Transcripts For CNBC Squawk Box 20160713

European equities on that historic day for the uk. We were just talking about this, the ftse 100 almost 6700. This index has recaptured its prebrexit highs and then some. The german dax still lagging. Italys might s mib is lower. Spains i bex is higher. There has been so much action lately. The euro hanging in there about 1. 10. The yen has been weakening again of course after the elections and bernankes trip and whether or not theres going to be helicopter money. Finally a check on crude oil. Yesterday the rally did the traders on the floor contribute to the rally we saw in stocks broadly. Energy one of the best performers. Today its moving the other way. Wti and brent lower. Which is by the way the best performer of the year. Up nearly 1 again at 2. 75. Todays economic agenda. Followed by the monthly federal budget and beige book. Kaplan and harker are speaking today as well. Young brands report earnings. Two prominent members of the fed making comments. Neel kashkari saying it isnt urgent to hike rates and the fed has time to allow the healing process before making any moves. Separately cleveland fed lor ret that mester spoke. The timing will depend on economic performance. Both officials mngss inflation as a topic of concern. Big money to be made if stocks fail to stay near current highs. In a web cast says hes beeni selectively. G gold is the better alternative against the backdrop of a european Banking System thats in a state of heading to insolvency. Yes. Yen didnt go above 100. Didnt weaken to where it was. I think it got up to 106 yesterday. But yesterday at one point it liked d looked like 95. People were saying 95 even. Yes. Where are christines economist who is all agreed. The ftse is probably wrong about all of this. Its going to come to its senses i think. I know. The 250. Where do you hide from brexit. The ftse is so national. Its been getting a bit of its mow joe back. Where do you hide from brexit . How about everywhere. Record high. Thats what you call that. Not new, fresh, alltime. Record high in territory thats never been reached before. New is redundant. Alltime is redundant. Its a record high. Do you ever call a fresh alltime new record high. I think one point i said new record high. Thats it. Stocks to watch today. Give me the stocks to watch today. You dont like that . No. Why. It doesnt seem important enough to me. Its not macro enough. Youre offended kelly got the opening thing. Let me give you stocks to watch. Ive got a lot prepared for both of them. Just so you can tell them apart, weve got the bow tie and the regular tie. See. Theyll be on in a second. Dressed up for the occasion. He did. Hes been working out or something or eating out. Fast food. Just kidding. Juneau therapeutics says the fda has removed a clinical hold on a cancer trial. Halted tests last week that followed the desclafaeath of ch patient. Its hard to tell with someone gravely ill and trying treatment whether its a cause of coincide coincidental. The treatment removes white blood drel cells from the body. The se kwoi away fund meanwhile has exited the. Sold the share over the last quarter. This stock, this company once accounted for nearly a third of its portfolio. That was really a huge deal when se quoia doubled down and then it caused this big upheaval inside the fund. People left over it. Exactly. Led to the departure of some pretty notable folks over there. Look at disney. Theres a Company Whose pension were affected. Not a math major, but a third of its value yeeanvaleant. Probably down overall unless theyre in i dont know. What could they have to be in to offset that . Its impossible. Burr borrowerberry sells fell. Offering a mixed outlook for the year. Now british prime Minster David cameron will officially resign today. Clearing the way for theresa may to take over. Wilfred frost joins us from london. I liked the discussion earlier about the cat, too. Absolutely. Larry the cat. It will resident cat and staying, not going with the prime minster. Stays at downing street, but let me set the scene on some of the other slightly more important points of the day. The front page of the telegraph going with David Camerons farewell message. As i leave today, i hope people will see a stronger country. Where as the front page focusing on the first items on theresa mays agenda which will be appointing her cabinet. Not only britains second female prime minster, but expectations of a heavy female cabinet as we well. Mays women on the march the headline there. Going to parliament for final appearance. That will take place in under one hour. Hell then return here to downing street. The final photo with his entire family. His wife, children and then make it away around 12 eastern time to buckling ham palace. Then see theresa may go to the palace and return here as the new prime minster. Very quickly shell get to appointing her new cabinet. Who exactly is theresa may. Shes been a member of Parliament Since 1997. She was home secretary since 2010 up until today when she will become britains second female prime minster. On a more personal level. Shes 59. Shes married. Doesnt have any children. And someone who has not been obsessed with being liked. She has not been obsessed with reaching the top. Has always got on with the political job shes been given. Has to be quite endeeringly embraced the limelight thats been thrust upon her. Shes not been the polished politician some other members might have been. Driven by morality as opposed to ideology. The last female was defined as the iron lady. Many people rfl dubbing theresa may as the steel lady. Just as much drive as getting things done. The first people to experience that will be leaders across europe as she attacks the first and main item on her intro, which will be withdrawing britain from the European Union. By tonight we will have a new prime minster. All very confusing sitting over here. Theres mps. Theres pms. Mps turn into pms. Nobody is elected. People get selected. Not elected. A lot of people around that want to be, but someone said something about someone and someone gave an interview then they have to leave then lets settle on its all very i think the queen is still in charge. Is what i think. Thats the way it should be. I love it. Its like a its like a rap you got going. No one gets elected, they get selected. People get elected to be members of parliament and the leader gets picked by the queen. The queen still has a ceremonial role in this. Only ceremonial. That sound like the democrats here select. They dont really vote for their nominee. I feel bad for David Cameron. Last thing he was saying like trump was stupid and stupid and wrong. I think youre not invited to london. I think he was stupid and wrong for ever leaving the acting profession and i dont know if he can go back and be in this brijt jones, latest movie, but let take a look. He is in it. Thats not him . Which one of those two is he supposed to be . Colin firth. How dare you. You dont like David Cameron . Kelly,thats not nice. There he is. No, no. In is no. Youve gone too far, joe. Youve gone too far. Scott, can you tell the difference if we dont put them side by side. That last picture looks more like David Cameron than the other one, i think. Its the same guy. How can it look more like it. Their two different roles, what do you mean. I dont know, wilfred. You cant go from like schwartz neigher did, acting, politics, back to acting. Wasnt he in the kings speech too. That was colin. You think of David Cameron, dont you . I do. Will he be remembered for the referendum . Is that it . It was good for the country and bad for him, i think, right . Not many old people think it was good for the country. Hes got the con servetives back in power. Labor was under power for some 13 years. Hes leaving the conservative party in power. He also saw an economic recovery. Youre absolutely right. His legacy will be the referendum. Something rereally delivered in the first place to protect his on political skin and its backfired on two levels. Hes lost his job and britain will be leaving the European Union. The other thing he will hope wont become his legacy would be the wider breakup of the uk. Sadly that will be his overarching legacy. Something he wouldnt have wanted to be on his achievements. Okay. He is a millennial. They like a they like a little bit of edge to the news. Most millennials got their news from the internet. From john stuart. And you get your comedy from cnn, really or one of the major networks. So thats what you discover on snapchat. I stole that from a guy we had on yesterday. The rock, said that. He said it about fox news. I switched it. Conveniently. Thank you wilfred. We will see you later this morning. Perfect for where do we get that guy . Isnt he great . And then all the stuff happens. Good timing. The dow s p trading at record hies. Where to hide with brexit. The nasdaq turning positive. Joining us now, olson,. You speak minnesota. Chief in factment strategist. Im going to kind of bust on you a little bit. Awesome. So you a couple years ago were probably one of the most bullish guys around in terms of this is going the be a longterm goal that were here. We finally get back to new highs and youre sitting here with an s p target of 2100. I dont want to mess you up here, but were at 21. R50 now. Its a math thing. Youre negative . Should i sell . Youre negative on stocks right now. Were finally break out to new highs and you dont want to celebrate and jump on with this. I dont mean to be johnny rain cloud. You are. Thank you its not december 31 right now, is it . If were going to 2400, youre going to need to raise your target from 2100. First of all, i dont think were going to 2400. Its a technician. Technical is not fundamental. Is that why its called technical. Heres what we said. Three things. Our 2100 target was probably too low at certain times in 2016. Change it then. No. At the end of the day we think there was downside to 1800 which cu occurred in january. Its summertime. The volume has not been great. We think what your year old joke what do we do with brexit. Its just a day. I also know technical is different than fundamental. We also know that theres going be a tremendous amount of uncertainty and volatility surrounding the election, shounding the fed and still with International Growth. Nothing to do with brexit. Has to do with the unknown of how the eu looks and International Growth properties. That is why we remain in the 20 year bull camp. We remain in the camp that 2016 is a transition year. Well see whether that plays out or not what was i dwoik to say . In your view. Rates stay low, earnings come back in the second half. Whats not to like, but you just say mid to low Single Digits for the year. Thats kind of bearish too. You just think flat. We could turn for the rest of the year for sure. Bullish. I think part of the problem is i dont think anybody expected we would be where we are today a few weeks ago. That doesnt mean targets for the year have to change relative to the surprise. Unless were wrong. Unless we really are starting to break out after two years of sideways rolling corrections. This is the time when things do happen. Were back at the principle right. Yes. What if there were an alternative. I would love one. The volumes have indicated and the sentiments to your point that nobody is actually really in stocks so why do we keep saying there is no alternative. Its not forced people into the market. If anything, theyre piling into corporate bonds. Its not only that. Its collectibles. Its art. Its reality. The money money is like water. You put it under pressure. It finds a new level. The pressure that is pushing it out into the system. Its not just stocks. Im saying it might no be stocks at all. Sure there are record highs. Corporations buying their own stock. Pensions have been moving out of them. People who are young r never got in in the first place. Is there any evidence people have been piling in into this market. Trading at 19 times trailing. Thats just a different price. For what you paid for the earnings you received, youve paid 19 times that. When you get 20 or above, that typically is a place that you cant sustain for long. At 5 Interest Rates normally. Never been at zero. Its inflation. And in a previous macro bull, it can get to 22 and next year were only at 17. Stocks always go up and down more than you think. Brian im going to let you go in a second. Im going to let you finish that thought. Uncertainty is the new normal. Were not certain brexit is going to occur. Its either going to be Hillary Clinton or donald trump at this point. I mean you can factor in your worst kcase scenario, but i dot think things are anymore uncertain than theyve been. At the end of the day, assets left america in 2013. Equity assets left. Are you talking about Going Forward too. Go ahead. Now were starting to see an unwiepd of that. The key thing for u. S. Stocks is you have a Portfolio Managers in country who have huge tracking. They unwind the positions as the economy continues to improve. They have to go back to what we believe are the hallmark sectors of america. Thats going to take time because Technology Companies have been used for redejss over the last six months. That needs to improve and we believe were going to see better Revenue Growth and better Earnings Growth and the key i think over the next five years is going to be Inflation Expectations are way too low. Everybody thinks were never going to have inflammatition ag thats going be the big surprise to drive stock prices. Youre not telling people so sell. Youre not telling people to be cautious. 50 points on the s p. If you think 17 and 18 are going to be that great, why try to cut it so fine by the tend of the year. We have a accomplished target of 2100. Youre not going to change the price target. Youre going to change when it goes down. So thats you accomplish something and its like sort of accomplished. Its too hard to change it. Theres certain compliance things. You dont want to sit and talk about changing things. You raised a really god point. Say in this country people have 1 inflation over the next five years and all of a sudden its going to be 2 or 3 . Who does that hurt the most . It would clearly hurt the bond market the most. Its an argument for stocks. Think about why people have been buying bonds. They are not buying because of fixed income. Capital gains. As that inwinds, its going to help stocks. Do you think it unwinds. Yes, do i. When. Thats been the question for three years. Nobody talks about the great rotation anymore. Three years ago it happened. We led our show with it at noon yesterday. Thanks for watching. 10year treasury right now. We work. I think at the gym where he frequents apparently you just have the mutebutton on. Were asking if the last couple of days are the beginning of the great rotation. You cant count it in days. When we have these bondholders start to feel pain skpm see negative signs, thats when the rotation happens. This is a product of qe. Bond buying and various sorts. When you have a 10year treasury at 10 . You have real inflation running at 3. Is that a good buy . Is that a capital enhancing purchase . We forgot about oil prices recovered. C pi is going to be bouncing here in a bit. People are not repaired for that. Thats going be the most important data by far. When you have the regular tie on, youre negative. Watch out. What happens if the bow tie starts spinning . Does that mean anything. That means im really excited. Okay. Thats tmi. Coming up, amazon second prime day sales event generating buzz, but did it live up to the hype. More importantly, will it boost sales in prime subscriptions. Y you recommend syhetic ov 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 golast year . If we nsolide suppliers whats the savin there . So should go wi the 467 horsepower . Or is a 423 enough . Good questio you ask a lot of good questions. I think we should move u to ourew fund. Ok. Sure. But are yoasking enough wealth management, at charles swab. Out how your wea managed . 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. Welcome back. Amazon prime day yesterday. Longer terms of the ecommerce giant have soured about 250 in the past five years. Its good to see you this morning. Some interesting price action in amazon yesterday, but whats the bigger take away for you here . We dont really have a take away yet. Whats missing are the disclosure from the company as what the sales amounts were yesterday. Well probably get a press release sometime during the day today. And get more call around the earnings call. Last year they generated about 400 million on prim day. We are estimated theyre going to do 500 million. Were not going to get confirmation until we get to earning season. Maybe some of the rivals benefitted to the attention that was paid to the only ecommerce space. Et si was up 5 yesterday. Is there a hallow effect. Probably not. The story about amazon has been they have been taking share overtime for offline retailers and online retailers. Amazon is growing two times the rate of overall retail sells. Companies like ebay are barely growing. We know Additional Details they probably ran 100,000 deals. Whats key to the event is not just the sales they generate, but the number of new prime subs they build up they acquire on that day. We think we estimate globally about 75 million prime subs. Why this matter ss for most Loyalty Programs spend more than those who dont and they spend more and more and from a broader range of categories. Thats the big win for amazon. We think it will not start accelerating in international markets. That was probably the big prime win yesterday, but were not going to find out for a while. Are they going to tell us about those prime subs. Are we going to have to wait for earnings. How much disclosure are we going to expect here. We are doing to have to do our work on our own. Thats why weve done in the past. We do our own survey work. Theyve never disclosed the prime subs other than to say they have tens of millions of subs. Based on the work we did we think theyre close to 50 million just in the u. S. And another 25 medical internationally. Well rerun our survey work in about a month. In the meantime those shares we just showed are at alltime highs. The Companies Valuation has grown tremendously. Theyre up 64 o over the past year. You say you look at the technicals on this stuff too. Where is this all going. We think the stock moves modestly higher from here. Its an okay buying opportunity. Its not a great opportunity. We think there are better picks in the large cap internet space. Keep in mind we think this is a great longterm asset. We want to look for dislocations in the stock to get more agriszive on the shares. This is not a dislocation. We had a major one earlier on the year. Now, its just a small buy for us. A good asset. Wed will booking to get agriszive on a major pullback. We dont see those cloud on the horizontal, but they inevitably will come back to amazon. Did you see some deals yesterday. You could get a motion activated glow in the dark toilet. So it glows when it detects you. Yes. Thats not i mean, the glow in the dark is appealing. You could also get a samsung curve tv. Your time will come. Mark, did you order anything . What do you mean . A household with four children at home. We order pretty much every day. The new device to keep in mind, the amazon echo. I think thats the great new sleeper. It may not be a sleeper product anymore. They were selling that at 50 off. I think this is amazons move into the kitchen. The ease with which one can order products while having a Voice Enabled device in the kitchen, in the hall way, wherever you want it. Ive heard rave reviews from people who have one and think toying with the idea of getting one too. It looks lovely out there. Thanks for joining us this morning. Im worried about that too. Do you need the geek squad to set it up . No. Then does it work with your thermostat . It needs to be set up. Do you need to get all that coordination or do you say, hey, amazon, order me an uber. We have unand im criticized for not setting it up. Its just sitting. Drew matt is. See this, this latest . Get to this. Check out the new poll. Coming up, move over, ken. Barbie is running for president , and her veep is making history. The s p 500 winners and losers. Welcome back to squawk box on cnbc. First in business worldwide indicated higher on the dow. Not a lot, but we just were up two Straight Days and then last week postbrexit e were up almost every day and were at new highs across the board in the s p. Indicated up ather 2. 5. Indicated up another eight. Time now for the executive edge. Turns out people who buy apple watches really like apple watches. Thats according to a new study. Gave the watch a rating of 852 out of 1 thur,000. That was ten points higher than samsung owners. Biggest problem cited, battery life. Not just that theyre ugly on your wrist. You really think its ugly . I do. Just a plastic band with no face. Ive worn it for a while. I go back and forth. Were sharing it in the household. Its got different advantages. Share . How . What do you mean. I tried it with running. You need it to be connected to bluetooth. So then i tried it during the day and its helpful and a friend of mine has a couple of young kids. Shell leave her phone somewhere in the house. Shes running all over the place chasing the kids, but she can answer stuff on the watch because its paired. Somewhat helpful. If they gvr get this thing with wi wifi, game changer. I dont know. If i had one on, i would have to stand up and take this one off. Doesnt it do that. You have to stand up . Yes. You have to keep it moving. That wont work. I would throw off the director, the camera guy. Like today is different than any other day. Exactly. Theyre skilled enough. Beer labels are about to get more informative. Be able to count calories, cashes, protein, and fat. As well as alcohol. As i was growing up, it was not to exceed. You never knew. There were some that were higher and some lower depending on what you were trying to accomplish. Right. Theres 32 beer in ohio. Usually beer with 6 . Other beer, some craft beers you can get up near wine type levels if thats your goal. You really need Nutrition Information on beer . Yes, if you dont want cashes. Beer has cashes. Beer has 90 calories if you get the right kind instead of 200. We know mic ultra doesnt have carbs. So we dont knee more regulation in labeling. Exactly. I dont need a nanny state. Let me have 16 ounces of coke in i want it, right . Of course. Shouldnt everybody be able to make their own decisions. I totally agree with you. Its that chair, i think. Lets get to mattel. Rolls out a new president barbie doll. She doms wi comes with her own Vice President. Available in six different skin tones. Are we supposed to read into this of frof si prophesy of sor . Female bash by presidenrbie . I saw j. P. Morgan this morning. It could take six years for the brexit to actually happen. From the Financial Times will join us in just a few minutes. In a world held cky compromise, businesses need the agility too one thing anotr. Onlyt has the network, people, and partners to help companies be. Lopen sece. L. Because onenows like at t. Ce. L. Today, wereeeing new technologies make healthce more persal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted ca, to cloud platformshat invite providers collaborate with the patients they see. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cogniza. Our mainxperts, technologists, gital d Data Specialists clinicns and scientiss, are tranorming theay Clinical Research sites llaborat with pharmaceutical companies, and enhancg Patient Engagement with innovative platform and sotis. Our populations growing healthcare needs wpreand improve the qualityies medof lives. H digital, 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. Actor key yan know rooefs made it big no hollywood. Now hes taking the passion to the road with motorcycles. Recently takes to reeves and joins us now. He was ted. He was ted in bill and ted. A lot of roles. In a warehouse near the airport, reeves is aiming to reinvent american motorcycles. On screen, reeves is famous for emercying himself in every detail of his characters. Now, hes going the same with his business. The arch motorcycle company. For me, riding is a kind of freedom. Reeves and his partner have produced hand crafted highly customized motorcycles from their la factory. They sell for over 80,000 each and every piece is handmade at their shop looking for like jewelry than engine parts. The company was founded after reeves asked holen der to make him a custom bike in 2006. We looked at that bike and it was an amazing machine. I asked him do you want to start a motorcycle company. He said no and i said, but listen man were going to die. Were going to die. Lets build something. As many machine is incredible. What youve done is amazing. It was unique. It was unique. Reporter arch motorcycles have been cult favorites in the cycling world. He has been riding motorcycles since he was 22. Always takes two wheels to his movie sets. When you come to that moment and youre riding and the director says action, its almost like everything that you are, everything that you feel or think is alive after that. Its like you have to youre there. Keanu says he tests everything. He is the perfect tester because he breaks everything. They start as harleys. No. I thought they were chopping. The first bike he came with a harley and wanted him to retro it fit it. These bikes are entirely some of the engine parts come from another company. Its not harley. So from scratch. Is from scratch. Some of the engine parts, a lot of the engine parts themselves are handmade at the shop. They really look like jewelry. The seats are hand stitched. The tank, the gas tank is handmade at the shop from one piece of aluminum. Its amazing. How much does it cost. 80,000. And you can get special add ones. He seems hes always in character. What was the movie with the bus. Speed. He was smart enough to avoid speed two. But in person, really very kind of zen and philosophical, but really generous. He wanted to meet every member of the crew. Really curious about my job. Just really interesting curious genuine guy. I think of him in parenthood, remember parenthood, he was hilarious. And rivers edge. That was his first. I do remember. Hes played a pretty good serial killer. The matrix put him into another strat fear. Yes, it did and point break two. Yes, all right, but its kind of weird. He says were going to die. We want to leave something meaningful as if all those movies were not enough. Or so let go on these crazy motorcycles. Yes, you dont want to die at 45. Hes had some bad accidents. He really does ride every single day. He has a porsche, but he doesnt drive the car anymore. He hates cars. In la a motorcycle definitely helps, but then youre going in between cars. He wants this to be part of his legacy as much these movies. You look very healthy. This is going to be part of your legacy. Yes, looked like a fun read. Coming up. David cameron just minutes away from making his last appearance in parliament as prime minster. Were going to talk to peter seali siegel about the transition of power. Heres a quick look of what happens in the European Union markets right now. Green across the board, all be it slightly from london to germany. Were back after this. Using technology is a critical differeiator. Changing txpectation that the consumer will have for wthis is whereand wee going toeed a big,ad, technogy parer. Bring in. Cuthe bell. Sap. Under armo is live busins. Can anticipate the ises and needs that youe going to have usi live data, to really dersnd theds of the athlete. To make better e righplace wi the right product at the right time. Are something thatghteen moh s are quily putting in our arview mirror. Th plans in ace right now to cut that by as much as twenty, to thirty, to forty percent. So whap relyoefore undearmour, it truly allows me to run our business endtoend. Tmom didnt want another dog. She said its o much work. Lulus hair just floats. She said ihe me much work. doorbell mom, check this out. Wow. Swiffer sweeper, a dusters thiss whatmking about. Look at that. Sticks to this better an it sticks tlulu. Thats your hair lulu mom, can wha another dog laughg tr and locup to 4x more dt, dust and hair than the store bran all right. In the next few minutes, David Cameron will make his last appearance in parliament as british Prime Minister. Incoming Prime Minister theresa may will take over this afternoon tasked with orchestrating britains exit from the eu. Joining us for more now is peter spiegel. Good to have you here this morning. Good to be here. The most notable difference between cameron and may from a policy standpoint that our viewers need to be aware of is what . Well, i mean, personally its economic policy. Her initial speech is on economic and corporate policy have troubled a number of businesses. Shes talking about, you know, reining in capitalism. Shes talking about almost a german style system. So there is this nervousness that shes going to come in sort of on a wave of uk populism and try to play to that audience. It will be interesting to watch who she appoints as the uk finance minister. Because people are watching that for signals. Is she going to pick someone in the cameron mode who is profree markets, potential ally from there . Or is she going to pick someone more unconventional that will go along with her ideas that are slightly anticorporate and certainly antithe city, the banks here. Thats worth watching right now. I think for us here and particularly for the city across the river here, her attitude towards companies and towards markets with real uncertainty, thats going to be something to keep a close eye on. So not necessarily a seamless, so to speak, transition of power. It could take awhile before we really understand what all of this means. It does, although i do think this evening, this afternoon when you see her cabinet appointed and that job of chancellor, youre going to get some signals. The problem is i think theres an expectation that particularly a lot of people who are abdicating brexit, they are talking about creating a european singapore. A way to deregulate. Weve been tied back by the brussels red tape. We could create a sort of real island of good for corporate europe and for banking. The question is whether that party takes over which theresa may is not part of that. And the National Mood right now is actually antibanks, antielites, anticorporate. Does she play into that . The signals this afternoon and evening when she puts her government in place, it will signal where shes going on this issue. What do you guys make on the predictions of brexit that could take six years rather than the two that people had been figuring was most likely for a transition out of the e snurks. Well, i must say, aye been arguing its going to be closer to six than two for some time. I think the market nos u, what you saw in the last 24 to 48 hours after may became clear she was going to be Prime Minister, you saw a bit of a rally. Look, this is a country people arent used to political risk. You have a known quantity in theresa may. Shes very well known. We have a shortterm relief rally. But that medium to longterm, what is brexit going to look like . Its going to take longer than people realize. Developing the trade relationship with europe is going to take a lot longer. Look at the canadians. They still dont have a deal. What that relationship is going to be with that europe and then remember theyre going to have to figure out their trading relationship with the rest of the world. Their trade deals thus far have been through the eu. I think theres going to be a lot of midterm uncertainty. It is going to take a long time. The clock starts ticking and its two years in the treaty. But to get all those negotiations done over the medium term, its going to take longer than two years. Everyone in brussels has been saying that. They always take longer than you expect. Peter, appreciate the time. Thank you so much. Peter spiegel the news editor at the ft. Officials preaching patience. Next former dallas fed president Richard Fisher will join us on set to talk markets, job growth, and the fallout from brexit. Squawk box will be right back. Can a toothpaste do everything well . This clean was like pow. It felt like i had just gone to the dentist. My teeth are glowing. They are so white. 6x cleaning , 6x whiteninga in the certain spots that i get very sensitive. I really notice a difference. And at two weeks superior sensitivity relief to sensodyne i actually really like the two steps step 1 cleans and relieves sensitivity, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. Your Business Needs Better Technology to drive better performance. So you need it to be reliable and fast. Really fast. Introducing the comcast business Summer Savings event. Fast Internet Speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. Get some of our most advanced products at a great price with over 500 in savings. Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. Markets making history. The dow hitting a new high while the s p builds on its recordbreaking run. Will earnings season and the fed bring an end to e the summer surge or are we going to keep going . Well break it down with Richard Fisher. Elon musk stand k by his company saying there no plan to disable the autopilot feature on teslas cars. Its risky. But will they buy what hes selling . Holman jenkins is here to talk tesla troubles and more. This is what its about here. And big papis final allstar game experience. The red sox slugger walking off into the baseball sunset receiving a heros sendoff. The highlights and impact on the business of baseball. The second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with kelly evans and scott wapner. Im messing up all my syllables and consonants. An historic day for britain. Youre looking at a live shot of parliament where David Cameron is speaking for the last time. I mean, hell speak again, but just not in front of parliament. Hes going to go to Buckingham Palace later to offer his resignation. And soon after theresa may will become the Prime Minister. Mp to a pm. Confusing to us over here. Only the second woman in history to do so. Were going to have more on the events in london in a bit. In the meantime, the futures at this hour after a great week last week for the bulls and already a couple of good sessions under the belt this week, the dow is not going down. Its up 12. The s p would be a new high territory as well. Up 1. 81. Oil, well still check oil out. Even though ever since it got into the 40 to 50 range, over markets havent keyed off it quite as much as before that. Its down 61 cents today. Wall street is extending its record setting ways in taking out its 2015 may alltime high and carving it in previous territory. The dow jumped 121 points yesterday. The blue chips now stand 18,347. Thats about three points above the prior high of may 19 last year. The s p meanwhile built on its record close monday. The new mark is now 2,152 and change. Thats a 15point improvement. Some individual names that helped, chevron the stock up 1. 4 yesterday. Its now sitting at a 52week high. Another mover, 3m. Also hitting a 52week high of 179 bucks. And who said Old School Tech is dead . Cisco also hitting a new high in yesterdays session. Because it was 70. Old tech is dead. Remember it was 70. Before i got here when i was sitting in the newsroom in dallas watching you guys when cisco was 70 yeah. Seems like forever ago. 600 billion market. One of the others that got to 600 billion before apple. Look at amazon. Look at adobe. Thats all new tech though. Amazon and adobe . Kind of. Theres some that have been able to make a go of it. You think of facebook and all those. All right. But amazon, its not new. But that was one of the ones we knew that even in 1999, even though berrins didnt think so. In the headlines this morning, even as the stock market hits highs, record cash balances are being held. Runs the Americas Division for swiss bank ubs. He attributes that to uncertainty surrounding this years election. More insight ahead today rob kaplan in philadelphia have public appearances scheduled. And the fed releases its beige book. The region by region assessment of the u. S. Economy at 2 00 p. M. Eastern time. Fiat chrysler is looking for hackers. The automaker offering rewards up to 1500 to socalled ethical hackers who can identify Data Security weaknesses in its automobiles. And Jeffrey Gundlach said hes been selectively betting against the s p. Which i dont know whether you can selectively its at new highs. Got to be really selective. And continues to favor emerging market bonds over high yield debt. He has repeatedly said gold is the better alternative against the backdrop of what he says is an insolvent Banking System. And im talking about europe. And that is thats a statement headed toward insolvency. We know about the italians. Krae. Some look to be priced for it. Two prominent members of the fed making statements. One saying the fed has time to allow the healing process before making any moves. Separately cleveland fed president Loretta Mester said it will be on the table for every meeting of the fed but the timing will depend on economic performance. Both mentioning inflation as a top concern. And i love days like this. Really. I mean, i really do. Its not a man crush really. Because i like bromance. Its a bromance. Here on set with us is former dallas fed president Richard Fisher. I want to talk about dallas in a serious way in a second. Because i think you know chief brown. But first, on a lighter side, on monday we said theres going to be 12 fed officials speaking this week. And then leaisman said theres going to be 14. I said thank god because you cant get a decent look with 12. Its like eight minutes abs. You cant go to seven minutes. You need eight minutes. We need 14. And did you see what we just said . We did kaplan, harker, kashkari, and mester. Theyre all going to tell us why theyre not going to raise rates for the ninth straight year. Well, its summertime. Time to go out on the streets or go to nice places and give speeches, i suppose. You were not in dallas i wasnt when that event occurred. But you must as a chief brown and our mayor our mayor just so your viewers understand it. We dont have political mayors. This mayor was the former coo of pizza hut. One of our greatest mayors in history was the founder of texas instruments. And we have a city form of government. Meaning we have professionals run our city. The mayor of dallas is one of the finest individuals ive ever known. Youve seen him perform but in a nonpolitical, nontraditional way. Mayor rawlings is an extraordinary individual. Chief brown who happens to be a personal friend of mine is a remarkable individual. And i thought his comments were the best of all. Including those the president gave a good speech and the former president who gave a good speech. And the punch line was if youre unhappy, sign up and join our forces. I think that just reduced it to the essence of what the issue is. But all i can tell you is without getting into the Political Part of it i think chief brown is one of the great persons that i know, one of the great people that i know. And hes been showing it. This guys a Third Generation texas nz. He doesnt care if hes black. I loved his comment the other day saying ive been black for a long time, his entire life. He understands this issue. Hes suffered a personal tragedy in his own family. Lost his son. Actually his son was killed by a Police Officer and his son killed a Police Officer. This is one of the great human stories in america. And i hope with all due respect to everybody sitting here, the press doesnt overdo this man because hes just a genuinely decent human being. Thats what a lot of the commentary i thought it was with all the worry and angst and how did we get here and whats wrong with our country for the country to have men like him grow up here, it makes you think that maybe we are going to get through this. Its a great country. In the midst of this political season with all this bs that goes on between our president ial candidates, heres a rock solid individual. In a city that is booming, the region is booming. We have so Many Companies moving into north texas, dallas, plano, that metropolitan area. Right. The metroplex, as they call it. The metroplex. Now bigger than the houston metroplex. But together they are enormous. Creating amounts of jobs. Toyota is moving 3,000 families into the dallas area and looking for a thousand more managers. This is just one of five or Six Companies coming into our area this year. So its important they establish a fact that does business, is stable, and will do things in a innovative way. Im proud of chief brown and extremely proud of our mayor. I hesitate to even get into the politics of it, but, i mean, the rule of law is what makes the United States the United States and these guys are on the front lines of making sure the rule of law is followed for the most part. But then again, i can imagine that there are certain places in this country if youre driving a car and someone that looks like you Richard Fisher i was saying that earlier. Theyve give me a big fine. No, you might not get the same treatment. And i dont know how we address that. If youre found drunk driving according to your net worth. Its a great system so joe, you got to watch out, pal. You know what . Lets talk some other stuff. Yeah. I need to be told that. So at this point, brexit. Right . Can we put that to bed and say that we should now focus on domestic employment type reports . We should no longer discount a 2016 hike because were worried about the effects of brexit. We now need to look at 4. 9 . I asked george who is as solid as a rock. She will tell you im just a farm girl. Common sense. Thats her hallmark. It always has been at the kansas city fed. She said the other day she was a delayed in terms of her descent because of brexit. Brexits gone. Its now been digested. Weve seen the reversal. A reversal and then some. Thats right. And let me make a comment on that. The british were able to achieve with one vote from mario draghi and everyone else have been trying to. Their currency has been dramatically improved in a period that some describe as currency wars. But the fact is i think britain comes out ahead on this. Its now being digested. But youre nonconsensus. And ive argued ive always been nonconsensus. I know. But people say britain is going to go into recession. How do you know that . Well, of course theyre going to have some imported inflation and so on. But anyway, ipg this was a market priced to perfection. You had a trip wire. People went berserk on the trip wire. Now things are being rationalized out. Its going to take a long period before it was measured out. Told you it was confusing. She used to be an mp. Now shes a pm. And they select people over there. Shes a party leader. Shell present hers to the queen. I love that that the queens still in charge. Right . Gracious lady, by the way. Right. But so i think things are balancing out a little bit here. The one thing youre talking about this morning that i find most interesting of all we usually dont miss anything. So were talking about how treasury yields are the lowest since the year 1790 when hamilton issued the first issue of bonds. But the dutch 10year yesterday traded at the lowest level in 500 years. So question. How long does this last . And thats for you market nabobs to figure out. Of where bond yields are . Forget stocks. What are yields . Obviously been driven first by central bank policy. And all these acronyms we have. Negative Interest Rate policies, zero Interest Rate policies starting with the fed. You have a lot of quantitative easing. Were not sure if it works. Ben bernankes in japan and still talking about more helicopter money. They literally wrote checks to people of a certain age and gave it to them. Didnt work. So there is this monetary experiment that took place. Thats the anchor of the monetary system. Weve had some relatively weak economic growth. Particularly in europe. Theyre trying to spur those economies. We are the beneficiary here because we see money coming in here. Janet yellen gives a speech in new york and says we can lengthen the duration of the feds portfolio to accomplish more accommodation. They have a huge portfolio. They own 20 of the federal debt. Havent had to do it. Because you look at negative Interest Rates elsewhere, where do you come . You come here. What i hear you saying is that the low rates, low yields historically low are not a sign of something ominous out there for the u. S. Economy. They are merely representative of whats happening elsewhere in the world and fed policy. Clearly theres a long history here. And i was proud to be part of it for ten years. But we had a crisis. We deliberately engineered as a central bank. Zero Interest Rates at the anchor of the curve. And then flatten that curve by buying massive amounts of treasuries. As you know, i felt we went too far with qe 3. But by february 2009 we had bought a trillion dollars worth of securities. The Central Market is going to keep money flat. What does that do . It changes the way you discount future cash flows for anything youre going to buy. And if you take things to zero, the math is your cash flows goes to infinity. We saw we purchased a trillion dollars in securities by february 2009. The market turned march 9th of 2009. It was what we hoped to see happen. And cap rates started coming down dramatically in real estate. So is the real question to me is how do you undo this at the same time . Thats what the fed is struggling with. It was actually to infinity and beyond at that point. That sounds like star wars. No. That sounds like buzz lightyear. Oh, thats right. I like the buzz part. You were talking about beer earlier. Yeah we do. Richard is going to stay with us. I think weve got things were going to talk about next time. Yeah. Weve got more stuff. You came prepared. Watch out. David cameron is making his resignation official. He is addressing parliament and will later go to Buckingham Palace to offer his resignation. Theresa may is set to take other as Prime Minister. You see the live shot out of parliament. Well have an update for you next. Is the recent tesla autopilot crash enough to question elon musks Business Model . Editorial writer Holman Jenkins, well hear from him in just a bit. Squawk box will be right back. 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. British Prime Minister David Cameron will officially resign today clearing the way for conservative Party Leader Theresa may to take the reins. Wilfred frost is live in london with more. Hey, wilf. Reporter hey, scott. In fact, the Prime Minister right now is having his final Prime Ministers questions session in parliament. He started by paying tribute to britains winners in wimbledon at the weekend including andy murray. Then made a quick joke of how empty his diary was for the rest of the week. And then he got on to the normal exchanges with the leader of the opposition Jeremy Corbyn including his economic performance. Lets take a listen. If were going to talk about the economic record, lets get the facts straight. Weve cut the deficit by twothirds. There are 2. 5 more people in work in our country. Theres almost a million more businesses. 2. 9 million apprenticeships have been trained under this government. And when it comes to poverty, 300,000 fewer people in relative poverty. 100,000 fewer children in relative poverty. And to be accused of sleuth in delivery, lets just take the last week weve been having these leadership elections. Weve gone on with it. Resignation, competition, coronation. They havent even decided what the rules are yet. Reporter so some classic drama there in Prime Ministers questions. David cameron really thought of as being a bit of a master at it. Quite the performer, in fact, and that might be an area where he differs from theresa may. Not quite got the same charisma, albeit certainly a determined worker. Other areas he just touched on in parliament, he congratulated theresa may. He said one of his most satisfying areas was legalizing samesex marriage here in the uk. He did say how much he loved larry the cat and was sad to be leaving him behind here. I told you thats my favorite story of all of this. Larry gets to stay . Is theresa may a cat person . Do we know . Reporter she has been seen wearing leopard skinned shoes recently. Thats maybe an indicator she likes that kind of an animal. That helped evolve her to fame. She was wearing the leopard print heels at that speech many years ago. And i do wonder, you know, its going to take a Big Personality in a way to be able to push britain from here. And she is going to name a brexit czar . Did i read that too . Reporter thats what we expect. Deciding who will be the chancellor of foreign secretary and the person who will be in charge of eu negotiations. Many touting one who managed her campaign for leadership. But just going back to your point there about whether she has the charisma to carry this through. I think part of the reason she won this leadership battle was because she was seen as the safe pair of hands. She wasnt the charismatic Boris Johnson type when it came to the serious negotiations. And i think markets have welcomed that since she of course confirmed as Prime Minister. The pound has gone up to around 1. 32. Exactly. All right, thanks. Well see you later. All right. Coming up, the big sendoff for big papi. Plus donald trump continues to stir up speculation about his Vice President ial pick. A look at the major contenders is coming up. Plus the dow and s p closing at a record high. More economic stimulus from japan and brexit fears are easing. What will be the next big driver for the markets . Well find out in a bit. Look at some key drivers over the past six months. Coming up, your money, your vote. Donald trump expected to pick a running mate within the next couple of days. Hillary clinton gets bernies endorsement. A look at the Political Landscape ahead of next weeks republican convention. As we head to break, heres a look at u. S. Equity futures building on record closes. Yesterday the dow up six. The s p up a point. Well be right back. Can a toothpaste do everything well . This clean was like pow. It felt like i had just gone to the dentist. My teeth are glowing. They are so white. 6x cleaning , 6x whiteninga in the certain spots that i get very sensitive. I really notice a difference. And at two weeks superior sensitivity relief to sensodyne i actually really like the two steps step 1 cleans and relieves sensitivity, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. Will rt. Among the stories front and center, Mortgage Applications jumping 7. 2 last week. That increase was driven entirely by refinancing activity as the average 30 year Mortgage Rate dropped to a low of 3. 60 . Nissan is looking to release semiautonomous driving functions. Nissan is emphasizing that these functions are intended to assist drivers, not replace them. No Earnings Report of note are due out this morning, but investors will be watching for the latest numbers from yum brands after the close today. Also Quarterly Earnings from csx this afternoon. Baseballs allstar game being held last night. The American League claims Home Field Advantage in the world series for the 11th time in the 14year history of the format. Beating the National League 42. Big story from last nights game, a sweet sendoff for one big name player. There he is. Big papi david ortiz. The Boston Red Sox slugger getting a heros sendoff. There it is. After being replaced by a pinch runner in the third inning. Ortiz retiring this year despite having one of his best seasons in a 20year career. The American League came out on top beating the National League for getting the world series Home Field Advantage. Are you a birds fan or nationals . Dodgers. Yes. We talked about this. You probably agree with me. I like big papi and everything, but designated hitter . He doesnt have to be in the field ever . He can just be a good guy id get rid of the dh, right . Yes. Go back to stealing and the managers thinking when am i going to pinch hit. What about whos coming up next inning . Dont tell me youre a designated hitter guy. You like orange baseballs too . No. Like red hockey pucks. Did you understand that music . That was peoples court. Hes a little bitter. Youre a little bitter because judge wapner never made the money that judge judy made. Ever. The inheritance that i could be waiting for exactly. If he made money like judge judy. I mean, if it was jung judy, id be like i dont have like coming to work today. Making 70 million. Judge judy . Yeah. Its incredible. Judge wapner was wronged. It excites me for stocks here. Donald trump, lets switch to that. Because eamons here. Will hold a public event on friday. Its expected that the presumptive gop nom mee will announce his choice for running mate. Thats before the convention that kicks off on monday. Eamon joins us from cleveland with more. Eamon, you know, its like polls are a dime a dozen. Ive been waiting for one since comey. And then friday and Everything Else and we finally got one from quinnipiac today that is staggering. And i know youre going to show some of these numbers. But florida, trump is up by three now. 42 to 39. The last one hillary was up 47 to 39. She was up eight points. Shes now down three. Ive got a graphic here that will lay out those numbers. But youre absolutely right. You get the feel this is a moving target a little bit right now given what we saw with the fbi director and Hillary Clinton email scandal. Thats taken a toll on her. Now were waiting for a Vice President ial election. Thats the other thing that could really change this race. We are here right now in the heart of bar district in cleveland. These places are not open at 7 30 in the morning, but we have been talking to a number of the Small Business owners in the area and they say they are prepared for 60,000, 70,000 people visiting the city of cleveland next week. They are saying they are expecting a big boost to the bottom line. They are prepared for some unrest, possibly some violence. A couple of the people we talked to are getting boards ready to board up the windows and protect them from any kind of rioting next week. But for now all the speculation really centering as youre talking about on who the have the Vice President ial nominee. You might expect it to leak out any moment now. Were on high alert for a selection piece of news here. Mike pence was out campaigning with donald trump in indiana. Hes the governor of indiana and he played that sort of attack dog role that Vice President s often play on the campaign trail. Heres what he had to say. After looking at the direction their party has gone, farther and farther to the left, to paraphrase the director of the fbi, i think it would be extremely careless to elect Hillary Clinton as the next president of the United States. So mike pence on the very short list here. Newt gingrich on the very short list. Donald trump has said hes narrowed it down to four. So well wait and see what his pick ends up being. All of that taking on heightened significance in the light of these polls out this morning that youre talking about. The quinnipiac poll. Take a look at these numbers. In the swing states. We know this state ohio so crucial and also florida. In florida donald trump now has a 42 to 39 headtohead matchup lead over Hillary Clinton. In ohio here, 41 to 41 . It is neck and neck for this crucial state. And in pennsylvania, 43 to 41 . Also an absolutely crucial state for both parties to win going into november. So that tightens everything up here, joe, as youre saying. And it may change the techtuxtu. That may be 2 in pennsylvania might be coal miners or something. You know . That might be the margin. Youve got pittsburgh and youve got philadelphia and then the rest of the state is a very different state. Politically its like two different places. It is. But they do have some still got some blue collar coal type miners that dont want to be put out of business along with their companies. Anyway, eamon and thats going to be trump country. Exactly. Ive been waiting for those. And i think therell be more coming. That itll go back, we got Bernie Sanders in the endorsement. But it is a moving target. Some people dont even want to have the election. They want to say, you know, lets just appoint theresa may. Lets appoint hillary. We dont even need an election. But we should probably go through with it. Dont you think . Were going to have some of the british leaders here in town next week. Nigel farage said hes not going to impose his will on the folks but he is going to attend. So were getting a mashup between brexit and rnc. They are thanking president obama for his views on the population over there. Right. Anyway, thanks eamon. Richard fisher is still with us, our guest host. Nigel farage going to cleveland, thats interesting. We had the chance here recently. And his piece in the wall street journal i thought was excellent. He blatantly said to the financial community, come. London and britain are open for business. That was not the mentality four years ago. This is the good that could come out of the brexit. First of all, the brussels if they have learned anything from this, it is back off on overregulating. The shape of a banana sold by a merchant in the midlands in england was determined in brussels. So theyve overdone pipt this started growing with the steel and coal union in the 1950s. Its gotten more rigid. Understand that. The brits now have an opportunity to go out and grab business. They have an opportunity, but they also have plenty of troubles theyve brought on themselves. Sure. If you say that regulation is the problem, if you say the size of government, if you say all of that is, you know, as much of an issue whether it comes from brussels or from london, it just seems like how much of an opportunity is this really . How much of that can they change . Those are difficult issues. And there was a great number that came out this morning of irelands gdp growth. It was off the charts. Who has the lowest tax rate . Ireland. So theres some good examples to follow here. But heres the point. I hope both the brits and the europeans take the positive from this which is you have to attract job creating businesses and bureaucracy stifles and kills and overregulation stifles and kills job creation. The greatest irony here is you know what the language is in the ecb when they meet . English. Was or is . English. Whether theyre in or not, its still legal of europe. Its german. Its french. Its the press corps covering that is going to struggle. One other point id like to make for your viewers, you have to think britain does have some power. Theyre the only Nuclear Power apart from frabs across the atlantic. Only they and france do that. I seriously doubt the germans are going to let the french dictate policy. And britain also is the second largest contributor to the eu budget. So its not like they dont have leverage in their negotiations should they invoke article 50 which miss may now says, the new Prime Minister designate, they are going to do. But i wont rule out the fact theyll have a different type of relationship. Or theyre going to have some leverage. You cant take an economy thats been that successful and pivotal and sort of remove it from the picture. And i think the average tariff for europe is 3. 7 . They made that up in the currency in one day. This is a moving thing. I think people got too excited about it. Theres always a lot of volatility. Itll even out. Its like a bad divorce. I was going to say. You dont think this is the first step of the crumbling of the eu as we know it . I think theres desire to hold it together. Remember this has been going since the steel and coal unions. Im worry about techxit. People in texas is worried. I tell you what we should be doing. And i tried to get this done at the fed. And i had governor perry and the new governor and everybody on board except for the Legislature Although we did have a bill. We have a higher Credit Rating than the United States. We should issue a century bond, have it completely only for one purpose. We need 80 billion over the next several years for water purposes alone in texas. We could finance that 80 billion with a century bond that i would venture would trade in the threes and be oversubscribed. Itd probably trade negative. Like paying you to do that. A general obligation taxable, sold. The insurance companies, the abu dhabiians they would love to gobble that up. Being a texan, you know about pride in your state. But can you feel a little bit of a shift from globalism back to nationalism from what we saw in Great Britain . These werent just bureaucrats in brussels. They were unelected. I live in a probusiness maybe not here. Im not talking about a texit. Suddenly nationalism isnt as dirty a word as it used to be. And youll never see russia and china in the asian union. They will never we understand that china is out for itself. We understand russia is out for itself. Were the United States. We got to feel bad about putting America First . In the uk with history has been to be in this union where these unelected bureaucrats are telling them they got to give italy no, we are different here in the United States. But do you feel the change . You can see the change with brexit . You can feel it. Its a global phenomenon right now. Response should be what do we do to correct for that . And the answer is not more regulation. Not more imposition. We ought to find the positives. Youre a lousy democrat. The way you talk, you need to switch, man. You need to learn the acronym dno. Is britain the last to leave the e snurks. I think for the time being the eu is going to work extremely hard to make sure they hold people together. And again, if theyre smart which they are, theyll correct for this inertia. Weve got to let you make your own fexit here. Fisher exit. Does the penultimate member get greece . Come on, joe. Richard, thank you so much for joining us. Thanks for having me. I may come back. Get while the gettings good over there. Coming up, tesla taking heat over an autopilot crash. Editorial writer Holman Jenkins joins us. He has a piece on the topic. Check out shares of tesla over the past year. There they go down about 14. 5 . Tesla at 224 a share. Well 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. Welcome back to squawk box. The futures now are still indicated higher. Theyve moderated. We have no idea what the markets going to be for the rest of the session. Its now worth noting that the transports which were up 2. 17 yesterday after a rebound in the airlines which really suffered in the last three or four months with it was the indices fourth in a row. Its now out of correction territory. All right. Tesla not bowing to critics in light of its crash investigation. Announcing it has no plans. There have been three accidents tied to teslas selfdriving feature to date. For more lets bring in Holman Jenkins who asks in his new piece out today if tesla is being toyotaed. Its good to see you. Good to see you. What does that mean . You remember what happened five or six years ago when toyota had essentially one floor mat that trapped a gas pedal and there was this huge launch of furor how the malfunction was causing them to accelerate out of control and anybody who had an accident where this accidentally step on the gas instead of the brake blamed it on toyota. Its like proving a negative. Youre saying that teslas being unfairly scrutinized like toyota was . I think it could develop that way. We dont know how its going to play out. Obviously toyota was japanese. The u. S. Government had just bailed out u. S. Automake perps on the other hand toyota has got lot of Political Support in the u. S. A lot of politicians backing it. So there probably will not be the setup there was in the case of toyota. But its possible. The precedent is there about how you treat computerized cars that dont function the way drivers expect. Interesting. Theres a headline in road and track magazine that i saw. I saw it this morning. Elon musk responded to it. But the headline is a column saying, leave tesla alone. The car makers is far from perfect but we are amazed what it has been able to accomplish. And i think that is right. I think tesla is a safe car and its drivers are safe. But you do get these people who are experimenters who want to go out there and make this car do its tricks. And this guy it appears wasnt paying attention. Youre supposed to be paying attention when you use any kind of cruise control. And he wasnt. What if it had been a deer that leapt out in front of them. You cant count on the car to avoid those. Fact of the matter is we really dont know what truly happened. He was going pretty fast. He was going the speed limit. But no braking with a truck in front of you. Usually theres skid marks. He didnt touch the brakes, the autopilot didnt touch the brakes. We dont know about the harry potter thing. That movie thing is speculation. This issue is whether theyre being unfairly scrutinized. The other issue is whether what happened with the accident is material or not. And whether investors should have been told ahead of a secondary offering. A car accident is not materials to a car company. This could sure. The practitioner, the hindsight fallacy could blow this up into something that is material. Because teslas so dpents on Political Support. Anything that undermines the subsidies. Youre saying this particular accident, youre taking the prnl view that you dont think it was material ahead of a secondary offering . No, it wasnt. When in the 10q that tesla filed they used language around Product Liability cases which would have a Material Impact on the business. Its a new technology. Which is true of all car companies. But there was nothing unique about this accident. This could have happened in a lot of cars that has this Adaptive Cruise control. It happened in tesla because they attract a certain kind of customer. Because theyre experimenters. But i dont think there was anything unique about this accident. You think musk will continue to have the steve jobs midas touch in terms of innovation and technology . What im leading to is, you take a bmw or mercedes or porsche and give them five years to work on an electric vehicle. Why is it just dogma that tesla is going to be the leader in five years and its not going to be bmw . Its not dogma to me. You know, its got brand cachet. People are lining up to buy these cars. They wont buy them at a price that economically generates a profit. But hes got the Brand Awareness out there. Hes got the market position if he can make it economically viable. Lined up to buy the secondary offering. You dont think investors had the right to know about this accident . Are you back to that . Yeah, i am. Because i almost every expert ive heard including the former chairman of the fcc on my program yesterday said that. And by the time were done here, this accident will be very material because of the way were reacting to it. In and of itself as an element, i dont think its material. It was another driver not paying attention and running into something which happens 30,000 times a year on american roads. So tell me again, then, five years from now tesla is the Market Leader in electric cars . It better be. If i had to guess id say no. I think the model 3 is going to be their waterloo. Theyre not going to get it out in time. The customers are going to disappear. I didnt even say ford or gm or lexus or toyota or someone like that. I just god, the competition is fierce and innovation comes so quick. You dont know whos going to build. In subsidies to these guys who get electric cars out there because of the cachet regulations. Good to see you. What are you going to write about next week . No idea. Think about it. Get back to me. Okay. Will do. And coming up, some stocks to watch after another record day for the markets. Here are futures this morning edging yet higher. And as we head to break, a look at some stocks. Also sitting at alltime highs. Well be right back. 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. Stocks to watch this morning, valeant pharmaceuticals. Turns out the sequoia fund told clients its completely liquidated its stake in valeant. Teva pharmaceuticals increased its guidance leading to early gains in afterhours trading that are no longer there. The stocks reverse course after announcing an amendment in its agreement to buy allergans generic drug business. It excludes several more products from that deal. Coming up, is this market in danger of joefr heating . Andreessen horowitz scott kupor will join us to talk tech when squawk box comes back. Ay, so r banks app. Now what . How will you keep up with the new demands of todays Digital Economy . The fact is some believe they wont need a Traditional Bank down the road, so at cognizant, were helping banking and Financial Services Companies Think digital, be untraditional, and reimagine what the bank of the future can be. Our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. Were creating new platforms across channels so customers can effortlessly invest, borrow, lend, transactwhereverwhenever they choose. And were digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. Digital works for banking and Financial Services. Lets talk about how digital works for your business. Theres a lot of kick left in this bull. The s p soaring to highs. Will the rally overheat or can she surge last . The japanese messaging app set to make its debut as the highest of the year. Were going to ask andreessen ceo. Move over, ken. Mattels president ial barbie has a new running mate. As the final hour of squawk box begins now. 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 kelly evans nicely done. And scott wapner. Becky and andrew are definitely off today. See. Hows that . The futures were just barely positive last time. Theyre back up double digits on the dow. 11 or so. The s p indicated up two. Nasdaq up six. In europe at this hour, when i saw it first thing in the morning, it wasnt a whole lot to write home about. Its still mixed. More on the record climb for these stocks in just a bit. But first among the other stoishs investors will be talking about today, dallas fed president rob kaplan and Philadelphia Fed president Patrick Harker have appearances scheduled. A new report finds wealthy u. S. Investors are Holding Record cash balances. Thats according to the Americas Division for swiss bank ubs which attributes it to uncertainty around this years election. And burberrys same store sales dropped 3 . Still the results beat forecasts. The British Fashion house which is in the middle of a leadership change is offering a mixed outlook for the year. A stealth rally for stocks so far this summer. Were now at record highs. Rick santoli joins us now. Of course has taken a lot of people by surprise. Lets say post brexit. Without a doubt. And very historic in the terms of the pace and steepness of this move. 7. 5 gain in the s p 500. Thats the best gain since 2009. Since the market was basically first accelerating out of the bear market low. Also 70 of all volume in the u. S. Stock exchange has been positive for ten days. Thats extremely rare. Thats also something you dont usually see. Its usually back to 09 and before that back into the early 1990s. All these things basically say that this market is something to be respected. Its a real breakout. The market does not go flat for 14 months then break to a new high because its a fluke. But there are probably things to take a look at in terms of whether the market in the shortterm is going to be overheating. Youre seeing early signs, for example, on the technical and sentiment front. You are seeing the Options Market get a little bit speculative. Its something to be concerned about. Sentiment is definitely brightening. But i wouldnt call it frothy just yet. Up to a level where you had the market flatten out a bit. Also the news letter writer surveyed. All these things saying people are getting used to the idea the markets at a new high. Wall street strategists were at 2152 on the s p 500. The consensus end year is 2150. We have not seen wall street buy into this move and say we can go higher. Its happened so quickly that theyre probably reassessing before they actually make those new numbers. Ive heard a lot of people come on air over the past few days. People on the floor of the Stock Exchange says it feels different. It does feel a bit different. Were up 2. 5 since april. And up 2 since february of 2015. This phase of the move has definitely caught people wrong footed why . Because we got used to the idea that 2100 is the high. Its about the cash balances. Whos actually in the stock market . And if were really going to get more participation, fine. But it seems like structurally, institutionally, psychologically, everybody would rather just be on the outside looking in. Exactly. In fact, people definitely started the defensive. And thats one of the reasons the january february selloff was so surprising. The idea that people dont really think stocks can do much for them i think is well engrained. That being said, you have to expect the market to flatten out, pull back and see if this is a level thats going to break out. You have to monitor just exactly how hot the market is running right now. You dont get this pace half empty long. We were going pretty well in 13 and 14. Then we had that totally flat year and then flat for much of this year. And people instead of saying wow weve done a lot of work to build on and roll correction and a lot of stocks have corrected internally, instead of taking that as a bullish sign and maybe earnings havent gone up that much, but theres been base building. And a ringing out of the enthusiasm. Thats a time where youd think they would be ready. Coming into this week, you still had sectors down from their highs. Financials, industrials actually not. And i think people are taking some heart in the cyclical tone of the phase of the rally too. Mike santoli. David cameron making a final appearance before parliament and wilfred frost joins us from outside 10 downing street. We had a shot earlier. This is a good shot. We had a shot earlier had to be from a chopper of the thames and the its just it is a country that should not be part of another dog gone average union. It is a great place. Reporter it is a would feel place, indeed, joe. And its an historic day. We managed to change our shot a little bit. Were a little closer to the main door right now. But as you said the outdoing Prime Minister just made his final appearance in parliament as Prime Minister. Lets have a listen to some of his closing remarks. I will miss the roar of the crowd. I will miss the barbs from the opposition. But i will be willing you on. When i say willing you on, i dont just mean willing on the new Prime Minister at this dispatch box or the front bench defending the men fes toe i helped to put together, but willing all of you on. Because people come here with huge passion and great love for the constituencies that they represent. The last thing id say is that you can achieve a lot of things in politics. You can get a lot of things done. And that in the end, the public service, the national interest, thats what its all about. Some poignant outgoing remarks. But only from his side of the political aisle. A difference from nine years ago. In similar fashion. The thenleader of the opposition, mr. Cameron, led a standing ovation of the hall of parliament. It highlights the level of polarization and division in uk politics at the moment that he didnt get a standing ovation from all of the labor members opposite him today. So thats it for his appearance in parliament. Hell make his way back to downing street before a final farewell alongside his wife and three children. Before he heads to Buckingham Palace to have tea with the queen where he will hand in his resignation and have, i imagine, a far more relaxed summer than he was expecting. Guys . All right, wilfred. Back over there. Its a i start to understand how you worked this whole thing out. You came here but every time something happens, you get a free trip home on cnbc. I feel like every time hes on he should be wearing that white coat though. You dont think so . That he wore to the correspondents din per. If he is if he put that on, that Tom Hiddleston guy doesnt have a chance. He doesnt have a chance. Theyd have to change the theme. They will have their next bond. Wilfred should walk into camera and turn to do a live shot. Reporter is this what you want . Sean connery was tall. I guess roger moore was tall, wasnt he . Sean connerys tall . Sean connerys not . Roger moore was not . Whats his name was not. There might be a height problem there. Anyway, wilfred. Thank you. Lets turn now to the tech sector. Theres been a batch of big deals that was a really serious report about cameron and the final and it ended with james bond music and our correspondent doing a i mean, its a you do this outside 10 downing. Right. Anyway, a lot of big deals including microsofts acquisition of linkedin. More on this Andresen Horowitz chief. Did it dampen anything . Did anyone say were going to put it on hold . No. Most of our companies are not Multi National in the first case. Theres one that does Money Transfer between uk and others. That was a boom to their business. But for the most part its business as usual. It creates uncertainty of the market. But for our business, our companies are basically, you know, like small cap stocks. Isnt that a positive . I think it is, yeah. Its a positive. The other thing you see if you talk to if you go around the country and around the world, if you go to the middle east and japan and other places, you talk to pension funds, sovereign wealth funds. Everybodys got a penchant for the assets. They would love to invest into relative to public equities. Theyre looking for tech and health care. All those things from a liquidity and money perspective all mean theres a lot of opportunity still in the tech sector. Have we decided whether they what andrew always calls them . The unicorns. Have we decided whats the average hair cut that were seeing in the last six months . There hasnt been much financing in that segment of the market. So we dont know. Probably 25 is probably fair. You know, i think theres probably it depends on the company. So youve got some companies that are softer companies, high gross margin businesses. Those are the low end of the hair cut. If you have companies with constraint growth margins, those guys are probably looking at 30plus percent. Im going to turn it over to kelly because shes a millennial. Im not a very good one. I beg to differ. You know all the stuff. But do you know big picture i didnt know what search was and i know now. But i didnt know at the time. I still dont know what social is. I mean, im on twitter. I dont like it. I dont like the people that are on twitter. I think its a cesspool. You may not be following the right people. No, i get news from it. But it is anyone gets to say whatever they want. Its just kind of annoying. But whats next . Is it some type of is it a subgroup of social thats next . I mean, this pokemon thing threw me for a loop. Its amazing, yeah. Theres social. A place where we and other people are spending a lot of time is in artificial intelligence. So basically what are Computers Good at . Digesting large amounts of data, figuring out patterns of data, and being able to act on that. Youre seeing lots of things. Youre seeing Autonomous Companies we have one called comma dot ai using Machine Learning to figure out how to build an autonomous vehicle. Youre seeing a lot of content now in the Virtual Reality side. Now that oculus has done well, theres content plays. I was going to ask that. The Common Thread i see maybe between the pokemon phenomenon and snapchat is taking reality and putting funny pictures on it. So where does that wave take us . I mean, it seems if you look at the success of that game, this is just maybe one of many, many to come in many ways people can leverage the technology. When you think of what oculus and facebook are doing, think of it as a new platform for content delivery. Were at the very early stages of even understanding what types of content will play on those platforms. So i think thats a big area where i think youre going to see a lot of activities over the next several years. Do you have a date for like, irobot. Do you have a date when that i think its further off than we think, isnt it . How about never . No. I dont think its never. If i had to give a date, its three, five years. Three to five for a truly thinking, that has an awareness of thinking. Well, then thats where we are. It can do complicated no. I want youre going to see phases of it. Youre going to see kind of, you know, being able to do various tasks and stuff. Thinking stuff is far off. I want to see when we have to decide whether theyre going to ep coo us around. No. Thats never no. What do you mean . I dont buy it. I want to see a robot say im not opening the pod bay door. Youre stuck. I think the selfdriving thing is already quite serious. Its not a thinking im talking about consciousness. You dont think driving is a conscious act . Knowledge of right and wrong. Being able to feel and see. Yeah. We could use that in the car world right now. People cant drive cars like pilots drive planes which is the only way to keep people safe in them. It almost requires more attention and more sophisticated level of piloting. Were talking about all the vehicles in this country. There are going to be tragedies with this technology. I think youve got to think about whats the comparison, right . The comparison is human beings which we know arent that good at driving cars either. But that was the thought with pilots in the 80s. Got to get away from human error. That was the cause of failures. No, it wasnt. In fact, by reintroducing the Human Element theyve been able to make the stuff safer. If we think that eliminating human ere ro for, if we make that same mistake with cars, were going to experience the same problems they had with airlines. What i think youre going to see is look. Were not going to go to fully Autonomous Vehicles tomorrow. Theres different stages of Autonomous Vehicles. I think youre going to see that for awhile which is driver assisted type autonomous driving and its going to be a long time i think before you get to fully Autonomous Vehicles. The assistance isnt going to be happening with the driver. I think its a question to whether the safety will be better in that scenario. Theres reason to believe that relative to humans driving, it might be. Im counting on it. 2045. I dont know. I think its a reasonable bet, yeah. You do . Do i know him personally . No. No. Im counting on this. Were going to work on it. Sean connery is 62. Who told me he wasnt tall . Roger moore 61. Pierce brosnan. Is he really 62 . In case you missed it, cnbc names utah the top state for business. Well hear from the states leaders. Squawk box will be right back. Welcome back. In case you missed it yesterday, cnbc named utah americas top state for business. With the help of a special guest. Im not a shadow of who i used to be its just me thats right. Donnie osmond joined us to honor his home state. Scott cohn has moved on from that location though hes still basking in the osmond glow and he joins us live from yet another undisclosed location. Morning, scott. Reporter good morning, kelly. Wasnt that cool yesterday . That was were all still, like, wow. But what we are going to do today is were going to look at the states with the best cumulative rankings over the ten years weve been doing this now. Ten years. We call it the top of the top. So well tell you which state im in now which is the state thats done the best overall of these years. And also the states thats done best in our individual categories. But first a little bit more about the top state for business this year. We spoke to the republican governor gary herbert who obviously said he agrees 100 with our study and he said the task now is to build on what theyve done in the past to keep utah at the top. Now, he is up for reelection this year. He is running against mike wy wynnholtz. He said as a businessman he agrees that with the ranking and hes proud of it. He said the people of utah are the hardest working people youll ever see. He told us this over the phone last night. But he did repeat the criticism that not everyone is sharing in that prosperity in utah. A high tide is supposed the lift all boats, not just the yachts, he said. One of the things he pointed to was education and the idea of a more sustained commitment to education which has been a weak spot for utah. Now, yesterdays special guest Donnie Osmond also had some insights on why he thinks utah does so well. Back in 2002 i think is when it all started. When i performed in the 2002 olympics. Where mitt romney was involved in that project. And the world saw how beautiful the state is. And then people started coming to visit utah. Industries started coming in. I think its the people, scott. Tell me what youre doing. I work very hard. My wife and i came up with an idea. Its called donny osmond home. Come out with home furnishings. We had no idea how much this would take off. Our furnitures being shipped all over the country. Its lighting, furniture, rugs, accessorie accessories. Were coming out with Outdoor Furniture this year. And its just taking off like crazy. Reporter were going to have a lot more from our interview with donny osmond online at our special website topstates. Cnbc. Com. Youll want to look at that. And all things competitive and why they stits did what they did. What it takes. A lot of people are weighing in on that. Take a look at it. Topstates. Cnbc. Com. Did you tell donny im sorry about talking the over him yesterday . I didnt realize he was going to keep going. Reporter its quite all right. Everything was good. We all got a nice dose of that. And that was a really cool thing for our tenth year to have him at such a breathtaking location. And youre doing top of the tops now . Is that right . Thats the next reveal . Reporter yeah. So i dont know if you can tell where i am. This is the state that has done the best looking at the cumulative point score. Its 2500 points possible every year. So out of 25,000 points this is the state that has done the best. And well be revealing that later on today. And talking a lot more about this years studies. We dont want to blow up guessing. No. Scott, ask donny about hes got some kind of skin cream or something . You know how old he . Reporter do i know how old donny is . Yeah. Reporter he will be 60 next year. Thats why aim saying it. Find out what his regimen is. Not for me. I got a friend that did you see him . Reporter right. He looked 35. Reporter you guys should talk. Ill hook you up. Anyway, coming up, barbie is running for president with a chic running mate. More details next. Move over, ken. Mattel rolling out a new president barbie doll just in time for the election. The new barbie comes with her own female Vice President. See . The chic. The chic Vice President is part of the first allfemale ticket. Dolls retail for 24. 99 and are available in six different skin tones. And its going to be hard for history to follow through. Because Elizabeth Warren is speaking on the first night of the convention which a lot of people say the veep would not there you are. But ivanka. Man, my daughters really beautiful. That is definitely not chic. No. Im glad i was born a man. Welcome back to squawk box. Breaking news. Were going to get a june read on import prices. Month over month up 0. 2 . Thats less than half we were expecting which was up 0. 5 . Last month it was up 1. 4 . That was the highest month over month change since the spring of 2011. Of course were moderating a bit. Month over month were expecting a number around minus 4. 5 . Pretty much what we received. Last months stands unrevised. Of course all eyes continue to focus on the equity markets. Some of us are paying a bit of attention to germany. Still a down year although you can take some currency moves into consideration on their equity market. And its toying with 10,000. Psychological level to be sure. Of course were continuing to monitor Interest Rates. Guess what. Theres been a big selloff. Theyre well pay close attention to of course as we have three Central Bank Meetings coming up in the next several weeks. Bank of japan, bank of england, and of course the u. S. Scott wapner, back to you. Thanks so much. Japans online chat app line is set to go live tomorrow which makes it possibly the biggest tech ipo of the year. So what is line . Susan li is here to explain to joe. Susan . Exactly. Well done. Talk really slow. Okay. So it was born in the aftermath of the devastating japan earthquake back in 2011. During that time thats when Telecom Infrastructure was damaged and lines were jammed with so many people trying to get hold of their loved ones during that time. Thats when south korean tech giant thought why not use the internet and thats when the line app was born. It didnt really catch on until they came up with cute cartoon stickers that users insert into their chats to i guess better communicate what theyre really trying to say. And in the anime obsessed culture of asia, it was novel back in 2011. It really caught on so now line has a dominant market share but the app has really evolved over the years. Not just a communication deal anymore. Now only its secondest largest. Content is a moneymaker for line. In fact, disney has a partnership with line to stream content on the app and is a Marketing Tool where businesses and celebrities use it to promote albums or new products by paying to send out messages to all line customers. This might be the future for social networking where you have one platform for all. For instance, wechat in china. Close to 800 million monthly active users. On it you can chat, you can use it as your facebook, your bank, buy tickets, order food, use it to hail taxis. And this might be, you know, the future for social networking. Because its a little bit different, it allows you, joe, no not impact publicly with all these people on twitter by just to do it with your daughter or friends. Then you buy a sticker, you might be given an ad. I can already do that, though, cant i . Why do i need a different way to send her something . And i have kimojis. Dont i . Dont you . It was on my phone. Someone put it there. I will never lend me phone to hes pretty modern. He knows kimojis. I didnt even know. Shed made 50 million last year. Whats your favorite kimojis. Oh i thought you meant of the kardashians. I like them all. Can line grow . It has 218 million users. Which a small compared to whats app. I think thats why theyre raising money. They need to get out of the four countries and go global. Whoever breaks it in the u. S. Is going to be able to break it big. Can i teach joe one term if i can . In japan since theyre talking about pokemon go and emojis and stickers. Theres a term in in japan called kawaii. Its like the island. Its almost like kimojis. Thats right. Let me show you something that happens to me a lot. See when im doing a message, if by accident im trying to hit a number, if i hit this globe thing here, those things come up. I dont how to get rid of them. You hit the yeah. How do you get out of that . Hit the globe again. If i go back to abc it takes forever. Then it says full access required. We can go to other tech news now. Talk amongst yourselves. The start of Hyperloop One has filed a wrongful termination suit citing having a noose left on his desk. Brahm brogan and three other former execs allege top leadership at hyperloop gave lucrative jobs to relatives and made decisions to pocket money. Our guest host do you know brogan. Are they messing with us . No. Thats his name. So what do you think of these allegations . I know nothing about it other than what ive read. Its a fascinating read. Does it surprise you though knowing him and having sort of followed his i literally know nothing about it. So itd be silly to talk about it. But i appreciate you asking me though. Yeah. Nice dodge. Lets go can we talk tech ip . Yeah. Line is now so if tillio reopened the market, maybe it did. What does this do . So i think its helpful. Its a very different ipo. If you look at twillio, 15 grower, you know, kind of not profitable yet but line of sight profitability. Line is much bigger company. 1. 5 billion business. So i think theyre two very different deals. I think what they both say is the market is open for good companies. Which is different from, you know, 12 or 18 months ago the market was open for almost any company, you know, for the last six months basically the markets been shut for pretty much any company. And twillio is good for what that looks like. Youve got to have 100 millionplus in revenue be profitable or quarters of net income profitability. Thats a theres a market for those companies. How open is the window, though . If its open for quality, is it open a crack . Is it, you know, getting i think its moving in the right direction. So i think its opening in the right direction. Opposed to generators available to go out in this market. But there are lots of companies that look like twillio in the valley that are looking up. Theyre so perfectly tailored to do well. Yeah. The floats are so small. Is that going to continue, you think . I think so. And i think what youll also see is youll probably see people do secondaries to try to mitigate the float as it comes off of lockup. Your looking at 10 , 20 type of sales at ipo which is probably not going to change. Do you think uber ipos in the next 18 months . So i dont know. Were not investors in it. But from even better reason to ask you. From everything ive heard, theyre not on that time frame. I think travis is thinking about something thats significantly farther than that. But i think there are lots of companies kind of in the 17 and 18 frame that are lining up that look like twillios that have those characteristics. What about lyft . You mentioned the need kind of lyft, snapchat. And lyft is still burning through capital. Theyre still consuming cash today. But i think theyre looking at ways to continue to improve the financial prospects for that business. I think youll see them, they dont have a plan to go public any time soon. But thats a prospect in the time frame. Companies like snapchat, companies along those lines. I think there are big marquee names that could get out over the next 12 to 18 months which could potentially signal a real new opening of the ipo market. What if they never go public . What if uber never goes public . And what about the argument maybe they shouldnt . Yeah, i dont think thats going to happen. The reason to go public the reasons that are still left to go public since theres Still Available capital thats what i was going to say. If you get the access to capital it used to be you go public because it was a branding event. That stuffs no longer relevant. Theres two big reasons for companies to go public. One is m a. At some point in Time Companies as they get to the end of a product cycle need to think of m a for product cycles. Its easier to do Public Company than private company m a. More liktty for companies. There are secondary sales happening, offers of employee shares. But those are really small opposed to giving employees but it almost forces a lot of these companies to have to go public. They otherwise would say were happy to sit tight. I think thats right but theyre still going at time frames. Versus, you know, kind of six years which is really what the median was over the last five years. So theyre still taking their time. I dont think were going to see a bunch of bloombergs and other perpetual private companies in the valley. Microsoft linkedin. Were you surprised by that deal . What if anything does it signal could ahead . So, you know, wasnt surprised in it was talked about at various points in time. It really shows much more of what e with would call growth activity in the valley. Lots of m a activity in tech but its been mostly go private type transactions. Youve seen lots of different things. Buying a maintenance stream of the business. What those deals showed was growth acquisitions now start to happen. I think thats a real signal youll see more of that to come over the next several years. All right. More from you in a bit. Coming up, a boost for the little guy . Why amazon hopes that primeday was a big boost. But first check out oil prices this morning. Under some pressure. Remember higher crude helped yesterdays recordbreaking rally. Today wti and brent down about 1 . Stay tuned. Youre watching squawk box cnbc, first in business worldwide. Welcome back to squawk box. The futures right now, lets check in now. They have actually just about doubled previous gains. Theyre now up 25. Big days yesterday and the day before. The s p will be if it were to close here today, up four points, it would be another alltime high. Fresh, new, alltime record high where its never been there. Unprecedented. Unprecedented, fresh. I like the fresh, new high. Opposed to rotten new highs. Which are anyway. Amazon is touting its primeday as its biggest day on the site. Kate rogers checked in. Whatd you find . It was a mixed bag with the businesses i checked in with. Theyre seeing Different Levels of success. Well start with debbie bean. Shes an Artisan Jewelry and trays. She decided to try this time discounting items by 20 . She had her best day ever since selling on amazon with a 700 increase over her average sales day. Now, rainier wine saw six times their average summer sales during whats typically a slow season and four times their daily year to date sales. Meanwhile madres jewelry which is a seller participating for the first time out of california tell us they more than doubled their normal sales compared to an average day but they didnt sell out of any product. Remember, though, participating in primeday does not come cheap. Especially for these smaller sellers. They had to discount their products by at least 20 and then amazons fees for sales are around 15 on average depending on the category. Amazon has yet to release their results telling me midday yesterday they were up 30 in the number of items sold by Small Businesses at that point in the day last year led by Strong International sales growth and in all small sellers last year sold 14 million items. Big number. Amazon is such a big site. Its got everything. The everything store. How do these small is it just that people are on it more than they otherwise would be and come across stuff they like . Or are they having to work to get their product placed prominently on the site. You cant. Several of these were handmade sellers. When you think primeday you think deals on refrigerators, mattresses. Youre not thinking jewelry and glass trays. It is pricey. They have to spend quite a bit. But to be featured on this big day amazon has created, it certainly is a good marketing opportunity. So theyre willing to kind of eat that cost and fees and hope to see their sales go up. Thachs interesting to see etsy up too. They might help a lot of others. It absolutely helpful. On etsy, they only charge 3. 5 fees compared to amazon. Amazons 15 . Wow. Yeah. But the bigger pond. I like that stained glass. Thank you. Thank you. Coming up, jim cramer will join us live from the new york Stock Exchange. Well get his take on the markets next. U. S. Stocks rallying to new levels. Dow and s p hitting alltime intraday and closing highs. Youre watching cnbc, first in business worldwide. Welcome back. Some news crossing on tesla this morning. The auto maker is adding a lowerpriced model of the crossover starting at 74,000. The new model has less range. It is 9,000 less expensive than the model sz. And ut has missed the sales targets, but how significant is this move, scott . Me . Oh, you, yes. And we have two scotts. And we have been following so many threads of the tesla story, and waiting on the super secret plan part two that is about to come over. And it is the crossover that is an ugly car. And the model s is cut two . Well, they went up on the other one, and redesigned it. What the x . The one that is ugly . The original the 75b . Yes. And i dont think it is that bad actually. It is like a prius, and ugly prius which is redundant. And oversized e prius. And what do you, scott, think of this . The other scott. And e e e llon musk in how h been managing the con troe vtro as of late . Look. He is the consummate entreprene entrepreneur, and he has a vision and he is going to be continue to move down the path, and he has done a great job with the company, and if you are thuing of the price cuts, what he is trying to do is to continue to go down market to mach it a much more broad mass appeal, and it is a very good strategy, and so far working quite well for him. And joe, you asked somebody earlier today, holman, about whether he was losing or was in danger of losing the steve jobs aura . It has happened. Yes, that is right. People believe he has it, and so, so far at least, the product depth that he has shown is incredibly strong. What you think about, i mean, look, you are are a fan of his, and i think that most people are a fan of what he is trying to do, and visionary in every great sense, but what about the sort of the way that he communicates with wall street. There is a level some would say of arrogance. Is that okay . Are you cool with that . Well, i am not sure should we be okay with that . Well, he has a big company he is running now, and lots of analysts who are covering the story, and people know the way he is going to be communicating, and so it is not a surprise when he does the types of things that he dushgsz and enough news flow and analysts out there that people can digest and interpret how it s and the style itself is not a problem, but sought known quantity and people can deal with it as they see fit. At the end of the day, as he said, the proof is in the puddi pudding, and he has done a great job to date, but he has a vision, and until then, he is going to be on the category of steve jobs. And the news flow is remarkable, and in the news almost everyday, and he has the amazing ability to control the news flow that is out there in the face of the negative news and then other stories will come out, and this one for example. Is she talking to you . Right now . Yeah. You know what she just did, she said, please, cramer next. Did you not hear that . Because i thought that she wasle telling me, and i cant control you, and i would never speak over you or game to take away your time. Did i take too much . No, what did i tell you why are you telling me. I think that now no, she is yelling at me, and lets get down to the new york Stock Exchange, and jim cramer, you have to put up with this, jim, as a big talent type guy . Well, scott wapner is a sports fan, and what is the s. E. C. , the pac who is the best . Well, alabama versus tesla in mid october is going to be amazing. I mean, you talk about some sort of the bad years, and could they take away a bcs championship from this guy . It is a recruiting violation. Anything that this guy does that is not regarded as posit e positive, i mean, anything . Cut the prices, and it is great, and this is, this guy is the ultimate teflon i cant believe it. There is nothing that he does that people dont love. And you called him a financial mass murderer. I did not. What did you call him . Something like that. And financial killer no, i did not equate that, but i did cast aspersions and raised the eyebrows. But the premise is that he is going to say anything, and say, well sh well, we will produce xmillion cars, but the reality is something different. We will do this. And the First Amendment allows you to say he is going to be producing a million car, and i defend him on the constitution. And the s. E. C. Has to the deal with the First Amendment when it comes to that guy. And who is a member of the s. E. C. . We need to talk to him. Well,ly tell you that Louisiana State is the team to beat and not musk. I mean, he is a that is it. The s. E. C. Is toothless. Oh, the actual guys in washington arent, but, you know, they are no more powerful than the big ten when it comes to the musk. Good to have him here for all three hour, because we would be interesting for sure, jim. Thank you. Quick break now. No. Cramer. The man has to sleep for a couple of hours somewhere. I know. But someone else is tweeting there. Tomorrow on i know, it is him. And tomorrow on squawk box dont miss larry fink who is going to join us after the companys quarterly reports, and we have kevin worsh for a u couple of hours as well. See you tomorrow. Today, General Mills ceo breakfast and beyond, the Food Industry hopes and buys hot new trends. Should the investors dig in . Squawk on the street at 9 00 a. M. On cnbc. With us is scott from an dr andreesen this morning. What are you seeing . Yes in the market for good companies, and the market is more discriminating than it has in the last 12 to 18 month, and obviously, better on qe 1 and it is the business as usual in the val e leeshgs and the companies farther along who have done, you know, the capital raises maybe at the valuations that in the past were a little bit aggressive, and they are, you know proven companies and small caps basically. Yes, that is right. Thank you, scott. Scott kupor of an drdreessen horowitz. Are you here tomorrow . Yes, i am. And becky . Hopefully. And larry fink. And kevin worsh. Yes. And somebody said that he would be a great fed chief. And he is and maybe treasury. Yes. We will ask him tomorrow. That is squawk on the street that is coming up next. Good wednesday morning and welcome to squawk on the street. Im Carl Quintanilla with david faber at the new york Stock Exchange, and how sturdy is the rally as the futures are up again today, but mildly, and the weeks are more interesting with the earnings, and politics, and bank of england, and jostled with the helicopter money coming to tokyo, a t