Transcripts For CNBC Squawk On The Street 20160617

As the board drama continues, well go live to Paramount Pictures for the future. And microsoft wasnt the only offer on the table for linkedin. How sales force missed out. Viacom issuing a warning for the current warner. They cite weaker sales after redstone moved to oust five board members. This is a significant warning on estimates. Yeah. They blame one movie. They claim the slate is going to be very good going forward. But they said the slate was going to be very good going backward. This is a company thats in disarray. If you buy the stock, its a complete crap shoot. Its rare you are say do we know whats going on in the company . I think they dont. And i say in a vacuum, the stocks a poorer vacuum. I think you buy it because you get a bid but thats just reckless. Theyre looking at 1 to 1. 05. The street was at 1. 38. A lot of people come in say a nice base had been set on this name. Yeah. I just look at this situation and i just think that this is such a poorly run company that the earnings estimates mean nothing. Theres a core value to it that we cant determine. I just think that this is a black box. But the stock is going up. Its been very hot. And it not going down big on this preannouncement, which tells me people feel like this companys in play. And i think that its in play because no one can recall a company that doesnt have anybody running it that doesnt have somebody gunning for it. I wish i had a valuation for it. It ha its hard to figure. Some argue a great activist play turns out to be a duel stock like this one. You set up a dual class so your family inherits and there isnt anyone who can come in. Remember dow jones had a separate situation and the families broke and murdoch came in. Look, to figure out what this companys worth on top of this preannouncement, why do they e preannounce . Are they afraid people might be bidding on the stock and theyre in possession of the that say, listen, our numbers are so much less than you think so before you take a shot at us, understand this is a material decline in our business. So at least theres someone issuing it. I mean, theres someone who pressed the button, right . I guess thats a positive. Well get to a lot more media news today, including disney in a few moments. First up, though, st. Louis fed president jim bullard cutting his economic outlook. He said under Current Conditions only one rate hike may be necessary over the next 30 months or more, barring unnecessary shocks, he sees gdp around 2 . He continues to see unemployment around 4. 7, inflation around 2, but he is clearly the outlier. We wondered who that was. Yeah, he was a guy who last year in august was talking about how strong the economy was. He had to pull back, saw the data wasnt so hot. You two have a history. Little bit. Fair to say. Came around to my view. Hes not on the board of lululemon so were okay there. Chip wilson, i do want to speak to you later because i do have comments on the insurgent founder, who i kind of like. Bullard is a guy letting the data determine it. I was surprised at this because when oil came up, he was using oil as a sign that the economy is weak and then oil doubles so i thought he might not go this way. You know, people change and i think bullard was a little doctri doctrinearian and hes backed away from that. I want to hear its the beginning of its amazon doing it, its digitization, its disruptor. When is the real world going to intrude on the federal reserves analysis. Youre not going to have as many people do as many things. Some of the people at sales force talking about how all the apps replace people. I need them to come out and say, listen, we are at a moment where the reason why we cant really grow jobs is because technology is just killing jobs. You could also do offshoring. Im just saying i need them to understand what digitization means. They dont seem to get it. A lot of questions about the model that the st. Louis fed is switching to. Housing, the mortgages are fixed, the lowest in a way. I will say this. I get the st. Louis fed, i get everything the st. Louis fed sends out. Their data is so superb, even week to week. I worked with them in the 80s. Theyve been the most disciplined in terms of their analysis. We need housing to be stronger. Were talking about a housing start number that was the same as we were when we were a nation of 150 Million People, we are 317 Million People. Rents are the cause of the cpi going up other than health care. Diana ola talking this morning correctly about some of the obstacles. Its not a Strong Economy but there are pockets of the economy that are very strong and theyre wiping out other pockets. A week from today, jim, were going to come in here and we should know the result of this brexit vote. This murder of jo cox is abhorrent. What happens if theres a remain . Do we shoot to 2140 . What . I have to tell you yesterday when oil was down a buck and a half and the market was looking bad, it really seemed like there was no way to come back. Im going to hate what i say here, but and then she and then the wow, then the incident occurred, okay, and then the stock market flew up because the incident was viewed as something that said wait a second, we have to cool the rhetoric and maybe the stay wins. If you look at the s p, it literally was right up when the murder occurred. You think it could change the trajectory of the vote . Yeah. I mean, it certainly changed some people say betting lines not changed, jim. I say the s p violated its ratio with oil and just turned up the moment she was murdered. Its rather remarkable to see that. These betting line, you have all these polls, but the s p, you got a unique thing with the s p if they stay and its going to be pretty bad if youre short. Theyre suspending campaigns, both sides for today. We mentioned la guard. She said there hasnt been a meeting with anybody in the past few months with anybody in which brexit has not come up. Take a listen. Zit going to cost, its going to be negative for imcome purposes, its going to reduce trade due to uncertainty. Those are blatant facts. And reuters quoting kbw that u. S. Banks could get a 6 hit on earnings. We did some yesterday and we went over different American Companies that get hit. Goldman sachs hit the most. Do you have to move to paris . Do you have to move to london . This is a job killer. Its so amazing. Theyre very the brexit group is very blithe about the jobs. Theyre not really talking about the jobs that will be lost but American Companies, american banks may have to shift, they may have to go to another country, which is really pretty amazing. Diamond has basically said as much to the u. K. , our Business Model here is going to have to change. You were totally dominated by events. Apple going down right now because of talk that the chinese are blocking the six. This country itself, its so funny, i do all this work on the country itself and i just find its hapless. I go why am i wasting my time . Its brexit. Its china. Its anything but home. Its going over kroger and kroger reversed yesterday. There wasnt anything that really reversed it. I stopped and said i must be the only person studying kroger, theyre studying british polls and apple in china and im sitting here i like kroger, its only the largest grocery chain in the country. Forget that. I care about having will frost on about the sales for rbs, royal bank of scotland, for barclays. But thats right. Thats right. Thats not the wrong approach. You have to focus on international. Those of us who have prided themselves of being able to do analysis of individual companies here, i accept the macro judgment. You have to accept the verdict. Were going to dig into that apple news. The journal saying beijing says the 6 and 6s violate a chinese patent, halting sales. Tim cook was just there not that long ago so i dont know. China is i mean, look, obviously the stocks going to head down more than 1. 75. Coming up, some tough talk from larry ellison. And the latest on the viacom board saga. He did show up for work today. Heres some video him showing up this morning. Take a look at the premarket. Not much action in either direction. Well see what the day brings. More squawk on the street from post nine in a minute. Okay. What if a Million People download the new app . Were good. Five million . Good. We scale on demand. Hybrid infrastructure, boom. Ok. What if 30 Million People download the app . Were not good. Were total heroes. Scale on demand with the Number One Company in cloud infrastructure. Using 60,000 points from my chase ink card i bought all the fruit. Veggies. And herbs needed to create a popup pickyourown juice bar in the middle of the city, so now everyone knows. We have some of the freshest juice in town. See what the power of points can do for your business. Learn more at chase. Com ink see what the power of points can do for your business. Man 1 i came as fast as i man 2 this isnt public yet. Man 1 what isnt . Man 2 weve been attacked. Man 1 the network . Man 2 shhhh. Man 1 when did this happen . Man 2 over the last six months. Man 1 how did we miss it . Man 2 we caught it, just not in time. Man 1 who . How . Man 2 not sure, probably offshore, foreign, pros. Man 1 what did they get . Man 2 what didnt they get. Man 1 i need to call mike. Man 2 dont use your phone. Its not just security, its defense. Bae systems. Salesforce confirming his company made a bid for linkedin before microsoft swooped in to buy it for 26. 2 billion. Salesforce will face increased competition in Customer Relationship management software. What did you think when you heard that . Id gone over linkedin. They were surprised they had such macro weakness. He always felt its a good social mobile cloud company. Id like to hear more from mark about the actual details of what he intended to do because he does not talk about material nonpublic information to the press. But i know that he thought the company is great and he was stymied by that previous quarter, as so many were. But even going over literally each paragraph of what was wrong. And i know that he was surprised. That next quarter made him feel better. When we asked him about demand wear, he said this is a deal we could get down. I kicked myself because that statement when he was right here and said it was kind of an admission that there were other deals i couldnt get done. It was right there and i just go over everything that i heard and i realize i screwed it up. I had that moment. I had that moment. Let others do the monday morning quarterbacking. No, i watched the tape, i was wrong. I handed it to the wrong guy. Who would have been the better story of linkedin . Who would have been the better story . I think that the independence of linkedin is much better for sacha because microsoft, they need the growth. Salesforce does not need the growth. They would be buying a Company Growing roughly the same, maybe a little less. But you dont know because if you listen to the unbelievable oracle call last night, youre dealing with a company that says theyre not growing that much at all. The oracle call, one of the great thing, Larry Ellisons three mentions salesforce negative, you always have to keep score of what they say because these guys are the fightiest guys evfight ie feistiest guys ever. At one point honestly, if marc benioff were an upset guy, he would have thrown his mouth guard at ellison instead of just steph curry. Lets listen to what ellison said last night. Wed like to accelerate our staff and past growth and make sure were growing at least double the rate of our closest competitors. We think we have a fighting chance to be the first staffed company to make it to 10 billion in revenue. No. No. Really, its going to be look, this is a horse race but benioff is going to be their fast tracker. Hes that close. Hes that close. But they do a platform as a service. It could be a photo finish between these two. Its been an important benchmark for both companies. Now, there is no shortage of promos on their Conference Call. Safra katz, who i love, she starts of with we were thrilled and says the results for q4 were fantastic. They dont wait for you to tell them its fantastic, they tell you its fantastic. Weve seen our movie and its fantastic. Erye did that about star wars but theyre competitors. Its the nfl. Apples down almost 2 . You got to get apple on the phone, guys, because the story, you know, china obviously so important. Jay clearly said the numbers are pushed out. Were getting a number of soft downgrades. Yesterday we had another. No one is downgrading. We reiterate buy and cut the price target. Thats the soft downgrade. I cant get confirmation other than theres been two stories that said the 6 is pulled. I need confirmation of that. Beijing regulator orders apple to stop sales on two iphone m mode models. Cook was just there. I know. They just invested a billion dollar in an important ride share company, which some say was an attempt to build goodwill. If this story is true, they did shut down the apple ibooks and itunes movie sight. If this is true, the stock will get hit with more than it has been. But this is not whats in the game plan. The 6 being pulled. And the China Mission was a kind of a, please, were working with you guys and this is not the reaction. Its a subpar situation. Suboptimal clearly for apple. Talk about difficulties in doing business in that country. Great example. Yeah. The big growth came from china. Its one thing to say the growth is slowing. Its another thing to pull it as if its just a box of secereal, theres something in the cereal, pull it. We act like its a democratic china and now, its a communist dictatorship and they control every aspect. There are a lot of people that criticized that thicahn thiss no longer worrying. This is in your face. The 7 has to be for sale there. They have to get the 7 in order for them to make anywhere near numbers. Does the fact that the 7 is around the corner take any of the sting out of this . This relates to the 6, which is in its twilight. They got to get to the beijing intellectual Property Bureau today. Yeah, look, you cant be out of that market unless you want to be out of that market. Google. Its bad. Im going to say its bad. I wish theyd check in and get some confirmation that this isnt a permanent ban or that theyre in consultation with them because you cant lose china. You cant lose china. On that note, we will keep an eye on that. Well get cramers mad dash. Well count down to the final opening bell of the week. One more look at the premarket and squawk on the street is back after a break. Ked and intellectual property being stolen. That is cybercrime. And it affects each and every one of us. Microsoft created the digital crimes unit to fight cybercrime. We use the microsoft cloud to visualize information so we can track down the criminals. When it comes to the cloud, trust and security are paramount. Were building what we learn back into the cloud to make people and organizations safer. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive with iphone sales, you saw other regulators suspending the companys movie and music business. There was a lowcourt ruling months ago that apple has infringed on those patent and immediately important all apple products are still on sale in china. Any idea how this takes fire . Were not talking about a tech blog out of nowhere. This is the wall street journal. I cant say. I dont know what the journals reporting was here, carl, what their sources were. I can only say who im talking to. Maybe some confusion about the Lower Court Ruling. There was a ruling. I think whats important is that apple is now appealing that ruling so the injunction has been stayed, carl. Thank you. Meanwhile, jim cramer is with us who has been working the phones on this. On the record confirmation. Absolutely not true. If it were true, its only beijing. Its a Lower Court Ruling. It is not true. The story as reported is not true. And if it were to affect china, it would only be beijing. I had it confirmed from the company. They dont expect it. Theyre saying its minor, minor, okay . You can argue a Lower Court Ruling is still stunning. But they are saying, listen, were for sale and even if it did occur, it would only be beijing. Obviously beijing a big city. You say only beijing, thats like saying only california. Its a minor court ruling and they dont expect any interruptions. And on the record, no interruption in sales . On the record. Talk about a big head fake on this. Jim, im glad its cleared up but it does, again, highlight concerns about doing business in a country where Something Like this even gets to this level. Yeah. And remember again the Chinese Court system is controlled by the communist party. So in other words, its not like the u. S. Court system. Thats a communist party ruling. You are not going to get a lower court to take a look at the facts and take each side. The communist Party Controls the courts there, so thats a communist party ruling. So lets not forget we make things up. We say was apple represented, fifth amendment, fifth amendment. Communist party made its ruling bu its selling. You mentioned other estimate cuts you dont call them soft downgrade. The cuts were real. Is it a value trap . A lot of my best guys are saying, jim, come on, its like an airline. Its going to sell six times earnings, but i have to tell you that i still believe that this is an inexpensive stock and i do believe, as apple just put on the record for me, that this is a minor, minor matter and, again, i say its a communist party. Can you say im trying to put a little nuance on my own because i know the chinese system pretty well, but there is other issues involving the actual number and whether the 7 is not going to sell as well. Im looking at the bill rate of within particular company, jbill, which is the principle according to jabil. Everyones kind of cutting their price target, everyone is cutting their price target or wants to cut their price target. At the same time, i generally have to say if youre going to panic on this particular aspect, i think you have to panic on other reasons. It does take a strange coat on a week, the car, everything weve been talking about thats promised in a long time. And ted leonsis. I do feel very strongly that the quarter seems soft. Obviously the stock off the lows of the premarket. That was down about 17, its turn around somewhat with the concerns obviously about the overall quarter. Lets get to the s p at the bottom of your screen. Final opening bell of the week at the big board. It is the new York City Department of transportation highlighting the citys rivertoriver festival over at the nasdaq, the no one has come out. I look at the number of people recommending the stock and its not in sync with what happens at a bottom. A bottom is the stock trades in the mid 80s, everybodys downgrading it, theres no hope for the 7s and thats classically how a bottom would be formed. Analysts are cutting price targets and theyre sticking with the buy. Thats not the way you get a bottom. Thats why i can say apple is going to be weak for a while. I have no edge about the quarter other than what jabil gave you and the analysts are saying. The ceo of verizon said it going to be big. I wouldnt dismiss what he has to say. But this quarter jabil made it clear that there was not the build that they thought they would have when they talked in the previous quarter. And is it a value trap . You have to make up your mind on that. I happen to believe in the company and have been recommending it since it was 5. So i guess i can change my mind right here right now but im not going to. We have to get on the record Elizabeth Arden and revlon. I think this is driven by ulta. Really . If you go to ultas web page, youll see a huge Elizabeth Arden section. Remember why people wear makeup. I went to polo last night. Do you think i took my makeup off before i went in there . Geez this is Elizabeth Arden. If you like the trend, its el, estee lauder. You go to ultas site and youll understand why people have to do it. You have to wear makeup. Carl, everyone has to wear makeup. Makeup is an expression, too. I was watching the web site mike, trying to feel young, millennializing myself. They put makeup as a statement now. Makeup, statement, selfie. Sara eisen did not have a selfie stick yesterday she was talking about in china. Makeup. If you go outside, you need Elizabeth Arden or estee lauder. Mack, do you know mack . Of course. Im thinking about wearing mack this weekend. Youre talking to a guy who wears makeup almost every day. Im antimillennializing myself. But Elizabeth Arden, revlon, its driven by the need to have makeup when you walk outside. We started talking about jim bullard. Steve liesman has more. He says the mismatch between where the fed is and the market is, the idea that the fed has been above where the markets are on the fed funds rate is eroding credibility and causing market distortions. His Conference Call was about trying to get off the roller coaster ride. He said the longrun outlook for the u. S. Economy is uncertain and the fed needs a way to express that uncertainty. He did not submit a long run forecast for the funds rate. He said we basically know whats going to happen the next couple years, cant go beyond that. He did say the fed should do the final rate hike this year sometime but he prefers to wait and hike on good news. He said the jobs report was not the one to do it. Hes supporting this 0. 63 funds rate through 2018. Thats just one hike. He was the on member of the fomc to be there. Hes changing his outlook to a new regime. Growth is going to be around 2 , he said, unemployment 4. 7, inflation stays at 2 and the funds rate remains at 0. 63, if you remember your old math thats 5 8 right there. We had a conversation a few minutes ago about the st. Louis fed. Whats different about their model in st. Louis . Is it clear what theyve done . What theyve done is said lets stop forecasting that both rates are going to rise and growth is going to somehow accelerate. He thinks that basically we move from economic regime to economic regime and this current regime is one of low productivity, one of modest growth at 2 where inflation is going to be around 2 . Kind of taking a step back. The fed had been forecasting this 3. 5 growth rate, he said we dont know much about the long run, lets incorporate what we know and come to this desigts that, hey, this is pretty much where were going to be and if we surprise to the up side, we can raise rates but it doesnt make sense for the fed to constantly be forecasting higher rate and an upper rate to the funds rate and keep coming down. He said it causes distortion and market volatility. How does it tie in what you said earlier in the week that markets are really holding the ball right now . I think the market has had this more right this afternoon the federal reserve. The federal reserve, they have to think their funds rate. Its like you know what the weather is going to be tomorrow based on what up see you see in forecast. In a sense, the funds rate or you believe the funds rate can create the weather. That changes how you forecast. Bullard is taking a step back from that saying were not going to be able to change the current regime very much. It goes in line a little but goes further than janet yellen, which is sort of a capitulation speech she gave at least in response to my question, i said why did you bring that down so much for 2018, that 5 8 drop, she said because a lot of things that we thought were going to be temporary now look permanent. A capitulation that were hearing from the fed right now. Is he talking about structural change to the economy, its never going to come back no matter who wins in washington . Or is he saying, listen, without any real help from washington or a major turn in the worldwide economy, he did not do it alone. He didnt say that, jim. But i could imagine that if you were to come forward with a big fiscal plan, big structural changes, or to the spending regime on the fiscal side, that would change it. But in a sense you make Monetary Policy with the fiscal policy you have, not the one that you want. And in a sense the fed cannot go out and say, well, we expect washington to do x, y and z. In a sense theyre kind of throwing up their hand and saying, you know what, we dont think washington is going to do anything. Thanks so much. Fabulous reporting. Between bullard and apple today, jim, its been i feel like when i was covering stories, jim, theres fire. Im getting to everything, im getting to everything. A lot of news on a sleepy friday. Im not sure were going to get quiet fridays. That 1 00 train that you could add that g and t on, whatever happened to those days. Before we get to the floor, coke and pepsi as they pass a soda tax. Genos, if you want to go there on twitter and confess that you agree with me. Mexico had it. Mexico put it on. There were several months that sales went down and then sales bounced back. Now, it just important to keep that in mind. Obviously the carbonated soft drink companies fought this tooth and nail. Pepsico a little more diversified from soda than cocacola. Diet exempt . The millennials have decided diet is bad for you. Diet is like the 80s ingredients in a bad burrito. You could have double digit declines in diet. Diet mountain dew is one of the Fastest Growing soft drinks in the world. I used to drink it but at the same time take a look at monster beverage. They just had a big run up after a tenure offer. You buy the companies because they have great cash flow and good yield and the cash flow is not down. And pepsico, by the way, had the best organic growth of any of the consumer packages that follow. Twitter now above 16. We know about the weektodate gains. Times today joins vanity fair in saying doesnt get too excited about this. A fabulous story that calls into question the notion that people think this is going to be next. But this is such a crazy day, carl, i dont even know anymore. But jims piece was fabulous as always. Were going to hear from him later as we always do on fridays. That will be great. Dow down 47, oil hanging in there, up about a buck. Lets get to bob pisani on the floor now. After a rough week, europe is much better today. Perhaps there was some hopes the stayin vote might prevail. You see modest gains here. Europe is still down 2, 3, depending where you are percent for the week here. Energy and mining stocks were higher and the bank sectors were remember how dramatically oversold the bank sectors. Those were at historic lows yesterday. You see them all bouncing back here today but big declines this week, still down 4, 5, 6 for the week. You want to see how confusing things are and what the moves in the currencies are doing to some of the markets, look at the confusion in oil. Oil could not have been weaker yesterday. It was essentially 45. Looked like it was heading to 40 at one point. Turned around in the middle of the day as the dollar turned around and weakened and could not be stronger today. Up see it hitting essentially at the high of the day, 47, and looks like it wants to move up. Rather confusing trading patterns and this is also true as well in the stock market. You look at sectors today. Energy, which has been under some pressure. On the up side as oil moved up. Only modestly bank stocks have been under a lot of pressure. As you see, this is pretty modest on either side of positive or negative. Consumer discretionary on the weak side. You want some idea about the strange sector of the it was odd to have oil down 4 yesterday and exxon mobil hitting a 52week high. 52week high on exxon mobil yesterday. Exxon has essentially become a defensive stock. That sounds strange. Within the commodity space, theyve become a defensive stock. A lot of investors apparently do believe them here. I hope youre all listening to steve talk about mr. Bullard. Mr. Bullard was not in the camp of lower rates for longer but now hes talking about only one rate hike through 2018. There is no alternative to stocks. Some are again arguing what else do you have with bonds staying down for a very long time . We did see the dollar weaken a bit as some of his remarks came out. In the ipo space, were still in another world of not trying to understand, not sure whats going to happen with the ipo space. One postponed. Aud aud aud audio visual and equipment company. Next week, twilio, its a very, very hot space, trying to consume all the other apps there. Its coming, essentially pricing on the night before brexit. Wednesday night for trading on thursday here at the new york stock exchange. This is going to be a very big one to watch. Demand is strong but, again, its coming at a difficult time, apparently the morning of the brexit vote. Well keep an eye on that. Right now the dow down 34 points. Back to you. Lets go to rick santelli. High friday, rick. Happy friday, carl. It wasnt a very happy thursday for most traders. You dont read this in the papers and we dont talk about this a lot, all my sources and i have a lot of them, all the traders i rub shoulders with and theres a lot of them, it want they were just questioning the fed, they were upset with the fed. And james bullard. Remember the movie whiplash, a great movie about a drummer. You get whiplash with all the flipflopping of james bullard. Now like the old saturday night live, they say never mind. Its frustrating. Let look at the charts. Two day of 10. We went from 150 intra day yesterday to basically 160. Theres a downward drift. If you want to see a chart thats hard for rates to go higher, look at a chart about a month before the alltime lows slightly below 140. And it looks like theres really no hope for yields to go up, maybe they will. One week of bunds, tap dancing right around zero after several historic closes below zero. Bob nailed it, there was counterintuitive action during the week, it was up and now giving some back. The last trade was around 94. 40. It closed a little above 98 1 2 at the close of yesterday. And thats pretty much it. Two big reasons for disney shareholders to smile this weekend. Dow is down 36 points. More after a break. When a moment turns romantic why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card. Disney poised to have a bla blockbuster weekend. And we have a game seven on nbc. And we have the much awaited finding dori. Some of the reviews, it can be touching, sweet and tender but its compulsively and steadfastly funny. At the street. Com, buster cohen, the best ive seen at analyzing, he said it going to be a huge hit but warns that sea world, its very critical aquatic captivity. For the sake of entertainment, sea world may not be something you want to be at over the weekend. It could be sea worlds attendance and stock further in the tank. I happen to agree with that analysis. Seas, sea world tant may not be what you want to be in if you watch finding dory. Is the movie right or wrong . Im just saying that Companies Similar that it does take a stand on a sea worldlike situation. Well continue to watch the story in orlando with the alligator attack. Oh, geez. Apparently some talk they will be putting in new signage that tells people, look, we are in the middle of florida and theres a chance there might be animals. When i was in tallahassee, i covered so many alligators. They love car tires. I knew never to get near one and there are no tame alligators. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. 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. The light bulb, a bright idea if you use the right ones. Led bulbs use 85 less energy and last a long time, saving you up to 100 over their lifetime. Heres an idea replace yours today. [light instrumental music] i work seven days a week to give you all i got time for cramer and stop trading. I never thought id say this but fang, facebook, amazon, netflix and google, my trust owns alpha bit, implying a slight deceleration. That stock has been acting very poorly. Fang is fang and cereal is cereal. I want to report the reason why alpha bits is going down is because theres talk of slowing. Its a very inexpensive stock, i think apple is a very inexpensive stock. This doesnt matter. Stocks that miss the quarter go down. Thats citys view. Ruth porter, i would feel better if she says it and she hasnt. And apple told me that china the operative term of the story is not right as we first saw it. It doesnt matter. Stocks go down. Is it deceleration. Is it eu overhang with google . I dont know. Google is more of an international company. Ebay, by the way, i with will frost, thats going to get hurt with brexit. But google is very european oriented. If youd like to see the euro great stronger for the dollar earning to go up. Doesnt matter. Whats on mad tonight . Dominion. Its the cheapest power in the country and thats where the server farms are. And they also have an lng export terminal that theyre building. Sometimes you can learn a lot from utility companies, utilities being the Strongest Group in the market. Its not such a snoozer. You may think it is. I could use some rest. Next week is going to be busy, for you and for everyone. Were going to have to skip sleep for the week. Well see you tonight, mad money at 6 p. M. Eastern. When we come back, the warning on viacom. Dow with moderate losses, down 37. Were back in a minute. Wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. Mr. President were on mars. Switch to a video call. Sure, we can do that. Congrat. Picture from mars looks great. Its about Time Business Communications caught up. Go from an audio call to a Video Conference with the push of a button. Vonage. Business grade. People friendly. There goes my sensitive bladder. Sound familiar . Then youll love this. Incredible protection in a pad this thin. I didnt think it would work, but it does. Its called always discreet watch this. This super absorbent core turns liquid to gel, for incredible protection thats surprisingly thin. So i know im wearing it, but no one else will. Always discreet for bladder leaks the first stock index musicwas createdughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Good friday morning. Welcome back to squawk on the street. Im carl quintanilla, sarah eisen and simon hobbs. A week from today were going to be talking about some brexit results. Oil trying to recover, back above 47. The saga at viacom raging on as redmond moves for a Major Overhaul of the board. Good morning, jane. Is summer redstone really calling the shots . On the east coast, the ceo going to work today. But fired, board member fred salerno said hold on. He wants the court to look at whether Sumner Redstone is really in charge because his, quote, physical andme mental conditions have declined and unsatisfied with sherry redstone. Unsatisfied with assets now worth more than 1 billion derived from gifts her father gave her. Felipe dauman may be fired. He has a golden parachute of 50 million. Something tom preston was asked about last night. One could argue about his contract. It was approved by the board, contractually he deserves it, yes. Does he deserve it in the performance of the company . Probably no. Stock was up and viacom upgraded to 25 below what the street was expecting, the current board blaming in part teenage Ninja Turtles performance. Carl, what to do about paramount is really at the core of the dispute in the board room. Back to you. Shares of viacom are up slightly this morning. Guys, good to see you both. Happy friday. James, is the rumor of dauman leaving or the hope of it worth the price appreciation weve seen . It probably is. I mean, again, at this point you have a little bit of the grass is always greener syndrome for why you would buy viacom shares. The performance has not been what people wanted so they figure, well, what change wouldnt be bad . But you never know. Does todays warning take you by surprise . And can they really blame it all on turtles . You know, a little bit. It seems harsh to blame it all on turtles. Yeah, it seems like its primarily the film segment. They gave an update on their advertising business, which seemed to be okay, in line with what people were looking for. Its primarily the film section affecting this quarter. Aside from the board room drama, there are questions about the brand and assets in an industry that is facing some big changes and big challenges . Theres no doubt that viacom has been an underperformer. But i think thats part of what people are seeing here, that you can have a better performance i think with better management. Certainly whats happening right now with the government dispute didnt help. They lost an spod deal and i think frankly a bigger part of the variance is affiliate piece and not getting that spod deal. Its having an impact on viacom now, all of this noise. This needs to end before the wheels fall further off the bus. I think the best thing we could hope for here is get this over with as quickly as possible. And i think in that theres real brands here that have been around for a long time. Theres real cash flow here and i think theres an opportunity to extract a better value out of this if you get the better noise out of the way and maybe better management. How loud is that noise button . What is the likelihood this will fail in the court . Im not a lawyer. If you look at the facts, the probability seems relatively high. This is not going to stand. The court is not going to uphold this given the agreements and the plans that are in place, the longerterm plans for the boards. I think the way aization l s like this goes is it either improves or theres a change in management or ownership. We saw in the disclosure about essentially 4 billion for a value of a 49 stake in a money losing studio. Theres real value here in these properties. So they either turn it around or theres a change. That can happen in a myriad of ways, whether whats happening in the courts or Sumner Redstone will not have control and there will be people that can negotiate what the proper control is at viacom. Forgive me for drilling it down. But there are two parts. On one part shes already attempted to remove them from the board of amusements and family trust. Longer term does that mean theyre out anyway presumably when redstone dies . Is it only a matter of time . It seems if the moves are taking stand and thats a lot of what the litigation is about, thats why. But its in two parts, the family trust and you have the control of the National Amusements by the trust and control of viacom. So theres two front. We asked redstone if he would do it and he said no. Who should . To tom extent its who wants the job. Thats always like a top question you ask a candidate, do you want this job. Theres been a number of people speculated, les moonves at cbs has been speculated. Theres obviously a number of options. You know. Its somebody who wants to make a name for themselves. Simon, it doesnt have to be one person. This is a company that if they cant make it as an integrated entity, it could be broken up. There are pieces that would fit very nicely with a lot of the other big media conglomerates out there. It doesnt have to be one white knight walking in turning it around. Theres a lot of ways this could go. The reality is people are paying top dollar to buy big brands, even if theyre not making big money. Youve seen what theyve done with dreamworks and legendary. Youve seen in this environment theyve been able to leverage these things with theme parks and around the world. The same shareholder controlled both companies. That makes it a unique situation. Its a possibility. But once again you have to have management that wants to do that and management wants to go through that process and management that recommends that as the best strategy. Part of that is you can look at viacom as a bunch of assets but you also need management that you have confidence to manage that, even if it is a partial breakup of the company. You need to look at thos things together. Its a fascinating story. James, appreciate it very much. Investigators in the u. K. Are searching for answers a day after the murder of british lawmaker jo cox. Bill neeley joins us now with the latest from london. Good morning, bill. Good morning. Within the last hour, the british Prime Minister David Cameron and jeremy corwyn made statements about tolerance. Where we he hatred, cameron said, we have to drive it out of our politics and out of our community. It the first ever killing of a female member of parliament. Jo cox was almost universally popular, elected just last year. She was murdered on the street by a man with a hunting knife. He also shot her three times. Now, detectives are investigating whether this was a politically motivated killing because there is a claim from the American Civil Rights group the Southern Poverty Law Center that the suspect was a long time supporter of a neonazi group, the national alliance, which incidentally used to be the leading american white supremacist and neonazi organization. There is also a claim that he bought a manual that included instructions on how to build a pistol. Well, the gun the suspect used was said to be crude or homemade by witnesses and these detail are very important. Because in politics, jo cox fought hard for the rights of immigrants. She represented an area where there are a lot of immigrants and the man suspected of killing her is tommy mair, according to his half brother, hes white, a 52yearold englishman with Mental Health problems that police say his motives are unclear. But they are still questioning him and looking into his background. Back to you, guys. The allegation that he shouted britain first during the fray. Bill neeley joining us from london. When we come back, much more out of europe as the brexit vote looms. Donald trump looking for Campaign Cash to push him through to the general election. Well speak to a major supporter who is actually throwing trump a fundraiser tonight. Much more ahead on squawk on the street with the dow down about 19 points. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Steve, i want to point out to people the relevance of this. This may be the most important thing that has happened this week when you couple it with your analysis that we got two days ago that they may be topping out on Interest Rate rises for this cycle. Take it away. Its an interesting way to put it, simon. I wouldnt put what i had to say up there with what bullard is doing in terms of him being an fomc member saying only one rate hike is necessary for the next two and a half years. He said the fed should make that final move sometime this year, waiting for better economic data, saying the u. S. Is now in a new economic regime and had some harsh words for the way the fed has been conducting itself, talking about the mismatch where the fed has been and the outlook saying what we are doing is causing distortions in Global Financial markets. He says that through the gdp is going to be 2 , its not going to be higher, the unemployment will be where its going to be at 4. 7, inflation at 2 and for all that all you need is a 5 8 or 0. 63 funds rate. If the fed would go do that fund rate and i could go cut that album and it also did clear up the mystery of who didnt make the forecast, the missing dot. I didnt report that. He did not submit a longrun forecast. Get the fed out of the business of doing longrun forecasting. I thought it could have by la layal. Vince, janet yellen received a lot of heat for changing her view this week when we heard from her in the news conference. This shift from jim bullard who is a voting member, i believe, this year seems even more significant when it comes to changing your mind about an outlook. Its two parts. One is an admission that the fed is not particularly good at forecasting. Drawing a straight lyine from where we are now is not a bad call. Its a different world view from the conventional thinking that dominates Monetary Policy. Hes basically saying were living in a world of multiple equilibria could matter for if you think inflati with a change in forecast and world view and everything, you know, vince, how important and how precious fed credibility is. Do you have to question it . What you have to question is the cohesion of the group. Were beginning to see a little bit of fraying, fraying both in terms of what the right setting of policy is and the right way to think about the world. I guess the question for markets and for investors is there was already this idea that the fed would be on hold for a long time. Do you now have to price in its going to be on hold for an even longer long time . I think so the fed i think has done the right thing by its sort of a do no harm approach of letting the market basically have a veto over what the fed does because the fed does, whether it likes it or not, kind of set policy for the entire global system and not just the u. S. Because what the fed does affects the dollar which affects everything else, affects financial conditions. If the bullard approach is correct and i do think its correct because it highlights the whole stock versus flow debate of level versus rate of change and i would argue as others have that maybe the fed has already tightened the full cycle just by getting out of qe. The atlanta fed has a shadow rate thats gone from minus 3 basically to zero. So the fed has already tightened basis points so it should be already done. I think there is merit there. If the bullard approach is correct, we would be at the end of the tightening cycles and that would be positive for the dollar and liquidity sessions. So the real Interest Rate long term in this country wont be negative either. Do you think the next chapter will be to admit actually that low Interest Rates a this the level may not work . Mervin king from the bank of england said what economists havent realized is the behavioral effects. Can you slash Interest Rates to negative 10 and it wont enliven the economy because you worry people so much. What would you say to that argument . I think you should just follow that logic and ask president bullard two questions. The one is if the fed is so influential in shaping longer term expectations, wouldnt a higher nominal Interest Rate perhaps encourage for nominal growth . If its all a world of selffulfilling expectations, then why is the fed stuck so low . The second question to ask is and what do you do if anything goes wrong . If the nominal federal funds rate is not much above a half percent and the real federal fund rate is negative, what happens if we get an adverse shock that basically refine the play pretty low and pretty slow and well be vulnerable to wind sheer. One question the fed is grappling with as yellen herself mentioned is the brexit vote, which is rapidly approaching next thursday. In case there was any doubt about what the economic heavyweights are saying about the way the vote should go, heres imf director Christine Lagarde speaking about a possible brexit exit. Its going to be negative for income purposes, will reduce trade most likely as a result of uncertainty. I mean, those are blatant facts. So at this point what does the positioning look like . How much is priced in ahead of next week if in fact it does come to a leave vote and what managing director lagarde just spelled out actually comes to fruition . Certainly it looks right now like its a coin toss and that of course is not very helpful for either side because if were somewhere muddling through in the middle, then there wont really be a mandate for either the remain side or leave side. From my perch as a strategist, i always ask this question, is this systemic. Ive asked this many times with greece and other developments and the two ways this could potentially become systemic is that if the u. K. Goes, and i read somewhere that if the u. K. Goes, scotland will have a new referendum, maybe france or finland or some other country in the euro will have a new referendum or a referendum and it could possibly lead to the end of the euro basically. So that would be one systemic risk. And im not saying that its going to happen but its a risk. The other one is that if you look at kind of this referendum as one theater if you will of a series of rererenda, theyre really on globalization or antiglobalization and i think its a backlash against a long period of very low growing nominal gdp growth. The rising tide lifts all boats, but when growth ends, i think thats what this is about. The end of globalization would be obviously bad for growth and bad for profit margins. And a big idea is going to factor into this election, too. Yes, we have to thank you both. When we come back, the socalled selffunded campaign of donald trump now looking for some cash. Texas attorney tony buzbee is throwing a fundraiser tonight. Dow down about 13 points. Real is making new friends. Amazing is getting this close. Real is an animal rescue. Amazing is over twentyseven thousand of them. There is only one place where real and amazing live. Seaworld. Real. Amazing. The 2016 general Election Campaign was expected to cost upwards of 1 billion for each campaign, but the once socalled selffunded campaign of donald trump is now playing catch up to meet that figure, which Hillary Clinton looks likely to meet from her massive donor network. Trump kicking off a threecity texas blitz in dallas last night tamed at tapping some of the lone star states top gop backers. Joining us now is the host of tonights fundraiser in houston. Former ted cruz supporter tony buzbee. Welcome to the program, sir. Good morning. Donald trump was not your first choice of gop nominee here. What journey have you been on . Well, hes our nominee now or will be soon, and i think hes going to beat Hillary Clinton. So im asking everyone to get behind him and lets make sure that he has enough money to compete. What sort of reception is there. I think the tickets have been sent out by the rnc. Whats happening in texas at the moment with regard to the fundraising effort . How easy is it for you . Honestly, its been very easy. Were well over 2. 5 million money raised. Thats probably going to be a record for houston for one event. I think mr. Trumps going to be in my home for probably an hour and a half and then hes going to go do a rally. So were very pleased with the response. In the wake of course of sundays mass shooting in orlando, hes decided to jump into the gun debate and is meeting with the nra and raising with lawmakers the idea it should be more difficult for suspected terrorists to get their hands on guns. How is that playing in texas . How will that play tonight, do you think . I dont think its going to have any impact on what were doing tonight but i think somebody like donald trump has the gravitas to make that case to the nra. Im a heavy nra supporter. Im a former marine. Ive never been in favor of gun control. But it seems crazy that anyone on a nofly list or who has been investigated by the fbi could get a gun. So i think we need somebody like donald trump who is not a packaged candidate like Hillary Clinton to make that case. You see, thats very interesting because texas senator jeff flake has suggested youve got 13 million votes there already in the can. As you switch from the primaries to the general, an aim at 65 million, youre going to have to changes way in which you approach a number of issues. What youre saying is that the freshness that trump may bring can challenge some of the preconceptions that the campaign has about where the campaign should go. Thats right. Donald trump, like him or hate him, has tapped into something in this country. He has a freshness. We all know who donald trump is. Hes been around a long time. But he has the gravitas to say things that a lot of the packaged candidates cant say and its refreshing. I mean, he is a refreshing voice in american politics. Nonetheless, there are many particularly gop members of course in both houses that are seeking reelection who are concerned that continuously theyre asked to react to already what trump has said that day on the hustings. Where do you think this takes the rest of the party and therefore the fundraising. How close to a billion can you get . Well, i dont speak for the trump campaign. Im doing one event here in houston, and my concern is to make sure this event is successful and i think were going to be very successful and its going to be a i can tell you my children are looking forward to meeting donald and his family. So ill leave that answer to that question to the trump campaign. But can i tell you having done many fundraisers in this city, ive had no problems whatsoever. Ive had to turn people away. Were going to have a great event for donald trump. Good to meet you, sir. Tony buzbee joining us from houston in advance of tonights donald trump fundraiser. Coming up, jim stewart join us on this friday. His take on a twitter takeover and of course the latest viacom drama. Squawk on the street will be right back. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvus 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. Good morning, everyone. Im sue herrera. Heres your cnbc news update. British Prime Minister David Cameron and Labor Party Leader jeremy corwyn paid their respects to jo cox who was slain on wednesday. Russian president Vladimir Putin says russian seeks compromises and doesnt want to return to the cold war era. This after the eu extended sanctions against russia after annexing crimea for one year. Dry brush and high winds continue to fuel the sherpa fire in southern california. The out of control blaze has grown to more than 1,400 acres and forced evacuations. For the second night in a row, the 101 highway was closed in that area. Rock singer meatloaf collapsed on stage last night. The singer had cancelled two other concerts in recent days because of ill health. We wish him the best. That is the cnbc news update this hour. Ill send it back downtown. Carl, back to you. Sue, thank you very much. In the wake of this weeks mega deal between microsoft and linkedin, could twitter be the next company on the shopping block . Our next guest says it needs to attract a suitor being overtaken by its competitors. Good to have you back, jim. Nice to be here. You talk to users who arent checking in as much. You say youre not tweeting as much. You say theres a lack of logical buyers essentially. Im probably not the best example here, im not the demographic of the future. But i did seek out some of the ever sobering mill eniaennials. One of them did say theres just too much typing. Theyre so visual. They just want to get the images, and move on. To me, what does linkedin that twitter doesnt . Twitter has kind of got it all, a huge discount to where it was trading. Its trading at barely half the ipo price. As these social Media Companies go, thats a bargain. Its got revenue growth, advertiser growth. Not what wall vestreet was lookg for. Influence. Relevance. We saw in the orlando thing this week its right in the center of the conversation. But the flip side of it is the engagement thing, the time spent. The big threat to twitter seems to me facebook. Facebook is like mowing everybody down in its path. First of all, it has instagram, which the millennials seem to love. It has the capacity to disseminate news in realtime, and its doing it. And its got people spending they said 50 minutes a day on it. Twitter has people spending one minute a day. I thought the comment you made about too much typing was perhaps a bit silly but i remembered the Vice President in facebook in london suggested in five years facebook will be all video. If you move to a situation where youre simply forwarding video, you dont necessarily need the platform as twitter presents it at the moment. Everything goes up into the air. It just about making that single connection. I think youre absolutely right. Look, im a writer and steeped in print so its a little sobering. And youre on tv right now. Im on tv. Thank god ive diversified here. And carls tweeting what youre saying. Its not going to go around tomorrow but the whole idea that the written word is not going to be the primary means of communication for future generations is to me a really sobering thought but i dont think we can rule it out as just a crazy idea as you say. Words have been so important to humanity but images now are playing an extremely important role. You look at the potential buyers of who could step in and make sense, alphabet at the top of the list. Twitter and alphabet already have pretty deep ties. The twitter tweets are showing up in the google search. Twitter is using the double click ad service of Google Alphabet to help advertise. Thats shown some progress. Twitter was stressing to me that they doubled the number of actual advertisers theyve attracted to the platform. So cross poll enation. A lot of cross pollenation. Twitter is being increasingly seen as a kind of realtime news and information site and less of social media. Its not that people are using it to communicate for their friends, theyre going there for the orlando situation, the la latest updates on crises. If its a content site, that really doesnt make any sense for google. Theyre already getting what they need out of these partnerships. Are you doing any work on viacom . It seems like its a wellplowed lane but theres so much being added every day. Of course i am. Both because of the personalities involved, the family dramas involved but also these fascinating Corporate Governance issues. I cant remember a situation like this where you have a sort of 93yearold patriarch, highly respected independent directors and thinking about the various directors being ousted, its not just dauman who is a close friend but there are four or five others, the people closest to him in his life. Can we believe overnight theyve lost trust, confidence and theyre all being thrown out . Hes persuaded by sherry perhaps. Well, thats the alternative hypothes hypothesis, shes calling the shots. This is going to be a fascinating Court Proceeding in massachusetts, in delaware, in california. Theres going to be a lot of laundry coming out into the open in the next few weeks and month. I wanted to ask you about disney. Youre an expert on that. What a week it has been. That spectacular, flashy ceremony in shanghai overshadowed i found myself waking up in the middle of the night flashing of an alligator grabbing my child. Its a horrible freak accident. Ive been at that beach and its the last thing you would ever think of. I do think its a freakishly tragic accident. Obviously disney is going to have to step up and make these do what they can. Im sure they will. But i dont want to read too much into it. Its just one of those horrible tragedies that could have happened. The timing is freakishly bad. When we come back, marr is investing more than a billion dollar in u. S. Manufacturers. Down 69 points on the dow, its the end of a very long week. Rick santelli is live in chicago. Thank you and good morning, simon. Id like to welcome the chief economist of the National Association of manufacturers. Thanks for taking the time this morning, chad. Thanks, jim. Before we get to your survey and index, which was released yesterday, Industrial Production Capacity Utilization were out this week and 8 out of 12 of the last 12 months, so if you look at the last year, 8 out of 12 months were negative for Industrial Production. Capacity utilization is a whisker away from the lowest utilization rate in six years. Having said that, how did your survey stack up . Gives the Second Quarter versus first quarters and any other subindices that are relevant . Manufacturing production has been essentially flat over the last 12 months. As we talked about last time i was on this program, rick, in general youve seen a lot of challenges from the dollar, from rising lower Commodity Prices and other issues. I think from our perspective, i think overall manufacturers are a little bit more upbeat this time than they were three months ago. Now, your index moved higher. It was 42. 2 in the Second Quarter versus 38. 7, right . Right. The fact that its below 50 means its below average. 57 of our members were positive about their companys outlook. Its pretty clear that those numbers are below where wed like them to be and that speaks to the challenges weve had. Challenges, let me stop you there, chad. Theres a list of challenges your respondents had. I like the first two. Why dont you tell us what they were. Three quarters of our members said Business Conditions and Health Care Costs are the top challenge. Over the last few years, more than 80 of our members said theyve seen their state and federal Regulatory Compliance costs pick up. Keep in mind manufacturers are not anty regulation. We all want clear water, we all want clean air but weve seen a pretty significant uptick in regulations coming out of washington over the last few years. This year alone a lot of regulations on state on both air and also on water and labor conditions. I think in general we want to make sure that were smarter about the regulations that were pushing out there. And on tax reform chad, let me stop you again. So yesterday and the day before was all about the fed. And one thing we learned, what had been, in their opinion, cyclical issues that policy would cure, now theyre saying structural. It seems to me if your number one problem was red tape regulation and the number two was tax reform, those are structural. I guess in your final comments, you know, many i talk to say manufacturings dead, its losing everything to technology. Your respondents are somewhat upbeat outside structural issues. What do you think manufacturing looks like two, three, four years down the road, sir . Its not hard to be bullish about manufacturing in the long term. Weve seen more exports in terms of our overall growth as a spector, yet its clear uncertainty has continued to hurt us. We clearly need comprehensive tabs reform so we can better compete in a world market and the constant onslaught of regulations hitting us is very destructive. We need to do much more to grow our u. S. Economy, make sure were much more competitive globally. Those are structural issues washington can address and unfortunately theyre not doing enough to do that. Chad, thank you so much. Lets go back to sara and the gang. Once again, well see you next read on your index, chad. Thank you. Speaking of manufacturing, when we come back, wrigley is making a major investment in u. S. Manufacturing. Well talk to the president , casey keller, when squawk on the street comes back with the dow down 57 points. Now you can. When you lease the 2016 es 350 for 329 a month for 36 months. See your lexus dealer. Because you cant beat zero heartburn i take prilosec otc each morning for my frequent heartburn ahhh the sweet taste of victory prilosec otc. One pill each morning. 24 hours. Zero heartburn. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Well, it is certain ly a ho topic on the campaign trail, and for all of the talk of Companies Moving manufacturing overseas, candymaker mars is bucking the trend. They are spending 50 million to open up a new factory outside of chicago, and they have invested more than 1 billion in manufacturing operations over the past six years, and here to discuss it from chicago is casey keller, president of wrigley u. S. Thank you. And so why are you bringing jobs here when mondelez is moving the manufacturing to place s ths that are cheaper li mexico and many to asia . Well, first and foremost we have seen the up precedented growth on the skittles brand which is what we are building the new production capabilities on. And five years of growth and the number one nonchocolate candy in the u. S. , and we are on a tear, and we need more skittles, and the first answer is that we need to produce more skittles candy and meet the demand for it out there, and we have at mars a core philosophy of investing and reinvesting in the communities that we sell. We believe in investing in the u. S. , and we believe in making sure that we are putting the facilities in the u. S. , and creating jobs in the u. S. , and with this particular 50 billion investment, we have added 75 b jobs in illinois, and we are proud. We are proud to do that and i guess that is great, and it sounds good, but the question economically is does it make sense . What are you finding in terms of the costs, labor costs, equipment costs, plant cost, and manufacturing here versus some of the factories overseas . Yes. I mean, we are competitive producing in the united states, and skit sls a complicated manufacturing process. We need highSkilled Labor and technically trained labor and we want to build in places to source that, and we have been successful in investing and building facilities here. Last year, we opened up a new facility for the chocolate business, and our chocolate business in topeka, kansas, and so this is a successful strategy, and we have a core ophilosophy of producing and investing in where we sell the products ash and this is something that is Good Business for us, and we will keep on doing. Mr. Keller, can you give us the insight of how technology has changed your industry, and you said just now that you are creating 75 jobs in illinois. If you had built this candy factory ten years ago or 20 year years ago, how many jobs would it have created then . In other words, to what extent have machines taken the place of even Skilled Labor . You know, i think that one of the things that has happened in all of the manufacturing that we have Seen Technology improving and the ability to manufacturing the product, and the high quality standards, and with this product product in skittles, the process has been relatively the same for the last five to ten years, and so we havent seen many changes in the manufacturing or the labor rekwird, but it is required, but it is a very sophisticated product that requires temperature control, and other things. And i think that you said that skit sls the Fastest Growing candy product, nonchocolate at a time when the increases of the consumeerers moving away from the sugary packaged food, and the players are having to change the ingredients, and taking tout artificial flavoring and why is sditl skittles doing so well . Well, skiel with well, sk a treat, and we are up front about that, and it is a high quality treat out thereon market. And we ve seen a lot of growth for skittles for a number of reasons, and we have great instore activity and displays behind events like the super bowl promotion, and the big summer movie releases instore, and we have had a successful marketing and Advertising Campaign called taste the ra rainbow, and it is the most e e cent example of a spot with steven tyler and the skittles portrait, and last, Great Innovation on the skittles brand. Most recently we launched americas mix, red, white and blue for fourth of july and Independence Day and out there in the stores and out there through july and tried to make it relevant and fun for the season, but it is obviously, part of the philosophy is that we want to be up front with people, and tell them what is in there and it is a treat, and know what is in there and we are clear on the label and try to comply with the fda and the World Health Organization guideline guidelines for less than 10 of the calories from added sugars and we talk about that on the label. And we have 30 seconds so i wanted to get a comment on you about the calorie and the sugar count, because now there is a tax in philadelphia on the soda company, and the first like this in a major u. S. City, and are you worried about the backlash, and the regulations like this coming to your industry . Well, i think that we always look at this and monitor it, but again, we are a treat. We are not, and we are clear with the consumers that there is sugar in that and we believe that they should use them in moderation. We try to make sure that the portions have the appropriate calorie count, and added sugars in it as part of the diet. And honestly, do we worry about it . No, because as long as we are up front and clear with the consumers what it is, they know and they will use it appropriate. Casey, thank you for joining us today. Casey keller, the north american president of wrigley out of chicago. Up next on the program, it is squawk alley on cnbc. Good morning. It is 8 00 a. M. In netflix headquarters in los gatos, california and it is 1 11 00 a. On squawk. The cable is full, and everybody is waiting on you and waiting on you and you have got time our tribute to orange is the new black with season four premiering today. And good morning. Kayla tausche, and jon fortt with me at post 9, and joining us is kara fisher. That is creepy. And su