meeting. policy announcement coming up at 2:00. in global news chinese stocks rallying overnight. this morning snapping the three-day losing streak. the shanghai composite closing up 3.5%. big growth. in europe greece's stock market will not be reopened today as some had expected. the exchange is waiting for an okay from the ecb and government decree. >> that's 6 or 700 points. >> huge. >> stocks to watch this morning, twitter earnings and revenue are both above estimates but it was the monthly average user number and it grew at its slowest pace since it was public and that is accounting for a pretty substantial selloff today. 32. i don't know the last time it was there. jack dorsey this weird beard, calls this unacceptable. have you seen the beard he's sporting? >> i have. >> it's like -- does the not pass by mirrors? people don't talk. he has a lot of yes people. >> yeah it looks good. yeah, it looks good. i like that egg yolk. right here. more of his comments and reaction from analysts in just a few minutes. shares of yelp also dropping sharply. the consumer website posting a surprise loss in the current quarter revenue view was far below street expectations. in other news yelp chairman max lynchman is stepping down. shares in gilead getting a boost. the hepatitis c top sales estimates. earnings also beat the street and the company is raising its full year sales. stocks to watch part two. >> part 2. >> part 2. >> so many stocks we're watching today. >> got to split it up. >> buffalo wild wings, the earnings falling short of estimates. they were hurt by higher labor and chicken wing costs. it is giving the stock a boost. the stock is up by 9%. get this we have the ceo sally smith. she will be joining us on cnbc at 7:40. >> remember the last time we said where are the wings? >> i don't smell any just yet. >> there will be wings. >> we ate too much. >> >> i don't know. >> what did you eat yesterday. >> i eat more after? >> you did? >> yeah. really it's weird because you hear ritz carlton. you would think they would have good croissants. >> and they did? >> yeah champaign, too. >> you drank champaign without me? >> we're winning the j.d. power thing again. >> winning again. >> and also beating the last record on a scale of 1,000 points higher or so. >> like you need an excuse to drink champaign and eat croissants. >> maybe mimosa. >> i got an e-mail from the trainer, a picture of us eating. >> wait a minute what trainer? >> he has a trainer. >> a guy. >> where did you get a trainer? >> this pushup thing -- >> he's not mine. we didn't talk about it. i did the urban mudder over the weekend. >> i didn't know that. >> the cousin. he was on our team so the entire team saw us eating the croissants. >> they were not impressed? >> no. >> the urban mudder. >> only requires 30 pushups? that's it? that doesn't sound -- >> 5 1/2 miles. >> people that live in the city. okay. city dwellers. >> city dwellers fat, happy. >> let me tell you about another few stocks to watch. iac interactive beat the streets. they say more users signed up for the dating services. the paid version of tender outperformed expectations. last month iac said it plans to float 20% of the match group. panera shares going higher. restaurant sales were a bright spot. picking up in the quarter, it's up by 8%. looks like there will be deal news this morning. bell gum chemical group solvay is buying u.s. rival cytec for 7.25% in cash or $2.5 billion in total. cytec makes composite and adhesive materials for the aerospace and auto motive industries. the products are used by mining companies. in tech news microsoft rolling out windows 10 today. free for windows 7 and 8.1 users but if you didn't reserve your copy already, don't get too excited. microsoft is upgrading in small groups. windows 10 designed to let users more easily work across platforms from mobile to desk top. in p and g land the appointment is effective on the 1st. david favor caught up with lafley last night. >> david has a broad away of experience around the world, a cross our businesses and he delivers consistently. and that's what we're looking for. someone who cooperationalize strategy with excellence somebody with a real track record, somebody who is an outstanding leader that people will follow. >> p and g will report quarterly tomorrow. and jon moeller will join us. let's check on the markets this morning. the futures as you saw earlier up a little bit, 30 40 points 35 points right now. great session yesterday. almost 200 point snap back. still below the december 31st close on some of the averages. in europe looking at it on the way in a little bit mixed. responding positively to the nice move that we saw in china. these markets also bounced back yesterday. they're higher but you see up a point, half a point, 3/4 of a percentage point. the asian markets, the one on the bottom. 3 1/2% up. >> 8 1/2% on monday. more than 5% on tuesday. up 1% on tuesday and then closed down 1.7%. weird story in the journal today that what's different about china's response to all the turmoil is that there's not a single person that you can point to. we had bernanke. he's the guy that was leading our efforts to keep the market higher, the stock market higher now that i think about it with his quantitative easing and then mario draghi -- >> right. >> -- is now keeping the markets up in europe. then they just did like a -- they have like a guy that doesn't have a face for china. >> yeah. >> he's like a shadow guy. this is not, by the way -- that person is different than the birka person on the cover of the post. that's gisele getting some type of surgery on her breasts supposedly. >> really? >> she's in paris with her sister. you didn't see this yet? >> no. this i'm interested in. >> why, because gisele -- >> forget the headline. >> you can see the business news. >> why would she need any -- >> cover up? >> she's perfect. she doesn't need anything. >> inside this is -- this is not good. >> hold it will. >> cloak and sager because apparently it was to -- >> no. no. no. >> i don't believe that. >> i don't believe that either. >> in the new york post. >> exactly. >> well, my point, you know getting back to what i was saying, this -- >> whoa. we have -- >> welcome. >> you're a guest here. >> you're a guest here. >> we did it. >> julia, i did this. >> i have time. >> all the way across the table. >> at least it went that way. >> off the table. >> anyway this person is -- >> get it all over this week. >> that could be gisele. that's a different -- that's the person that -- anyway. >> but we digress. >> they don't have anyone in china spearheading. >> i don't believe this joe, the gisele news. i just want to say. and i'll tell you why. >> would you like to go -- >> i want to expand on this. >> how is it you think -- what's in the birka? >> you say this is the country with the best doctors in the world and if you are going to have -- if you're going to have work done, you're going to come to the united states. you talked about this. the health care system in the united states, the best surgeons, best everything. >> except she asked to pay in euros. >> you were going to come back to that. >> yes. besides, if you're going to recover somewhere after surgery. >> nice place to do it. >> paris. let's get back to twitter. shares doing a dramatic about face after beating on the top and bottom line and they plummeted. jewel boorstin is here. >> absolutely. it was quite a wild ride for twilter. first shares surged on better than expected numbers but then quickly gave up all of those gains on the earnings call after guidance about major challenges to growing twitter's user base which added 2 million new users to the core service. cfo anthony noto warning that twitter's problems with stagnating growth won't get better any time soon. >> to be clear, however, we do not expect to see sustained meaningful growth in maus until we start to reach the mass market. we expect that will take a considerable period of time. >> interim ceo jack dorsey said he's nod said with twitter's user growth and he is working on better communicating twitter's value. on the up side notice he says it's 1/3 where the company's long-term potential is and there's plenty of room to grow and add advertisers. it wasn't enough to reassure investors spooked by stalling user growth. >> we need to do three things one, we need to ensure a more disciplined execution. two, we need to simplify our service to deliver twitter's value faster. and, three we need to better communicate our value. >> so certainly a lot of work to be done for twitter and really a lot of talk on the earnings call about how they're not happy where things are right now in terms of the product, in terms of how it's marketed. >> julia, stay right here. we also have an analyst joining us on set to talk about this. victor anthony is here. victor, i think what's stunning is looking at user growth that basically didn't change. 302 million to 304 million, that's growth of less than 1%. it's phenomenal to see a new social media company seeing that much growth. what happened? >> to be clear, better than expectations. >> expectations you were thinking it was going to be less than that? >> expecting that users would have declined. that's why he stopped falling earnings. the comments were subdued, borderline negative. >> that in itself the idea that you can sit and not grow in your user base that's kind of phenomenal. they need to describe their value better. hard to over estimate or under estimate when you're looking at stagnant growth. >> yeah. it's a problem. investors are punishing the stock for lack of user growth. engagement decline from last year. that's an issue. also talked about all of these different product launches and iterations that they announced and talked about it at the analyst call. nine months later they talked about all of the product launches failed to drive user growth. that's a big issue. >> now they talked a lot about how they have this new project enlightening. overhaul of twitter service coming in the fall. they made a lot of little changes since november that haven't had any impact really as we've seen. the question is do we think that a project overhaul in the fall is going to change the game for twitter? is it going to make it something that's now a very valuable service for a small group of people or make it something mainstream? >> the confidence in that working is no longer there. that's probably why you're seeing the reaction in the after market. which i think is a little bit overdone by the way. investors are losing confidence. now maybe product enlightening would work. talking about a marketing campaign in the fourth quarter to get user growth to drive the user growth over the next several months. we'll see whether or not that works. we have to wait and see. that's probably why you're seeing the stocks. >> is it worse to be running the company? >> know i think they need to find someone else to come in. >> do you want them to remain independent? one of the questions is whether you get through the fall still wondering about who's supposed to be the ceo. if the numbers don't improve and somebody emerges and says look we'll take you out now and call it a day, that they would take that deal. >> i think that's highly likely. >> that is highly likely? >> it is. >> is that built into this stock price? >> it's not. it's not. someone may come in possibly google. i think google has failed twice in the social media efforts. i think they realize that they need a presence in social media. that's what the time is being allocated to right now i think. >> there's a new pressure to announce a new ceo. twitter is not going to sell right now because they think they're at the bottom and there's a lot of anticipation in terms of things turning around this fall third and fourth quarter. i think google would make sense but we shouldn't expect a sale at this point in twitter's life cycle. >> victor what price would it snake the company is a $24 billion market cap now? >> anything in excess of 30 billion. if any company could do it google would do it. they have a responsibility to shareholders if someone were to come in and make an offer for the company. they have to entertain that offer. >> it sliejs a lot. 30 billion. >> you have an asset that's growing. asset revenue 7%. >> i plan on being done with twitter in a year or two. >> are you still sitting here? >> what else are you going to be using? >> i'm not going to be using anything. talking to people, going out, being outside. >> it seems like twitter has proven it's useful for 300 million people. >> right. >> the question is whether it can go ever grow anywhere -- >> does it matter though? can you make those 300 million users very valuable? >> yesterday they did say they think they're only at the third of the level. monetization, they can grow. wall street wants to see if it can be at the level of a facebook. >> i can buy alcoa for 13 billion. twitter. why does everybody have to be in social? google has the greatest search engine. it's a verb. they're up 100 points last time they reported. why do they need twitter? >> well mainly because that's where the time is being spent. shifting over. >> you spend time going through meaningless comments from every single person on the planet and never an unspoken thought and then you don't ever buy anything or click on anything. >> only 300 million. >> never induces you to do anything. >> we'll have to get you to sign up for facebook. >> no not on that earth. short facebook too. psychologically short. >> advertising. advertising is working on facebook. working on twitter. >> see bird man? >> no, i still haven't seen it yet. >> the daughter just yells at him, you're irrelevant. you're not even on facebook or twitter. you're totally irrelevant. it was like -- like watching geez i don't know. >> victor thanks for coming in today. julia, thank you. >> nice to see you. >> coming up only -- we'll get to you live. only a week left until the first gop debate. john harwood catching up with new jersey governor chris christie. we'll do that next. before we do that here's a look back at this date in history. ♪ ♪ ery auto insurance policy has a number. but not every insurance company understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. welcome back to "squawk box" this morning. the first gop debate. fox news is luring the threshold for an early debate. the candidates that don't make the cut for the august 6th primetime event will now be invited to participate in a 5:00 p.m. squareoff. they needed to reach 1% in polling. primetime debate is the highest in the national polls. they say this is a way to allow some of those folks who might not have made it initially in. you want to have a woman in. she may be able to get in. >> 1%. >> 1%. >> that is a lobar. >> right. talking about different percentages. new jersey governor and gop hopeful chris christie making the rounds. that's where he sat down with john harwood for the cnbc speak easy series. >> the math doesn't support donald's position. >> he says i will make us rich enough that we don't have to touch those programs. >> listen, my proposal is substantive and based upon the facts on the ground by social security. this is not just about growth. growth is very important to every element of our economy. i plan to deal with growth but you still have to deal with the facts, john. >> you had an interesting exchange with a pro trump voter last night. you said donald's great at getting attention but he couldn't govern. you talked about the great line about the mexican wall. is this another one of those things where you say something that sounds good and it simply is not possible and not true? >> well when you do that it hurts the credibility of the presidency. you have to have some experience in actually difficulty in governing. as i said last night, donald's got lots of skills and lots of talents that have made him wealthy and lots of people around him wealthy. that's a great thing. not necessarily the same skills that are transferable to governing. and so you need to understand how you have to work with other people, how if you disagree with somebody you can't fire them. >> not possible for him to be a successful president? >> i think it is much less likely for him to be successful than it is for me to be successful. i don't think it would be in the best interests of our party to have someone who i don't think would be an effective president to be the nominee. in the end, that's why i'm running. >> now of course what we've seen is increasingly other republicans are targeting trump, even now chris christie who calls donald trump a friend. donald trump has taken so much attention and oxygen in this race, everybody else is fighting for a place. chris christie is going to be on that debate stage next week and he's counting on a strong debate performance to help him break through. >> the flow, did either of you order from flo, the waitress standing behind you looking on? she didn't like -- either she didn't like you, which i suspect, or she didn't like christie. one or the other. maybe she's conservative and she said e oh, harwood. do you know? >> no, she actually does not dislike christie. >> i didn't think she disliked you. >> i don't think she disliked me. >> i think she disliked you. where were you? >> lindy's diner in keene and we had a nice conversation afterwards. we talked about the minimum wage. she was giving christie a side eye when he was talking skeptically about the $15 minimum wage and she said she actually agreed with him, that she thought it would cost jobs and be counter productive. >> she liked christie. she did not like you. it's very clear to me. she was a -- probably a right of center person and said oh, boy, who came into my restaurant? john harwood. >> the -- we -- we -- we had a very good time together. the whole staff of lindy's was fantastic. they've had presidential candidates coming in. ronald regan was in there, barack obama was in there. they like to say if you're going to be successful you have to go to lindy's. >> you saw christie's skills -- i know you've been with the governor before. you get him talking and that's why i -- you know, i wouldn't count him out. we talked about that. unbelievable. >> he has very good political skills. >> very good. >> i saw him the night before at a town hall meeting. he was getting a hard time from various people and just handled it very well. none of the signature, you know yelling exchanges or anything. but just he went on for two hours. it was charming. the funniest moment was near the end this one guy, he had been bearing with asked him for two bucks to buy a beer. christie reached into his pocket and pulled out 4. he said, by the way, when donald trump comes here get 100 from him. >> we asked you about what it was really hinging on for him. for christie is it all about the debates and making sure he really makes a name for himself there? >> yes, but -- but more specifically in terms of states it's about new hampshire. he is not an iowa candidate. he's been there but he's not going to -- he's not going to be a top finisher in iowa. but new hampshire is really where he's counting on to make a breakthrough that gives him a ticket to go on try to get past south carolina some of the southern primaries, get back to the midwest where he can compete more effectively. >> does he make fox primetime or does he make the earlier show? >> primetime. he is just above the line for fox. in fact when i was looking -- i don't know which polls they're going to use for their average, but just as a way of getting the order of magnitude, i looked at the real clear politics yesterday. number nine is chris christie number 10, interestingly, is john kasich. and the people who are out under that scenario are people like rick perry, rick santorum and carliey fiorina. lindsey graham as well. carley will be interesting because there are a lot of people that would like to see her on the stage. >> john, thank you. great to see you. >> you bet. when we come back this morning, forbes unveils its list of top colleges. plus why china is making a big push to rewrite the rules of the internet. first, as we head to brake, look at the s&p's winners and losers yesterday. in the us, three in ten college students drop out. but how can you spot who's at risk? the one who lives far from campus? the one who works the night shift? the one with new responsibilities? one thing can't tell you, but the right combination can. universities are using ibm analytics to understand pressures in and out of the classroom- some expect to cut dropout rates by twenty-five percent. ibm analytics is working to make education smarter every day. here is a simple math problem. two trains leave st. louis for albuquerque at the same time. same cargo, same size, same power. which one arrives first? hint: it's not the one on the left. the speedy guy on the right is part of an intelligent system that creates the optimal trip profile for all trains on the line. and the one on the left? uh, looks like it'll be counting cows for awhile. so maybe the same things aren't quite the same. ge software. get connected. get insights. get optimized. so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep them all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberyy apple scones smell about done. ahh, you're good. i like to bake. with at&t get up to $400 dollars in total savings on tools to manage your business. welcome back everybody. forbes is out with the annual list of top colleges. the cover story, the new golden ticket. you don't have to code to get rich. how liberal arts grads are conquering silicon valley. four classic liberal arts colleges made it into the top 10. pomona taking the number one spot bumping last year's number one williams to second place. stanford princeton and yale dropped. m.i.t. snagged the tenth place. what are some of the common threads that landed the schools at the top? low faculty to student rates, generous financial aid packages. probably some wealthy alumnae who can help people in terms of making contacts. >> pomona number one, m.i.t. number 10? >> yeah. unhappy with that? >> no. i went to grad school. is alma mater a grad school? >> college, too. both of them. colorado was your undergrad. >> explains it. >> why would you not claim it? >> i don't know. >> and if the shoe fits. >> you know that joke -- >> what? >> about the bird the flu bird? >> if the -- oh, yeah. >> you almost said it. almost started to say it. >> this -- i dare mention this because you guys are just going to look at me funny, but you shouldn't be. this is a story about michael jackson. >> nothing anymore. >> michael jackson at the beginning of the show we talked about it. there is a glove that is available for sale one of his famous gloves right-handed gloves. >> a couple of them out there? >> there are a couple of them. this one being put up by nate sanders. bidding started at $20,000 for this glove and we should tell you that another glove was sold about six months after he passed away. >> there you go. thank you. there joe's doing a little bit. >> i can do it. >> now the thing that i can mention, in 2009 about six months after he died i actually put in a bid for the last glove. >> i can't believe you did that. >> for real. i actually went online but back then the minimum bid i think was a couple hundred dollars. i think i might have gone up to $5,000. >> why would you want this glove? >> michael jackson is a major piece. i saw it as an investment piece. i was not that wrong because i was blown out of the water. the glove was sold ultimately for $420,000. >> $5,000 would have been a good steal. >> you have some more assets. >> i'm not going to bid. >> would you bid on o.j.'s glove? there's a notorious aspect? i don't even -- >> i am glove -- >> i don't even want to know. i don't want to know -- >> i see past all of that. >> you see past pedophilia? okay fine. >> i'm not -- i'm not -- yeah. just who knows? it's far from me. >> it's what? >> this is a guy that loves kids. >> let me step in. i want to tell you guys -- >> step in because you just took -- >> saw this today, too. >> how -- $20 million to some kid to shut up right? >> four years ago you guys remember when things were happening and this was the arab spring was happening, governments were falling left and right, china was sitting up paying attention. we pointed to twitter, we pointed to social media, the internet as all of the reasons this was happening. china issued a huge washing. the u.s. was a shadow popular during those up risings present as a result of the internet. they're working quietly to rewrite the rules of the internet. >> scary. >> it's a little frightening to think about it from that perspective. i never thought of china looking at the internet saying this was the u.s. trying to make a play in and break down barriers and walls there. as a result, they think they can rewrite the internet. they are doing things like telling companies they can't use u.s. vendors anymore, they have to use internal vendors who will give them encryption keys. they're monitoring discussion groups and debates. kind of taking the internet as we know it and turning it on its -- >> i have to think about which is preferable those guys or wheeler and obama? >> in terms of -- >> of running the internet. i'd almost say i might give them a shot in terms of just being more free market oriented than what we've got here. china has moved through the decades. a little bit -- >> i wasn't sure. >> we took control of the internet here, which hopefully, you know doesn't go past a year or two. >> al gore invented it. >> yeah he did. he did. can i ask you guys about this? i mean in europe 400 years, digging up graves 400 years ago they're a dime a dozen. here it's really old, jamestown for us. did you see? we went in. i initially thought, here they are. here's the skeletons. i think we have shots of it. initially i thought kind of ghoulish digging these guys up. do you remember what happened when they dug up the mummy. how po'd that guy was? >> poltergeist. >> there were four of these remains found in the church. the church was discovered. a church from 1608 where pocohontas got married. ages 24 to 39. already dead. >> they were the elders? >> not necessarily elders but they were leading english men in the colony. one was a clergyman, another was in the military and they found -- they went all the way back looking at oxygen isotopes to discover, in their bones, where they were where they came from in england. they looked at other stuff in the grave with them. they identified all four of them by name by lineage and who they were and what they did. >> how do you do that with isotopes to figure out? >> i don't know. i thought about that for a while. i still have to figure out what part of england they were from. i just -- when they put these guys to rest did they know someone was going to be rummaging through their remains? >> as you said this is -- >> that's taken a lot -- >> that's taking a lot of liberties. do they believe in the after life? >> these are walt disney's cryogenically frozen. >> ashes to ashes. i'm not worried about what i leave behind. >> there will be a movie when these guys come back mad that they've been dug up. >> i assume you're freezing yourself because you want your brain downloaded later? >> no i'm planning on that happening before. >> "walking dead"? >> and gaim of thrones, zombies everywhere. money managers double the fun. special "squawk box" duo ready to tackle the summer swing. we'll talk about it when we come back. greece china, earning season and the fed make it a very busy earnings season. with a mid cease sovereign. we have the portfolio of the hodges fund. good morning to you both. >> good morning. >> people who make a living picking stocks they don't -- we can talk about the overall market because they always tell us, hey, that's a stock. that's the most important thing. let's just talk overall market for a second. has your faith been shaken at all in the last two months? >> we do think we're in the late innings of the u.s. bull market and that we're going to see continued volatility because of things that are going on in places like china, but let's look at second quarter earnings. they're coming in better than expected. the u.s. economy remains strong. we like companies in areas such as cyclical. they're trading at three month. above expectations is one thing. a lot of earnings are above last year or flat. a lot is energy related. dollar revenues haven't been spectacular. >> revenues across the board have been kind of challenging. we're looking at companies such as estede lauder. they just put in a new sap system which will help them reduce cash flow by a billion dollars. >> i'm intrigued by this year's stock market. 2014 it was three big selloffs 5% in february 7% in may and 10% in october but the market ended up 10% up for the year. this year it's just kind of been this -- there's never been any real selloffs never any entrenchments. we had the news to combat that. >> 5% for business. >> it's odd. >> it's been painful. we haven't gone up much. very frustrating year. it tells me there's a lot of money on the sidelines and every opportunity that's presented by the market is absorbed quickly. >> you like the stock, sarah just mentioned? >> i like estee lauder? >> do you have others of your own? >> yeah i have a few of my own. >> what are they? >> my favorite -- well this is an actual energy stock. i'm brave coming here talking about energy. matador resources is the change i'm making. >> what do you take off? >> joe foran was on your program a month ago. >> he was good. we like him. >> the stock was around 28.30 then, the stock is 21. it's the best small cap team in enp. they're incredibly efficient. they've cut their drilling times in half. their costs have dropped by half. it's $50. $48 oil. they're making 30 to 50% rates of return on wells. >> how much do you control your own destiny in the larger oil picture and natural gas picture? >> there's no question these stocks are driven by the commodity. i personally think that oil may be down for a little while but the bottom line if at these, you know -- when the commodity's cut in half and you can still make 30 to 50% just by your your efficiencies they're drilling better wells for less money. >> what did you sell? >> got out of eagle materials. we've had an incredibly wet spring and i think -- >> did you make money on that or did you have to sell it off? >> i think it was about even. >> we're fans of matador also. how do you think about their ability to manage cash flow versus their desire to spend on production in an industry that's notorious for making pretty poor capital expenditure decisions. >> i've been comfortable. we were in the stock two months after the ipo. the management team has delivered time after time. they're very good with their money. they're very great at geology. they don't try to do everything but what they are doing is very efficient. the bottom line is, they make money. they make money. >> where did you have it blown here? >> i can't remember -- >> no the x. something x. >> american x. >> skin head. >> history x. >> it was cropped. >> i think you shaved it too. >> in red dragon as will -- as one of the hannibal lecter movies. >> red dragon? >> yes. >> i can't remember the movie. >> great movie. >> it was the threesome, the triangle. >> excuse me? >> there was a triangle love story. get your mind out of the gutter. >> you said a triangle love story. you take me to the gutter. how am i supposed to stay out of it? >> brought to you by becky quick. >> thank you. you got that one. we're talking about edward norton obviously. and you're seen on stage. that was interesting. >> primal fear. >> primal fear richard gere. >> richard gere? >> altar boy accused of murdering a priest and the truth is buried several layers deep. >> i don't want to know the plot of that one. >> remember that? >> altar boy. >> andrew i think. thank you, reminder you can go online to cnbc pro to track the picks of all of our portfolio managers in real time and read their exclusive analysis. when we come back this morning, attention road warriors. a new startup wants to make your life easier. imagine a day when you don't have to pack a thing. show up at your hotel and your outfit is ready. we have that story next. welcome back. in sports news nfl commissioner roger goodell upholding a four-game suspension of new england patriots quarterback tom brady being punished for his role in using underinflated footballs during the afc championship game. goodell said the pats star told an assistant to destroy his cell phone on or just before march 6th, the day that brady met with independent investigator ted wells and the text messages reportedly could have contained details of brady's communication with equipment managers blamed for deflating footballs. the nfl players association is planning an appeal in court. just on personal privacy grounds if someone said i need to see your cell phone, i would say you can take my cell phone and put it where you're not going to see it. nobody has a right to -- look at what lindsey graham did. >> i don't know what the league's rules are on something like this. >> you can't ask someone for their cell phone. now you believe this. you disparage "the post." what additional information did you find out to believe that -- >> i don't know what happened but just from the reporting, if the reporting is accurate they showed a picture of her driver with her and then a pick ter of her driver with her in the burqa thing. i'm more inclined to believe it than i was initially because i didn't think it made a lot of sense. we got another story we got to talk about. there is a cool service i want to tell people about. global business travel reached trillions of dollars last year. nearly 22 million bags were lost. a new app is out and it's called duffel. it does packing for you. it does cleaning storing and shipping and it does it without you having to do much. bill is the founder and ceo of duffel. it's a new service. i wonder whether it's a sign of a top in the world in terms of the economy people willing to spend money for this. tell us about the service and tell us how much it costs. >> the service costs $99 a trip. what i mean by a trip is that is shipping to your location where you go on business and shipping back to our warehouse and then all of the cleaning involved. >> so the deal is i take my clothes and i send them to you. >> we send you a large roller bag and you send us back all of the clothes you typically wear on the road for business. we store them. we inventory them and put them in an app to decide what you want. >> pictures of your closet. you say i want this shirt and these shoes and i'll be at this hotel in san francisco next thursday. when you get to the hotel on thursday, it's at the hotel waiting for you. >> how do i get it back to you? >> when you leave, you signal in the app that you're leaving. we send someone to pick it up and bring it back to the warehouse, condition inventory, take pictures and do it all over again. >> it seems like it would work easier for men than for women. what's your client breakdown? >> right now 75% men and 25% women and it really does mimic real life. women's closets are much larger than men's closets. we average 80 items for women versus half that for men. >> can you make money at $99? i think the bag itself will cost $25, $30 per trip to send it back and forth. >> the model makes money. >> at 99$99? >> we make more money at scale is a better way to say it. >> there are services shipping services, where if you go on a trip you can actually send the package and send your bag ahead of time. this is a very different service in terms of the price point i would think yours isn't that different than sending your bag on your own. >> it's a lot less than sending the bag on your own because of discounts we get from carriers. you talk about luggage forwarding and that's a great service and there's been some successful companies at it. that's not what we're doing. what we're doing is storing all of your items and then -- >> it seems like a cost intensive business because you have people storing items, cleaning the items, putting them in the bag and doing this. so for $99, it's $99 a trip. >> correct. >> if i did this on a plane and if i wasn't a silver gold or whatever where i get free -- >> you'll have to pay for dry cleaning of the clothes you brought on your trip. >> it's a cool service. >> does it store other stuff? if i want makeup or hair spray. >> that's toiletries and full size. you don't have to worry about three ounce limitations that the airlines put on you. >> good luck to you. i hope it works. coming up the top stories of the morning and the great rate debate. jeff rosenberg weighs in on today's big fed decision. twitter shares plummeting. a comment from twitter's conference call that spooked investors straight ahead. >> it's fed day. jeff rosenberg will tell us what to expect. he is amazon wants to carve out space for delivery drones. the take on the future of unmanned flight coming up as the second hour of "squawk" starts right now. >> live from new york city, this is "squawk box." >> i'm with you on the brady stuff. come on. >> what about brady? do you think he should have had to give over his phone? hand over your phone. i want to look at what's on there. can i welcome -- i sincerely welcome everybody back to "squawk box" on cnbc first in business worldwide. robert wolfe, our guest host. took that number even though it was o.j.'s number didn't have any problem. >> i heard about the gloves. i would bid the michael jackson and not the o.j. glove and 5,000 was a good number back then. it was years ago. >> who has $5,000 to spend on some stupid glove? once again proving the 1%. >> joe, your dance moves -- >> more from robert coming up. first, let's look at u.s. equities future continuing the recent rebound after five losing session which is got us down into the mid 17,000s on the dow again and down for the year. but we're making our way back slowly. almost got 200 points back yesterday and another 35 or so indicated. had a great day in china on shanghai up 3.5% which is a big move for that -- that would be a 500-point move on the dow. >> that's still less than half of what they loss on one session. >> on that record day when they lost 8.5%. it's still up 70% for the year in the last two years. >> it just looks more and more like a casino and less and less like an investment place when you see swings like that. >> these government officials ought to be better at manipulating the market than they have been. >> in the meantime let's look at other top stories at this hour. social media giant twitter surprising the street to the upside beating expectations for the top and bottom lines but the stock fell on twitter's metrics. >> to be clear, however, we do not expect to see sustained meaningful growth in maus until we reach the mass market. we expect that will take a considerable period of time. what i can tell you today is we'll be bolder and raise the bar in everything we do to unlock value for shareholders. >> twitter has 304 million active users. that's just up 1% from last quarter. 88% of ad revenue came in from mobile. china stocks climbing overnight. a rally snapped the three-day losing streak with shanghai composite going up 3.5%. there's no news conference after the fed meeting. >> for more on expectations for today's fed announcement we're joined by jeff rosenberg, chief investment investment strategist at blackrock. there are some expectations that maybe the fed will raise rates in september. what does that mean? >> it means the end of a very long period, unprecedented period of low interest rates and uncertainty for financial participants for what that means. september raise shouldn't be a huge surprise. markets are generally pricing that in. not exactly on september but between september and december there's well expected movement that the fed will raise interest rates. what's the bigger issue is what happens after that? and this point has been made many times that it's not about when they raise rates first but what happens after that what is the full pace of increases. importantly back earlier this month in semiannual monetary conference she made a point that was clear and articulated the sooner but slower path of interest rate increases. that's raised our expectations. we had expectations for a while that september would be first liftoff but you have a gradual or more measured approach to raise interest rates to dampen any financial market impact. >> how would you tell investors to play that when it comes on fixed income? >> one of the issues going into the summer is we saw valuations in fixed income not reflecting a lot of risks particularly on the credit side. we came into the summer underweight credit. a big movement here. for reasons not so much related to the fed we've had a micromovement and talked about china and big commodity price shock going on. spillover effect isn't about the equity market but about china's growth and contributions so you end july here with a big deflationary fear. we came in with that risk showing up and risk of the fed saying you want to be more defensive going into the fed movement. >> with the deflationary fears you mentioned and with janet yellen talking about trying to get to 2% inflation, i'm surprised to hear you say that you actually think there would be a september move. would you put that above or below 50% because most of the clients i talk to think probably 50% december but probably more of 2016 than september. where do you gauge it? >> i have better than even odds for september. there's a big diversity of viewpoints in terms of should they liftoff now? should they liftoff later or 2016. you have inflation. the issue is also that monetary policy operates with a very large lag and so if you wait until you see the inflation actually showing up the risk is you're going to have to go faster. that's part of this argument about do i wait longer and then raise interest rates much faster? that's the risk of undermining financial market stability so you start a little sooner and that allows you to be more gradual in how you raise rates. we think that's how they're going to go. between now and then a lot depends on how the data shows up and whether there's another excuse or reason to defer from december or september. we see it as september for what we see now. >> why do you think stocks have been held back this year? we've gone nowhere. >> people are nervous about the strengthening of the dollar and the geopolitical risk around the world is heightened and i also think that there is a nervousness of rates rise that has been overhanging now since mid year and then we see slow growth which i think puts everyone in a skeptical position of okay when is it happening? >> what happens if the fed actually raises rates by a quarter point in september. is there relief in the markets that, okay we've started or is there additional fear that okay, we don't know what comes next? >> i think everyone likes to know what's going to happen. no one likes to guess. once it starts we know it's the beginning of starting. i think actually you'll see a lot of money back into the stock market. it feels like earnings are going to be doing better and the u.s. is the place to go. i do say the strength of the dollar is something we have not dealt with over the past five years for a while. we're not sure how it's going to impact trade and capital goods and exports. >> if there's going to be tightening that steve liesman has been talking about all the time which is somehow does the fed have to signal to the market that it's coming before it actually comes? feds fund rates, all of that is a signal coming or will it just surprise us? >> the fed doesn't want to surprise you but at the same time they said they're not going to telegraph for example in this meeting that the next meeting they're going to raise rates. so the way in which they're going to signal if anything and what everyone will focus on today is what's their assessment of the economy? how do they characterize jobs and labor markets and assessment of oil prices and do they use transatory factors and talk about wage inflation? we'll get the eci report which is a key economic report on wage conditions. we'll get that after the fed and so that's going to tie into market expectations. it will also be in the speeches ahead of september as to how they're signaling viewpoints on the economy and letting that be the signaling opposed to an explicit signal out of the statement that they're going to raise rates. >> i was going to say, jeff being the largest fixed income player in the world, where would you recommend that people put money in fixed income since you talked in a neutral bearish tone on the fixed income market. >> the big issue that we'll see more of this going forward is to think a little bit more broadly about your fixed income exposure and think more globally. so when we look at where monetary policy has been over the last six years, it's been a monetary policy of everyone is doing the same thing and what we're going to see is monetary policy will evolve where we have easing policy in some regions and fed is tightening so global fixed income exposure is more important. if we think of the slowdown in china, where is that going to lead to the greatest benefit. you're going to have a lot of pressure on the reserve bank of australia and pressure on the bank of korea to lower interest rates and so using fx hedged global interest rate exposure that allows you to get better exposure outside of the u.s. that's one example. another example is going to be inflation linked bonds if we talk about the fed that's getting more comfortable about inflation and talking about a norm normalization. you talk about normalization of inflation. not big increases in inflation but rising inflationary environment are two examples with we think fixed income investors will be better served. >> jeff thank you for joining us today. robert will be with us for the rest of the hour. coming up, when we return we'll talk politics. he raised more than $1 million for president obama's campaigns. your friend the president, said he could do a third term and would win and then the dramatic swings in the chinese stock market and a spicy quarter for buffalo wild wings. stock rising sharply and ceo sally smith joins us first on cnbc and is bringing wings to the set. "squawk box" returns in a moment. welcome back to "squawk box," everyone. breaking news this morning. afghan officials say the taliban leader omar has died. he's been one of the most targeted taliban leaders. the state department has been offering a $10 million reward for information leading to him. >> what does that mean has died? >> it means we didn't necessarily target him. >> he was so elusive. so many times we had him in our sights. he was number one on the list. this is markets ought to go up. i don't want to say anything. it's crazy the world is. new jersey governor and gop hopeful chris christie making rounds in new hampshire earlier. we showed you the part of john harwood's interview with the governor and on one other contest. here's what christie had to say about growth. we'll see if we see flow again. >> my proposal is substantive and based upon the facts on the ground about social security. this is not just about growth. growth is important to every element of our economy and i have a plan to deal with growth. you still have to deal with facts. >> let's talk more about the race for the white house right now with our guest host robert wolf ceo of 32 advisers and obviously you're a big -- what were the big guys for the president called? bundlers. >> i don't know what they called them. >> what did you call them? >> friends of the president. i have no idea. >> you were a key guy. >> i raised a lot of money for him. >> with that in mind now we'll talk about your viewpoint for this next election. hillary has a clear path you just said. o'malley -- >> it doesn't feel to me that o'malley or saunders will get there. it feels like clinton will have a clear path. >> there's questions about whether biden runs. >> everyone likes the vice president. likable guy. i think at the end of the day -- >> there are only -- out of 40 e-mails, they found four that should have been classified. o'malley, he shot himself in the foot by saying all lives matter. who would say that out loud and say -- he ought to just resign from even trying to -- >> i met the governor. he's smart guy. >> why did he apologize for saying that? >> i think that it's laughable to fold under pressure like that. >> i was going to talk business. >> you can't defend all lives matter. you can't say i said it and i meant it. >> what i would say about o'malley is when he starts bringing backbreaking up the braekeaking up banks, there's a small slice of the party and it's not where the country is. >> it can't go after hillary for the more central viewpoint. >> were you advising her on how to think about how -- >> i'm going to quote someone who is very smart and wrote in his article that she is starting a useful and meaningful conversation. >> i think it is a meaning conversation. you may not think it's a meaningful conversation. >> i listened to both of her last two economic speeches. my perspective is that really the whole lessons of trickle down economics is no longer working. it hasn't worked the past decade and her platform is talking to that. you know as someone who is a big reagan fan, you know i loved it then. it's not working today. >> i totally and completely and wholeheartedly disagree with that narrative. last decade we've had your president in for six or seven -- seven out of -- eight years it hasn't worked. that wasn't trickle down. the reason it hasn't worked is because it wasn't trickle down. >> it's up 2%. it's up 2%. >> trickle down government maybe. we have not instituted trickle down growth policies. i'll even say we've done the exact opposite. i don't need to say exact if i say opposite. we haven't done anything close to what trickle down would have called for. i think by definition -- by definition growing the pie -- there's two ways of doing it. you grow the pie or take existing pie and redistribute it. i said by definition to say that growing the pie isn't the right approach to an economy is just logically -- that's what trickle down is. >> you look at the fed -- >> when you say trickle down you're not talking about the fed. you're talking about government policies from congress and the lawmakers that try to spur private sector growth. >> i think the fed changed everything. i think the fed called more shots than washington has called. >> because washington has been gridlocked. but to say the last ten years trickle down hasn't worked, we haven't been doing trickle down. >> i would debate you on that. >> when you're stuck at sub 2% growth -- >> we've been stuck at 2% because housing is normally the thing that speeds up the recovery and it didn't because we never have been in a housing market like we were the last five years. >> or because all of the regulations that went in made credit difficult for small businesses and homeowners that housing can't recover because of overshooting on the regulatory front. there's two sides to every argument. >> i agree. that's why we're on opposite sides of the table today. we should sit next to each other. >> i saw it in the notes and thought now -- it's the narrative. we heard that '80s and '90s were -- the great growth policies -- i have seen people come in and say we tried these things before. >> i'm a huge volcker fan. >> how can you be a reagan fan and -- >> the world is different today. >> the more the world changes the more it stays the same. growth policies will work. >> major distinction. technology and globalization. i said the same thing over and over again. that's the one thing that has changed. >> then we need to find growth solutions that address both technology and globalization. we don't all of a sudden just divide the pie more equally and think that's going to work. you need to grow. growth solves everything. you said we're stuck at 2% growth. the guy goes with the current policies and productivity that we can't grow. this is maximum growth. who was that that was on? he said no it's not that we're stuck there. it's with the current regime and with the current way we're approaching things we're at 2%. >> you're convinced we can get to 4%. >> well above 3three. hopefully four. >> not a sustainable way to live. >> 3% is what we definitely in this country -- >> normally post-recession half is housing and 1% is consumer and -- >> we've done 6% and 7% at times. >> disproportionate amount was housing which is coming back. >> we're back to what's causing that. now we're back to what's causing the slowdown in housing. and then you throw in obamacare -- >> that's been a positive. >> i disagree with that as well. all of the other regulations. you never get rid of old regulations. >> what regulations? >> there's regulations across the board he have year we have -- >> there's regulations being decommissioned across the board. you throw allout all of these things. >> you don't think there's more regulation? >> there's larger regulation. >> that's not accurate. regulation and what's been demissioned and what hasn't been. >> it's been the way the obama administration -- i'm trying to play both sides on this. it's the way the obama administration said it would get things done because it can't get past congress. >> there's been large regulation. dodd-frank no question about it. >> what it cost businesses to comply year after year is billions and billions of dollars and why do you think there are so many part timers. we can't go above 30 employees. there's a million reasons why we're stuck in the muck right now. none of it because of our way of our economy and our workers. >> i get the feeling we haven't resolved anything on this just yet. we will continue this conversation and talk about other things too. when we come back another beloved '90s sitcom getting a reboot. that story straight ahead. americans are keeping their cars longer. phil lebeau has data out this morning. stick around. "squawk box" will be right back. 40% of the streetlights in detroit, at one point, did not work. you had some blocks and you had major thoroughfares and corridors that were just totally pitch black. those things had to change. we wanted to restore our lighting system in the city. you can have the greatest dreams in the world, but unless you can finance those dreams, it doesn't happen. at the time that the bankruptcy filing was done, the public lighting authority had a hard time of finding a bank. citi did not run away from the table like some other bankers did. citi had the strength to help us go to the credit markets and raise the money. it's a brighter day in detroit. people can see better when they're out doing their tasks, young people are moving back in town the kids are feeling safer while they walk to school. and folks are making investments and the community is moving forward. 40% of the lights were out, but they're not out for long.they're coming back. more and more, data is visual. in fact, the number of mris has increased by ten percent a year. and a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. because it's so challenging a research project is teaching ibm watson to see. in the future, it could help clinicians spot key patterns quickly and precisely. ibm watson is working to make healthcare smarter every day. finally good news. hollywood news this morning. "married with children" reunion. >> put your hand in your pants. >> reunion is in the works. the actor that played bud is developing a spin-off. sony is behind the project. no word on who will take part but the whole original cast will have at least a small part. "married with children" had an 11-season run on fox that ended in 1997. the main players have gone on to great things. al bundy is now on "modern family." great on that. christina applegate has had a great career and katie seagal huge on "sons of anarchy." great as the matriarch in that. >> loved it. >> i'm not a sitcom guy but i loved that show. >> al bundy and homer simpson are my heroes. coming up china stock market problems aren't going away any time soon it says here. we called in a squawk market master. form a new season brings a new look. a chance to try something different. this summer, challenge your preconceptions and experience a cadillac for yourself. ♪ the 2015 cadillac srx. lease this from around $339 per month, or purchase with 0% apr financing. so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep them all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberyy apple scones smell about done. ahh, you're good. i like to bake. with at&t get up to $400 dollars in total savings on tools to manage your business. ♪ every auto insurance policy has a number. but not every insurance company understands the life behind it. those who have served our nation. have earned the very best service in return. ♪ usaa. we know what it means to serve. get an auto insurance quote and see why 92% of our members plan to stay for life. welcome back to "squawk box." among centers front and center this morning, better than expected earnings in revenue for altria and announced a $1 billion stock buyback program. mixed quarter for northrop grunmangrun grumman grumman. >> data on how long americans are holding onto cars. phil lebeau has the numbers. it's like 11 years or something all those beaters on the road we look like we're in cuba. >> i don't know if it's that bad, joe. it's get longer. it's now at a new record high. 11.5 years is the average age of a vehicle on the road in the united states according to new data out this morning which is tracking vehicle registrations to see how quickly our vehicles have aged on average go back to 2000. on average they were about nine years old. now they're 11.5 years old. even more astonishing, 22% of all vehicles on the road were built before the year 2000. if you have a '98 civic, congratulations. you are not alone. the average new car is held for a new high of 6.5 years. average used car is held by the buyer for an average of 4.3 years. here's the ihs automotive analyst to put this data together on why so many people are driving these old cars. >> there's people driving these older vehicles and they continue to hang onto them longer whether it's economic factors that keep people from purchasing a new vehicle all of the way to simply better quality vehicles and they don't need to scrap them out at the rate we did in the past. >> bottom line these are better made vehicles and as a result the repair business the auto after market business is booming. in fact, if you want to look at the hottest stocks in auto sector, a lot want to look at tesla and talk about those stocks that are going crazy. look at these guys. good old fashioned auto parts. o'reilly, auto zone, these guys are in the sweet spot of the market because there are older vehicles out on the road and people want to repair their own vehicles or take it into a shop. the bottom line is we are not yet at a point where we are seeing the average age hit a high. we're going to see it in this 11.5 year range for a while and then maybe it will plateau. it's still ageing out there in terms of the vehicles people are driving. >> 17.5 million. that's amazing if things ever get going, it should be really good for the auto sector you would think. >> well yeah we'll see that age plateau because we're at near record highs and we're now selling more new vehicles than scrapping vehicles. so that age is going to plateau here soon but make no mistake. there are a lot of people driving pre-99 models and they're happy to drive them because of the economics. >> makes you wonder about the whole 5.4% gdp that we're supposedly in and unemployment rate that we're supposedly at and it just makes you wonder. no one feels that -- you're right. they're repairing cars but people aren't ready to just go out and blow money on a new car either. they are not feeling like this is a great economy yet. >> but joe, we'll get auto sales on monday and on monday we will see the u.s. do something we haven't seen since the year 2000. three straight months with the auto sales rate above 17 million vehicles. there are people out there buying. there's no doubt about that. >> there are. it just -- stephen roach is here. you have been complaining about consumer for a while. thanks, phil. >> we'll turn to china right now to the new leadership there struggling to limit the recent collapse in the stock market. trillions of dollars of value lost from chinese equities in recent weeks. the government is planning to purchase some additional shares to prop things up even more. how much longer can china's rescue squad keep intervening? "squawk box" master stephen roach is here. the manipulation continues. how long can it last? is it even working? >> look this is the classic unwinding of a levered asset bubble. it's been driven predominantly by relatively young and inexperienced, undereducated retail investors who boosted margin purchases of stocks by three fold in 12 months ending june 12th of this year. so there's a lot of pressure that's still on the downside as we saw with the market action on monday. >> but when you think of what the government is trying to do. both in terms of inspiring a lot -- they created the conditions for a lot of this to happen the first time around. but now in terms of as it comes down, are they just trying to soften the blow? what is the strategy? we always think they're so smart but maybe not. >> i don't know if they think they're so smart. they made a mistake in condoning a levered asset bubble. this is a big deal not from the standpoint of what it will do to the real economy. i think the economy is going to avoid the hard landing that everybody is convinced that this route signals. >> that's an interesting point. we do talk a lot about the market. there seems to be a disconnect or at least a worry about contagion in the economy but people like yourself -- >> look the way that markets impact the economy is through the wealth effect which hits consumers. irony of china is the consumer sector is de minimis. it's 36% of the gdp half of the consumer sector share in the u.s. and furthermore, the wealth that was generated was in such a short period of time in china that these young, inexperienced under educated investors didn't have time to adjust their lifestyles. >> there's a difference between easing and putting in controls. and i think what china is trying to do and we use this phrase on wall street all the time is catch a fulling knife and controls usually just don't work. >> wait, you're telling me that monetary policy works and they should be like us and throw qe into their market? >> what would you recommend they do? >> i think the regulatory approach which is a surgical effort to deal with the market would be better than a broad instrument of quantitative easing. >> it won't stabilize the market. it will bring it to a point where it's back to fair value. >> we don't know that. they have enormous firepower with their regulatory back stuff on close to 500 billion they're prepared to put at work in buying stocks. they still have stock trading suspended on over 530 shares in their combined exchanges right now so it's hard to get a read on what the sort of natural forces that are at work in the market right now. again, margin calls, unwinding of these levered bets clearly underscores the potential for more downward pressure. >> would you invest in china right now? >> right now, no. right now, no. i think over the long haul this economy shifting from a producer model to a consumer model, yes, absolutely, yes. >> let's say you have a five or ten-year horizon. you wouldn't put money in right now? >> i'm not too far away. >> how much more downside is there to go then? >> i don't think we know. it could be another 10%. it could be another 20%. i would -- you never can tell. >> what does this mean? the country's security regulator is investing share dumping incidents that occurred on monday. when you have the government looking into the idea that people are selling shares. are they going to make that illegal in this environment? >> i don't think they're outlawing selling of shares at this point. there was a same type of complaint from firms that were getting obliterated in the u.s. in late 2008. they have requested that certain state sponsored investors refrain from selling. >> you heard me reference your viewpoint about the american consumer with phil lebeau. i thought we would start quickly with that so you could finish it. does it explain that we're still not -- 12-year-old cars on the road. >> i heard your discussion talking about housing. the big story in this recovery that's holding us back is 1.5% consumption growth we've been on for seven years plus. consumers were battered by a levered asset bubble and they have yet to fully recover. >> it doesn't feel like -- >> if 5.4% unemployment rate was real, we would have consumption growth tracking at 3, 3.5%. it's tracking at 1.4. you're entirely right. >> people still -- if you ask them a lot of people think a majority of people say we're still on some type of recession. >> would you say that's an employment situation or a wage problem? >> i would say again overhang of excess date and lack of saving and there's real wage stagnation that continues to overhang. >> once you get to the point where people are competing for skilled workers, wages go up. it's much better to do it with people need -- always better to do wage and price controls. they dislocate things. the minimum wage is a wage price control. >> we're in a recession and we're still in it. that's the bottom line. >> stephen, thank you. coming up buffalo wild wings reporting earnings and revenue. i looked at you and said where did you come from? a chicken place. then i realized it was buffalo -- stock rising sharply on the same store sales stronger than expected. ceo sally smith will join us next on cnbc. can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit? can a business have a soul? can a business be...alive? you total your brand new car. nobody's hurt,but there will still be pain. it comes when your insurance company says they'll only pay three-quarters of what it takes to replace it. what are you supposed to do, drive three-quarters of a car? now if you had a liberty mutual new car replacement, you'd get your whole car back. i guess they don't want you driving around on three wheels. smart. new car replacement is just one of the features that come standard with a base 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really waiting to see how we comped over last year's strong same store sales due to the men's world cup and with 4.2% at company stores and positive traffic, i think that sent a very strong message that we had a really great quarter and that we could continue to drive traffic even when there weren't specific sporting events that are guests could watch. >> pretty interesting. people then are sort of making the decision to buy the stock not based on what could be a transitory increase in your costs but based on your ability to bring people in to the locations without the world cup. that was a big deal. there was so many games and a lot of times you see excuses with companies saying last year we had this or we had olympics or whatever. it's a real thing and you were able to go beyond that. so people don't care about chicken prices being up. >> well i think they had been monitoring and saw that chicken wing prices were up overall i think while we were up a little bit in our cost of sales, it came in below what we expected. we saw nice leverage in the rest of our market basket. i think there's a couple positives out there. we announced we would acquire 41 stores in texas, new mexico and hawaii. that gives us some nice runway in terms of cash flow and net earnings as we go into 2016 and beyond. i think the fix that we were positive in driving traffic and positive traffic numbers, compared very well with the industry where you have seen traffic flat or down in the second quarter. >> people drive there, right? would you say that you're finally seeing $47 oil reflected in your traffic or still not? >> i think -- from a macro standpoint sometimes it's hard to tell if gas prices are affecting us. on macro standpoint if it affects others it's probably affecting us as well. i do think that we've executed very well. we've introduced some great new menu items and we had a focus on the world of sports going up against last year's world cup. so giving our guests another reason to come in. >> have you jumped totally on the bandwagon of you watch some of the fast food places dealing with the perception that it's not healthy and that gmos and the whole fad of going to healthier food. i don't know. chicken skin is not very health healthy, is it? you would not serve these at a health club, right? are you going to keep doing what you're doing or are you going to change it? >> you know i think the guest comes to us for the wings, sauces and it's an indulgence let's face it. we have a number of things on the menu for the guest that maybe chooses not to have traditional wings. we have boneless skinless chicken breasts and great salads. you have to have a variety. do i think they're coming in to eat wings every day? no. i think that we're always looking for ways to not only improve food quality but pay attention to what's going on in the marketplace in terms of what that guest wants whether it's antibiotic-free chicken, which it always has been and as that supply chain and as producers and more pressure is put on producers, we'll be beneficiaries of that as well. >> we talk a lot about how valuable sports has become content-wise and you just watch what networks have to pay to secure the rights. sometimes i think you can almost look at your stock and sports has become more and more valuable and people want to go to buffalo wild wings to watch these sporting events and it gathers more eyes. it's amazing. it's not that simple. it's your great management style as well. >> sports definitely drive. we have a great environment for friends to gather. >> you do. and still haven't done what i suggested with the six wing chicken. it would be cheaper. >> you'll be the first to know, joe. >> you want me to talk to someone? i can talk to someone about getting a six wing chicken going? two wings per chicken. that's crazy. why not get six -- okay. do what you want to do. thank you. appreciate your time. >> thanks joe. when we come back this morning, our guest coast robert wolf is a veteran of the banking industry but his new company focuses on drones as a service. robert will explain when we come right back. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver? for 30 years our guest host has been in investment and now he's expanding his company to the service use of drones. we've heard about the retail consumer drone. everyone is getting into gopros now. that's not your business. >> not at all. >> so we focus on commercial and industrial use and focusing on four sectors. precision agriculture. we just finished the feasibility study with the american farm bureau on having farmers and ranchers use drones for productivity and efficiency. >> to monitor what's going on on a farm? >> from monitoring the soil and water retention to spraying pesticide pesticide. we're focused on energy and power. we did a work in africa with utility line that was in vegetative state and working with one of the largest pipelines in canada on inspection. >> where is the faa on the commercial use of drones? this actually seems to me somewhat safer because it's over a farm and it's professionalized where as i don't really want to be running around new york city or somewhere else with drones flying over me. >> there's a huge difference between consumer use and commercial and industrial applications and the faa is moving more quickly these past six months than they have in the past years to make sure that people understand the regulatory environment which we need one. so to fly not near airlines and not near airports. that's not what we're doing. we actually have put in faa section 333 application to fly drones in a legal and safe and secure way. our focus is it's a business. and i will tell you being on wall street for a near 30 years has been exciting but i wake up and i'm just amazed. we're talking anti-wildlife poaching in jungles. we're working with insurance companies on risk assessment. i'm telling you -- >> make sure they are monitoring traffic. >> every day we walk in and there's a half dozen different ceos reaching out to us talking inging about how to use it. >> thank you for coming in. great to spend time with you. you guys go to lunch? >> we play golf. we go to lunch. >> we're just a little different. >> he's a lot different when he's not on tv. >> i see. when we come back it's launch day for windows 10. the point man for the new free operating system joins us right here first on cnbc and then we'll talk tech valuations with sun microsystem founder scott mcnealy. don't want to miss it. back in a moment. ♪ ♪ ♪ ♪ isn't it beautiful when things just come together? build a beautiful website with squarespace. why should over two hundred years of citi history matter to you? well, because it tells us something powerful about progress: that whether times are good or bad, people and their ideas will continue to move the world forward. as long as they have someone to believe in them. citi financed the transatlantic cable that connected continents. and the panama canal, that made our world a smaller place. we backed the marshall plan that helped europe regain its strength. and pioneered the atm, for cash, anytime. for over two centuries we've supported dreams like these, and the people and companies behind them. so why should that matter to you? because, today, we are still helping progress makers turn their ideas into reality. and the next great idea could be yours. decision day for the fed. countdown is on. is the table set for a september liftoff? that debate straight ahead. microsoft rolling out windows 10 today. no lines. little fanfare. can the new release give the slumping stock a boost. a top executive from microsoft is here to tell us. >> twitter shares tanking. slowest user growth since going public. scott mcnealy joins us to talk about the high flying tech sector, social media boom and big time valuations. the final hour of "squawk box" begins right now. >> live from the most powerful city in the world, new york. this is "squawk box." >> welcome back to "squawk box," everyone. this is cnbc first in business worldwide. i'm becky quick along with joe kernen and andrew ross sorkin. we've been watching futures this morning indicating higher once again this morning. you can see dow futures up by 48 points above fair value. s&p values up by six. nasdaq up by 18. this is coming after the dow is up by 189 points yesterday. let's get to some of the stories that investors will be talking about today. the fed wrapping up a two-day meeting this afternoon. a policy announcement is due at 2:00 eastern time. this time around there's no news conference. also new housing data this morning. mortgage activity up just slightly in the latest week despite a drop in rates. that small gain was driven by refinancing applications. and overnight in asia chinese stocks staging a late-session rally to snap a three-day losing streak. shanghai composite closing up 3.5%. in today's top stock to watch, twitter earnings and revenue topping estimates but that's not the news here. it's monthly average user numbers grew at its slowest pace since its been public. the ceo calling this unacceptable and a warning that a problem with stagnating growth won't get better any time soon. >> to be clear, however, we do not expect to see sustained meaningful growth until we start to reach the mass market. we expect that will take a considerable period of time. >> here's what internet analyst victor anthony told us earlier this morning about all this. >> investors are punishing stock for the lack of user growth and second thing also engagement decline from last year. that's an issue. he also talked about different product launches and iterations that they announced and talked about in november and nine months later they talked about those product launches failed to drive user growth. that's a big issue. >> shares of twitter this morning expected to open down sharply by 10% at the moment. procter & gamble confirming that david taylor will replace a.g.lafley. he caught up with a.g. lafley on the phone last night. >> it's fairly simple. david has a broad array of experience around the world, across our businesses, and he delivers consistently. and that's what we're looking for. someone who could operationalize the strategy with excellence somebody who had a real track record. somebody that's an outstanding leader that people will follow. >> results will be reported tomorrow and then the cfo will join us on "squawk box" to break down numbers. >> let's talk about a few other of today's big stock movers. shares of yelp are down sharply. the consumer website operator posted a surprise loss. its current revenue view is far below what was expected. the chairman is stepping down to pursue other interests. another firm he's been working on which is taking on some of the big banks and that's where his interests are headed at this point. stock is down by 20%. also glaxosmithkline topping better than expected sales. lower profit margins and that stock is up by 3%. panera shares are tradinge inging higher. restaurant sales were a bright spot picking up during the quarter and that stock is up by 6.5%. check out shares of akamai. current quarter revenue and profit below estimates. blaming the strong dollar. that stock is down by 8.5%. major moves today. let's check out citrix shares. ceo mark templeton is retiring. that stock is up by 4.5%. >> microsoft rolling out windows 10 this morning. >> microsoft launching windows 10 operating software including integration of a virtual assistant and microsoft edge. that's the replacement for explorer. this is going to be available windows 10 for upgrade from windows 7 and from windows 8. i had the briefing from you guys and corporate vice president of microsoft windows and devices group. i'm impressed with what i've seen so far. the split personality of windows 8 where you were taking me from a tiled experience to an old desk top desktop. that's gone. edge browser has nice features. this touch world is blended. a couple things for investors. let's go there first just to get that out of the way. are going to be big. one is this pc upgrade cycle. a lot of analysts saying you can download this for free if you're on windows 7 or windows 8 so they're not expecting a big pop from this operating system. microsoft even said don't expect much until the second half of the fiscal year which is basically 2016. is that pessimist? the operating system looks good. there are a lot of consumers who haven't bought a new pc in a long time because they've been buying phones and tablets. how long is the consumer upgrade cycle? usually it's three or four years. aren't there people with five or six-year-old pcs who may be enticed to upgrade when they see what this can do? >> this is the best windows we ever built. >> i would hope so. >> if you look at reviews last night, they've been overwhelming positive. we've been, knock on wood, gratified to see that. two things will happen here. one is this upgrade. we have a goal to get to a billion users in three years and the upgrade is going to lift tides for all boats as people see the great experience with the free upgrade. the way the pc cycle will go is two-fold. you'll have new machines that come out this holiday that will be take advantage of special features of windows like hello where you can sign in with your iris automatically or better mikes or devices with pan or touch. people will want to buy pcs because of what windows 10 will unlock. lastly in enterprise it's the most secure version of windows. this will have enterprise want to move quickly more so than in the past. >> they didn't upgrade to windows 8. i've seen some analysts say that they think windows 10 enterprise will jump at. >> the question i have is office 365. steve ballmer was windows first. he's cloud first, mobile first. so are people going to be more likely to sign up for office 365 and spend that 70 to 100 bucks a year to get access to office apps because of windows 10? do you have a nice enticement if people sign up for windows 10 that makes them want to pay that subscription fee for office 365? >> for consumer what we've done is designed windows 10 to run off us perfectly. you can have multiple desktops and use office in ways you can't in other operating systems. on the enterprise side we worked with windows 10 office to have a complete story for enterprise all of the things based into windows 10 office will run well on that. that's the story. we want to be able to be cognizant of the cloud first mobile first world and we're built for that. >> i've now become -- you may think this is crazy. on an apple phone i have outlook now on my phone. that's something i would have not done a year ago. how important is that component of getting people on the 365 program? or is it unrelate edd. >> we've focused on getting to happy and engaged people that use devices wherever they go and embracing that notion as you were saying. let's get people trying the systems and services on any device they use and over time do a good job and they prefer that. >> you said our devices. it's not just about your devices anymore. you chase people down on other devices. i use one drive, one note and office on this for the longest time i couldn't do it in a good way because you sort of crippled it on other platforms because you wanted me to switch to windows and i wasn't doing it. >> this is a recognition that we know people use a variety of devices and a variety of experiences and i think our aspiration is build a great service across those and if you do a good job, over time you can have a value prop. >> how much money will you spend to market that? i discovered outlook on this and how good it is through word of mouth and people who were early adopters have recognized that this is actually a really great app. but i don't think that most people in the world know about it, appreciate it or anything like that. >> it's a fair point. it's catching on pretty well. part of the strategy we've had now is let's get back to doing what you said. let's get people who are excited to spread the word and then part of what we're doing as you've seen with windows 10 is make a free upgrade. let's get that out broadly. combination of getting both of those out. >> early adopters may not have known that. i know that because i wanted my work e-mail on all of my devices and found a way to do that. i probably got caught on the tail end of that. >> many thanks. it seems like you guys are laid back about this. windows 10 it's out there. check it out. you're not making the hard sell like you used to. >> biggest proof that we're going after in a big way is we made it free. we've never done that with a version of windows. all features you listed up front, intelligent agent, xbox app, most secure version of windows, huge innovation for free as an upgrade. >> who made that call? >> it was made with the leadership team. let's repivot the whole idea about building the biggest ecosystem and a billion happy and engaged customers that will drive the business of the company forward. >> awesome. thanks. >> thanks for coming in. when we come back decision day for the fed. countdown is on and it's now less than six hours away. investors will scour the statement for signals to the timing of the first rate hike. we will hear what the tea leaves are telling us. "squawk box" returns in just a moment. er outages in the us are caused by weather. but utilities can now predict where the power will go out, within a few city blocks. working with ibm they're combining micro weather forecasts with detailed data from local sensors. to predict where outages are likely to occur. and send crews exactly where they're needed, when they're needed. ibm analytics from the internet of things is making energy smarter every day. these two oil rigs look the same. can you tell what makes them so different? did you hear that sound? of course you didn't. you're not using ge software like the rig on the right. it's listening and learning how to prevent equipment failures, predict maintenance needs, and avoid problems before they happen. you don't even need a cerebral cortex to understand which is better. now, two things that are exactly the same have never been more different. ge software. get connected. get insights. get optimized. the drought is affecting all of us. at pg&e we've definitely put a focus on helping our agricultural customers through the drought. when they do an energy efficiency project and save that money they feel it right in their pocket book. it's exciting to help a customer with an energy efficiency project because not only are they saving energy but they are saving water. we have a lot of projects at pg&e that can help them with that and that's extremely important while we're in a drought. it's a win for the customer and it's a win for california. together, we're building a better california. >> it's all residual of 2008. if i said to you, the end of 2008 beginning of 2009 that we were going to begin the longest economic expansion in history and greatest bull market in history, you would have me arrested. we've been optimistic but by in large we're setting up for what looks to be the biggest bull market in history. >> that was leon cooperman on "closing bell" last night sounding optimistic. let's get into our market discussion with brian and chris is here freshly lyly promoted to chief investment officer and cio of u.s. trust. congratulations on the new gig. it's relatively new? >> relatively new. >> is leon cooperman right? >> i love it. i love everything he said. >> you want to bathe in it? >> in 2008 chris and i were at merrill lynch together when merrill was merrill and what happened was you had the largest asset shift in the history of our country. went from anything to do with inequity to fixed income. they bought fixed income for one reason only. they thought they wouldn't lose money. he is flat right in terms of what he's saying in terms of stocks. we have to think about from an investing standpoint is last 15 years was about china, anything but america. the next ten years maybe in 15 years is going to be about america and market growth period. >> this is not a straight line. >> never is. >> never is. are you looking for a serious -- i don't know if you call this a pull back. it's a flat nothing. rare that you go more than six or seven years without a crisis. >> i would argue that we've had quite a few mini crises. go back to last year september through october. we had a 9.97% pullback in a matter of a couple weeks. we haven't had a 10% pullback. that's a 10% pullback. we had 19% pullback august to september so we've had mini crises left and right. from a pullback perspective, everyone is looking for that big flush. we won't get the big flush. the big flush has happened and that was obviously the '08 and '09 correction. a point that brian made before about fixed income is that not that people went into fixed income, as rates came down and returns came down overall, they actually increased their fixed income as they were going in to what they used to have thinking yields would come up and they would get that carry. it's never coming. that carry has been gone away. it's been flushed away. equity returns that we saw from '09 through into last year were above the hundred-year returns. we'll go back to hundred-year returns. so that to me is a good market. it's a lengthening bull market. leon is right. people were scared to death and it's hard for them to come back into equity risk culture. >> china? you guys don't care? does it matter? >> well -- >> with commodity prices is that related? >> there are cycles that run in stages. we right now are fixated around the world in reactionary stage but more importantly, investments run on scarcity and capacity. right now there's capacity in china they have to work off of it. what's the scarcity proposal is stability and consistency and that's what we get from equities and developed markets here in america. so as volatility increases, we actually think that jobs and work and capacity is coming back to america slowly. china has to work down its capacity next few years like america did between '99 and 2009 during our lost decade which by the way set us up to be fundamental sound for the next 20 years. >> you're nodding. >> i'm nodding because -- would you tell clients to invest in asia or emerging markets right now? >> asia is a broad play. non-china investments. stick with that. china related investments, it's a massive restructuring. there's a lot of manipulation in the stock market. if you just kind of pull back a second and say where does risk adjust to capital go? capital go is to the greatest risk adjusted return regardless of what asset class it is. if you use that as your core principle, you look at the themes whether in the united states or europe or asia across asset classes and that will give you your core principle on how to build a portfolio. it sounds elementary but it should be. that's what you start with. in the united states most of them are there regardless of what goes on day-to-day that we all are pessimistic about. >> so why has the market gone nowhere this year? do you think people are misjudging risks out there right now? >> valuations got to a certain level. most people said overvalued because they point to the lows of pes of 12s and 13s. when you get to 17 everyone exhales. that's a good multi ple. when you dig through into the shadows, our growth rate our gdp that says 2.5% 2% right now, is higher than that. it's not picking up a good portion of the new growth that we see in this world particularly in the united states. so we had that exhale. it's a grind. those returns are going to be based on earnings growth right now and that could be between 5% and 7.5% and themes that dominate health care merging growth, it's the organic growth that's in biotechs and they get overvalued from time to time but those are smaller quality ones. >> we're going to leave the conversation there. thank you. when we come back this morning, tom brady's suspension upheld for his involvement in the patriots deflategate scandal. we'll tell you about new developments that nfl commissioner roger goodell called very troubling and hear what brady is saying about it all this morning. "squawk box" will be right back. when you get up to 50% off thousands of hotels with travelocity it means you can also afford to get up to 50% swedish-er swedish massages. making it the place to find a place for summer escapes. go and smell the roses. we have media news for you this morning. cbs tells cnbc that it will live stream super bowl ads with the big game next year. this is a big change and it will force advertisers to factor in online views and ratings at the same time. >> speaking of football the nfl has upheld that four-game suspension of new england patriots quarterback tom brady for his role in deflate gate. in the ruling commissioner roger goodell said new information about the destruction of brady's cell phone showed that the four-time super bowl champ in his words sought to hide evidence in his participation in the underlying scheme to alter the footballs. tom brady sounding off on facebook this morning says he's very disappointed by the nfl's decision adding again in his words i did nothing wrong and no one in the patriots organization did either. >> it's always the coverup. the coverup is always the -- >>i'm just saying. i don't know if he should be suspended or not. >> the coverup of the crime you're assuming there was a crime. >> if that's true trying to get rid of the phone, it doesn't help. it doesn't help to get rid of the phone. if you were completely innocent -- i don't know if he is or isn't. i hope he is innocent of course. >> i can think about a lot of stuff he wouldn't want out there. >> by definition -- >> you would never hand over the phone? >> no. it's none of their business to have my phone. i don't care who they are. >> based on employer actions there are some cases you can say -- >> i'm not saying it's legal or not. >> i want the guy playing all the time. >> i want him playing on the first game on nbc on thursday night against pittsburgh. >> if he was completely innocent of all of the stuff, maybe you should hand over the phone. i'm just saying. >> this is going to play out for quite some time. >> it is. we don't know any of the background. what goes on. by the way, i don't want to hand my phone over. i get that. i think it's more of a psychological advantage. i don't know. there's big arguments that patriots never fumble because belichick is going to kill you if you fumble or because the balls are always deflated. there's two sides to all of this. don't argue with the patriots fan about it. >> i'm not arguing. >> when we come back this morning, the fed wrapping up the second day of the meeting. will chair yellen signal that we're in for liftoff? right now as we head to a break, look at the u.s. equities future continuing higher with dow futures up by 34 points. at the dealership. nice buick! i guess that test-drive last night went well. actually, i'm still on it. you know, we're test-driving this buick for 24 hours, right?. yeah. so what are you doing? test-washing it. okay, well let me know when you're done, i'm gonna take it test-shopping. introducing the buick 24-hours of happiness test-drive. it's on your terms and a better way to take a test drive. ♪ welcome back to "squawk box." here's what's making headlines this morning. one economic report due today, the national association of realtors will be out with june pending home sales. that's coming up at 10:00 eastern expected to show a 1% increase and mortgage applications rose 0.8 of a percent last week. refinancing accounted for that entire increase with 30-year mortgage rates edging lower and mastercard reporting quarterly profit of 85 cents per share in line with estimates. however, revenue did fall below street forecast with mastercard having a bit of trouble this morning as we talk about that incident. foreign exchange issue. headwinds also a mixed environment for them. there you have it. >> the european commission is targeting disneyland paris for allegedly overcharging british and german customers. they say customers from france and belgium have access to cheap deals unavailable to englanders and germans and accused disney of redirecting customers to ticketing sites with higher prices. part of a broader campaign that people are pursuing against price discrimination in europe. i would figure they would do it to americans, right? >> not disney. it's an american company. >> not disney paris. >> they all report back. >> the eu bans discrimination on basis of nationality or country of residence. >> how do you get greeks to come to disneyland when they don't have the same cash as someone else would, right? >> that's probably true as well. the countdown is on the two-day meeting wrapping up today. the latest survey shows that just over half respondents believe a rate hike will come in september. steve liesman is here and has more on that. >> the question we go into, is this the last call for zero rates? will the fed signal a rate hike is coming? i thought we would share the results of nbc fed survey. 52% say july is the meeting before the meeting where they hike rates. that is down quite a bit. 82% figure a rate hike is coming this year. this is the important part. 63% telling us there will be no hint in the july statement of a coming rate hike. it's all data dependent. let's go back and look at what i call the three fed test. a lot of people say there's two. there really are three. i'll show you the third one. first is obvious. jobs. are we there now and the answer is yes. there's still some slack but at the current rate of unemployment, the fed would be comfortable hiking right here. inflation. are we likely to get to 2%? that's the second fed test. and the answer is unclear because we just got through processing the inputs of a stronger dollar and weaker oil and now we have global economic weakness through china and commodity price declines. the fed is going to be uncertain about that. and then there's the third test which not a lot of people talk about. this idea is can the economy withstand rate hike normalization. further rate hikes to come. fed factors in not just one hike but the impact of multiple hikes and that's a gdp question that is something you look for at 2.5% growth. one more chart is the inflation chart before we move on. you can see that this is the source of the fed's uncertainty. there's the headline down there in and around zero and there's core 1.8%. the question becomes how global economic weakness and commodity price declines in the past month or so process through the inflation numbers. the fed wants to be sure we're not going down maybe at this level or at least rising a little bit they would be happy to raise rates. becky? >> steve, stay there. we have more to talk about. let's bring in another voice as well. lindsey is the chief economist and you don't think they'll talk very tough and you don't think we'll see a rate hike in september. >> i don't. it would be very difficult for the fed to justify an increased assessment of economic conditions given that since june the data has been relatively disappointing. and as the fed maintains that they are data dependent, they are watching the significant amount of slack in the labor market, still very unconfident that inflation will reverse back to 2%. i think that keeps the fed on hold much longer than the market expects. >> that makes sense except when you get to the idea there's a thought the fed would like to more more slowly. if they don't want to hike rates every time and move by 50 basis points, it would make more sense for them to start earlier rather than later because it would give them more leeway. >> the momentum or lack of momentum in the economy suggests that we are going to be in or around this 2% growth range for the next several years. so really there isn't any pressure on the fed to initiate this year. they can wait until 2016. we may see 50 basis points on an annual basis well until 2020. there really is plenty of time for the fed to be patient and wait for the economy to at least be back to trend growth before initiating liftoff. >> steve, this is a pretty important one this time around because we're not expecting to hear other things from yellen down the road, right? there's no jackson hole. we won't get testimony in front of congress. she testified and talked to both houses. this is kind of it before september, right? >> becky, that's right. if you look at the published schedule. it's well to remember that the fed chair if she wants to talk and communicate with the markets has any opportunity to do so. for example, there's "squawk box" as an opportunity for the fed chair to talk. if janet yellen would like to come on "squawk box," she may do that at any opportunity she desires. or come out and make a public speech and/or send out one of her deputies vice chair stan fisher, who is talking in jackson hole and we'll listen to him carefully and we may have other fed presidents who are talking. i wouldn't say -- yes, it's the published last chance for them to talk and very important one to point out but there will be other opportunities and the data has to come in and lindsey brings up an interesting point that people have to ask themselves. let's grant that the economy right now is not in the place where the fed would want to hike rates. can it get there before the fed meets in september? i think it's going to be difficult. i disagree with lindsey a little bit. i think the unemployment numbers are sufficient for the fed to hike. it's very hard to see how the inflation numbers get there and other place i think i disagree is 2.5% may not be enough for the way people feel and the political establishment. i think for the fed 2, 2.5 is enough because they see potential growth right around 2%. >> lindsey? >> i would say that maybe we could get away with maybe 2% 2.5% gdp but janet yellen is clear that civilian unemployment rate does not tell the whole story of what's happening in the u.s. labor market. we have to look at some of those peripheral indicators. the millions of americans that would like full-time employment but can only find part-time employment. so if we add those back in now we're talking about augmented unemployment rate and that shows a lot of slack. >> this could be the rate hike that never comes. >> that's the point. the fed doesn't have to go now. we may wait for 2016 maybe 2017, 2018. >> in 2009 we have been waiting for years after years after years for the economy to be strong enough. so really it comes down to the idea that is the fed really that impatient that they would initiate liftoff without the economy being strong enough. >> i just ask you -- i completely understand and agree with what you're saying. how do you process though the statement by chair yellen at the congressional hearings where she said the economy both needs and can tolerate higher rates. that spoke to me of a desire she has of getting off zero and start this process. almost irrespective of what the data say. >> i think she is getting very impatient. i think the market will be able to withstand rising rate environment if we see further improvement. that really is the second part of that statement. she also said that 2015 may be appropriate for a rise in rates. again, if the economy continues to show improvement. that's very much based on the feds expectation that the labor market will show further improvement and that inflation will move back toward 2% and the economy does begin to show market improvement in the second half of the year and i don't see that momentum. not only do i not see that in the second half of 2015 but questionable if we'll see that momentum in 2016. >> lindsey, thank you for coming in today. great seeing you. steve, we'll see you soon. >> 2:00 statement. stay tuned. no press conference though. >> got it. thanks. a tech titan who knows what makes silicon valley tick. scott mcnealy joins us after the break to talk about the high flying tech sector the social media boom and big-time valuations. "squawk box" will be right back. ♪ ♪ isn't it beautiful when things just come together? build a beautiful website with squarespace. new york state is reinventing how we do business by leading the way on tax cuts. we cut the rates on personal income taxes. we enacted the lowest corporate tax rate since 1968. we eliminated the income tax on manufacturers altogether. with startup-ny, qualified businesses that start, expand or relocate to new york state pay no taxes for 10 years. all to grow our economy and create jobs. see how new york can give your business the opportunity to grow at ny.gov/business ♪ >> if you plan to offset the cost of a new iphone by selling your old one, the time is now according to data from ebay. now trade in values are higher in the months before apple announces new versions of the phone. resale values drop by 10% in september and october and fall as much as 30% by november and december. usually because there's a new phone out. iphone 6 plus would fetch around $435 right now. $287 in december on expectation there will be a 6 plus s or something. you never know how they're going to do the digits. >> we should tell you that the pentagon has taken down an e-mail network because of suspicious activity. it's used by the u.s. military's joint staff. the army didn't release details about the suspicious activity. >> check out shares of facebook. the social giant expected to report after the closing bell today. the company now carries -- this must be wrong. a $267 billion market cap for people looking at each other's pictures. seriously? >> that's right. >> $267 billion market cap as it gets closer to $100 a share join us to talk tech valuations scott mcnealy. currently the chairman and ceo of weigh in and that's a social marketing startup focused on driving marketing results and you got some skin in the social media game. when i said 267 billion, that doesn't make you flinch at all, scott? i'm just a dinosaur i think. >> i'm getting there too, i guess. those are big numbers. it turns out we're heading into the era of big data and the social media companies have a very, very big chunk of data out there and it's all current and realtime and it's a sign to actual individuals which makes it even more important. >> to connect the dots you use that big data and that info to target them and sell them stuff. is that how it works and they're going to generate enough money to justify that market cap. >> a lot of money is spent around the world matching buyers with sellers and knowing their demographics and sentiment and interests and whereabouts and all of those things allow buyers and sellers to be matched much more seamlessly without all of the extra clutter and people get the one to one marketing which is actually way less offensive than having to watch advertising that has nothing to do with you. i do not consider somebody who is talking to me about soft spikes on my golf shoes as intrusive where other products may be a little bit less interesting to me and be a lot of crowd noise to me. >> you saw zach johnson slip on that 3 wood. did you see that? >> i did see that. in fact a lot of pros still use the old metal spikes which makes sense if i was making a living there i would probably use metal spikes. >> he won anyway. doesn't matter. so scott, in the last month, there have been things that are staggering. we saw amazon and what happened and google and the move that made and you saw apple and that move the other way and then twit twitter today. can you address any of those and give us insight into what's happening? >> well, i think what's happening is big keep getting bigger with the fed continuing to keep interest rates low running deficits in the implicit tax that that puts on a lot of other financial options for investors. people put it into equities and they put it into companies that appear to have tipped to the area of safety and you're getting a lot of people putting money into the very large companies. it's just the options that they have. you also see a lot of money going into venture capital right now as people are looking for ways to get beyond the fact that you can't save your way to a pension. you have to put your money into higher risk investments. >> which numbers don't make sense? the private market numbers? or any of these other ones? twitter, amazon. >> they all make sense given what the government is doing at any particular time and the government -- when the government was pushing fannie and freddie, it made sense to be in real estate because they were pushing real estate very hard. when basically they are out of the business it tends to be a lot more balanced but now they are pushing people into equities and i don't think anything is going to change between now and the election just because the political machine will influence things aggressively enough to try to keep the economy from doing anything too different between now and then. >> i was thinking about you earlier. we got to go. when we were talking about why we're still in theneeding to do other things and regulations haven't affected the economy and none of the things that government is doing is affecting the economy. trickle down doesn't work. i could have used you. you weren't here. >> well there's no question that the things that the government are doing regulations are hurting small business. >> there are no new regulations under president obama with a straight face. >> that's hurting employment. the labor participation rate is the worst indicator we have out there. people aren't at work. and we're spending money on things like college loans and college loans is greater than credit card debt and half of the kids are unemployed or underemployed coming out of college. >> you are blaming minimum wage for underemployment right now? >> let me tell you, why don't we put minimum wage up at $60, do you think that will help? the problem with minimum wage is -- >> to go from 20,000 a year -- it doesn't help to work more until you make 50,000 a year. you give up benefits that take you up to 50,000 right now. it doesn't even help to work more right? >> i'm not going to make the argument for higher minimum wage or not. i'm going to say to blame the current state of the employment picture in this country -- >> an issue. it is an issue that's death by 1,000 cuts but regulations, raising minimum wage, misallocation of resources. all those things are impacting the ability for the economy engine to grow and all of these costs are hitting the bottom half of the economic folks worse, and that's -- i don't know. i don't think most of the people in congress are in the administration have actually had private sector jocks and wentbs and went to economics went they were studying. >> come back and come in studio. >> when we come back jim cramer from the new york stock education change. exchange. we'll get his thoughts on twitter. "squawk box" will be right back. so you're a small business expert from at&t? yeah, give me a problem and i've got the solution. well, we have 30 years of customer records. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep them all digital. we're looking to double our deliveries. our fleet apps will find the fastest route. oh, and your boysenberyy apple scones smell about done. ahh, you're good. i like to bake. with at&t get up to $400 dollars in total savings on tools to manage your business. what if there were only one kind of dog? then it would be easy to know everything about that one breed. but in fact, there are over three hundred breeds of dogs. because no one can be an expert in every one... an app powered by ibm watson will help vets tap specialized knowledge in the cloud for every breed... and whatever else walks, flies or slithers through the door. ibm watson is working to make medicine smarter every day. let's get down to the new york stock exchange. jim cramer joins us now. is it me or some of the numbers are getting harder to interpret. i couldn't have figured out buffalo wild wings. if you miss by $0.14, that's not the metric. and twitter is above on everything is revenue is more than people thought but you look at a metric there -- i don't know how to interpret amazon. you never know until you see it happen. >> sally smith on your show today i thought sounded bullish. the last five weeks have been pretty good and research firms raised the price targets in the last couple weeks. and they think things will go up because of acquisitions. twitter said we repudiate what went on before which is different from the interview with dorsey after the coup and i think if you listen they're saying it's not a quarter story or a three quarter story. it's going to take us a long time to figure out how to fix twitter. so for those who thought it ain't broke, you find a case that says it can't be fixed short term. it makes it difficult to own the stock when they put out ye of little hope. >> can you help us decide what to do with facebook before -- >> i have two guys that raised numbers, facebook and bullish going into the quarter. that worked for amazon and netflix but facebook if you remember the last quarter, the number was reported and the stock just got slammed. i think facebook is doing much better than twitter and i think twitter would admit that but this story trades erratically after it comes out. let's wait to hear the conference call and the guidance rather than decides in now. facebook is a better longer term story than twitter is right now. >> okay. so it's really worth 267 -- it is what it is. >> it's not growth. twitter has very little growth. yelp has kind of negative growth and facebook has fantastic growth. people pay up for growth in this environment. that's what they want and facebook the earnings may not be what you want but they have growth. stay can fax, netflix and google if that's what you want. >> comeing up why donald trump is getting a shoutout. can it make a dentist appointment when my teeth are ready? ♪ ♪ can it tell the doctor how long you have to wear this thing? ♪ ♪ can it tell the flight attendant to please not wake me this time? ♪ ♪ the answer is yes, it can. so, the question your customers are really asking is can your business deliver? behold, these are two wind turbines. can you spot the difference? the wind farm on the right was created using digital models and real world location-based specs that taught it how to follow the wind. so while the ones on the left are waiting the ones on the right are pulling power out of thin air. pretty impressive, huh? now, two things that are exactly the same have have never been more different. ge software. get connected. get insights. get optimized. zplnchts welcome back to "squawk box" this morning. mark cuban says donald trump has changed the game of politics. in a message using his cyber dust app, he congratulated the donald referring to the candidate as probably the best thing to happen to politics in a long long time. cuban is applauding trump's willingness to say what's on his mind but trump shouldn't count on cuban's vote at least yet. the mavericks owner says he's not sure who will get his vote. >> what's interesting is when mark cuban tried to clone the apprentice, the donald reamed him. he's horrible. he's trying to be me. he's boring. for mark to come back and be that positive -- and then donald said wow, i'm becoming a dallas maverick fan. it's a love fest. >> just like "squawk box" every day. make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ good wednesday morning. welcome to "squawk on the street." i'm quintanilla with krim jim cramer and david faber. yelp gilead buckle up for all that. shanghai managed a 3% on the upside as the government injected millions into a sovereign fund and watch bonds. oil losing a lot of gains from yesterday. the road map begins with

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