In a moment. In the meantime take a look at u. S. Equity futures. Dow was down a couple of points yesterday. Looks like s p up and nasdaq up by 14. Lets take a look at stocks to watch today. Shares of rack space. Market valuation of 3 billion before the report of a possible sale. Fire yief announcing plans to layoff workers. Missed its own forecast of the company cut its full year outlook. Zynga releasing a weak outlook. Active users fell. And restaurant chain poe yolo co. Matched the estimates and what is that now, up 8 yesterday. Lets take a look at the broader markets this morning. We showed you the futures are in positive territory. If you take a look at the early markets in europe. There are gains there once again. Looks like the dax is up bailey. The cac is up half a percent and the ftse after the gains we saw in the market there yesterday as the bank of england voted not only to ease Interest Rates by 25 basis points, but also to add a lot of additional quantitative easing and other stimulus. That market up by about a quarter percent. Overnight in asia, you could see looks like the nikkei was down, but just barely. It was down less than 1 point. Shanghai comp down one point. The kud oil was the big story yesterday. Back within striking distance of 42. Giving back a little of those gains this morning. Still a lot of cushion between 40 and where wti stands right now. This is the story ive been watching to closely. I still cant get over it. The 10year treasury yielding und under. Back to people who said the brexit didnt matter, guess what it mattered and awful lot. It matter ds when we start looking at yields. We may think the fed is going to say, okay, were going to stand pat on this. Its the only place you can get a positive yield for treasury. Well keep a close eye on this. Mark grant is joining us later this morning. Take a look at the currency boards. The pound right now 1. 3162. Euro 1. 11. The dollar yen at 100. 96. If you take a look at whats been happening in gold prices. Up barely this morning, but still has been gaining ground for many months at this point. One more look at testimony futures ahead of todays job report, and, again, green arrows at this point with the dow futuring up 30. S p up 4. 5 and the nasdaq up almost 14. Im just looking here, becky, we were at 67 on the twoyear going into the boe announcement. Now its down once again this morning. And 154 on the 10year treasury. Lets get back to the main event july job report. Joining us now rkmichelle. What number are you looking for and what number do you think is the aurm thats good for the market. Lets see, when youve got a forecast of 195 overall and 180 when i was talking before the show, truthfully, i think the trend is probably slightly below the 150 market although when i look at it sector by sector the number is coming in stronger this month. You wouldnt be surprised. No. I think were looking at a slower trajectory for employment growth. Part of it is lack of supply. There is some settling back. Its typical to see at this point in the cycle. Weve certainly seen it on the Business Investment side. Given the uncertainty globally. Margin says lets wait a couple of months and see how things go before we had a lot more workers. What about whats happening with yields right now and how they effect youre view of the value of stocks right now. So certainly yields are low and we think going lower. This whole postbrexit environment, we thought it would be a play into a couple of typical haven, strong dollar lower treasury yields, weaker oil prices. All of that has played out. When you look at equities in that context, youve got this sort of tina argument. There is no alternative. One of the things weve seen has been investors who absolutely starve for yield are going into this big low beta dividend players and thats where the flows have been at least in the first seven months of the year thats where a lot of returns have been. If we get good news on jobs, will that be bad news for stocks today or good news. This is only one data point. Were a little more conservative than michelle. The claims data has been fine. Were fine with all of that. The important thing is that were another month away from that stench in may when we only have 11,000 jobs. Just word of caution, the august number thats coming up which well see a month from now. August is the quirkiest month of the calendar and historically you end up getting a flash miss of about 70,000 jobs for a bunch of different reasons. While todays number of is going to be fine, the august number could be a little quirky. No rate hike in september. Exactly. Help me. I cant live this way. I cant wake up in the morning and change my view of the world. I mean, like our senior producer is very down today. We need to get him up. Figure out a way, becky. How do you take a step back, get off this roller coaster, give me the broader view of the economy. Say this number vm numbis weak r strong today, are you going to change your view of the world. No, but we talk about stepping back month to month. We are seeing a slower trend in payroll growth. That actually corresponds with some softening in general. The economy overall has lost a bit of momentum i think. Were growing at closer to 2 growth pace. I want to challenge you on that a little bit. I have this 2 view and i wouldnt normally get depressed about the second number. They downgraded the quarters. It looks like the gdp data were closer to 1 economy than 2 economy. Digging deeper and stripping out the noise of inventories and maybe even trade and looking at consumer and business spendsing, the domestic private economy, i think is where you can easily see were growing at a closer to 2 or 2. 5 pace. Thats a step down somewhat by about a half a percent from where we were. So for me it does feel like weve stepped off a little. Back to the good news back news thing. At 830 im always trying to figure out where the market is going to go. What im a little worried about. What if its under 100,000. If its under thats bad news, but if its a little above its good news. Again, first of all, i dont think people are realistically thinking the fed is going to go in september. Theres a little bit less pressure. We are clearly looking ahead chltd and if you saw a number sub 100, that would certainly reinforce concerns that people like myself had. Right. What does the market do on that. Thats my concern. If the market looks at this and thinking oh, my gosh. Were not pulling out of that 11,000 number for may. Maybe were not going long. Certainly if this number is a disaster that thakes the fed ou of the equation in september. Writing articles in the journal the fed is thinking about september. Youve got to understand where his source is coming from. Funny im not writing that for cnbc. Why is that . What we havent seen the whole brexit thing completely unfold. Thats a concern we dont know what the fed is going to do. Have to see how that plays out. As michelle has pointed out, the economy from a gdp standpoint has ratcheted down here. Not just missing last week, but three of the last four quarters were sharply lower. A much slower trajectory right now. If todays is around that consensus. What is a dissas terre. Two months ago we just had one. What if its 250. We could have that conversation from our perspective our the claims data which have been close to a 40 year low and the adp number which was fine. So from our perspective it would be inconceivable we have a sub 100 k number. We could have made that argument in may as well. Just im only looking at the glass half empty. What if it is 250,000, is that a disaster too because it puts pressure on the feds. The fed is thinking hard about september. I think too you can understand weve had speakers themselves still says we could get one or two hikes this year. Certainly the fed wants to keep optionality in there. I think that was dubbish in the sense they hear them talk about one. A rate hike. Of course San Francisco fed saying even two are possible this year which was so incredible to me on the other side you can push that away as well. So i could see the fed wanting the keep optionality open flaes that they do end up feeling this year its going to be appropriate to move. Ting hurdle is very high. I dont think fed chair yellen who has a much more global per speck tifr ulative is feeling t urgency to act. Even if we do get strong job numbers. More people working is always good. Its not bad. The fed is going to have the ambiguity of weak gdp numbers. That might be enough. I think they were revised in august one time. Youre not going be in a place where you feel like the economy is. You have weak business numbers. We havent seen that outside of recession. There are things the fed dmesically have to be somewhat concerned about along with all of the other global krnls that vz be pressing all along that have kept them from moving. Give me shom investment ideas here. One other issue thats important to this talking about the fundamentals that the fed is thinking about. Weve gone back and done a study and looked at the post par history of the Federal Reserve. Theres a very strong per pond refinance here in the period of labor day to election, the fed prefers to be out of the market. Theyre going to front end load changes, back end load changes, but they dont want to impact the economy of the markets before the election. So the data has to be really strong to dictate they need to do something. Thanks to michelle and to bill. Thank you. Little bit of political news, a new nbc wall street journal poll out showing that Hillary Clintons lead growing over donald trump. John harwood joins us now in Dallas Keuchel with t d. C. With the details. Confirms the results of other polls since the convention showing Donald Trumps support declining and Hillary Clinton lead growing. Before the two political conventions Hillary Clinton led by five. Now she leads by nine. 47 to 38 over donald trump. If you include the third party candidate, she still holds a 9 point lead. They dont hurt her lets look at president ial qualities and see how people are evaluating the candidates. On the economy, plus four. On handling crime, plus eight, but Hillary Clinton has advantages on those more typically associated with president s on being commander in chief, 11 points. On handling a crisis, 18 points. On caring about people like you, 16 points. On handling foreign policy, 26 point edge. So donald trump is in a difficult position now. We have republican candidates for congress distancing themselves. One adam king ger of illinois has rejected the candidacy. Mike hoffman in colorado has an add up now saying he doesnt like donald trump. Hes going to stand up to trump thchlt is a moment when he gives a speech to the Economic Club on monday really badly needs a reset because hes in a position thats very difficult to come back from right now, guys. I dont know if you saw this story in the New York Times today about donald trump and the economy and i wanted to ask you about it in terms of his ability whether he wins or loses to potentially reshape the way the Republican Party has thought b about economics historically. This piece suggests theres a new group of people called the reform a cons rejecting additional tax cuts. Theyre promoting the benefit of trade. Theyre ruling out privatizing things likes seth smith and medicare. How much of this do you think is real. Well, the reform con movement is real. Theres no evidence that donald trump is attached to any movement whatsoever. His message is donald trump. So to the extent there is overlap between him and any faction of the Republican Party, traditionalists on tax cuts at the top or on not touching entitlements or other things that reform cons might lean toward as a way to appealing to more middle class voters, theres no reason to think that any of this is important to trump personally. So you cant really talk about reshaping the Republican Party for somebody who is fundamentally about himself. So i dont see trump reshaping the Republican Party. I see him as an idiosyncratic event that is highlighting the trends in our politics and our culture that he is going to go away at some point and the Republican Party has to figure out what there is after that. One quick question, i know the professor has a question too. Were going g getting jobs numbers, how do you think those numbers whether theyre good or bad work into this, especially given not just this particular month, but i dont know if you heard the last interview suggesting that august is usually unique and comes in remarkably low and how that plays into all of this. Honestly, i dont think they matter at all. Were on a trend of moderate job growth and so whether its 180 or 110 or 210, i dont think that changes how people think about the economy at this point. And they certainly wont change how people think about donald trump versus Hillary Clinton. Very quickly. Im remind ed i think of the led that john ker riry had for a wh. There have been double digit leads that have been overcome. How serious is this for donald trump . Wom well, there havent been double digit leads overcome in the modern area. In 1976 jimmy carter came out with a lead and gerald ford made it close. Barack obama never led mitt romney by 10 points. He may have led john mccain by ten points and ended up winning by seven of. We havent had a president ial race that was decided by double digits since 1984. Its difficult to come back from a deficit of this magnitude. Pretty good. You didnt know this was coming and you had all the numberings right at your fingertips. What was the actual percentage number, do you remember . I believe Ronald Reagan got 59. And since then, president George Hw Bush won. President obama won by about seven by double digit leads are not common in our politics anymore. The reason is the country is evenly divided and democrats and republicans are so fixed in their views and that i recall diminished number of swing voters its hard to move the numbers. Thats why a president ial Approval Ratings dont go as high as they used to go because youre not going to see the voters of the other party credit the president in power. Absent an extraordinary event like 9 11, you dont see numbers oscillate quite that much. Thats why its so unusual how low president bush fell at the end of his term. Its donald trump is an extremely deep hole right now in ra New Hampshire poll we talked yesterday morning where hes behind 15 points, hes only getting 63 of republicans. If you cant get more than twothirds of your party, thats a recipe for a catastrophic loss. John, thank you. You bet. Let the games begin. The Opening Ceremony for the olympics kicks off tonight. The games are a big opportunity as you can imagine for advertisers and olympic partners. Going to join us next how Companies Get the most bang for their buck in rio. Squawk returns in just a moment. Welcome back to squawk box this morning. Olympics kicks off right here on nbc. The games are one of the biggest opportunities for brands to get their products in front of consumers. Joining us now is howard. President of kneelson skbramt. Good morning. Is this olympics going be the biggest ever again in terms of ratings and audience. Theres a lot of speculation about it. We wont know until it actually happens. Were not in the business of predicting big things like that. Ky tell you personally i cant wait to see it. I cant wait to tune into stuff. Its highly anticipated. I love the opening ceremonies every time. The parade of nations. Its going be one of the most watched parts of the olympics. No question about that. Doey she people are going to watch this year. Every year we get further away from Technology Becomes more advanced and people are watching on the phone and stuff like that, how does it change this year. Its going reflect a lot of whats going on in media. Personally when im watching. Im a fan of football. When im watching football. Im watching one screen with the game and another screen stats and im watching my switwitter feed. Exactly. Show have you changed howd you measure for brands the impact because you do have the sortd of two and sometimes three screens going on at one time. We are big on measuring the consumption through the things and being able to see the programming through. Sports is a gigantic business. I think worldwide its about a 325 billion business. That includes media rates. Apparel business is 125 billion business. When you add media on top of that, its kind of butting up against half a trillion dollar business. Its really, really big. Brands are making gigantic bets on sports. Naming rights on stadiums can be a billion dollars. Those numbers are out there. Over 60 billion is spent around sportds. Its probably the most valuable advertising Industrial Media there is. This year 93 of the top 100 rated Television Shows will be sports events, which is pretty a astounding. Thats up dramatically from about 14. So thats the way its going. The most watched show in the history of television was the World Cup Final in 2014. Which was seen by over a billion people. Thats a big number. I want to go back to the measuring piece though. If nike calls you up and says i want you to measure how far the brand reaches during this particular next two weeks, for example. Yes. Its not just whats going to happen on tv and the radio. Some of these athletes are going to be tweeting and some are tweeting and being paid to tweet about the sneerns and then theres going to be fans on top of that some of whom will include images. How does that work on your end . Im just curious. We try to measure all the ways that Media Consumption happens. Certainly on television and raid you talk about, but more and more whats going on the other screen. Its mentioned or what happens if its an image. They wont understand all that. He wants to understand whats really being capture. Dewayne so we measure most of that stuff right now and increasingly were getting smr sophisticated with measurement and brands really want to understand this stuff. Right. Before you came on we talked about the end score. It used to be the q rating now theres the n rating. Yes. So thats what it stands for. Tell us what the n score is and how it differs from a q rating. So what n score does is it measures what peoples perceptions are around athletes, music figures, media fission yours, radio figures and theres people in the data base. We send out a survey and ask them they are perceptions of certain things about those people and tlheres 50 new peope tested each week. We marry that with what the consumers are buying and their other behaviors and put that stuff together. Is it like the q rating where even if somebody doesnt like you, the fact they know you exist adds to your number. So the awareness is one of the factors we look at. That could be awareness because people love you or it could be awareness because people are not so thrilled with you. Thats important for me. People love you. No, the other one. I just want to get back to the sports thing. How was the explosion of sports changed how youre measuring sports . Have you widened your net . Are you going deeper in ways you havent before . Obviously its a big business. Its a bigger business for you. Is it the same way you used to do it or have you changed using Additional Technology and other methods. Theres other methods we use. It used to be when there were three or four places people could watch tv, it was a little more simple. Now its more complex. Its drawing much more audience. Out of home measurement is the example. I remember when the world cup was on last time. I live in manhattan. I was Walking Around the street. Any bar you would go through had people lined up watching. Some measuring that and also measuring out of home audience and other audience we talked about on the digital side of things as well. Let me ask this final question and why cant others i hate to say this, do this better than you . I always thought the Cable Operators who have the boxes should be able to measure that piece better than you probably could. I apologize. They would have that information. I would think that google and some other tech guys who have cookies imbedded should be able to figure out the digital component better and ive always thought if they could marry themselves up. They would make quite a competitor to what youre doing. They may. And there are players who want to be competitors. What we do is tough work. It takes a lot of effort and energy and weve been doing it for a while and it takes something very sophisticated. We have 10,000 data scientists crunching the data all the time. It marries the consumption information along with consumer information. Kneelson is in the business of measuring what people are buying as well. Connecting those two things. People see something on television or on the screen, what does it mean to them. You have advertising campaign. What did it do in terms of moving product that youre looking to move. So marrying those pieces together is really important. Its not an easy thing to do. We work hard on it all the time. We want to create this transparent market about how people evaluate that stuff. Just improved your score. Thank you. Liked being here guys. Thank you. Coming up, google wants to help you find parking. Plus apple announcing a new bug bounty program. Well tell you how much the company will pay to find holes in its security. As we head to break, look at yesterdays s p 500 hundred winners and losers. Mapping the oceans. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. 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Her biggest weakness is she cares too much. Thank you. My friend really wants a job at ge. Mine too. Im a wise elf from a far off shire. And sanjay patel is who you should hire. Thank you. Seriously though, stacy went to a great school and shes really loyal. You should give her a shot. Sanjays a team player and uh. Images, videos, social updates. We call it dark data. 80 is invisible to most businesses. The ibm cloud has tools that can help see dark data and put it to work. Hello, my name is watson. Working with watson in the ibm cloud, we can help an Energy Company predict pipeline corrosion. And help a startup to use social data to predict market trends. Now businesses can get more out of their data. Thats what the ibm cloud is built for. Time now for the executive edge this morning. And we have some good morning for digital bounty hunters. Apple announcing it will start paying hackers who find and report vulnerables in the product. Could earn you 200,000. Microsoft and facebook have similar programs in place. Apple had listen criticized for not pursuing programs like this, having hackers try to hack into their system because of the system. This is a big move for them to open up as well. Google wants to help you find a parking spot. Soon to be updated maps app reportedly could include a text base aletter systalert system t could send you messages about parki ining destination. Air bus is closing battle. European air maker had a total of 323 jets after cancellations. That compares with the 33 for rival boeing. Theres a look at both of those stocks. Also House Speaker paul ryan saying he sees no point in holding a vote on the transpacific partnership. The radio interview ryan says there just arent enough votes for the trade deal. President ial candidates have bashed tpp, but white house has pledged to make a major push to persuade to pass it despite even Hillary Clintons position youve seen obama has continued to support it. Yes. As he probably has to. Trade is such a hot bottutto topic in this election cycle. You saw it with bernie sanders, donald trump. Hillary coming out with this. That has been the back story, they would try to pass in the congress, but for anybody who is planning on sticking around in that congress, theyre not going to want to touch it. They cant even pass the zika. Right. So former cia coming out supporting Hillary Clinton. He says he supporting clinton because he believes donald trump is unqualified to be president and he may pose a threat to national security. Trumps statement about russia shows hes more in line with russia that america. Recruited trump as an unwitting agent of the russian federation. When we return, what yesterdays bank of england rate cut means for investors in the united states. Mark grant will join us, next. We know where he thinks Interest Rates are heading. Well hear what he thinks about what happened yesterday with the boe. 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Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. Welcome back, everybody. We are counting down to jobs friday. Less than two hours to go before that number hits. Joining us to talk about that and what hes been watching in the markets is mark grant. Mark i have been looking forward to this interview today because ive been dying to get you take after what we watched the bank of england do yesterday and what weve been seeing with the Interest Rates today. What do you think. The bank of england joined the fray along with the bank of japan and the central bank of europe and lowering Interest Rates and engaging in quantitative easing and the only Major Central Bank in the world thats not doing anything is the fed. They are sitting on 4 trillion worth of assets from the last time. In terms of Interest Rates, i was on with you. I remember with great foundness your eyebrows arching into your hairlines, the 10year was 177 and i said 125 skpo you went. And yes, now are you still sticking at 1. 25 . Were 1. 4 today. Were below 1. 5 . Do you think it could drop even lower. Could drop even lower, but 1. 25 is where im going to keep my call for a moment. You starlet making more grand calls than that and people eyebrows leave their heads. I think 1. 25 is where were going to get to. There is 220 billion, 220 billion a month coming from the Central Banks of the world and the sovereign debt dragging 12 trillion worth of sovereign debt into negative yields. Were going down hugely in Corporate Bond yields and other risk asset bonds and theres its all about the money. Money is just driving yields down and driving equities up. So watching that knowing that this is part of that, there is no alternative im so tick of saying that, but its true. If you want to find yield, this is the only place you can find it in the nation. If you want to buy into that nations debt. What happens to stocks as a result of all that, mark. I think what you have this tremendous amount of money flowing in, i think equity probably keep going up. Even though if you look at the fundamentals, the pe earnings for almost the last year and a half, you would think to yourself that we shouldnt be here. I mean, it makes no fundamental sense. With the exception of that this giant amount of money keeping rolling in from all the Central Banks and its finding its way into american yields because theyre the highest yields of any major country and finding the way into the american stock market because it looks safer than the japds or yumpz stock markets which are troubled by the Banking System and were bigger more liquid and safer. Mark, back in 1999 when i was a younger more naive reporter, a Deputy Managing Editor for the wall street journal came up to me and we were talking about the woernds of technology and he put his arms and me and said, steve, this will all end badly. I wonder if thats you take. This is a moment the way you talk about whats happening with the central bank and money in the system the way theyre driving down yields people into equities. Is this your opinion this all ends badly. Steve i have a different take on that. I know a couple of bright guys who have made that comment and i think thats a very good question. Heres my take on it. Its going to be lower yields for longer and lingering. I dont think were going to get to any end for quite a period of time. I think the money thats been put into the system is going to keep equities high. Its going to push down 10year treasury. Its pushed down Corporate Bond yields have tightened about 35 basis points since the beginning of the year. It just is going to keep pushing this market yields lower, equities higher, and i dont think were getting to an end any day soon. Hey, mark, what would you look for as signs and signals that maybe an end is near. Is the Central Banks going to have to start reversing policy and raising rates in some way . Is that the first sign . Whats the canary in terms of thinking maybe the stock prices dont make sense here. It wouldnt be they would raise rates. They would stop pumping money. If they stopped buying sovereign debt. If they stopped buying Corporate Bonds like they are in england and europe and japan. Once they begin to stop buying, then the markets are going to trade more on the fundamentals, pe multiples, normal things that they have and not on this giant amount of cash plumped in by the Central Banks which is why in my commentary this morning i said its all about the money. All right. Mark. It is great to see you. Always appreciate your commentary and have a great weekend. Thanks to you too. Coming up when we return, were throwing a bit of a party with help on the party city ceo. Here to talk jobs, licensing deals and health of the consumer. Were back in just a moment. Welcome back to squawk box. A celebration for party city investors. Shares up more than 45 this year. Sales rising 7 just in the last quarter. Joining us now to talk all about it and have a party here, jim harrison ceo of party city. You brought no confetti or anything. I brought myself. You brought yourself. Youre a big party goer. Im a party thrower. All right. Tell us, why is it working . It works for a couple of reasons. One, weve got a unique model. We manufacture, wholesale, and retail. As a result most folks think party city, kids party store, were done. The truth of the matter is, the biggest challenge we have is convincing the world that party city is one pillar of our business. If you go into any other party store that says party on it, youre going to find a bunch of product we made and wholesale. How cyclical is it . I understand halloween is the biggest. Its the deal. The whole game. Not the whole game, but what percentage for that quarter . Retail business, 20 of the business comes from halloween. For the wholesale business, its much more linear. Because theres a season virtually every month and theres over 300 million birthdays in america every year. And those happen whether its rainy, cold, economic conditions. Doesnt matter. Youre going to have that birthday. And we talked licensing earlier. Licensing is a big part of the business particularly on the juvenile side. On the licensing side for party goods we manufacture ourselves, the paper plates, the napkins, cups. Where . In the u. S. You manufacture where . In the u. S. Why dont you manufacture in china . Thats where everybody manufacturings. Hes never been attacked for manufacturing in the united states. Im not attacking. We have a 60 Worldwide Market share of metallic balloons. We manufacture all those balloons in indianapolis. We manufacture napkins in new york. Our paper plates in louisville, kentucky. We recently opened up an Injection Molding operation in new mexico. Roll the star spangled banner here. This is great. We do manufacture our latex balloons in malaysia because thats where the rubber trees are. We were just talking about my son whos having a birthday party. Ive been buying everything teenage mutant ninja turtles. The stuff i bought from amazon, did you make that . A high likelihood. If theyre balloons and their brand and anagramed, theyre ours. If youre in the party business, you do business with us. Every one of our Business Units is a Free Standing profit. I want to go back on this. Are you not tempted to go overseas because of low labor . We manufacture those things that are highly automated here in the u. S. 70 of what we wholesale, obviously we source. Most of that is sourced from asia and china. A lot of the stuff thats made here is automated. The manufacturered stuff is done here. The automated stuff. Its an automated process. Not a huge number of jobs. Yeah. The plates, napkins, thats all u. S. Made. Can i ask one other question. Are you a barometer of Consumer Health and confidence in the sense, are people throwing more parties when they feel flusher . The economy can be too good for our business. Ill give a great example. Want a pick on becky, for example. So if she were to have a baby shower and the economys great why, is she pregnant . Just a little. And her sisterinlaw is throwing her a baby shower, if the economy is great they might go to the restaurant and have all the girlfriends come there and have a nice time. If the economy is okay, its going to be in somebodys home. When its at home, theres going to be more decorations and more stuff. Interesting. Our business is very predictable. Even in the great recession, our sales went down 80 million and our profits went up. What is the biggest product, line of products right now . Wearables. What does that mean . Hats . Party hats . More than hats. So if we go back ive been doing this 20 years. For the first 15 years, people wanted to decorate the table and the room and have nice stuff. Everythings got to coordinate. Last five years with the invention of the selfie stick, everybody wants to decorate themselves for their party in addition to the room. Stupid glasses. Stupid glasses, head boppers, necklaces, tshirts, ties. That speaks well of us as a society. I dont want to judge. But i think st. Patricks day, tons of wearables. Christmas, tons of wearables. Even easter, tons of wearables. Wow. So its a lot of fun. Its really going to help grow the business. What is the most expensive product you sell . Ticket rolls. One of the most expensive products. Outside of halloween. Like the half and half at the school raffle. Very expensive. But for halloween theres a lot of expensive items. We talked jobs, trump, stocks, party city was the segment of the hour for me. Thank you very much. Are you doing trump masks for hallowe halloween . We do have trump and hillary masks. We were going to do pinatas but decided not to. We thought it encouraged bad behavior. Avoided that. Thanks for coming on. Coming up, what to expect from todays employment report. Predictions from economist vince hooin heart and Jeff Rosenberg. Squawk coming right back. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. My m. About my toothpasteice. She eveand mouthwash. Ice. But shes a dentist so. I kind of have to listen. She said jen, go pro with crest prohealth advanced. Advance to healthier gums. And stronger teeth from day one. Using crest toothpaste and mouthwash makes my. Whole mouth feel awesome. And my teeth are stronger too. Crestpro health advanced. Is superior to colgate total. In these 5 areas dentists check. This check up . So good. Go pro with crest prohealth advanced. Moms right. Again working for a living. July jobs report likely to set the tone for todays trading but could it be a game changer for the fed . What you need to know ahead of the numbers. A preview is straight ahead. Let me games begin. The ceo of adidas talks branding and the state of the consumer. Why theyre going for gold in rio. And activision going through the roof. We talked to an analyst about the companys cover and the release of destiny the rise of iron. As we all look to become legend. 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, everybody. This is cnbc. We are first in business worldwide. Im becky quick along with Andrew Ross Sorkin and steve leisman. We are less than 90 minutes away from what we are calling the most important of the month. This is a biggie. Forecasters are expecting nonfarm payrolls to come in at 179,000. Theyre also looking for the Unemployment Rate to drop to 4. 8 . Steve will have much more on what to expect in a minute. Meantime, look at the markets which have been higher ahead of this number. Dow futures up 35 points above fair value and the nasdaq up close to 15. Couple of headlines this morning. Apple now offering rewards of up to 200,000 for people who find critical security flaws in its products. The program limited to about a dozen researchers who had been specifically invited by apple to participate. But this is a Big Development for apple. They avoided uses white hat hackers to hack into their systems. Google, facebook, and others have done this for some time. The Software Community watching this closely. Yahoos Messenger Service is going to shut down today. Sense the software has been a primary tool in communication among oil traders for years. Yahoo has a new version but doesnt meet standards set by the oil industry. This morning one of the premarket movers is rackspace. Dow jones reporting the company is in talks to be acquired by a private equity firm. A deal could be announced as soon as today. So after a may jobs report that was too soft and a june jobs report that was too strong, quote, expectations are that the july jobs report will be the goldilocks reading, just right. Here are the numbers. Its worth remembering. 179,000 is the estimate. We did 287,000 in june after 11,000 in may. So were looking for the real jobs report to please stand up. I might have stolen that from the wall street journal. Now, there is an interesting and legitimate debate about what constitutes a strong jobs report. Fed officials put the estimation from 80,000 to 100,000. Thats enough to keep the Unemployment Rate unchanged. You can see there janet yellen, 100,0 100,000. Does anybody matter besides yellen . I think so. I think if this whole chart were shifted more to the left or the right, it will give you a change in policy. For example, they would be more concerned about 150 or 200 if it was higher or lower. That means they would see the current number of job growth in the 200,000 range of thats too strong. For the moment, something below that should keep the hikes at bay especially after yesterdays bank of england cut. The u. S. Got a chance of enjoying good job growth, low inflation, and low rates or just right i think is the possibility here. I dont think theyre at a place theyre ready to hike even if you had strong jobs growth. Okay. Were going to talk more about that right now because were joined by Jeff Rosenberg and vince reinhart. And gentlemen, welcome to both of you. Why dont we get your take, first of all, on what youre looking for in this jobs report thats coming up in just about an hour and a half. What do you think . At the con census expectations around 180. Inside of the details around the improvement that weve seen on the good side. The professional services side. We think it could come in a little bit on the surprising side strength. But nothing thats really going to disrupt the expectations as steve laid out. Very little expectations in the market here for fed action. Were pricing less than 50 for the end of the year in terms of a hike. It would take a significant turn to the upside. Importantly more than just one job number. Right. Because were going to write off any one number as an aberrant you need two points to have a line. You need a line to extrapolate. So one number isnt going to make that difference. Most importantly in the backdrop of all this, were in a slowdown in terms of overall headline job growth. Not because the economy is slowing, but because the job market is tightening. Evidence on the market, market will be focused on that wage figure as well as signs for that. Weve seen a steady increase in terms of wage inflation. Expect 0. 2, 0. 26 year over year. Not great numbers in terms of the historical record, but certainly evidence that were seeing the tightness in the labor market. The important thing about july is what didnt happen. We didnt have bad weather. We didnt have a big strike. We didnt have a major event disloca dislocating. Were a touch lower than the consensus. 170,000 jobs created because im a little worried about the High Frequency readings and the fact is gdp is tracking pretty well. What . Even so the unemployment tax takes down a tenth, average Hourly Earnings at 2. 6 . Gdp is tracking pretty well, you said . Thats not the impression we got with the last report we saw. In the sense of some of the purchasing manufactures indicated you mean for the Current Quarter. Current quarter has been 2. 5 in the rapid update. Last hour, i said i cant live this way. That this idea of market data point to data point as a way to make fed policy. You had one of the most critical staff jobs at the Federal Reserve in washington. When you look back, think about what you did back then, is there a way for the fed to get off of this train and say, you know what . The future of policy is not dependent on todays jobs report. I think were overthinking Monetary Policy. It shouldnt be dependent on just one data point. One thing to remember, though, when youre talking about the employment report, youre getting a reading on domestic momentum, nonfarm payrolls. Youre getting the reading on slack, the Unemployment Rate. And readings on cost pressures. So its a package of information. But one month shouldnt make, you know, make the difference for Monetary Policy. I think the real thing thats going on is if the anticipated adjustment of Monetary Policy is considered so slight, so slow, and to not a particularly high rate. Then the probability of action at any given meeting is a data point can be material in that. Can you pick up on that question and give it from an investors point of view. Im the first to say maybe the media is part of this. But i feel like were reacting to the Market Reaction which is they tend to swing from, you know, point from one side to the other based on a single data point. On the disappointing may figure, how much time they spent on that. The fed says theyre data dependent and i think you were referring to this a minute ago. Sometimes it feels theyre data point dependent. Then the market feeds off of that. What were talking about here is that one data point wont make a difference in terms of long policy. But the markets on a shortterm basis are going to be based on a surprise. You get that overreaction because of this sense that the near term data will drive the near term commentary from the fed which is what the markets are then going to feed off of. So its a cycle. A vicious cycle potentially. But isnt this time different in that no, no. Isnt this time different that were in the month of august, most people dont think anything is going to happen in september. We just talked about it. Dont we think theres a two or three month lag thats different in previous months where we actually thought maybe there was something the market would be surprised by a september rate hike. And the other issue is youre getting into the election. So theres a lot of expectations that theyll defer until after that. Thats why september is less than 20 probability. So todays report has to be really outsized to try to move those probabilities. And if its too outsized, people will dismiss it. Hey, vince, weve talked about how since the brexit there hasnt been a huge reaction in our markets. Yesterday the bank of england took some severe steps not only cutting Interest Rates, also adding to the stimulus, adding to the quantitative easing theyre doing out there. They lowered their growth expectations pretty dramatically, too. Do you think thats an issue that will catch up with us with u. S. Gdp or do you think this is something that is really more central to england and perhaps to the eu . The uk inflicted an aggregate demand on its by voting to leave the eu. Markets reacted, the depreciation of the pound, the Monetary Policy response is pretty much going to contain that shock to europe. Its a problem for the ecb because their stock at the effective lower bound to Interest Rates, they dont have much room. But in some sense, the Federal Reserve already responded to the global shock because people arent talking about too tightenings in 2016. Theyre thinking at best one. If youve only got one tightening to do in 2016, an individual data point is material in deciding whether september or december. Thats the world were living in. Jeff, wanted to ask you. We had mark graham on last hour predicting 1. 25 on the y yield. He said even though its closer to his target, hes not changing. Hes been directionally on the right side of this trade. Whats your view . Not on mark grant, on yields. Clearly thats going to be about what we just talked about in terms of brexit, about shocks to the global economy. If we have a recovery in the second half in Economic Growth and the threats from brexit and economic shock are limited, then its very unlikely that youre going to get that low of a 10year treasury rate. However, its not out of the realm of possibility at all if those shocks do show up. If that surprise impact on the economy shows up and its growth negative and inflation negative, then certainly that rate of 1. 25 is not out of the realm of possibility. We were close to that not too long ago. Jeff, thank you. Vince, thank you. Good to see you both. Okay. A lot more on the jobs report in just a bit. But up next, a record shattering release of overwatch leads to a big gain. The stock up 40 in a year. And looking to raise higher today. Were going to take profits next. Kraft heinz posting better than expected earnings helped in part by the integration of the kraft and heinz brands. Revenue fell but still managed to beat estimates. Hiked Quarterly Dividend to 60 cents a share. 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Down this morning. Shares of activision getting a big boost this morning since closing that acquisition. Video game maker reporting a record second quarter. Now in part of the newest title overwatch. The company now has over 491 million monthly active users across all games. Activision joining for the full year. 40 up. Mike olson, Senior Research analyst at Piper Jaffray anyway joining us. Morning. Morning. Can they keep this up . You look at where the stock is now, its been on a remarkable ride. Do you say to yourself 12 months from now it cant double . A lot of excitement recently. Overwatch is a huge phenomenon if you look at the revenue it generated half a billion dollars since it came out in late may. Its got 15 million players and its the biggest game in china and south korea. But if you look beyond overwatch, well have another call of duty comes and another world of warcraft expansion. Its on the console and pc. Is this the next big thing in the competitive market when theres money involved . It could be. Overwatch was designed to be well made for esports. And as you know, esports is becoming a huge phenomenon. It seems crazy that people are watching other people play video games, but its a real thing and were definitely seeing a lot of titles that are benefitting from it. Today its hard to quantify the positive impact of these sports from a financial perspective. But what we know for sure is that its helping with player engagement. So its getting players to watch other people playing games, watch tournaments, things like that. And then end up going out and buying the game or Digital Content for a game. One of the things we did learn this quarter from a number of the gaming business, were finally and youll tell me. Are we finally hitting that Tipping Point when it comes to people buying discs relative to digital downloads . Is the shift really happening . Were definitely getting to a point where its starting to accelerate. Right now about 30 of industry titles are purchased as downloads versus buying it on a disk. And a good thing for publishers is every time somebody buys full game download versus disc, its going to have a positive 15 to 20 point impact on gross margins. This is helping a secular trend for all the video game publishers. Which is great for their longterm margins. When you think about we always talk about game stop and some of these stores and whether they turn into blockbuster, do they still have a chance five years from now . I think looking out five years is hard to say. But in the near term, theres enough gamers out there that still want to own a physical disc that a lot of the retailers can still do well. And specifically a lot of the gamers want to own discs because they can resell them to a place like a game stop store. And its also often easier for portability if youre taking a game to a friends house or Something Like that. Were still seeing a high level of interest in physical discs, but there is a shift going on every year. 10 or so of the market shifts to all game downloads. Whats the role in terms of mobile devices in all of this . Were still on discs and consoles but is that going to shift . You know, its interesting. When the new consoles came out which was all the way back in november of 2013, there was a concern that mobile games would kind of cannibalize the existing console space. And it really hasnt played out. Obviously the xbox one and playstation 4 have done well. What its done is show its two separate markets. Mobile games are doing bite size gaming where theyre playing for a few minutes. Where a console Gaming Experience is a longterm inhome experience. I dont think one can necessarily replace the other. Thats why weve seen Companies Like activision go out and acquire king to complement. Whats the stock going to be worth 12 months from now . Whats your outlook . We have a price target in the mid40s. We think thats definitely doable given the strength of overwatch and other upcoming titles. We appreciate it. Thank you. All right. Coming up, a brand showcased for adidas. Its adidas in europe. At the olympics. The ceo talks about the importance of the summer games, branding, and the state of the consumer. And then how do you like your wings . Spicy, boneless, crispy . The ceo of swing stwing stop co. Squawk box coming right back. Welcome back to squawk box. This morning stocks to watch. Weve got a couple of them for you. Weight watchers falling short of analyst estimates. Membership fell. Shares falling sharply in afterhours trading. Also priceline reports a better estimate. The firm also forecasting Current Quarter earnings above estimates. And kraft heinz posting better than expected earnings helped by the ongoing renovation of the brands. Revenue fell but still managed to match estimates. They hiked their dividend to 60 cents a share. I want to go back to Weight Watchers for a second. Can we go back to that one more time . Remember oprah joined. Was what about a year ago . A little over a year ago, yeah. So can we look at a oneyear chart to go back to . There was the oprah effect which oprah like everything she touches turned to gold and Weight Watchers went up. Thats when she jumped in. Its been funny watching the Earnings Releases since that happened. Because and this is a volatile stock. Its swung around quite a bit or at least some of the numbers that theyve reported have been pretty volatile too. I want to go back and see where it was before she joined. Krae. Looks like its been on the Weight Watchers program. Except for when she joined, it was under 7 bucks and it jumped. It almost quadrupled. That didnt last very long. Its just been interesting watching though. She says shes never quitting Weight Watchers, by the way. Interesting. Check out this video from china. Passengers panicked when Ceiling Tiles at a shanghai subway station suddenly collapsed. Whoa. Yes. Oh, my. You know the good news . Whats the good news . Nobody was hurt. Thats good. Thats good. Officials say damp weather corroded the grid work. When we come back this morning, adidas ceo Herbert Hainer is going to be joining us to talk rio and sports brandings. Theres been so much happening with adidas, nike, under armour. Were going to talk to him about the business of the olympics, what that really means for him. When we come back, well be speaking with mr. Hainer. Meantime, check out the markets. You can see the equity futures are up about 27 points for the dow futures. S p up by 4. 5. And the nasdaq up by 13. Oh, my goodness. Among the stories front and center, were about an hour away from the highly anticipated july jobs report. Economists looking for 179,000 new nonfarm jobs. Looking for unemployment to drop to 4. 8 . Amazon has unveiled its prime air jets. It agreed to release boeing 747 jets to broading its delivery system. Walmart is implementing a new scheduling system to have sufficient staff on hand during its busiest shopping time. It also gives more certainty about their hours. Its now in effect in walmart Small Format Stores and will roll out to all its u. S. Stores. Lets talk some olympic news this morning. Just hours before the Opening Ceremony in rio, russia has found out that some of its athletes wont be able or will be able to compete. The ioc has now cleared 271 athletes meaning more than a hundred competitors of the original 387 member team have banned. Russia narrowly avoided a widespread ban. The opening ceremonies, of course, will be airing tonight at 8 00 p. M. On nbc. In the meantime, the Olympic Games are finally upon us with the opening ceremonies tonight in rio. Were going to talk sports and sports business. Thats where german Sports Company adidas hopes apparel worn by competing athletes will drive sales. Herbert hainer is ceo of adidas. He will be retiring at the end of this year. He joins us from rio this morning. Good morning to you. Good morning to new york. Help us with this. You are one of the official sponsors and ive always tried to want to understand in terms of how sponsors think about this. Theres multiple tiers of sponsorships. Youre at the high end of the sponsorships. How do you think about the money that you spend being that sponsor relative to your peers . And also how all these other sponsors whether it be nike or others who are lower tiers then try to ambush you. First and foremost i guess every brand has to decide for itself what ways of communication and consumer they choose. Obviously different opportunities. Digital media or via sponsorship. This is what we do at big sporting events. The olympics definitely is not as a commercial opportunity for example as the football world cup. But its definitely a showcase for our brand where the athletes all around the world are competing. And therefore its definitely a Good Platform for us. In terms of driving business around the world, you look at the olympics and you say to yourself, this is going to drive more business in the u. S. , its going to drive more business everywhere . How do you think about it . First and foremost i think the olympics are the most watched event around the world. And of course it helps you to establish our brand. And then obviously following. And when you look to our numbers in america, which often just released Quarterly Results yesterday. And we have record quarter, record first half. Record 2016. And the share prices are at an alltime high. Something has to work within our strategy. The olympics are part of that. In terms of market share in the u. S. To the extent that youre competing against nike now under armour, how do you look at how the sort of market share is shaking out . And also where a reebok and other brands fit into this . Of course there is still a huge potential for us in the u. S. , there is no doubt. But there is also no doubt that with our current Management Team, we definitely find the right way to code. And we are growing now since several quarters, more than double digit. Just in the last three months, we are growing by 32 in america. 60 in our running business. This is just the beginning. So im absolutely happy how the business in america is evolving. China sales up 30 in terms of your overall business. How do you think of china relative to the rest of the globe for your market . China is a very important market for us. As you know, its the second biggest market in our landscape behind the u. S. And we are growing since 15 years now double digit in china because we started early to invest there. We are doing over 2 billion now in china. And this growth will continue. Because imagine you have 1. 4 billion people. This is a real potential which we see in china. Herbert, the World Economy is supposed to be terrible. So what world are you selling all this stuff in and having all this growth . How is it possible youre doing quite so well . Yeah. There is definitely some challenges in the World Economy. And some unrest as we see in the moment. But i do believe first and foremost people want to live a healthy lifestyle. They want to do more sport. They want to work out. They want to walk. They are much more Health Conscious and body conscious. And obviously we with our brands adidas and reebok are successful in helping the consumers to fulfill the demands and to fulfill their wishes. Besides of that, i think especially as a sports brand and adidas, for example, really has been very successful in bringing sport and lifestyle together. You know our collaboration with kanye west just to mention one of them how successful it is to merge sport and lifestyle and give especially the young consumer a special feeling. Lets talk a little bit of golf. Nike said earlier this week it was going to stop making a lot of the golf equipment that it had been. Youve been talking about spinning out. Taylor made and your golf equipment, thats been doing well since you talked about it are you still planning to go ahead with the spinoff . First and foremost we announced 12 months ago that we were looking to all alternatives what we are doing with golf equipment business. Which means tailor made. But the first job for us was to bring it back to growth and to the undisputed number one. Which we did. You saw it on the results just yesterday. Obviously we are in talks with several people who are very interested in buying tailor made. They do their Due Diligence and they have some management talks. And we will see what the final solution will be. But the First Priority is for us to bring tailor made back where it was. Whats the problem with golf . Everyone wants out of golf. Is this is a longterm secular trend where you think golf is not going to work . I dont think that everybody wants to go out. But the fact is that the golf industry, the golf Equipment Industry was not a growing market in the last several years as we know for several circumstances. And obviously we are an apparel company. Whereas you could see on our results see a lot of potential in the world. And therefore i think its our obligation as a Management Team to ask what is the future of the equipment business and this is what we are evaluating. Before we let you go, you are the longest standing ceo amongst german dax companies. I want to understand how you view the politics of whats taking place in europe right now post brexit and what it means to adidas and the economy there. Obviously as i have said already before, there is definitely some challenges in the political and then in the Economic Situation in europe. As you could see in our numbers we dont see any influence neither in england where the people have decided for the brexit. And it will not they woch the games. They follow their heroes. And with our products as i said before, you can do a lot for yourself health, for your fitness. I think therefore im not worried about it at all. As i said yesterday in the investors call, i see tremendous future for us the next years ahead. We appreciate it very much. Outgoing ceo of adidas. And have a great olympics. Thanks very much and best greetings to new york. You bet. When we return, Donald Trumps economic adviser team has announced we have the list next. And then the big business of wings. The ceo of wing stop stops by to talk about jobs in america on this jobs friday. Check out the futures at this hour. Right now looks like things are still in positive territory. Dow futures up to close 23 points. Nasdaq up by 12. Squawk box will be right back. We have some breaking campaign news. Gop candidate donald trump just announcing the members of his economic council. They include steve roth, harold hamm, steven menuchin, tom barak, steven calk, andy beatle, also steve feinberg. In addition to the council members, includes advisers david malpas as well as dan dimoko. And david is going to join us today. Its also interesting for whos not on the list. Somebody like a carl icahn or a Steve Schwartzman or henry kravitz. Some you would expect to see given how hes talked about them in the campaign. Id say there are only three economists on here. Malpass, steven moore, and peter navarro. Which seems a little light to me for an economic maybe this is just the list. We will talk to these people. Im going to pass judgment. I think this is a very strange list. Im sorry. Steve roth is an alister. The farther down the list, a blist team. I dont know if the viewers are saying that. But it is what it is. If you look at the people who run the world for better or worse, this is the antiestablishment list, but in terms of historical look, i think there are people in terms of both business and economics, this is not there are people who would say it may be good not to have economists on the list. But if this is and i dont know this harold hamm is on the list. If this is the policy engine, then its hard to see how policy that can become law and change the country comes out of this group. If youre trying to surround everybody talked about him surrounding himself with the best people in the business. This is not the best. Thats all im saying. Lets talk about wing stop. The company out with Quarterly Results. The chain saw same store sales growth of 3. 1 outpacing the industry average. Higher chicken wing costs taking a bite out of the earnings. That was up sharply too. Cost of sales up by 3 . Joining us now is charlie morrison. The ceo of wing stop. Thank you for being here today. Thanks for having me. It does seem like americans craving for wings has never gone out of style. What are you seeing just in terms of what is coming into the store and how your revenues doing . Well, as you noted, we had a great quarter. Our same store sales up 1. 3 this quarter. We opened up 41 new stores during the quarter. We had an outstanding quarter. And i really believe our brand is one of a kind. Theres nothing really quite like wing stop out there. There are other restaurants that have bar oriented settings. But wing stop is unique in that 75 of our business is takeout. And our core customer is aimed at millennials. And women. 53 are women. That surprised me. I think of wings as being a guys food. No. Everybody loves wings. And i think thats the unique appeal for this brand. It has the ability to cross all demographics and i think thats one of the reasons our appeal is so great. You may not see anybody else as a particular competitor. But the street does look at you similar to how they look at buffalo wild wings. If you want to take a look at the charts of your stock ver ses their stock over the last year or so, obviously you had just come out with the ipo. But they track pretty similarly. Because you are facing a lot of the same issues. Buffalo wild wings fell a bit steeper than you did during the course of the last few months before coming back and kind of getting right in line. But issues like higher food. Up 12. 1 . Is that just because the cost of chicken meat itself has gone up . Certainly the cost of chicken wings is up 8 this quarter as compared to where it was a year ago. But our model is built so we can sustain some of the challenges of higher commodity costs as it relates to chicken wings. We have a simple foot print. Theyre very easy to operate. 90 plus of what we sell are wings, sides, and fries. And so that makes our labor and execution model very simple. And were able to absorb some of the commodity fluctuation very easily. And still our franchisees which make up our franchise restaurants 98 of our brand are the ones that are continuing to expand. What about your able to absorb higher wage costs . The rise in the minimum wage in some places affecting your bottom line . Certain markets have seen increases in minimum wage. However, our model that i just described, the simple model we have requires a smaller roster size. We tend to have more tenured people that we tend to pay higher than most restaurant concepts. That helps us absorb that. But i think the simplicity makes it much easier for us to address wage legislation. All things being equal, would you hire more people if the minimum wage were lower . Well, were hiring a lot of people now at over a hundred restaurants opened in the economic domestic footprint alone this year. That means at least 20 to 25 new jobs for each restaurant thats created. Certainly were in a phase of hiring as we continue to grow. Were getting mixed signals from analysts and some of the company ceos about whats happening with eating out. We have some people saying the consumer is cash strapped not out there spending. And i look at the data and up until about march of this year. The restaurant category was very good. Came off in the spring and summer. How do you describe the overall climate for restaurants right now . You know, i think there certainly are some brands that see challenges. That seems to be still strong and have a strong sentiment is the millennial. As you noted earlier, 49 of the Customer Base is made up of the millennial customer. With their strong sentiment, thats helping fuel our growth and continue our growth and very consistent growth from quarter to quarter this year at least. Charlie, just taking a look at your footprint, you did announce this International Expansion with saudi arabia. How does that work . Youre the exclusive rights to open wingstop restaurants throughout saudi arabia and youre planning on opening how many . Yeah. The deal calls for 100 restaurants over the next 10 years in the kingdom of saudi arabia. And it continues to expand our International Footprint. Now with saudi arabia we will be in six countries around the world. Weve been developing an International Footprint over the past few years. Were very proud of the brand. We believe that the world in general loves chicken wings as much as folks do here in the u. S. Chicken is the most consumed protein in the world. And our unique flavor profile, the unique flavors that we add to our great wings is something that has great appeal worldwide. Are you talking atomic . We were just trying to figure out, steve was eating some wings. I went to school at the university of buffalo and spent time at the anchor bar which was the source of founding of chicken wings. I have not tried the buffalo style yet and i will try them and pass expert judgment. He went with boneless because hes afraid to go atomic. Nothing wrong with that. We have 12 unique flavors that everybody can enjoy. I highly recommend our original hot which is our buffalo style wing. Its won awards over the years and for good reason. Its an outstanding flavor. Do it, steve. Do it. Im going to do it. Im going to try it. On air live so we can watch you sweat. I am looking for that anchor bar swing. You can buy the sauce. They sell it. Charlie, thank you. Thank you, charlie. Glad to be here. Thank you. Coming up, the jobs train wont slow down. Were a little over 30 minutes from the number of the month. Our jobs panel ready to go. Well hear from them at the top of the hour. And speaking of jobs, the video Game Industry, its booming. Designers, coders, and more are in high demand. A look at the video game business as a job machine. Straight ahead, squawk box coming right back. They told me a bottle couldnt dream. That i would never become a superhero. [singing indistinctly] but i learned how to fly. Just to come back in a new disguise, and be the hero ive always wanted to be. Well, steve finally bellied up over there. He is trying some of these hot wings. Is that the atomic one right there . Its supposed to be the atomic one. You dare me . I dare you. I triple dog dare you. Is it hot . No big deal. Its all good. I figured youve got the palate that could handle any of these. Its all good. Middle east there and atomic. Lets look at stocks to watch in the meantime. Go daddy seeing its stock soar. The company also saw shares jump yesterday after it recorded a smaller than expected loss. Also wow. That stock was up by 23. 5 . Fi fireeye revenue missed estimates and gave a weaker than expected guidance for the full year as well. And you could see that that stock is down by about 15 . Check out rackspace. It is in talks to be acquired by a firm. That deal could be announced as as soon as today with a deal. And the stock looks up 16. 5 . Google wants to help you find a parking spot. This is pretty cool. Its soon to be updated maps app could include a text based alerts system to send you a message about parking shortages at your destination. So the bad news the good news is youll know in advance theres no parking. The bad news is what exactly youre going to do about that. When we return, our jobs panel is ready to go. You can count down to the number of the morning jobs number. Its at 8 30 a. M. Well talk all about it, get the expectations from our team of experts. In the meantime, take a look at futures ahead of that data. And take a look at steve chowing down on that atomic wing. Were back in just a moment. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. Fresh ingredients, tokyostepbystep recipies, delivered to your door for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. My m. About my toothpasteice. She eveand mouthwash. Ice. But shes a dentist so. I kind of have to listen. She said jen, go pro with crest prohealth advanced. Advance to healthier gums. And stronger teeth from day one. Using crest toothpaste and mouthwash makes my. Whole mouth feel awesome. And my teeth are stronger too. Crestpro health advanced. Is superior to colgate total. In these 5 areas dentists check. This check up . So good. Go pro with crest prohealth advanced. Moms right. Again jobs in america. Breaking news this hour. The july employment report. We have the numbers, the instant Market Reaction, and what it means for the fed straight ahead. New this morning, Donald Trumps economic dream team. Our special guest this hour, David Malpass, one of the gop nominees newest advisers. Plus the combination of work and play. Handing out big bucks to coders and designers. The final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im Andrew Ross Sorkin along with becky quick and steve leisman. Everybody go synchronize your watches. Take a look at the futures. Dow looks like it would open about 14 points higher. S p up about 3. 5 points. It all depends on the number. The 10year looking right now at 1. 492. Steve . All right. News from the intersection of wall street and washington today. Politics and the economy. Gop candidate donald trump just announcing members of his economic council. Including john paulsen, andi biel, and steven feinberg. Also including David Malpass, dan dimico. David malpass will join us today at 8 40 a. M. Eastern. Our all star jobs panel this morning, Douglas Holtz aikin is here. Hes president of the American Action forum. Jeff manbrake part of the rediscovering government initiative. And our very own senior contributor larry kudlow. Welcome to all of you. Great to see you. This is great. This is the ateam. You want to comment on donald tru trumps Economic Team . All brilliant people. Eight guys i couldnt make the cut. No way. This is really the creme de la creme. But i will say this just to start the show off. Mr. Trump is going to speak at the Detroit Economics Club on monday and in general terms, this is going to be what i call a big bang Economic Growth program. With lower tax rates, lower spending, lower regulatory burdens, and whats happened over the last few months as people have tweaked this around, we put in much more growth and far lower budget deficits. Even Douglas Holtz kin is going to like our plan. You promise that. 9. 6 trillion deficit it would create. In the last century, way, way back. Seriously. Thats a very that was andys number and the Tax Foundation as well. I understand. Are those wrong . Theyre not wrong. Its been tweaked. The plan has been modified. And raises new revenues . It raises lots more revenues. I cant get into the details. Youre not going to raise. Thats right. I was looking forward to talking to you after that lunch. I didnt know i was invited to detroit. You know, i told somebody yesterday theres a big plane. His plane is very large. Its got plenty of room for ace reporters like yourself. Hes got three living rooms in there. I really want to underscore this. Because i think the conversation has gone astray. Its a very substantial Economic Growth plan. And hes going to go directly up against mrs. Clinton. Because in my opinion, others may disagree, shes raising taxes across the board. And given our sluggish, poor economy and the fact we may be very close to yet another recession, we need growth. And i dont see her growth plan. But shes spending. Shes spending. A lot more than shes rai raising. Thats right. The conversation has gone astray. That has not been what the entire political debate has been around over the last couple of weeks. I hear you. Im doing the best i can. Seriously. How do you feel about it . Honestly. About what . About the fact that the conversation donald trump has been having has not been about the issues that i know you care about but about other issues. Look, some off the cuff gaffes have been made. Gaffes or real judgment issue . You know, im an economist. But this whole issue is about whether you truly i know its about trust and a lot of people dont trust Hillary Clinton either. Youre asking me to do some psychoanalytic work, i cant do it. Im not qualified, andrew. Its one of the few things im not qualified for. Different question. Dare i say this list doesnt include you thats correct. There were some people shaking their heads when they saw the list. This is not and there are people on this list we like a lot. But this is not necessarily the ateam. Is that a polite way to put it . I dont want to go there. Im a cnbc senior contributor. Most grateful to be one. That is my job. I have been an informal adviser to the campaign and will continue to do so. Why do you think theres not more alisters on this list, if you will . I dont know. Whats an h alist . Theres a lot of really smart people on that list. Im not dismissing them. Can i get my friend doug holtz aikin in on this . I was trying to hide over here. This is one no one wants to take. He was the last cbo direct tore have a sense of public responsibility, came on did interviews as cbo director. Since then its been hard to get someone on. I think its not well acknowledged and should be. Thank you. I do. Always have. Hes a buddy of mine. Let me just say, ask you doug, when you look at trumps plan, if you were cbo director honest assessment. Its been criticized for cutting taxes and the taxes going very much to the wealthy. Yet larry just said well get a different plan. You cant have a secret plan. The people have to evaluate it. Will it be in the Public Domain . Steven, i just got through telling you hes going to deliver it in detroit. Im on record on your question. I mean, i graded all of the plan. I gave him a dminus. And whatd you give hillary . Dminus. I dont think thats good for either. Tweak implies minor changes, not major changes. Are they major changes . No. Actually, i mean, youre right, jeff. That was the way i described it. I continue to describe it that way. That plan was never priced out before it went off. I just like the fundamental direction of the early plan. Which got my support. Particularly slashing the business tax rates for large and small companies. That stand always was the corner stone of it. And i want to say things like the standard deduction is still in there. Personal rate reduction, i just cant give you any more details. Having said that, jeff, the people who are really going to benefit from these business tax cuts and theyre both ccorps and scorps. You look at the studies, particularly my friend. Youve done some of this stuff. The biggest beneficiaries of lowering the tax burden is the middle class wage earner. This is not a rich mans tax. This is really a middle income tax and also a tax that in my vision, my view will attract trillions of dollars not only repatriated American Company dollars but just foreign money from all around the world because mr. Trump wants the usa to be the most larry, is there a loophole closing item . Yes. And a specific plan to repatriate american profits . The answer is yes. But i cant say more on it. I dont want to do details. To both, theres a limitation on the deductions, absolutely. Are you aware of dougs concerns . Can you get him to give it a b . I think he would give it at least a b when he sees the final copy. Hes a tough grader. Hes a tough grader. And hes also a dear friend of mine. But i think that dougie is going to like this. Nothings perfect and i get that, but i think hes going to like it. What time on monday . You know geez. I think its around lunch. Can you come on next tuesday . Absolutely. And tell us what you think about this when we get the numbers on it too . Larrys view really quick on the idea that the Republican Party is shifting. Whether trump wins or not, some of the sort of bedrock fundamentals of the way i think some people in the party have thought about the world is changing both around taxes, tax cuts on the wealthy. I dont know what were going to see on monday. So maybe you cant speak to it. I dont know. Ruling out privatizing things like Social Security and medicare which youve supported. What do you think is happening here . Some of my friends are reformicons. Wow. Wait a minute. That is a toasty comment, larry. Some of my best friends what does that mean . It means theyre great friends, ive known them for years. Theyre terrific scholars. I love them. They come on my radio show and we talk and have fun and crack jokes. How much influence do you think they have with the Republican Party . I dont know what the label is, but i will say this. As a general matter, theres an enormous amount of angst around the trump nomination and candidacy. But the good news is that, you know, change comes out of creative destruction. And the Republican Party is not going to look the same at the end of 2016. And thats good. Because in 2008 and in 2012, the economic message failed. And to run that play book again is silly. One of the big concerns out there is about donald trump and trade. Yes. Can you tell us if this plan has changes to what people see as opposition of free trade . What are concerns in the Business Community about tar rafs and kicking people out of this country who are here illegally and doing so in a way that can hurt our workforce. Look. A lot of this will come out on monday. But mr. Trump has already gone on record in a number of these areas. He believes in trade, free trade. He sees the benefits of free trade. But he also sees that everybodys got to play by the rules. And we have on the books, on the legal books, lots of enforcement action which was just underscored in a new bill by paul ryan and senator ron wyden. So trade is good. Hes seen that. But there must be enforcement. So youre supporting whats not being enforced about nafta . Sorry . What is not being enforced about nafta that makes it horrible in the eyes of the Trump Campaign . This baffles me. Im a little baffled by it too. At least where the ethic can be improved in some spaces. But on the whole, i myself think nafta has had a very good record on our economy with canada and mexico. Now, you know its too complicated but theres border adjustabilities is an issue. You know, they have a vat on imports from america we dont. Things like that probably need to be equalized. Just put out a tax reform plan thats fantastic and includes border yes. This is kevin bradys plan. There isnt going to be a whole lot of daylight between the trump plan and the brady plan. Thats my prediction. Theres trade is a place where left and right seem to be meeting. Yeah. Is it fair to expect that almost no matter who wins, there will be changes to trade in this country . Changes to the extent to which borders are open now in a way that where tariffs are minor and will go up . One of the greatest over simplification is that trade is good for almost everybody. Thats never been the case. There have always been leaders there have always been losers. Its part of trade theory. Its accepted. But it was very much minimized, i believe, by mainstream economics on the right and to some degree on the left. And now thats changing. But its changed very slowly. And its clear workers need protection, Certain Industries need protection. I tend to be in favor of Certain Industries and theyre limited by trade i live frd six years in a country that did not have open competition. That was russia. If i was going to make an error, id make an error towards more open borders. The effects on industry and the possibility of economic sclerosis as a result of closed borders is much, much, much worse. Steve, its not an either or issue. Its not im afraid when you start going down that road, though, its bad. I really fall out with jeff on this. Its not the first time. I know that. To your great credit. I am a free trader. Ive always been a free trader. But i think the evidence coming in last ten years is that some losers there may be more than we think. Theres been frequent studies coming out on this. And we have not done much to address those that lost out. Look, the average tariff in this country is what 2. 5 . That isnt going to change. What is going to change is the enforcement and structure of deals. A lot of these deals are policed by international commissions which are not acting obviously in the american interest. Our congress should determine these rules. Not some far away eu bureaucratic unelectable ph. D. Bureaucrat. You had to throw the ph. D. In. Of course. Two things first. Im going to agree in principle with jeff. That was chinas industry in the world trade system. And its over. The best example of this is were predicting the demise. We took out all the tariffs on semiconductors and goods and we won. Larrys going to be with us for the rest of the hour. We are lucky to have him here. And doug and jeff, will you stick around for a bit. We didnt talk anything about todays job number. Will you stick around . Sure. When we come back, we will talk a little more jobs. Plus the video Game Industry is not just fun and games. Were going to head to Salt Lake City where theyre putting coders to work. Squawk returns in a moment. When it comes to healthcare, seconds can mean the difference between life and death. For partners in health, time is life. We have 18,000 people around the world. The microsoft cloud helps our entire staff stay connected and Work Together in real time to help those that need it. The ability to collaborate changes how we work. What we do together changes how we live. Box. Time to time to find out where they are in the video Game Industry is putting people o work. Kate . Hey, andrew. Good morning. Video games are fun, of course, but theyre also serious business. Now, experts within the industry say that jobs could grow by about 10 in the next few years which means Companies Like wildworks where we are today are going to be hiring. Look no further than pokemon go for proof of the publics rabid appetite for gaming. The industry hit 71. 3 billion in 2015 and is poised to grow to 90 billion by the year 2020. This means game designers, coders, and artists are in demand. Companies like Salt Lake City based wildworks are part of the expansion. Theres considerable growth ahead in the gaming industry. I dont think you can discount the pc as a standard platform that will continue to bear fruit. But the advent and the accessibility of smart phones with larger screens, were going to continue to see significant increase in the mobile market. With females comprising nearly half of gamers, a growing number of game makers including wildworks are looking to hire more women. Not an easy task in a male dominated industry. We are finding difficult to find programmers that are trained and have experience in the industry that are women. Now, a College Degree here isnt necessarily needed. It certainly does help and pay within the industry is very competitive. In 2015, Software Developers made a median salary of over 100,000 a year whereas multimedia artists took home 64,000 annually. Back over to you guys. Thank you, kate. We appreciate it. Are we going to do a little jobs talk now . In just a moment. Before we do, we want to tell you about what is coming up. We have the economic number of the morning, the week, the month. Its the july jobs report. Well get the details, global Market Reaction, but when we come back after this well reconvene with our jobs panel and tell you what to expect. Squawk box will be right back. I enjoy keeping people up at night. My Analysis Shows your stories are actually about human connection, even love. Great storytelling needs drama and empathy. Amy cognitive apis canan chelp any businessove. Better connect with its audience. You should try writing a book. Find a remote hotel. Bring the family. I do not think that is a good idea. Weve got the final countdown. Were going to get payroll predictions from our panel and then the jobs report and instant Market Reaction. As we take a break, look at the futures which we said before and warned the numbers could change. Dow looks to open 25 points higher. Back in a moment. The heirloom tomato. Intenselyflavored. Colorfullydiverse. Beautifullymisshapen. Cultivated for generations, its the unexpected hero of any dish. When you cook with incredible ingredients. You make incredible meals. Fresh ingredients. Stepbysteprecipes. Delivered to your door, for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. Welcome back to squawk box, everybody. It is time for our final countdown to the jobs report. We are 4 45 away. Lets get our final protection predictions from our jobs panel. Larry, whats your prediction . 150k. Unemployment as well . I do not. So 150k, thats a little below the consensus. I wanted to take the under to use mark haines former terminology. Because . Because i see a lot of weakness in the business side of the economy. Weve been talking about it for awhile. Doug . Im at 140. Weve been averaging 147 the last several months. So we should be in the 140, 150 range. Im taking the low end. I think labor force will decline. Steve . Im at 135. Wow. The pessimist crowd. My model gives me 125 and i randomly add 10 for government. So my model has been plus or minus 50,000 over the last year. So thats the story. Can you top these gentlemen . I wish i could break the tie, but im worried about the economy. I think its 150k. I think we need 200k. I think we should be talking about what we need to make sure this economy is not going to stall. You think 200k . Thats higher than anybody on the fed. Well, 180k is the consensus. I think Goldman Sachs aid 190k. Im just saying i would like to see that to make sure its not weve got some real problems here. I probably have a different solution than most people on this. Give us one real quick. Im talking about fiscal policy. Both sides are spending. Trumps got a bigger Infrastructure Program than clinton does. Wall streets you dont know that yet, my friend. Well, he said it. Excuse me for going on what he says. Youre picking moving targets, come on. Im picking what he said. He wont be spending . It will be in the plan which im not here to discuss specifically. But to jeffs point, you heard me. I believe weve been in a business recession for the last year. Profits are falling, Business Investments are falling, structures are falling, manufacturing is falling. Year to year declines. I dont see any letup in that. Therefore, at some point since businesses create jobs and weve already seen a slump in the threemonth average of jobs and a sharp cutback in capex. Yes. Thats a big issue. Capex as you said. Rick, how about you . What number are you looking for today . You know, i like larry taking the under but its already taken. Under employeds already got that claimed. Im going 200,000. Rick, let me ask you. What happens to the market if these guys are right and the numbers are a little lower . Lets say we take the low end with steve at 135,000. Does that bother the market or is it something that can be quickly brushed off . Well, i think low numbers will bother a certain segment in the market, but probably not the part of the market thats more actively trading in things like the equity markets. I dont think any number today is going to change the notion that the fed is going to go to extreme measures to make sure that they dont have to raise rates any time soon. I think stronger weakness number wont change that. At least not in my opinion. I want people to look at the boards just so you can see. I think the dow is up by about 40 points. Just about a minute before we go to the jobs report. Right now the dow futures up by close to 37 points above fair value. S p futures up by three. The nasdaq up by nine. Im also asking because id like to see the 10year. Its been below 1. 5 this morning. Right now sitting just there at 1. 499 . So well keep an eye on all of those numbers as we get into this. So go into this with a 10. 5 chance of a rate hike in september. 10. 5 in december. Call it 11 for simplicity. Unless the numbers blow out on the high end. Itll be interesting. Youre right. We could all be totally wrong. Theres about 100,000 factor error in all these numbers. It could happen. Im not predicting that. Im just suggesting are you on record for that . Im not. Im not on record. Oh, im sorry. I was just checking. All right, guys, we are getting down into this final countdown. Just a few seconds to go. Again, the stock market has been indicated a little higher this morning with the dow up by 35 points to 40 points before we get the number. Right now, though, the actual number. 255,000 july nonfarm payrolls increased by 255,000 jobs. The Unemployment Rate is 4. 9 . Average Hourly Earnings up 0. 3 . Higher than consensus private sector jobs in july, plus 217,000. Revisions, may now revised upwards from 11,000 to 24,000. Over what was previously reported. June an additional 5,000 from 287,000 to 292,000. An additional 18,000 jobs in the past two months than what was previously reported. 70,000 jobs added in the professional and Business Service sector. 43,000 for health services. 45,000 leisure and hospitality. 38,000 government employment. Most of that local and most of that in the name of teachers being hired, if you will. Losses, Mining Sector leads the way down another 6,000 jobs. The Labor Participation rate, 62. 8 . A slight uptick from the previous month. The so called real Unemployment Rate average job growth now over the last three months, 190,000 over the previous 12 months 206,000. Back to you guys. Hampton, thank very much. Look at the boards weve been walking you through. We showed you the dow picked up about 20 points on the news of this. You actually saw more than that. Up about 35 points now. Dow futures up by 80 points above fair value and climbing at this point. S p also up by 7. 5 points. Nasdaq up by 21. If you were looking at the yields on the 10year bond, that also went. Much stronger than expected jobs report of 255,000. 1. 528 afterwards. Rick, you are the closest, you get the first word. You said 200,000 which was above consensus and it beat even your outlook at that point at 255,000. What do you think is happening and how about the Market Reaction . Well, a little curve flattening. A knee jerk reactioning with saw bigger gains in yields, bigger drops in price. Particularly fives which hopped up five basis points right away. You look at the tens as you pointed out, basically 3. 5 basis points. The 30s right now, three basis points. Even though its subtle with the markets under the thumb of many different issues of policy, our best knee jerk look gives us clues. Fed fund futures sold off. December sold off. And remember, every time they go lower in price, they raise the odds just a bit. But the odds are nowhere near the market putting a blue stamp or a green stamp on any type of normalization any time soon. I think the dollar index gives you your best read of all though. That was down about a fifth of a cent. Now up a quarter of a cent. Well see if it holds. Theres something, huh . I guess its a good moment for me to acknowledge being spectacularly wrong. Two months in a row. Me too. [ overlapping speakers ] you can freeze the frame if you like and throw darts at your television at my face if you like. I imagine the throwing darts at an l. E. D. Screen is good for the l. E. D. Screen. More jobs, more private sector jobs. 217 is the number. With strength in interesting places that suggests a broad based. So we have construction employment which was down minus 3 in the prior month. Manufacturing has been positive the past three months. Retail powers ahead up 25 in june. That is up 14 in july. I have a hard time understanding how all these retailers are coming on talking about how difficult their business is. We have overall consumer numbers growing at 4 and we have this kind of retail employment going on. At least going through these numbers. Temp help. Another Positive Side for the future. Up 17. Then heres another story that ive been tracking that got sidetracked for awhile. You had people coming back into the workforce. That stopped in may. It was a big story. For six months we had i think 2 Million People came back. That is now resumed in june and july. Up 400,000 in july. The people who have dropped out, that is beginning to reverse itself. 420,000 found jobs. Thats the household survey. Guys, quickly i want to interrupt with breaking news. Check out shares of merck. Merck is a dough component and those shares are up by about 12. 6 . This is also helping add to the dow futures this morning along with that better than expected jobs report. Merck right now you can see up by 11 . This is happening because of bad news at arrival. Bristolmyers, its a cancer drug. Opdivo fails a late study. If you check out shares of bristolmyers, they are down 17 . Merck able to pull a huge win with that. And again, merck is part of the issue that is helping the dow futures this morning because its a dow component. Can we look at the 2year before we go on . These numbers are not these yields are not supposed to jump around so much. What was your im sorry your household number . I think it was 400,000. Plus . Can i just reinforce his point . Go ahead. This is about the best news we could expect. It suggests the economy is not stalling. Its coming back. A stronger expansion is possible. It doesnt mean its a shoe in. But jeff, i got a big problem with that idea. I got businesses cutting back on capitol spending. The number of quarters now, theyve been cutting back on inventories. Except for the hiring side, theres no sign of confidence on the side of business. But the hiring number will start to generate some confidence. Thats the very point. Its the first number of the month. So that could begin to change. Thats what we need. We need stronger we need people getting jobs. We need people spending. Im with steve. I dont see a growth upside without return of capex in the export sectors. Were not going to have a recession. Its too strong. How are we going to have a return without more jobs and without more spending . Heres the other piece. Historically every time you get now back to the election. Every time you get into the three or four five month period around an election, there is a stall out in capex spending. Irrespective i think of what happens with jobs. Capex has been falling for well over a year. And so have profits. So theres a conundrum here. Theres a paradox. Squlob jobs are looking good. Todays number was a great number on the base of pit. Yet the whole thing is looking poorly. At some point they have to come together. But i just because a number of jobs is big doesnt mean theyre good jobs though. This report is not any of the single numbers. Its strong throughout. We have rarely gotten a report that didnt have some hole. Like you get jobs but theres no wage growth. The labor force declines and down for the wrong reason. This is strong across the board. You guys saw a number like this repeated next month, would you say okay . That thats going to win out, that the labor picture trumps capex and these issues . It would move me in that direction but two months is not enough. I will argue as i like to do, John Baptiste saying the greatest philosopher i was there when he wrote this supply creates its own demand. If youre not producing and not investing you said John Baptiste. Say. The french called him j. P. At the time. But anyway, supply creates its own. Meaning businesses are the heart of the economy if theyre not producing and other things are going to be slumping. Now, that is not happening now. So youve got a split. And well have to see. If i the heart of french philosophers. You just got to pile it up. The part of disagreement i have as larry knows with him is you think demand is growth. This is an indication. Im spriessed youre talking about capex is not moving. Capex doesnt this is the indication of something that may move capital expenditure. It could. We should be happy about it. If as you said we get another month i want to give doug the last word on the economy. The threemonth average has moved up. It was 150. Now its 190. Whats that tell you about the economy right now . We had what we thought was a slowdown in the second quarter. Its all it adds up much better 37 so this makes it much cleaner. We have time to give rick is quick word on this . Go ahead. Whats your take . We have been watching these markets throughout. Rick . You know, ill tell you what. I think its interesting. We get some good numbers, we get some bad numbers. I dont see anything dramatically changing on the horizon. And i think as we slide into november, i would expect these jobs numbers are going to average 200,000 or higher. Okay. Rick, thank you very much. I think you cant just leave that the way it was. I believe there was a little bit of a political statement in that. Rick, are you just you want to elaborate on that . Well leave it right where it is. Okay. I understand though. I speak rick. One thing about 200,000 a month job growth. It will cut the Unemployment Rate in a year to about 4 . That would be extraordinary. And i just want to relative to the election, i want to defend the bureau of labor statistics. Theyre honest. Their models may be off sometimes, but they are not political. There is no linkage between the election and the jobs numbers. I just want to say that. Thank you. Seconded very loud. Doug, thank you very much. Jeff, thank you. Rick, thank you. Larrys sticking around. Steve . Thats for me to read . Coming up, donald trump rolling out his Economic Team. One David Malpass long friend of squawk box, hes going to talk us to talk trumpnomics. Squawk box will be right back. Gain the freedom to fumble with the new water and shatterresistant Samsung Galaxy s7 active. Exclusively at at t. Your but, during the day, fine when yothey can move em on. In the morning. Noon. Evening. Enough is enough its time to use fixodent plus adhesives. With just one application. They give you superior hold, even at the end of the day. So you can keep enjoying your evenings. Fixodent. Strong more like natural teeth. Fixodent and forget it. Welcome back. Donald trump rolling out his Economic Team. Joining us now one member David Malpass. Good morning. Good morning, andrew. Thank you for being here. Quick lets go over the numbers. Do you look at this and say a much healthier economy . I think the economy is flat meaning theres not a strong business cycle. These are great numbers this morning. And so weve got to say that some parts of the economy are doing well. The big problem is the Participation Rate is still really low. Almost as low as during the whole recovery cycle. And so what youve got is a lot of people that are just being left out of the upturn. So you dont think this changes the way donald trump has approached discussing the economy and jobs . No. Because you need the same policies. You need tax cuts, you need trade reform. You need to have regulatory reform, energy reform. All of those are critical to the long run of the economy. So you cant look at one month and say, im going to not do an improvement in the economic program. The big problem here is president obamas program really hasnt worked. Weve had the weakest recovery since 1949. So how do you undo that . You change policies. Thats what were not seeing from candidate clinton. One of the questions weve had thats overhung the market, of course, is what janet yellen will ultimately do. Given the election, do you think that plays into the way she has to think about what to do or not to do . You know, im not so much of a fed watcher. I dont think theyre policies are working well at all. She laid out in a may speech i think that if the Participation Rate stayed low, that she wouldnt have to hike because there were a lot of people that could still be brought into the economy. David, 15 million jobs since the bottom, january 2010. Thats a strong performance, isnt it . Yeah, but well, wait. Since 2009, even more people have gone out of the labor force than have been added to the employment leaving the workforce as being a negative thing. We both know that theres a huge contingent of baby boomers who have retired. My point is the research ive seen shows its about half and half. And about half of the people that left has been because they retired and made a choice. But thats many that left because they were discouraged. Youve got a lot of people around the country who would like to work but they arent looking because they know theyre not going to get a job. They dont have the skills or the companies simply arent hiring fast enough to bring that younger workers, minority workers, theyre just not getting brought into the labor force. Youve got a set of issues here though. 15 million jobs sounds like a great number over seven years. Its not. Its not. Compare the reagan recovery to this. Better than the bush recovery. I agree. By a long way. But that doesnt mean anything to me. Im just saying, its okay. Its not great. The key point is the Participation Rate. I dont agree with the retirement argument. You know i dont. I dont either. Look at breaking down the Participation Rate groups. Its the youngers and the middles that have been falling off. Thats a bad sign. The whatever 25 to 54 group. And the the guys, the younger guy who is arent working are spending eight hours a day playing video games. Thats the time they would be working is spent. Ill just say this. The uppers, the 55plus, the 65plus. We are working our tails off and its showing up. So the retirement thing doesnt work for me. The key thing to do is to get an economy thats hot enough that it brings people in. We want an economy that sucks younger workers, minority workers in. That means Small Businesses and one of the key differences in the campaign here, trump is proposing a cut in the Small Business tax rate whereas clinton is proposing an increase. How is that going to work . Thats just going to stop young people from getting jobs. Do you think we need to pursue more Infrastructure Spending . We need more effective the answer is yes. We need more effective allocation of spending across the whole budget. The governments spending 3. 6 trillion and not getting nearly enough for it. And so we need more effective spending and trump wants to do that to have stronger finances for the country. Do you know who does most of the Infrastructure Spending . Who . Private sector. Yes. By far. By far. So if you have a Better Business situation, if you lower barriers such as taxes and regulations, youre going to see more Infrastructure Spending. Or if you team up with Public Private partnerships. I agree with you 100 on the regulation issue, larry. I would sure like to see dodd frank revisited from certainly a good. Ive said that for a long time. I think the Federal Reserve could revisit the idea of not reserving against central Bank Reserves. Why do you have to have capital Bank Reserves against central Bank Reserves . Why are we paying people for excess reserves . My point is we shouldnt believe in secular stagnation until weve proven if it could be good. A critical point here. People are saying we cant do better. Of course we can. And the idea is if we had better policies, wed go faster. I told you theres a seat on the plane for you. Like lyle lovett said, you have to try, larry. You have to try. Ill ask this question. Not an economic question. Since with larry we were talking about making a referral to some of the comments trumps made. What do you think of his judgment . Forget the i think his judgment is great that the economy is supposed to do better, that the country can do a lot better than were doing, and what we really need is a lot of change in washington. So thats great. Have you heard some of the comments hes made over the last week . Peoples make mistakes. I do. I we all make mistakes. You would calls these mistakes. Donald trump is going to be the Economic Growth candidate and his policies announced on monday will make that abundantly clear. Mrs. Clinton does not have Economic Growth, tax and regulatory reduction. She does not. None of the things that he said in the past couple and this i know. Sort of andrew, will become secretary clinton was on sunday on the tv shows saying that she hadnt sent any secret information. No one believes that. And so arent you as outraged at that. I think theres a trust deficit on both sides no question. Not me. So you mean generically . We got to break it up here and we could go on forever. Better policies in 2017. Im sorry. We will be back in just a moment. More reaction on the jobs report. When squawk returns. Mapping the oceans. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. 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. 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Did you guys know statistically friendly kids have more friends . Yeah. Thats obvious. Did you know most people think theyre using the right car seat for their kid, but theyre not . Announcer parents who really know it all know for sure that their child is in the right seat. Visit safercar. Gov therightseat to make sure your child is protected. But they demand the best shopping experiences. They may want the latest products and services, theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Welcome back to squawk box. A huge day, 255k on the jobs. Joining us barbara, head of asset allocation. Barbara, the market looks like its like this number. Sure. A little bit comes from some merck news we had but some of it answering andrews question that good news appears to be good news. Is that your take . It is. Good news is good news when markets are in a nervous state and you can tell by fund flows that a lot of investors, both retail and individual, have been allocating more money to fixed income this year and taking their allocations to equities down and that is a sign of a nervous market which means good news can be very good news. Individuals, what about institutions doing the same thing . Fund flow data includes both and you can see on the margin etf and mutual fund thats a solid base for a higher trade. It is. When everybody is hiding under the rocks. It is. Weve seen the market move higher. What are places very quickly in light of the numbers this morning and in light of that we have a much stronger jobs outlook here than we appear to have had that you like, what sectors . The number across the board was fantastic this morning and we were glad to see all parts of the report were very good. Average Hourly Earnings going up is very supportive of the consumer. We like u. S. Midcaps and u. S. Large caps. We think the u. S. Outperformance that has been going on for a number of years at this point can, indeed, continue. Is it can i ask one question . Im not criticizing, i want to ask a legit question. Yes. Average Hourly Earnings are up, year to year, 2. 5, 2. 6. It was going in. Im glad to see americans get a wage increase. On the other hand, productivity is zero, so unit labor costs are running faster than prices. Yes. Thats a negative profits position and if profits are declining how can stocks continue to rise . Because First Quarter the First Quarter of this year was the trough to the profits recession. So on a First Quarter year over year profits were down, anywhere between 7 to 8 and it looks like theyre going to be down this quarter but, indeed, be down less, so at the margin the First Quarter was, indeed, the productivity down because all the old people are retiring, the efficient people are going to trade up the young folks and have productivity. You know without experienced people like myself this place would go to hell. Why do you think serious question, why do you think profits will rebound . Whats the factor . A couple of things. Youre coming off a very low base, youve got very good trends in terms of whats going on with the price of oil and also with the u. S. Dollar. And while you do see that labor, the average Hourly Earnings were up, theyre only up 2. 6 . Year over year the july number was very, very poor, so july of 2015, so wages are growing modestly but not fast enough that theyre going to, indeed, dent profits. Folks, i think that kind of brings to an end this wonderful fabulous discussion. Im andrew im not going to cut you off but thats it. Larry, always an unbelievable pleasure to once again i love it. Trump more fun than i have a right to have. Thank you. On monday join us then. Time for squawk on the stree. Its friday, baby. Good morning and welcome to squawk on the street. Im david faber, along with jim cramer. We are here at the New York Stock Exchange but you are looking at a live shot in rio where the Opening Ceremony is just hours away. And Carl Quintanilla there he is, hes made it live and hes going to join us in just a few minutes and hes looking good which im glad to see. All right. We start, though, with the breaking news here in the u. S. , adding 255,000 jobs in the month of july. Thene
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