From the president S Manufacturing council. P g ramping up its fight against nelson peltz and netflix with a big score in the content war signing shonda rimes away from abc a tweet from ken frazier saying he will resign from the president S Manufacturing council was met almost immediately by a response from the president in which he said frazier would now have time to go lower rip off drug prices and immediate reprisal for what i assume the white house sees as a breach of loyalty. Ken frazier is known as one of the more thoughtful executives out there anyone that followed the drug industry knows that he has a lot of false promise he speaks his mind the president. Hes the president of the United States but it does seem a little, ill advised to just immediately attack him for going and gouging and mr. Frazier as also been a man that tried to hold the line on drug pricing. So it does to me, i mean, who am i to say its unfair it just seems like that mr. Frazier deserves better. He speaks his conscious. This is video were watching here of past sit downs between the president and ceos you see frazier has been prominently placed to the president s left in this case theres Jared Kushner next to mark fields. I dont know that you could say necessarily he was a high profile member of the council but certainly got a lot of notice apparently from the white house. Merck is a huge employer. Merck has been known as a stand out company for years and years. Merck is a company considered to be a Great American asset. So i found it disconcerting that he was immediately atakd i understand the president is very, hes, why did he do this im just a guy. This is the merck statement if you missed it as a ceo of merck and as a matter of personal conscious i feel a response toblt ta responsibility to take a stand against intolerance and extremism and i can assume its from a lack of response from the president over the weekend he will sign an order that will have more to do with china and trade. Right i dont know, he wants to go, hell have more time to lower rip off drug prices. I dont know my mother and my father would have said thats exactly the opposite of what you should do. Guy says his conscious and say i wish you well. How about i wish you well. Even the nfl, they know better i dont know jim were all finding our way here. Were stunned. In this extraordinary new dynamic between the government and American Business. Mr. Frazier is a man i have looked up to i have praised him many times on our show he has drugs that would do better, that would do much better if he was promotional like other companies he has been compassionate and he has been the last guy that i know that ever said my mom died of cancer and i have seen time and again that i have seen time and again that he has said listen maybe my drugs arent he doesnt do the big advertising because he doesnt want to create false promises. Hes a man of conscience maybe he didnt buy into the president , the president didnt buy into him twitter is interesting i guess its a place you can really take some shots but he is the president. Its very meaningful when the president attacks people very meaningful. Remains so. Well get to aman this morning not only do we have todays events to look at but also an eye on this council. You were just showing the tweet there from the president attack ken fraziers industry, his company and perhaps the man himself. I want to underscore this is an astonishing Political Choice that the president of the United States has made this morning he has been under fire over the weekend for seeming to be too soft on White Supremacists too soft on nazis. Not calling them out by name the white house criticized when they did finally call him out by name doing it via an unsourced background his Vice President , his attorney general have been out on National Television trying to clear up the political damage from his comments. Today ken frazier resigns in a protest of conscious speaking of fundamental American Values the president of the United States had a choice to make this morning and the choice he made was to attack ken frazier, to lash out in anger and frustration saying that the industry has rip off drug prices that is a Political Choice the president has made i dont think you will find a political adviser in either Party Anywhere in washington or around the country that would say that is a wise political move to make given the situation the president finds himself in today. I think this tweet is going to reverberate throughout the day and the president and the white house are going to face intense questions about why he chose to respond this way to ken frazier. Speak of today, walk us through what we think were going to get at 3 00 the president over the weekend suggested there might be a News Conference of sorts but what is actually on the calendar we dont know what were going to get today we expected the president would have an event related to china later in the afternoon at the white house. He has been in bed minister new jersey over the past week or so. We expected him to go to trump tower today but that was cancelled. The president is is now coming to washington. We have heard from Jeff Sessions that he expects that the president will address the nation today regarding what happened in terms of the racist violence in charlottesville, virginia over the weekend but we have not heard that from the white house itself so we dont know if they have an event planned around this event that happened over the weekend. We do know that the china relate event is still on the calendar for later this afternoon at the white house and hes planning to go back up to new york and back up to trump tower this evening, carl. Well come back to you later on this weekend. Look dont let the door hit you on the way out mr. Frazier were in a polarized country a lot of people feel like mr. Frazier called the president out so the president called him out. Thats another strain of thought. I totally get that thats not my strain my strain is unimportant im offering that in the industry mr. Frazier is not known as someone who has done rip off pricing. Whether you like or not what he did in terms of his conscience i think its good to have a conscience but you have to get your facts straight. Mr. Frazier has not been at the forefront of raising prices for the sake of raising prices at mercks profitability. So for those that think its absolutely right that trump called him out because he called trump out, all i can say is i would call him out on something that you may not like his state of conscience which i dont mind but do homework. Homework is key because i know companies. I know companies there are some companies that have continually ripped off the american people. If you hate him or like him for what he said can we at least get the facts straight on mr. Frazier . Jim thats why we lean on you. Im talking about merck thats what im allowed to talk about. Am i against violence . Yes . Am i in favor of free speech for the president and mr. Frazier, yes . Am i in favor of whether hes the guy that ripd off people, no, because the facts dont mandate that theres people that ripd off the people mr. Frazier has so kept down his sales by not promising because he doesnt want to give people false hope he could blowout the sales he could blow them out he has every right to try because other people have blown out cancer drugs and made to feel like my mom is going to go on that drug and shes going to live and then she dies. Jim, people are going to be talking about this all morning long after the break well get to the markets and why the futures are soup dramatically today. A lot of Corporate News as well including a mixed bag of news regarding netflix. Well talk about that. Price target upgrades over at tesla on the street today. More squawk on the street from post 9 continues in a moment 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 . 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. 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. So north korea is not off the front burner as much as well, we have seen the chinese true colors. Its not unlike president truman when he fired mcarthur people forget history. As soon as president truman realized that china was a total ally of north korea he recognized that the idea of bombing china would be a mistake. I now feel like once again youre bombing china if youre bombing north korea which would be an ill advised situation. Why launch this inquiry today to look into whether or not, to investigate the chuy feinese fo requiring u. S. Firms to hand over intellectual property. Im waiting for we cant let the chinese be the only people that make steel. But the president is reluctant to use 232 which is a shame. Intellectual property. Well, still, that was reckless abandon. Thanks for nothing but what really matters is we have this Steel Industry i thought was promised by the president and i think 232 is a must. I have been saying that china and south korea has been plague unfair we get that. Theyre all out of business so i thought it made sense. We dont want to make our tanks out of chinese steel i think they would prove to be effective. Does the Auto Industry say okay no, the Auto Industry has to fight this were not making those with aluminum i know that the Steel Industry, if they did not have foreign steel would be able to raise prices with abandon but youd like to think they would be responsible. Its better to raise prices than it is to go out of business. Jim, a lot of people over the weekend looked at historic inflammatory political events, military events, stocks tend not to crater. No, they do the opposite. This is like one of those things, i dont want to be so cliche to say well the sounds of guns but look people last week were very powerful. Howard marks was on, scott i googled marks bearish 2010. I guess i could have done 2011 too and they were all the same comments very similar to what he made and you could say wow, if i showed you those comments you might say well arent those the ones he said on scotts show no that was fortunate magazine hes a distress guy. I remember like somebody asked about the semiconductors, hey, i dont do that but he just trashed them by implication. Its very interesting. You can have that view. And in your view too cautious a view. Thats always that kind of hey, you know what, if you growl like a bear and you paw like a bear maybe youre a koala. Im a koala bear which arent even bears but 2010 you can do it theres all the stories popped up and they read very similar to what he said and thats fine because youre allowed because theres free speech. We discussed free speech youre freely able to scare people out of the market you can do it. But, you know, he does know distress better than anyone. I would never walk in to it but it did read a lot like what he said last week like 2010. Now he could say jim you are arbitrary and capricious to pick 2010 but i dont know. I picked it out of a hat but he said easy money well it turns out that the dow doubled. Well he said commercial real estate was the biggest worry or the banks double he talked about how important it was to be cautious well the s p went up huge. But thats right you have every right to come on air and be wrong theres nothing that says you can come on air but if youre wrong, you cant come back i read the way people you have every right to be as cautious then as now now am i showing disrespect . I am most respectful like my colleague larry kudlow would always say, with all due respect, but then he would ivicerate you. Were going to go to meg and get more on this story. Were just looking at shares of Drug Companies premarket. Of course when people make political comments or have in the past we remember that Hillary Clinton tweet historically they have effected the ibb. Youre not seeing an effect on drug Company Stocks after seeing trumps tweet talking about mercks rip off drug prices. Merck is up. 3 along with the rest of the market pfizer there also in the green this morning so it is really interesting to just see the market shake these comments the sort of threat from the president off. Drug companies, you know, there has been concern in the bio Tech Industry that trump was going to have an executive order on drug pricing. That has eased over the last few months and bio tech stocks have come back as people assume that the president was going to go easy on this space and its going to be interesting to watch to see if ken frazier the ceo of america coming out this morning resigning from the president s Council Making it clear to stand here as the ceo of one of the Largest Pharmaceutical Companies in the world what impact this is going to have on the industry. Traditionally the drug industry has been hesitant to get involved politically particularly among the Biggest Companies in the industry. It was really Silicon Valley leading that charge from the business perspective pharmaceutical companies for the most part stayed out of that conversation but this really changing from ken frazier and merck this morning carl. We had a discussion a few moments ago, meg, about frazier himself. Not just practices on pricing but frazier as a man and a human being. You interviewed him several times. What would you say about him as it relates to this decision. I have known ken for a few years. Having covered the farm suit kals for you guys for about three years. He is very engaged obviously he has done a lot of work in law. Outside of merck he paid a lot of attention to the death penalty. Theres stories about that there. He is a very engaged person. This is a very strong stand coming out as this member of the president S Manufacturing council feeling like he had a responsibility and responsibility as one of the biggest ceos in the country. This doesnt feel out of character for ken phrase torefr Something Like this. Well come back to you. When we come back well get cramers mad dash futures continue to look steady here more squawk on the street is back in a minute what powers the digital world. Communication. Thats why a cutting Edge University counts on centurylink to keep their global campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. When you clock out, ill clock in. Sensing and automatically adjusting to your every move. There. I can even warm these. Does your bed do that . Im the new sleep number 360 smart bed. Lets meet at a sleep number store. We created the ripple the doughnut in a doughnut in a doughnut. Right away, it was a success. I mean, it really took off. What people dont know is that it all started with points from my chase ink card. I bought the ingredients, utensils, even custom donut cutters. Wow all with 80,000 points. What will you create with your points . Learn more about the ink business preferred card. Earnings are better than expected it has to do with Capital Spending and the way people want to be on the web it has to do with the way there is an overarching Capital Expenditures that are going on in tech and its going to ignite tech today tech was obviously up last week and this is so well timed. If youre trying to figure out a reason to start buying they just gave it to you theyre really good guys and for them to beat the numbers shows you how strong business is. Yeah, we talked going into the earnings season about the lack of reannouncements. Earnings came out pretty good although the average stock that released earnings was down on the earnings. We got this take a look at Western Digital thats typical everybody feels and theres comments today that theres just a big fall off in demand and that they made too many chips both maybe even flash but so there is a Semiconductor Industry but were not seeing this in what i regard as virtualization type software. Well watch vm wear and other names. We get to the opening bell in about 4. 5 minutes. Flfs finally. Hey ron theyre finally taking down that schwab billboard. Oh, not so fast, carl. Oh no. Schwab, again . Index investing for that low . Thats three times less than fidelity. And four times less than vanguard. Whats next, no minimums . No minimums. Schwab has lowered the cost of investing again. Introducing the lowest cost index funds in the industry with no minimums. I bet theyre calling about the schwab news. Schwab. A modern approach to wealth management. 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. Predictable. The comfort in knowing where things are headed. Because as we live longer. And markets continue to rise and fall. Predictable is one thing you need in retirement to help protect what youve earned and ensure it lasts. Introducing brighthouse financial. A new company established by metlife to specialize in annuities life insurance. Talk to your advisor about a brighter financial future. In each case there were positives. Particularly kohls. Kohls brought 120 million shares back in the last five years and macys is buying back debt the one point that really killed everything was when macys said you know what, its going to be a really promotional 4th quarter. Had he not said that i think the stocks would have been up. They were going up before he said the word promotional. Its true, nordstrom had the first positive comp in three quarters although this times piece over the weekend on varies was rough. Yeah. That was rather negative. Celebrating the recent listing at the nasdaq. A power supply utility in the baltics. Its good to see some, wow, thats a lot of green. Now look when you have it on monday typically what happens is between 10 30 and 11 30 people that werent able to get out on friday will take profits theyll get out and then youll say listen it was all phony and then the market comes down and buyers do come back in thats the rhythm. It could change but thats the rhythm. Would you have bought here in the past some things are down enough that bike them but really, im stuck with this retail situation having done it in a vacuum and notwatched the stocks because was off in my garden making some good tomato gravy or sauce or whatever you want to call it but i came back and i said look maybe i wouldnt have bought these stocks but to sell them down look if jeff hn said those things about a promotion, i would have said, you know what, theyre Getting Better the cfo painted a good picture kohls has a lot of businesses doing well including foot wawefr jcpenney challenged because they didnt live up to the forecast but its not like they all blew up nordstrom, if they want to do the buyout im sure theyll find money. I hate to throw hot water on a group that everybody hates but it just wasnt that bad. There came to be a real momentum though whoever was in those that thought they were going to have huge quarters, they should like go back and do more homework there was no one promising that. The other thing we got friday was cpi which was a little cool having had personal income cool and Construction Spending cool but the view on the economy in the back half remains i would argue, fairly bullish. I see a lot of companies doing better than i thought. There were whole areas that i was really worried about like take cars the price of cars that were old have been going down and then theres hertz. Its come back it was horrible hertz has not been good. I have been building a thesis saying housing is not so good but thats the case. Its as negative as the market is i think given the fact that a lot of Companies Reporting good quarters you may say listen apple, forget apple. It was a great quarter you wanted production increase and cost decline thats why you saw a lot of selling. Jim, your point about tech this morning is well taken all four of them, the top s p gainers. 13 times earnings its coupled with financials. The journal this morning, agencies looking to pull back all kinds of rules. What matters here just so people know is that if youre a Bank Regulator you read the paper and what all of these things are saying is go easier now there are people in the world that say there shouldnt be but if you go back over what jaime dimon has been saying, hes not a clown there said it. He was interviewed which broke my heart no wilf did a great job. Jamie dimon was saying if you let us lend more aggressively we could have pulled out of this earlier. He could have said wait a second they had a big Justice Department fine. I come back and say look if you were able to lend more yeah it would help the economy so i think that these are signal to a regulators. If someone has a high fico score and they want to be able to expand their business dont say no to them because its been an impetment to business. I find that funny because having worked at Goldman Sachs you have a couple of bad quarters they dont sit back and say are we bad no reviews happen and the reviews tend not to be as pleasant they call people in and its not like hey, man, you have to work harder no they may have a friendly face but you dont want that review if you didnt make your numbers theres a lot of places you could work many place. I think people understand that culture. We have to hit netflix this morning. Two pieces of news one is that they secured shonda rimes which is a big blow to abc and disney but then over the weekend arguing the shares could fall by 50 by the end of the decade they look at cash burn and the content defections, the debt on hand. Netflix defied a lot of people when it made these comments and maybe this time the negatives will be right. One of the things that netflix has done is they have gone after we had this fella that managed to be able to crack the inner core of netflix and they have managed to be able to shift. Its exciting to work for netflix. All the independent directors want to work for netflix because they feel they have much more freedom and thats in each country so i think that. We interviewed brian grazer that said the great thing about netflix is creative freedom but they expect to get paid. They pay them a lot but what i think matters here is that if you think disney content is make or break, lets just say Reid Hastings saw this coming now a lot of people i talked to about the disney move were still surprised a little but this is about espn, i think if he has a Technology Platform and he can off load that to the technologists out there in Silicon Valley but i do think that netflix is prepared and its been a great short that hasnt worked. The first year of tesla wasnt such a great one i was in the good wife and i came out bitcoin 200. I was in favor of 200 and a great actor questioned me and i stuck by the 200 so those that think that im not on board, let me just say youre wrong. Bitcoin by the way, 4,000, up 40 in august alone. If you love the car i could see you buying the stock i gave up on the 3 thats not a stock statement thats a statement from my daughter that said dad i need the 3. It was just too long sorry elon i know you think im a figment of imagination. Did you put down the deposit. The 1,000 deposit. Yeah. You got it back. They did that they gave it back to me. People hate tesla so much but then again thats also been very difficult short. So marks credit he says that in his note. I could be way early, right but way early and that could be embarrassing and harmful in the shortterm. There you go. It can be. Embarrassing and harmful, yeah i mean, maybe im early on liking apple okay. Isnt that better. Yeah. When tim cook came to the set at 93 i said this was a chance to buy. Then it went up 60 points. The idea of being early here, they have been in charge for pretty much all of the year. The better part of the year and were seeing that sentiment again today as we see the markets a lot of green across the board. The dow up 135 the s p highs in the egs up by near aly percent 20 points to the upside. Nasdaq composite up. Sit part of this whole picture in terms of a reversal of the tension we have seen in the marketplace. Hong kong, the german dax, all very strong for the upside the notable down side one here is japan because theyre reopening from a market holiday last week all ten sectors are higher notably though the Energy Sectors and utilities, Energy Prices as well in focus here theyre the ones lagging the most i want to point out three points in the market that we talked about in terms of risk aversions. First of all the treasury side of things that bid for risk averse assets. Treasury yields did go lower were seeing that reverse again today. Back above 2. 2 for the u. S. Ten year treasury note yield also gold prices we had seen a rise on the heels of the north korean tension. A fall in those prices today as well also the yen dollar yen has been moving lower. Dollar weakness, yen strength. People have been buying that up on the safe haven trade. Thats also starting to reverse as well and ill point out junk bonds. Those had been selling off a descent amount over the course of the last week here. Were starting to see a bid there again. Risk assets part of the picture. Well see if that holds into the rest of the week we have been seeing that trade be a theme over the past 18 months back to you. Indeed, thank you come back to you in a bit. Lets get to oil prices as well. Up about 15 cents. Good morning to you crude prices are still on pause right now just turning positive on the session sitting under 49 barrel still supported by the dollar here but clear catalyst right now isnt there to drive oil over 50 barrel. Last week a build in u. S. Gasoline inventories was bearish. If theyre not rising at this time of the year when demand is supposed to be the strongest its tough see more upside from here still with that bounce we have seen in crude gas price are up 8 cents in three weeks. Thats according to the survey that has the National Average at 2. 40 a gallon its up from this time last year but still well below where it was in 2013, 14, and 15 at this time of the year the inventories will be in focus again. Was that a blip we saw last week with gasoline . Will we see more weeks of Strong Demand into the end of the summer that of course is the big question finally several crucial meetings for opec but nothing from them we know compliance with the cuts isnt as strong as it was in january when the deal was announced so that question also. Will they do anything about it well still be watching this week back to you. Retail earnings heading our way. Courtney reagan with a look at what to expect. Thats right. This week its the Big Box Retail and the specialty players well be looking for like last week results are expected to show sequential improvement but with the seismic shifts happening in retail it may not be enough to prop up the stock prices so tomorrow is one of the heavier days of the week well get results from dow component home depot, coach, Dicks Sporting Goods and Urban Outfitters wednesday target reports after upping its guidance in july full results you after months of pressured comp sales the focus will be on walmart analysts are looking for comp sales to grow nearly 2 and investors are curious if they can continue to log the huge gains after last quarter 60 growth rate. Friday, foot locker and estee lauder round out the roreports when it comes to comparable sales growth many of this weeks reporting companies are expected to log gains lead by home depot at 4. 9 and both ends of the spectrum including discounters walmart and target all the way to coach as well as both Sporting Goods retailers. Dicks Sporting Goods and foot locker should see positive growth now theyre look for earnings beats for gap and miss for urban b but its hard to predict with retail broad fundamentals still challenged wells fargo, that gap could beat but wouldnt be surprised to see a sell off there and its also lowering estimates for urban investors are look for reasons to sell many of these names regardless of the results. Carl. Get some rest courtney. Youre going to need it. Which are you looking forward to the most . Gap stores could be good. It could surprise. I do a lot of shopping at gap. The prices have been very Good Old Navy has been good and i think it would surprise people i dont think people are quite aware. Theres been big changes at gap stores and theyre positive. I think its working at target i think, you know, underpromised and overdelivering and thats good but i do think that gap is kind of, i dont want to say its back because retail is so impossible but go shopping and go shopping at Banana Republic and gap youll be surprised hi wife saw my gap slacks this weekend. She thought i looked good in them. Thats why. I like to shop everywhere david isnt here today but i went to a great gap in San Francisco and i felt like a million bucks. Wow. When we come back well get more reaction to merck ceo ken frazier resigning from the president S Manufacturing council and the president firing back almost immediately on twitter. As we go to break take a look at the movement this morning. Ten year works its way back above 221. Back in a moment [vo] progress is seizing the moment. Your summer moment awaits you now that the summer of audi sales event is here. Audi will cover your first months lease payment on select models during the summer of audi sales event. 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. Stay with me, mr. Parker. When a critical patient is far from the hospital, the hospital must come to the patient. Stay with me, mr. Parker. The at t network is helping First Responders connect with medical teams in near real time. Stay with me, mr. Parker. Saving time when it matters most. Stay with me, mrs. Parker. Thats the power of and. Looking for a hotel that fits. Whoooo. Your budget . Tripadvisor now searches over. 200 sites to find you the. Hotel you want at the lowest price. Grazi, gino find a price that fits. Tripadvisor. Snaps moving higher this morning. The lockup expires on the 782 million shares held by employees. Nearly four times the number of shares that hit the market in the ipo. We already know he said hes not going to sell this year other than whats tax required. These are staff people and its probably going to be an ill advised decision to sell the tech crunch just came out and said snapchat lets you picachu yourself so maybe their ratio is better than i think thats the pe. So maybe they got a whole new method of measuring. Maybe we are all small and, you know, its like at the end of sunset boulevard theyre big and the picture got small. Jim we didnt have you here friday to talk about the dau miss, right . Yeah. Or the fact that the dancing hot dog is now the most widely wachd watched ar super star. People do not understand the nature of facebook if you do something really great facebook will imitate you because its not like theres a creative jail. Hey they have a better one people should recognize that not to switch too far but the Dollar Stores a lot of people think could be good too but when it comes to snap my problem with snap is always the same which is that snap, twitter, these are about advertising and its just, i think the reach for facebook is just a better place to advertise. Snap is an underage group so its not like youre going to see a lot of captain morgan ads there. Maybe gillette. Its a lot of food and movies. Yes movies are good and theres good sports on there and you can advertise against that but im just saying that when you sit down with the ceos about where you get the real good advertising it always comes back to alphabet and facebook. We had an analyst on friday that said they should broaden their scope to older users because 98 of people brush their teeth twice a day. What do we have to hide if were doing things that disappear, what am i hide something i dont know that i ate too much this weekend . What am i hiding dow has had a nice open up 121. Experience unparalleled luxury at the lexus golden opportunity sales event before it ends. Choose from the is turbo, es 350 or nx turbo for 299 a month for 36 months if you lease now. Experience amazing at your lexus dealer. 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. We never mentioned the peltz letter and that was my mistake we should have peltz just added to ge. Proctor isnt taking city down here and we have to be aware that this fight is going to get very ugly. Going to get very, very ugly. We tried to make the distinction between the tone of akman and adp and youre saying theyre converging its not going to get that bad. Yes believes that, this is Procter Gamble, seeking a board seat to satisfy his own agenda his agenda from what i can tell is to see the stock go higher so i share his agenda as anyone who is a member. You and your price appreciation agenda. I know im out of line looking for higher prices but i think hes in favor of higher prices and if thats wrong, wow. What are you going to do tonight . I tried to like franticty lyy trying to get my act together. Thats bad i got Ipic Theaters are challenged here movie ratings are challenged the only thing that doesnt seem to be challenged is playing outside and having a great time. Well see you tonight 6 00 p. M. Eastern. Politics. I know. When we come back more on merck. Ken frazier resigning from the president Manufacturing Counciling more from bill george. Dow in a nice open here at 132 dont go away. Good monday morning. Welcome back to squawk on the street im with kelly evans and sarah at the New York Stock Exchange nice open as some concerns about north korea are better some what our road map for the hour begins with President Trump versus ceo ken frazier stepping down from the president s council. Trump firing back. The president expected to launch a big crack down on china today. Plus retailers walmart, target and home depot all getting ready to report. Will it be a bright spot for the sect sector. The president going after ken frazier on twitter after frazier announced he is resigning from the president S Manufacturing council. Were expecting the president to be here at the white house within about a half hours time so well see if he has anything further to say about the racist violence in charlottesville, virginia over the weekend that left three taed including two Police Personnel over the weekend in sharltdsville, virginia but here at the white house theyre announcing to the announcement by ken frazier that he is resigning from the president s Advisory Board over his handling of that incident. Our countrys strength stems from its diversity and the contributions made as ceo of merck and matter of personal conscious i feel a responsibility to take a stand against intolerance and extremism. The president responded with a very tough tweet of his own. The president had an opportunity to decide how he was going to handle it and this is what he decided to say now that ken frazier of merc mercmerck merck pharma has resigned from the president S Manufacturing council he will have more time to rip off drug prices the we dont know carl whether were going to hear from the president or not on this subject today but theres a mounting pressure for the president to come out and clarify some of his statements from over the weekend. His Vice President , his attorney general have been out doing exactly that over the past 24 ours or so and well see whether we get an additional statement from the president today, carl. Thank you for setting that up we want to take a closer look at this this morning. Joining us is bill george, professor at Harvard Business school he served on the boards of exxon and goldman sax. Good morning to you. Good morning, carl. Have to get your reaction to this what do you think of what happened on twitter today . I have great admiration for ken frazier. His courage. Hes been a leader in the pharmaceutical industry. And by the way hes been the person in the industry thats trying to constrain drug prices. Very constructive on this. Hes taking a stand as always or should take a stand and im extremely disappointed the president didnt agree with him because he never mentioned President Trump in his statement and i think talking about honoring our values and standing up against hatred we should all stand for that and i think it was a missed opportunity by the president. But i do think ken has a lot of courage and this is, he spart of a group of Business People that have more and more stepping up his business statement bob iger did the same thing when he resigned elon musk resigned. If leaders dont take a stand then they are come poliplicit i whats going on. If you were one of the remaining ceos on this council youd step down. I certainly would you feel an obligation to be a part of these groups at first back in january when he agreed to do it but yes i would of course step down and i would hope to have the courage to do Something Like ken frazier did. We have been reaching out furiousously to other members of the Manufacturing Council for any comment on his decision and on their own decision but how do you walk the line of being there to effect policy changes that the ceos have been talking about and complaining about like high corporate taxes for so long but also endorsing some of the social policies, Climate Change now in response to charlottesville. Thats a very important question you have raised and it does raise the question where you draw the line and when do you say this has gone too far and i think ken has done that but i think others will do the same thing these ceos are representing a global constituent sy. Patients all over the world, employees all over the world, shareholders the same and they have to represent all of their constituent sy as well as work toward u. S. Policy and i think youll see ken continue to work toward constructive Health Care Policies and drug pricing policies as well i dont think his voice is going to be muted. In fact i think it will be accentuated by this and i hope others would do the same thing i certainly would. When others have been asked why they would stay on the president s council they dont necessarily support him. Jamie dimon said hes a pay ttr and wants whats best for this country. Imlying that anybody that doesnt leave the council is somehow supporting what happened that leaves little room for people that say im here to try to work for the good outcomes for this country. Thats true thats where one has to make a decision it does come down to a personal decision it comes down to who you represent in your company and its a tough call. Thats why people joined and worked constructively to try to get better policies, particularly on health care where we need to do that desperately as a country i certainly think and hope that people like ken frazier will continue to work toward that but at a certain point in time it become ace matter of personal conscious and principle. Bill before we let you go, Lloyd Blankfein tweeted in the last 30 minutes or so. He says a house divided against itself cant stand and then he says isolate those that try to separate us. No equivalence with those that bring us together. Its obviously a sub tweet of sorts. Hes not referring to what happened over the weekend or what happened this morning but do you believe that that true is widely held in American Business and is it held by people now serving the white house that have come from goldman and other companies . I cant speak for the people in the white house today they certainly would when they had that position. Absolutely good for lloyd thats stepping up how can anyone support a group of neonazis after what they did to the jewish people this is intolerable and i agree, this has no place in america and i think we have to isolate people these people do not stand for American Values that everyone is created equal so we all have to take a stand against it and even without the violence and now with the violence that just accentuates. We cannot split our country. Bill yogeorge, thanks for yo time. Thank you, carl. Stocks are surging as investors shrug off tensions at home and abroad. The dow is up over 100 points here after the open. With us is citigroups chief strategist always good to check in with you. Good to be here. I was going to ask you about merck. Stocks trading up actually usually immediately negative and then buying opportunities. Any strategy around this not really. We talked awhile back that tweets would become more muted and they would let it roll off their backs and that was early in the presidency. Itunesed them out. What about north korea . A lot of noise last week certainly too much for a market that had run up to a record high plus 20 since the election. Whats the feeling about the risk and how it influences investor behavior from here. Theres a couple of things. When the market was vulnerable we tracked top 50, how they trade relative to one another so for example think of it how is google trade versus exxon versus merck versuses Procter Gamble for that matter. If theyre trading together they tend to be very macro sensitive. If theyre separately you tend to see investors and Portfolio Managers looking on a micro basis. Almost ignoring macro. One client told me if you dont do macro, macro will do you. So we got down to i think it was tuesday last week, 5. 7 correlation. Thats extraordinarily low we have never seen that before and it suggests that people were vulnerable to a macro and it could have been the chinese weakness or some Capital Spending number. Anything macro would have changed the focus on the fed so i think theres still vulnerability in the very near term in the market but we dont have wildly complacent investors. When we talk to clients we see them always bringing up concern and when we look at one of our sentiment me tric sentiment metrics its still in that territory. Youre still bullish. Im constructive over the course of the year by next year we see the market up in the middle of year were where we should be an theres more about rotation where you can see financials do better and energy do better and some large cap tech weaken. We had some high profile managers it was pimco saying their cash balances are above average of course talking about the percentage of year assets in gold anything change in your model . Not really. With a we saw the end of june we saw their median cash positions had come town from the lowest level since 08 when we started asking where is your cash positions. Theyre just getting dragged into a market up over 10 . Especially when theres a whole movement from active management. These guys are being pressured to put money to work as opposed to sit back and i dont think its because of that i was in boss on the last week visiting with some of the institutions there and i kept telling them its fascinating. The market is up but youre so glum youre wealthier and youre still not feeling good about it. Which is odd. Why are we up this morning . Clearly nothing bad happened over the weekend i mean, leaving out charlottesville. Im talking about the Korean Peninsula looked calm and there is, youre hearing the news about back Channel Communications and diplomacy trying to rachet down what seemed to be more rhetoric than anything i even look at the korean dollar it hasnt moved that much to suggest that currency traders were worried these things get overdone because its exciting and its, you know, everybody jumps all over it and the question is does anybody really raeshlgswant to h brink. But if we get closer then what is the strategy is it move to cash is it going to safe havens we saw the safe haven with people running into dollar and treasury yieldsor Treasury Bonds bringing down the yields as opposed to making an economic call and i think that would probably replicate itself. A lot of investors say is there Something Else other than treasuries in the dollar maybe some gold . Although im not. My dad asked me about it. Thats not a good signal i apologized dad if youre watching but i worry when the traditional Retail Investor starts asking questions about something they dont know much about its usually worrisome sign. Thank you for joining us. Sorry dad. When we come back another big week ahead for retail earnings coming off a rough week. Well get details and analysis and the big names to report in a minute plus another lockup for snap its the biggest one yet 782 shares hit the open market well discuss the impact on the stock with the dow up 136. We have a question about your brokerage fees. Fees . What did you have in mind . I dont know. 4. 95 per trade . Uhhh and i was wondering if your brokerage offers some sort of guarantee . Guarantee . Where we can get our fees and commissions back if were not happy. So can you offer me what schwab is offering . Whats with all the questions . Ask your broker if theyre offering 4. 95 online equity trades and a satisfaction guarantee. If you dont like their answer, ask again at schwab. Even better than expected results may not be enough to lift Retail Stocks this week remember last week both retail dow components report this week home depot on tuesday, walmart on thursday. Target Second Quarter report is sandwiched in between those two. They report as well. Specialty players including Urban Outfitters report as well. Now the Worlds Largest retailer is expected to see as comparable sales grow nearly 2 for the Second Quarter walmart is fighting to grab share online and analysts like the strides its made so far as well as innovative ways. It continues to be another important me trick for investors. It changed quarter to quarter how its calculated. Target upped its forecast in july setting a lift in traffic and sales. So much of what we heard from other retailers are ready. Who continues to be one of the weaker areas of issues because its a traffic driver despite making up 20 of target sales. Several analysts are expected coach as well. Likes coach here hes looking forward to the first formal look at the combined coach kate spade business and many retail point to brands over boxes well look at that this week as well and more sales move online into amazon and that follows the stock movements we have seen from a michael kors versus a nordstrom when both beat expectations but shares went in opposite directions, carl. Thanks a lot. A lot to digest. For more lets bring in managing director and president and ceo at the American Apparel and Footwear Association is that sort of what you see july ending a little bit better . Some of these year over year comps getting less bad at least . Thats the case we were surprised to see how clean retailers actually were in the month of july so promotional levels are down. Retailers are exiting in a clean note starting off in a positive way its very early in the back to school season. What areas in the sector did you think were poised to do better i think some strong brands where there is real evidence of innovation brands like coach, lululemon where its exceptionally high and the off price segment which is left for dead and touted as the next segment that amazon is going to take over look for strong numbers across all three of the off pricers. Then theres the department store. Really interesting to watch the price action around what was largely better results or at least less bad what do these companies have to prove . It feels like the case is still there on Department Stores yeah. I think i think last week was a bit of a severe over reaction and business is not that bad the results were not that bad. Consumer confidence is at a 16 year high. The price of gasoline is 2. 40 a gallon unemployment is 4. 3 this is all positive signs for the industry i would look forward to good results this week. I think youre going to see an improvement. What were you going to say about the Department Stores . I was going to comment more generally whether its Department Stores or specialty retailers. The numbers are actually going to be in line or better. I think guidance is going to be reiterated and maybe in some cases we see a tick up but i dont think its going to matter its going to be very much a show me space and i think the prevailing view and negative sentiment is there that some of these companies dont stand a chance to amazon. Thinking about the brands and their future here is that the way to go . To bet on people that can distribute any channel they need to and own the relationship with the customer as opposed to worry about shopping in a mall or online. Its about managing across channels when i think about the checklist of why i would like a particular stock, brand and innovation have always been there and obviously executing and that goes along with a Strong Management Team and managing technology across grounds was never on the checklist before its core today and thats important. Lululemon has done tremendous overhaul and now its one of the few companies thats seamless and offering that seamless experience across all channels. We had you on in the past retailers successfully burr rid the border tax but now we have these nafta negotiations is that going to be important in the second half of the year. Its going to be important. Yes were very pleased and proud that its no longer with us and that its unlikely there will be any consumer tax whatsoever. We have review of taxes going forward. We have review of nafta going forward. Unlikely it will do any damage to apparel and footwear. Well see what happens guys thank you so much. Thank you. We have a live shot for you of President Trump he just arrived at joint base andrews. Hes heading back to the white house before leaving for new york today see brief stop in washington d. C. We also have news out of charlottesville. Kayla is there on the scene and she yoijoins us with more. Were getting word from our nbc colleagues just down the street at the courthouse where the suspect in saturdays car ramming incident appeared Via Teleconference for an arraignment. The judge denied james alex fields jr. Bail after that incident that took place that caused one fatality and 19 injuries some highlights, fields said he has no ties to charlottesville and didnt have the finances to make bail now or at any point in the future he makes about 600 a week but he has no ties to charlottesville as the city and its leaders and the leaders of the university around which this town is centered have described this as an event in which people converged on charlottesville who are not part of this community and do not share these views and trying to isolate this community and against the messages of White Supremacy on clear display during the weekends events. A judge denying bail for him. Anyone familiar with that area knows charlottesville is the nicest place in virginia you have the university. Its completely the opposite of the depiction that you might expect from what happened this weekend. Its a much different story when youre talk of course about a lot of the rural areas in virginia and the carolinas. Places where they had to have conversations daily about whether to change the names of street scienigns of universitie places that still have lee or jackson on their name for example and Something Like this is going to accelerate those talks. Well, and kelly, right behind me there is a statue of general robert e. Lee and if you walk up close to it you can see very faintly the words black lives matter that have been scrubbed from that. Thats organized a multiyear debate over the removal of statutes. Theyll be adding new statutes to supplement the history and theres a tough conversation going on here over the last several years but charlottesville is open for business unemployment, 3. 7 doing better than the rest of state as a whole and its a very affluent and very liberal college town but certainly one where a very intense debate has been taking place over the last several years. As were talking, were showing the president boarding marine one of the helicopter there. Just wanted to say going back to your point if you think about what happened in South Carolina with the horrible shooting in North Charlotte on teston and t nikki haley responded. Youll see something similar now. Where people that have had the struggles well see many leaders step up and say well accelerate the plans to take them down. As the mayor of lexington did over the weekend. Kentucky. Or rirj virginvirginia lexington virginia had plenty of these discussions themselves well check back in with you shortly. When we come back we have shares of snap soaring as the largest lockup expierres. Plus a look at stocks. Strong japanese gdp figures overnight. S p up 22. Nasdaq is up 72 for better than a 1 gain. Squawk on the street will be ghba rit ck you always pay your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. At ally, we offer low rates on home loans. But if thats not enough, we offer our price match guarantee too. And if thats not enough. We should move. Our home team will help you every step of the way. Still not enough . Its smaller than id like. Well help you finance your dream home. Its perfect. Oh, was this built on an ancient Burial Ground . Okay. Then well have her cleanse you house of evil spirits. Well do anything, spiritual chatter seriously anything to help you get your home. Ally. Do it right. Here is your cnbc fuse update at this hour. Vice president pence speaking on the today show this morning defended President Trumps statements on the white supremacist attack. He made a very strong statement that directly contradicted the idiology of hatred, violence, bigotry, those things must be condemned in this country. Theyre totally unacceptable. Obviously that was attorney general sessions and not the Vice President an attack by gunmen on the turkish restaurant left 18 people dead last night 8 more were injured in the attack the assault lasted nearly 7 hours. The chairman of the joint chiefs of staff meeting with the defense minister in seoul. They want to peacefully resolve its standoff with north korea but it is read do use military options is it if provoked. Thats the news update this hour today is the largest lockup expiration on snap shares are actually surging right now up about 8 . This comes on the heels of last weeks disappointing Earnings Results which tanks the stock. Its been all over the place julia joins us with more what are the risks around this other. I have to point out what kind of volatility were seeing in snap shares today. This morning, earlier this morning snap shares hit an all time low today up more than 60 for the stocks all time highs but now they are rebounding up about 7 a lot of talk about how theyre Short Covering here as well as perhaps the stock finding its bottom now today the lockup expires in and an estimated 782 million shares held by employees thats nearly four times the number of shares that hit the market in snaps ipo. How many of those shares could actually sell. About three quarters are owned by directors, executive officers and other affiliates they limit how many shares they could sell per quarter no individual can sell more than 1 of outstanding shares of the class of stock that theyre selling. And cofounders that each own 211 million shares announced they would not sell any shares this year. Jp morgan saying that that move should, quote, help alleviate near term concerns around the lockup that leaves 182 million shares held by other employees according to jp morgan one of the stocks risks is continued pressure on the stock from the tail end of a substantial lockup expiration. Now for comparison the bottom for facebook and twitter shares was the day after their lockup expirations. The low for linked in was one week after its lockup noting that those three companies were also high profile ipos with sceptical wall street opinions initially similar to snap todays stock moves could give a hint about how employees feel about the company and also other period perhaps after so many dramatic declines especially after last weeks earnings reports that a stock has hit its bottom. Back to you. Well see still a long way from that 17 ipo price. For more were joined by james. Just downgraded the stock to neutral on friday. So you western impressed with the result and they were actually ahead of facebook on this virtually Little Development here and then on the user experiences yes the dancing hot dog is great and i think were seeing some developments but at the end of the day it doesnt draw in new users and doesnt educate the users on the things working like maps and search and thats what is going to count in terms of driving that monetization level higher. Specifically around this lockup expiration this is the second one what have you found in these Tech Companies do you see it as any bottom for snap a lot of these guys are also under water so i discount that a little bit and evan spiegel selling shares attend of the year. And bobby murphy. But what you have to focus on is the fact that user growth is actually okay. 100 of the problems are selfinflicted the users are there theyre not monetizing by definition thats where the disconnect was. You think the consistent criticism that they are product guys and not ad guys is fair theyre focused on the Mission Statement and i think a lot of the cases here can be extended over to twitter as well because they have strengths and theyre not focussing on those strengths. Theyre trying to be everything to everyone so the Mission Statements are aligned with capitalizing about what they have in front of him. What facebook is doing right is having a good ad strategy but its just having the Largest Social Network and able to copy features it looks elsewhere. Look at the reports this weekend about how whatever the name of that data company that it bought, it uses that installation on peoples phones to track their usage of apps like snapchat or whatever. It might be house party. One that internally they have been obsessed with making sure that they dont steal a beat on them how can you blame the cofounder what is it going to take for them to become a couple of billion users in size. Can they simply not get there and is that what the market is saying its not the number of users. Theyre focused on the affluent market so by design theyre not going to get to the same scale as book thats fine but as long as theyre customers that big advertisers and agencies want to go after they should be able to monetize that. Theyre not seeing that happen in north korea theyre better Business People you can balance it together. Were not seeing that on snap. So what is value here after estimates came down the revenue multiple is still around 8 or 9 times 18. So make of that what you will. I mean, what is fair value five times, six times . I mean are you at 1377 my target is neutral. Im saying at this point lit perform at best with the market. Its an interesting idea that the number one competitor is not facebook but snap itself runs counter to the narrative. Look gave them the benefit of the doubt. Yes, there was part hope in there along with the estimates but the hope was justified because the numbers could easily get there if they monetize in the manner in which theyre theoretically capable of. Thank you for joining with us your call today. When we come back President Trump getting ready to sign a memo on chinas trade practices. Reaction from beijing is straight ahead ua othstet will be back in two. Whoooo. Going somewhere . Heres some advice. Tripadvisor now searches more. Than 200 booking sites to find the hotel you want and save you up to 30 . Trust this birds words. Tripadvisor. Launch a probe into chinas trade practices. China responding to the potential u. S. Crack down. Eunice joins us with more. Thanks so much. Well President Trump hasnt even signed anything yet but the Chinese Government and state media already indicated that this is not going to go down very woefrl here and it could be a set back to u. S. China relations. Officially the Trump Administration officials have said that this directive which is supposed to focus on intellectual property is unrelated to what the president perceives as a lack of action on the part of chinese to reign in north korea. However based on some of the tweets and the comments of the president and the conversations that i have been having with chinese officials they believe he is trying to connect the two and it really bothers them the Foreign Ministry today weighed in saying the Korean Peninsula issue and trade issue are two different categories its clearly inappropriate to use one issue as a tool to press the other issue. In the Chinese State media since the weekend has been threatening retaliation. The u. S. Action can trigger the trade war and we should make washington realize that china is not the one to be messed around with now if you take the chinese threats just at face value the concern now is that this could descend into the trade war that the Global Business community has been worried about, kelly. All right thank you. All major indexes up this morning. The dow now positive for the month of august. 150 point rally with markets seeming to shrug off the geopolitical trade concerns and tensions and were off the second worst week of the year. Lets bring in ben steel director of International Economics on the council of Foreign Relations and next to him is the Global Quantitative strategy at Wells Fargo Investment Institute quickly on this issue about u. S. Trade how much of a head wind is that he is trying to put pressure on china to move forward, cooperate on north korea and he would prefer not to take any action that would trigger a tic for tat trade war and hes put himself in a very difficult position. Hes trade sanctioning china over north korea. Hes made clear theres a linkage between the two and that cop progress will north korea will result in him taking pressure off china in regard to trade. How much is that because there one anything adverse there over the weekend and we had some strong growth figures overseas. Its a large part of it its korean equity and its the vicks and thats way down. All of that starting to feed into risk oncoming back into the market. Why doesnt the market seem worried about the trade war with china with President Trump expected to make this executive memorandum and china already firing back. Rightly or wrongly the markets reach the conclusion since the election that you cant draw much from Donald Trumps public comments. That is it doesnt readily translate into policy. Having said that, north korea maybe entirely different because donald trump doesnt need cooperation from congress in order to launch a military strike against north korea or north korean facilities so thats why the north korea crisis i think is very real and the markets will have to continue to pay attention. Is that savvy to link it with trade . The art of the deal . The negotiation . My view is that the chinese reaction is appropriate. That donald trump should not be linking the two. They are qualitatively different. Everyone in that region and the south china sea, east china seas region has an enormous vested interest in security and we should not be letting trade problems interfere with cooperation to eliminate the north Korean Nuclear threat. Even if this is just a respite and things heat up once again people over the weekend trying to draw analogs to past crisis, stocks dont end up being a doesster six months out, 12 months out. It depends on what the backdrop looks like. If you have liquidity and global Central Banks are accommodative. If you have earnings growing and low inflation thats a good background for investing so the way you look at risks in that backdrop is theres opportunities to buy and thats what youre seeing is people stepping in that werent able to get in before the north korean issue. What flips that dynamic you need the backdrop to change and the economy to slow and earnings to start to hit a pothole. You need the Central Banks to start to get more aggressive youd see a much bigger market reaction. Anything you would add to that. Geopolitics not going away. He made clear that he is considering firing missiles toward guam to demonstrate to the United States that he has the capacity to hit a Major Military base in the region. If he does so and donald trump wants to escalate he may try to shoot down a missile and then we presumably are in a situation that could be very dangerous first and foremost in terms of our concerns here for the marke markets. Lets go down that road and say what happens the reaction may not be that exaggerated and its something that should be temporary i know its hard to talk from precedent in those situations. The most important thing is whats happened over the last 7 orrel years. If you have a 6040 portfolio in march of 09, its twice as volatile as the portfolio you started out with years ago you should be taking that equity money and putting it back over and youre older now. People have a 6040 portfolio. Maybe they do. Thank you both for joining us this morning. When we come back this morning. The fight against nelson peltz is heating up. Dow is up 146. 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. Four of this years five performing etfs have something in common. More squawk on the street coming up flan is working you will not benefit from the change for the sake of change. No word yet from trion i do be expect them to comment white papers, et cetera. The stock is doing relatively well hit a decent quarter, kelly. This is just a further escalation in this proxy fight which will come to a head on october 10th so far its been pretty civil and continues to be so but david taylor, the ceo of p g, sending a new letter, sort of going a little more personally at peltz giving investors what they think is a reason not to vote him on to the board they say he doesnt bring ideas. Criticisms of the company are outdated if you look back at ten years this is peltz comments but taylor has been on the job since november 1st, 2015 and the stock outperformed it depends on your time frame. I wonder if they looked at the interview david faber and say we can take our case directly to the public and tell them the activists dont know what theyre talking about and perhaps theyre deciding they would rather push back a little. I think there is a strategy to fight back and be more public its a little more different because adp was messier. And the ceo, remember, peltz is not demanding a ceo change or a drastic strategy change. Theyre coming at this friendly. They want to add urgency and a few ideas to the board they own a huge amount of stock. This is like turning the titanic. Even if you had an aggressive captain at the helm this is one of the biggest activist campaigns that would have ever been waged he only has 1. 4 of the company and 3. 5 billion stake. Well see if they start making the case to share hold whaerz that looks like and what changes they are advocating for. P g says its not enough to move the needle or to let us put him on the board theyll be able to answer back now dow is up 15 will 8 points now pretty much session highs with the s p 50up0 26. Nasdaq up 1 squawk on the street. Well be right back. Tmobile announces zero down for all. Now, get the whole family the hottest smartphone brands like Samsung Galaxy for zero down. Plus, get 4 unlimited lines for 40 bucks a month, taxes and fees included. More reasons why tmobile is americas best unlimited network. Dont miss fired Google Engineer james damore. Hell talk more about why he wrote the memo, whether he would have done anything differently, his reaction to the fallout since. He had a short essay in the wall street journal over the weekend and weve seen and heard from a couple times. It will be interesting to press him on a few more things. Thats a big get. A lot of questions for him amazing how it changes the conversation in the valley and arent world, right . Its more entered the consciousness than ever. I dont know what that means i dont know if there is going to be an effort to most Companies Back towards the middle or not. Time will tell i think also the conversation is more from one being about sexism in Silicon Valley to being about echo chambers in companies and whether youre allowed to voice political opposition and social open stoi opposition to a company and hes very critical of the company and a lot of people side with him. He has a shirt with gulog on it that is putting it mildly. All right squawk alley is next at ally, were doing Digital Financial services right. But if thats not enough, we have 7500 allys looking out for one thing, you. Call in the next ten minutes to save on. And if thats not enough, well look after your every dollar. Put down the phone. And if thats not enough, well look after your every cent. Grab your wallet. Access denied. And if thats still not enough to help you save. Ooo i need these well just bring out the snowplow. You dont need those well do anything, seriously anything, to help our customers. Thanks. Ally. Do it right. Welcome back to squawk on the street. All sectors flashing green this morning with financials and real estate and tech all leading the charge industrials, however, also up almost 1 . Propelled by Aerospace Suppliers like arconic and also about it transport clz are bouncing back after a month of losses. The Top Performing transportation names this morning, railroads, norfolk southern, Kansas City Southern and Union Pacific and airfreight and logistics names including Expediters International and u. P. S. With that, i send it back downtown for the start of squawk alley. Guys all right thank you very much, morgan. Good morning it is 11 00 a. M. At merk headquarters in new jersey and 11 00 a. M. On wall street and squawk alley is live