Transcripts For CNBC Squawk Box 20160603

Markets this morning, yesterday an upday. The nasdaq has seen seven straight positive sessions, the first time that happened since february of 2014. This morning we are flat as wall street awaits the jobs report. Overnight, in asia, take a look, youll see, yeah, asia was higher with japans nikkei up by almost half a percent. You saw gains of better than. 4 from the hang seng and the shanghai composite. In terms of what is happening in europe in the early hours, youll see right now things are up for most of the markets. The dax is up by half a percent. If you check out crude oil, yesterday, crude oil was higher, broke a fourday losing streak. This morning it is up another ten cents to 49. 26. The next fed meeting scheduled for june 14th and 15th. There is a small chance of a rate hike at that gathering, but the cme groups fed watch program tells us that the markets are now pricing in roughly 59 for the july fomc meeting. Well talk to says july or september. Hes sitting right there. He hears you. If i had only known. If i had only known. And that will be the last meeting, the july one, before this years jackson hole conference in late august hosted by the Kansas City Fed chair. Janet yellen is now expected to attend after skipping the event last summer, which at the time we said, she wanted to stay out of the limelight and not talk about what and not not really give any indication. Now they seem to want to give more indication. They want to they want to signal things to the market. Want to get back want to normalize, they finally think it might be a good idea to normalize. Right. Found religion after a long, long time. Yes. Better late than never. Yes, yes. Chicago fed president Charlie Evans says there could be two rate hikes this year if u. S. Economic data continues to be favorable. But in an interview with cnbc in london, he said the timing isnt all that critical. Since 2016, my own call, for that, if the data continues to be in line with my outlook, thats a slow and gradual increase this year. Asked whether the uks brexit vote would have a bearing on the fed hike, he said hes not sure it plays an Important Role in policymaking beyond monitoring Global Financial conditions. We hear that a lot. They all say the same thing, one month or the next doesnt make much difference. Months turn into quarters and quarters turn into years and years turn into eight years. Miss it. A lot of times you say, okay, what is the difference . Well, the difference between one month to the next is there could be some event that happens that you never know about. That makes it less likely. And with this fed, just about any event is enough to cost something, cyprus or greece or could be brexit, could be anything. And on a or grexit. If it is global, you have how many different places if youre watching every single thing, you know, every time you put it off, you give yourself another opportunity, not now, not now. Well see. But this is why were here right now after such a long time. Back to the campaign trail. Hillary clinton going on the offensive yesterday, taking shots at donald trump during a rally in california. Donald trumps ideas arent just different, they are dangerously incoherent. Theyre not even really ideas. Just a series of bizarre rants, personal feuds, and outright lies. He is not just unprepared, he is temperamentally unfit to hold an office that requires knowledge, stability, and immense responsibility. In an environment like this, and were, i guess were business and political junkies, i saw all the cable shows last night and the point is made that youve got two candidates with very high negatives. Neither candidate, therefore, is going to focus on anything other than the other candidates negatives. This Foreign Policy speech, which outlined very little of didnt really talk about her history as a secretary of state, didnt go into that much, or even the future other than to say im not crazy. The one sell point she made for her own record was in supporting the iran deal, which is still really high negatives among most people. That was Donald Trumps point. He said this wasnt a Foreign Policy speech, this was a political speech. And youre right, though. From either side. He doesnt go into the issues either. Get ready. Five months of this. Next week, the 7th, i think, tuesday primary . Tuesday. Is it already. Yeah, it is. Yeah. California. New jersey. Garden state. Clinton and her rival Bernie Sanders are neck and neck. If you look at people that will vote in california, it is tied. 1. 5 new democratic primary voters have registered. Hard to a quagmire to get through. It is hard to get shes got a big lead on the people that have already voted, number one. It is hard to it is one of those nonpartisan where you can go from you dont necessarily need to be, but one of the other several polls have now put them within two points. But then when they ask are you going to vote, the ones that say they are going to vote, shes up by ten. Bernie is a lost cause, i think. People love lost causes. Even if he wins california, he still may not have enough by the way, it is not just super delegates, more voters who have turned out, more of the delegates. Turned out too. Super voters people love the idea of a lost cause and a lot of times people will it is amazing to me how often people will attach themselves to a lost cause. By definition, it is a lost cause. A lost cause is the guys never won in a lost cause, have they . You know it is a lost cause going into it. And then they always lose and youre with them, but with them for david versus goliath. Well, maybe it happened then. How long ago was that . In the 1500s or something. No, before that. Paul ryan making his decision for the november election in a tweet. He says he will be voting for trump saying hes confident trump will help turn the houses gop agenda into laws. Thats interesting too. Because it was an endorsement and donald trump said were great, i love paul, im glad hes behind me now, but hes more or less saying i arrived at this decision because this is the house the house is going to dictate which way the Republican Party wants to go and these are going to be the initiatives that we pursue as a Republican Party and we think that donald trump is the best guy to help us pursue what were going to set as the agenda for the Republican Party. Which is the same thing that Mitch Mcconnell toll us thd us, thinks the party is going to change donald trump, not that donald trump will change the party. Still clinging to the notion, well sort of be let bygones be bygones with trump. Were going to talk more about the road to the white house. Love this guy. Excited to have him on. Brian fallon in next hour, squawk box, this guy, man, number one, i want to ask him where did you learn to be hes very good. Im telling you. Where do you learn to do that . It was a scathing Inspector General report and i watched him with wolf blitzer and i dont think wolf really wanted him to not have the right answers. Wolf was, like, sort of i hope you got answers to all my questions because, you know, where wolf stands. Anyway, he was so great smile, waits for people to talk, answers, but doesnt really answer, comes out with a really good hes amazing. Im just going to be in awe and just talk to this dude. We have him coming up in about an hours time. Didnt do quite as well with brett bear, didnt have the same smile. Is he here yet . Probably. Anyway, just gave him a lot of praise. Youre good at that. Thanks. You look great today, by the way. Thank you. Youre glowing. You know youre glowing. You know what that is code for. Pregnant. Fat. Right. Lets tell you about a developing story in texas. Massive flooding in the Lone Star State claiming more lives. Five soldiers are dead and four missing after a military vehicle was swept away by fast moving floodwaters during a Training Exercise at fort hood. No break from the rain ask. The New York Post reports that twitter met with yahoo s management several weeks ago to discuss a possible merger. That is thats like staples and what is the other one, the two that arent going to be around much longer . Office depot . These two, two drowning guys. The paper says Ceo Jack Dorsey didnt attend and his company appeared more interested in getting more information out of yahoo than it was in really . Second round bids for yahoo s core internet are due. Verizon expected to be the frontrunner because they got Tim Armstrong that could maybe do something with this company if he put it together with all, maybe. Apple says all its Services Including its app store resumed following an outage yesterday. A Company Spokeswoman declined to comment on the nature of that outage. Lets check open the markets once again. As we showed you, the futures are flat. But yesterday was a positive session for all three of the major averages. The dow closed up by about 49 points. It is now just about 2. 79 from its all time intraday high, which hit back in may of last year. S p was up 6 points, highest close since november of last year. And the nasdaq as we mentioned is up for the seventh straight session in a row. The First Time Since february of 2015 when it had a tenday winning strike. Europe as we showed you is looking mostly higher this morning with the dax up by half a percent and the ftse up by 1 . Asia closed higher overnight as well. Again, half a percent gain for the nikkei. The hang seng and shanghai composite up. And oil broke that losing streak, seen four days in a row of down days. Yesterday was higher. This morning it is up another seven cents to 4924. If you want to check out the tenyear note, the yield slipped yesterday. Lets look at currencies, youll see that at least at this point, looks like the dollar is up across the board. Euro trading at 111. 43. Yen at 108. 97. Gold prices, which were down slightly yesterday, looked like theyre up by about 130 today. At the low, the recent trading range goal. Recent, yeah. Good time to buy this . Youre on this gold kick. Im not a gold fan. Dont have to be a fan. You can put 1 of your i wont put 1 of my money in gold. 1 . I wont put anything. Should put 1 . You think so. I dont want atfs and dont want physical gold. Ever held a maple leaf. Heavy. Not just heavy. 1 in maple leaves. They open up one of those chests they get from sunken ship and it is all gold, ever seen the way youre like, gold, gold there is a reason for 4,000 years it has been 8,000 probably. Why is it irrational though . Im not interested in holding hard assets what is rational about paper . Rock, paper, scissors. I just im not interested. We got to introduce the guests. Producers inserting himself into the okay, all right. All right. Took him a while. Were just were just over two hours away from that jobs report. Lets bring in michelle and jason. Michelle, i like blue. Blue is nice. Okay. Thank you. These guys and gals, they have done back flips to say maybe it will be june. But it never really was she said in coming months and i think that is a signal for the summer. The debate is i think in most peoples minds is it june or july. And it is all about, you know, brexit. I think most people feel like this is a fed, particularly janet yellen the last several months, talked about a Risk Management approach to policy, better to be cautious, better to move too late than too soon. Against that backdrop, with this vote, the way this what is the rush. Figure this out, though. So they dont leave. Then they could have done it in june. If they do leave, you cant do it in july. Just do it a lot of i hear this from a lot of people, but i think this get becausing to where Janet Yellens head is. If they dont go in june and we have brexit or Something Else that prevents them from going in july, i dont think janet yellen is going to say, darn, i should have taken the opportunity. You dont care if it is july or september. Youre a wimp. No. I dont know if im a wimp. But i just think i just think that the i just think the risks are you say are asymmetrical. Quarter point . Asymmetrical . If youre janet yellen. Were not arguing for something normative that i want necessarily. I think they should have been tightening a while ago. That anxious. I think she is. I think janet yellen, my feeling is shes very is that okay . Shes the fed normally is late anyway. Janet yellen wants to be late. Shes already late. So i think another month from her perspective, i think if the economy runs hot, if people get higher wages, i think shes good with that. I couldnt agree more with jason. If they cant go in july, shell view that as validation for not shell say thats exactly why it was good not to go in june, if something happens and they cant go in july. I think it is the mind set of where the fed chair is right now. Both making the same assumption, staying at a quarter point or staying low it can help with the economy. Number two, there is no adverse effects from staying at low im not saying were trying to figure out what im trying to get what she thinks. Criticizing her. I am. Will you take it easy. In terms of it goes back to the gold situation in a way. I would say you are at the point now, mercifully japan is making the mistake that hopefully allows us it avoid the mistake theyre making, to say that japan is finally showing you the limits of low Interest Rates. And actually the fact that low Interest Rates are actually deflationary. Manifestly deflationary. Amount of global sovereign debt with negative yields, see that number . 10 trillion. The knock against gold always has been it has got no yield and costs money to store. And i would say if youre a japanese saver, or youre a german saver, it is exactly like having a deposit account. I would rather have not declining in value. You have a positive carry. For the first time in 5,000 years, so in the u. S. , you know, were not quite the same, but im with you. I think low Interest Rates have been harmful. I think janet yellen a lot of money. You founded this thing. Made a go of it, huge success. You can take a little bit from the talking heads. Good, all right. Jason and i are completely on the same. I think all of us agree. Absolutely low rates here are doing more harm than good. I agree with jason. They wouldnt have been in this position had they started much earlier and been able to move. Truthfully, as much as im a hawk, i would say this is probably a time to be more cautious. There is global well, im just making the point that if you were looking at all of the opportunities that they had to move, the case to me is somewhat less compelling now than it was a year or two years ago. So thats what im i actually the airplane movie, i picked the wrong date, said it so many times over the past five years, that shows you how many times to show the point, i guess the point were what jason and i are trying to do is put ourselves in Janet Yellens head and if im janet yellen, listening to what she said, she wants to be cautious, wants to make a mistake of going too long. Let it run hot. Against that background, it seems to me, you just wait. If you wait if youre this cautious, and this sort of just to put your foot in the water, couldnt anyone be the fed, couldnt anyone just wait and wait and wait . If there is no leading indicator aspect of what theyre doing in anticipating what is going to happen and what they need to do now, even though it is not obvious, anybody could be the fed. If there is no cost to low Interest Rates, and easy money, why doesnt everybody just it is that kind of there is a cost. The problem is, what i believe is that it is much more subtle now. It is not like you see rampant inflation so easy to identify. It is corporate buybacks and Financial Engineering and savingisaving i s. What if it is the fed that is keeping us and youre both giving the fed cover. Today is friday. I think what has happened is youve largely sterilized what the fed has done by tight regulation. Youre stepping on the gas, stepping on the brake at the same time. You have all these excess reserves in the system and the federal government is suing jpmorgan for things that bear stearns did and saying, why is the average fico score of the mortgage written last year was 755. Doesnt make any sense. An article i think was it yesterday in the wall street journal about how the jumbo loans are where all the banks want to be. Those are the ones that will get that make money, thats why the velocity of money continues to go down despite all the easing. Ill vote for trump. Ill vote for trump. Jason gave me the cover. It is not a new segment. I dont know why i decided to ask. We were talking with welch and others yesterday. And there is the idea that maybe a lot of people like the intel ceo on the outside will not admit it, but you got the curtain behind you, you dont know what a lot of ladies, we hear that, you know, no women are supposedly going to vote for trump. I just dont know what is real and whats not at this point. I dont know whether anyone is really telling the truth everyone is so you dont know what the polls will be within the margins of error. You dont know who the vote hes taken Political Correctness and made it almost a that almost a dirty word, freed it up. None of us feel costabmfortable thu n this new world. I work for larry kudlow early on. And now that larry is no problem. No problem. And, you know, i think when you start some of things that hes talking about, and conversations hes having, you know, makes people this support him are saying, look, you cant do everything you want anyway. Youll have paul ryan, youll have some maybe some of the stuff needs to be shaken up and shook up and all shook up. Came right out of it. All right. Guys, some raincoats and you can pull out the thank yo guys. When we come back, climbing Mount Everest and snapchating all the way up. The two alpine athletes attempted to summit the highest peak without the aid of supplemental oxygen. Theyre in our studio with their story. Thats here next. Check out this day in history. Stop doing this. Welcome back to squawk box. The nba finals tipping off last night after 9 00 p. M. Ridiculous. Thats great. The Golden State Warriors apparently playing in a championship. I havent seen a single game. Trying to repeat as champions after being down 31. Theyre back and beat the cavaliers. Steph curry and le been jaebron facing off in the rematch that everybody wanted. It was all warriors last night. Pretty big lead there. 10489. Game two set, good, for sunday night probably at 9 00. Another one i just have to read a teleprompter about. You keep advertising how lame your life is. No, ill not. I cant state up until 9 00. The guys were about to talk to. It is abc. I cant get in trouble for trashing abc for putting it on that late. Number two, the nba, a little sensitivity to people who get up in the morning. Seniors. Pregnant women are glowing. Im not the one who is talking about kids cant stay up. Lets talk about our two next guests. These two alpine athletes attempted to summit the worlds highest peak without the aid of supplemental oxygen. With the aid of social media they snapchated along the trek. Adrian and cory are back from everest, thankfully, and here in studio. Welcome back. Thank you. Good to be here. 21,000 feet before that last part. I was nervous. Wasnt going to try to make you nervous and talk you out of it but dont try it again. Im telling you. Were sorry. We were plenty nervous already. Kids. We got three months to gain weight. What finally happened this time . I remember one of you guys went, right . Cory went to the summit. I ended up turning around. Little bit below the summit. I had hypothermia, my core temperature dropped and was having trouble functioning. That can happen in you knew that, right . You might get cold up there. Im impressed by both of you and what you managed to do. Cory making it up without oxygen, adrian, he i wi was tel you before, i was impressed with your decision to turning around and knowing your limits. Im still heart probroken in some ways by the decision. But at the same time, i could see my body system shutting down as i went and i was very clear to myself, i didnt want to be a statistic or fatality, or cause a rescue that sucked cory in. I wanted to come home. It is a red blood cell thing. You know the way it works. If you get to the summit, use something supplemental oxygen, is it really does that ruin it, really . It doesnt ruin it, but you have to do it without oxygen . There is a purity to it. I think for me, like, rising bringing myself up to that challenge versus bringing it down to me is important. And granted, thats, like, we have a very unique physiology that allows us it try to do it that way. What is that . It is just it is a we breathe well at high altitu altitudes. It is great to live in boulder. I was raised in the mountains, raised in Salt Lake City skiing. We dont know the science why some people are predisposed to doing this. Probably cheating if you used depot. Little bit. Yeah. You create your own standard in the mountain. No governing body. But we sort of wanted to approach it as purely as we could. There is only about 200 people that have done this. Less than 200 people. What is interesting is 7,000 people climbed the mountain. Less than 200 without oxygen and 30 of the deaths that occur are attempts without oxygen. How many in the last couple of years . That statistic spiked because the earthquake and the avalanche and the ice fall. Adrian can speak to that more. He was there. How many . Dozens the past two years. You think that would give me pause. Of course. Why we went to the north side. We went to the north side, it is probably that risk that makes the experience so special, so intense. There is this very clear consequence when you do things wrong. Is it ever enough . Are you going to keep going back and doing this again and again . This is my ninth season on the mountain and i summited six times before with supplemental oxygen. Youve been there. Yeah. Six times before. And cory, youre already you have plans to go back . I dont think it is there is old mountaineers and bold mountaineers and you hopefully you garner enough experience over the years to make smart decisions, sometimes you get caught out and thats unfortunate. And adrian and i both lost friends. But, you know, it is like anything in life, youre not going to stop playing golf. I told you, there are bunkers on some courses. Extreme sports to step in there knowing probably going to take me a couple of swings. Very similar. I wouldnt spend the night, but sometimes i feel next time you go, if youre wondering whether or not would you like to join . No. Come on. Put a web cam up there. Were about out of time, the snapchating, how did that change the experience . It was a fantastic storytelling app to bring people into it. Hundreds comments and videos of people asking questions and being part of the climb. It is the ability to bring people to a place they never actually go. Thats very, very special as a storyteller, somebody who works in photography, thats one of the most special things you can do, share that emotional experience. Were glad youre both back here in studio. Thank you for joining us. Thank you so much. We wish you nothing i can say to change your mind . Im pretty sure i want to go back. Okay. Good luck. Coming up, walmart kicking off the annual Shareholder Meeting. On the agenda, a business. And surprise musical guests. Okay, so whats our latest data say . Our customer is a 21yearold female. Heavily into basketball. Wait. Data just changed. Now shes into disc sports. Ah, no shes not. Since when . Since now. Shes into tai chi. She found disc sports too stressful. Hold on. Let me ask you this. Whats she gonna like six months from now . Who do we have on aerial karate . Steve. Steve. Steve. And alexis. Uh, no. Just steve. Just steve. Just steve. Live business, powered by sap. When you run live, you run simple. With usaa is awesome. Homeowners insurance Life Insurance automobile insurance i spent 20 years active duty they still refer to me as Gunnery Sergeant when i call being a usaa member because of my service in the military to pass that on to my kids something that makes me happy my name is roger zapata and im a usaa member for life. Usaa. We know what it means to serve. Get an insurance quote and see why 92 of our members plan to stay for life. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Time now for the executive edge, walmart kicking off the annual pep rally and Shareholder Meeting in fayetteville. Courtney reagan joins us now with more, playing some music. I didnt know who it was. I guess youll tell us. For us, you know who it would be, right . Who would it be for you . I dont know. Dierks, maybe. Somebody like that. What about you . You like brett, right . Yeah. I like brett eldredge, luke bryant, any of them. We have a couple of hours until that actually happens and the annual Shareholder Meeting for walmart kicks off behind me. It has been a pretty busy week down here in arkansas for walmart associates, media and executives. Just this morning, walmart announced that in the next two weeks it will begin testing using uber, lyft and deliv in phoenix and denver. Walmart employees will shop for items online and request that the on demand delivery be sent directly to the shopper. The standard Delivery Charge remains the same for the consumer. The new delivery pilot is another example of ways that walmart is reworking its Business Model to infuse technology. The retailer has a long way to go. It is spending billions of dollars to get closer. Walmarts ecommerce Sales Growth Rate decelerated seven of the last eight quarters. And the ceo said that growth rate is simply too slow. Investing in technology and investing in its employees, and cutting costs to offer lower prices will all be themes for the meeting here today. Now, the founding Walmart Walton family still holds about 52 of the outstanding shares. So all of the 11 nonretiring board members, plus the addition of Stuart Walton are expected to be approved as the new board for the coming year and none of those three shareholder proposals are expected to go through. Well have to wait and see who the host is, who the musical guests are, i think there is about six of them, lots of trucks here so far. But i havent figured out who it is yet. Back to you all. Is it always country . Theyre not going to have, like not always. Not always. They had mariah last year. You have no idea. Not like some embargo thing, you cant no, i really this is like top secret, only a few people know. I wish i knew. I could better prepare, but i dont know. Maybe youll see somebody. Right. Jake owen would be good. That would be a good one. That would be a good one. All right. Thank you. Maybe were stereotyping arkansas and walmart with all country. Could be it is just who you like. Coming up, it is National Doughnut day. And i already checked, even a glaze is 250. Munchkin is 70. I know that. One on saturday, one on sunday. Who better to spend it with than the ceo of dunkin brands, nigel harris. Well talk coffee, all Day Breakfast, competition with the other guys and any new products that are in the pipelines. Squawk box coming right back. The call just came in. Shes about to arrive. And with her, a flood of potential patients. A deluge of digital records. Xrays, mris. All on account. Of penelope. But with the help of at t, and a network that scales up and down ondemand, this hospital can be ready. Giving them the agility to be flexible reliable. Because no one knows like at t. Because you cant beat zero heartburn i take prilosec otc each morning for my frequent heartburn ahhh the sweet taste of victory prilosec otc. One pill each morning. 24 hours. Zero heartburn. What are you doingetting faster. Huh . Detecting threats faster, responding faster, recovering faster. When your securitys built in not just bolted on, and you protect the data and not just the perimeter, you get faster. Wow, speed kills. Systems open to all, but closed to intruders. Trusted by 8 of 10 of the Worlds Largest banks. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Clean it up. Today may be jobs friday, it is also National Doughnut day. Were talking dollars and doughnuts here on squawk and getting the scoop on how one of the Worlds Largest could have fine doughnut chains is gearing up for the big day. Nigel travis joins us on set, chairman and ceo of dunkin brands. You always update us on the latest moves. Stocks doing okay recently. Still over the past year or so, hasnt made much headway. What to you need to do . Where are you in the efforts . Our franchisees, new five part strategy we launched at the end of last year. We talk about it every day. But what is really good, i think, about the new strategy is that it focuses on our strengths. We are number one in hot iced and flavored coffee. Were moving more and more into espresso drinks. Today more than starbucks even . Well, starbucks is the leader clearly in espresso based drinks. Were moving more into that. Our franchisees are dong a good job. We believe our drinks are the best out there. But the thing i want to talk about today, even though it is National Doughnut day and clearly every year we come and talk about National Doughnut day, last year we gave away 5 million doughnuts in the u. S. , but were announcing this morning that were taking our on the go app national for monday. So everywhere in the country, not just here in new york, where we have been testing it, everyone can go in and i think thats going to be a differencemaker. The biggest change in our Delivery System since this is the app. You order ahead, and you just press once and you get the order. You can save your favorites. You can save your locations. And if youre here in the morning, going to work. You can save it for one location around the corner. When you go home, i think to new jersey, you can press a button for your local store there. And you may go with the kids to have doughnuts in the afternoon, may want a sandwich in the morning. This is the greatest device we have, i think, for creating convenience for all our consumer and for our franchisees, which is very important. The cost to roll that out . I would say the investment has been pretty low. But we built on the app we already had. We updated it, it has gotten a new contemporary design. The investment has been pretty low as i say. But what we need to do now is to get the message out. We got a lot of advertising behind it. I think what is going to happen is that consumers will realize they can go more quickly through the drive through, skip the line in the stores, and youll get more perks members into our membership system. So we like the opportunities. Is the money still in coffee more than the doughnuts . Absolutely. The margins are in coffee. Were 60 of our product mixes in beverages. And we got a bigger and bigger array of beverages. Most people dont realize were number one in iced coffee and we continue to add new flavors. We have got sweetened, unsweetened coffee flavors. So we continue to grow in that category. But i really think what is going to happen as a result of the ordering is that people will come in, they will realize they can have up with drink in the morning, another drink in the afternoon, save it. What happens with mcdonalds doing all Day Breakfast with other Companies Jumping in. Well talk about this. This is the real morning this is the real morning joe doughnut, right . This is the morning joe, joe kernen doughnut. On the go confused about who the real morning joe is. I always ask you, you finally came prepared. Have you ever dunked a doughnut. You say no. This is for dunking. I still havent. I bought this just so you could show me how to do it. You stick that end if you dont know how to do it, you have problems in other areas probably i got many problems. Yeah. Go back to your you just stick it in there. Stick it in the coffee. All Day Breakfast, we had we have our menu all day, every day. Clearly mcdonalds came out with all Day Breakfast because thats what consumers want. Im trying to keep a straight face. So seriously, back to this, with all Day Breakfast, with other chains that are really jumping into breakfast in a big way, you always think of Dunkin Donuts as the first place you stop in the morning. Is that having an impact . There is a lot of competition out there. You have the grocery aisle. But were coming back with obviously new products all the time, we got great value every day. People thats why people go to Dunkin Donuts. And i think it is the value, the variety, and were responding i think extremely well to that increased competition. And as i look forward, we feel that technology is a big opportunity for us. Our leaders are in technology through our perks program, through our app and now on the go ordering. We continue to innovate in terms of doughnuts, breakfast sandwiches, tea, fruited teas in boston right now. And most people probably dont realize our large last year of kcups is one of the biggest launches of all time. Were actually making over 300 million in sales in the first year, which is staggering. Preaching the to the choir. My only choice is iced or hot, depends on the day, and i dont have to feel like im getting ripped off. I dont need vestiges on my cup preaching me about some stupid social thing the ceo decides is in his best interest. It is a much easier way. I dont feel like a yuppie when i go there. Im not saying i do at the other places. Thank you. Had we cowhen we come back, going to talk about the biotech bounce. Stick around. Olay luminous illuminates skin with pearl optics science. Your concert style might show your age, your skin never will. With olay you age less, so youre ageless. Olay. Ageless. After a rough firstquarter, the nasdaq biotech index is up over the past week. Lets find out if the rebound is for real. Joining us the asset portfolio manager. Biotech can be the most rewarding and the most difficult to match up fundamentals with stock price movement. A year or two ago these were just standouts, right . The valuations were some had infinite valuations, didnt they . Because there were no profits. Right. Do you deal with those or just no. We deal with them every day. How do you value those . You have to go out a long way with what the market size is, and discount back. You have to use some probabilities. What caused the pullback . A riskoff environment affecting the overall environment. Political rhetoric. Onpricing. Concern. Rhetoric has cooled the last couple weeks. We have seen some m a has come around. Its a very as you were alluding to, its a very sentimentdriven sector. Sentiment got really bad and now its starting to improve a bit. You have the majors, the ones everybody has heard of that are almost pharmaceutical companies now. Monthly. Yeah. Some have maybe one or two drugs, some revenue. Then you have the real speculative ones. Do you dabble in all of them . In our therapeutics portfolio we go down to small caps and all the way up to the big caps. So it varies. I know we have the big cancer conference this weekend. Asco . Yes. Not expecting that much. Small caps. Lets talk about it. You have how many stocks do you have that you love that you want to tell us about . For your purposes for biotech well talk about a couple. Radius pharma has a drug theyve submitted to the fda for osteoporosis. Another company has a drug for migraines. Maybe not as exciting but highly necessary. Going back to the probability side, we like the riskreward. Some of the more speculative names that are coming up, if we cant get a feeling for which way its going to go, well probably avoid it both long and short. Not saying biogen none of the big ones . It would be like talking about pfizer. If we had to own a big one, which we do. We would own the ones that pay dividends. Like the pfizers. Do you have a home run, speculative, that if it works out its going to be a three, four, fivebagger . At the risk of going small caps, yeah. One small one we own is traycon. Whats that symbol . Its very small and very speculative. What have they got . They have a couple drugs for cancer. Wow. More than small. We cant even im not going to tell you the symbol of that one. Yes. We want to avoid those because it sounds too much we want to avoid those too, on tv. 84 million market company. Radius alder. Less, thank you. Coming up, the countdown to the jobs report. Larry bossi joins us to get ready for the big report. The superbug that has officials on high alert. Dr. Zeke emanuel has a way to fight the superbug threat. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Jobs and the race for the white house front and center. Were counting down to this mornings employment report. Will it be the last piece of the feds rate hike puzzle . Hillary clinton attacking donald trump on the campaign trail. He is temperamentally unfit. Her National Press secretary joins us onset ahead of the big california primary. The battle against superbugs. Antibiotic resistant infections are on the rise but dr. Zeke emanuel says he may have the winning solution to finally defeat the deadly bugs. He joins us with his battle plan straight ahead. Phil mickelson a moment ago. Watch this. Who says golf is not a dangerous sport . Phil mickelsons wild tee shot smacking a volunteer worker square in the head. What did phil do to make it up to him . As the second hour of squawk box begins right now its friday, im in love live from the beating heart of business, new york city, this is squawk box. Great. Just what we need. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with rebecca quick. Were 90 minutes away from the months most important data point about every month, the may jobs report. Will the numbers do anything to change the feds stance on Interest Rates at their meeting in a couple of weeks . I wonder if it could be Strong Enough to all of a sudden get june as a definite instead of at least get it above 50 of the fed futures. There is where we are. Flat. Its been kind of a market has been around the around zero or unchanged every day. Finally up yesterday, but it had trouble making headway. This will probably change once we get the number at 8 30. Quick look at oil, which has also been 49 and change, almost all week. In our headlines chicago fed president Charlie Evans said a case can be made for deferring rate hikes until core inflation reaches the feds 2 target. That would take until 2018 if the current fed forecast holds. Evans emphasizes that his base case is still for two rate hikes before the end of the year. He did say it didnt really matter when the hikes came. More consolidation could be ahead in the airline industry. United, continental and delta are among suitors for avianco holdings. Jpmorgan chase Ceo Jamie Dimon says the brexit would be terrible for the u. K. Economy and for the bank. It would mean fewer jobs. For today, we can service eu companies here, freely, with systems technology, research, investment banking, sales and trading. We can do it here. After a brexit we cannot do it all here, and well have to start planning for that. I dont know if it means a thousand jobs, two thousand jobs. Could be as many as four thousand. Jobs all around the u. K. The most important thing for me is were going to take care of our people. Well take care of our people and our clients. Dont worry about it, but when you vote you should think about Something Like that. He spoke to employees in england. He was also talking yesterday about how auto loans in the United States were getting pretty lofty and he thought there could be pain spread out. He says jpmorgan doesnt do much of that. A trillion dollars. He was listening to our conversation. I doubt it. He has seen Interest Rates move up. The average time of the loan. Not good. Real quickly, i mentioned this earlier in the journal, 10 trillion sovereign debt with negative yields at this point. Yeah. 40 outstanding . I havent followed it tick by tick. What was the total of global sovereigndate . 30 trillion . Ten sounded like a lot. That much is really negative negative. Yep. So messed up. You cant run a planet like that, larry, can you . No, you cant. It hasnt proven to be successful in any way. And its the sooner it goes, the better. Some dumb economist, pie in the sky economist, one of your peers, thought this was a great idea. You want to have this conversation now . Ill have it now. You said you dont want the zero bottom stop a second. People of their own vo lilitione taking money out of their pockets and giving it to sovereign governments to receive negative Interest Rates. There is no gun to their head. There is no alternative. Its a combination of that and a combination of fear thats out there, which tells you what when you think about it . Which is that is maybe the appropriate rate for money given the amount of money in the system decide to do it as some experiment . If the central bank decided to go to 2 tomorrow, what would happen to long yields . Probably stay where they are crash. I bet they would crash. As concern raised that the Central Bank Im getting yelled at, just want you to know. Good. My ear, folks. But the people are making these decisions. You say its just the central bank. There is still palpable fear out there about the future that limits what people are doing with their cash. You gave two reasons. There is a third reason, and thats the severely damaged i. Q. Why would you do that . Its widespread. You scare them to death. Im not scaring them. Im not scaring them. What did i say that scared them, larry. It starts with you, probably. Me. Probably. Well, its nice to know that im that powerful, but a little bit worrisome about the state of the world if thats true. People are doing this. Theyre taking money out. There are Pension Plans that are putting money in and investments all over the world that are giving negative rates. Oh, no. You mean hes dead he cant do it or youre going to kill him. Can we put greco on the air. This is an important jobs report that could sway the Federal Reserve to a june rate hike or delay until july. The verizon strike along with Ongoing Energy layoffs and low job last claims and weather effect from march that bounced it up and in april and could bring it back in may. Lower job expectations. The economy should not be producing 200,000 jobs given whats happening with labor force growth. The demographics. Wages have been up. Widespread wage pickups. Well show you a new chart on that. Increased participation. People have been coming back into the work force, which is a good sign. I want to show you what fed officials have said about the steady state of job growth. What you need to know is they basically say, when you look at the demographics, a hundred thousand should keep the Unemployment Rate steady. Thats all you need. Anything above it should bring it down. Janet yellen is at 100,000. The next chart, an atlanta fed wage checker that a lot of fed officials are thinking about. The number is higher than the average hourly earnings. Its 3. 5 instead of 2. 5. Theyre looking at an actual individual from the jobs report and how they did 12 months later. It shows stronger wage growth out there than is being tracked if you just look at average hourly wages. A couple fed officials have pegged this chart. This shows the influx into the work force. This is showing the change or the who is coming back to work. Millennials. The millennials are back to work. Its pretty widespread. These are the contributions to the game in the work force. Next chart is looking at it by education. College folks never changed at all. College folks look, some college, theyre back in. And high school, theyve gone from being negative to being just about positive. So were going to watch to see if it continues because there are lots of people on the sidelines. Wages wont go up so much, and the fed can take their time. If there are a few people on the sideline, wages could surge, right, and then the fed has to worry about inflation. There is a big pot of people we dont know. Some are retired. Some are discouraged. Some have decided for personal reasons they dont want to work anymore. 94 million americans are not in the work force. Thats not the all its a huge number. Its a huge number. Some of them are retired. Some of them are kids. Some are discouraged. Thats a large part of the population. Pretty much. Wow. My number i think the Participation Rate will remain about 62. 8, 62. 9. Keep the new level. My number for today is 145,000. Our guest host today is larry bosti. Former honeywell chairman and ceo. Larry, weigh in on how you see the economy shaping up right now. I think we are in a relatively stalled period. 8 in the first quarter. Maybe two in the second. You see pieces of the economy that are good. Housing is fine. Manufacturing sector, 12 of the economy, continues to be very slow. Energy companies are being hurt. Big Machinery Companies are being hurt. Low productivity because of the absence of volume. Larry, do we get a little stability on energy . Prices have at least stabilized. There is still ongoing layoffs and reductions but it should stabilize in there somewhere. One of the big issues with energy coming up there has been a shut down of capacity. Theyd like to turn on the capacity. A lot of bankruptcy. The financing of startups will be difficult. Its going to come back but it will be difficult to get there. Jack welch pointed out yesterday, if youre supplying the industry, the prices you can charge have come down sharply. So your margins have compressed. The economy is kind of in a stall mode. With respect to the rates, i wouldnt be surprised if they moved in june and maybe again in december because theyre so low. I dont think its because of any economic strength. If youre sitting there as ceo of a company, which you were for quite a while, of a very large company, and the fed raises a quarter, how does it influence it doesnt change my mind at all. It makes me think about how high its going to go and when its going to get there and what do i do about that down the road. You might think about restructuring debt now if its coming later versus soon. Maybe thats a good thing if it gets people thinking about where rates are going instead of thinking theyre at zero forever. I dont think 25 basis points does that. I think there will be a couple. Cap spending in the country is low. Again in the first half. Business investment spending, low. I mean, we got to get an economy thats moving faster than this. You guys talk a lot about job creation. Unless that begins to happen, this economy is not going to sing. You dont get the job creation if you dont get the investment. Its the loop. Another thing about job creation thats crucial. We have a lot of open jobs without qualified people. We have to educate k through 12. We need a digital course from kindergarten through High School Teaching the people the skills they need for these jobs. I think a lot of these jobs have some technical requirement, and we dont have the people capable of filling them. I hope, as we look at k through 12 in the curriculum, we change it in a way that provides for opportunity for people to work. Steve, well see you in a a little bit. Huge day. When we come back, Hillary Clinton hammering donald trump on Foreign Policy saying she cant wait to debate him on the topic. While she fends off Bernie Sanders in california ahead of the primary there. Well speak to clintons National Press secretary after the break. Dow futures up 10 points. Relatively flat numbers all morning long. The jobs report is about an hour and 15 minutes away. Stick around. Squawk box will be right back. singing you wouldnt haul a load without checking your clearance. So why would you invest without checking brokercheck . Check your broker with brokercheck. Dinner may i be excused . Get the new xfinity tv app and for the First Time Ever stream live tv, watch on demand, and download your dvr shows anywhere. He believes america is weak. An embarrassment. He called our military a disaster. He said we are, and i quote, a thirdworld country. And hes been saying things like that for decades. Those are the words, my friends, of someone who doesnt understand america or the world. Hillary clinton sharpening her attacks against donald trump heading towards the california primary. The latest polling shows her with a slim lead over Bernie Sanders. From the latest from the campaign trail bring in brian fallon. I think he is famous already. I watched you the day of the i. G. Report. Just about everybody side youre good at what you do. That was a tough day. And i didnt see a whole lot of people lay a glow on you. Thats why i was asking you offcamera. Is there a place you go to learn Media Training like that, brian . You have a good future. Thanks, i guess. No. I just read the report that morning. Youre doing it again. Youre already doing it. So the report was so not antihillary that it was easy for your job, for you to defend . Not to we dont want to l litigate all of the parts of the report. There were plenty of parts in there that were exculpatory and werent getting attention. So it was my duty to bring those out. There were 180 i dont knows in an hour or something. Seven lawyers. Its never the original thing, the email thing, its the way its handled subsequent to that. Thats where people might have an issue because the story has changed so much. Lets not talk about that. This is a business network. What i want to talk about is california and Bernie Sanders. I think she is going to win because the twopoint lead is not people who are going to vote. Most of the young people, theyre not as consistent about hitting the polls. Shell probably win by i think eight or nine points. Geez. Youre setting the bar pretty high lets say she wins by two. But whatever it is. My question is going to be about just the way that the republicans were unable to knock trump out. She hasnt been able to knock Bernie Sanders out because i dont think she has she has said the truth about socialism. What worries me is does Hillary Clinton think socialism is a viable economic alternative . Well, to start with, i dont agree with the premise. In a normal campaign, by any standard, her lead would be such that, you know, somebody might have decided to drop their campaign. In terms of the popular vote, she has got an extraordinary lead of 3 million votes. In terms of the pledge delegate count. See how he does it. My question was, does hillary believe in socialism. Can you just answer that . Youre smiling at me now. This is why im trying to smile more. For me, with hillary. I think i could have knocked Bernie Sanders out very early. She has a huge lead, joe, is my point. She is still dealing with this guy. He is a socialist. Why cant young people learn socialism is shared misery. Its been tried. Its awful. She has such a significant lead. We are totally fine with having him remain in the race. This is not a matter of where we would be seeking to push him out he is doing a good thing in terms of bringing more people into the process. Ill admit there is a lot of independent voters who would probably be sitting out the democratic primary but for the fact that hes in the race. Do you reject socialism as an economic model ever . There was a debate where she stood on the stage and said she supports freemarket capitalism. So she has. I think she thinks free market capitalism is prone to excesses just the same, and she has proposals and plans to make sure that the economy works for everyone. But yes, we believe in the system that we have here in the good old u. S. Of a. Democrats dont know whether to say we want another eight years of this or we dont want another eight years of this. Im not sure where she comes down. Ill show you some charts that i had made that ive seen. Okay. This is the current state of the economy. Because the president has the president has taken a victory tour and there are some who say he hasnt really won so its tough to take a victory tour. Student loans what is the time period . Seven years. The entire frame . Yeah. Health care costs. Labor force participation is what we talk about here a lot. Down at 62. Inequality. Median family income. Home ownership. Which is it . Is it a continuation of the Obama Policies or is it going to be Something Different . Put that way its a bit of a false choice. I think we recognize the Obama Administration has made tremendous gains. We recognize there is also still a lot of work to do. The number one issue in this election even though you heard secretary clinton give a speech yesterday based largely on Foreign Policy, we still believe the fundamental issue is who can get incomes rising again and who can make the prosperity shared across the board. She has because this guy has been so tough to get rid of, hes going to have people who . Sanders . Yes. Sanders. Hell have the plank of the party will reflect a lot of his views. Hell want a pound of flesh in one way or another to express or to satisfy his constituency. I guess she has been loathe she has stood her ground in terms of what she believes. Do you think left of president obama is the answer to what all those charts i just showed you or do you think to the right and maybe where bill clinton was . If i ever wanted to vote for Hillary Clinton, if you were to tell me she will be much closer to the center like her husband was and work with the congress that might sell me. At this point she has moved so far left of Bernie Sanders. What are the indications of that . The Democratic Center of the party 50 of them now would elect Bernie Sanders, a socialist. How did we get to a point where our young people think socialism is a viable i think when you see things shifting none of the candidates at this point are in favor of trade, even though bill clinton is the one who brought nafta along and did things like this. I guess we have heard things like her say she would help her husband lhelp out on the econom. There is a lot of trying to figure out where she stands on the issues particularly because of Bernie Sanders still being in the race. In terms of an issue like trade she has been quite sensible and saying that, yes, shell take a long, hard look at any trade deal and right now she cannot support the transpacific partnership, for instance. She spoke out against the trade war donald trump would provoke. 35 tariffs on imparts from china and what it would mean in terms of prices here if retaliation was taken by those countries. If you look at what hes proposing. Mass deportations, exploding the debt with his tax proposal. These are recessioninducing activities and proposals hes putting forth. A couple of questions. Number one, how do you deal with the significant negatives here . 57 negative. Trump is in the same place, but that must be something to concerns you to a partial extent at least. Second, if she is for free trade, why wouldnt she be for the tpp . Trade in general is a good thing for our country because we are more open than most countries with whom we deal with. Here is a deal with 11 other countries, excluding china, giving us a chance to penetrate some markets where we havent been before. Why wouldnt she be for it . First, on the negatives. I think we encounter a lot of false equivalents in terms of equating Donald Trumps numbers with hers. His are appreciably worse. Rightfully so. Hes earned the numbers the hard way by offending a lot of the electorate. Hers are because she has been the target of an unprecedented level of spending both even during the democratic primary she was not just taking attacks from Bernie Sanders and Martin Omalley but 17 republicans were talking about how tough they would be on Hillary Clinton. We have to convince people that everything the republicans have been saying about her is untrue. Donald trump has to unwind or take back things he said himself. And he made a racist comment yesterday attacking the judge overseeing the Trump University case. She has acknowledged that when she was secretary of state she hoped to be able to support the deal. She wasnt against it existentially or philosophically. She didnt think the particulars met her test in the way they came out. She recognizes that were 5 of the worlds population and we need to take advantage of the rest of the worlds markets. I think she has taken a common sense approach to the way we need to govern the economy. You think shell govern, friendlier to the private sector than obama or closer to Bernie Sanders in terms of the approach to the private sector . I wont make a comparison in that vein. I ask a lot of according to you, brian, i ask a lot of terrible questions. Either false narratives or youre so good. Thats what im talking about. You dont have to answer them because theyre all flawed from the start. She does want to continue to try to crack down on things like corporate inversions. You know how to crack down on corporate inversions, right . Lower the Corporate Tax rate. Thats all she has to say. She is a smart woman who knows about the private sector. I dont fault her for talking to Goldman Sachs and saying i dont know what she said. Maybe she said you guys do a great job for Capital Formation in this country. She said the same things she would say if she came on here right now. Im not hearing it because she has been pushed so far left by a socialist. What are the examples of that . There is not going to be any pivot or reset from the primary to the general election. Shes shes separated herself from half the stuff her husband did in terms of welfare reform. The crime bill, nafta. In terms of thats what he did and im not going to do any of those things. She has said shes not rung for his husbands third term or president obamas third term. She is running for her first term. She got a good guy when she got you, brian. Thats what i said. Anyway, hope you come back and ill have more of these crappy questions if you do come back. It was fun. Brian, good luck. When we come back, a tee shot one golf course worker will never forget. Phil mickelson in ohio yesterday. Later, dr. Zeke emanuel says the inflated demand for antibiotics is leading to overuse and the rise of superbugs. Stick around. Squawk box will be right back. Among the stories front and center we are about an hour away from the may employment report. Economists expecting 150,000 nonfarm jobs and the rate to remain steady. Were also going to be getting the may trade deficit at 8 30 eastern time. At 10 00, the Manufacturing Index will be out as well as april factory orders. Tribune company will soon have a new name. It will be called tronnic. Its in the abouprocess of fend off a takeover bid from ginett. Massive flooding in the Lone Star State claiming more lives. Five soldiers are dead and four are missing after a military vehicle was swept away by a fastmoving flood that came during a Training Exercise at fort hood. There is no break from the rain. It is expected to drop another 3 to 5 inches on eastern texas through saturday. Also, a doctor says Sumner Redstone has the mental capacity to make decisions about his trust, including removing vibacm ceo filipe dauman. They argue redstone is under the influence of his daughter, shari. Stocks to watch this morning. Apparel retailer gap reported a 6 strop in samestore sales for may. The Company Called the month challenging, though it says it saw improvement in traffic at its gap, old navy and Banana Republic stores heading into the memorial day weekend. Broadcom reported quietly results, 2. 53 a share, 15 cents above expectations. Up almost 8 . Also announced a one cent increase in the Quarterly Dividend to 50 cents a share. Broadcoms first Quarterly Report since the combination of this company and Avago Technologies earlier this year. United, continental and delta are bidding for a panama based airline called auf yaufrnyaufrn avianco. Pay attention to the flight of the ball, golf fans. At the pgas memorial tournament in columbus, ohio, Phil Mickelson hit a wild tee shot on the 15th hole. The ball hits a volunteer worker squarely in the head. Thankfully he was not seriously injured. Phil walked up and joked, if your head was a touch softer, i would be in the fairway he gave him a signed glove with the inscription, i am so sorry and that was nice. Anybody thats played in proams. It happens a lot. It happens to the pros. Some pros, larry, you know this, they have a natural backstop on some holes. They know there is people standing behind it. He can hit a different kind if youre going to err, you can err along you know it will bounce back in. The cliche is of course, we said what did phil do for the fan to make him better. You know what the line is. Its not funny, but he gave him a stock tip. Har, har. A superbug found in the u. S. For the first time Alarming Health officials across the globe. Dr. Zeke emanuel you say it too fast its zika manuel. Its ezekiel emanuel. He plans to share his battle or his plan to battle the rise of the antibiotic resistant infections. Becky has the answers for this. Its mainly sorkin. Sorkin takes the zpaks at the drop of a hat. He has a virus, he takes a zpak. Thats the problem. Welcome back, everybody. A superbug was found in the United States for the first time. The drug resistant bacteria putting Health Officials on high alert. Some arguing that more incentives are needed to spur the development of new antibiotics right now. Thats the topic well talk to dr. Zeke emanuel about. It was his latest oped. Want to win 2 billion . Create the next antibiotic. He is senior fellow at the center for American Progress and the chair of medical ethics and Health Policy at the university of pennsylvania. And doctor, thank you for being here today. Great to be here. A lot of us were highly concerned when we read about the new superbug. Its a bug that was resistant to the last strain of antibiotics thats used in lastchance scenarios. Its pretty dangerous because it can shift into other bacteria, its something that can get picked up and spread around quickly. You have a plan for how we attack this. What is it . Both, we have to stop overusing antibiotics. In hospitals up to 50 of prescriptions for antibiotics are inappropriate or unnecessary. In the outpatient setting at the Physicians Office its about a third of them in a recent study were proven to be inappropriate or unnecessary. So we have to stop that. And we have to do whats called good antibiotic stuardshewardsh how do you know . Is it a prescription written to kind of make sure youre knocking everything and anything out . Its a combination of physicians wanting to move quickly past a patient. I have had two days of sore throat, its not getting better, can you give me something. Even though the overriding chances are its viral and youre not to treat that with antibiotics but a lot of physicians do and write a prescription when its inappropriate. Whats the impact of overprescription . Two things. One is youre not treat an infection and youre breeding resistance in the people. And people may take the antibiotic for three days instead of ten days. And that also breeds antibiotic resistance in the bacteria. Thats another reason we have this problem. Thats on the demand side where people are overusing antibiotics and doctors are overprescribing that. Medicare can change it in the hospitals, and i think they need to move quickly to make every hospital actually have this antibiotic Stewardship Program as a requirement of getting paid. On the flip side. We need more antibiotics. Well need more forever because bacteria evolve. They get resistant to our antibiotics, and we need Something Else. So we need a major push in antibiotic research. Part of the problem has been there is no money in it. The market is a failure because people are not willing to pay as much for antibiotics that might save their life as they are for cancer chemotherapies that dont cure them, dont save their life and prolong their life a few months. Thats the dilemma. If you are a drug company, you say, do i develop this anticancer drug that will sell for a hundred or a hundred 50,000 or an antibiotic. Its an economic decision by the Drug Companies and they go with the anticancer drug. We have more than 20 times as many cancer drugs under development as we do antibiotics. You have a plan to try to fix this too. I think we have to we need to think outside the box. One of the ways we need to think outside of the box is prizes. When i started working in the white house under peter orzag, the then director of the office of management and budget, he had us think creatively to incentivize policy. One of the ideas was more prizes. In the past napoleon used prizes to figure out how to preserve food for his army. The british gave prizes for naval navigation. Netflix has given a prize for predicting people. We should try this. Not just the United States but a lot of developed countries have the same interest because they have the same antibioticresistant bacteria. We should pool resources and give hefty prizes to researchers and Drug Companies and whoever can develop new antibiotics. It will take five to ten years, so we need big prizes. And, you know, saving a lot of peoples lives i think is worth 2 billion for every new drug, antibiotic, that gets through the fda. Zeke, while we have you here, we have been showing pictures about zika and statistics on that too. Can you update us on just how big of a threat this is to the continental United States. I guess women who are pregnant here at this point. Look, this is a very serious mosquitoborne disease. We know the mosquitos are around. I think we should not overhype it. First, we have very good Mosquito Control in this country. We know that because a related infection, dengue fever, has been in latin america for a long time and has while its entraite penetrated the United States it hasnt been rampant. And the mosquito Vector Control is very effective in the United States. The second thing is, for most people its not that dangerous. It is very, very serious, and the consequences are tragic for people who women who get infected and then get pregnant or are pregnant and the brain is developing. And so we need to be very, very vigilant about it. I would just note for you that, you know, we have now had a repeated issue on infectious diseases. Ebola, zika, this antibiotic resistant. I think we need a new approach to emerging infections and a much more comprehensive approach to it so we are not sort of responding to the latest controversy and we dont have a strategy that is well thought out and well funded. And i think this zika really alerts us that we are not doing a great job of both monitoring infections and responding to them and rapidly developing anti measures, whether its diagnostic tests or antibiotics to fight them or antivirals to fight virus infections or vaccines. We need a better strategy. This sort of stumbling from crisis to crisis is a very bad idea. The infectious agents are coming back bigtime. We thought we conquered them in the 50s and 60s with all the antibiotics but this is a major threat to us, i think, and will continue to be. There is a lot of talk about the zika virus and the olympics in brazil upcoming. I know in august its fall in brazil. Right. Do you think its a big risk, or do you think its containable . I think youve got billions of dollars invested. You have no obvious alternative. No planning for an alternative. While the zika threat is present. Its already diminishing. I find it hard to believe that theyre going to cancel the olympics. That does not mean that there is zero threat. And or that we can just ignore it. But i dont think its going to be sufficient for the Olympic Committee to cancel it. That would be Pretty Amazing and unprecedented. So but those olympics have lots of problems, as everyone knows, in addition to zika just adding to it. Dr. Emanuel, thank you for your time. Its great to see you. No problem. Thank you. It was a pleasure. When we come back, walmart will be in the spotlight today as investors get ready for the companys Shareholder Meeting. And counting down to the jobs report. Look at the numbers from outside the Labor Department in the next hour. Squawk box will be right back. Y you recommend synthetic over cedar . Super food . Is that a real thing . Its a great school, but is it the right the one for her . Is this really any better than the one you got last year . If we consolidate suppliers whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Ok. Sure. But are you asking enough about how your wealth is managed . Wealth management, at charles schwab. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Welcome back, everybody. Walmart is testing a new way to bring items to your doorstep. Theyll Start Testing a Grocery Delivery Service with uber and lyft to compete with amazon. The test will debut in denver and phoenix in two weeks. Theyll officially announce the program at the Shareholder Meeting. Coming up. An Australian Mining billionaire is taking on modernday slavery. Its hard to believe it even exists but apparently millions are still enslaved through human trafficking, forced labor and sexual exploitation. Its happening around the globe. This gentlemans report and the two countries who are the biggest culprits are up next. Squawk box will be right back. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Nearly 46 Million People around the world are living in modern slavery according to a new report by the walk free foundation. Men, women and children enslaved through these things, human trafficking, forced labor, debt bondage. Forced marriage or commercial sexual exploitation. The Global Slavery Index finds that modern slavery exists in all the 167 countries that it covers. You can see some of the numbers in Different Countries in absolute terms. Ipp inda with 18. 4 million followed by china and pakistan. Joining us now the man behind the report. Andrew forest, an australian billionaire, mining magnate and philanthropist when his daughter discovered that a childrens orphanage she worked at in nepal were being groomed for the sex trade. Who is doing this . Is it foreign governments that are that are actually involved in it more . Or is it corporations that that arent being forced by governments to change their tactics . Or is it both . Look, there is a little bit of complicity by government. Its more just not doing much about it. When the United States outlawed slavery and thanks god you did, but what actually happened is that you deregulated it. You allowed slavery to crawl off into the shadows where its absolutely thrived. Youre right. Its about 46 Million People. Unfortunately, i think the number is climbing. These are people who are, you know, treated like farm animals or much worse in many cases, particularly in the sex trade. And theyre not allowed to leave. Their passports are taken or theyre held by force or threat. So this is its a major issue. Its basically done by socalled Business People who think theyre a little smart but in fact theyre just breaking the law and horribly undermining human rights. Out of all the different subsets that we talked about, out of the 46 million, would you say greater than half are in sexually exploitive areas . Or even more than half . No. Look, its about a third. A third. Thats thats some 20odd Million People. Its massive. Its like the size of australia. I dont understand what the other twothirds is. Is it forced labor and those people are really stuck where they are . De facto slavery . Its absolute slavery. Forced labor. If you go to leave, say the big sweat shops where i personally found slavery within my own companys supply chain. When my daughter grace had the heinous experience. She was likely to have been kidnapped herself. It was actually only the kids under her charge that were taken. When i looked for slavery in my supply chains i came across thousands of south indian workers in these huge garagetype factories in the middle east in atrocious conditions. They had their passports removed. The live expectancy in the factories was less than five years. You didnt get paid. You were fed just enough to live. It was run by people who actually thought they were Business People, these fruitcakes. It actually went all the way up to a huge company in britain, a big publicly listed company. This was a supplier that was supplying my company and hundreds of companies all over the world. Many of them in the fortune 500 here in the United States. I just went looking and i saw every government and every company, look for slavery. If you find it, i believe your media, particularly here in america will be proud of you. You wont be crucified. Go look for slavery and tell the world when you find it because youll help free other slaves. Do you have data that, once rescued, the people can lead normal lives or theyre scarred forever. No doubt theyre scarred forever but the people become productive and really motivated people. Theyve come from a very dark place. They dont want to go back there. There is a converse to this too. I would like everyone in america to be conscious about where they buy their shirt or jeans or their food. Ask the question, can you tell me where the food or shirt came from. If they cant answer that theyre looking the other way on modernday slavery. I would certainly say, if america takes a strong stand against slavery i dont mean with your checkbook, i mean with your leadership, your example, youll help to lead the world out of slavery. Nobody knows this stuff, i dont think. Thats were ahead of the game just from talking about it, andrew. I appreciate your time this morning. Thanks. Cnbc have been fantastic. Thank you for bringing this to americas attention. Its a huge issue. Right. And thank you. We appreciate it. All right. When we come back, the most important number of the month, the may jobs report, due out in just over 30 minutes. Our panel is ready to break down the data, talk jobs, and the state of the economy. Theyll join us on the other side of the break. Quick look at the futures right now. Picked up a little bit. Dow futures up close to 18 points. Nasdaq up by just over 1. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Jobs in america. Breaking news this hour. The may employment report. The numbers, the Market Reaction and the big question, will todays data be a gamechanger for the fed . Will they stay or go. Britain prepares to vote on its future in the eu. The best case isnt good. The uncertainty is bad. Well bring you jamie dimons prediction. Walmart gathering with investors today and getting ready to roll out a test of grocery delivery with uber and lf lyft. The final hour of squawk box begins right now everybody working for the weekend live from the most powerful city in the world, new york. This is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with rebecca quick. Andrew is off today. Synchronize your watches. 29 and a half minutes to the jobs report coming at 8 30 eastern. Saying the economy likely added 158,000 jobs last month and the rate steady at 5 . Expected to rise. 2 . The government predicted the verizon strike would cut 30,000 jobs from the payroll numbers. The futures right now have been right around a flat line. Up a little. Green up across all three. A point on the s p. 17 on the dow and about. 60 on the nasdaq. Checking out markets in europe. Ftse has been the strongest one all morning. Still is. France up about. 5 . Some of the stories investors talking about today. Czech f chicago fed president says there could be two rate hikes this year. He notes the timing of the moves is not that critical. Two rate hikes in 2016. Thats my own call for that. If the data continue to be in line with my outlook. Thats a slow and gradual increase this year. The next fed meeting comes a week before the u. K. Votes on a referendum on whether britain should remain in the eu. Jamie dimon speaking to his banks in london and the chancer of the exchequer. Weve already seen the uncertainty causing less investment in the country. People on june 24 will invest less as they try to sort this out. Dimen says a brexit would mean fewer jpmorgan jobs in the u. K. Back here in the states were following a developing story in texas. Massive flooding in the Lone Star State claiming more lives. Five soldiers dead and four missing after a military vehicle was swept away during a Training Exercise at fort hood. There is no break from the rain. Its expected to drop 3 to 5 inches on eastern texas. Stocks on the move today. Gap is probably i remember last time we talked about it its hard to move the stock at this point. It is up. Thats what i mean. Even though samestore sales dropped 6 last month. It was smaller than expected. Its up on this news. Broadcom, big gainer, beating the street on the top and bottom lines. Up 7 . Company also raised dividend by a penny. Bp will pay 700 million to settle a suit stemming from the 2010 gulf of mexico oil spill. The suit contended the Company Misled Investors by understating the severity of the spill. United, continental and delta are reportedly among those considering bids now someone corrected me and said it wasnt panama. That it was clolombia. Anyway, its avianco holdings. Panama based but colombian. What the heck does that mean . Anglodutch or something . Apple services, like the app store, have been restored. This follows a more than twohour outage yesterday. A andciti says the income will be lower than last year. Its the flag carrier of colombia. Then whats panama . Im looking. Its going to take a while. Its wikipedia. Go ahead. I have time. We dont have the jobs report until 8 30. Can you imagine if people did things like that . Silence on tv is so scary. Oh no. Nobody dies. Before we get to predictions on the jobs report. More about the economy and the fed. Panel of experts here. I use that except for larry i use the term loosely. No for all of you. Im sorry. Would you want to be called an expert . I wouldnt. Larry bossidy, former chairman and ceo of honeywell. Christina hooper u. S. Investment strategist. Austin goalsby is here. Always a sour puss. Even though its his guy running things. He is a university of chicago professor, former counsel of economics advisor chairman under president obama. I dont know why he ever left. We would probably be in a much better position now, austin, you know . Douglas holts hagan, president of the American Action forum. Doug, where have you been . You are a nevertrump guy, arent you . Ha, ha. Im watching and wondering. Is that a yes or a no . Uh, im not going to be in the trump administration. Thats for sure. Now youre incognito. You still have the beard. All right. Christina, whats your number today . I expect around 140,000 today. Liesman is at 145. Would you like to change your number based on his previous work . No. I think okay. All right. I think its probably going to be there or a little less. Austin, what does that mean . Youre at 80 or something . No. I was at 165. I was getting optimistic but i didnt know about the verizon strike. I should reduce my number to, i dont know, 140. Really . What do you mean you didnt know about the verizon strike . I knew about the strike. I didnt realize that that was that many workers in that week that they do the survey. I cant believe a guy who does this for a living youre an academic now. So it didnt really matter. Joe, i agreed with the first thing that you said that youre not an expert and you wouldnt want to be called that. Doug, sorry that i put you on the spot. Didnt want to out you as one of the republican establishment elitist types. Do you have a number today . Thats what i am. Lets not kid ourselves. Im at 165. Im not changing it. Whats your number . I am at 165 and sticking with that. Youre sticking with that. Austin . Im 168 less the verizon. Down to 133. Is this enough for july . Theyre not going in june . They want to make you think they might but they wont . We think june is still very much live. Really . We have had enough fedspeak recently to really try to set expectations that its a live meeting. We think it very well could be. Of course, if polls suggest that the leave vote is increasing a lot relative to the brexit, perhaps they may sit on their hands in june. But we do think its a live meeting and thats the way its been messaged. Austin, you can comment on that. Also, i showed some charts earlier. We are in a big discussion now its weird, within this Election Year. Were not really slure with bernie and hillary whether they want another eight years of this economy or they dont. It seems like they want to continue the president s legacy, but then they say, no, no, no. The middle class is not doing well. There is a lot of income inequality. Which is it . Two totally different things. On that one, i think its perfectly legitimate to say were way better off than we were when we were about to go into a depression, and we have improved over the last six years quite a lot. But we still have a fair ways to go. I think thats totally legit. That seems to me like what they have been saying. On the fed, i think somehow the fed you can see them. Theyre itching to raise the rates. I dont know if they need a big thing of jubilee or what, but the itching has, in my view, has been not totally based on the facts. There is no denying that they want to raise rates. If we got a big number today, i think june would absolutely be a live meeting. I think the only thing that is weighing it down and you saw governor tarullo say that, is the brexit vote, that they dont want to do something and then, if they got an exit vote in the u. K. , that freaked out markets, i think they would be upset. Did you sayjubila . Yeah. They want to itch their foot fungus . Is that what youre saying . That was my analogy, yes. I thought you would appreciate that. Its like early. We talk about we talked about having someone cop to having foot fungus on the show before. You tricked him into admitting it. Do a lot of people have it . Joe said to somebody, ive got foot fungus and the guy said, yeah, i do too and joe said, i was kidding. They should be itching. God, theyve like hamlet. Theyre so indecisive. I was supporting of the fed until end of last year. Since then theyve been wavering and uncertain and ambiguous. Their postmeeting conferences are not reassuring. So i do think theyre run more politically than they are by the financial numbers and i think were going to move in june. In june. In june. I wouldnt be surprised if we moved again at the end of the year. If you have someone like eric rosengren, a dove, out there telling the Financial Times that we are on the verge of the conditions being met, i think you have to take it seriously. Hey, doug, do we still have the charts . I dont know whether you saw the charts. I ran them earlier. People are retweeting this like crazy. I think it was the victory lap that the president took last week. A lot of people wrote, you cant take a victory lap without winning. There were like seven or eight charts, you know, Participation Rate, food stamp rise. Maybe we can bring it up again. What grade would you give this economy . Here are the charts. Student loans, food stamps. Federal debt. Money printing. Health care, labor force participation. Home ownership. Black inequality and median family income. Would you run on that, doug . It doesnt matter what grade i give it. You look at know poll, americans are very frustrated and unhappy with the state of the economy. They think the nation is on the wrong track. I think it explains perfectly why you are seeing a Hillary Clinton and a Bernie Sanders try very hard not to be the third term of barack obama. They dont want that perception at all. They actually agree with the policies, but they dont want to have to live with the consequences. Thats a tough political place to be. Thats what theyre trying to do. Be a little careful on the polling. One thing you have seen in the polling, which has happened in the past when we came out of recessions. If you asked people, how do you think the economy is doing, they say horrible, the worst. If asked about their personal situation, how do you think youll do over the next year, thats actually turned up a fair amount. Theyve been pretty clear about what they think about the direction of the economy, the nation and the policies. Its been seven years, austin. Its not just coming out of a recession. Remember, in 2005 the polls still showed that people thought we were in a recession when the recession had ended in 2001. Well, i am very familiar with this phenomenon. Remember, i was on the Mccain Campaign where it was essential that we try to convince American People this should not be the third term of george bush who was at that point a very unpopular president. This is exactly the same problem on the democratic side. We have to take a break. I have to add another chart. Foot fungus. Its very prevalent and its getting worse. Look at this picture. Look at that guys nail. Joe, somehow i understand why becky is a lot better on twitter than you are. A lot better on twitter. Risk factors. Man. This is i am learning a lot about this. This is not something you want. Gyms. Is that a risk factor . No. It can be its nasty what can actually happen. Nail deformities. Ewww its 6 to 9 . Anyway. Well return with our panel in a moment. In the meantime, the number of highskilled jobs set to exceed the number of graduates by more than 20,000 just in the next few years. How monsanto is cultivating a work force and developing homegrown talent next. Incredible bladder protection from always discreet that lets you move like you mean it now comes with an incredible promise. The always discreet double your money back guarantee. Always discreet is for bladder leaks and its drier than poise. Try it. Were so confident youll love it, well give you double your money back if you dont. Incredible bladder protection. Double your money back guarantee. Thats always discreet. Enis really built into theat foundation of the company. Whole foods market is engaged with pg e on many levels, to really reduce energy and reduce our environmental footprint. For a customer like whole foods, saving energy means helping our environment, and we can be a part of that. Helping Customers Save Energy is a very important part of what pg e does. We can pass those savings on to the environment, the business, and the community. Pg e really is an expert in saving energy, and that partnership is extremely exciting. Together, were building a better california. Epidemic. By 2030 the World Population is expected to jump by another 1. 2 billion people. The agriculture industry is working to feed all those mouths. Also, too few workers for too many jobs. Mary thomas joins us from monsantos headquarters in st. Louis with a look at where the jobs are. Good morning. I am at a greenhouse at monsanto headquarters. Behind me you see a number of plants that the company is testing now. Theyre undergoing herbicide testing. Plants are not the only thing monsanto is cultivating. Its looking to grow its work force which is increasingly made up of hightech jobs. Supply is tight. A recent survey estimates for the foreseeable future the annual shortage of College Graduates needed to fill these highskilled jobs in agriculture is north of 22,000. Monsanto carefully tends to its work force given it needs a certain yield. On an average year we typically hire about 1500 people. Melissa harper is Vice President of Global Talent acquisition. The Jobs Available at monsanto range from crop science. Economist and software engineers, data scientists and Cyber Security specialists. There is a shortage and an opportunity. The ancient art of agriculture is looking to tech to manage water and soil and increase efficiencies and harvests. Companies are recruiting a new type of worker to the field. The opportunity to use data in meaningful and new ways means that we need new and different types of skills and competencies to drive Agriculture Technology forward. Monsanto is using modern techniqueses like blogging and social media to recruit potential candidates hoping to lure them away from pure hightech with a promise of a job that could feed the world. Monsanto says most jobs require a fouryear degree and many require an advanced degree. The pay can range from 50,000 to 100,000 depending on the job and the workers experience. Trying to figure out quickly about how much farm land we use now to get much more. 1. 2 billion is a big number. Given the technology and everything else, if we reclaimed all the farm land that we used to have, we could figure to feed a lot more than 1. 2 billion additional people. Though obviously not all the people in the world are fed sufficiently right now. Technology is amazing, isnt it . Do you know numbers like that. It is amazing. I dont know what the numbers are but its not only the farmland here in the u. S. Its land elsewhere around the world that has to be cultivated in order to feed the growing population. A lot of the focus is on africa and basically improving the land there and making it, you know, more open, i guess you could say, welcoming to the big farms that are needed to fill that feed that population, certainly. They used to do rotation and it had to lie fallow or two or three years. Now the things monsanto has done with the hightech jobs, its amazing. Funny you said they need a lot of people. Youre talking about genetic engineers, not farm hands really in terms of the jobs. No. These are highskilled jobs. Thats right. Thanks. Still to come, this mornings main event, the may jobs report. The numbers and the instant Market Reaction. First, though, this tea is for you. Well tell you about a partnership between starbucks and Anheuser Busch next. Welcome back, everybody. In our headlines this morning, this tea is for you. Starbucks and Anheuser Busch are teaming up to produce a bottled version of tea vaughna, tea. It combines starbucks tea expertise and inbevs production know how. It will be available next year at supermarkets and convenience stores. The final payroll predictions and the jobs report and instant Market Reaction next. Ahead of that, the futures are relatively positive. Nasdaq and s p up fractionally. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Its the final countdown the final countdown it is the final countdown to the may jobs report. Lets talk to our panel the experts, some of whom have given final predictions, some of whom have not. Rick, youre new to the table. Why dont you give us your prediction. Everybody is concentrating on verizon. That may have an impact. Im going with 190,000. Hmm. High. I really still think that, you know, were close to 200,000. We could debate as to how many parttime or good jobs that includes, thats my number nonetheless. Steve . How about you . Im at 145 trying to balance the verizon strike with maybe snapback from a weaker april because of a stronger march. I think it come backs to a little bit of normal. Curious about Government Employment and whether or not the weather has an effect. Its slight, but rick could be right at 190. The error rate on my model is plus or minus 50,000 which is apparently pretty good in the model business. You point out the tenyear note. The yield dropped yesterday, which i was surprise. Its 180 i think its possible. You need a strong number to make it happen in june. There is talk about why not wait. I think the other issue is also why wait. Something else could happen in july. There was criticism of them not moving in september, not seizing the moment. If they want to get it higher and do it over a very long period of time, take the early opportunity. Gives you an opportunity to wait more on the back end. Rick, your thoughts on the tenyear . Rick . Oh, im sorry. I didnt hear im looking at the yield curve. When you were talking about the fed, were down three on the week in twos. Eight on 30s. Six on the week in tens. Even though yields are dropping. I think its erroneous to look at the long yields falling and draw by disconnect. How would you rate it in terms of the fed meeting next week . Its pretty important. We havent you know, it can go either way at this point. So this could be helpful in it being a deciding factor of some sort. We know that the fed is looking wholistically. Its not just about nonfarm pay ro rolls. The jobs report is up. Essentially the last chance the last important piece of data before the meeting. Quick look at the futures board and the tenyear note so people can gauge the before and after numbers. Dow futures up 15 points. S p by one. Nasdaq by 1. 6. The tenyear has been just under 1. 8. Now it is time for the jobs number. 38,000, repeating. May, nonfarm payrolls increased by just 38,000 jobs. The Unemployment Rate, 4. 7 . Average hourly earnings, 0. 2 . The 4. 7 Unemployment Rate the lowest since november of 2007. That plus 38,000 jobs is the lowest monthly total since september of 2010. When we actually lost 52,000 jobs. Obviously this number way below the consensus forecast. There were also significant downward revisions for march and april. Those two months reduced revised downward by a combined 59,000 jobs. Lets talk about the job losses in may. We lost 34,000 in employment information. That, of course, was the verizon strike which people had anticipated. But construction was down 15,000. Mining, minus 10,000. Manufacturing, off by 18,000. Temporary help, down by 21,000. Job gains, health care, plus 46,000. Professional and business services, plus 10,000. Food and drinking places, plus 22,000. The labor force Participation Rate, decreased to 62. 6 . Down. 2month over month. The civilian labor force last month shrank by 458,000 workers. U 6. 9. 7 , unchanged. With the downward revisions for the last two months, the average job growth for the last three is now plus 116,000 compared to plus 219,000 for the past year. Back to you guys. All right. Lets get back to get some instant reaction from the jobs panel. Whats going on here . Im still looking for a digit here. Were missing a digit. We went because the work force shrank. People dropped out. The opposite of the trend i was talking about. And the number of unemployed fell sharply. 458 leave the work force, 84 fewer unemployed. You reduce the numerator and denominator and you end up down 4. 7. Can they use the 38 now and save some right before hillary right before the election . Thats what they do right now. They take the ones and put it in a file. September and october well do are you texting to jack . No. I hope hes watching. This is for an october surprise. Its all political. Its all political. Can i talk about the data for a second . Its like a ceo comes in. Get it out of the way now. So, a couple surprises here. The first surprise is that, relative to adp these guys, look, theyre plus or minus 50 but not plus or minus 150. Was it 173 yesterday . On adp for the private sector. This is 25. Places that stand out as differences with adp and folks, i cant tell you whats right or wrong here because truth outs after a year essentially when we get the state data on payrolls. You see construction down 15,000 much you had strong construction growth. Services, 61. Thats missing a digit relative to adp. Well get ism at 10 00. Well look at the employment component there. The information number, influenced by the strike. Maybe you want to add 38 to get back to another number. You also cannot dismiss the prior revisions. Revisions tell you a trend. And this trend does indeed speak of weakening. The temporary help services, a number ive pointed to for years as leading the way, down 21,000, is not helpful for thinking about strengthening the job market. Let me look by the way, manufacturing hours were up. Let me look at wages here. Average hourly average weekly hours, 34. 4. Unchanged. Earnings up 0. 2. The same as it was, as expected. 0. 2 hours. Undoubtedly weakening. I have my doubts that its weakened this much to be down into just doubledigit gains, joe. Hmm. The thing to remember on this, the wild card that we have been saying for the last several months could easily be a wildcard explainer in this, which is we dont know whats happening in productivity. This might be a sign that productivity is starting to come back. As i have been saying for months, if productivity just goes back to even resembling normal, the jobs numbers will deteriorate quite a lot, because the output growth hasnt been that high. So if you have high productivity growth, you dont need to hire anybody to grow. What does the fed say . I think on a Risk Management standpoint you take a step back and wait. Ten more months like this. Ten more months of 37,000 and well be under 3 unemployment. This totally summarizes the disconnect between good jobs, the jobs number, the Unemployment Rate and what motivates the fed and its dual pillars. Im sure well get mr. Perez out here. I am sure he wont brag about the 4. 7. This stencil has been in place for quite a long time. It really underscores how the Current Administration and the future president , whoever that may be, if you are running on this record on jobs and you look at that Unemployment Rate, the only thing you should be able to discern is that, if the fed uses any of this in their model as a high priority it explains why policy is so horrible at this point in time. The dynamic of the jobs market, if questioning productivity, you know, austin, productivity is the whole key to everything. I think what this tells me is i agree. People and there is no easy reason for it. The reason is simple. You get all of these rules, all of these bad policies, the fed is maybe the biggest worst enemy. I take that back. Probably the ecb and the bank of japan. The more negative the world goes the more you see strange dynamics like this. I would be curious to know what numbers you would use to make policy. First of all, i would start using withholding taxes a bit more. Its a year this stuff is a century late. Its a century late. The other thing listen, this isnt yelling, okay. Spend thanksgiving in an italians house sometime, youll see what yelling is like. This is not yelling. This is called a discussion, okay . Its a discussion. Rick, i am also of the smettsme semitic region of the people who have a tradition of growing olives. Were the same in terms of whats yelling at the kitchen table. No reason the government should be able to get the wage data more quickly. It doesnt. They need to quit with the questionnaires and get the census area out of the white house. I am with you. All the survey questions are loaded questions. I dont care what people say. Ed lazear will tell you go to war with the data you want, not the data you want, rick. If this was Corporate America with these types of data, there would be big issues. Christina. Steve, havent you made the argument that the fed standards are a lot lower than the market standards . Not this low. He said 50. I said a hundred. Said it could go down to 50 plus or minus 50. Yeah. You said even 80 to 100,000. You quoted one member as saying that. Youre getting close to that 80,000. I would argue that, yes you think they ought to punch the button. They have to have some dry powder if something bad were to happen. Japan and its negative Interest Rate policy is a cautionary tale. I think theyll look at this and say, you know what, it wouldnt be that bright to raise rates into weakening payrolls. This is a real reason. When you say what difference does one month make is doug still out there . Yeah. Doug, what would you look, look, these guys are people. Theyre humans. Theyre looking at the same thing you are looking at. They dont have a crystal ball any different. They have all these models. You know what the models are. Look at the atlanta fed gdp. What would you do in this situation . Would you pause . Would you hike . I would hike. They will not. I thought we would get 165. Theyre feckless and how would you explain the we just got a very, very low jobs number. They cant hike in june. They wont. If they did and the economy got worse people would be like, how dumb are you. Maybe thats why its getting worse. Low rates are the problem yeah. We have a whole game of thrones time continuity thing going there. Facts, austin, facts. Facts. Before rick veered off on his attacking every government, i was going to agree with him for much of what he was saying about our problems with the data dont do me any favors. There was a a rumor going around in september that vicechair fisher was making the case, begging the fed, to raise 12. 5 basis points. Could we see the potential for at least some faction of the fomc to beg for a 12. 5 basis increase . I dont think so. They would say, if its good enough to do 12. 5. Its good enough for 25. If its not good enough for 25, its not good enough for any is what i think they would say in that context. I agree with you. Joe, youre full steam ahead . Youre going to do the quarter point . Yep. Take the quarter . They should have two years ago. Should now. I am in that couple of too. Doug, bossidy, joe. Becky, do you have a vote on this . Its t its tough. Its not helping. Christina, where are you . There is a difference between what i think they should do and what they will do. They should raise 12. 5 basis points at least. Split the difference. The rumor was stan fisher was arguing that back in september and almost begging them to move. Get something started. It probably would have been a good decision. Rick, would you game out for us how the fixed income market would behave, how equities would behave if the fed hiked in june . My kids never liked it when i took away their allowance when they didnt get good grades in school. Im sorry. In this case, let the market move the way the market moves. I think there is a stockholm syndrome going on between the markets and the fed. Its been conditioned in the negative way. Listen, why should we treat the market any different than the whats the right thing in the long term for the u. S. Economy . We need this central bank to lay down the gauntlet that no more negative Interest Rates. Were going the other way. It isnt because of datadependent. Its to save the capitalist world. Without positive rates, bill gross is right, it all falls apart. The risks so far outweigh i would do 25 right now and i would do another 25 a month from now. The fed has never xhencommena rate increase regeeme when the growth rate was below 2. 5 and the so what. Who cares. We never had 10 1 2 trillion dollars of negative government securities around the world. Dont start raising until the economy is growing. Give me a break. This is crazy. Were pandering to markets. And whiny investors. Grow up. Tighten the market. The fed should be turned into an algorithm and sent to disney world. All right. Enough. Thanks, steve, rick, austin, christina. People are sticking around, i guess. Good. Good. When we come back, politics and the economy. Well talk about how todays jobs report could play out on the campaign trail and ask larry what three things hed do if there was a bossidy administration. Check out the dollar. After the employment report, dollar down across the board. Had been higher across the board before we got that number. A lot of people were thinking june was definitely active. Maybe this means the market is thinking its much less likely that the fed will raise rates. Squawk box will be right back. It takesbut stealing itd work to eaonly took a few days. Female announcer protect your money. Find out if youre dealing with a registered investment professional at investor. Gov. Before you invest, investor. Gov. Igoing to clean betteran electthan a manual. Was he said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. Welcome back to squawk box. The may nonfarm payrolls coming in at 38,000, which was not even close to what anyone was thinking. And, as it so often happens, that naturally meant that unemployment would go down from 5 to 4. 7 . You wonder why people get this look in their eye when stuff like this happens. I guess it makes sense that the market goes down. We have had less and less bang for our buck when it looked like the markets are escape velocity at some point. Thinking were almost there. Finally. But we are getting the worst of both worlds now. When the fed started talking hawkish and tough about a live meeting in june, the markets had trouble. So now it got over it pretty quickly. It did. Three or four days. And then we figured, okay, now theyre okay with raising rates. Now theyre not going to do it again and were not getting back what we lost. I like christinas idea of 12. 5 basis points. Baby steps. I dont like that at all. Thats like kissing your seriously . Get it started so youre not sitting there yet we still hear how great the u. S. Economy is and were tiptoeing up to lets go to 5 . No. Add in probably 12. 5 basis points. Now youre down to adding an eighth. Why not a 16th. At least were moving in the right direction. Incrementalism at its worst. Better than no movement. What if the whole premise in this is where people are in disagreement. The whole premise is it doesnt help to stay low and actually hurts to stay low. Look at japan. Look at japan when they went deeper into negative Interest Rates. God help i mean hopefully the decision our central bankers make from here on out hopefully is not dependent on whats happening in the rest of the world. Theyre trying experiments that arent working. Were basing our environment on the structural problems they have lets say theyre always low in europe because of their structural problems with an entitlement states. Larry, does that make sense . Globalization suddenly is not the great word it used to be. Nationalism is coming back. Larry, you are the president. You are in charge. What are the three things you do in your administration . One, i would expect the antiquated tax code and make Corporate America more competitive around the world. Number two, i would fiercely attack regulation. It stymies small business, particularly, but its very expensive for big business, and its out of control. And thirdly, i would change k through 1 education in the sense of making Digital Learning a part of the curriculum just like math and science. In the last month i have been exposed to a number of things that have been amazing to me. One, this harnessing of big data under the internet of things. Caterpillar now, by virtue of intersected sensors, can detect equipment across the world that needs repair. Marathon oil can detect toxic escapes across their footprint. Enormous things are going to happen in that that respect. Introduced with the bitcoin going to be expanded and you can eliminate intermediary such as bank clearinghouses because of this digital ledger they have. Artificial intelligence you read about every day. Now theres nimble electronically controlled tackling dummies, complements of dartmouth college, now use in terms of reducing injury. Now theres medical technology where they added genes with enormous biological impact. Somehow or another our young people have to learn how to do this kind of stuff because thats where the jobs are going to be. So id like to see in terms of third point we cant wait for all that to happen. There are places giving courses teaching College Graduates to be employable. Were doing it ourselves. We have to do it faster if were going to give these people the satisfaction they think they deserve. And they d deserve. Were going to continue this conversation in a moment. In the meantime jim cramer will join us live from the new york stock exchange. Well get his take on what he thinks about those jobs report numbers and also some of todays stock movers. That is next right here on squawk box. They may want the latest products and services, but they demand the best shopping experiences. Theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Lets get down to the new york stock exchange. Jim cramer is joining us. All this is happening in an Election Year too. We got 38,000 and in downward revisions, but were at 4. 7, but theres that Participation Rate, again. And 70 of the country thinks were headed in the wrong direction, i just i dont know. I dont know whether to believe 4. 7. Somethings rotten in denmark, isnt there . Yeah, i think so. I mean, im trying to figure out how much the minimum wage increase made it so people are not hiring as many or theres more automation. Trying to figure out the shifts, how youve got people working regular hours. But in the end it just shows you that may was a very weak month in the country. A lot of retailers indicated that that there just wasnt a lot of spend. So its very tough to figure out. I dont want to be political about it, its just hard to figure out. Is he trying to go through the line items. Can you see it all of a sudden jumping in august and september though . I dont know how that i dont know. Obviously that implies something. Yeah, i mean, we should have known when you saw bristol myers, almost a profound shift to health care, if the fed raises were going into recession, if the numbers weak were going to buy slow growth consistent grower. Stock market was really trying to predict this yesterday and they really got it right. Man. So they prepare us for a live june meeting. And this is the big scary thing that theyre in the roach motel and they can never get out. Its impossible to leave. Hotel california. Yeah. You can check out but you can never leave. Yeah. Wow, i mean, i thought housing was getting better. Housing is a little better. I cant imagine june now. I dont know. Is the digitization, amazon, all coming together at the same time . People getting laid off all over the place . You know, you got four minutes to think about and figure it out. Thats exactly how i feel about it. Thank you. More on the Market Reaction and todays jobs report and later this morning dont miss without accounts Economic Advisor sandra black joining squawk on the street at 9 30 eastern. You wouldnt order szechuan without checking the spice level. It really opens the passages. Waiter. Water. So why would you invest without checking brokercheck . Check your broker with brokercheck. For decades, investors have used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Welcome back everybody. That jobs report catching a lot of peoples attention. Donald trump weighing in on that report as well. The gop nominee tweeting, terrible jobs just reported. Only 38,000 jobs added. Bombshell i like that. Bombshell. All right, our guest host this hour, larry bossit and christina hooper, we only have 30 seconds so both of you need to explain how you can do no, dont do that. Any closing thoughts, larry . Im surprised at the number. Ill be the first to say that. I think the economy is soft. I think in the following months things will improve because i think theyll be politicalization. And as a result they will improve. How much below 4. 7 is structural . I mean, Monetary Policy cant help it any way. So its really might hurt it though, which we decided. All right, that does it for us. Im voting for larry. Happy weekend everybody. Join us on monday. Right now its time for squawk on the street. Good morning and welcome to squawk on the street. Im david faber with jim cramer. Were live from the new york stock exchange. Carl quintanilla is on assignment this morning. The ball is now in the feds court. May nonfarm payrolls up only 38,000, that was the weakest performance since september 2010. It was of course well below the forecast for 158,000 jobs created. March and april payroll growth was also revised downward. We are now at 116,000 jobs over the last