one with canada, china and mexico have been considering whether they would reach an agreement so the u. S. Really needs to get back in the game, get this renegotiation done, try to get it wrapped up as quickly as possible, build investor and business confidence, in the power of the north american market, and use the powerful blocks of north america as a way to increase the ability for u. S. And our allies and our neighbors to get better terms in foreign markets. When you say true or false question, naftas been very good for u. S. Corporations. Thats probably that might be true normally you would think thats good for u. S. Workers, because if a company flourishes, you know, then its workforce is going to flourish. But is that is that definitely not true in this case its been good for companies, bad for u. S. Workers in your view the u. S. International trade commission, which is a bipartisan agency set up by congress did an Economic Analysis of all the u. S. Existing free trade agreements they concluded that on a net basis, both for the overall economy, for american consumers, and for american workers, that nafta has led to job increases in the u. S there certainly have been changes in the nature of that work following nafta. But, itc believe that where we stand now is a solid foundation. What we need to do is build things like digital commerce, we need to bring things like environment, and Labor Centers into agreement and then deal with some of the real challenging issues that are going to be the hardest ones for the three countries to address like the u. S. Focus on reducing trade deficits, and the focus to canada going on, including Climate Change provisions in the revised nafta. So reducing trade deficits, should that be the a goal of these renegotiations is that a is that something that is definitely a positive in all cases . Its been said its not necessarily a positive it is not a positive in all cases. Trade deficits are bad when theyre the result of artificial barriers that prevent u. S. Companies from accessing the market trade barriers are not necessarily bad when or trade deficits are not necessarily bad when theyre part of overall supply chain if the u. S. Gets a greater value out of what we import, than would be shown on the face of it so this new focus by the Trump Administration is really, i would argue, the certain u. S. Wild card in this. Because the administration hasnt said how they would get there. And the focus on a trade deficit itself is largely driven by other factors, like the strength of the u. S. Economy, by Foreign Investment in u. S. Markets so things that will ever be impacted by a trade agreement. So how the administration gets to a final yes on this, that also keeps mexico and canada aligned is the big open question as we get into negotiations. Any chance it really gets done this year thats what they said. Renegotiated by the end of the year you believe it if any agreement has a possibility of doing that, this one would be it. Largely what all three countries have so far including the yes are the provisions that were degr agreed to in october 2015 under the transpacific partnership. If that is the basis to 80 to 90 of the final agreement, and i suspect it will be, the question is can they get quickly to that 10 to 20 of areas where there will be disagreement and work through that. My guess as a better man would be that it probably doesnt get done but this i think is the one trade agreement that has so much prep work has been done that that is, in fact, a real possibility. Well, well watch were going to finish this, and tax reform, and health care, and the deficit, and the infrastructure all all of that all of that, and joe ill just add when i talked to you the other day you asked me about being ambassador to malta yeah. Yeah i just you got news on that . You just booked my trip the other day to go to malta at the beginning of the year. And iwant you to know, im going to check it out for you. And ill come back and report im not asking for a lot. Id rather have france, obviously, or italy. 4 but malta i will take, as let me know what you think you said malta the other day, im taking you up on it. You know if you can get that gig seriously you should take it its beautiful its in the mediterranean. Its awesome anyway, that was never my strong its there somewhere warm thanks ambassador. Ambassador to malta, Robert Holleyman. Not yet. Soon. Taking my spot is what i think i just heard i think so, too when we come back, cnbcs Investigative Team is following the altright money trial and how businesses are beginning to step in. E atto rhtftig aer the break. Whoooo. Looking for a hotel that fits. Your budget . Tripadvisor now searches over. 200 sites to find you the. Hotel you want at the lowest price. Grazi, gino find a price that fits. Tripadvisor. Welcome back to squawk box. After clashes in charlottesville, companies are now distancing themselves from the altright movement the latest is paypal which says it will not accept payments or donations for activities that promote hate violence or racial intolerance. Contessa brewer and the cnbc investigative time is finding out how the altright is finding new ways of funding. Unsolicited donations have increased since charlottesville. But the altright groups say they dont trust mainstream businesses with their money. In charlottesville, airbnb canceled the reservations at the last minute. Uber had refused rides afterwards the controversial website daily stormer which was a participant got booted by web host godaddy, and then by google i just checked you cant access it on the open internet maybe on the dark how do they know how do uber and airbnb know who these people are how do they know if youre a protester or counterprotester they were alerted by the counterprotesters, hey, you should take a look out for some of these people. Whats happening because of that the altright is setting up this alt economy. Businesses and internet platforms created especially to protect those who cant get a foothold with mainstream business so say they get kicked off go fund me. They can then get in the crowd funding platform researcher which now largely raises Legal Defense funds for the altright. And daily stormer is on there. It has collected more than 150,000 dollars. And thats only one of its fundraising platforms many websites now also accept bitcoin. Were told 10 to 15 of donations now come in bitcoin currency its preferable for those who can manage it, because it provides anonymity, and theres less risk. Paypal even before this latest decision, often was holding money, or forcing refunds, so, some banks also have been reluctant to issue processing for credit cards, which leads people with high risk processors, counter. Fund provides that alternative. It handles credit card processing or paypal transactions it will turn bitcoin into cash it charges a hefty fee, 20 . But that fee, in part, goes to Fund Movement activity its creator Pat Dickinson told me yesterday, we cant trust these companies because theyre controlled by the left we need to build our own system. We need to build a shadow economy. And he envisions a Business Model, monthly subscribers who buy from each other, job boards where applicants dont fear being fired for their views, and what he says is think of it like a Grocery Store coop. You would all be supporting each other. Wow saw some stuff yesterday, email that had come in talking about how counter protesters were going after visa, mastercard and some of these things to shut down these groups it seems like the businesses themselves, thats a pretty big risk to try and figure out and constantly police yourself and then theyre running the risk, too. Were going to talk later today to some people who dont consider themselves necessarily to be part of the at right movement they say absolutely theyre not White Supremacists or neonazis but they see it as a slippery slope. Today if paypoll is willing to hold money from a distasteful, controversial group, what happens to this fringe group who they disagree with tomorrow. What is ultimately, but for me, the legality of this everyone i talked to yesterday has been toeing the line when it comes to paying their taxes. They file the appropriate tax forms. They file for nonprofit status they pay their employees and their Social Security taxes. They are toeing the line because they dont want to end up in jail oh, no im not talking about the tax implicatiomplication im talking about the decision not to do business with certain people because of their views. Well, as you know even if theyre your First Amendment your First Amendment right to free speech is has to do with the government, not interfering with your free speech it has nothing to do with private companies. But look, weve decided as a country that you cant discriminate in terms of employment, on certain issues. Based on sex, based on race religion. I mean, theres an ideology. Religion is sort of an ideological but free speech is still one of those areas where your company has a say in what you say. Very interesting. This is going to get very interesting. Coming up, july Housing Starts welcome back to squawk box. Rick santelli here live on the floor of the cme breaking news. July read on Housing Starts. Expecting something close to 1. 22 1. 23 million we end up with less. 1. 155. Seasonally adjusted annualized units. Sequential slight revision downward which makes this number down close to 5 . Permits, what lies ahead 1. 223 million. Thats a little on the light side follows 1. 27 which was slightly revised to the upside. Makes this number down 4. 1 . Last time we were near 1. 155 million on the top line on starts well, thats the weakest number. Only since may when it was 1. 122. Just to give you some real historic kind of feel for this number its alltime high is 2. 7 million in january of 06. Theres been lots of improvement. Still running basically half speed. Getting closer and closer to 230. The euro slipping a bit. Seems the news of the day, mario draghi is not going to say much in jackson hole. All right, rick, thank you very much. Activist investor trian partners has issue d a letter t Procter Gamble they say peltz has a long track record of improving performance at consumer oriented companies, of course this has been the back and forth. Procter gamble ceo taking aim at that and talking about how under his guidance shares have been up 27 beating the markets performance. He points to nelson peltzs performance on the boards that he sat on during that time and said theyre only up by 8 and even points to the one large Multinational Company that he sat on mondelez and those shares were negative during that time period President Trump going to be a fight President Trump responding to reporters questions yesterday after a number of ceos deported from the white house Manufacturing Council. Joining us now ron christy, ceo of christy strategies. He joins us from washington. Ron, it is its good to see you. What should ceos that are on any of these councils, what should they do . They should search their own soul or decide how they feel about it do they have an obligation as good Corporate Citizens to do something . What do you think they need to how do they respond to what we saw yesterday in the press conference well, good morning. I think they need to tread very carefully. I think the ceo of under armour said that were in the business of sports, and were in the business of business, not politics if you can find a way as a good, Corporate Citizen to associate yourself with public service, to work with the white house, to advance a very good cause of lowering Corporate Tax rates and doing things that will promote economic growth, im all for it. But, if you join a council, or you join a board and you have a president of the United States who could potentially bring harm to your business, as a Small Business owner myself, i can tell you, i dont want to take any risks that are going to hurt my bottom line what about just as an individual, with a conscience, that in the past, for probably 100 years, not 100 years, i guess, but for since world war ii, all president s have had a an easy answer about White Supremacy or nazis or any of those things, and you would think the president unambiguously, you know, make it very clear, zero tolerance did we see that . Should we be disappointed . Well, im disappointed to be honest with you. Everyones saying that President Trump should have come out last saturday night and denounced the white nationalists my view is he should have come out last friday. You had a number of neonazis marching in charlottesville on friday evening the president s grandchildren are jewish his daughter is jewish his soninlaw is jewish as an american and as a father you would think that hey this is unacceptable behavior im going to step forward with a podium and the power of the bully pulpit of the presidency and say, lets just stop this nonsense before it goes any further. And the fact that it took until, frankly, two days ago for the president to make a really strong statement on this, i think has a lot of people wondering whether the president understood the magnitude of the crisis that unfolded in virginia so number one, what can you explain in terms why you think that was that was the case . Does it have to do with certain parts of his base might have tendencies that lean that way and he doesnt want to alienate those individuals . Can you figure out where this is coming from . I think if i could figure that out id help rally the market as a ceo, should a ceo at this point you said you know, tax reform is a worthy objective. If it entails seideling up with someone that you disagree with, or where you think either as andrew in a tweet yesterday said either implicitly or explicitly doesnt have a problem with hate, to some ek tent, can you sedai sidle up to that person . Do the means justify the ends . I certainly could do this if this administration asked me to join a Business Council and promote the efficacy of why lower tax rates are good for america, good for jobs, good for stimulating growth, i could absolutely do that at the same time again i would say is this going to hurt my bottom line . Is this going to hurt my image as a llc owner could i potentially take clients of mine that dont want to associate with me due to my association with the president so i think its a very important calculus for these ceos to make. Let me be very clear i support those ceos who felt that it was in their best judgment, their conscience to step down from this board because they did not believe the president acted forcefully enough they have to vote their conscience they have to follow their instincts, and these individuals, i think, made the right call by following their instincts and their judgment hmm all right. Before we go, i have two questions. Which is theres a piece in the daily caller weve been talking about it this morning where they say that corporations now have sort of this new role in society, in terms of being a moral arbiter. Do you think the company should be a moral rbiter . Do you think thats, in part a parcel of this idea of leadership, in an age where corporations often talk now about the values you know, andrew, i look back to the 1980s and those companies that were invested in south africa, and those companies that were doing business in south africa, and you say to yourself, do you have a moral responsibility as a corporation not to associate with a racist regime and i think the answer is yes. I think that they do have a moral imperative to try to do better by their shareholders of not getting involved with Shaky Investments or those who have a repugnant sort of Business Model. So yes, i do think you have a moral imperative and thats why again i believe that those ceos who decided to step away from the president s council did so because they thought what was best for their shareholders do you think the president s a racist no. You dont i think hes misguided. I think he certainly doesnt understand the magnitude of what took place this past weekend but i cant look in someones heart and say yes i think youre a racist i just fundamentally dont believe hes a racist, but at the same time i think he needs a lot more learning to understand the magnitude of the office that hes taken just these past six, seven months ron, thank you. Good to see you okay. When we return inside look at the Decision Makers at netflix the streaming platforms latest power move, snagging the socalled queen of tv Shonda Rhimes from abc. Well talk about that in just a moment are the best here. Yeah, but his offensive win shares didnt even break 4. Come on, check out that stopandpop what do you think . My tradeoff analytics indicate no one creates more space on offense. This allows him to nail a jumper from a densely populated urban area. What youre trying to say is from way downtown . I am still learning. I can see that. Welcome back, everybody. Some stocks to watch, citi raising its rate on mylan to buy from neutral it said its best positioned to execute in a challenging environment. Bristolmyers squibb under pressure the company says that a combination drug treatment for Kidney Cancer patients did not meet one of its primary goals in a late stage trial and Hedge Fund Elliott management has raised its stake in miner bhp billington to 5 . Elliott pushed at changes since first buying shares of bhp back in april were going to talk netflix, because its been a busy few days for that company. Disney announcing its going to shift marquee content off netflix in favor of its own service. And then netflix snatched Shonda Rhimes from abc. Variety got a look at one of the most critical players, the chief content officer, joining us right now the author of that story, varietys new york bureau chief. We appreciate you being here this morning thank you for having me so, there was another article, not yours, but another that said that netflix wants to be disney. Do you where do you think this all goes . I think netflix really wants to be everything they want to produce content they want to push out the content. They want to have you watch the content whenever you want to watch it and its changing and revolutionizing hollywood. And its disrupting people often talk about netflix as a great disruptor. It really is disrupting what the studios do and wrecking models. Whats going to happen in 2019 how important do you think the disney content is to the company . Well, so heres what happened last week. In addition to nabbing Shonda Rhimes who is the biggest show owner on tv they also convinced David Letterman to come back and do a talk show, they got the cohn brothers to do their first tv show for netflix. Theyre announcing new deals it seems like every day or every hour i think theyre trying to prove that they dont need disney content. And the disney animated but this stock must have been set up for a long at least some of it for a Long Time Coming even before disney made this announcement. These negotiations are prolonged, and they can take months so i think all these things happen but they didnt necessarily happen, you know, on purpose, all sort of in this but think about this world. Come 2019, theres going to be netflix, theres going to be amazon, which i assume youll still get free as part of being a prime consumer, which will get you ancillary benefits, youll have hulu. Now youll have disney and apple saying they want to make tv. Youll have hbo. Youll have showtime im probably leaving out somebody in all of this. Are we all going to have ive got seven fingers at the moment up, are we all going to have seven subscriptions, plus the cable . That hasnt been worked out yet. And so ted in our interview this week, i asked him about that and i talked to him about that he said its hard to launch a streaming service. Its hard to do what netflix does, and theyre way ahead. Right so the question is, are you going to really need to subscribe to all seven or are most consumers and users just going to say ill do netflix, and then ill do this in a Movie Theater or see this on tv or this it will be interesting to see how consumers do you think hes going to ultimately get into the sports game because thats been the one piece that people have waited for in terms of how this whole tv landscape may change. I think anything is possible for netflix. They seem to be interested in all content. I asked him about the live tv question because one of the things that theyre doing is veally ramping up reality tv they have 50 tv shows in production and he said so far live tv hasnt really worked for netflix because the idea of netflix is you can watch on your own schedule whenever you want and so i think for sports that doesnt necessarily make sense but that said it doesnt mean, you know, a few months or years they cant find a solution to that prison reality stuff coming up do you know any prison stuff . Prison reality the best reality stuff we talk about, all of the lockup stuff. Actually, no. They were losing disney, netflix. At this point, more than a couple of times, sorkin, i have gone and i had to find it on amazon prime which i find i am a member of. And i can watch. But they dont have, they never have the movie im looking for it always says im putting all the letters in and trying to work it to you know spell it, it always says its coming up, and then it shows me things similar to it. Its never the movie that i want so they already dont have the movies i want on netflix whats the problem this was a turning point for the company five years ago that made the decision they were going to do original content and i watch that. Thats good. Give them the content but if i want a movie its not on netflix its on amazon they want to be well known for their own branded content. Is netflix more like a disney when you start thinking about content. Or more like an hbo . And i guess that tries to get you to the valuation space right now theyre more like an hbo but that doesnt mean that in a few years it wont be more like a disney and they want to do more movies. Is it going down in less than five years stock price has been going up, up, up the cover of barrons was in five years it could cut in half. They hope it wont be the big issue is the cost theyre spending an enormous amount of money and the others, just whether you can surface all of this content, meaning the amount of go on to netflix and theres so much content its unclear whether you could even find half of it. If you think that over the longterm at some point they say actually were going to make less content, not more no they seem to be in the business of more and more. Theyre spending 7 billion on content next year. He was saying its revenue that theyre spending. Theyre not taking out debt. Right because its money they have. You subscribe to netflix and you who is the loser in allist . The loser is the studio the loser is the tv networks that are losing their talent, you know you want Shonda Rhimes to stay at abc theres bidding wars for movies and product. Everything is becoming more expensive because netflix will pay more the other premium guys . It hasnt caught up to netflix. Amazon is very different than what netflix is doing. Netflix is the leader right now in streaming and looks like they will be for netflix goes in half, comcast doubles. Thats your prediction . No. Were oend by comcast. It is a great it is a great story and ted is a remarkable ted came out of nowhere i mean thats the other thing. Ted is just a personal remarkable story so read the article. Thank you very much appreciate it the nfl preseason is kicking off with some changes under way after ratings of regular season games plummeted last year. Julia boorstin joins us roo it now. Julia, good morning. Good morning, becky coming off last years ratings slump nfl preseason is off to a strong start with the kickoff game drawing its best ratings in five years and some changes are under way to make the games more engaging and keep that ad time the most valuable in television this season viewers will see less frequent but slightly longer ad breaks about four for quarter instead of five. And some commercials will run along with the game on half the screen and to speed up the game, halftime will be limited to 13 minutes and overtime shortened to ten minutes refs will be able to review plays on the field on tablets to save the time it takes to go to the side liens and the new play clock will start the game quicker after scoring plays. Nfl games on nbc, cbs, fox are exposed. Together they brought in about 5 billion from football ads last year. Now Piper Jaffray saying in the note that they expect to see above ad revenue in coming months last years decline was mostly due to the election. All right, julia, thank you very much. Folks when we come back, jim kraker will join us live from the New York Stock Exchange. Well get his take on todays top stories. Futures have been positive all morning long right now dow futures are indicated up by 60 points. S p up by 5. 5. Nasdaq up by 16. Welcome back to squawk box check out shares of Urban Outfitters surging posting better than expected results up 22 this morning in the premarket. The retailer posted earnings of 44 cents a share compared to what the street forecast net shares at 873 million but still exceeded estimates and aim store sells had fallen and thats better than the 6. 4 drop that wall street expected. This is is a company left for dead. It was a 40 stock in the last year. Yeah. And it was at 16 so it was on its lows but thats a good snap back lets get down to the New York Stock Exchange jim cramer joins us now. Target what about target, jim . What do you think of target . Well, target lowered the bar very very really just underpromised overdelivered at the beginning of the year and now theyre beating their lower numbers but you know what, well take it. Its obviously not as good as Urban Outfitters where they literally said each month was better than the last and that perhaps things have bottomed but target good, Urban Outfitters in the sequential really good. Yesterday a really terrible day for retail kicks basically putting out that its the worst of all times so its a very bad picture. You nighted health is a monster, right i mean, does this matter that hes going to executive chairman i think they did it right youre absolutely right. He has navigated the Health Care System better than anyone. I have felt and i have said many times joe if you gave the Health Care System in the u. S. To United Health we would be in unbelievable shape because they have all the data. They know what works and what doesnt. They could run the Systems Health care and do a heck of a lot better job than the government. There is, wow. Yeah. They know they know what works, what doesnt work they have a great data base. How many more ceos in your view will eventually end up leaving at this point . If you havent left yet, you know, youre probably maybe sticking around. I know that theres were saying parade in exodus but last night was a different press conference and no one this morning said anything unless theyre waiting for the market to open. Did you know bannon no, i didnt. I regard gary as a friend but i did not know bannon. Think he leaves its over my head. Jim i dont know if you saw reporting that gary is disgusted by what he saw what do you think that does in terms of his ability to work inside the white house and potentially to end up being the fed chair . I think that intemperate marks by the president i think hell temper i think hell be a little more accommodating when he reads that i dont think hes going to take that out on gary i think he needs gary very much. I think theyll make some peace. Gary cant go anywhere gary has to stay but i understand he has a conscience just like everybody else. All right, thank you. Well see you in a couple of minutes. Dont miss the ceo of valiant pharmaceuticals. Its joe is it papa joe papa. Its absolutely joe papa. All right thas tan exclusive interview at 6 00 p. M. Eastern time. The babys room wont build itself. And her paw wont heal on its own. Were all working forward to something. Synchrony financial can help your customers make it happen sooner. So she can plug into her dreams. And theyll have a new addition for their new addition. Whatever youre working forward to, even if its chasing squirrels, Synchrony Financial can help you get there. 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Recode now reporting that early uber investor is calling on benchmark capital to leave the companys board. Suggests that benchmark is working with another major investor in an attempt to remove them from the board so as the world turns. We will soap opera continues. We will give you the next installment tomorrow. In the meantime a final check on the markets tomorrow before we hand it over to squawk on the street the futures have been higher all morning long dow up above fair value and the nasdaq up by 17. This comes after a flat day for the markets yesterday. If you want to check out the treasury market looks like the ten year note is now yielding 2. 275 so those yield versus picked up substantially where fr where they were last friday at that time. Right now its time for squawk on the street. Earnings in focus as the Market Studies the president s base of support among briz europe is up fed minutes are headed our way at 2 00 p. M. Eastern time. Another Business Leader stepping away from the president as potus doubles down on the both sides rhetoric target beats comps are up, stocks are higher