Transcripts For CNBC Squawk Box 20170818

That they have killed five suspected terrorists they were wearing suicide belts which authorities detonated in controlled explosions. Police say both incidents are linked President Trump responding to the attack tweeting the United States condemns the terror attack in barcelona, spain an will do whatever is necessary to help be tough and strong, we love you. Meantime, lets check the markets. The dow fell 274 points yesterday. The second worst session of the year but as you can see, its 1. 25 a big number, but 1. 25 . We always need to mention both because somehow we snuck up past 20,000, so that the big triple digit numbers on a percentage basis need to be put into perspective. It gets people nervous on a late thursday especially a late session selloff, that leads into friday its not awful necessarily this morning, but it is down, showing continuing losses. Treasury yields, the markets rallied sharply yesterday. Back below 2. 2 on the tenyear thats whar what wet were loot today. It was red earlier 2. 189 on the tenyear. I thought the euro might be over 118 at this point, it wasnt last i looked. 117 still. Not a lot of movement there. Overnight in asia, it wasnt quite as weak as it was abou the same in europe something that technicians are writing about, a lot of stories about some reemergence of the hindenburg technical problem it looks at nonconvergences between the dow, s p and ge. Ge, a multinational with operations everywhere. When something happens to those three things, i dont know the derivation, but i assume its bad. The idea that ge you wonder how outdated that might be the idea that ge indicates anything anymore did you see ge yesterday 24 24 all the stuff, the back flips getting above 27, well do this, reail gallocating this prepare r the future with this, it was 60 at one point, now 24 worst performing dow component over the last i dont know how many years do we care about the hindenburg . Scary name, but with ge i know nothing about this i will try to figure it out. Nickel was a alcoa alcoa i dont know if General Electric matters in terms of i wouldnt put it in a technical indicator anymore. Lets tell you about other stocks to watch. I dont think these are part of the gap gap could be in the hindenburg replace ge with the gap images in here with this. Gap posting betterthanexpected earnings. The clothing retailer raising its fullyear forecast, positive results thanks to old navy products, fewer discounts and Inventory Management efforts thats good news for a company thats struggled shares of raw storage jumping. The retailer posting earnings and sales above wall street estimates and forecasting sales and Earnings Growth for the second half of the year. Profits at thapplied materials beating the street you dont want to miss the companys ce ocean, garceo, gar, at 11 30 today im reading about the hindenburg its right 30 of the time has all these crazy things, including the mcclellan oscillator the issues of a specific exchange hitting 52week highs and lows has to exceed 2. 2 , the number of those issues in the exchange okay well follow this up and talk about it more later today. In political news, President Trump scrapping plans for a new council on infrastructure. Eamon javers has more on the latest on councils that seems to be falling apart no resignations or firings from the trump team this week, despite the speculation that there would be a shakeup on team trump in the wake of that Fiery Press Conference on tuesday. All of his aides and staffers seem to be remaining yesterday an indication that the white house may be having trouble in the wake of the charlottesville incident in attracting new support they pulled the plug on an Infrastructure Panel they were trying to create heres the statement the president S Advisory Council on infrastructure which was still being formed, will not move forward so much of this speculation has focused on gary cohn, the president S National Economic council director, former Goldman Sachs executive. Would he stay or go . The white house putting out a couple statements yesterday. The most recent one is nothing has changed. Gary is focused on his responsibilities any reports to the contrary are 100 false this has been a very tough week for some of the president s supporters in Corporate America. I want to draw your attention to a quote from billionaire home depot founder ken langone. He was quoted address sayis saye president has blown it he said i had high hopes he has blown a great opportunity. He completely mishandled charlottesville. How can the president repair his relationship with Corporate America . Thats a big question facing him when he returns to washington next week. Today he is expected to go to camp david where he will deal with south asia. The Vice President has come back early from a foreign trip. He will join the president there. Were told thecleared his schede weekend should the president need him eamon, thank you. Joining us is semien hyman and j. J. Earlier we were talking about the vix, the hindenburg and ge at one point it was up 30 , the fear index i said i forgot but kinnehan is coming up. Its from low levels, but in this case were do for something. Sometimes it starts like this, doesnt it yeah. Ill say this, everybody is talking about the political ram if i kegs of yesterday, really you have to look back to earnings walmart and cisco were as much as theres intrigue about politics, walmart and cisco started this cisco the night before last, walmart yesterday morning having disappointing sales on sams club, about 6 of their revenue. That started this. Vix jumped, then bonds and gold started to jump. The three primary risk measuring jumping on the same day. Its something to be concerned about. As we look at the s p 500, last night we stopped at 2430 we can go down to 2412 before we see some support overall today you will see people on edge a bit certainly early in the day as we come into the opening. I would be surprised to see, you know, so many times weve seen vix jump, the next day its back down 20 it would surprise me to see that quick selloff this morning didnt help im not putting, you know, barcelona, im not using that as an excuse to talk about the stock market but when that happens again, and over the years, you know, there was madrid, there were multiple terrorist attacks. The case has been made that the markets are used to these things now, and snap back quickly but you cant help it, when you see Something Like that, no one its just a sickening feeling. Suddenly were reminded, theyre there. Theyre still here, theyre plotting every day to try something omewhere that wasnt a good thing at all yesterday. Doesnt affect the markets directly, but doesnt make anyone buy stocks. Theres more important things to b think about. These moves are not anything to be concerned about. The s p is down 2 , but the barclays ag is up 25 basis points this month. Thats not much of a diversification benefit. Earnings, aside from a couple of disappointments, top line was up 10 , 5 on sales, 0 on earnings so you have that support there the question is where else are you going go the options are tilted towards development in International Markets to defend against weakness in the u. S. Suddenly we stop talking quite as much about north korea, but i guess isis is still something. Thats not going away. This is a generational i think thats right. Your vix comments, we are taking sort of two steps forward and one step back. The vix popped about 50 on the north korea flair up came about halfway back, yesterday the vix popped about 20 , 30 there is opportunity for trading around that. You have to be careful that step back can be quick. In fact, there was a lot of short trades on volatility coming out of the two pops even if you look at the losses from yesterday, big numbers on the points, but it only gets you back to where you were three weeks ago for the dow, five weeks ago for the s p 50 500. What do you tell people to do at this point . Do you think this is the beginning of a bigger selloff . Every time we had a selloff over the last five years, it has paid to be a buyer i guess the if i was looking at it as a football play, it would be like keep running the play until it stops. That being said, i think people have to be cautious. Theres you know, theres so much noise around the market the market has absolutely ignored everything but earnings. As rightfully it should. Earnings drive the stock market. When there is this much noise and it seems like theres been a cascade of it over the past two weeks, i would tell people to be more cautious. You dont have to buy the bottom or sell the top. With that being said, anyone who enjoyed the ride that we have had since the election basically, and has done absolutely nothing should be looking at their portfolio overall and saying should i perhaps lighten up if we go down, its another opportunity f we go up, one mistake that retail traders make, they look at this world in an all or none type of way. Most professionals i know look at the world in an iterative type of way. So now may be looking at maybe taking risk off the table with whats going on with isis, north korea, any unexpected thing that may happen and there is a lot of political noise at the moment. Some number of sessions without a positive result, but do you know anything about the hindenburg i know nothing about the hindenburg as a child, as a teenager, as an adult, have you seen the damien i have seen all three of them i never checked your scalp out maybe a little 666 when gregory peck finally looks those are scary movies. That kid was a good actor whats wrong . I wanted to go back to high yield spreads, away from the movies what about the hindenburg you knowing in about the hipdenbehipd e hipdenbehipd e hindenburg i will look at the high yield blips as opposed to the hindenburg do you know anything about it becky says it never works. I know more about the movie than i do about the signals, joe. Yeah. Okay they remade it, too. I dont think the remake is quite as good. Doesnt have the excitement it once did. The Jurassic Park guy played damien as an adult. Did you see that yes sam neil. The guy who is the professor . Yeah. Theres another annabel out, too. I went back and i this is what i found on amazon prime, Sorkin Netflix has this is similar to anna bshg annabel, and its really bad okay thank you. I spent some time this morning reading this, Travis Kalanick now officially firing back against benchmark capital the former uber ceo filed legal documents against the Venture Capital firm arguing its lawsuit was initiated as part of a public and personal attack on him. This is kalanicks first court filing since benchmark sued him to force him off the uber board and rescind his power there. Benchmark citing fraud and deception. What happened i dont know. I dont know i cant fathom i dont think it ends well i dont know if it ends well for benchmark nor travis nor to have infighting like this, you know, dueling lawsuits i dont know if it ends well for uber yeah. Theres no ceo, theres no cfo. Theres nobody running the company. I like this whole story, because shervin is a friend of ours fshlgt we should call him. And hes doing the hyperloop. Im changing subjects here. Did they really get government approval to start doing that we never heard. We saw the tweet from elon musk saying regulators i dont think so. I think somebody told him dont you want it to happen yes, i do dont you think it would be cool i do. I think you have to live for a while for that to happen is this really better than a hyperloop discussion only because its the news of the morning. And its a deal you like it. Energy Capital Partners in agreement to buy power corporation. The private equity firm will pay 15. 25 per share in cash for the company. The deal could be officially announce td as soon as today. When we return what happened nothing he was being himself. Who was being himself you lost me a little. Calpine is a member of the that company went to Single Digits a couple of times theres a new standalone star wars movie. I know. Can you get excited about that no, i cant well tell you about that after the break. So you miss the big city . I dont miss much. Definitely not the traffic. Excuse me, doctor. The genomic data came in. Thank you. You can do that kind of analysis . Yeah, watson. I can quickly analyze millions of clinical and scientific reports to help you tailor Treatment Options for the patients genomic profile. You can do that . Even way out here . Yes. Even way out here. Even way out here . I know when i hand them the its gonna be scary. Car 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. Livestreat the airport. E sport binge dvrd shows while painting your toes. On demand laughs during long bubble baths. Tv on every screen is awesome. The Xfinity Stream app. All your tv at home. The most on demand your entire dvr. Top networks. And live sports on the go. Included with xfinity tv. Xfinity, the future of awesome. Check this out i was reading this, i thought, great, were going shares. The story is the most expensive stadium ever built for High School Football. What state did you think texas i tint even read didnt even. Any doubt friday night lights 12,000 seat stadium in a place called caty, texas, probably near a big city but really 12,000 seats 70 million to build the field is named after mike johnson who coached the caty tigers to three state football titles in seven years. School Officials Say the stadium will benefit teams from eight different high schools and host more than football other uses will include drill teams, band, cheerleading, soccer they had to throw all that in. They couldnt say were building a 70 Million Dollar stadium for a High School Football team. But in texas, this is what you do thats it. Where else could it be . I didnt read the story, but i figured techxas. Delaware. Maybe not. Mondays eclipse expected to cause traffic jams in the area where the full eclipse will be the longest but also expected to jam cellular networks. Some of the Rural Area Networks werent built to handle the influx of people at t expects video usage to be high during the eclipse. The four largest u. S. Cell phone carriers are deploying portable towers to many areas such as hopkinsville, kentucky, a small town where the eclipse will last the langeongest duration of thre minutes. For more, go to cnbc. Com do you have plans no plans. All i can tell you is years ago, 1999, i went to cover the last major eclipse of the century, cornwall, england. That was the best location to see it i dont know if it was millions, but hundreds of thousands of people descended on the place, and then it rained i know people who have reservations in three different places who sent you there . The New York Times i was working for the New York Times. It was 1999. Was it going to cause merger and acquisitions no it was august. All of the reporters were on vacation all of wall street they called me and said could you go i was 21 or 22 years old, i could not rent a car back then, you had to be 25 from. You didnt know how to drive a car back then. I called the editors, back then they said get a driver. Newspaper business i was driving around you couldnt find a driver, so i hired a these Companies Like the wedding drivers, we had a we got a fancy car driving me around cornwall. Then it rained it was a funny story any way so theres no y2k issues, are there . People are trying to no, i remember writing about those, too yeah. This is going to happen and be gone, it will be like, oh i think, isnt it . Its exciting its fun to see a social movement that gets the world kogt a together and thinking about something lighter. Lets take the day off take the day off and look at the eclipse. Um maybe move the show to one of these locations. You can do it afterwards. It doesnt take place during the show thats true. Will be forgotten quickly, i have a feeling its fun. Its kind of an interesting thing. You buy lottery tickets, too. Im not going to the eclipse, my parents are once the lottery is over, do we still talk about it . No, but its fun. Isnt it a half billion dollars now . Is it really . Yes where is my ticket . Well do it after the break Obiwan Kenobi that was the most exciting news of the day. Obiwan kenobi is getting his own franchise. Disney keeps working on these youre a movie guy, all you do is talk about movies. I know, but from the 1920s, i know. Are they remaking war of the worlds . Coming up, ceos distancing themselves from President Trump. What it could mean for his legislative agenda later, Scott Mcnealy told us when Trump Took Office it would mark the end of eight years of waterboarding for the business community. Well check back in with him at 8 40 a. M. Eastern. 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Then well have her cleanse you house of evil spirits. Well do anything, spiritual chatter seriously anything to help you get your home. Ally. Do it right. Youre watching squawk box live from the Nasdaq Market site in times square. Good morning u. S. Equity futures at this hour, take a look. I bet theyre moving around a bit. Earlier they were down, theyve turned around. Theyre recovering from the 200 plus loss yesterday. To get there, you have to be down 90, then 100, 180, then 200 i guess you know this we know how to get to 270. As its happening, it seems worse than is 1. 25 . A manhunt is underway in spain for the terrorist who drove that van into a crowd of pedestrians in the heart of barcelona yesterday. Earlier this morning Spanish Police confirmed a second suspected terror attack in the coastal town of cambrils heres what we know so far 13 people are confirmed dead, more than 100 are injured in that attack. Authorities expect that the number of deaths will rise isis claimed responsibility for the attack but offered no proof. Not that that matters. In cambrils, police say they killed five suspected terrorists they were wearing suicide belts which were detonated both isnncidents are now known be linked. Some political news to tell you about. Senator bob corker had some pointed comments regarding President Trump yesterday following a luncheon in tennessee. The president has not yet has not yet been able to demonstrate the stability no some of the competence that he needs to demonstrate in order to be successful. And we need for him to be successful it doesnt matter whether youre republican or democrat, we need our president the world needs our president to be successful he said that the president has not demonstrated that he understands the character of this nation. Ceos all over the country facing difficult decisions this week in light of President Trumps response to the Charlottesville Violence they had to decide how closely they want to be associated with the president but also how to lead their Diverse Group of employees. Joining us now to talk about this is Robert Safian with fast money magazine, and we are joined by kate kelly, cnbc contributor and longtime friend and part of the family we have not seen you in a while. Heres where i want to start the conversation yes ill start with you, robert so many of these ceos have disassociate the thd themselves the president via these councils correct however, how and if are they going to communicate, relate, work with the administration and washington Going Forward i cant imagine theyre really going to cut off all communications as a result of this of course they cant, right but we have to remain ourselves how unprecedented this moment is with the relationship between Corporate America and the president. He has selected these folks. They agreed to be with him, and then they pull back. This is it is an unprecedented moment it creates a lot of uncertainty in a lot of ways for the way government operates and business operates and the cultural backbone of the way the country looks at these things. You cant disengage from being with connecting with the government i talk to some of these ceos, as i know you have. They say, listen, in our jobs we interact with Business Leaders all across with government leaders across the world who have lots of difficult places, who have politics and policies we dont agree with. We have to work with them. They recognize they have to work with the u. S. Government but the cultural leadership that they are forced to engage in as leaders of their businesses forces them to act in a way that they im not dismissing how important the significance of the optics of this are my question is how much of this is optics, this is to say its one thing to be a part of the construct of these councils, its another to go in privately and engage with the administration i guess the latter will continue to happen, andrew this move that we reported on this week was optically significant and substantively significant. There were serious issues that we dont have to debate about, about the response to charlottesville, what was lacking there. But i think this president , for example, has shown to be somewhat fickle in terms of his relationship with people im sure hes frustrated now that may change within months or years. Also these ceos have other lines into the administration. There are rapports that people have with jared curb mekushner, cohn, Steve Mnuchin of the treasury is in touch are a lot of executives, specifically the business executives, because they lobbied for the v. A. T. Dismissal. I think that will continue, even if its not at the donald trump level it will continue with the administration theres a difference between the relationship your having with the government and administration and then specifically with the president. Thats the divide were seeing come across. There is pressure on government on Business Leaders to act and have influence on culture and society. To lose the platforms they have. Theyre getting pressure from employees, and their responsibility is continuing to rise it was before this event you go back a few weeks ago, we were talking about memos at google, the role that Business Leaders had to play in gender issues, cultural issues. This is an ongoing trend trump that let me ask you a question fast company has been at the forefront of this. As companies have spent more time espousing value the, being more value oriented there was an article talking about whether companies have become the moral arbitrators of america, or whether they should be i think more and more they are required to have to exhibit a moral responsibility thats more and pore required by the way employees react to them, the way the marketplace reacts to them, the way customers react to them. Bob makes a good point. There one person i was talking a private technology pane in new york he w company in new york he said people used to have church and other institutions where they felt connected and it created their cultural and moral foundation now the workplace is the center of focus he thinks that people really want to work for a place that stands for something that they consider to be morally sound that has a mission, that is substantive and beyond just making widgets in that respect, thats the prism through which he sees some of this behavior this is great finally the New York Times will look at the ceos as not just someone to call out for high compensation and greed, but now paragons of moral virtue this is good they may not all be paragons, but these guys will make it i dont want to be cynical. These guys will make it look good in terms of thil say aeyll the right things but when push comes to shove andrew was going where i was going to go. I said i am not going to get involved in this conversation, but im like are you sure theyre not going to be working behind the scenes just like before now that the optics are off the table, theyre freed up, they dont have to be told wow, youre associating with this person anymore, they can still do it through back channels, but theyll try to do it for the company and in terms of tax reform, there is a Friendly Administration to some things that theyve tre trying to do. Its not frently lyfriendlyr things they want to do. And its devoid of legislative victories. Ch when i heard bob corker talk about he wants the president to rise to a new level of competence the senate is talking about competence and getting things done all right. Do what i say, not what i do, bob. Like i say, heal thyself theres tax reform, naziism, bigotry none of them i have been watching the whole week i saw. I was there for ive been on for three hours a day the entire week talking about that. Im just raising, you know i saw it. Im aware. You can understand the we covered it the Cable Networks have covered it. You can understand corkers frustration. He goes back and forth. We now you have a republican house, republican senate, and a republican president en, and were not getting anything done. It thought the significance f what he said was about the president not appreciating or understanding the character of the nation i think its different competence is one thing, but to go further, and then the larger question that all of this relates to is what is the ability of the president to push through these policies if you have people like bob corker, whether you think hes competent or not doesnt almost matter for the discussion were having, the corker comments are far more important than the ceos yes, you would like a buyin from Corporate America, but obviously the lawmakers involved are more Important Congress has some big things to deal wfrmt. With. Its always the same four chuck todd said they contacted 52 republican senators, not one would come on. I know theyre not coming on, but the ones who are most does that change the dynamics in terms of i know. Was tough to push through tax reform before. How much tougher did it become true. These guys are all interested in selfpreservation as well. They think we dont even care about this president , we need to do tax reform for ourselves to get ourselves reelected. It will be interesting to watch. Reelection and getting good tables in d. C. Right i think the next question is do the defections stop here with the ceos or do people leave the administration thats the next question kate kelly, robert, thank you. Get the magazine good article thank you when we come back, Quarterly Results revealing some big winners and losers in the retail space. Then Business Leaders distancing themselves from President Trump. A trump supporter will tell us why hes sticking with the president. And later this morning, sun micro ceo Scott Mcnealy gives us his take on everything happening. Stay tuned, you are watching squawk box on cnbc whoooo. Going somewhere . Heres some advice. Tripadvisor now searches more. Than 200 booking sites to find the hotel you want and save you up to 30 . Trust this birds words. Tripadvisor. Welcome back time for the executive edge. Janet yellen will be speaking at the Central Banks annual symposium in jackson hole next week she will talk about Financial Stability next friday at the conference janet yellen was in jackson hole last year and in 2014 but skipped the event in 2015. Everybody stayed awake this could be her last appearance there, as her term expires in january President Trump is exploring other candidates, including white house adviser gary cohn. Some people are saying he will want to make his mark, shes not staying, other people are saying cohn he has made his comments. Are you walking back your comments i dont know. I know from people around him he has been remarkably uncomfortable and was uncomfortable about the comments hes made. He made that clear to people around him weve now seen those comments. The repercussions on how that would play out if you watched President Trumps language about janet yellen over the last many months it has solve esoften thed signiy shes a dove as a president you dont want a hawkish not just as a president as a real estate guy he has put on the record i love low Interest Rates dont we all . None of us are in the lending business, are we no but were in the borrowing business thats what i mean. I love low Interest Rates. Love them. I wish they were zero. They are the former minneapolis fed president has some advice for janet yellen in a series of tweets yesterday he said i said trump should reappoint janet yellen as fed chair. My advice foto the president remains unchanged, but my advice to janet yellen is to decline any such offer any position means implicitly that you approve of his goals for the u. S. I know janet yellen well, i know her vision for america is highly distinct fromaccepting a fed chm him would send a signal that she would regret and perhaps highly. She should announce a to 2018 departure. That is kind of crazy its supposed to be separate from the administration any way, this post. If you think you are doing something for the good of the nation very interesting. I dont know i dont know what to think about that are you an independent body . Are you not . Do we give ben bernanke credit for what happened with the economy . Its a complicated story coming up, regulation a plus ipos are a new way for Small Companies to raise money theres a new mini ipo today the ceo from chicken soup for the soul entertainment will join us to talk about that next stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. Were drowning in information. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. I like russo. His on off splits 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. Chicken soup is coming to the nasdaq the Company Behind the feelgood brand is taking its Video Division public. Chicken soup for the soul entertainment is going to begin trading today. This is the first mini ipo to be listed on the nasdaqs Global Market and joining us right now is ceo of the chicken soup for the soup entertainment. Hes also the head of the parent company. Thanks so much for being here. Its my pleasure. A lot of things i want to talk to you about, but first people know chicken soup for the soul its the book brand that sold, i think, over half a billion books, copies. Thats true you have done a ton with video since that time. What is this division all about . This division is to take the essence of our brand, and turn it into video stories. Were known for our books, as you say. And our stories are about positive inspirational items you know, things that make peoples lives better, that help heal some of the wounds that we see so visibly in the news lately, especially and you know, this video business will be to take those same kind of stories and make them into television shows, and also make them into digital videos you have two series or two projects, project dad and the second one is Hidden Heroes. What are those about project dad is a great show its about a few dads who are left alone with their kids for a weekend, and they find out what happens. And as you might expect, you know, in some cases chaos ensues and sometimes its very funny. But also its about that heartwarming relationship that developed between the fathers and the children we watch that happen its about being a father. Its all about encouraging fatherhood, and encouraging dads to be involved with their kids Hidden Heroes are the best stories of people who do great things maybe some people. I want to talk to you about this mini ipo. This is the first of its kind. This is a smaller situation where you are talking about offering Something Like 2. 5 million, 900,000 of the 2. 5 million shares youre offering, you want to make sure get to individual investors, and not get split up by the wall street banks. Why . Well, you know, i think its pretty clear that these days when ipos happen, the people who tend to get them, if theyre good, are institutional investors. And individuals often find themselves cut back, and given a very small allocation, if anything for chicken soup for the soul it made more sense for us to try to help our fans get an opportunity to buy into our brand. The pushback that you would inevitably get from this is that individual investors arent savvy enough they dont know what theyre in for. What do you say to that . I think anybody who vests has to be careful and has to be prudent and diligent and we provided full information, looked just like an s1 as far as people were concerned with audited Financial Statements and potential risks and the like we did our absolute best to make sure people knew what they were buying bill, we want to thank you for being here today youre ringing the opening bell right here right here. 9 30. We are. Looking forward to it. Thank you for joining us. We appreciate it thanks for having me. Coming up when we return, market selloff the dow plunging 274 points for its second worse loss of the year well talk to a market strategist, try to figure out which way this thing is going to continue to go one way or the other plus former saks ceo steve sadove is going to weigh in on the winners and losers in the Retail Sector this week. Squawk box returns in just a moment i dont know. 4. 95 per trade . Uhhh and i was wondering if your brokerage offers some sort of guarantee . 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Stocks posting their second worst day of the year as terrorism fierce and concerns out of washington weigh on investors. A read on where the markets will finish this week and what you can expect next week is straight ahead. A massive manhunt is under way in spain for the terrorist who drove a van into a crowd of pedestrians, killing 13, injuring more than 100 others and police say at least five suspected terrorists are dead following a separate incident south of barcelona we will talk terrorism and National Security with former nypd commissioner bill bratton plus the trade agreement between canada the u. S. And mexico under pressure. A look at what could change over the weekend as nafta negotiations continue. The second hour of squawk box begins right now live from the beating heart of business, new york city, this is squawk box. Good morning, welcome back to squawk box right here on cnbc were live at the Nasdaq Marketsite in times square im Andrew Ross Sorkin along with becky quick and joe kernen. Take a look at the futures after what was a difficult day yesterday. The markets look like they would open up marginally higher. But only marginally right now. Dow looks like it would open up about 1. 5 points higher. Nasdaq would open up about 16 points higher. The s p 500 up just a point. Take you through whats going on making some headlines right now. Spanish police are on the hunt for the driver who ran over pedestrians in barcelona yesterday killing 13 people and injuring many others in the see said town of cambrils. Police killed five terrorists after they drove that car into a crowd of terrorists. One death has been confirmed those attacks were wearing what turned out to be fake suicide bomb belts according to local officials. Earnings also in focus this morning. A short time ago farm equipmentmaker Deere Company earning 1 per share two cents above estimates revenue did fall slightly sort of forecast. Deere says Market Conditions are improving throughout the world, and were also watching shares of apparel and footwear retailer foot locker. Set to report a quarterly profit of 62 Cents Per Share. Below forecasts of 90 Cents Per Share. Revenue was shy of forecasts sales fell 6 . Analysts had been looking for a 1 gain. Wow. Wonder what happened there thats not even close not even close. A few stocks on the move this morning, gap posting better than expected earnings revenue and samestore sales the clothing retailer also raised its fullyear earnings forecast to positive results are in part due to Strong Demand for its old navy products. Fewer discounts. And Inventory Management efforts. Shares of ross stores, Andrew Ross Sorkin stores no, ross stores jumping this morning. Retailer posting earnings and sales above wall street estimates. The company also forecasts sales growth for the second half of the year and Power Generation provider cal pine has agreed to be acquire by private equity firm energy Capital Partners. This deal is worth 15. 25 a share in cash or 5. 6 billion. Cal pine will retain its current management as part of the deal i was thinking back, cal pine was remember when enron was really hot yep it was ahigh flyer. That was the same kind of was it the same period, i think, that cal pine was really happened did then went down all the way to Single Digits, right . Its still around. Still got a name youre not as excited now you were excited last hour big deal. Cal pine was a big deal they havent had a big deal in awhile. There havent been any big deals because i really think that the big deals in the m a report flourish when things are slow when they have to be these things to sort of show revenue growth, or is that because earnings are going well not i mean, do they ever really have a good idea synergistically about how to do things that remember the bankers come and say youre a pharmaceutical company, youve got to own a pharmacy benefit and then they buy them and two years later you really got to spin off these pharmacies, do they ever come up with anything i think your cynical view is right most of the time whole foods i can think of some comcast. Comcast, you know, just about you cant just about every case comcast has just been far ahead. Seriously, keeps getting bigger, at t time warner i think thats going to be smart. Some cases where only the big survive. Right but you could say that at t was in a position where it had to do it it wasnt just because of all the other businesses werent going to show the type of growth thats what i mean, there are some places where it pays off things are going great. The only thing i would suggest would differ from that is if you do look at a historic chart of m a activity you would lay it over the s p 500, dow, in times of when the dow is high, or the s p is high, theres a lot more deals stock deals, right . Both stock deals, and its just its a confidence story its a confidence story and so and so the strange part about this particular moment is that confidence, you would think, should be high given the stock market is high, and yet, youre not seeing transactions it could be a big deal tomorrow it could be it could be. But i do think its a little bit different in this instance right which is to say that maybe the markets have more confidence than the ceos do themselves. Hmm that wouldnt ill still put my money on the markets in that case okay. Although the ceos as they know now have to be everything to everybody id be scared to be a ceo now. Because you basically have to be a priest, too, right religiously the dow posting its biggest oneday fall in three months as concerns about the conflict continue to grow dom chu joins us with more on that im going to kind of dovetail off the conversation you guys were just having about it. Theres a reason why maybe some people dont feel as good right now about markets that are kind of near these record high levels, yesterdays downside Market Action notwithstanding. So the reason why were trying to find some tea leaves out there, some indicators about sentiment in the marketplace, and heres what we did to find some of those stocks out we looked at the s p 500 overall and said, hey, how many of those stocks have actually hit either 52week, multiyear or record highs just in the month of august halfway through that now about 109 of them did. If you take out some of those ones here that have pulled back 5 or more since those highs that weve seen in august, it comes down to 23 stocks. Heres a sampling of some of those names. Ones that maybe some traders are looking at to see whether or not they could be leading indicators of a shift in momentum, maybe to the downside for the markets nike stocks hit the 52week high in august. And now its pulled back by about 5 you guys just mentioned deere on earnings those shares hit a alltime high and then the pullback 6 since then also marginally lower in trade dag on the heels of earnings envied yeah the hottest stock of the s p last year, one of those redhot chip stocks, has now hit an alltime high but has pulled back 8 since hitting it just this month in august priceline. Com, same story. 12 decline from those levels that theyve just hit in terms of alltime highs. And then Marathon Petroleum down 13 , as well so as we talk about some of these names out there, are there indicators, perhaps, that momentum is shifting yes, nvidia could be one of those stocks, so could nike. Remember, we have been in a buy the dip regime and have been for the better part of a year and a half now so now traders have to figure out how much weight they should put in these stocks, as the signs that maybe theres a downturn coming. Of course nobody really knows the future, however some of these stocks could be those indicators i havent put up all 23 here because i ran out of real estate ive tweeted them out. Youll see that spread sheet graphic on there, thedomino. I like it dom, thank you very much joining us right now to talk more about it is fedlety investments adirector of global macro. And rich steinberg who is drez and chief Investment Officer for Steinberg Global Asset Management rich, how about you . Do you think that this is signaling a shift in momentum or not . Yeah, if i could just kind of jump on doms comments, you know, earnings so far, 73 have beaten earnings. But what weve had is weve had a move in the s p on very small amount of stocks, theres been a large portion of this. If you look at the twoday window before earnings, the twoday window after earnings, youve had a 0. 3 fall after earnings on surprises that were positive over the last five years thats been 1. 3 . So i think the shift is going to happen, but because liquidity is so great, investors should take a deep breath from all this stress and maybe they should be looking at some of the names that are more value oriented, that havent had the moves, because money is going to have to stay in the markets so i think there are opportunities, you just have to scale into the market, and look for opportunities on some earnings selloff that might have been overdone yurian we did esai selloff yesterday. It was the second worst day of the year but youre still talking about some very modest declines, really only pushing us back three weeks for the s p 500, back five weeks for the dow or vice versa, i forget which is which. What do you think . Is this the beginning of a serious selloff or is this just a temporary blip well, were down 2. 4 from the highs just a few weeks ago but were up 9 for the year over the longterm, you know, stock prices follow earnings earnings for the Second Quarter are on track to be about up 11 after a plus 14 in q1. Liquidity remains pretty ample, even though the fed has been hiking rates and valuations are high, but theyre not super high so, fundamentally things still look good. But we are in that seasonal period you know, august to october, where the market tends to correct, and you know, investors have gotten quite spoiled. Since about the First Quarter of last year, when we started this big global reflation rally you know, the s p is up three times its as much as it normally does for about half the volatility that it normally endures. So, weve gotten pretty spoiled. So you know, a 10 correction, im not calling for that but the odds of that historically are 1 in 3, and it can basically happen at any time for any reason are you telling people to sell stocks, and lock in some of the profits they may have seen or are you suggesting that they should hold off investing in new stock purchases, and save a little dry powder for Something Like that happening . I tell investors what i always tell them you know, have a portfolio that makes sense for you while youre maximizing the amount of return for per the unit of risk that youre willing to take and then the other part is dont be your own worst enemy by reacting emotionally to events like what were seeing dont listen to any of this, just keep investing, keep doing what youve been doing and dont worry about it if youre like the average investor, and youre investing for the longterm, have a portfolio that makes sense and dont be your own worst enemy. Now if you have additional cash to invest or youre underallocated for equities, to equities, then thats a different story. Maybe you rebalance. Maybe you buy some International Stocks because they have better valuations or maybe you wait till october but, for most people, dont try to secondguess it, because start getting emotional, and you overreact, and you know, every correction has basically always gone back the right way. You just dont know how much its going to be, and how long its going to last but its a tough game to play. I want to thank you both for your time today. Have a good weekend, both of you. Coming up when we return, theres been plenty to watch in retail from earnings to the ongoing discussions of how ceos respond to the political divide in this country. Former saks chairman and ceo steve sadove is going to join us after the break. And then terror in barcelona, former nypd commissioner bill bratton is going to join us to help us understand the Security Issues over there, and over here squawk box returns in just a moment we check our phones 85 times a day. So it only made sense to create a network that keeps up. Introducing xfinity mobile. It combines americas largest, most reliable 4g lte with the most wifi hotspots nationwide. Saving you money wherever you check your phone. Yeah, even there. See how much you can save when you choose by the gig or unlimited. Call, or go to xfinitymobile. Com. Xfinity mobile. Its a new kind of network designed to save you money. Welcome back to squawk box. It has been a rough ride for Retail Stocks. For more on some retail trends we want to bring in steve sadove the former saks chairman, ceo and principle of Steven Sadove and associates good morning to you. Good morning. Help us understand how we should look at what weve seen over the past week or two now of earnings from so many of the different retailers. It has been such a mixed quarter. You know, weve seen we see some High Performance and also seen some real dogs. Absolutely. I think what you have is you have a train wreck in terms of the stocks by and large. But you have a number of the Companies Performing well, and as you say, a lot that are performing poorly. Id attribute, its not a question of internet versus brick and mortar i think people are saying that and its wrong what its all about is the companies that are providing value to the consumer are doing well the ones where the consumer isnt perceiving value, theyre not doing well so yesterday, for example, you saw ross stores come out well. Tjx. That says the outlets are doing well i think that the brick and Mortar Stores like costco. Right are doing well. Obviously, amazon is doing terrifically well. Every one of those are offering the outlet malls as an example are doing well also every one is offering a value to the consumer if you look at the ones that arent performing well, you have to ask yourself, are they providing the consumer a value that they want and so who are you thinking about in that context . Well, broadly i would say the Department Stores. Right i think that, you know, if you go to a Department Store on black friday, you obviously are getting a great deal or the oneday sale but i think overall theres a question in the consumers mind whether or not when you say value, youre literally talking about value, meaning well it could be price. It could be service. Theres any number of definitions of service is probably one of the big issues when ive gone into Department Stores i almost feel like it is a, you know, a cyclical issue where because theyre under pressure, they arent staffed as well, they arent stocked as well, and when consumer i get frustrated. Theres an element to that thats true. Youre right its a circular problem. I do think that the internet has caused all of this, because of the price discounts, you go to your mobile app and youre going to be able to know exactly the right price. And youre also not youre able to get the thing delivered in two hours or whatever its going to be. So, that is causing but remember only 12 or 18 months ago people would say that the internet was supposed to put the outlets out of business. I dont think thats it was supposed to be the opposite the outlets i think theres the element of the find. Going out and finding something special. People still like going into stores 85 , 90 of sales are still being done in stores and the ability to find something that you cant get on the web is thats whats driving where do you stand on walmart . Oh, i think walmarts terrific and i use it as one of the best examples of a big brick and Mortar Company thats able to start transforming themselves. Everyone was skeptible about the jet. Com acquisition. Jury is out over time except what theyve done is changed the culture. And theyve moved themselves more to being a digital thinking company. 60some odd percent growth on their Digital Business but its the actions theyre taking they changed distortment theyre doing better job on pickup in store. Three years ago i would have said walmart was dead in the water as it related to the digital experience now i think theyve leapfrogged past a lot of the others right what about the relationship that amazon is going to have with brands in the future the reason i say that. You have two things going on on one side you have nike and others joining amazon for the first time on the other side you have and its really been led by Small Companies, birkenstock and others, but a lot of the Specialty Brands who say i dont want to have my stuff on amazon. I dont like how people are trying to go around me and third parties to retail my brand against my will. I call up amazon, i tell them they have to take it off or theyre counterfeit products that look like mine and amazon is not playing ball with me. How is that all going to play out . Its a tough one because amazon can be your best friend and then theyll turn into your enemy because theyll grab all the data the issue is that the brands need to sell the products to consumers wherever, whenever they want them if you dont sell to an amazon, youre limiting, and lets say youre a brand like a pbh and youre not selling to an amazon and relying just on the department shores that are losing share and declining at lets say 5 youre missing out on an enormous opportunity so they open up distribution maybe they do it with differentiated product and they sell different products on an amazon than theyre selling on a brick and mortar store but i think to ignore it but what about the internetonly brands i mean theres been the success, sort of massive success of albergs, the tshirts that everyones wearing or even we talk about the welby parker i think what youre going to find is that whenever the internetonly brands open up retail, they find their sales triple so theyre going to becoming and theyre going into the malls now and taking space and opening up i think the play is for a brick and mortar store like a nordstrom or like a macys to exclusively carry some of the hot Internet Brands, and be the place where people can go and experience them. Were talking about this whole thing of experiences well part of experiencing is to experience a new product and to be able to getthe hot Internet Brands only at a nordstrom. Or only at a macys. Or a high end brand only at a saks, thats the way you ought to be starting thinking about it and its an efficient way for the internet brand to get to distribution so is it possible that outlets could become the favored place versus malls i mean are malls going down as outlets are going up well, youre going to probably have a third of the malls in the next five to ten years. A third of the malls ill tell you why im referencing this were coming down through new york, we had a wedding in vermont. Oh, yeah the big outlets upstate. Theyre awesome. Theyre not awesome someone had to go to the bathroom, finally came to an exit and we got in there we were trapped we were trapped. We couldnt get out. Its the scariest place the crowd no Parking Spaces the outlet mob malls are mobd there are tour buses. The best thing in the word, and what i mean by that is take a coach. They overexpanded the outlets, they overdistributed and then you lose your brand image in terms of value. So they are a destination. So youve got to be careful with them what is that place. But every have you been, sorkin i have been but every luxury brand has struggled up talked about coach ralph lauren everyone who has the little pony, used to be, you know, a luxury well now its big, too. But used to be considered a luxury item. Now its luxury is great when its scarcity the minute it becomes ubiquitous it goes over the edge. I remember when my youngest daughter was in, i guess she was in sixth grade or Something Like that, and every we were carrying at saks Juicy Couture i remember juicy juicy took off the day i walked to her Elementary School and saw every kid wearing juicy, i knew it was terry cloth everything. Remember that . It happened with tiffany. It happened with and youve got to be real careful about how broadly you distribute these things. Coach has come back. I think the world of what the team are doing, because they made it cool again but theyre pulling back distribution and thats a very painful process. Because you have to be willing to live its painful. Youve got to the juicy sweats that you have you dont wear you never wear those . I i kept my juicy hoodie but dont think about retail as dead. Retail is growing. Weve got to go besides amazon and walmart give me three winners that t. J. Max, burlington, ross in the last few days these are all outlet type things three losers. I dont want to give you foot locker was a loser today. But i dont want to give you some sfex. I think the Department Store sector has a long way to go in terms of reinvents itself. Macys is is a big company they are a consolidator. They consolidate everyone. Steve, great to see you thank you. Coming up, barcelona, still reeling from yesterdays deadly terror attack. Isis has claimed responsibility. The latest on the global war on terror is straight ahead check out the futures after yesterdays selloff now were in the red ainga that the nasdaq. The s p down a half, dow down six or seven nasdaq up 12 welcome back to squawk box. Nafta negotiations expected to go through the weekend what you can expect out of the latest meeting up next manhunt in spain the driver of that van that was used to plow into people on a busy street in barcelona killing 1 3 yesterday still on the loose. Were going to talk public safety, the president s response and the obglal war on terror with former nypd commissioner bill bratton squawk box returns with mr. Bratton in just a moment the governor has declared a Winter Weather emergency. Extreme risk of burst pipes and water damage. Soon, Insurance Companies wont pay for damages. That is, not if they can help prevent damages from happening in the first place. At cognizant, were turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. Get ready, because were helping leading companies see it and see it throughwith digital. What should i watch . Show me sports. Its so fluffy look at that fluffy unicorn hes so fluffy im gonna die your voice is awesome. The x1 voice remote. Xfinity. The future of awesome. Good morning, Everyone Welcome back to squawk box here on cnbc we are live from the Nasdaq Marketsite in times square among the stories that are front and center this morning, shares of foot locker taking a big hit in the premarket trading check things out right now youre going to see whats happening to the stock its down almost 19 this morning, after the athletic footwear and apparel retailer earned 62 cents a share for the Second Quarter the street was expecting 90 cents a share. Revenue also missed the forecast and samestore sales declined by 6 expectations were for a 1 increase so this was a surprise on every level. Shares of nike and under armour falling in sympathy, because, of course, their products are sold at these stores. You can see nike shares down 2. 7 under armour down by 2. 8 . Two directors have resigned from the board of hospital operator Tenet Health Care the single representatives of glen View Capital Management say theyre stepping down over significant disagreements with the management those resignations trigger a 15day standstill agreement, after which glen view can take other actions regarding its tenet stay and just one economic report on todays calendar the university of michigan issuing its midaugust Consumer Sentiment index that comes out at 10 00 a. M. Eastern time the Consensus Forecast calls for a slight increase from the final july reading spain continues on high alert this morning, after yesterdays deadly terrorist attack the manhunt continuing for the person who drove a van into hundreds of people, killed 13 in central barcelona. Joining us now, former new York City Police commissioner bill bratton. Hes executive chairman of tenio risk, and an nbc news senior Law Enforcement and Security Risk analyst, and i guess we know now, commissioner, that the weapon of choice is has become this very difficult to defend against van into a crowd, and its something that in a free society i dont know how you ever completely prevent the possibility of it. Youre correct, it is the weapon of choice its low cost. Low tech very high impact and it follows the al qaeda and isis instructions to use guns, bullets, bombs, and cars several days ago i was talking here in new york, to john miller about the issue of the threat of these types of attacks, and we have the idea of coordinated attacks. And you think of the incident up in catalan with five people in that one car, some of them wearing suicide vests. If theyd opted to get into five different cars in five different areas of that city and it follows a pattern attack with a car, get out of the car, and attack with guns, knives, or in this case possibly suicide vests. It is unfortunately the new normal that were going to have to start facing more frequently. And it will occur more frequently is it when i think of things, we have more barriers in the states than they do over there. I would have thought that this area in barcelona would have been a place that, if you were nice and some of the other attacks over there, wouldnt this have been a place where you would have thought maybe someones going to drive this is part of the through many of them . Too many soft targets . Its just part of the evolution of thinking in terms of reacting to this new and growing threat right, in back of us here in times square youll see a combination of existing metal ballards but also many concrete blocks theyre temporary until the now ballards that theyve ordered come in. Some of the discussion now are they high enough that the idea is they actually impediments for pedestrians, as theyre so low and pedestrians are continually tripping over them so this is a new area the idea is theyre about three feet high and you see the crowds in times square, theyre moving along, they dont see them theyre bumping into them, falling over them. They will stop a vehicle but then theyre creating another form of impediment so its an area thats going to be a subject of a lot of experimentation. Im sorry . Do they look i mean is the right answer theyre supposed to look bigger . Well some discussion is the design of them so aesthetically that theyre attractive, while at the same time, performing the mission of keeping it safe against vehicles the discussion about barcelona, what assisted this individual in terms of his attack was it was like a funnel. There was no obstructions or hundreds of yards that allowed him, effectively, to move down there not being obstructed at all. You cant protect everywhere all the time its impossible. You can protect areas like times square they have another 80 or 100 ballards i would be advising my company with several of the largest Construction Projects here in new york and a lot of our effort is on the placement to protect the public space areas commissioner, i think if you look at this we think, okay, this is a situation where we wish we had more intelligence. It seems like the authorities there in barcelona didnt have any idea, didnt have any Human Interaction that came back, even though i believe some of our agencies had warned them that this could be a potential area for attack how do we improve what were getting back in terms of the Human Capacity of this there what were hearing from sources from other places . I think the most significant defense we have against these types of attacks is just what youre describing, intelligence. New york city has probably the foremost intelligence gathering police force in the world. You can prevent a number of them, but ive been monitoring social media through the various intelligence entities that are out there. But the reality is, that so many of these characters are socalled lone wolves who might be inspired by or enabled by isis, but theyre not being directed by them part of the investigation here will determine was this a directed attack. Were these individuals part of an organized cell . With the two attacks and the bombing the day before orchestrated ar coordinated . Theres some thinking that maybe the explosion that appears to be an accidental explosion may have been the catalyst to set off this sort of another attack or both attacks it will be part of the investigation. Try to learn from every one of these things but thats a lot of people to not have any family member, any friend, any neighbor say hey, this looks a little suspicious thats the issue around the idea of intelligence we talk repeatedly in the Law Enforcement community about the whole issue of encryption. That through social media, watch these individuals, engage, but now they engage and immediately disappear. They go to encrypted sites so, its an evolving science, if you will, in Law Enforcement, speak with some understanding of it from the recent experience with the nypd. Its constantly improving its capabilities were going to see the situation get worse as isis is defeated in its socalled caliphate, aand a lot of those people are going to die on the battlefield but a lot of them are going to get back into europe. So europe has seen more deaths now through these car ramming events than anything else in the last several years my expectation is more of them in our country, were seeing a concern the nypd on august 8th put out a bulletin concerned with criminal activity in terms of using vehicles increasingly for Crime Commission an individual a few weeks ago with a carload of propane tanks, battle with his girlfriend, drove into a building. Fortunately didnt all go off. But youre going to see it also more of these type things in traditional crime areas. So this is a generational battle that were in war against these elements i was watching, you know, the discourse on one of the channels last night, of how finally how we finally deal with it whenever it happens i dont know how long it happens. But that the point was made that if it becomes clear that isis will eventually lose, and there wont be a caliphate, that its hard to recruit if you know its a losing cause and its all part of taking back territory, but then you get the diaspora but if it becomes clear, like it did with the references made to communism, that we dont see communism it looked like it was going to take over the world but once it saw it was a losing proposition, we really did defeat it. Its not really we did defeat it but its still there, cuba, Venezuela Venezuela has effectively does that eventually happen, if it becomes clear, will recruiting dry up if it becomes clear . No. Never. What is different now is isis has, since its beginning, used social media for recruitment and even now their most recent magazine was reporting honestly on the losing of the caliphate and using that as a recruiting tool in other words, they were basically glorifying thedeaths of many of their members fighting in the caliphate as the caliphate was being destroyed. Theyre using that, theyre extraordinary marketeers in terms of how they recruit. Theyre using the loss to recruit even more. Theyre going to be around for years to come. Modern life will include will include a hyperloop, and it will include, you know, smartphones, and it will include eighth century ideology and theocracy from the eighth century . It doesnt seem, the barbarity of it doesnt seem possible in in the 21st century but the 21st century has enabled it lets face it 2007 the smartphone is created. A few years ago, you look out on that street out there two out of every three people walking down the street has got their nose buried in a smartphone so isis, more so than al qaeda, really caught the wave of how to communicate but, to deliberately try to have body parts strewn across a street and 14 innocent people including children, it just doesnt seem like that can be something that thats because youre a normal, rational person. These people are not normal, theyre not rational but its still based on ideology, though were fighting the ideology we talk about the muslim religion, but this is basically an offshoot of that thats become radicalized and it its hard to imagine, i think, for the audience hard to believe that someone raised in the current, you know, obviously theyre not raised in maybe necessarily the United States, but the barbarity of it is just shocking that the two brothers in the Boston Marathon bombing. Two kids, one going to college, the other one wanted to go to the olympics, he was disgruntled because he couldnt get into the olympics theres two people in a very short period of time in europe its socioeconomic, they dont really theres going to take awhile. Okay, all right i remain optimistic but its going to take awhile commissioner, thank you thank you okay, coming up when we return a lot to talk about trade wars, nafta negotiations continuing as trilateral trade agreement between canada, the u. S. And mexico coming under pressure were going to speak to the former head of Economic Affairs after the break. Then at the top of the hour the nations top ceos speaking out about the president s handling of those events in charlottesville, virginia. Trump supporter, foster frieses is going to join us at the top of the hour. Squawk returns in just a moment. Welcome back to squawk box. Futures, again, right around the flatline for most of the session now green again. Up 2 on the s p. A little over 10 on the dow. The nasdaq has been the strongest, maybe it was one of the weaker components yesterday. Its up. Today the nasdaq indicated up 17. 5 nafta negotiations expected to go through the weekend, and the u. S. Came out swinging in the first round. The Trump Administration has made it clear that the number one concern is the trade deficit. Joining us right now is former head of Economic Affairs at the mexican embassy, a Senior Adviser at the albright group. Good morning to you. Good morning. Good to be with you. Good to be with you help us try to understand where you think all of this goes, and from the perspective of the u. S. , and from the perspective of mexico . Well, i would say that all three countries, mexico, the u. S. , and canada are negotiating in earnest to get an upgraded nafta. This is a modernization rather than a full renegotiation. Agreement on a number of issues, including ecommerce, but a number of sticking points, no doubt about that what do you think the biggest sticking points are going to be . I would say that one of them has to do with what is frankly a u. S. Obsession with the bilateral trade deficit with mexico and whether its important or not and how to deal with that. Another big point thats come out in the past few days has to do with the rules of origin for automobiles. So those will be two tough issues and what do you think needs to happen on the automobile front . The automobile front i think that the solution is to see how we can foster more investment in the region but letting markets work if you make rules too strict in terms of regional content, some Companies Might opt to produce elsewhere, or just to forget about nafta. You talked about what you described as the administrations obsession with trade deficits i gather you think that obsession is wrong i would say overall, its wrong, because thats not a good way to assess a trade agreement, and secondly, mexicos overall a deficit country globally, so if the u. S. Is, indeed, concerned with this deficit, i think it should focus on its deficit with china and on working with mexico to produce with mexico to export more so mexico is a part of the solution its not the problem here. Where are the fault lines between how mexicos approaching this and how canadas approaching this i would say that mexico and canada are in sync in a number of issues. Regarding, you know, how to deal with antidumping countervailing issues the u. S. Wants to do away with the panel system that reviews them canada and mexico do not want managed trade to deal with the trade deficit, and they dont want, you know, rules of origin that are too high for the auto sector so theyre pretty much in sync basically across the board all right what do you think the chances are that the agreement breaks apart . I think its possible, but it will have to do with politics at the end of the day, if politicians let negotiators do what they do best, theyre real experts, theyre real pros, they could come up with an agreement that benefits everyone but if theres too much noise, if theres a zero sum view that the u. S. Wins at the expense of canada or mexico, then it will be very difficult to have an agreement. And if it were to break apart. Yes play out the dominoes for us. Just so we understand the risk at hand here well, i think that in terms of what is the plan b, canada and the u. S. Have a prior agreement, and that could remain in force mexico and canada would retain their own Free Trade Agreement and mexico and the u. S. Would trade under wto rules. Thats sort of a simplified scenario of what would happen. You look at the big u. S. Companies. Who has the most at risk right now . I would say a lot of them because mexicos a major export destination. A lot of the ag producers, cargill, adm, mexico is very important for them the Auto Companies that produce in the u. S. And mexico, so either or, its both, so its both manufacturing, its agriculture, its services mexico is a growing market so i guess everyone has a stake in the game. Okay. Antonio, we appreciate your time and perspective this morning thank you. Thank you coming up when we return, it has been dubbed the Great American Solar Eclipse its going to happen on monday the moon is going to move in front of the sun and millions across the country will be watching we have a preview of what to expect, and theres big business behind it. Then at the top of the hour, republican mega donor and trump supporter Foster Friess is going to join us to discuss the ussarray surrounding the white hoe. Hes got a provocative view. We are in the green after what was a very difficult day yesterday. Back in a moment oh no. Schwab, again . Index investing for that low . Thats three times less than fidelity. And four times less than vanguard. 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. We are just three days away from the first coasttocoast american eclipse in 99 years as enthusiasts position themselves inside the socalled path of totality, we are joined by one well known eclipse chaser, derek pitts is the chief astronomer at philadelphias Franklin Institute and thanks so much for being with us today. Thanks for having me. This is the first time weve seen an eclipse like this over america in 99 years. But youve been chasing them around the globe andrew was at the last one back in 1999. You were there, too, right yes, i was. I was overseas in the black sea, actually, following that eclipse. And what happened well, it was a really interesting eclipse for me i was on a cruise with my wife, as part of our honeymoon celebration. Wed been married two years before, and as i got on board the ship with some other astronomers who realized that there was an eclipse happening on board the captain of the ship needed someone to direct the ship to where it needed to be to see the Solar Eclipse for the rest of the passengers, i suddenly realized that everybody else had taken a step back, and i was the guy in the hot seat. So, i directed the captain where to put the cruise ship in the black sea on the day of the eclipse and what he said to me was, you tell me where to put the ship, what time to get it there, once we get it there, ill turn the ship over to you for the duration of the eclipse, after the eclipse is done, you give it back to me and well head on to the next destination. It was a dream come true so you get to find eclipses youre pretty good at it where are you going to be positioning yourself this time around this time im going to be at saint joseph, missouri at the rosecrans airport. The center line of the eclipse goes right over the southwestern corner of the airport. Ill be there with a group of other folks, two other colleagues of mine, eclipse chasers, also, will be there with a host of thousands of others who are going to join us. You know, this is something that so many people are preparing for, that theyre excited about, and even in the highest point of totality youre talking about an event that lasts three minutes. Why is this such a big deal culturally whats it mean well, in this particular instance, totality lasts a little over 2 minutes 40 seconds which is on the short side, id say for total eclipse totality but the reason why its such a great cultural event is because people actually get to stand in the shadow of the moon because it passes all the way across the United States, millions of people will get to experience this really wonderful and somewhat unique astronomical event. You have to remember that what makes this really culturally significant for people is that this is a way for them to participate in a really significant authentic science experience without having to do very much. And its an astronomical experience, so they dont need any sophisticated equipment, really, and everybody can experience this. And also see this really wonderful demonstration of the mechanics of the solar system as they see the moon pass between the earth and the sun. This may be a bit of a stretch but were a Business Network so lets try and get this back to business, try and get this back to science, something that really matters to this community why should Business Leaders be watching this . Why should people who are interested in business be watching this . Well, this is almost like an ultimate Tourist Destination event. I mean, you cant actually create an event like this to bring people in to a location. But to have total Solar Eclipses happening across the United States, if you could have that happen several times a year, or maybe once a year or so, you can really generate a lot of business so if you look at the tshirt market or if you look at the glasses market, or you look at, you know, just the tourism angle as it is, look whats happened with car rentals look whats happened with hotel rentals. Look whats happened with sales of anything in the eclipse path. Those things have exploded, so, this is a real business boom for a lot of communities that may not normally see huge amounts of people i mean there are tens of thousands of people pouring into places that only have hop passions of maybe a few run dread. And even though its just going to be for a couple of days its going to be a real shot in the arm for a lot of those communities. Derrick, well done. I wasnt sure exactly what you were going to do with that but it makes sense youre right we are going to see a big tourism boost, and thank you very much for your time. Good luck and i hope you are where the skies are sunny. Thanks for having me. I hope you get a good view, too. Are you part of k. U. , derrick . Is franklin part of k. U. No, no. Oh, but youre in thats where hes going to be what are you doing in lawrence oh, i have family here in lawrence, and im just about an hour away from saint joseph, missouri oh, you know, i know lawrence thats why i was going to ask you about lawrence i spent a lot of time there. Im wondering whether youre a wheel guy or a hawk guy as you go have a couple of beers. Those used to be the local pubs there. Whoever has the beer, thats who im with thanks so much, derrick, we appreciate it. When we come back, gop mega donor and trump supporter, Foster Friess is going to join us after the break to talk about the trumpal jen today and u. S. Business plus theatt t lesonhe manhunt in spain after yesterdays deadly terrorist attack. Squawk box will be right back. Youre in the match app. Now tap on the new missed connections feature. It says ive crossed paths with kate six times this week. That is a lot of times. Shes cute too yea how did i miss her . You didnt. Match picked it up for you. Check out new missed connections on match. Start for free today markets now. Watches and worries and terrorism fears weighing on stocks after the dow and s p post their second worst day of the year athletic Retail Stocks losing foot locker among the Companies Getting crushed in the premarket. Plus the super bowl of car collecting more than 290 Million Dollars worth of classic rides on the Auction Block in pebble beach. Well take you there, live, 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. You can do it live good morning, welcome back to squawk box here on cnbc. Were live from the Nasdaq Marketsite in times square were doing it live. Im joe kernen along with becky quick and Andrew Ross Sorkin the futures right now are indicated every time we look its a little different. They were green last time. Theyre still green up 18 on the nasdaq, 14 on the dow, up 2. 5 on the s p. If it were to open that way it would be a little bit of a rebound from that bearish stressing that we saw yesterday with people talking even about the hindenberg omen, which is some technical situation that involves the dow jones, the s p, and General Electric and has been could be a warning about some future bearish action in equity markets but it doesnt always work only works a third of the time 30 of the time thats what i read on cnbc. Com i think you just like liesman his work. You know his work my model. Your model. Treasury yields were blow 2. 2 on the 10year after the trep digs, and the vix and Everything Else yesterday on 2. 19. An update on the terror attacks in barcelona Spanish Police are on the hunt for the driver who ran over pedestrians in barcelona yesterday. Were still saying 13 people were killed. I saw somewhere that it may be 14 now, unfortunately. That was indicated that maybe additional ones. Also injuring more than 100, even 130, perhaps more, and in the seaside town of cambrils, you say that right cambrils all right. Police killed five terrorists after a drove a car into a crowd of civilians and police. One death has been confirmed in that incident. And those attackers, by the way, were wearing what turned out to be fake suicide vests. According to local officials in corporate news, a few earnings reports to tell you about this morning, as well. Shares of foot locker in the red after the athletic had been expecting. Revenue missed forecasts and the samestore sales declined by 6 versus the 1 increase the street had been expecting. That has shares of foot locker down by almost 20 this morning. A drop of close to 10 38. 32 is the last tick and that pain spilling over to other athletic retailers and brands that are sold within those stores check out shares of nike and under armour nike down by almost 3 now under armour off by 2 estee lauder beating on top and bottom lines the results helped by the success of twofaced and becca and that stock is up by 3. 5 and then deere beating earnings estimates by two cents revenue shorter than what the street was expected. Raising their fullyear outlook as demand improves in various markets. That stock is down 4. 6 . Now to politics President Trump scrapping plans for a new council on infrastructure the group of leaders were supposed to advise the president on how best to improve u. S. Infrastructure white house saying, quote, the president S Advisory Council on infrastructure, which was still being formed, will not move forward. Well some ceos have distanced themselves from President Trump in light of his remarks on charlottesville some of his base still offering him unwavering support joining us is Foster Friess, investment manager and philanthropist, republican donor and trump supporter and we welcome him to the program good morning to you, foster. Joe, its so good to hear your voice thank you for asking me on im honored to be here were thrilled to have you. This one is andrew im sorry, foster, its going to be andrew today i dont want you to think this is me, either. Okay. Well just know that in advance i love the backdrop. I love jackson beautiful. Well the eclipse is coming soon, its going to be a nightmare. Were going to have about 20 miles of parking lots on our highways, were afraid foster, wanted to try to get your thoughts and understanding of, and reaction, really, to the ceos disbanding these councils over the week, and planning, before they were disbanded, at least announced as such by the president , to resign en masse, if you will. Well, i saw jeff immelt resign, and hes, remember, the fellow said when obama is elected were all democrats, and then also the aflcio fellow in resigning said that President Trump in condemning the nazis and the White Supremacists and racist were forced remarks donald trump doesnt impress me as someone who can be forced into do anything i think its sincere from his heart. If you really know Donald Trumps history, at maralago when he opened up the club down there, he admitted jews and blacks for the first time, and i understand also has an openly gay couple as members in his club that doesnt sound like what a racist is all about. So i think a lot of this is politically inspired for the people who dont like donald trump, to make him look bad. In fact i was really shocked that fox news had a little clip and it told what the two bush president s had said how racism is not a part of america, and condemned it, but they said it was in relationship to trumps statement. Well, anybody is against were all against the racism, and what was represented there but, they by putting it up there implied that they were condemning trump, i think. And if you look at the history of our country, remember the democrats were the one who spouned the ku klux klan remember senator byrd, one of the klan members served in the senate and Franklin Delano roosevelt when he dedicated the statue of general robert e. Lee, just applauded him as a great gentleman, a great leader of men, and then went on to say hes one of the great christian americans in our history now should we start taking down Franklin Delano roosevelts statue its sad go ahead i think the question for a lot of ceos is, this past week, was what their responsibility, and moral duty was in regards to the comments that the president made and im not going to dispute what you said tosuggest clearl the president condemned those words, but then, he both doubled down on what some people thought was an equivalency between not people promoting nazis, and White Supremacists and those that were promoting the sort of antifascism and that those are not the same things and that thats why so many people have come forward on this issue. And that hes been slow, not just this week, but has a history and i pattern of being slow to defend that position well, i think thats pretty ridiculous you know, what does serving on the Manufacturing Council have to do with what happened in charlottesville . And i think of all the 10, 15, 20 guys, international paper, michael dell, all the people that stayed on and said, look, were here to help jobs, not to make political statements. And why did people say that his statements were racist or endorsing . In fact, graham, senator graham said hes contrasting the nazis compared to Heather Heyer who is killed now, he never said anything like that in fact what he said was that both sides have some responsibility for this. Have you ever gone to a prize fight where theres only one fighter in the room. Have you ever been to one of those andrew it doesnt happen. Foster you saw some people carrying torches, some people who had nazi flags there, you saw some people who were weaponized, highly weaponized walking into this. I mean, i think any time a president doesnt stand up and unequivocally shoot that down you are obviously opening yourself up to criticism from people who say, wait a second, why arent you saying this more quickly. He was very quick to criticize frazier, who stepped down from the post, immediately lashed out on twitter he was not quick to condemn some of the actions donald trump is going to improve on his speeches that speech wasnt a good speech you contrast obama he gave the greatest speeches in the world what did he do, drawing a red line in syria, where trump puts 29 tomahawk missiles down the syrian aircraft, so if you look at donald trump, im really grateful that susanboro, who was the mother, thanked donald trump for standing up and saying this is ridiculous, this is she said thank goodness he spoke out against the nazism does anyone really think that donald trump is pronazi and pro but foster, why foster he talked about the people on the other side of this as being good people when you see a nazi flag and torches, dont you think that the correct response is to run the other direction . Well, thats the medias approach but i that wouldnt be your approach my approach is basically, look, i told you when i was a kid i went to the seven motels in my town and asked them why arent you accepting jews and blacks when i was my fraternity president i got the first jew in our fraternity so dont give me any grief about what that might be my point of view ive been fighting this fight for a long time to bring equality and decency, and to realize the American Dream that were all in this together so lets put what donald trump said was that there probably are some people now if you had a rally said were going to try to protect the statue of robert e. Lee, theres a lot of people probably showed up say, hey, id like to protect that statue, had no idea who the sponsors were. I can imagine that there were maybe some good people there you dont know that. You dont know if theres good people there and now Heather Heyer, on the other side, definitely was a good person. But yet, what about that whole group that confronted the nazi group . Did you see any battle black masking and black suits and baseball bats . I think what donald trump why donald trump gained so much stature with those of us out here in the colonies is the media who part of the kingdom of d. C. , they take things completely out of context, and obviously you cant have violence without having two groups now Heather Heyer was a peaceful demonstrator she was one of the good people there. There were probably good people on both sides. But lets go find out who they foster, let me ask you this, without relitigating this past week, how does the president move forward its not just that the ceos have abandoned, at least publicly, a president who has run on a platform of being a business president. But also so many in congress, so many in the senate, that have effectively denounced and condemned not just what took place over the weekend, but the way he has reacted to it and how hard is that going to make it for him to and the administration to promote the policies whether it be tax reform or health care or some of the other things that i know you care so much about i think, andrew, the victims father, Heather Heyers father, mr. Breaux said its time we start forgiving each other and i forgive james field for killing my daughter. These guys are crazies that are doing this stuff 20yearold kids running into these people and so, if you look at our country, what happened in charleston, nine people were shot did you have riots like you said in ferguson. And in baltimore the mayor of baltimore said we had to give them room to destroy. In charleston, they had hugs and rituals. They didnt have riots why is that . Its because theres a value system in our country that is different from place to place, and for the press not to highlight who some of the bad guys were in the antiprotesters is irresponsible and why the American People are losing confidence in the press there were some bad people among the protesters against the nazi guys and lets not forget that. Foster so if we got to go but one final question for you the president has taken a lot of credit for the stock market and the rally thats happened thus far. Does he deserve credit for if it falls, too does he deserve credit both ways well, well, when i was in the business for like 30, 40 years i thought that whole political animals always took more credit for it, and i think theres a lot of things going on besides the policies that make a difference but i just want to make sure i love donald trump. And hes being hes become a victim and hes being bullied and why americans are flocking to him is because they hate people that see bullies. God bless them foster, we appreciate your time and your perspective this morning. Thank you. When we come back, a wild card for the transport sector. Trade talks. We have that story right after the break. Nafta renegotiations kicking off this week. Morgan brennan joins us right now with more on how the talks could hit the transport sector morgan, good morning good morning, becky for those companies that are moving all those autos, avocados, Energy Products around north america, that cross border trade has been a growth story. Especially on the southern border so take Warner Enterprises the biggest u. S. Truckload carrier doing business to and from mexico. The ceo told us yesterday on power lunch that mexico business is now 15 of warners total business that has grown for ten straight years he echoes what i hear from other transport ceos that its time to modernize nafta. Address ecommerce automate border crossings. Both of which are on the table right now with these talks but beware, if nafta just goes away, all three economies would be hurt. Thats what they say u. P. S. And fedex have been outspoken on trade as well with rival shipper ceos coauthoring an oped as they said earlier on your show, u. P. S. Chief david abney maintains every new trade agreement has resulted in a 20 jump in u. P. S. export business meaning more jobs. Also watch the rails which all do business with canada. Canadian pacific and Canadian National and south of the border Union Pacific which owns a part of a Mexican Railroad and also Kansas City Southern which gets over half of its profits from its mexican operations its become a proxy for u. S. Mexico trade relations since the election, and has played out in that stock chart all right, morgan, thank you very much. Joining us right now for whats working in the transport sector is don broten, founder, managing partner and principle at broten capital. You hear all of this you heard what morgan had to say. When it comes to the sector what is it that you like . We continue to like things that are related to ecommerce we continue to like things related to parts of the economy that are growing thats the nice thing about transport is you can see on a realtime basis whats actually spanning, and whats actually contracting and set to disappoint so does that mean u. P. S. , fedex, those are the plays that you like based on the ecommerce sector continue to be very positive on the shares of fedex, continue to be like things like xpo which delivers the last mile so that when you decide you want a refrigerator, or a kayak, and it doesnt fit through the fedex or u. P. S. Sortation system theres somebody to come deliver that, and or set up the big screen tv. I asked you about fedex and u. P. S. And you said fedex you continue to like you didnt mention u. P. S you dont like them as well as fedex or is there Something Else there . Well, its that when i look at the two companies, theyre vastly different in their culture. U. P. S. Is a custodial culture. Its highly unionized in its workforce. Fedex is a much more entrepreneurial culture and its reflected in the rates over the last 10, 20plus years, consistently fedex just outgrows u. P. S. And so, if you want to buy an equity, and you want to participate in that longterm growth you want a company that grows faster than the other one. And fedex definitely grows its top line and bottom line faster than u. P. S what do you think about csx right now . It has been an outperformer with the new ceo . Well we continue to be big fans of Hunter Harrison. Unfortunately right now were having some disruptions in service. Thats kind of right out of the Hunter Harrison script book. Hell come in and he fires customers. He goes through the book and says, you know, i know you would like us to pick up two cars every day, but thats just not going to work for us youre either going to have to pay a lot more for that or were going to come by twice a week and pick up six to eight cars at a time because thats inefficient only to pick up one or two cars a day. A lot of customers dont like that that leads to disruption in the shortterm in the longterm his track record is very clear, though, it leads to ever higher rates of utilization and ever higher rates of margin and profit for shareholders in other words the customer is not always right . Depends on what the customer is asking you to do. Exactly. And hunters put he really challenges everyone in this system its true for customers, its true for suppliers, its true for people internally. And, in the end, thats the you know, you got to row the boat youve got to make some waves, and thats what he does thanks so much. Its great to see you. Pleasure is mine. Coming up, more than 290 Million Dollars becky worth of classic cars are on the Auction Block at pebble beach. Something else out there o t nice golf course. H,hats it thats it. Thats the place well be right back and take you there live so we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. I thyou never got the brakes looked at . L. 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. A lineup of classic rides up for sale at the annual pebble beach car auction. Robert frank joins us now from these are golf carts, robert, or these are im confused. Normally, joe, they would be golf carts were actually on the fairway on the golf course, the delmonte course which is part of the Pebble Beach Golf Course network but were selling cars today which i think is a lot more fun for me than golf more than 290 million worth of cars expected to sell. Now the classic car market had been the strongest collectible market on the planet for about ten years. But right now, were seeing a bit of a correction, maybe a stall from the peak of 2014. Cars now second as a collectible behind wine. And this week over 1100 cars expected to sell and right now, the high end is actually the weakest part of the market so those multiMillion Dollar ferraris, mercedes, the porsches, those cars that had been setting records for 2013, 2015, now thats the weakest part, and a lot of people say its because those collectors are the most sensitive to the stock market, to whats happening in washington, and of course, some of the growing uncertainty around tax reform. The overall confidence that we saw a year ago of this is going to be a huge capital creating opportunity for those interested in building collections, the confidence is definitely not there right now now we are going to see the best of the best, some of the holy grails of the car world, trade at incredible prices this week and the most expensive car thats going to sell this week is probably an aston martin dbr1 thats being sold by sothebys aston martin only made six of these. And these cars are just massive in the mythology of racing and british car history. That car could sell for well over 20 million now supercars, these are fairly modern, recent cars built in the last ten years, theyre becoming much bigger in the auction, and the ultimate super car, mclaren f1, thats going to sell for somewhere between 10 million and 14 million. But the celebrity of the week, the literal movie star of the week, is Steve Mcqueens racing porsche. Now this car was in the movie le mans, famous movie, sort of become a cult classic among car collectors that car could sell for between 10 million and 16 million over its bidding. And that would be the most expensive porsche ever sold and probably the most expensive movie car ever sold. But still the real top sellers here this week remain the ferraris this is a 2. 2 million ferrari thats going to sell here at meek up. And then race cars, especially a car like this which was driven by the legendary sterling, the jaguar nobli that could sell for 2 million but we just dont know the big sales start tonight, guys. So lots of questions, will the stock market move yesterday affect the mentality here . Lots of people on edge about how the past week will affect some huge prices expected this weekend, guys. Hmm that is cool, Steve Mcqueen. Just 49 years old, robert did you were you around for i mean, i go all the way back to when he was on wanted dead or alive. He was cool, man 49 years old that is so thats the that car is going to go for something seniors, huh yeah, and whats interesting is whatever vehicles Steve Mcqueen ever owned they had a porsche that he once owned that went for quadruple what a normal porsche like that would sell for cars that he drove or owned or started, theres a multiple on Steve Mcqueen thats unlike any other person in the car world. So its going to be really interesting to see what that car sells for. I like that one car that was that was made in 1956 because that was a very significant year very important year, because my parents were born in 1956. So that would be very important year anyway near and dear to your heart near and dear to my heart yeah my grandparents were actually born, robert a great year. Yeah. Thank you, guys im going to start saying that thats thats what people in hollywood do yeah, just start rolling back the clock. Start rolling back the clock. You think people would buy, lets say i go 1964, would they buy that, you think . Youve got to jump it slowly. You dont move eight years at a time you kind of roll every year you can slide back a couple of years. Into a on the odometer, so to speak my parents were born in 56 thats impossible. Id be your age. Thats when i was bon. But i dont want to admit that you just did. Theyre going to take care of all that and a lot of other things were going to live forever technology is Getting Better and better science is Getting Better and better right 60 is the new ive got it down to 35 now well take that all right lets talk about puts you at about 18. Which is cool, right you can drink. In some states no, you cant ohio you can. No, you cant yeah, 32 beer you can. Not anymore what . Youre dating yourself. Lets take a look at some stocks to watch Power Generation company cal pine has degreed to be acquired by private equity firm energy Capital Partners the price is 15. 25 a share. Or about 5. 6 billion. Gap reporting quarterly profit of 58 cents a share. That was six cents above estimates. Gaps quarter was boosted by Strong Demand at its old navy unit also by fewer promotions and ross stores came in five cents above estimates with 22 cents a share. The discount retailer also posted a better than expected increase in samestore sales and that stock is up by 11 . Are you checking me on google . Virgin islands. Andrew hes Fact Checking me on google no, youre right. There was a federal law that they raised it to 21 why do you know that because i was under 21 when that happened. Well your i. D. Said youre 26 i never had a fake i. D. You never no. Id still like a Shirley Temple coming up is the u. S. Locked in an economic war with the u. S. . Thats what steve bannon said and what china expert agrees with him James Mcgregor is going to join us right after the break to talk about it first u. S. Equity futures at this hour. Dow looks like it would open up about 22 points higher, s p about 4 points good morning, everybody, welcome back to squawk box here on cnbc we are live from the Nasdaq Marketsite in times square President Trump just tweeting, Homeland Security and Law Enforcement are on alert and closely watching for any sign of trouble. Our borders are far tougher than ever before. President trumps chief strategist steve bannon saying this week that the u. S. Is at economic war with china. Bannon telling the american prospect that if we go down this path, if we continue to lose it, were five years away, i think, ten years at the most of a friction point from which well never be able to recover joining us now is James Mcgregor, chairman of apco Greater China region when people make points, sometimes theres hyperbole. Is this hyperbole, or do you think that mr. Bannons got it right . Well, i hate to agree with anything from steve bannon, but i have to tell you, i dont believe in the economic war. But we are having a very hot competition, and we need to figure out how do we do a reset with china because china, the way our system interfaces with china inc. Gives china all the advantages so weve got to change the way we do things, especially with technology because chinas got plans, i mean, you cant really fault china. Theyve got plans and they know what they want to do and weve got to wake up to what theyre really doing and figure out our countermeasures and weve got to figure out where we want to go as a country, especially with future technology how did we get here was it were just the induce we saw those cheap good, we saw what we were able to do if we imported things, and it was almost like a Faustian Bargain we agreed to it and didnt know that it was going to eventually come back to haunt us well, actually, no, i think what happened was, the china got into wto, and we didnt really recognize the difference in the system china has its interface with the world of attorneys and investment bankers, and playing by the wests rules or the worlds rules, but on the other hand its got china inc. And all driven by the party, and its very, you know, very mercantilist, and its very much zero sum game and now that chinas got this very powerful economy, and they are focused on it, and theyve got 1 50 billion at the sill can chips alone. Theres 30 sill done chip fabs under construction or approved in china today new tears, artificial intelligence, claude computing 3d robotics, they are off all of this and theyve got science to go for it, and we dont want to give up that supply chain or technological edge the problem is, our openness and our rule of law work against us because its hard for us tosay we dont want chinese investment, because we do. But if its state directed and its aimed at eliminating Foreign Companies in that market, and then taking them on globally we better wake up to that hmm you think its the genies out of the bottle at this point . Can we really i mean politically, and in terms of what, you know, what the chinese how the chinese respond, can we take back any of our of the advantages that maybe we should have here . Or at least equal Playing Field that we should have . Yeah, i mean, i think that the Foreign Business Community in china, American Business communitys been pushing for reciprocity and when you say that word, all the lawyers and diplomats get very nervous but, we need to have a reset with china, say okay you had a good 20 years. You did mercantileism just like america did in the past and japan did in the past, and now you want a winwin, great power relationship, thats very good lets go back and start over again looking at how we interface with each other, based on reciprocity, equality now theres a lot of places that wont work negotiate your way from there. Politically i dont know youve got a circus going on in washington you know, we got to fix ourselves, too lets not get stuck in victimization that chinas doing all these things to us lets look at what were doing to ourselves right all right, James Mcgregor, well be watching. Another thing to Pay Attention to anyway, thank you. We appreciate your time today. Sure. When we come back, top ceos backing away from President Trump. What will that mean for the esens osiss agenda . We will talk to former sun mi o microsystems ceo Scott Mcnealy right after this break with this level of engineering. Its a performance machine. With this degree of intelligence. Its a supercomputer. With this grade of protection. Its a fortress. And with this standard of luxury. Its an oasis. The 2017 eclass. Its everything you need it to be. And more. Lease the e300 for 569 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Welcome back to squawk box this morning check out shares of foot locker. Theyre down more than 20 this morning. The athletic footwear and apparel retailer earning 62 Cents Per Share for the Second Quarter. That was well below the 90 cents consensus estimate revenue also missing forecast and samestore sales declined 6 compared to expectations of a 1 increase and under armour and nike also as a result of all this under a bit of pressure this morning as well nike off almost 4 under armour off almost 3 President Trumps relationship with top Business Leaders is on the rocks after a number of ceos distanced themselves from the president following his response to the violence in charlottesville. Joining us Scott Mcnealy former ceo of sun microsystems. Scott you werent necessarily on any of these councils. If you had been, what would have been the time line for whether you decided to leave, or to speak out, and have you spoken out against where were you in this whole issue that youve been watching play out over the last week and a half well, i wasnt on any councils, and if im asked to stay on a council ill probably be there until its over you know, i think this whole concept of speech as opposed to action, i think needs to be clarified and talked about a heck of a lot more i think there were a lot of actions by a lot of people at that event that were illegal and should be prosecuted im much more willing to listen to different kinds of speech the concept of hate has been thrown around in the media, and with government officials way too much ill tell you what i hate. I hate crime and i dont understand the difference between a hate crime and a not hate crime to me, i hate people who speed i hate people who break the law. I hate people who murder i hate those are all hate crimes as far as im concerned. To some level or another speeding . We tend to try to split harris on hate speech and i think that gets very, very difficult. But, in terms of ceos, i think, you know, they have a tough issue, because of the division that has been created over the, seems like the last decade they dont want to lose half their market by being affiliated with one side or the other i dont think government should be choosing sides on issues. They should be deciding whether its legal or not and enforcing tranquillity and peace among the people but, Business Leaders cant be choosing sides but theyre pr canaries and theyve got handlers all around them that the most sensitive to anything that could lose a customer as anyone. Let me ask you this, you were you called the end of the eight years of the Obama Administration the end of the waterboarding. But obama never had a relationship with, you know, these top ceos it never soured to the point, im sure andrew would say, where we are right now with these ceos as bad as you think obama was, to the private sector, it never soured to this point that supposedly were seeing right now. Is that a fair statement i think with social media, and the media of war between theres clearly a war between trump and the media, i think it is very, very difficult. Now when i was a ceo, we didnt have all the social media stuff, and stuff didnt, you know, get lit up like it gets lit up today, controversial issues. I think you have to be much more carol to be apolitical and under the radar so you dont lose half of your i dont think the ceos are not going to answer a phone call from donald trump i dont think theyre not going to theyre not going to stop lobbying in washington, d. C. For regulations that help their company or spending that helps their company, or whatever that will continue to carry on the crony stateism will continue all of those other efforts at that will still continue scott, and this is my opinion, theres nothing political about calling out hate and those that defend hate and so create some kind of equivalency between speeding, and people who are carrying torches, and nazi signs that are talking about killing the jews, and are effectively supporting groups and supporting an idea that killed millions of people, im sort of just baffled that that were even having this part of the conversation. Youre having this part of the conversation i am i dont say theres moral equivalency. I said theres to some level you said people who speed and you hate people who murder theyre not even in the same meaning. Youre not youre making the statement. Youre not letting me make the statement here i dont believe in anything about White Supremacy or the nazis, its all terrible, its horrible i said it, its done its obvious you shouldnt even have to say that but the issue about which said did what, all the rest of it, that doesnt make any sense. If youre breaking the law you ought to be arrested and i think thats what has to be focused on. And i think we need to protect free speech, and i dont know where you draw the line on whats free speech and whats not free speech but i tell you, it gets very, very crazy because i dont know whos going to be in power next, and decide what else is not free. Free action is is not, because that can impinge upon my rights and liberties and freedom. Free speech, i guess i grew up with people are allowed and these people are idiots, theyre absolute morons, to be saying what theyre saying. And they will not Gain Momentum in a free and open and liberty based country. So, im less worried about them. Im more worried about kids getting murdered in chicago. Im more worried about the opioid crisis. Im more worried about getting people back to work. I hate joblessness those are the things that id like to focus on and i think this whole thing is a its not a side show, but its a slam dunk because theyre a bunch of morons and idiots, and they shouldnt get any time on air. Do you think, scott, that the possibility of some of the that the progrowth policies that the Trump Administration is going to pursue, do you think that those will be delayed or made more difficult by what happened in the last week . No, i dont think so. I think congress has got to stay focused on what they congress has a hard time focusing on anything right now but, we need to continue to reduce regulations the Biggest Issue we have, and whats causing all of this divisiveness, by the way, is i think these factions are really often just side shows. Whats causing the big problem is government has gotten so big, so intrusive, and so important to every business, to every person, all the rest of it, it has gotten beyond just protecting life, liberty and the pursuit of happiness its now taking care of you, whether it be and all of these regulations that they write, created barrier to entry for small and Innovative Companies that come and compete. Wall street loves regulations. The Insurance Companies love obamacare regulations. The cab Companies Love the city regulations on transportations all of these things allow the current crony status to stay in power. And i think what we need to do is get Government Back into a very small scope of limited scope and get them out of what ought to be happening in the private sector we all know that capitalism is the system, not socialism, that has brought billions of people out of poverty around the world over the last 50 years and i think we need to get back to that argument thats the most important argument to me right now its all this other stuff. This division is caused by people who are saying, i want free, and other people are saying, i earned this, why what is the right share of something that somebody has rightfully earned . What is the right percentage of their income to give to somebody else and thats the argument we ought to have. We ought to have a scope of government argument because thats driving all of this decisiveness. Thank you for your time this morning. We appreciate it well see you around. We didnt talk about weigh ins at all but next time we will. Coming up when we return, more Tech Companies taking a stand against hate speech after the violence in charlottesville. Up next we will talk to a ceo of a company, his company just cutoff services for neonazi sites. That when we return in a moment. R. About three months ago i became aware of almost 10 million customers on Cloud Based Network was doing something reprehen reprehencesab reprehenceable they were attack people and harassing people submitting complaints about them. That caused the site to become on our radar convene and for us to effectively put them on probation. Over the course of the next few months there was a series of other events that caused them to be a massive distraction to us and our team and it was the exact opposite of what was the case so i made the determination on wednesday morning that life was too short to deal with jerks like this so we fuld plug on having them use our service. Matthew, how do we think that Business Leaders, especially tech leaders that have platforms. When it comes to the First Amendment people can say whatever they want and have a conversation about whatever they want. Im the son of a journalist and im an incredibly strong believer in the First Amendment and think its essential and very important i will say though that it is a uniquely american idea and institution and it doesnt translate as well around the rest of the world so i think at some level we should shift the conversation from being about the First Amendment and free speech to instead being about due process and what i am concerned about is that technology Companies Like facebook and like google that control huge swaths of the internet cloud by itself sees over 10 of all internet requests flowing through our network that i can wake up one morning and make a determination without any kind of he gentleman ma sy or political responsibility and literally wipe someone off the internet i think what we should be thinking about is what is the right process for these platforms and Technology Companies to go through and follow so that their decisions can be transparent and understood from the outside and that you can know what the rules of the system are before you participate in it. Its a longer conversation. I hope theres an opportunity to continue it with you we appreciate your timane d perspective this morning. Thanks for having me on. Up next, the jetsons are getting a reboot we have the details next 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. 100 years in the future and will reintroduce the jetsons through a modern filter. They didnt have iphones. But they did have robots and flying cars. And a food that would come out of a microwave thing after ten seconds. Everybody have a great weekend. We hope to see you back here on monday morning right now its time for squawk on the street. Earnings are a head wind though. Europe as well though were watching for developments out of barcelona today. Oil is stead i can but near the