that came off a 14% drop in july exports from a year ago. part of that story is the strong yen. the dollar weakening across the board after yesterday's release of the minutes show that policymakers were divided on a near term interest rate hikes which has led most participates to think, we're not going to see anything any time soon. >> i've been ranting. she's privy to all my ranting. i've decided i got a new view. i want to get a job at the fed. all they need to do is either just spend all the time, what do you think, should we raise, i don't know, what do you think. >> i'm worried, i'm worried. >> i don't think we should. i think we should. for years they do that. and they don't have to do anything else. twidle their thumbs. now i decide they're one big composite of hamlet. hamlet is like, i really should do something. >> to be or not to be something. >> maybe i do, maybe i don't. if i do this would happen, if i don't, and they go through all this hand ringing and we know how hamlet ended. that's why it's called a tragedy. >> yes. >> but these guys. they're talking about a quarter plummet. my last was that don't tell me anything else. just surprise me. when you finally do it, i'll deal with it. if it's a quarter, month from now, six months from now. let's not mention it. >> i have gotten to please stop talking. every day we read off this list. >> there's more today. dudly speaking again. >> but i guess given the global nature and the nirp, which is a new word. negative interest rate policy. i guess it really does matter. because depending on our dollar. you know what, talking about how weak the dollar is getting versus the yen and all of a sudden again, they say, maybe we will raise. not only are they trying to manage stock market, but even managing the currency. >> even people like jack wlo said if the collar is too strong, it's bad for u.s. economies. >> nirp is more consequence shl. >> not to mention what it's going to the pension funds. >> exactly. it's so brutal. when you think back to the depression of the 1930s, you need expansionary loans. there's a millennial out there that's going to switch around and see some other channels. do we talk about nirp or zirp. >> it's martians. >> let's play fun music to trick them into doing stuff their interested in. they were doing that on final count down. i know futures aren't doing anything, but i'm excited about it anyway. >> he's young. he's still doing the tv -- he does it the right way. >> what are we playing. >> we played car yus ruker. what is that place on the garden state. >> the pnc art center. >> that's where he's coming. >> you said he's coming here to the set. >> that's what i thought he said too. >> he's been on the set. i know he's a golfer, great guy. >> call him while he's here. maybe he'll come up. >> i'm trying to get dan. >> in the meantime, why don't we take a look at european equities because this is exciting too. check it out. you'll see the early trading in the markets. half a percent move for the germany dax. it's all green. check it out, everybody is in positive territory this morning. also legts take a look at crude oil prices. if you take a look at wti. 4702. that's come a long way in a couple of days that i wasn't paying attention. 47 .02. >> here's what's on the agenda today. walmart expected to announce quarterly results at 7:00 a.m. eastern time. we're going to bring you the numbers and reaction from wall street as soon as it happens. we're going to hear from retailer gap. data due at 8:30 at the same time be on the lookout for the philadelphia fed survey. more fed speak today. san francisco fed president john williams will offer economic outlook at 4:00 p.m. eastern time. in corporate news, watching shares of cisco. guidance however was cautious. sees flat revenue in the current quarter and earnings outlook is shy of analyst estimates. also announcing plans to cut 55,000 jobs or 7% of the workforce. >> those are good jobs too. >> comes as it switches focus from being a hardware maker to higher margin software. cisco ceo will join squawk on the streert at 9:00 a.m. later in the hour. >> you know how i don't like the long reads. she's had to do all of them. >> like if she has this quick int intro, she gets i get the quick intro to andrew. you get this long read to wilfred. and i'm like, wait a second, you're doing power lunch today too. three here, that's five hours. >> oxygen is haair time. >> i got that from brian williams. >> it's me and joe and wilfred shows up at 7:00 and suddenly for the next two hours, the only read have i is let's get to andrew whose in rio. >> you're not helping. just digging deep. you want to read what other people write in some anchor way sdwl why did we get into the business besides the travel. >> you can have all my reads off the promp ter. >> so andrew, you were with becky. so this was not like a big deal. it was for me because i vice president seen her in a while. >> you were off for two weeks and i was here for two weeks. >> you were here. >> yes, i have seen becky. i have seen becky. >> she's good. she's good. i didn't realize you had you look great. i didn't realize you were already here. >> he's been practicing this. you know how he goes you're huge. she looks like she already had the baby. >> i've been wearing black or navy the entire time. >> andrew has to talk. sorry so distract you from your job. go ahead. >> sorry, we do have a couple things we wanted to get to this morning only because not only do we have a full day of competition, but we have a lot of controversy going on right here over what really happened to four u.s. swimmers. it's taking the front page including the new york post. the developing saga over whether ryan lochte and his teammates told the truth of being held at gunpoint taking a bizarre new tender when brazilian authorities removed two of the swimmers from their flight home right at the rio airport. >> there was some confusion because initially we thought the court order only applied to jimmy fegan. >> it did, but when we found out james was about to leave the country and had in fact some how checked in and when we found out that the other two were about to leave the country on a plane, hen the judiciary understood that it was the best for the criminal procedure to keep them in the country. >> jack conger and hunter were questioned and released with the understanding they could continue the discussions with the officials. this comes matt lawyer speaking to lochte on the phone. we have another report overnight surfacing of team great britain being held at gunpoint and robbed themselves so the security story overwhelming a lot of the news here. we should say despite the headlines, there are hundreds of athletes competing here in rio and a number of bilg highlights the u.s. sweeping the top three spots marking the first sweep of any track and field event in olympic history. also in beach volleyball holding off brazil. winning the bronze medal match. in the first game of the knockout round of men's baflkt r basketball, beating argentina. advancing to the semifinals. they will take on spain tomorrow. that was a big beat. probably one of the biggest beats they've had thus far throughout the game. a lot going on here, but this ryan lochte story continuing to overwhelm the conversation pretty much across the board. the papers here the front pages, the papers there the front pages talking about what this means and the go political issue security in rio. we talked so much about the fact that business people, executives, not too many dacame down here in part because of security. trying to understand who is telling the truth in all of this matters a lot. >> we talked about it here. it is the cover of everything. waterga watergate. something fishy. got all the tabloid. it's in the interest of the rio authorities to make it seem like it didn't happen. >> here's the thing though, when it did happen, and andrew and i had a conversation about it yesterday, where i gave the benefit of the doubt to the swim team, it highlights number one, how bad -- nobody was surprised. right? nobody doubted it because crime is so ramp id. sometimes the police themselves in brazil are involved in crime. it just highlights how bad an issue security is even if these guys are lying, which would be horrible and wrong and terrible, but remember one of the greatest per capita concentrations of armored vehicles in the world, where is it? brazil. one of the greatest concentration of helicopter continuers per capita, it's brazil. you could be demised very easily. >> there's all kind of scuttlebutt whether the x-ray equipment saw the wallet. didn't have the phones. i would be scared anywhere to be taken off a plane. andrew, i immediately said midnight express on a bus. you think you're free and clear. >> you're referring to -- >> how are the local people there reacting because i've heard two different reactions. one that some brazilians are furious. glad the judge is doing this because they want to prove it didn't happen, if indeed it didn't. the other side is wow, you're making this worse and it's become a much bigger news story by continuing to harp on it. >> i think the overwhelming view here is the first view that you es spoused. lowball l locally if there was lying and we a we are reserving judgment. if there was, thap feel betrayed. this is their country. that's the overwhelming feeling. joe was referring to some video from the daily mail. that video was actually cited by the judge in the order to take those passports. however, those other pieces of some of that reporting has not been confirmed yet. i want to caution everybody about what we're looking at here. a lot of moving pieces to to story. >> that was after the incident. >> it's hard to say. the point i'm making in that video for example, there's suggestions that they actually had that i recall waeir wallet. it's unclear. >> you didn't know whether they actually had the wallets. you could see phones. they had their belts, which by the way, you didn't have on yesterday. it wasn't a suit. they were like causal pants and you were walking into the shot with big -- you didn't even bring a belt to rio. did you bring one at all. >> you know me. i try to avoid -- i'm not into -- i wear the suits with a little tab sgls it was a causal outfit and you had no belt on. it's up to you. >> i know. the current fashion police. >> it's not me. just normal belts. belts with belt loops. that's why pants have them. the attitude that they had when they were coming back, they were sort of kidding around with each other. i saw ryan lochte. that was the other thing. whether there was a wallet there or not. >> it's hard to prove. >> they said they were drinking. >> exactly. maybe they wouldn't -- >> you have to remember that when the story started, there was controversy almost from moment one because the story broke originally when ryan lochte's mother told the story on television. then there was a denial that she was telling the truth. then it was only later that lochte then told the story again on the today show after originally denying it. so now he said he denied it because he thought he was going to get in trouble. as i said, there's a lot of moving pieces. very unclear right now of what exactly happened. nobody has said specifically they lied. the government saying they want to continue the investigation and try to understand what happened and that's why they want these players to be here so they can take their testimony. >> okay. they want us to move on. >> this is all we want to talk about. >> he loves his water cooler. cisco laying off 5500 people. the world -- there's other stuff. >> the fed might go up. they might. they're saying that might. they really might this time. don't push them. >> i'll do you a favor, we'll talk more about this over the next couple of hours and throughout the day. >> you're so excited. i know. i'm glad you're down there for this. >> we'll see you in a little bit, guys. thanks. in the meantime we have been talking about the markets too. and obviously the stock market enjoying another rally. joining us right now is michael tyler. also david joy, chief market strategist at aher price financial. welcome to both of you. why don't we start off with you and get you take on the fed. the way a lot of us have been reading it is you shouldn't expect anything until december and maybe beyond that. what do you think. >> i agree with that. i think one rate hike is coming. inni i think it's december. i think the fed really wants to do it. they're afraid we lost momentum in the second quarter. i think they're nervous if they move too soon, they could derail whatever strength there is. the other aspect is they're afraid of a little temper tantrum in the bond market. if they move too quickly, you could see a backup in rates which is not a good move for the stock market. >> a backup in rates to 1 bnt 6% for the ten-year. >> we need to get one rate hike and that won't happen until the end of the year. >> michael, how about you? is the fed the only game in town or are there other things we should be paying attention to. >> one of the key things is the market is being lev at a time l by two other things. the dollar has been weaker and oil is coming back. both of those is helping earnings. with stronger earnings in the back half of the year, that helps. the other is i think the crushing influx of money from overseas into the u.s. stock market looking for yield. so the fact that the u.s. market is yielding 2% give or take is a positive. i don't think a fed hike is going to dramatically affect that one way or the other. what really would affect the u.s. market would be if europe and japan suddenly adopt different interest rate policies. >> david, if rates were higher, would the market make sense at these levels? is it something you can support based on fundamentals of what we're seeing? we have seen improved earnings outlook. if oil prices stay at this leflg and push higher, people think we'll get better numbers in the second half. does that make sense for these levels that we've seen with the new highs. >> i think it does. if we get it. and that's the big question, but i think the market has already discounted some of that. so if there's any sort of disappointment in the earnings growth expectations for the second half, ting market is a little vulnerable here. at the start of the year, we thought we would see positive growth in the third quarter for earnings. that's been postponed to the fourth quarter. we're a little bit suspect. we're hopeful, but suspect we're going to see that follow through. >> what would you do with your plun. >> market seems to have drd already -- >> what would you do with your money? what would you tell people? >> to the extent you want to be in equities at all, we're well overweighted in the u.s. we're concerned about the political environment and the policy environment in japan doesn't seem to be working by default we're overweighted in the u.s. also trying to find some alpha in nontraditional asset classes. so we're a little bit defensive. we're not out of the market, but a little bit defensive here. >> gentlemen, i want to thank you both for joins us today. great to see you. >> donald trump's shakeup. weak poll numbers have establishment members worried. john harwood with more details. >> reporter: michelle, one of the things that is so concerning to house republicans and senate republicans is that a problem at the top of the ticket is going to pull down their majorities. let's run through some of the numbers. if you look at the senate, republicans have 54 seats. democrats when you include the independents like bernie sanders have 46. that means that democrats need to carry at least four seats to regain a majority. of course the vice president breaks ties if it's a 50/50 situation. you have a series of competitive seats being defended by republicans. ten seats that are in doubt as to the outcome are held by republicans. now, only one by democrats. that's the seat of minority leader harry reid. you look at republicans who are fighting the trump tied. you're talking about people like richard burr in north carolina. you're talking about kelly ayacht in new hampshire. marco rubio in florida. blunt in missouri. members have to stay ahead to save their seat. if you look at the house, it's a different picture. democrats need to gain 30 seats to gain control of the house. that is aal order. there aren't that many competitive seats. republicans have 31 seats they now hold that are competitive. democrats just have six. when you talk to republicans, most of them have safe seats, but the competitive seats are in more jeopardy because of what's happening at the top of the ticket and the senate is the one that's really, really in doubt. republicans now are concerned that they may lose the four seats the democrats need and maybe even more than that, guys. >> i was reading everybody covers it differently whether it's a reset or late in the game, i saw on usa today and i read some of the trump supportersers are saying it's a good thing. kelly ann conway is great. trump is going to be trump. i was reading some of the other republicans were hammering and i go which one were those it was kevin madden. if only we could get him maybe to help trump, do what he did for romney a couple of years ago. you know what i mean. get some of the talking points, the advice, some of the stuff that propelled that. i think it was said he was weakening as we got closer to the election or something. which, you know, john. >> he would recognize. >> exactly. >> reporter: i tell you one thing, joe, right now a lot of those republican incumbents would wish for mitt romney at the top of the ticket compared to donald trump. we'll see how it comes out. maybe you're right. >> those are guys worried about their own job. i don't know too many other just regular people that would wish for -- that was not a good ending for obviously for the gop last time around. i don't know. portman seems to be doing fine. toomey has other problems. >> portman is running ahead. >> toomey has other problems. going against tpp. all these guys do what they got to do and that's what is disgusting about a lot of politics. they lick their finger and put it up in the wind. always about them. that's the argument. >> i was surprised the former head of the club for growth came out -- >> always about them. they must get good tables or something. what is so great? why do they have to stay in that job? >> it's the undert the table stuff. >> i know biden has some nice vacation houses and stuff. i don't know. >> joe, before i go, i just want to point out, if i'm ever late for a live shot on the show, it's because i was held up at gunpoint. >> and if you were, john, i hope this is another thing we're talking about. i hope someone holds me up at gunpoint, i first say, i ain't getting down on the ground, pal, if they hold a cocked gun to my forehead, i hope i say. >> or in the general direction. >> i hope i say, okay, whatever. and i get down instead of just completely ruining any shorts, which is probably what would be my -- you know, hold a cocked gun to my head. >> you would punch the guy in the face. >> no way. no he wouldn't. >> in the past, some hollywood type like christen slater was getting -- the police were doing something and he went for the policemans -- they think they're in a movie. i'm not in a movie. i'm scared. i'm scared talking about it. john, anyway. you're right. if it happens to you, you were held up -- i don't know what really happened. the great britain report sounds real too. >> it's going take a while to dig through this. >> it is. don, i want to see you with ryan lochte's hair. coming up, cisco posting an earnings beat and a plan to cut 7% of global work force. we're going to dig through the report with an analyst. that's coming up next. at ally bank, no branches equals great rates. it's a fact. kind of like grandkids equals free tech support. oh, look at you, so great to see you! none of this works. come on in. cisco posting a upbeat. company announced going to cut up to 5500 jobs as a restructuring plan. global head of technology hardware and software at drexel and you know what, because of this election, i hear 5500. i immediately want to know, is sit all here? is it all domestic? >> it will be on a global basis. >> how many here. >> they didn't give any indication. think about most of the revenue, 60% is in the americas. >> that's what i think about now. 5500 jobs that we really can't spare at this point. >> i think what they're doing, they had a big restructuring in 2011 and 2014. so they were very similar to what we're seeing here. chuck robins is all about execution. he looks at where the company is going, more software, more security. more iot. he looks at the legacy businesses and they're taking away. >> do you remember what peak employment was and what it will be after this. >> in terms of what? >> peak employment. >> was well over 70,000. >> now it will be. >> you'll probably get into the mid 60s. >> with reinvesting, does that mean they're going to hire 5500 software engineers to come along with this or is this going to be slimming of the ranks. >> they won't hire as many as they're letting go. they will invest back into the business. it could be through head count, but in areas like security, iot. next generation data center. >> trade is such an issue in this election and donald trump talking about whether they're going to be tariffs on china. cisco has deltd with this issue long before it became an issue within the elections. china has nativist policies. they have been working very hard to eliminate the need for cisco companies like cisco. where are we in that battle. it seems like we're fretting over here about this so much where the chinese have already decided what they're doing. >> it's a great point. cisco was very early to get hit by chinese government. >> is it because we blocked wall way or this is the way they were always going to go with chinese. >> it was a big part of it. cisco has done well. before all the other companies got hit in china, it was cisco. then what happened, the snoeden ifect. that was a great excuse to hit cisco even harder. they have a partnership they announced last year with inspur. a local chinese company. that was suppose sod ramp this fall. it's a little behind schedule. saw china revenue fall 12%. last quarter was up 22. qualm quarters it was up 60. tanked in china. rebounded dha eed sharply now w coming back now. >> it's strong in places like france. that's something john chambers was august about a year ago. >> most of the world embraces cisco. it's not just a networking company anymore. >> what is it? it's $150 billion market cap company that was $600 billion at the peak and it's not a tech. you don't think of it like facebook. it's not a growth tech company at all. what would you call it? >> it's low single digit revenue growth. >> blue chip? would you call it a high-tech company. >> it's definitely high-tech. their markets don't grow at the rate of facebook. >> is ibm still technology. >> definitely. just because you don't grow at the rate of google or facebook. >> blue chip value play at this point. >> it's exactly right. if you look at like surg water companies. detergent companies. you put these in a bucket. these guys traded 22 times earnings. they've grown eps for five years. been a 7% grower. so maybe to kind of the next realm of defensive plays are the big tech companies that aren't going away, but they don't grow at 30, 40 times earnings. >> they don't grow at all. they barely grow at all. >> the low single digits. >> the stock price doesn't grow at all. >> cisco is on a rerating trajectory right now. >> that means -- translation, lower multiple. >> a multiple is going to go higher. year to date, stock up 13%. s&p up 7. it's starting to perform great under chuck robins. that will continue. the mind set has to change. it is dirt cheap. not going anywhere. >> what's the multiple. >> ten times x cash. >> 3.4% dividend. it's going to attract people. there's a yield. >> that's pretty reflective of it not being considered a growth stock. >> not a growth stock. i would call it a value stock. >> thank you. >> yes. won't ask about apple. what's your target on apple. >> 185. it's performed very well. >> just so you know. >> you started 115. it went to 90. >> then you were 200. at 120, you didn't change your 185 target as it went to 90. you wanted to downgrade in the 90s. now it's at 110. >> you're declaring victory. >> i'm declaring victory. >> all right. : 185. that will happen. >> new housing data on underwater homes. how many people owe more than their house is worth. plus we're going to check in with andrew sorkin in rio. >> reporter: for the first time in 15 years, vegas is taking bets on the olympics. what sports have the odds to pay out big. we're going to tell you when "squawk box" returns live from rio. ♪ we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. a good car has to maneuver quickly. that's also true of a good car company. people have always bought cars. but we saw an opportunity in sharing cars. so we moved fast and launched car2go in 29 cities, all around the world. doing that required dozens of data centers, designed for speed and performance. we built our business on the ibm cloud. because that's what the ibm cloud is built for. welcome back to "squawk box." time now for the executive edge. nearly 6 million borrowers are behind on mortgage. 5.9 million people owe more on their mortgages than their home is actually worth. more than half a million borrowers still owe twice as much as their home value. chicago carried the highest number of inflation. >> you got the executive edge today. that is a plum. >> plum assignment. plum assignment. do you want to read this one? i will bequeath it to you. bequeath it, you don't bequeath. that means you're leaving he in or something. >> no, i'm leaving this read to you. let me see if i can pretend to be interested. i am. last year's graduates landed fewer jobs than any class in the last 20 years. new data from the association for law placement. 86.7% of last year's law school grads were hired. that's the same rate as 2014, but down from 92% in 2007. >> good inflection. >> median starting salary. >> i want you to do the knitting. when i get done with this, whoever is next, immediately start. >> stitching. >> that's why i don't do very well. >> starting salary, this is the key point -- starting salary grew 5% to $100,000. i think all of this would agree there's never, ever enough lawyers. >> impossible to stitch. if you ad lib at the end. read the end again. i'll show them what stitching is. >> $100,000. ready. grew 5% to $100,000. mcdonald's is voluntarily pulling the activity tracker from the happy meal. the fast food giant making concerns over skin irritations that may happen from wearing the band. it sounds like a step it activity tracker. maybe a fake fitbit. >> i didn't even know they had those. >> i didn't either. no word on how many customers may have been affected. however one parent complained on facebook her child was burned by the happy meal toy after playing with it for eight minutes. questioning about what's in the bands and what impact they have on the skin. they're gone. they're gone. when we come back today, we'll be talking about dow component walmart. it is expected to report at the top of the hour. bring you results and action from wall street right away. so far the stock looks up 1.3%. >> we're going to talk betting on the olympics for the first time. what sports give you the best odds of winning. we'll tell you exactly which ones when "squawk box" returns for rio in just a moment. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. welcome back to "squawk box." right here live from the olympic games in rio. in february of last year t nevada betting control board lifted a 15 year ban on placing bets on amateur sporting events. now with the olympics in full swing, vegas bookkeepers are seeing the action. >> reporter: in las vegas where bookmaker william hill is offering odds on 200 olympic events. betters favor the familiar. they tend to bet what they know. so without question, we wrote the business on the men's basket team. >> soccer and golf also seeing big action, but the lesser known sports like kayak and shooting, less activity, but that's where betters have a chance to beat the house according to william hills, director of trading. >> the odds could be in your favor on the obscure ports, but you have to do your homework on those. it's very tricky: they have as much information as us. it's a cat and mouse game. >> and the handle on the olympics, we should say, relatively small by vegas standards. saying that the wagers on two weeks of olympic competition, only going to amount to 10% of the super bowls handle which is $13 million and i think we should bet on ping-pong, table tennis is my sport. >> what happened yesterday? i saw some big deal with the chinese table tennis team last night? i was thinking of you and wondering if you were watching the whole thing. >> infortunateunfortunately, we there. where they are and where we are is like two different contin continents. pretty cool event last nightly. >> excellent nevada pronunciation. right at the top of your sdplsh -- all the way from rio. thought of you when i thought of saying that. i thought about skipping over it. >> talking vegas would be safer. >> nevada. it's not difficult. it was really, really good. you didn't see andrew's match, did you? >> no. i didn't. >> when is taekwondo. >> we're going to show you taekwondo tomorrow. we have some marathon eating going on in the next hour. i think in the next hour. maybe in the 8:00 which is a lot of fun. i hope you enjoy that piece. we do have fun stuff on tap today. >> he loves to eat on camera. he has a hollow leg too. thanks andrew. we'll be back shortly. we're going to go inside the shark tank in a minute with r rivet terror. makes handbags out of military material and employs military spouses. company co-founder will join us next. here's a quick check of what's happening in the european markets. becky was so excited about the green earlier. >> ftse holding on. >> got to stay tuned to see how this plays out 6789 ♪ great music for this segment. another "shark tank" success story. this time a fashion start-up creating bags with a mission. r-riveter. like rosie the riveter, i guess? repurposes old army tents to make accessories. the products are made by military spouses which creates stable jobs for families that often have to move from post to post. joining us now the cofounders. they appeared on "shark tank" earlier this year and struck a deal with mark cuban. good to have you here. >> excited to be here. >> this is a wonderful story. show us the bags, first of all. what are they made of? how much do they cost? >> great. well, our handbags are like you mentioned all made by military spouses across the country. they're making the parts and pieces. we have different lines. we have the signature line which really supports mobile income for military spouses. they're able to make them at home. >> how much is that bag you're touching right now? >> this is $240. >> what i love about this is you have been able to take two underutilized assets and increase the productivity level dramatically. right? military spouses, it's tough to have a career when you're forced to move every couple of years. right? >> exactly. >> absolutely. >> you're both military spouses? >> yes, we are. >> so you knew the story. >> yes. we both -- i moved eight times in ten years. couldn't find a job every place we went. i could see employers taking my resume and putting it at the bottom of the pile. we didn't want to be victims of circumstance. so we decided let's do something about it. and, you know, i think america just wants to support america. we're all in this together. and supporting our military is -- military spouses, the great men and women behind our service members is what we're all about. >> same story for you? >> absolutely. i had just graduated with a masters degree. i moved into the middle of nowhere with my husband who was active duty. lisa and i, that's where we met in georgia. we were like how are we going to make our lives better and the communities better? if we can do anything to make military spouses' lives and their families easier, that's what we're about. >> second underutilized asset? leftovers from the military. how do you source these materials? what is this stuff? >> so our limited edition collection is made from recycled military materials. we source sit from anywhere we can find it. anywhere in people's closets. we get donations. we have people that find it for us. the stuff is just laying around. if we can turn it into something beautiful and repurpose it, it's amazing. >> how do people buy these things? do they do it online? showing up in stores? >> we do a ton of business online. then we actually have two of our own retail stories. we just opened outside of d.c. and we have a flagship store outside of ft. bragg. >> with cuban, what does that help you do? >> it helped us scale the business. >> we started the company just over $2,000 each. because we had limited means as military families. and so there was -- we grew the company handbag by handbag. that's really where we're marking it. >> once you appeared on "shark tank," what happened to sales? >> it's incredible. >> can you tell us? percentage? >> around $300,000 the year before. and $1.3 million now. >> wow. how do -- you must have learned about scaling. >> yes. >> absolutely. >> that's pretty hard, right? >> it is. to learn how to scale a company that fast, not a lot of companies go through that type of growth in a short amount of time. and to be mothers and husbands being gone, it's -- we really relied on each other. we created our army of military spouses. >> how many people do you employ? >> we're a team of over 50. independent contractors making the parts and pieces and employees in north carolina. >> did i make a bad assumption, is it all with im? >> no. we actually have a mix. >> it's a majority women, but we do have a handful of male military spouses and employees. >> was mark cuban helpful? >> mark cuban's amazing. he's there when we need him. but he lets us grow the business and make our own decisions. he's just a rock. >> what advice did he give you? >> not to wait. opportunity is now. and that's something that we've really learned from him is don't wait on something. take action. >> the bags are beautiful. >> thank you so much. >> thank you very much. >> i like this toiletry kit. can i buy that from you today after the show? terrific stuff, ladies. congratulations. >> like that music at the beginning. >> i did. >> why? >> papa's got a brand new bag. >> oh, good. you got it. >> the connection, yes. i didn't know anything yesterday. so he's making fun of me again. >> i thought you just liked it. i didn't realize you heard papa's got a brand new bag. so there was a -- >> thank you for coming in, guys. >> yesterday was shake it up for trump. and she said why do you keep playing. >> i might take a little to catch on. >> family show. >> a lot of the music. we'll be right back. when we come back, an earnings alert for you. walmart is set to report in a few minutes. we'll bring you the results and the reaction on wall street. that stock up now about a dollar. inside everyone is an incredible cook, someone who can cook an amazing meal any night of the week. farm fresh ingredients, step-by-step recipes, delivered to your door for less than $9 a meal. get $30 off your first delivery blueapron.com/cook. walmart earnings set to hit the tape. the numbers and the state of the consumer, that analysis just minutes away. plus guest host walter isaacson is here to talk the fed, the economy, and cyber security. are zika fears overblown? we will speak to the head of the puerto rico hotel and tourist association about recent cdc warnings and the tourism industry there. and drama in rio. two u.s. olympic swimmers pulled from their flight home. police questioning them about an apparent robbery. more on the developing story and the highlights from yesterday's action. the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and michelle caruso-cabrera. andrew is in rio. we're going to catch up with him in a few minutes. does he look that good when sitting in the studio. >> yes. you just don't notice it. >> because the camera is very friendly to you down there, andrew. he looks like one of the athletes kind of, doesn't he? >> better lighting. >> is that what it is? i think it might be better lighting. awesome, andrew. you don't have to say anything. they're telling me to move on. why can't i compliment andrew? you have a problem with it? the futures at this hour are indicated a little bit lower. wow. can't get much more than a little bit. 0.22 of a point. 22 ticks on the s&p. the dow down about seven and the nasdaq down four. the numbers hitting the tape. >> looks like walmart's second quarter earnings per share was 1 $1.07. analyst estimates beat. walmart's also raising its full year outlook for a range between 415 and 435. they had previously guided between $4 and $4.30. consensus is $4.27. there is going to be a 5 cent impact from the jet.com acquisition which is expected to close in the fourth quarter. >> only 5 cents? >> that's it. 5 cent impact. comps, listen to this. u.s. comps up 1.6%. >> that's really strong. >> that's the eighth straight positive quarter. and actually the strongest in two years. there were years when those comps were up 1.5%. traffic up 1.2% in the u.s. that's a seventh straight quarter of gain there. the inventory in the stores was down 6.5%. but the in stocks are up. so that's really good news. e-commerce sales up 11.8%. walmart may want that to be stronger but that is an acceleration when it was up 8%. i spoke to walmart cfo brett biggs. and he attributes it to fundamentals like clean stores, improved employee morale. and he doesn't see a market change in the consumer but sees things working in their favor like wages and gas prices. but also perhaps causing a bit more caution. regarding larger business decisi decision, biggs says they are being -- leading into jet.com. but potentially a little bit away from businesses like the example of selling 119 of its mexican clothing chain suburbia stores as an example. leading into the new, de-emphasizing older investments. >> i think that was part of the big question when they came out with the jet acquisition. $3.3 billion sounds like a number that is a market cap of over $227 billion. so it's not a massive bet for them. but the idea this is a 5 cent charge that they'll be taking on earnings, they couldn't give clarity at the time because they were in a quiet period. this is what the street's been waiting to hear. if you check out shares right now, they're trading up by almost 3.8%. $75.70. a gain of $2.70. that was the one question because they couldn't give more clarity in the quiet period. >> and the free cash flow, more than $10 billion. nice little number there. >> what about the e-commerce numbers? >> so e-commerce up 11.8%. that's better. last quarter was up 8%. >> yeah. they've been disappointed in the previous quarters. >> they would love to see numbers up 30%, 40%. but, you know, i guess they'll take an acceleration. >> that's what jet.com is about, i assume. improving that. >> and getting an urban millennium shopper who tends to be jet's customers right now. >> it's to go after the jet customer opposed to using that platform which could be better? okay. >> i think it's both. would you agree? >> jet has stuff behind the scenes. some algorithms that they're interested in. no doubt this is about trying to get millennials in the door. >> do we have any idea when it's going to be -- >> did they say? >> they did not say. >> there was a conference call today. maybe we'll get details then. >> got it. all right. stock looks great over the last year. those two -- >> by the way, we should look at the dow once again. look at the futures because walmart a dow component. . a gain like that, it could have an impact on thinkings. you were looking just before we got the numbers down just slightly. now down by less than one point. so we'll continue to watch that. >> thanks, courtney. here's what else is making headlines this hour. following yesterday's indecisive fed minutes, investors will get clues to the economy this morning. out at 30u8 a.m. eastern time. gannett has reportedly raised its build for tronc. that's according to the journal which says details of the new bid for the publisher couldn't be wlerned. tronc. >> i hope they keep that name. >> that's an awful name. >> hay had to change it. we gave them grief for getting rid of tribune company. they weren't allowed to have that name. >> there's another name associated with it, too, wasn't there? but tronc -- >> it sounds like a movie from the '80s. >> tronc battled godzilla. i don't remember who won. but tronc was a formidable -- >> opponent? >> but what about the video game -- the computer game villain. what was that guy call snd. >> there was a movie "tron". >> that's what we were talking about. >> interesting what gannett would look like if this goes through. are they going to be so saddled with debt? >> what was the gannett spinoff? what's the name of that? >> i don't remember. >> that's got a crappy name too. >> they spun off time warner cable, let them keep the game. and poor jeff still gets phone calls when people can't get their cable installed. it has nothing to do with time warner. >> between tegna and tronc, the gannett spinoff is tegna. you don't even know how to say it. >> walter isaacson is the guest host. >> i just snuck in. i'm sorry, michelle. >> right now we should get to the olympics. team usa continues to collect medals in rio. but away from the games there are questions and controversy continuing to surround four members of the u.s. swim team who say they were robbed at gunpoint by men posing as police. andrew's there. he's following this story closely as well. andrew, right back to you. >> hey, thanks, becky. you're absolutely right. it is the big story here. there's certainly a number of questions which is why rio authorities are now looking into continue the interviews they've been holding with the athletes involved. here's what we know right now. ryan lochte who has become the face of this controversy standing behind his account of what happened. he spoke to matt lauer about it last night. meanwhile jack conger and gunnar bentz were released but will continue to provide information as requested. we will follow the story. it's not just a security story, it's an economic story. but we want to talk a little bit this morning about the sponsorship of the olympics. because that's the other piece of this story. when you think about it, the olympics may be one of the biggest pop-up businesses, if you will, in the world. and this story has a huge impact. there are new 57 suppliers and sponsors of the games from adidas to bridgestone. top sponsors pay between $100 million to $200 million depending when they entered their contract to the ioc to use the olympic rings. that does not include the ads you see and buying air time. there are put multiple tiers to this. here's what's going on. at the top level, you're going to see companies like mcdonald's, coke, visa, samsung, and omega. all those guys have an exclusive marketing right to the games. they're the top sponsor. they're the ones paying that big number price. visa, for example, the only card accepted at the venue in these parks. the mcdonald's, the only restaurant, and coca-cola the sole beverage provider. they have exclusivity, if you will. then there are the other tier sponsorships we wanted to explain within the ioc and then within the countries that own olympic organizations. so you're going to see nike, for instance. they outfit usa. allowing them to display the nike swoosh alongside the olympic rings. and usa rings wear nike gear on the medal stand. however, companies like under armour have reached deals with specific teams to outfit them during competition. however, nation in the under armour case, for example, they can't display the olympic rings or even use the word olympics in the advertisement. and under armour in this case hope people will notice the logos. all of this means big money for the ioc. brought in billions of eyeballs from sponsors. whether spending all this money is worth it of course is a perennial question. but this year there's renewed questions because the ioc added rule 40 which allows non-sponsors to run ads with olympic athletes. you probably saw the michael phelps under armour ad as long as they don't use the rings and then there's a blackout period during the games. and athletes can be stripped of medals if they or their sponsors violate rule 40. companies like red bull have tried to take advantage of this rule. we'll talk about this in a bit because we'll have the ceo james weber of brooks. brooks is against rule 40. they mounted an advertising campaign against it. we'll talk about that a lot more. when you think about the big business of the olympics, you think about the sponsors and then this lochte story, by the way, and what it means to the swimming team and all the money involved behind it, it really isn't just a story of athletics. it is a story about money. >> goes back to the adage follow the money. thank you and we'll see you in a bit with more on that rule 40. it's something we've been buzzing about too. in the meantime, we have watching shares of cisco this morning. the company posting better than expected earnings and revenue, but the guidance was cautious. cisco says it sees flat revenue in the current quarter. its earnings outlook was shy of what the street had been expecting. and the company also announcing plans to cut about 5500 jobs nap is 7% of its workforce. this comes as the company is trying to switch its focus from hardware to software. cisco ceo chuck robbins will join "squawk on the street" later this morning. the federal reserve is deeply divided on when to increase rates. still talking about this, aren't we? nine years. the market already believed that a rate hike in september would be highly unlikely and yesterday's fomc minutes just reassured them. joining us now our guest host for the morning walter i.c.saai. we have you on with guy laba who is fixed income strategist. so we are going to talk about the fed now. but i was thinking what would i talk to walter about. there's nothing i wouldn't talk to you about. >> that's nice of you to say. >> but you could -- theoretically you could just sit here every day and whatever we're -- >> i'd listen to you. >> well, you would like that. >> i'd love it, yeah. >> nice. >> this is nice. but i'm thinking, you know, so you wrote -- you're an unbelievable author and writer. you ran cnn. you have the aspen ideas institute. you're like the definition of a renaissance man. is that a good thing? >> you know what i'm writing now? the definition of a renaissance man. i'm doing leonardo da vinci. >> are you really? awesome. >> because i want to figure out how you connect art to science which is where that intersection where creativity comes from. >> i'm not even sucking up to you. even if i come to new orleans you'll show us a good time. what i was trying to figure out -- i like guy. how do i pronounce your first name? >> it's guy. >> guy is cool. all right. let's talk fed. walter can weigh in on this too. we're still talking a quarter point. it kind of annoys me that ichk we could handle that. i think rates are so low that all of this conjecture as business journalists we have to be involved with, i get frustrated we talk about it so much and time passes and we're still talking about whether they're going to do anything. i guess it does matter because it's a foreign currency effect and a global bond marker right now. central banks are very important. but should i be frustrated that here we are talking about this? you got any insight you can give us that we haven't said? >> i'm just as frustrated as you are we're having this discussion. the good news is at least the fed watching process has become less complicated than the olympic sponsorship rules andrew was talking about. and less exciting. but the theory we're working on why it still matters, if you will, is that central banks across the world, this is not a new story, has pushed down volatility in the interest rate markets. and the volatility has popped up in the currency rate markets. china is effectively though not literally on the u.s. dollar. we get a stronger dollar here, that means a stronger yen and export problems in china which has global effects. and so that's probably the biggest economic connection we have between a slower u.s. economy. direct stuff as you referenced, it's not going to change mortgage rates all that much. it's not going to slow things down on a day-to-day basis here. >> that's stuff i wasn't thinking about. you found something. which is harder and harder to do. >> but doesn't it concern you that what you're talking about is china's economy rather than the u.s. economy in terms of what the federal reserve is supposed to do? >> well, i'm not saying they're supposed to take that into account directly. but the feedback effects are really clear. you don't have to go back further than january and february of this year to recognize as the dollar rises it's somewhat mysteriously terrible for the u.s. economy. we saw data deteriorating, markets deteriorating as the dollar was rising. >> if we're going to worry about the entire world -- you can say that about the entire world when it comes to the dollar, right? then they're never going to raise. there's always a part of the world that's problematic. >> the theory is -- at least my running theory is the extent that future rate hikes are priced into the markets. we were in the neighborhood of about 40% chance in december relatively recently, yesterday. >> walter -- >> the extent that those rate hikes are priced in, it should be effectively priced to the dollar as well. you won't get the same if the talking up is gradual. >> how does the world escape negative interest rates? how does this play out? that's the question. >> you need underlying growth. you need profits. you have gotten to the point where the u.s. economy is close to full employment. but you're not seeing any inflation as far as i can tell. >> if it's still -- yeah. we're still well below the target, there are officials who say that's what they're really looking at now. >> right. the 2%. you know, 2% inflation, wage growth, everything else, that's what we're trying to get back to. >> how do you in 20 years of, you know, deflationary pressures or something that japan's gone through -- if we're now on a race to the bottom, you also need innovation. >> we had a huge burst of innovation in about the early 1970s when you have the microprocesser, microchip, personal computers, all these things come online. we're maybe on the verge of some great innovation with whether it's artificial intelligence, data mining, health care. but health care is not going to be reflected in the numbers right away. so what you need is something that would kick the u.s. economy but also the global economy up in the productivity fashion and innovation fashion the way the '70s and '80s did with basically information technology. >> guy, what do you think? what's the short-term solution to any of this? sor there one? >> i'm not sure there is a magic solution, frankly. i think that was the robert gordon theory there were these great leaps forward in productivity every 50 years or so and then a period of stagnation. i would argue demographic profiles are probably a bigger driver and less changeable in the productivity aspect. here in e the u.s. the working age population is growing at roughly 0.6% of a year. you compare that to the '80s and '90s experience, that's a third less -- >> don't blame me. i'm doing my part. >> good job. >> so i hear. >> with interest rates this low, the other thing we could be doing and i'm happy to say both presidential candidates are in favor of it, is some infrastructure spending where you can look at the airports, you can look at our air traffic controls still being way behind. you're against it, michelle. >> i am not against infrastructure. don't get me wrong. we need more infrastructure. but walter, we give money to congress for more infrastructure. we don't get more infrastructure. the transmission mechanism is broken. until that is fixed, we're just throwing money into a hole. >> yes. and you could do things by an infrastructure bank where you have real people figuring do you have a return on investment if you build this, if you -- >> you eliminate congress from that? >> you try to -- >> don't hedge. the answer is yes. >> the answer is yes like base closings on the military. you give them a yes or no veto but they can't do a line item. let me push back. in the old days when they had earmarks, you got some things built and it wasn't the worst thing that happened. >> we had a museum to the edsel, i believe. lawrence welk museum. >> you know -- >> thanks, guy. >> guy, we'll have you back. great. he's a thinker. >> certainly do our best around here. >> exactly. because it's -- you know, it's hard to find something we haven't talked about with the fed. whether they're going to go up a quarter point or not. my idea, walter is -- i keep saying this over and over again. let's not talk about it again. when we do it, let me know. >> you need that little red flag. >> yeah. when you decide to raise, let me know. coming up, okay. it says here to read this slowly. i'm not sure why. but i will. investors getting -- oh. you know, greco? people could see me doing this and i'll be the one that gets accused of something else. >> misogyny. >> yeah. anyway. investors -- can you read this? all right. investors getting a rise this morning from the l brand. parent company of victoria's secret is a stock to watch at the opening bell this morning. we'll reveal the numbers after the break as i objectified an entire class of people. >> models. >> yeah. great. we will look at the futures when this video runs out. there it is. down nine points. "squawk box" will be right back. that was not me. name's matt greco. sic plays thr♪ the first stock index was created over 100 years ago as a benchmark for average. yet many people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? it's time to bench the benchmarks. this clean was like - pow. everything well? it felt like i had just gone to the dentist. it just kind of like, wiped everything clean. my teeth are glowing. they are so white. crest [hd]. 6x cleaning, 6x whitening. and at two weeks superior sensitivity relief to the leading sensitivity toothpaste. i actually really like the two steps! crest [hd]. step 1 cleans, step 2 whitens. it's the whole package. no one's done this. crest - healthy, beautiful smiles for life. . take a look at some stocks to watch this morning. l brands beat estimates by 11 cents with quarterly profits of 70 cents a share. victoria's secret parent also raised its outlook for the full year. we already did the video. no need to revisit that. you know what? this is the video i'd like to show. >> spam, baby. >> spamming the globe. spam and eggs. hormel foods reported a quarterly profit 1 cent above estimates. for brands like spam, skippy, and muscle milk. also hormel raised its yearly forecast as well. i think -- is dinty moore hormel as well? >> i think it is. >> you missed it yesterday -- was that not the highlight of the show? wilfred normally called it twitter. we got him to speak american. and he goes twitter. just like that. and he got all kinds of stuff on twitter. people were tweeting about how wilfred -- because he can do it if he tries. he can speak the normal type of -- he doesn't want to the. >> what's the word he always puts in that we give him grief about? >> whilst. >> with a "t"? >> yes. he's written it in the script. >> you know it's not mom over there. it's mum. >> with a "u." >> spelled with a "u." anyway, twitter was cut to sell from hold at ever corps who says it sees more -- that's how i say it. among other factors which to me is accurate competitive concerns such as snapchat's move to monetize its own popular service. when we return, we'll talk more about walmart. we will get the street's reactions to the numbers after the break. but you can see for yourself that component up by 3.5%. stick around. "squawk box" will be right back. with just days away from the closing ceremonies, the olympics here may be coming to an end but there's still plenty of competition and action. we're going to bring you the latest live from rio when we return right here on "squawk box." ♪ welcome back to "squawk box," everybody. among the stories that are front and center this morning, we're going to take a look at shares of the dow component walmart. the company was just out with its earnings a little bit ago this morning. beat forecasts on the top and bottom lines with the numbers. raised for the full year too. that is helping things out. you see the stock's up by 3.5% nap is helping the dow. speak with an analyst in detail in a moment. the labor department releases its weekly jobless claims in an hour's time. claims will probably come in around 265,000 for the last week. that will be unchanged from the week before. and mcdonald's is removing a fitness tracker toy that had been included in the happy meals. this comes after the report that the tracker's band was causing skin irritation on some children. mcdonald's says it is investigating the issue. let's talk more about walmart's results. joining us now on the phone on the squawk newsline, joe feldman analyst at telsey advisory group. thanks for calling in. >> thanks for having me. >> how are they getting this right? >> well, they drove a lot of incremental sales and traffic to the core walmart u.s. stores. they've done a lot to remerchandise a little bit. and that's been helping to attract customers and they've been pricing a little better. a bit more competitive in the grocery area. it seems to have worked this quarter. >> so better execution on the basics, it sounds like. >> absolutely. they've been doing a much better job. merchandising within the store does look better. there's a little bit better leverage of technology within the stores. shipping times are better. and they're doing a pretty solid job across the board. >> this is walter isaacson. i was wondering what low transportation, low fuel costs may be doing? >> well, i think for the consumer it's been lep ihelping. especially this end of the consumer market where they feel there's more money in their pocket. plus walmart raised wages for their own employees which are some of the their best customers. so that probably helped as well. but, you know, on the transportation side, the gross margin was up a little bit. and that's probably helped by supply chain. >> i was going to ask, we've seen hikes in the minimum wage in various parts of the country. that a factor here? >> it actually helps the walmart customer. traffic was up 1.6%. you know, the pricing's right, the merchandising looks better. the emphasis on fresh and fresh produce within the grocery department really worked. i mean, grocery was up low single digits for them. >> you've got a price target of $71 but it's trading at $75. you're going to up that or you're negative on the stock? >> no, no. well, i think the valuation is kind of full here at around 17.5 times even on the high end of the new guidance. it is something that we evaluate as new information coming out like today and the day just started. so we'll be looking at that. >> got a yield of 7.2%. interesting in this. all right, joe. thanks so much. >> thank you. okay. >> don't mention it. it's my job. when we return, is it safe to vacation in puerto rico? the cdc handing out warnings of zika virus in the country. this is what puerto rico needed. she says the cdc warnings are overblown. we'll ask why. as we head to break, look at the u.s. equity futures. you know? >> i'm sorry. >> what happened -- welcome back, everyone. the u.s. declaring a public health emergency in puerto rico because of the zika virus. more than 10,000 cases have been reported there. but the tourism agency is trying to put it in perspective as it works to draw travelers and those on vacation to the island itself. joining us now is the president and ceo of the puerto rico hotel and tourism association. also our very own meg tirrell joins us now. walter isaacson from the aspen institute is here as well. clarissa, thank you for joining us. >> thank you. thank you for the opportunity. >> i'll admit zika is something i'm concerned about and digging into. why do you think the fears are overblown as the cases have been stated from puerto rico? >> because from the beginning the numbers that were given were based on projections. the reality is that as of today, less than half of 1% of the population has the virus. the numbers that were given in e the beginning were six digits saying that one-fourth of the population would have the virus by this time or by the end of the year. and the reality is that as i mentioned it was the worst case scenario. puerto rico immediately took action. we started following all the suggestions that the cdc has given. >> except for spraying, right? >> well, one. because there are some spraying going on with different ingredients that was approve. and as a matter of fact, that is done on a daily basis in different areas of the island. >> let's just talk about the detection rates that we've seen. 10,000 is the official number. >> 10,600, yes. >> here in the united states just in miami i think it's 25 to 26. >> over 30 now. >> over 30 cases of local transmission. but what we also know about this disease is that only one in five people display any symptoms of it and the testing mechanisms are not very good at tracking down zika. which is why they think that the numbers are so much higher than the official reports. >> yeah. but the -- i mean, as i mentioned before, it is -- the facts is that today only less than half than 1% of the population -- >> but, again, we're talking about people who have officially tested for it. people don't do go in if they're not pregnant, if they're not showing symptoms. and the tests are not great at detecting. >> but the important thing here that it's easy to prevent. from the beginning we started taking all the steps necessary, educating the population of puerto rico as well as our guests. we created microsites. we have trained our people with the cdc, as a matter of fact. we have been doing seminars training the industry to make sure that they understand what needs to be done. the only thing here, there's no need to worry if you use your repellant. if you use loose clothes and light colors. the only issue here is if you're pregnant. and that is totally understandable if you're pregnant, that is a decision that you have, you know, to make. >> i've actually heard public health officials here say puerto rico is still a great place to visit as long as you're not pregnant. >> exactly. >> what impact have you seen as a result of this? >> this whole thing started in january. and the month of january was really great for us. we had an 11% increase in occupancy on the island. february, march, and april it went down. and after that when things were starting to move, we have seen things a little bit stabilized right now. it's looking good. we had a really good summer and hopefully we'll have a good season because things are starting to calm down now. the education continues in the hotels. for example, they have crews every day making sure that the breeding grounds are okay. they are spraying in the areas with the approve ingredients by the cdc and the health department. so we have not stopped educating. there's really no reason to worry if you follow the suggestions. >> we don't need this type of v.o. here with all these mosquitoes and spray. we need some el dorado. what are the nice -- el dorado is one. >> the golf courses. >> yes. there's another new -- is there a four seasons or something? >> there's a rich reserve. beautiful property, yes. >> but in terms of -- >> but could you get a deal? sorry. i know you want zika, zika. but it's probably cheaper right now. >> right now it's our shorter season. so you have really good deals no matter what. >> are you going for christmas? >> i don't know. i'm open. >> he's not joking. he's been asking where to take the family for christmas. >> we have a tlot of great golf courses. the el dorado ones you mentioned is are international and well known. >> it's not just pregnant women. it's also anyone who could get pregnant or if your spouse is there, they say they tell you not to get pregnant for six months or not to have sexual relations without protection for that period of time. >> wait a minute. you can't have sexual relations? >> if you are planning -- their recommendation is if you're planning to have a baby or you're pregnant to try avoiding place where is the virus is. and that is totally understandable. >> just to bring it back to the projections, because i think it's really important that we couch them accurately. where the projections came from that a quarter of the population could be infected, i've seen, is from modeling similar to chikungunya which is spread by the same mosquito which did infect a quarter of puerto rico's population. so i think the concern with saying that the cdc is fear mongering is that puerto ricans and people considering traveling there won't take zika seriously enough and protect themselves. and we've read story after story saying that people there aren't responding enough. so how do you make sure that as you are trying to put the facts out there and tell people it's still a great place to vacation and it is, that they also take the adequate measures to protect themselves? >> i have to disagree with that. because from the very beginning, everybody, central government, municipalities as well as the private sector took action. so that's why we have been able to keep it at a number not as high as the previous numbers. >> but aren't we still in the middle of the hot season, the rainy season? >> yes. >> we're probably at the beginning. >> yes. we are in the rainy season for another month. but the reality is if you spray, you use the repellant, you wear the right clothes, in the homes of people of puerto rico, it is recommended. and this is something that we usually have because we have been dealing with mosquitoes for a long time. >> the counter to that is anybody who's considering it says is this a risk i'm willing to take for vacation. that's the judgment it comes down to. >> yeah. here the only real situation will be if you're pregnant or planning to get pregnant. then you know you have to decide what you want to do. but if you take all the necessary precautions, wearing your repellant, as you use sun screen. when you come down to the island and you go to the beach or go to play golf you usually put your sun screen on. just after the sunscreen put the repellant on. >> places like florida and other places -- >> my doctors have told me not to go to florida for six months. >> sure. >> but if you're -- let's say you're an early, very early middle aged person and you get zika. what's my worst case scenario? >> well, the worst case scenario in very, very rare cases has been a paralyzing syndrome. >> a what? a paralyzing disorder? >> that's very rare. and only one out of five experience it. [ overlapping speakers ] >> she's a big doubter. i tell you. my gosh. >> i would love to go to puerto rico. >> i was expecting a gold for a couple of days. >> some people have no reaction at all. a little rash others, it depends. but a general precaution, make sure you wear your repellant, wear the right type of clothes and there's really no reason to worry. >> thank you so much. >> thank you. coming up, more reaction to walmart's earnings. the stock at this hour is higher in the wake of their numbers. first, though, we're going to check in with andrew in rio who is in a zika place? i don't know what this whole conversation implies for your future. >> i am wearing deet. i should tell you, we have not seen and carl did not see a mosquito the entire time. >> good. >> take from that what you will. in the meantime, we will talk with jim weber the ceo of brooks. brooks is not an official sponsor of the olympics but does sponsor certain athletes. he's not allowed to use the word olympics. we'll talk to him about it when we return. welcome back to "squawk box" right here in rio. we are live covering the angles of the olympics. for the first time in olympic history, companies that are not official sponsors can feature olympic athletes in advertisements during the games. but there's still a lot of restrictions. ads cannot mention certain words including the words olympics, rio, summer games, gold, or medal. and need to be approved months ahead of time. some athletic and apparel companies look to end those restrictions which they say hurts them. ceo of brooks jim weber joins us on set in new york. it's great to see you this morning. are you allowed to actually say the city that i'm in right now? are you allowed to use that words or is it off limits? >> andrew, good morning. it's off limits. we' i'm not going there. >> you're not joking. >> i'm not joking. >> so you guys are sponsoring 12 athletes that are here. you can use them in ads in certain cases but they're blacked out in other cases. is it worth sponsoring athletes at all given the restrictions? >> for us it is because running, you know, running is bigger than the sport. running is health and well lifestyle. that's our focus. we invest in athletes because it inspires particularly high school kids to run. if they start running then, they'll be running forever. so it's the sole of running. we have two major programs that do middle distance and training. we've done those over a decade. this is about the athletes because they have to cobble together, support. look at january. they'll be looking at 2020 in tokyo and they're going to be in des moines and boca raton, and new mexico. they have to cobble support for this next cycle. it's about them being able to support themselves. >> so here's the question, jim. nike,ncaa $200,000 scholarship benefit out of this. so in an age of social media, they ought to be able to use their name and image as least. >> the loosening of the rules is because of the blowback in london i saw during the olympic games where they weren't allowed to do anything. the athletes were so, so angry they would tweet out photos of their hair dryer, they would cover up. it was really ridiculous. the goodyear blimp goes over head, they black it out. i don't know if you remember. michael phelps was in a louis vuitton ad that got leaked early. very nice ad, i might add. and michael phelps didn't suffer any retribution for that whatsoever. not that he should have. it was more that, wow, if you're a really big, important person you're not going to get in trouble but the little guy -- it's just like lobbyists and regulation. when you're the little guy you can't get out of regulation. >> and these second tier athletes, i don't want to call them that, they may never make the podium but they're local heroes within their sport. this particular athlete, we sponsored this program for ten years. i can't say her name. i can't talk about and i can't show her image. i can show her shoe which i love. but it's about local stories and their communities and within the sport. and track and field, swimming, these second tier sports need that. it's important to the athletes. it's their moment. >> can i ask you a quick question? >> quick question that's not about the olympics. what's the difference between focuses on performance and being in the athleisure business? >> we are a performance lifestyle company in run. the neat thing about that is it's fitness, health, and wellness. our opportunity is huge. but it isn't athleisure. the gear we create is for use. of course people wear it and it's identity, it's self-expression. it's always been that. but it's how the shoe works at mile 26 that's giving us our reputation for all runners. >> jim weber, ceo of brooks running, we want to thank you. and i will say it for you. olympics, rio. olympics, rio. thanks for coming on this morning. >> uh-oh. >> go team usa. >> wow. we're on thin ice here, i think. when we come back, more from our guest host walter isaacson. plus black friday in august. best buy gets ready to celebrate 50 years of business. "squawk box" will be right back. tokyo-style ramen noodles. fresh ingredients, step-by-step recipies, delivered to your door for less than $9 a meal. get $30 off your first delivery blueapron.com/cook. igoing to clean betteran electthan a manual. was he said sure...but don't get just any one. get one inspired by dentists, with a round brush head. go pro with oral-b. oral-b's rounded brush head cups your teeth to break up plaque and rotates to sweep it away. and oral-b delivers a clinically proven superior clean versus sonicare diamondclean. my mouth feels super clean! oral-b. know you're getting a superior clean. i'm never going back to a manual brush. ♪ still to come this morning, we have more from our guest host walter isaacson of the aspen institute. and then drama in rio. brazil police pulling two u.s. olympic swimmers off of a flight on their way home to question them about a robbery that apparently took place earlier in the week. you've heard about a lot of this leading up to it. but we have new details straight ahead from andrew who is covering all the olympic action. in the meantime, check out the futures. after walmart came out with earnings that were better than expected, you did see the dow pick up and almost flatline. but now you can see there's some red arrows once again. dow futures down by 22. take a look at walmart though. it's up by better than 3%. "squawk box" will be right back. now what? how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road, so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be. our clients can now leverage customer intelligence to predict their financial needs and provide more contextualized products and services. we're creating new platforms across channels so customers can effortlessly invest, borrow, lend, transact-wherever-whenever they choose. and we're digitizing the way banks run, driving efficiencies and delivering new value for their customers in return. digital works for banking and financial services. lets talk about how digital works for your business. ♪ whmade plastics that tmake them lighter?rs the lubricants that improved fuel economy. even technology to make engines more efficient. what company does all this? exxonmobil, that's who. we're working on all these things to make cars better and use less fuel. helping you save money and reduce emissions. and you thought we just made the gas. energy lives here. earnings alert. dow component walmart posting a big beat. reaction from the street and what it means for the consumer straight ahead. plus a clean sweep of the hurdles. a record breaking night for the u.s. track and field team. live from rio, "squawk box"! ♪ live from the most powerful city in the world, new york, this is "squawk box." welcome back to "squawk box," everybody. this is cnbc, first in business worldwide. i'm becky quick along with joe kernen and michelle caruso-cabrera. andrew is reporting live from the olympic games in rio. there he is. we're going to get back to him in just a minute. lots of music happening there. first let's tell you about some of today's top stories. walmart posting better than expected revenue also raising first year forecast. that is something the bulls on the street have liked to hear. right now that stock up by 3.25%. we are also watching shares of cisco. that company posting better than expected earnings and revenue. but cisco sees flat revenue in the current quarter and its earnings outlook is shy of analyst estimates. also the company laying off 5500 people or planning to lay off 5 5500 people, about 7% of its workforce. chuck robbins will be joining "squawk on the street." that's coming up just a little later this morning. let's look at futures. we've been moderately lower through midweost of the morning. s&p futures off by 2.5. and the nasdaq off close to nine. let's head back to rio -- or joe. i'm stilling your lines. >> that's okay. i do love -- you know, i miss andrew. and i was gone for two weeks. i haven't seen him since before then. andrew, it's me. >> nice to see you, sir. >> hey, buddy. what's going on? >> we continue to follow the developments of what is the biggest story here in rio. members of the u.s. swim team being questioned about their accounts of the reported robbery over the weekend. ryan lochte who has become the face of it tells matt lauer he stands by his account of what happened. meanwhile swimmers jack conger and gunnar bentz, they were detained last night shortly before their flight was scheduled to depart rio. they're released but will remain to stay available to local authorities. then in another development overnight, great britain reporting one of its members was held at gunpoint and robbed last night. reporting the team has now been issued a memo saying it's not worth the risk of leaving the athletes village at night. we're going to bring you more on this developing story as it unfolds. but i should note, you know, we talked to a lot of athletes over the weekend. many of them said they hardly leave the athletes village at all. many spend time on their ipads in their room watching tv. which led us to ask them which shows they like to binge the most. in our ask the athlete segment. ♪ >> probably "law & order svu." it's my go to. >> i don't watch too much tv. i'm outdoors most of the time. >> i like series like "supernatural," "once upon a time." of course "game of thrones." >> i just started watching "game of thrones." i'm on the first season so i'm probably going to binge watch that. >> "game of thrones." and "daredevil". >> "game of thrones." "lost" some years ago. yeah. and now i was looking "black mirror." >> i haven't been watching tv much lately. i'm trying to keep my mind focused. >> right now "gilmore girls." >> i used to watch "two and a half men" before. but not anymore of course. "big bang theory." >> "love & hip hop." >> and the olympics, a bit of game of thrones here. we all binge on perhaps carl's show more than anything. we'll bring you more on this ryan lochte story as we get it. >> got it. we'll look forward to that. thank you. walmart shares up nicely this morning. last of the major retailers to report. >> if you look at the two results, you wnt think they operated in the same quarter. but they did. walmart did beat on earnings. $1.07 compared to $1.02 estimates. unlike target, walmart raises its guidance and reports comps up 1.6%. that's the strongest level in two years. the eighth straight increase on traffic of 1.2%. target, though, saw its lowest traffic in 1.5 years and its first quarterly comp sales drop in two years. almost exactly opposite. i spoke to walmart's ceo brett biggs. he doesn't actually see a market change in the consumer for good or for bad. but he does think there are things working in the consumers favor like wages and gas prizes. then regarding the larger business decisions, biggs says they're being thoughtful about the capital. less into others like selling 119 stores of its mexican clothing chain suburbia. remember walmart has grocery and that is very important. a very big chunk of their sales come from grocery. that's where likely they get a lot of the traffic. grocery is something target wants to get better at. it's not quite where it would like to be there. >> and walmart is doing fresh a lot. >> that's right. making a big push into organic and keeping prices relatively low. perhaps that's helping. >> and what's the difference between walmart and target in terms of why they diverge like that? >> well, the consumer profile is a little bit different. a target consumer is -- has a little bit more affluent, perhaps. but the grocery is a big differentiator. target's signature category are things like style and baby. health and wellness but not grocery so much yet. they hope to be because, again, it's easier if you get into the store to buy milk than also to pick up some shoes. but if you're not doing that, it's harder to sell those shoes. >> thank you. let's bring in managing director at raymond james. bud, your reaction to the numbers from walmart today. they were better than expected. >> they were better than we were expecting too and i believe we were up above the consensus. so very pleased with the very solid performance. and as you go through all the details of the financials, they look pretty good. inventory was another notable callout because that was down. and the u.s. comp was down 6.5%. payables overall were up. accounts payable was at a 92% level which is near the top of where it's been in a very long time. so all the metrics were quite good with walmart. courtney said raising guidance was another pleasing development that we were very happy with. >> what's your price target? because that stock is now trading above $75. >> well, it's $80 and we will address that as we do in every written comment. so i can't make any comments about that. what i can point you to -- >> sounds like you might raise, though. i read between the lines. >> i didn't say that, becky. you can read between the lines. i can't say between the lines. >> got it. >> but i can tell you if you look at my written work we do a fairly angdic evaluation. and the top end of that valuation in 12 months was $86. so you can take whatever you wish to. you can infer whatever you wish to from those comments. >> let's compare walmart to a target. walmart to some of the competitors they're going up against. i don't believe you cover amazon but that seems lately it's been the biggest competitor for walmart. >> well, it is. certainly online. and walmart's online business, their e-commerce business accelerated from the first quarter with the gross merchandise value being up 13% and being up 11% or so. and with the u.s. actually growing faster than the overall. so it's accelerating but it is a focus. and amazon is clearly the big dog in that particular arena. remember walmart's got 4,000 stores or so in the u.s. so it's a very big deal to make sure the stores are really the performance. and that as doug would say, having the transaction be a seamless transaction is really their competitive advantage. regarding target, target had some issues. they've called out on their call yesterday on the issue with apple which was not good for them. they've gone through a major change in the last quarter with outsourcing their pharmacy business. and so they've had some changes and we'll see how those develop over time. >> great. i want to thank you for joining us today. >> thank you, becky. >> see you soon. all right. coming up, are the doves ruling the roost at the fed? minutes from the latest fomc meeting suggests a split view on a rate hike. we're going to talk to a strategist next. plus we'll check in again with andrew in rio. the olympic games may be taking place here in the olympic park. but i went out to go on a food marathon and i went for gold. when we come back, i'll show you a bit of my food race here on "squawk box." boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade amazing sleep stays with you all day and all night. sleep number beds with sleepiq technology give you the knowledge to adjust for the best sleep ever. the time is now for the biggest sale of the year, where all beds are on sale! save 50% on the labor day limited edition bed. know better sleep. only at a sleep number store. you can't come to rio without going to a traditional ria. they're going a limit given the olympics. maybe some of the healthy stuff first. avocado and shrimp. who doesn't love a fried banana? you want one? i don't know if i love this fried banana. bring on the meat. this is filet mignon? yes, please. i'm not a sauce guy. can we talk about sauces for a second? a little bit more, yeah? so condiments are always complicated. we'd love some ribs. in the meantime, a cheese puff. eating here is like a marathon. it's a slow and steady game. sprinting a out of the question. usain bolt could not do well here. bingo. thank you. do i -- or do i use a fork? not as good a visual. as this food marathon comes to a close, let's review. we had the ribs, several versions of filet mignon, we had the ribeye plus the cheese puffs. we've got to end this. white flag. i'm done. guys, we're not done. we're still eating breakfast this morning. but the food, we have to say -- we've had great food here, guys, right? pretty much across the board the food's been out of control. that is a particular brazilian specialty. we wanted to bring you that experience so you could have -- >> how do you not weigh more? andrew, how do you not weigh more? >> you know, it's -- i don't know. metabolism, maybe. i'm not sure. >> yes. age. i'm so glad you've tried that. i love it. it's delicious. >> really great. >> yeah. >> see you later, andrew. keep eating. >> yeah. our next guest says the recent market highs are not being driven by earnings growth and are not sustainability. which means we could be in for correction come the fall. hans olsen for the wealth and investment management business. good to have you here. >> thanks. great to be here. >> you're bearish. make the case. >> i'm not bearish. i think that we have hit all the returns that i expected that we'd get this year. we've done it through the -- essentially the first eight months. and when you look at the things that we needed to see in order to sustain the rise in prices, it's just not happening. one, we would expect to see earnings start to turn, right? that doesn't look like it's going to happen. >> i thought it is happening. we're finally hitting a trough when it comes to earnings. >> well, we've had five consecutive earnings of declining quarters. looks like next quarter will be another quarter where we see earnings fall as well. maybe we'll see a turn in sales. >> okay. so you have a different view on earnings, okay. got it. >> and basically the entire run has been multiple driven. right? expansion driven. and it's increasingly these new highs are being hit on very low volume, indeed. look, august, is a seasonally slow time of year. when you account for that, we're experiencing below average volumes here. so i don't think it's sustainable. >> you're right about the multiple expansion. right? it's because the average person sits there and says, god, i can't get anything in the bank. i can't get anything in treasuries. i can barely get anything in corporates. i'm going to buy something that has a dividend yield. and when interest rates are lower than they are, you are far more willing to pay a higher price because what else are you going to do? what brings that to an end? >> to your -- michelle, to your good point, it's the t.i.n.a. principle. there is no alternative. >> to me it's a great reason. i'm getting income. right? >> but what are you paying for that income? right? if you're paying close to 20 times historically when you get to 20 times or more for earnings -- >> if i'm going to hold for a long time, why wouldn't i own an ibm stock that yields more than its debt? because you might get capital appreciation. you might not. but i have time. >> but that's a subsection of the market. right? so when you're buying the market -- if you're buying utf, you're buying the entire market. you're buying the entire earnings stream which isn't there. to your good point, if you're buying subsections of the market which is the dividend payers or like that, that is the last refuge in all of this. >> so what undoes this is if we see yields go up. and i don't mean the fed raising rates a the long end. >> the raem tight linkage there is not interest rates but it's inflation. if you start to see a surprise in inflation, it starts to move up. that's when multiples really move. the correlation is with interest rates. interestingly enough. >> with the fed's hand. in theory? they've always got an excuse. >> that's right. and we don't expect much from the fed. >> all right. thank you. good to have you on. >> good to be here. walter is sticking around. you didn't get a question in, i'm sorry. i'm a hog like that. >> that's very interesting. nice to see you. coming up, major power players set to return to the stage at cnbc's delivering alpha summit. including paul zinger and carl icahn. we'll see how their funds have faired since last year. "squawk box" will be right back. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t. announcer: don't let salmonella get funky with your chicken. on average, one in 6 americans will get a foodborne illness this year. so, learn the right temperature to cook each type of meat. keep your family safe at foodsafety.gov. ♪ carl icahn and paul zinger will take stage at delivering alpha next month. thought it was going to be at some type of trump rally. the -- they're both trumpites aren't they? >> no paul is in the never trump move. >> interesting together like that. >> it's the annual conference that brings everyone together and is put together by cnbc and institutional investor. kate kelly joins us with a look at how funds run by icahn and zinger are performing since their last appearance. >> key figures from last year you just mentioned returning this year included carl icahn and paul zinger of elliot management which manages about $28 million. paul just issued one in recent weeks. he believes many having distorted. but in the latest he was as bleak as ever. in this market he said everyone is in the dark. experience doesn't count for much and extreme confidence may be fatal. he also noted we're in the biggest bond bubble in world history. that's a quote. and that the global bond market is broken. likening the current picture to the run-up of 2008. just in the sense that a reversal was inevitable and who knew when it was going to happen. he talked about the possibility of uncontrollable inflation. and he said while nobody knows when preparedness i.e. hedging in his world is going to be as important as ever. singer's fund is up about 6% through late july thanks in part to a settlement with the argentine government. while being dinged among other things by event arbitrage. carl icahn in contrast is down 18% through late june in his privately held hedge fund thanks to short positions. speaking of shorts, he said etfs would blow up in the future without giving a specific time frame. since that event the junk bond index is down about 5% troughing earlier this year and bouncing back a little bit since then. but it's still down. both singer and icahn back this year. should be interesting by politics as much as anything given the views there on donald trump. >> and on -- well. >> and many other things. >> and views on the other candidate as well. maybe not media, but in some places there are some -- there might be some disparate views -- >> they might agree that this dislike hillary clinton. >> yes, they might agree on that. i was hearing about how worried people were yesterday that trump was getting some classified info. as if we don't need to worry when the other candidate gets some -- you know, she's been so careful with the classified info prior to this, right? could you believe that yesterday? oh, my god, no. don't tell him anything. he might not -- he may be careless with it. where someone else might be able to find out, you know, who our operatives are. >> but she was exonerated wasn't she? >> that's right. i forgot. >> i was surprised there weren't more jokes on whether she would be sending private e-mails. but in all seriousness she does have the experience of diplomacy behind her, right? which trump doesn't. >> diplomacy is assumed to be good diplomacy or does that include bad diplomacy? >> well, i'm talking about the experience of running the state department. >> into the -- into hell or? >> careful. >> you're not going to get anywhere with me on this. i don't know. >> i got you. >> kate, thank you. >> thank you. looking forward to delivering alpha. it's going to be great. >> let's stick to that. >> yeah. all the big names. when we return, we are just a few minutes away from breaking economic data. we've got weekly jobless claims coming and we will bring you those numbers as they hit. and then billionaire entrepreneur john paul dejoria will be joining us. stick around. "squawk box" will be right back. welcome back, everybody. we are talking with our guest host today walter isaacson. we're waiting on numbers from the weekly jobless claims that are minutes away. we've been talking about productivity and about jobs and what the picture looks like right now. what do you think overall? a broader perspective on how we're doing when it comes to jobs in this country? >> the big question is whether technology and trade reduce the number of jobs in this country or increase it. and that's the big debate we're having politically. >> now it seems that both sides of the aisle are opposed to trade pacts we put in place over the last two or three decades. >> exactly. the whole notion of free minds, market, trade is taking a hit. but i do think that there are ways of saying, okay, this will actually increase productivity, but what it does is displace people so we got to deal with that. we've got to make sure that, you know, we can look at these things through a jobs lens. making sure that they're good jobs, good wages. >> we have 45 seconds. give us an in-depth answer on how we fix that. >> michelle and i have been having this colloquy. i do think with 0% almost, you should have infrastructure spend. it's hard to do it as michelle will push back, sometimes the government can squander that money. but if you have a really bad air traffic control system, airport, roads, bridges, everything else, it's useful to put people back to work on things that will give a return on investment. >> and there has been talk about public/private partnerships. >> or infrastructure bank or something not just squandered spending. that's easier said in 45 seconds than explaining it in an hour or two. >> sure. let's get a read on the immediate picture. rick santelli is standing by at the cme in chicago. take it away. >> all right. let's check it out. yes. we're getting claims -- well, not a huge move. but a drop of 4,000 nonetheless. and there were not even a subtle change last week's 266 so it brings us down to 262,000. continuing claims on the other hand, you know, a little revision. 2.16 million and then that moved up to 2.175 million. of course i am anxiously awaiting the philly fed. i like it because it's an august read, but i have to tell you maybe it's snowing in philadelphia baa i don't see anything coming out yet. of course this read -- there it is. exactly as expected. rarely happens. especially with philadelphia. it makes durable goods look normal. and we know that's volatile. so up 2%. now, if you look at up 2% in the context of sequential, last look was down 2.9%. so an improve. this is a wild series of numbers. you get big ups, you get big downs. so as expected. the aftermath of yesterday's meeting, though, is much more important. of course the markets are the boss now. i don't know. i don't know that it's a good way for the fed to operate at this point. this deep into still basically crisis rate. but the dollar index says it all. we're approaching the 94 handle. we've been down pretty much for the year, most of the year. the dollar index, if the investors signal was really that there was a tightening. we couldn't be debating. the dollar index would be screaming the answer. also hot off the presses, the employment component was down 20 versus down 1.6%. that's big. and new orders down 7.2% versus our last look of 11.8%. the more you dig into philly, the less good it looks. back to you. >> rick, thank you. >> thank you, rick. we were paying attention and listening although we do have a pretty special guest. i might have been picking his brain about margaritas. famously signing the billionaires pledge, our next guest is an entrepreneur experienced in building brands and he has a new bet that he suz will be worth a billion dollars. john paul dejoria is cofounder of patron spirits and cofounder of the new beauty company abio life sciences. i forgot about paul mitchell. i mean, i knew paul mitchell, but i immediately started talking about patron. because who thinks of let's take tequila and get a name like patron and make a high end tequila. that is worth -- how much is patron worth? >> it's in the billions. i think the important thing is -- >> in 20 years? >> 25 years, to be exact. but the world is ready for something high end that came from plants. lean paul mitchell from other ingredients. so we ended up making the finest premium tequila and introducing to it the united states happily. we were showing how to make the perfect patron margarita. >> i wasn't going to tell anyone that. >> it's a secret. >> pine app apple, i've tried a little. orange juice. >> you hear that too. half an ounce of this, half an ounce of that. you mix it with your patron. it's smooth and easy. >> don't think you need a mixer part of the tequila. it is the true part. >> no. you don't want those sugars and such in there. maybe agave in there. >> walters is here. >> we just released it. it's called roco. it's patron roco. very slow process. >> bring us some? >> i didn't because it's early. if it was later i would have brought you guys a few bottles of patron. >> he's from new orleans. >> that's right. it's always late. you can get silver. you have a presence? >> i like the silver. maybe an ounce and a half. a half an ounce of lime juice, half ounce of pineapple use. shake it up freezing cold. >> you can't wait. six months from now. >> i can't do any of this. >> try three. >> i have something for you. >> for my hair? makeup. i need that now. >> this comes here from aubil. what it is is this. 3.8 billion people, that's two-thirds of the entire population of the world suffer from the cold sore virus. okay. >> wait, i don't need this. >> but they do. >> i do have a rash but it's not herpes. >> you'd be amazed what this works on. okay? but it's all from plants. and someone feels a tingle coming on, they have a rash coming on, they put it on there. there's a good chance it won't come out. if the cold sore came out, you put it on and in 93% of all cases it's gone in two days. all plant. >> what does it do for, say, a rash -- contact dermatitis brought on as a reaction to sunscreen? >> that's a long one. i can only tell you this. we're in studies right now because we couldn't believe it. on things like pimples and acne which is another condition not even related to cold sores. we've been testing it on that and we're blown away on what it does. >> you have my complete attention. >> you have no adverse effects. i want you to take this, i want you to use it. we also have a lip balm. i'll leave this with you. >> is this a whole makeup line or skin care line? >> this is strictly now for the cold sore virus. but we are working now on skin care line that we're trying to get approved now for pimples and acne. >> so it's before the fda right now? >> what we do is fda-type studies. this is over the counter. that's why it's only $29. if you went to target or you went to rite aid or went to cvs. go to aubil.com, $29. that's it. but you want to get it before you need it. off cold sore, you don't want to run around looking for it. $29. can't beat it. >> all the businesses where you're making money. liquor, shampoo, makeup. these are all -- i mean, you got to be good at marketing, right? you are. you're great at it. >> we make money but we give it all away with john paul pet. i started that a few years ago. we put it right into pet programs. because we don't take the checks. we adopt pets. we just do unbelievable things. that's why i started the company, for pets. you can start a company that you make money but you put in that much more and more if you wanted to helping a good cause out. >> what do you look for when you're identifying a billion dollar brand? what does it have to have? >> something that benefits a lot of people, high quality, and priced right. very important. you want to quality. you don't want to be in the selling business. the world should be in the reorder business. your product or service is so good, people want to reorder it or reuse it. so i look at that also. look at the need. aubil, two-thirds of the population have the cold sore virus. patron, the world was ready to treat themselves to ultra premium. paul mitchell, made with hairdressers that works every time you news use it where the hairdresser can recommend it. so we look at that quality, that repeat business and price properly. yes, all three are premium products. but they're all priced realistically. >> how many pets do you have? >> four. i have four golden retrievers. >> really? i love golden retrievers. >> i had a golden retriever. i have two german shepherds and a maltipoo. you've never had a german shepherd? >> i had a chow. and a bull mastiff. they're really big. >> now i'm a sucker. i see somebody that needs to be adopted and i'm thinking four. i saw a german shepherd that needed a face. they're like people. they really are. my gosh. >> smart. >> can i get -- i don't think we can have four. because the two right now, the way they play is not conducive to lamps or furniture. >> but they give you love. if anyone's ever lonely, go get an animal. >> yes. one's going to be 140 pounds and one is 110. i live with animals. i almost live in a place where there's always hot breath on me. >> so you shop for several people. >> oh yeah. and you got to get into that business. you know what these big ears cost or what the lamb lungs -- >> john paul pet is the best grooming products. send you some. give me an address. >> this has been profitable. margaritas and pet products. when we come back, we're going to head back to andrew in rio. what do you have for us next? >> we've got donny jones and bloom the guys behind the new original primetime show "adventure capitalist." they've also spent time in the athletes village. more from rio in a moment. for decades, investors have used a 60/40 stock and bond model, with little in alternatives. yet alternatives can tap opportunities that traditional assets can't. and even though they're called alternatives, they're actually designed to help meet very traditional goals. that's why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. ♪ announcer: they'll test you. try to break your will. but however loud the loudness gets. however many cheese puffs may fly. you're the driver. the one in control. stand firm. just wait. [click] and move only when you hear the click that says they're buckled in for the drive. never give up till they buckle up. enepeople want power.hallenge. and power plants account for more than a third of energy-related carbon emissions. the challenge is to capture the emissions before they're released into the atmosphere. exxonmobil is a leader in carbon capture. our team is working to make this technology better, more affordable so it can reduce emissions around the world. that's what we're working on right now. ♪ energy lives here. welcome back to "squawk box" live here in rio. nbc hasn't released social media metrics around the olympics but it's partners with snapchat and instagram appearing to pay off with the platforms. julia boorstin joins us with a look at who's winning. >> that's right. partnerships with facebook, instagram, and snapchat have helped drive a record 2 billion live streamed minutes of the olympics which means the games are driving massive social engagement too. now, snapchat tells us a third of its 150 million monthly active users watched the first week of olympics content on snapchat. that's helping it draw blue chip brands including walmart, hershey's and ford across snapchat's olympics content. now, facebook which partnered with the international olympic committee, nbc, and others is distributing recap videos and drawing viewers to the facebook live platform with the likes of this michael phelps video with 4 million views. twitter is not an official partner so it cannot share highlights. but it is capitalizing on the highlights section. highlighting medal counts and headlines. and offering 200 olympics-related emojis. the top tweeted moment was usain bolt winning the 100-meter gold followed by michael phelps winning one of his gold medals. perhaps most popular on twitter, comedian leslie jones' tweets about the games were so important that they invited her to rio and to keep up her tweeting. the platt form has also come under attack for failing to crack down on twitter bullying of star athletes including gabby douglas. andrew? >> hey, julia. thank you for that. in the meantime we're joined by special guests this morning. there's physical risk and financial risk. and the question this morning is which one's tougher. a new group of thrill seekers look for the next game changing product. joining us is dhani jones and jeremy bloom, two of the hosts of cnbc's new series "adventure capitalists." you've got to watch it starting on monday night, guys. you're an olympian, we should say, before we even get started. you've won two? >> i went to two olympics. >> you went to two different olympics. winter olympics. >> winter. it's winter down here in rio. a lot of people don't realize that. >> and you both played football together. >> yeah. we were teammates at the eagles. we go way back. >> way back. >> too far back, actually. >> tell us about the new show and what this is about. >> it's like "shark tank" meets the great outdoors. so investors come pitch us in the environment that they created the products for to disrupt whatever survival space. so we get to hear about the pitch, hear about the product, and test in the environment. really fun show. >> coolest place you guys have gone? >> coolest place was in the sierras nevada. >> bahamas were great. >> we want to be able to meet these people in their environment. we want to try the products. that's what's so great. a lot of time people are board room investors. they take a phone call and just talk on the phone. we want to be with them. >> i was literally talking about chinese distribution with one of the ceo and founders under the water. we were scuba diving under a wrecked ship and talking about distribution. it's got a unique angle to it. >> it's also testing the products and taking a chance with the products. because they don't necessarily always work the way you think they're going to work. that's what's great about it. >> since we're at the olympics, got to ask olympic questions. ryan lochte is the story this morning. you guys spent time in the athletic village. >> i know ryan. we competed at similar olympics although he's summer. i want to give him the benefit of the doubt but losing confidence every day. seems like the story is changing. and i'll just say this. if it comes out that it was completely fabricated and made up, scott blackmon should ban him from the ioc from life. he should never be allowed to compete for the united states. if it's true. benefit of the doubt. >> what about the other guys? >> you got to go back and take care of your teammates. regardless if it's an individual sport or not. he was with somebody. so my position is, we don't know what's actually going to happen if the future. but we do know that there are some people that are left behind. and i think that he has a responsibility to make sure he's taking care of them. >> always talking about the business of the olympics, and the sponsorships. you were looking at the cover of "sports illustrated" with michael phelps there. he has a nike swoosh on him even though he's sponsored by under armour. >> there are rules with athletes you cannot violate or you can lose your olympic privilege. companies like nike pay a lot of money to represent team usa. so i understand michael's predicament. i know he's an under armour athlete. i was an under armour athlete. big fan. but when you're at the olympics, you have to represent the brands that pay to be here. >> we have the ceo of brooks on earlier. they were not an official sponsor but sponsor certain athletes. he says the system is unfair to the athletes. if you're phelps, it's one thing. but there are so many other athletes that e the economics don't work for them and they need the sponsorship and the rules should change. do you think it should? >> think of those fighting tooth and nail day in and day out to train and they sometimes have a secondary job to offset that. it's important for them to garner as much capital as possible to sustain their career. >> it's a tricky situation. the usoc is not government funded. so our olympic team, there's no government funding. it all comes through sponsorships like nike. so those sponsorships are super important for the athletes and the olympic movement. but at the same time you're right. i mean, most athletes unless you're in the top 5%, you're working second and third jobs to live out your dream. >> i want to thank you guys. "adventure capitalists" starts on monday night right after the olympics. thap is absolutely right. so thank you for that. and i'm going to send it back to new york. but in the meantime, i should tell you when you get back to new york, when we return, millions of borrowers are still under water on their mortgages five years since the housing recovery began. we're going to talk about it. daw technologies make healthcare more personal with patient-centric, digital innovations; from self-monitoring devices that can interpret personal data and enable targeted care, to cloud platforms that invite providers to collaborate with the patients they serve. that's why over 90% of the top 25 global pharmaceutical companies are turning to cognizant. our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way clinical research sites collaborate with pharmaceutical companies, and enhancing patient engagement with innovative platforms and solutions. our population's growing healthcare needs present growing opportunities for our clients: to advance the future of medicine with digital, and improve the quality of lives. ♪ . welcome back. it has been five years since the housing market hit bottom, but many homeowners still find themselves in the red when it comes to their mortgages. diana olick joins us with that story. diana, good morning. >> good morning, becky. it's amazing 5.9 million borrowers still owe more on their mortgages than their homes are worth. the so-called negative equity rate in the u.s. is falling, now at 12% of all mortgaged homeowners according to zillow, down 30% at the worst of the crisis but the numbers are still very high. it should be around 2%. they're equally spread across both urban and suburban communities. it would seem like negative equity should have evaporated by now, given how fast home prices have been rising, but it hasn't been enough to lift all borrowers. markets in the west like san francisco, portland, denver and dallas, have the least borrowers in a negative equity position and that's due to strong employment and competitive housing markets. but others like cleveland and detroit have more bifurcated markets, negative equity downtown and lower in suburban neighborhoods. detroit's urban rate is twice of the suburban rate. chicago and las vegas share the honor of carrying the highest negative equity rate in the nation and that problem is one of the driving factors of higher home prices. homeowners in this position are unlikely to sell at a loss so they stay put which in turn lowers the number of homes available for sale. fewer listings mean more competition which only drives prices higher. we just got a report from red fin saying that inventory dropped by the most in july that they've seen all year, still no help on that front. back to you guys. >> all right. interesting. thank you, diana. coming up more from walter isaacson, a big project coming up on cyber security and don't miss cisco's ceo chuck robbins on "squawk on the street" later at 9:00 a.m. eastern time. coming up. we'll be back here on "squawk box." ♪ [announcer] is it a force of nature? or a sales event? the summer of audi sales event is here. get up to a $5,000 bonus on select audi models. can an established bank move like a start-up? it's a question we get from some of our largest banking clients. the face of their business was tellers. then atm's. today it's their mobile app running on the ibm cloud. across every transaction, the hybrid cloud helps their data move quickly and securely. our clients are building out features and pushing updates faster, on five continents. with the ibm cloud, they can move at the speed of any start-up. welcome back, everybody. our guest host this morning is walter isaacson president and ceo of the aspen institute and also a cnbc contributor and by the way, aspen institute is partnering with m.i.t. and cnbc for a cyber security summit on october 5th. cyber security is the hot topic right now, walter. >> it's really important. i mean we have an internet now that's basically insecure. it has been driven -- it has driven productivity and innovation for the past 50 years. but now so many bad things are happening so many hacks, the notion that our electricity grid or our electoral system can be hacked, so i think, you know, we're trying to put together cnbc, working with the aspen institute and m.i.t. on october 5th the summit which will be interesting because we're bringing in the government, industry, academic people to say what can we do to make the internet more secure. >> is your view of the whole apple saga changed? because i was -- i got converted by privacy people that -- i mean it's going to have to be unencrypted. some things we will have things that aren't saved to there is no way to find the record. might as well prepare for it now and not assume we could stop the stuff. >> you could create verified identity for people who want it. the type of internet where people don't have pure anonymity, you can leave the rest of the internet the way it is. if i want to deal with my bank or take an e-mail from people -- >> you haven't changed from how you think -- >> i don't think anonymity, sometimes described as privacy, is a be all and end all. people should have choice. >> what about the -- with it -- the whole -- it's been a year now since apple, right. almost a year. do we look at it is differently now as technology continues to move ahead or do you still -- >> this is -- the apple issue is a complicated one that deals with, you know, your iphone, should government be able to open it. we've had in this country sort of policies for 250 years on what's reasonable search and unreasonable search and we got to figure it out in the cyber world. >> it's different now, isn't it? because everything -- >> it's different but there's certain underlying principles that we have in our society and haven't figured out how to apply them in the cyber age. >> conference on october 5th. >> you can discuss that. >> at my school. >> go back to your favorite place. >> tell me your m.i.t. connection. >> graduate school. >> for two years. >> yeah. >> come back. >> molecular biology. >> we'll have biological computing. >> i know the singularity is coming. thank you, walter. >> thank you. >> before we go andrew, tell us what you have coming up tomorrow? >> okay. live from rio tomorrow, what's going to happen to the brand new apartment complex that's housing almost 10,000 olympians once they move out. we will tell you. also, the moment you might have been waiting for, i go one on one with one of team usa's tae kwon do athletes and spoiler alert, i am still here. can't speak for the other guy. so we will show you that tomorrow. >> we've been waiting for that video. >> better than ping-pong. >> how come you're wearing a helmet and he's not. >> there's a reason for that. a reason for that. >> oh, my goodness. ouch. all right. that's a good tease, andrew. we like it. enjoy. >> that was good. thanks i'll see you tomorrow. >> you did that on purpose but looked real. >> running late. no. final check on the markets, quickly, check out the futures, which are now down about 14 points not a lot happening premarket. who knows how we'll close the day. join us tomorrow, are you here tomorrow? >> i'm here tomorrow. >> all right. joins us tomorrow. and you'll be back. >> i am. >> yeah. >> join us tomorrow. "squawk on the street" is next. ♪ >> good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with sara eisen and scott wapner at the new york stock exchange. big names dominating the news flow as walmart and cisco post earnings, dudley speaks in an hour, futures shy of the flat line after yesterday's late day surge keeps that streak alive. 12 days of alternating gains and losses on the dow. europe steady, oil up six straight

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