Transcripts For CNBC Squawk On The Street 20170731

Our road map begin with the last trading day of july. Plus the ceos will join us for an interview at 11 00 a. M. The first 30 tesla model 3 customers have their cars. The reviews plus why elon musk says hes in production h efrks ll but first the final trading session of the month major indicies in fact most of these are looking at the second best month of the year i think it just took people by surprise i dont know why it wasnt like it was saying were not doing well i went over that verizon Conference Call again. Did you its like boeing. Were not as bad as you think it lends itself to another story as well which leads to goings on about charter which is this belief that verizon needs to do a deal for content although thats highly unlikely but to your point that quarter was a good one given expectations. You dont want to go too far it wasnt the quarter they had 7 or 10 years ago when they owned the network. Thats why john said to me on twitter thats really good, well terrific because you have 3. 5 times growth i bothered david this weekend thinking this was going to be like the biggest thing ever and didnt realize that it was a nonstarter. It ran so great, i thought we were going to come in here and its just going to be battle royal. Its far from over. It was an interesting statement we got last night from charter itself so softbank now, masa is just very difficult to understand exactly other than he just wants everything potentially. Well doesnt musk want everything theres kind of a want everything component by these people loser take none. Thats true. Well we got charter, sprint, masa to watch and then discovery scripts for nearly 12 billion in cash and stocks. Deal is worth 90 a share compared to the friday close of 86. 91. It was exploring a sale. Stay tuned for a live interview at 11 00 a. M. Eastern time calling it a perfect marriage as theyre now in search of super fans people that are going to tune in not because they like what you have but because theyre obsessed with your brand and your network you need to be dom nanlt in the sliver and be able to charge what you like and i also thought shark week was good except for the phelps thing but everybody still watches shark week are any of your networks important number to be in these overthe top groupings that have been put together and that still renans question in this changing world of distribution when you have these networks will they be must carry as in the old network cbs, nbc, abc but do you need them . Do people want them but by being able to put together these two companies networks the belief is we have very dedicated fans that want to buy a prescription to all of those together as an overthe top bundle not to mention put them in a better position when theyre negotiating with the Cable Companies in terms of distributing them as a whole theyre saying 350 million. A number of people think the number is higher than that and you typically want to low ball those numbers. Thats an interesting move. Its not programming that you have to watch. It is interesting that heres espn dropping year after year and we focus on that and then theres this group of product that just because something had to be watched now we wrote it off and then we dig deep and we see you got these specialized niche group of people that continue to watch this programming. Food, food is big. Yeah but hgtv is the 4th most watched network in prime. People forget the demo might not be right. Demo may not be right the numbers to be the 4th most watched network are nothing like ten years ago. Think about a show like the walking dead on amc which is the single most viewed show of any show, period on television, by far and those numbers are nowhere near what, you know, what we used to be talking about. But that, by the way, begs the question of further consolidation and i didnt mention amc just by chance thats another name that people are going to say is it time for that company to consider it. Its controlled by the dolan family the discussion is always netflix. Netflix comes up with a new series and everybody buzzes about it you dont buzz about scrip approximate scripps di you catch the food network last night . I dont want to spoil it for you. What happens to it i dont want to tell you. Scripps not a moment too soon if it was trading uneffected today it might be down they did miss on their Second Quarter numbers that were released just before the deal and they lowered guidance a bit. It was u. S. Advertising that was weak good day to be printing the deal given that people wont be focused on that. Yeah. Yeah i dont know what it would have been down so thats 63 theres a collar we should point out. Discovery stock prices more fewer shares and the Scripps Family is key here and they give their support and they obviously followed ken lowe that created a lot of follow. Thats the name of the white shark. One of the better. The cuban reef. Yes. Can you believe i still watch this thing yes. Except for the phelps i dont know phelps is going to eat the shark. What is that no that would like horaldo with the safe. People talked about it. They talked about it. He got people going and i think the Labor Day Party is going to be bigger than ever david. It should be a blowout. Theyre going to lever up to do this to a certain extent. Dont forget virksacom they competed here and didnt get here his world shot again. Well talk about charter. Talk about cbs radio. Cbs stock has been fabulous. Theres so much in this group and the group have been kind of like well forget it because programming costs are too high and the viewers are going i wish i were in the group its one of the hottest groups. A lot written over the weekend about the reinvention of mtv although recode has a piece about the average number of tvs per home in 2015 2. 3 versus 2. 6 in 09. So theres more home with say two televisions instead of 3. But on that att call. This is a tv and they keep the point that this is your tv and when youre on the subway which i know youre on constantly its everybodys tv. It is not to mention your desktop computer that most people still have thats your tv ipad is your tv. This is down 15 . Intel has now become rodney dangerfield. Its samsung. The stock has been up lately. Hertz was downgrade today. When we come back, activist investor said to be pushing dow chemical also ahead, davids exclusive with qualcomm ceo as the company battles apple in the legal dispute. Got some calls on facebook and go pro more more squawk on the street for post 9 in a minute hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at Td Ameritrade. I enjoy the fresher things in life. Fresh towels. Fresh soaps. And of course, tripadvisors freshest, lowest prices. So if youre anything like me. Youll want to check tripadvisor. We now instantly compare prices from over 200 booking sites. To find you the lowest price. On the hotel you want. Go on, try something fresh. Tripadvisor. The latest reviews. The lowest prices. For years, centurylink has been promising fast internet to small businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. This is what he said about a question about structure from jim on thursday. I dont see three companies coming out of dow dupont i see six. One has to be headed by you. Its ridiculous that you ride into the sunset when we have more than thought. Tell us that this will not be the end. Mostly the portfolio were doing now will determine the best possible answer for shareholders we are committed but well have better answers to that question in the next month or so. What is important is that we execute. The execution you see the past five years and from dupont recently well keep that going thats job 1, 2, and 3 of course we have 30 billion of new value coming out of these and two i aint done by a long shot mr. Cramer so i have lots of opportunities in front of me and im looking forward to being one of those creating this ahazing new company and its intended spins for now i dont get that. I think the case, you take a look at dows report theres six divisions that report. Then look at what dupont has they can do nutrition and food and nutrition, performance and i think he certainly has every intention over time to split the Companies Like he did tyco its timing. It makes too much sense. Dont underestimate the frustration on the part of large shareholders. I had larry robins on with us a few weeks back talking about the fact that they feel as though its time for this company to move on without him. Right. And make good on the commitments he did when they announced the deal to stand aside. Hes a very behind the scenes guy. Hes brilliant and a very regular guy. When you listen to him you realize, if you think theres more value were going to bring out more value he has never stood in the way of value. Hes always been in the forefront of value i think its very jarring to split into Six Companies this mannos how to create balance more than anyone look at tyco one of the great value creators. He didnt say we need six ceos and six structures he is a practical guy. I think the activists are saying i want you to have six different headquaters and hes like give me a break youre lucky were doing three right now. Give me some time. Im actually surprised but he is going to shock them. He has much more value hes really an awesome operator. A lot of people felt he should come into ge maybe theyre more oriented. I talked to him quite regularly. Creating more value than i ever dreamed. Wait until you see what we do with probiotics. This time divide it into ten companies. Give him a chance . Is there anything hes ever done wrong . Every Company Wants him as ceo im getting tired of the activists. That is a full throated defense. He is amazing. I got another one i got these guys dont know how to create value like breen they should say were so delighted youre there honestly, honestly. This is like i they know nothing moment named at activists. Im tired of activists. Breen is the guy. They love breen and should show love to breen if you dont like him just state it state it he knows how to divide companies. Im ashamed. Ashamed that the activists are focused on the one guy many america trying to bring out more value than anyone. Why dont they go after a crummy company. I think they do that too. Not as often. Protect your down side thats the way to do it. What is that . Now youre going to support the activist well get the mad dash and countdown to the opening bell. Were back in a moment music plays throughout all right were going to talk a little ulta the ceo says we were surprised with the softness in the mass market like i think everyone else this is from last friday so downgrades ulta buy to hold now. Its a little late this was an amazing call because no one knew about the softness in the mass market until he says it i was very surprised. What is it a result of . They didnt know. Theyre the number one partner of ultimately at a. When you hear them saying were not sure but theres a lot of price competition and were challenging backdrop the stores like macys were trying to generate the price come down but the thing thats shocking is this motion when youre on a call saying we all know its horrible when we all thought it was good. So the Conference Call is the one you want to listen to. Thats what is driving ultimately at a. Number one partners they pointed out. It wasnt like they were trying to separate from ultimately at a. They were hanging on though. So what the hell is going on. Its a very interesting and very down beat Conference Call especially because theyre not seeing it. Theyre not seeing the same weakness. Theyre not mass market higher end higher calling but he is a genius a lot in china too. Hong kong, fantastic. Brazil i have a house in italy i sound like an american hes italian. The opening bell is about six minutes well, four minutes away also going to try to make sense of china, sprint, soft bank and so many others and other news involving soft bank at ithll bring you after this. More breaking news. A little bit. I cant contain myself. Whats going on here . Um. Im babysitting. Thatll be 50 bucks. You said 30. Yeah, well it was 30 before my fees, like the pizzaordering fee and the dogsitting fee. And the rummage through your closet fee. Are those my heels . Yeah yeah, were the same size. In shoes. With tmobile taxes and fees are already included, so you get four lines of unlimited for just 40 bucks each. For a limited time save 300 dollars on the amazing iphone 7. Live from the Financial Capital of the world the opening bell in a minute another busy week as we watch a new round of earnings coming in. Its the last trading day of the month. General john kelly is taking the oath as the new white house chief of staff right about now and a lot of chatter and the hill tries to pivot. And i know it seems on all parts of government controlled by the republicans but it is a concern because its in disarray. Now the president tweets today no disarray. Thats interesting its not necessarily in sync with what others are thinking though i dont see that happening the s p at the bottom of your screen celebrating a recent ipo expands united. Org a Sports Center not for profit start up speaking of oil, its about 50 intraday for the First Time Since may. Venezuela, a bunch of other things chevron had a good quarter. That quarter of chevron was actually much better than exxon. Chevron is growth. They came into the gulf of mexico and they did a lot of stuff. They drilled theyre a very Successful Company they are really the stand out major. What a terrific job they did. Thats setting the tone for what is going to be descent. Most people thought bad oil earnings season. Decent oil earnings season kind of surprising given the decline. If theres a slowing in the u. S. That is going to be psychologically far more important. We are only 8 of the world. Theres not enough pipe coming out. Even though its got the old system we dont have enough. The United States is not going to be you as much as people thought which is leading oil to go higher. I dont know whats going to happen in venezuela. We have to wait for tweets. Its been difficult its a very important market. New record high for the dow as we are now about 160 points dow components today people come and talk to me about demarco all the time i dont have any bulls ever come up no. People are always concerned. Always concerned. Its almost like what are you doing not telling everyone to sell i dont know. What am i supposed to do put out a tweet . Its like, honestly what is it with you its like the best stock there is people theres a downgrade today in the semis i thought the intel Conference Call was good. I think autonomous driving for real i cannot believe when you talk to people of some means theyre like you are whistling past every single graveyard its like i never do anything except whistle past a graveyard. Im whistling while i work. We talked about this many times. An underlying theme of what i discussed which is theres general concern about the overall world. And our government and things that arent happening that people had hoped for and that seems to manifest itself and why isnt the market responding and then we come back to the four walls of earnings. In the end its like people were surprised by the potty mouth. Yeah. General kelly and scaramucci, that could be interesting. If you take a look at overall, its up 54 this year approaching 60 bucks of course yahoo s core business shares of alibaba up 80 . 80 . And its a lot of cash. Its also stake in yahoo japan that is owned by soft bank remember the Company Already did a 64. 5 million buy back under a dutch auction about 3. 4 billion way back in june he actually knows his way around these Balance Sheets the key is is there a tax efficient way to close the gap with what the ownership of alibaba is worth and can they figure out a way to monetize it and close that gap i dont know the answer. Thats the best one having a great opportunity there. Wow. To be sold today. Another 800 million shares by the end of august. Stock was down 2 in the premarket. Thats a lot of stuff unconvention unconventional. Blue apron is up. Claug its way back to 7 theres a lot of companies lawing their way theres a bunch of downgrades today which is noted coach and city and some others but earnings coming on thursday by the way. They argue that the stock already reflects the challenges and quad copters they have gotten some things correct in terms of their echo system maybe you make 50 cents here all right shares of discovery are getting hit down a little over 4 . Thats not exactly what youd like obviously you want to start off on a positive foot with the stock responding positively to the deal its a very large deal for discovery. Certainly a defining deal for the company. They will lever up for this but their ability to produce cash flow and delever seems certain. Synergy is 350 million already to a certain extent adjusted to the expectations that the deal would be 90 at least. That was my reporting actually it was 90 exactly. 70 30 cash split the overall value is coming down a little bit other areas are cool financials are cool. There has to be a drug deal so many of these Major Drug Companies that reported so far, no growth. No growth. I just think that theres got to be one day that you got to be working in that sector there has to be one. Theres just too much sluggishness and the biotechs have done quite well thats something that you should focus on. Id like to be ahead of these things. I know you do as do i. Unfortunately i fail at that Parent Company of everything. Just watching things. Well should we do a report now . We want to do a little faber report can do that . Faber gives it to you ahead of time and youre a great actor. We make sure not to discuss things so we can be real in the moment. Lets see in the moment on charter. Lets start off there. It was up 7 at the open still up 5. 52 thats a big move for charter. Of course this on news late friday first we got it from the journal that sprint was interested in trying to figure out a way with of course its majority owner softbank to acquire charter. Then last night we got a statement from charter and we understand why a deal is attractive from softbank but charter has no interest in acquiring sprint which of course is weird now sprint is a third of the size of charter. A more competitive business. You saw the charter numbers from last week. They were strong and the market reacted accordingly. Chart her said we have a Good Relationship with verizon. Intend to launch wire lesser s Wireless Service next year well, masa is trying to understand and figure out a landscape in which he can secure a future for sprint. Remember when he bought that years ago the expectation would be that he could do a tmobile deal antitrust regulators said no tried again. They said no now hes thinking about trying do witt the germans that control tmobile and its had Great Success and my understanding is the germans said well try to acquire you for purposes of the deal and it was a low ball offer so then you had talks with comcast our Parent Company and charter that seem to have amounted to nothing in term of getting a mobile Virtual Network operation agreement. Now reporting are saying theyre going to make an unsolicited offer. I dont believe that can be the case but theres interest from softbank would it have the financial wherewithal to pull off a deal like this . Its unclear would bit able to meet the price e expectation of charter shareholders certainly the guys at liberty, theyre willing to listen. I dont know what the sale number is but the man that runs charter whose options strike all the way up into the 500s stays fairly determined to stay the course and tell his board we can keep performing the way we have. Well meet any number that anybody can put out there so it will be interesting to see what develops here. I cant figure out exactly what softbank is thinking hes going in so many Different Directions he has this vision fund which he has raised almost 100 billion in would all of that money be put toward buying chart senator that doesnt seem to make sense sprint cant do it on its own. Not a chance you need softbank to buy charter. Softbank might not can mount the bid it would need to they seem to be, you know, scared verizon if you want to call it that then theres altice. Remember him they have a u. S. Currency now. People characterize him as more passionate he is passionate and then theres comcast thats probably scared of doing anything along the lines of this because of the antitrust concern it went through when trying to buy Time Warner Cable so well see what happens with charter. Its fast nat fascinating to wah this completely separate from what were talking about here remember the conversations that softbank has been having with uber about making a significant investment in the company largely by creating liquidity for existing share holders, benchmark and a number of large initial investors in uber were talking with softbank about a multibillion investment to which they were partiall tender some of their shares. Also might have been new capital coming into uber im told by people familiar with the situation, done, dead over softbank is no longer having talk with uber about an investment there simply too much at that company right now for soft bank to consider it so that can be at least put aside for awhile. I have to tell you something is going to happen there will be something that happens. From all of this talk. Theres the benefit from putting wireless and cable together the advent of 5g. Theres things cable has that could be beneficial in terms of cutting cost and also the idea that wireless is eventually going to be a threat to the Cable Companies when you get to the point of bringing in broadband to the home which is aways away and there are reasons this is happening but sprint is a hobbled company still. Its dead a lot of people own dead it dominates the high yield index. Its incredible how much there is a lot of cash flow not a bad quarter. No, they have to report still. No but im saying last was not a bad quarter. Now the problem with this industry is if everybody freezes and no more churn. Theres been very low churn. You might end one something but its conceivable that you end up with nothing. That would be a bummer. Maybe. Do you not believe were going to go to the president general john kelly sworn in already. You look at the tremendous results we had and you look at the spirit and with a very controversial situation theres been very little controversy which is Pretty Amazing biting y itself i want to congratulate you on having done a fantastic job and we look forward to if its even possible an even better job as chief of staff thank you very much. Well see you in the board room. I think we have done very well we have done very well lots of records. Lots of records created john you look at stock markets the highest its ever been unemployment lowest in 17 years. Companies are doing well business spirit is the highest its ever been the highest its ever been in the history of the polls we have a Tremendous Base and tremendous group of support the country is optimistic and i think the general would just add to it. Strongest stock market ever on friday we hit the highest in the history of the stock market. Business is very enthusiastic and we will proceed and keep going. We have a fantastic leader, chief of staff, its going to do a really great job thank you very much. Well see you in the board room. The president there referring to a Cabinet Meeting that begins in about 15 minutes but that is general john kelly taking the oath as the new white house chief of staff the first general on the job since nixon. Thats one of the greatest press conferences ever when he said that he was im in charge. Its interesting. The president so affiliates himself with the stock market. The previous president regarded the stock market as almost the third rail better not talk about it because rich people own stocks not that he was secretary of state then wasnt he he was filling in at the moment were in unchartered waters now. Looking into the president and the president tried to fire that special prosecutor by pressuring the attorney general. He came back to hurt them dow is up 78 were getting chicago pmi this morning. Lets get to rick santelli. Yes its july were expecting the number stronger than the 58. 9 we ended up with. 58. 9 from july would be the softest pace going back to april when it was 58. 3 the High Water Mark was just last month now lets look at the chart shall we they look like theyre climbing a bit and indeed they are except for the fact that even though were basically unchanged, were a bit higher on friday were not om on change for the day were on change for the month of july. Thats where we settled, 2 30. If you look at bunds for a month to date they settled at 47 theyre currently trading 56 so were up 9 basis points. Heres what gets interesting the dollar index is not having a great year as a matter of fact its having a horrible year and dropped over 2 cents just for the month of july from 9563 to where its hovering now and finally heres the big star so far of 2017 its the Euro Currency 114 and a quarter at the end of june 117 on its way to potentially one higher say technicians carl, jim, david back to you. Ill take it. Thank you. We have been covering this really significant battle between qualcomm and periodel thats been going on over the last few months involving well apples unwillingness to pay royalties through its contract manufacturers to qualcomm. Its a battle that is only picking up steam and i did sit down with the ceo of qualcomm and in speaking with him i characterized apples position and which is this is a battle that is a worldwide attack on an unfair Business Model. So us its a smaller issue as opposed to a worldwide referendum on a Business Model unfortunately i think apple instructed the contract manufacturers not to pay so we had to pull them into court to get them to deliver. You think apple wants to get the price down. Thats what it looks like to me but im sure theres other issues and if there are we can resolve them. Were going to have a lot more from that interview a lot more in the next hour. More specifics about the litigation and not to mention of course the ideal and also the process pektds for 5g which of course qualcomm plays an important role. This is going to be such a great story. First there is an opportunity for option people. Its what the next 28 days the am. We could get the judge whether or not they should judge by mid august. The san diego judge, qualcomm is san diego i would say this is one of those opportunities where theres very little down side if they lose. Remarkable upside if they win. Qualcomm holds the key to 5g as you mentioned. Its above the offering price. What theyre offering. David, qualcomm is on the hot seat but maybe theyre in better shape than i thought. I dont know what youre conclusion is. Im going to watch it. We have a lot more from that interview. Not all of it will be Available Online as well when he lays out this case. This is a very big case and qualcomm has become the david against various goliaths. Theyre fighting the ftc here and fighting in south korea and of course settled in china theyre facing a lot of different fronts in this war its not a worldwide attacks more on that. Still to come, on their 12 billion deal were back in just a moment. Because, when you really, really want to be there, but you cant. At cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready, because were helping leading companies see it and see it throughwith digital. This stock like a lot of other stocks bottom. When we realize that amazon isnt killing anyone be aware that retails with a bit of a charge here basicallysaying is that all amazon has meanwhile amazon goes down so i think that this is another Empire Strikes back. Brick and mortar but their own channels amazon didnt kill anyone. They didnt kill anyone. Well others would argue they want to which is going to cost them more money. When are they going to do it . Now we know that these other companies are not just standing still. Betting against costco at the 150 level is going to turn out to be a bad mistake. I like costco. Whats on mad tonight talk about a stock thats been crushed this is another opportunity to find out whats been going on. This is the international sales. He has a plan in place to reverse international. If thats the case youre going to want to buy dominos but you watch the show tonight first. Got to get your take on tesla. Took the deposit. Got tired of waiting went and bought a nice lexus well see you tonight live bermuda view with tintervi. Dont go away. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats up to 16 times faster than slow internet from the phone company. Say hello to faster downloads with internet speeds up to 250 megabits per second. Get fast internet and add phone and tv now for only 34. 90 more per month. Call today. Comcast business. Built for business. Post 9 of the New York Stock Exchange markets off to a good start ahead of a busy week of macro data and earnings. That is where our road map begin with the markets another big week ahead plus opening in the green on the last trading of the month the dow hitting a fresh run. Youll discuss how you should prepare your portfolio ahead. Snap taking another hit why today is a big test for shar shares. Well give you the detail plus well have the ceo of both companies at 11 00 a. M. Eastern. Spending home sales up 1. 5 in june month to month thats the first time in three months weve seen a monthly gain up 0. 5 annually and the realtor is still saying that the first half of 2017 was flat compared to 2016 for home sales. Why . Inventory, down 7 and theres gains across most of the nation except in the midwest month to month but the west still down 1. 1 annually and down 3. 4 in the midwest. The realtor saying that investors pulled back in june and that may have helped competition for regular home buyers investors just 13 of home sales. Ha thats the lowest of the year. That pushed all cash sales down to 18 investors, all cash buyers have been real competition for the First Time Buyers trying to get into the market. Still high home prices are keepg First Time Buyers out. We did get your signed contract. Theyll be closing 2 to 3 months out. Still the first half of 2017, no gains. Back to you guys. Thank you very much as the trading month comes to a close today. The dow hit a high the s p has gone shortly into the red. Were joined by citigroup chief u. S. Equity strategist always good to get your take good morning to you. Good morning guys i think 24 or 25. What is the play book for you. Its got to be about whats going on in the market floating on top of the water and we think thats the environment were looking at markets flattish but within the market and areas like financials and strengthening. Wed probably be moving as the fed worked on the Balance Sheet. Economic growth continuing to keep pace here its more around whats in the market another 7 upside. Technology weekend Wh Technology weakened. What brings that about if you look at last years set up, its down 1. 37, yields and close to 2. 6 and basically growth faltered valued it really well the first half of this year the reverse occurred and bond yields move up again because Economic Growth is there. Its not fundamental problems in technology theres very strong growth rates being generated and strong i. T. Budgets at a corporate scenario if its cloud, cyber security, innovation, the virtual reality. Augmented reality. Theres good fundamental activity going on. Its more the valuation of the company. What about the Broader Market talking about valuations the s p 500 is trading at a multiple of earnings thats the highest in history yet we have seen Earnings Growth continue to improve. Where do you come in on this debate about whether theyre now being justified. And that can fuel further gains. Theres different elements for valuations and also Interest Rates are fairly low i think the potential of rates moving higher is there the fed is indicating that accelerates in that and generates the higher bond yields people dont really believe in that earnings are critical. We show cased about 92 of the movement in stocks can be explained by earnings. Earnings have been strong in the first quarter. And we suspect it in the second half im not going to say its wonderful. Why arent you raising your target then . As carl illuded too. We are for next year. From 2560. We didnt raise it this year although we said look we got a 1 or 2 flexibility around earnings driven by a weaker dollar im not sure were really providing a whole lot of insight to people if it was a 10 move that would be a very different perspective. Finally tobias on policy, we have been watching three month t bills and nervousness about the debt ceiling he thinks the tax reform package. In what way does policy drive the 3rd and 4th quarter. If you remember right here, markets kept going people were almost not paying any attention to it. I think should there be a tax package on the table in september people will take a hard look on it but we have done surveys with clients if theres going to be tax adjustments it will be in the first half of next year. Over 60 of our clients are telling us that. Less than 20 think its going to happen this year. The market isnt billing anything in yet. Its more of a phenomenon. Should it happen should they be able to move through the program . It would be positive given that some things are getting accomplished in washington. Good to see you as always thank you, man. We have a deal we have been talking about as a strong possibility for the last week or so discovery announces its intent to purchase scripps. 90 a share. The remainder is in discovery stock. That stock is getting hit this morning. Despite the fact that the market is in this deal. Despite the 90 a share it came in at. 350 million that may be seen as low by some that believe the number ultimately may be higher adjust Free Cash Flow in the first year after closing of course it brings together a group of wellknown networks whether its food network. That was also owned by sinclair along with majority ownership. As well as the idea and part of it is certainly that it will enable the company to effectively battle for position in a market and concerns about whether cable providers continue to carrie these networks and these over the top programming choices that are delivered via broadband that put together groups of channels. Would any of those be in them . Now they believe they have the wherewithal to actual bli a part of those as well as create their own offering direct to consumer offering and run the combined company. Discovering a should say describing their own super mini fan networks and they were brought together and low overall. Well see. The deal will lever up discoveries Balance Sheet but will delever fairly quickly. Conference call has concluded and well, one does have to look at the price of discovery and see that theres perhaps a little bit of concern at this point in terms of the deal itself also may see some shorting going on and includes some stock well talk to the gentlemen behind this deal they have been friends for a long time. They talked about it in the past but this time they got it done we look forward to that and one of the shares of the company. And it is the last trade dag of the month. Take a look at the dow up some 60 points. Boeing up for the 7th straight day adding about 20 points to the index. For years, centurylink has been promising fast internet to small businesses. But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. Statement today. Dillards is unleveraged Real Estate Company that is mass cace raiding as a low from duck activi productive retailer. It exceeds the companys entire income as a retailer back to you sarah. More activist activity in retail thank you. Meantime apple enjoying a sizable run so far this year stock is up nearly 30 the company does report earnings tomorrow after the close can ceo tim cook keep up the momentum josh joins us with a preview. Thats right. Q3 eps 57onrevenue of 44. 9 billion that would represent gains. Not focused on q3 specifically that quarters guidance theyre 7. 1 billion and revenue has fallen for five straight quarters apple appointed the director of that region. And forced to play a political game with beijing. For example in order to comply with new regulations its now removing vpn apps. Those are apps that can allow users to break through government imposed firewalls its up nearly 30 trying to trade it am does not miss earnings expectations too often when it did does the stock does typically get punished one week later its down on average 4. 5 josh thank you very much. When we come back tax reform is back in focus as congress at least vows to move on from health care. Well speak to a major Real Estate Developer on that topic at the moment. Its a bit of a Holding Pattern but the dow is up 66 points. Dont go away. Promises regulatory relief and tax cut. He is the chairman and ceo we should also say long time friend and fellow Real Estate Developer with donald trump the president of the United States what gives you any faith in certainty that the president will have better luck on selling tax reform than he did on health care well first i think hes learning on the job. So hes, the donald trump that i know is very resilient and probably has figured out how to coalition build in a more effective way and is figuring out all thats happening down in washington. As youre speaking the president at the Cabinet Meeting. Admire what he has done and at homeland what he has done has been nothing short of miraculous as you know it was a tremendous problem and now close to 80 stoppage and even the president of mexico called me and said their southern border very few people are coming. They know theyre not going to get through our border which is the ultimate compliment. I want to congratulate him on the great job he has done with Homeland Security and have no doubt that he will be an absolutely superb chief of staff. We were discussing a little while ago before the meeting howell were doing and we have the highest stock market in history. We have gdp on friday. I think very little mention. 2. 6 is a number that nobody thought they would see for a long period of time. Remember i was saying well hit three at some point in the not so distant future and everybody smiled and laughed and thought they would be at 1 and 2. 6 is an unbelievable number announced on friday unemployment is the lowest in 17 years. Business enthusiasm is as high as they have ever seen it. 28 years according to a certain graph and certain chart. And the enthusiasm level sin credible we have some interesting situations that will handle north korea, middlel east, lots of problems that we inherited from previous administrations but well take care of them. Take care of them well overall were doing incredibly well and were starting from a really good base. General kelly will go down in terms of the chief of staff. One of the great ever. Were going to have a good time. But much more importantly were going to work hard and make America Great again. Thats what im going to do. Thats how we won this big election and thats what were in the process of doing and continuing its great to have you on board. Thank you very much. Thank you very much, everybody. Thank you. Were going to be able to handle it. It will be handled we handle everything thank you very much. That is the president answering some questions at the top of the Cabinet Meeting in the cabinet room referring to north korea there saying it will be handled calling general john kelly sworn in as chief of staff today a superb choice for that job and echoing some things he said in the stock market and Unemployment Rate and 2. 6 gdp number which he said is unbelievable. And touting the economic gains even as there is a very large geo political cloud that is hovering over this white house he said that general john kelly as white house chief of staff would go down as one of the great ever he touted his work along the border with motion coe where he has been spending a lot of time especially in regard to immigration and the white houses effort there one question that has been raised though carl is how he will work legislatively. He doesnt come with a robust history of effecting legislative agendas and that was one point of concern with the president. With the former chief of staff that was tasked with Getting Health Care over the finish line and people were looking at general kelly and saying while he does command discipline and respect and brings a much different tenor to the west wing it remains to be seen how far that can go in getting cornerstones Like Health Care and tax reform across the finish line. Thats where were going to pick up our conversation thank you very much. With us is the chairman and ceo of a man hat tan based Real Estate Company President Trump will be successful in negotiating tax reform hes learning on the job its interesting youre one of those people that say youre willing to pay higher taxes so that President Trump can go do you think its going to happen. I think tax reform will happen i think President Trump is a risk manager thats the set of thats the skill set that you need. This is a much larger business so i think hes going to figure out how to get tax reform through and my quotes about paying more sarah have been much along the lines of if they changed provisions that would effect me in my real estate business would by prepared to pay more and certainly i would be prepared to pay more if they were to eliminate 1031 exchanges and things that real estate people take advantage of. Wouldnt bother me not one bit in exchange for Corporate Tax reform because thats critical and thats what we need to have here repa repatriation of Corporate Taxes overseas i believe we get political harmony on that and ultimately more money going into peoples pockets. Tax reform gives psychic value its a really, really big deal for confidence and i just heard the president talking and i am confident that we are in markets where we believe theres value we are prepared to build and were prepared to do the things that create more jobs out there. At a time where the president does need some legislative wins. Do you have thoughts on that i worked in the senate. I worked for the senator prior to going to law school and i think that i commended his decision on general kelly. I met him before and i think hes a good descent man but the white house needed to get its house in order and he made exactly the type of decision that he would have made in his business and that i would make in his by every day. If youre going to be a risk manager you meet people that would be able time plement correctly according to your plan and it just wasnt happening correctly. He was a liberal republican they dont exist anymore. Well. And in part that seems to be part of the problem or lets call it moderate if you want but he was a liberal. Yes. What gives you the confidence given the divides that we see. I was talking to a friend of mine ed rollins a couple of weeks ago. We had dinner and i said to him do you think we can get back to the conditions that exists back then when he said the rankin minority member was posting it and working with the democratic controlled senate and he thinks there clearly is that opportunity to do that i candidly dont understand sometimes how the entire new york congressional delegation doesnt always sit and have din we are the president he is a new yorker and say first and foremost aim has to be new york we want to bring home the bacon here mr. President we want to work with you we want to talk about what we can do for new york and those conversations dont seem to be happening. Maybe because like mccain did the other night they come under increased pressure from the republicans, yes i would agree with you but legislation since the beginning of time has always been about Coalition Building and been about compromise it happened back then and it happened 200 years ago and in israel every single day when they have Political Parties and i actually believe that President Trump is Getting Better at that. Are you worried about that . Not one bit. Do you think it will hurt the new york economy i am totally loyal to new york i could be one of those people that move down to florida to escape taxes i have a home down there and i like it down there and not to escape taxes because new york has given me blessings but new yorks budget is is bloating and thats fact and this may well get politicians in this town to get their budge dare lives in order. Thats what liberal republicanism was about. Being liberal from a social standpoint. Were out of time but thank you for coming in and wed love to have you back to talk about this as we see whether the president can be successful on tax reform the ceo and chairman. Thank you. When we come back my interview with the ceo of qualcomm on why hes take on apple and when and if he thinks osat deal is going to cle. Squawk on the street will be right back good morning here is your cnbc news update at this hour meeting after russian president Vladimir Putin demanded they cut staff in russia by 755 people. Pence thanked them for their support of nato and pledged unwaivering u. S. Support under President Donald Trump the United States of america rejects any attempt to use force, threats, intimidation or influence in the Baltic States or against any of our treaty allies. The Islamic State Group Targeting the Iraqi Embassy with a suicide bomber blowing himself up outside of the gates and then followed by three gunmen that stormed the building the assault set off a four hour fire fight that ended after they killed all the attackers 180 acres and forcing the evacuation of nearby homes thats only 10 contained. Thats the news update back downtown to you david. Thank you very much qualcomms global battle with data and goes into a Wireless Phone continued as pressure at least is certainly out there to try to reach the deal. I sat down with the qualcomm ceo in an exclusive interview. To us its more of a smaller issue as opposed to a worldwide referendum on Business Models. Were just trying to get somebody to pay on a contract thats been in place for ten years and that contract, today unfortunately, i think apple has instructed the contract manufacturers not to pay and we had to pull them into court i can hardly think of a Business Model more competitive than ours we invest in the technology ahead of time that allows the business and ecosystem of mobile to grow i would argue apple is probably one of the graetest beneficiaries of that Business Model. Now that theyre in a position of making the vast majority of the industry profits they probably look at it as the cost of doing business and want to try to get that cost down. And i think their point would be that you use a monopoly provision in all of your contracts and the key point is the linking between selling a chip and also asking for a royalty as well as the money for that chip. Why is that something that you continue to pursue when i buy a car i get all the ip that comes along with that car. Why dont i already get the ip one is if you look the agreements that we have are two separate businesses. Its about licensing the full portfolio. The voir diast majority on the p side theres no way to conclude that that isnt the most competitive Semiconductor Industry in the world. Its the whos who its the feeling that is appropriate for you to charge that i think its a 5 royalty. If i buy an intel chip im also paying 5 . One of the arguments to be made is if i have a 400 phone and a 600 phone that have essentially identical features and even a higher price point has a better camera. And they made that camera better theyre going to pay 50 more as a result of being a 600 price point. It would seem qualcomm had nothing to do. We had a number of patents all over the phone its pretty tough to make a camera without looking at what qualcomm has already done. We provide certainty to the entire device by licensing at the end level. Even if they have the same features its only a matter of the input from the manufacturing in terms of improving certain parts of that phone. They typically dont have the same features. Also the value of that ip. The value of the fundamentals that made that industry exist sort of realized by the end price of the device. It made sense to me that you pay on that level. Thats actually a two decade long standard of how the industry has been organized forever. Why now why do you believe youre facing this from apple now. We had challenges to our licensing business before. Im sure well have them in the future as well we havent really heard a new argument this debate, but the difference is who is making it and i would say the length to which theyre willing to go in order to put pressure on. Do you expect youll reach a settlement the history for us is that the rhetoric can can sometimes be quite, you know, quite aggressive but typically Companies Come to agreements out of court sometimes on the courtroom steps and sometimes not on the courtroom steps and we had experience over the course of the history both ways. How long does this need to go on before it becomes a real impetment. Obviously a chip business doing well but this is an important component of your profits. Apple is an important component of that component. I would think at some point just spinning on rnd starts to become an issue if the money is not coming in. We think its worth sometimes taking some near term bumpyness in order to get to the right longterm deal how long will it take . I cant tell you. You think apple wants to get the price down. Im sure there are other issue and if there are, we can resolve them. They settle with the chinese after a dispute. It was a billion dollars the South Koreans came after them and it was a 750 million fine apple has come after them. The optics of it dont look particularly good for this unique Business Model. Its probably more the result of the industry structure and how powerful some of the people that attack that unique Business Model are verses the people themselves. When youre talking about apple here a number of other Companies Jump in it takes awhile to go legally and defend yourself its worth doing its very valuable to our shareholders. Thats not inconceivable. We could be talking another two greers now and this might not be resolved. Theres always cases where that could be a case it could also be a situation where a solution just appears. So your point about a settlement not going all the way. They say theres a lot of value there. We feel comfortable in the strategy that we have and we also have i think the staying power in order to get the right deal for our shareholders. Thats what youre focused on. In part youre up against the company that has unlimited resources. Theres no end to what theyll be able to spend. I think at the end the law and the way the industry, you know, art history is going to help us. Fascinating fight interesting to hear. Something else that could be a fight in the future at least for the company is its acquisition of nxpi. The deal price 110 in cash and as i reported a number of times in the months to come as the Regulatory Approvals come in theres some question as to whether or not qualcomm is going to be able to get the 80 of shareholders it needs to tender their shares at 110 number of large shareholders i have spoken to indicate they believe it will be more highly valued as a Company Given the multiple that they believe would be fair for the Company Given its success in the marketplace. I asked if thats a concern to him. I think any time you have a tender process you get a lot of speculation. Our focus is get in, get through regulatory we think we are going to be closed by the end of the year. We got two big major regulatory regions that we need to get done europe and then china and both of those are on track to close by the end of the year thats where our focus is. What will you do if you fail to receive the 80 that you needed. Its hypothetical at this point. And the issue is now get through regulatory and people can speculate. Its only going to grow as we get closer although some of the people that im speaking to you may have a problem on your hands. As i said, its not the area were focused on we have to go through the process to close one would not expect him to whether or not they would ever consider raising their bid if they need to get to that 80 this could be a story coming but for now they have to get them in police. I found his confidence interesting. Have we heard anything from apple on this. Other than their lawsuit, no. Not much they have not engaged outside of the courtroom as much. In terms of explaining their position remember the contracts are with the contract manufacturers apple is paying for their defense and defying them and unlimited resources. At qualcomm they believe apple has been behind this global effort to sort of hurt their Business Model all they say of course in seeking to pay a lower overall price to increase their profit margin. Dont expect to hear much about frit ams call on earnings tomorrow take a look at shares of boeing. This is the big winner the best performing stock in the dow, rising for 6 consecutive sessions more than 212 points alone through the Dow Jones Industrial average. Also more positive news this morning issuing a record forecast stay with us here on squawk on the street 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. And the wolf huffed like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies child giggles symbicort. Breathe better starting within 5 minutes. Get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. Their leadership is instinctive. Theyre experts in things you havent heard of researchers of technologies that one day, you will. Some call them the best of the best. Some call them veterans. We call them our team. Shares of snap down this morning as the lockup period expired allowing for insiders and employees to share 400 million shares although some arguing limited action to the down side. Argues maybe some of this is priced in. Also they quoted a derivative strategist saying there was actually a pattern in fwooraceb, twitter and linked in. But just something to be aware of theres another wave coming. By tend of the month. Another 800 million shares. For those that want to bet against snap though this does present the opportunity of creating more shares available to short which is not unimportant also increasing it in a significant way. Maybe more questions will be answered in earnings which are out next week august 10th i think. The last Earnings Period which was the first since going public there were negative remarks after that on the tone of the Conference Call. Playing down some of the negative reaction on wall street to the ipo they did manage to add 8 million daily active users which was a little disappointing but some would argue if twitter is having trouble adding mau sms maybe some of them are sticking on snap. Facebook isnt having trouble feeding the argument that digital ad environment is becoming saturated. These companies have to figure it out. Theyre going to continue to be a presence there we talked about how that is effective. He pointed to facebook he also pointed to some of the chinese sites as well where they have a big growing market. Interesting interesting to note as well, twitter shares down 3. 5 this morning lets send it over to john fort and get a look at whats coming up on squawk alley. You were coming up on squawk ally were excited about it the big deal, discovery buying scripps. And tell you exactly what is going on whats behind the deal and whats next r fothe industry thats coming up on squawk ally. This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade stocks set record highs. Lets get to the cme group and the santelli exchange. Good morning. I would like to welcome my first guestst week, thank you for taking the time, peter thanks for having me, rick. All right last week treasury and National Capital flows otherwise known as tic data, two months in arrears. May day to show foreigners just enamored with purchasing securities best pace and close to ten years. Tell us what you think is going on, there peter. Yeah, i think u. S. Yields are just higher than the rest of the world. Were seeing that foreign buy. Youre seeing as equity valuations hit all time highs, credit valuations are still a little wider than they were precrisis. I think there is actually more room for credit spreads to perform. Which, you know, theres been so much talk about are we in a bond bubble or credit bubble. If anything looks cheap right now, especially with the foreign flows coming in. All right everybody watches the dynamic youre describing. That our rates are higher than many countries rates especially countries whose you acurrenciese on a terror like the eurozone many believe that mario draggy is a long way from qt. Many expect like our fed some announcement in september f this doesnt come, do you continue to see the euro moving higher and european markets kind of the darling of investors yeah. I think youll continue to see again that will also translate to much more u. S. Paper by foreigners even on the corporate side, the ecb i think bought over 100 billion of corporate paper so theyre squeezing out the supply in europe so whether its bonds, french government bonds or Corporate Bonds even, european investors are struggling to find fixed Income Investment so that keeps driving capital here, keeping our rates low but in a very artificial type way you know, being an extrader, i would think that mario draggy isnt just going to lay down and say uncle. There is no way i can stop all the 60 billion a month euro purchases any time soon. Most likely there is going to be a litany of words. Do you suspect as traders watch this there will be a good twoway trade to continue to see setbacks to buy into european markets . Yeah. I think were going to continue to see that i think he is going to back up again, we saw this probably in mid june, the fed seemed hawkish. The first sign yields backing up and dragging equity markets down, they reversed course were not seeing any signs of inflation. I think were going to disappoint for at least those of would you say like to return to normal i think we return to normal is further off than we would like to see all right you know, wlhenever there are tourists on this floor, i point to the euro dollar options pit the forward rate it basically prices to libor and whether you have a mortgage, deal with banks or any type of financing, the strip set are afforded fwha contra afforded by that contract are a variety of originators and end users. My question to you is they want libor gone, regulators want libor gone by 2022 whats going to take its place what happens to these very liquid contracts that are so integral into market hedging thats a huge question. Its been one were being asked by institutional clients every day. Were having a Conference Call on that on wednesday just to try to go through it and it seems like this is one of the cases where regulators may be behind the curve. I think a lot is done to fix the problems with libor. It is controlled about it ice libor. It feeds into euro dollar futures and swapz and mortgage it feeds into so many places it seems to be working much better they seemed to have fixed the problems im wondering if they should just leave alone it seems more disruptive excellent excellent synopsis peter, thank you im not sure how libor will turn out. Well keep everybody informed along the way. Squawk on the street gang, back to you. Thank you very much when we come back, discovery inking the deal buy scripps. Well hear from the ceos on squawk alley. Dow is up 58 excuse me, are you aware of whats happening right now . Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Can we do that . 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. Welcome back to squawk on the street. Industrials are higher to day. Now poised to close the month marginally higher. That is a reversal from a last week one group fueling that, aerospace and defense that is led higher by boeing, Lockheed Martin and raytheon. The three contractors developed Missile Technology and defense lockheed makes thad which was tested by the u. S. Over the weekend. Raytheon makes the patriot system which south core hell upgrade. And boeing is still soaring on last weeks earnings has the ground base mid course defense that protect the u. S. From a icbm attack. All are trading at record highs to day with that, i send it back to squawk alley. Guys thank you very much, morgan good morning, 11 00 a. M. At discovery headquarters in silver spring, maryland 11 00 a. M. On wall street. And squawk alley is live