Transcripts For CNBC Squawk Box 20160908

Say. Nikkei did not lose. That would be war or something. Okay. Lets also take a look at europe. You see the early markets there. The dax and the cac are slightly lower. The cac is essentially flat. Ftse up. 50 . Check out crude this morning, this is going to be interesting. This comes after the largest weekly draw down in crude stocks. Crude oil was higher yesterday during the session. When that news was released after the close of the session, wti traded everyone higher in extended hours, up another 1. 8 to 46. 32. New data from the American Petroleum institute showed a surprise plunge in u. S. Crude stocks of 12. 1 Million Barrels. That would be the largest one week decline since 1985. Couple other big stories were watching this morning. Hewlettpackard noncore with british micro focus. Hp at 21. 98. This is all part of hp to try to focus on areas like storage and networking. Reporting mixed results. Firm oos Current Quarter Earnings Guidance met expectations in a program note. David faber has an interview with hpe Ceo Meg Whitman at 9 00 a. M. Intel announcing spinning off Cyber Security dwugs. Formerly known as mkafi. Own 51 of the firm. Values it at 4. 2 billion in total. One more final deal to report. Liberty media buying racing formula one. Told you about it yesterday. Liberty which is owned by billionaire john ma loan has stakes in several Sports Entertainment businesses. For now liberty will purchase a Minority Stake in the motor firm. It will fully take over the whole thing after regulators give the deal the okay. I want to say formula one runs on friends channel. This is what we think with monte carlo and stuff like that. Cars too. Im thinking of euro sport. I think its on one of those. Dont they use formula one cars at indy . I dont know enough about that. I think monte carlo and places around the world they go around the actual street. Is cool. Before i get to stocks to watch. Nasdaq hit a new high alltime high yesterday. Yes. Dow theory, charles dow, do you know when he lived . No. Do you know when he died . 1902. So transportation, the dow transports, they had rallies. Transports did great yesterday. I want a new dow theory. If he was around, hasnt technology become more i understand how transportations are important too and things need to move and i know how that works, but if there was a new dow theory, it would have to be the nasdaq breaking out the alltime highs if other things confirm it, that would be a bullish signal. Again, the dow transports did very well yesterday. Rise in the airlines. And its quiet. Too quiet. You like quiet. Because youre never short a dull market. Are we there . You know weve been going up since brexit and ive been talking about that since then. Kwhoev is a 2100 do you see where we are . The futures are 2188 now. They can say oh, 88 s p points. Its 88. They have this week. I love that though. Im really, really bullish, but my target is 2100. How do you lose on that . I was bullish as it was going up. Then if it goes, i said its. Youre talking longterm. If you get to the end of the year. Whats the current in forecast. Whats the kernen forecast . If we get were you here . Youre so shortterm oriented. Youve never invested money for people. You have to i remember what i say. Heres what i was saying. Youve got two years. Two years ago we thought it was going to go up, up, up. Two years later it consolidates. We have rolling corrections. Earnings improve all these things happen and were totally flat and people say were overvalued. They didnt say that two years ago. People are so focused on whether or not the fed will raise rates. They always are. Number one, would that make a different if we got back one or two. Thats the biggest question. If Interest Rates go up a quarter of a percentage point. Does that matter . Whats to say theyre going to . Right. And by the way, most people think if they do it, its one and done anyway. Richard fischer is on today. He thinks that should be raising rates. All those comments trump made about an artificial market, its hurting savers. We said the same thing. Hillary is like you should never say anything about the fed. Youre trying to influence. Saying rates have been low for too long. Theyve got to take these ridiculous stands and yell about it. Although it did make me when trump was on with us, he talked about. He liked low rates. But he said he also wouldnt keep janet yellen. Thats uncertainty. If hes going to cut taxes and spend all this money or infrastructure, youre going to need rates low. You look like you have indigestion. Are you excited about brine moynihan. Im fine. Participate. What do you think . Participate and talk about these things. Maybe this will get you going. Pierre one. You cant say that without thinking about the shipping problems. And the 14 million of good sitting around. Pier one says the board and ceo have agreed to part ways at the end of the year. Smith has led the company for nearly ten years, during that time i had no idea he was running the company. He has been. His name is alex smith. Also forecasting a Second Quarter lost. Same store sales fell more than 4 . Tractor supply, cutting guidance. Blaming the prolonged decline in oil, gas, coal production. Appears to be hurting customers living in Energy Producing states. Thats a huge drop. You wouldnt think of that. You would think it with grain prices, but not necessarily. A huge part of that stores probably operate in south and southwest and the north. On the way to ohio, we stayed at a place across the street from holiday in express was a Tractor Supply company. Looked like a fun place. Overall, have you ever had a pair of overalls. Orb gosh by gash . You said it. You know who you sound like and look like, ebb. Do you remember eb . No. Do you remember ava . Oh, this is green acres. Green acres is the place to be. Juno therapeutic says drugs could be more effective and less toxic. New study funded and conducted. This is what you wanted to get to. I am excited to talk about am i interested in a topic this morning. I am very interested in this topic. Tell me why. They got rid of the headphone jack. Thats it. Its going to be more than that. We have a guest. Were going to talk about it. The new wireless thing is really good. I dont know about that. Really . Thats what we should talk about. Plus it cost 149. Hole td the phone. Hold on. Apple unveiling the any iphone 7 among other products at the tech giants annual fall keynote. Here to break down highlights, tech reporter with the new york times. Good morning to you. Help us through this, you can probably hear, lets do the headphones thing first for joe. You have to buy the headphones. 150. What . They used the give them to me. Actually the headphones are 160. They do come with headphones in the box, still just plug into the bottom of your phone where you charge the phone instead of the headphone jack that we used to have. You will still get earphones. You wont be able to plug them into anything else, like the seat on your airplane. So theres that. Then the other piece on the headphone thing thats worrying me is i could lose the little adapter peac eer piece, right. Yes, everything is small ask easy to lose. If i buy the 160, theyre just little buds without anything. You think this is going to be a successful product . The headphone piece . I dont know that the ear buds are going to be successful right now. Theyre trying to get us used to a product that doesnt have as many wires. Starting with the ear buds. People are producting next year or soon after introduce a Wireless Charging system. They want to get interested in a Wireless World as they want to connect all these products together in ways that are easy and seamless. I get that. Arent they ahead of the curve meaning a little too far ahead of the curve. Like the product is not ready yet. Theyre trying to be. At the same time Wireless Headphones have been around forever. Theres things going on with the phone. Water resistance other smartphone makers have done in the past. Theyre pushing us a little further than we want to go at the same time. Give me a little hope. I was trying to be excited about this yesterday and wasnt as excited as i wanted to be when i finally saw the actual. It was much anticipated. It was and didnt live up to at least my own personal hype. This is the iphone 7. Traditionally they do the six and then they do a middle stage version of it the next year and leap the frog ahead. My question for next year is become the iphone 7 something or iphone 8 . Well, next year will be the tenyear anniversary of the iphone. They love anniversaries. They like to do something big. I dont know what theyll call the phone, but thats when people are predicting bigger bells and whistles and a product to wow you more than this one did. Last question, watch, i was waiting for this thinking this would be my big chance. I didnt want to buy the first one. Always buy the second version. I didnt get that excited about this one either. This one, i swim so i love it. I love the idea of it. You can take it into the pool and all sorts of fitness tracking for it. Really starting to refine the message around the watch. Its about health and fitness. Did the pip with nike. Made this waterproof. So if health and fitness are things you care deeply about, this is a great product for you. Its also expensive as with most things. 369 and most americans dont own smart watches now. Only 14 own a smart device and watches are a tiny subset of that. Tiny market and trying to get ahead of that as well. Thank you for your perspective. Were you disappointed . Am i wrong to be disappointed. I dont think youre wrong to be dispointed. The blog has leaked every single new thing. Werent any surprises. Sort of a letdown if youve been reading the apple blog, you now what was going to happen. And people are waiting for a bigger, better device. So they race all the way to monte carlo. Youre back to formula one. Remember the great racer, he was a seventime champion. For almost every year he lead athletes around the world. It was lucrative then he had a skiing accident. Likes to go fast. 2013 had to retire and its unclear. Formula one is pretty cool. Think about the streets of monte carlo and i dont know. Go back to cars too. Back to the animated whats his name . Owen wilson. Who is the guy who is the italian formula one car . Cars two was horrible. Frwe should tell you about politics and whats been happening. Donald trump and Hillary Clinton taking tough questions on defense and security at last nights commander in chief forum on nbc and president obama wrapping up a speech in laos. John harwood joins us. Reporter good morning, becky. The commander in chief last night moderated by matt lauer under scores the asymmetry of this company. Hillary clinton has been in politics for a long time. Shes been serving in the National Security realm. She has a record. Matt pressed her on the issues surroundinger email. Around her vote for the iraq war when she was in the United States senate. She was put on the defensive by those questions. Donald trump on the other hand has not served in public office. Not surferved in government. He can say whatever he wants including things like he had opposed the war in iraq before it happened. There isnt any evidence of that. And, in fact, theres some statements by donald trump that support that indicated he supported what was going on at before it happened in 2002 to howard stern among others. Nevertheless, if you dont have a record, you can say what you want. Among the extraordinary things donald trump said last night was he praised Vladimir Putin. He pointed to his 82 Approval Rating in russia. Of course thats an authoritative country. Said Vladimir Putin was a better leader than president obama and said that president obama and Hillary Clinton had reduced american generals to rubble. President obama was just asked about that at his News Conference in laos, and heres how he characterized donald trump. As far as mr. Trump, i think ive already offered my p and l. I dont think the guy is qualified to be president of the United States. Every time he speaks, that opinion is confirmed. Reporter that was as specific as he got. Didnt address any of the particulars. Indicative of the kind of dialogue were going to have for the next two months with democrats casting donald trump as fundamentally unfit and trying to navigate the arguments that donald trump is making, guys. John, i know that early voting in some states opens in just a couple of weeks before even the first debate that comes up a little later this month. How is that different than in years past and does that mean the way people are kind of feeling right now is going to have a bigger impact than it would have in years past. Well, early voting, becky has been growing in this country for quite a long time. The longer people get culture to it, the more a vote gets cast early. In some states a majority of the vote. In oregon, its a mail ballot state. All of the state is cast by mail. That changes the campaign. Before the debate takes place and a lot of the Campaign Messaging and voter turnout operation is geared toward the early vote, and theres a rolling process as we get cloesz closer to election day. A well organized campaign. Knows how to navigate that. Thats going to be an advantage for Hillary Clinton because she has more of a cohesive team. Donald trump has indicated he doesnt believe in a lot of tv Data Analytics and the particular turnout methods that people have used in the past, but he does have the Republican National committee to try to provide some of that for him. John, thank you very much. Well see you in just a little bit. You bet. In the meantime, donald trump addressing news that mexican finance minister resigned in the wake of controversial visit to the country. Finance minister playing a key role in orchestrating trumps trip. If you saw what happened in mexico the other day. Went there. Had great relationships. Let them know where the United States stands. Weve been badly hurt by mexico both on the border and taking all our jobs or big percentage of jobs. If you look at what happened. Look at the aftermath today. The people that arranged the trip in mexico have been forced out of government. Thats how well we did. Mexicos president was criticized for not being forceful enough and rejecting proposals by trump and controversial comments about mexico. The loss of the finance minister there is a big blow for business. Responsible for bringing a lot of American Investment down. It was seen as the brains behind the openness in mexicos market. President , none to popular for completely different reasons. For scandals in his own administration. Yes. They were angry he didnt push back on trump when he said the issue was never brought up. The issue of the wall. Giuliani said there was an agreement not to talk about that that was broken by the president who was probably trying to save faith with the mexican citizens. Arent they our second largers trading . Were going to get along with mexico no matter who becomes president. The Common Threads that ran through that News Conference down there, i was gratified hearing. Theyve got their own problems on the southern border. Got problems with drug money coming in from the north. The finance minister was really key in orchestrating a lot of things for that administration. Im sorry to see him go. No act of kindness goes unpunished. Coming up, an exclusive interview with brine moynihan and the health of the bank. The political environment and the feds plans for Interest Rates. Theyre going to keep them low. Thats at 7 30 eastern. Well be right back. Remember here at ally, nothing stops us from doing right by our customers. Whos with me . Im in. Im in. Im in. Im in. One, two, wait, wait. Wait wheres tina . Doing the hand thing . Yep we are all in for our customers. Ally. Do it right. Welcome back to squawk box. The ecb is set to release latest decision on Interest Rates. Cardiolo coming at 7 45 eastern time. That will be followed by News Conference of mario draghi 8 30 a. M. First time filings for unemployment are expected to tick up slightly. Then at 3 00 p. M. Well be getting the latest snap on americans borrowing habits with Consumer Credit figures. You can look for results from skbarns noble before the opening bell. Planning uncertainty waiting for the feds next decision. Got citigroup out with new report on different markets scenarios under a clinton or trump presidency. Im more interested in christmas forecast anyway. Maybe well talk about it. Im glad city has a view hillary is going to win. Did you think brexit was going to stay . We didnt think brexit would be there. It was a high probability. High probability of what. Started with 30. When we got there it was close to 50. People kind of ignored the polls that it was a very close decision. The actual result was nice and easy. Im going to get to christian. We have Steven Whiting with city. And chris, hes chief investment officer. So youve got this will be simple for me. Four main things to talk about to dictate how we should invest. Absolutely. No rate hike in september, not even december. Neither one. None. I think the Global Environment for policy support is going to be with us for a long, long time. That is really good for Global Equities and because wonder yields are low and that shorts prices in equities. Thats not necessarily consensus thinking. Global equity markets continue to do well in a low rate environment. Seems simple, but everybody is missing it. The other key thing is negative Interest Rates as a policy tool has kind of faded a little bit. Thats number three. First was no rate increase. Second was Global Equities do well. Third is we figure out negative Interest Rates doesnt work. Yes and as a result kwan taytita quantitati quantitativesing will be the only tool people are using. Financials which were on the back, on the back of negative Interest Rates on a global basis goes away as well. The part i had a little problem with you have emerging markets and developing markets and the dwimpbs between value growth. Im trying to figure out what youre saying here. Should i go em or dm and value or growth. Em is a better proposition than dm with the exception of u. S. Its really u. S. And em is what im saying. Developed markets. And value or growth. Growth. So value came back because sicksic cyclically we slow down, growth coming back and growth short world. In that environment, investors are far more willing to pay for growth and were seeing that. Thats why nasdaq is breaking out. He doesnt care if its trump or clinton at all. Theres a lot of things that matter here. He just mentioned credit returns this year in the United States have even competed equity returns. This is really important. We are, you know, taking every income producing asset in the world and driving up in value with low yields. Thats a key story today. Obviously the election is something thats been important. We had 11 recessions since world war ii. Eight of them have overlapped a new u. S. President s first year in office. So this is normally relevant. The way things are playing out, i think i kind of got tired of reading all the stories that trump is president. Clinton is now president. They decide everything. Really what its coming down to is congress. Were getting polling that suggests a very status quo environment. Likely to have divided government. Lets assume that. That means the election is not disruptive. Good. We dont need to talk about that. Do you agree request the conclusions that he came too or differ. I think especially fixed income, its dramatic and how much higher the yield opportunity is in developed markets. Thats where its clearest. Have the opportunity to see double digit yields in brazil come down and look at germany, switzerland, japan, these are ridiculously low yield environments. So what happened with petroleum in emerging markets. These are important correlations. Weve switched after several years of being underweight emerging markets to moving more and more importantly to emerging. Equities . Equity is a little less clear, but thats the right direction. If credit can improve, equities follow. Let me be clear on that. Equity and credit and rates in emerging markets. Emerging markets is positioned for a really good run because you have a lot more room to cut policy rates in emerging markets than you have in developing markts. We had somebody yesterday recommending emerging markets too. If the fed does raise Interest Rates, its going to have an impact on emerging markets than it would here. Of course. Its all contingent of the fed not doing anything. Thats our core view. Right now in terms of risk, a lot of rate sensitivity in markets. Utilities have red in the United States. We see tips yields. Real yields at zero. This is not a market built up on strong growth expectations. Yes, even if there are give backs and pauses. Thats an opportunity. Yes, we think it will be an opportunity to buy. The average viewer is supposed to do what . Supposed to buy stocks and credit in emerging markets . You also said u. S. Stocks. Can i just buy u. S. Stocks. U. S. Stocks and emerging markets. Really consumer oriented emerging markets. You get etf. How about credit in emerging markets. You buy dedicated funds. Think about where the heads have been. In latin america, youve had four years of collapse. If you look at asia, youve seen for example, china appreciate and hold up markets for most of the ten years. You need to be collective. So which one, we prefer latin america, generally for fixed income. Just because, but, look. This is a small part of portfolio. Not like most of the world thats gone up since 2009. This is final markets thats had four years of losses behind it. Can i just buy comcast . I just pulled that stock out of my head. It could have been could have been comcast bonds i could have said. No. U. S. Stocks are good. I think they have a lot of room to run still. All right. Fair enough mpx when we come back, the National Debt standing at 19. 5 trillion. Congress is going to be hearing from experts on that subject later today. Mitch daniels is going to be here to lend expertise. Before that, join us right here on squawk box. Head to a break, take a look at s p 500 winners and losers. They say the world does not revolve around you. But today, maybe it can. I am helping 1800flowers find the perfect gift out of trillions of combinations. And working with the new York Genome Center to find treatments as personal as dna. And i am helping sesame street make education unique to every child. Hello, my name is watson. Working together, we can outthink anything. Hello, my name is watson. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov welcome back to squawk box take a look at the session. Nasdaq up just marginally. The Congressional Budget Office says the prospect of ballooning u. S. Debt poses big risk for the country. This comes over the last ten years the debt has risen to over 19 trillion now. Our next guest will address that. Joining us now the per Due University president and former indiana governor mitch daniels. Thanks for being here today. Thanks, becky. Seemed like it was on the front burner a couple of years ago. Definitely got pushed off the front pages. Pushed on the front of mind. Why are you addressing this right now and how big of a problem is it. Im addressing it because i was invited to for which im grateful and the problem is enormous and very ironic and discouraging. Youre exactly right. Were not hearing anything about it. We have a president ial campaign which any time something fiscal comes up, each are proposing to make it worse. Friend of mine says were suffering from deficit attention disorder. If we dont get this one right, nothing else we do well in terms of National Policy is going to matter much. Part of the reason its probably become less of a front burner topic is just Interest Rates are so low and that has helped kind of make the problem not as immediately evident. What would happen if Interest Rates were to rise in terms of how much of our national bujd wed be spending on just funding the deficit. Last time i checked, the good rule of nuthumb is 1 increase Interest Rates. Were going to see higher Interest Rates. This bizarre situation we see today cannot last. Thats only one problem. The huge problem of course is that no one has done anything about the run away spending of auto pilot programs which in just a few years, along with Interest Rates, are going to crowd out all the necessary functions of government. Its already happening. Basic scientific research, national defense, things the government really must do are being squeezed by the sewcalled entitlement programs and its late in the day to act on them. I hope we will soon. One of the things the gross has tried to do is put in sequester. If we cant agree on budget cuts, there will be automatic cuts across the board. I believe both candidates would not be in support of that. Sequester is a dumb way to do it, but at least it has implications. Better than nothing. Its the only thing that has moderated spending over the last few years. I agree its a ham anded and blunt instrument and the only thing its better than is inaction which is what we apparent would have had otherwise. Governor, so indiana where you used to be governor, has really been an economic sort of miracle over the past, id say, decade probably. Maybe its mostly you. Maybe pence gets some credit as well as governor. I think being right next to ohio through osmosis a lot of good things seep into indiana. Says the ohio boy. From the great state of ohio. Is pence being on tennessee ticke the ticket srkts that if you have for you . No, i wont be endorsing any ticket. I serve a Public University and dating to the actually into my previous job when i said yes to that invitation, ive stayed out of partisan politics. So convenient. So so voeconvenient. Let me ask you this in is different way. Whats come out lets talk about the fbi drop before labor day. Do any of those things in your view give you great pause to have Hillary Clinton as president or do you even have a greater pause for things trump has said to be president . Are they both disqualified in your view. Let me come at it a different way. We all see an unbelievable unprecedented situation in which we have two candidates for president. Each of whom has viewed less favorably than any prior candidate from either party. Large percentages of americans say they wish they had a different choice. A High Percentage say theyre thinking of not voting this time. I read somewhere someone said turnout may be depressed because choicings are so depressing. Not knowing what a c stands for. Heres the thing. In the cnn and latest saying. Donald trump not thought of by a lot of people maybe as the most honest and trustworthy gets 50 . Hillary clinton at 35 . That went that flipped upside down based on the latest disclosures. Let me just say, i happen to be a member of the commission on president ial debates. Mine is a minority viewpoint. I think under these circumstances where theres a lot of distrust, those debates this might be a year they ought to be open to whoever is third. Let me just tie this back. Something that troubles me a lot. Let me tie it back to your first set of questions. We have not been honest with the American People for a long time about the debt problems. About what is causing them. About how bad theyre going to be. About how theyre hurting the economy now and especially about how incredibly unjust it is to borrow money in huge quantities today. Spend it not on investment in the nation oos future, but on current consumption and hand the bill to the young people i hang out with every day at the university. Thats a terrible problem. You think people feel distrustful and betrayed now. Wait until Social Security goes bust. Governor daniels youre going to be speaking to the joint committee of congress today. Are there willing listeners in congress. People who will take this seriously and pick up the cause or is this really an uphill battle almost sis fis at this point . Sis fous. I havent been down here in a while. I sure appreciate the invitation. Its a very important committee. Bipartisan committee. Obviously takes the subject seriously, but whether action will follow, i just dont know. Again, we cant take a whole lot so far from what the two president ial leaders have said. You optimistic about saturday . Im optimistic about saturday. Are we talking football here . We are. Youre not taking boiler makers are you . Little side bet off the air, joe. I thought you are now recusing yourself as the president of perdu. No, were going to win. Im looking for a little side bet off the air. Lets do that. What are we going to bet on . No spread and somebody has to send food from one place to the other. Loser has to loan the other guy money and pay for the privilege. Ill send you some skyline chilly or montgomery and ribs. You got anything in indiana except that race . Got a lot of good eats. Youre getting popcorn. Coming up, nintendo stock getting a power after the announcement super mario is coming to apple devices. That story next. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . When you cook with incredible thingredients. Ato. You make incredible meals. Fresh ingredients, stepbystep recipies, delivered to your door for less than 9 a meal. Get 30 off your first delivery blueapron. Com cook. [ clock titime. ] you only have so much. Thats why we want to make sure you wont have to wait on hold. And you wont have to guess when well turn up. Because after all we should fit into your life. Not the other way around. Welcome back to squawk box in morning. Time now for the executive edge. Super mario coming to the iphone. Announce the launch of super mario run available on the app store. Spiking 18 on that news. Another stack were watching this morning is sage therapeutics. The pharmaceutical firm is launching a 150 million stock offer. Could be expanded to 172 million if theres enough demand. Coming up when we return, the enduring effects of the financial crisis. Lagging salary growth has been much worse than people expected. We have that story when we return. 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. Its peyton on sunday mornings. Eman what up, peyt. You know i have directv nfl sunday ticket. I get every game, every sunday. All in hd. Yeah. I know that. So you wanna come over . Ill make nachos i cant right now man. Im playing. Oh yeah. Alright. Ill pencil you in for tuesday. vo get nfl sunday ticket included at no extra charge. Only on directv. Welcome back to squawk box. This week marks eight years since the collapse of Lehman Brothers and the beginning of the Global Financial crisis. Some new data out despite a 10 jump of gdp since 08, u. S. Salary growth has been among the weakest for developed countries. Joining us is steven kay ceo of cornferry. I was surprised to see the u. S. Do as poorly as it did. What do you ascribe the low wage growth really negative growth really. Down about 3. 1 relative to other developed countries. Well, i think youve seen a number of things. I think youre seeing particular pressure at the lower end. Youre seeing the impact of the labor market. If employees leave and theres turnover in industries and youre seeing people sometimes corresponding on lesser levels of compensation. Youre also seeing job growth perhaps coming in sectors of the economy which are, you know, perhaps not the highest paying. Youre seeing growth in hospitality, retail, and health care which also has low paying segments. This goes to sort of the larger debate around inequality in the United States. Canadas salaries recovered the best. A 7. 2 growth rate compared to ours of negative 3. 1 . How did that happen . Well, you know, in some respects canada had a good crisis. Canada and also australia. Countries that werent as impacted as much by the Global Financial crisis as others. I think the experience of the u. S. Corresponds more closely to that of the uk. You see economies with flexible labor markets where theres an ability to replace, both of them are growing. And amongst, you know, some of the other peer group is a tradeoff between growth and increases. You know, you see more Salary Increase but on the other hand you see you say employees with a lower paying entry level titles had 14. 1 inflation drop in wages. This goes to the whole political debate in this country around globalization. How much of this is a globalization story, trade story, how much is a Technology Story . Well, i think its i think to be honest its a skill story. You know, what you see there because if you look at some of those industries, retail and the hospitality and health care, those are ones where perhaps theres less globalization impact in some cases. But what you see there is, you know, much greater supply and sort of, you know, not the same demand, not the same skills, not the same pressure. So where there are plenty of people with those skills, theres more competition in that respect. What you see is at the high level jobs where there is much greater need for skills. Then you see, you know, a very different story. What you see is the skills in balance where supply exceeds demand. Thats putting pressure on wages. Is this a union story . You also look at countries like france. Is that a function of unions . You know, what i was going to say is weve really looked at three positions. Weve looked at an entry level position thats not necessarily the lowest level position of the company. Thats where i think you really see the impact of minimum wage regulations. But what you do see is the impact of more regulated economies. You do see perhaps in some of those other countries a more unionized environment. So perhaps less about the minimum wage in this particular report. And more perhaps about at the low end about the impact of the more regulated or unionized environment. Okay. Heres the real question. Given the wage story relative to gdp, which number do you put more weight on . Well, i think theyre both important. What i think it shows is that, you know, as we go forward, theres just going to be a real mismatch between those people that have skilled and dont have the skills to compete in the market place going forward. Thats where the Pressure Point is going to be. And for those people without skills, im afraid it could still be a tough journey. Thanks so much. Thank you very much. Coming up this morning, a cnbc exclusive interview with bank of america Ceo Brian Moynihan. An update on the health of the bank, the political environment, and the feds plan for Interest Rates. Squawk box will be right back. . Is that a real thing . Its a great school, but is it the right the one for her . Is this really any better than the one you got last year . If we consolidate suppliers whats the savings there . So should we go with the 467 horsepower . Or is a 423 enough . Good question. You ask a lot of good questions. I think we should move you into our new fund. Ok. Sure. But are you asking enough about how your wealth is managed . Wealth management, at charles schwab. And programmers i teach them to talk. Es, so yeah, ge is digital and industrial. So its indigital. Digidustrial. Indigenous. Shhhh. Lets go with digital industrial. For now. Digidustrial. Yeah. Or, digital industrial. Everyone thought i was crazy to open a hotel here. Everyone said its so hard to be a musician, but i cant imagine doing anything else. Now that the train makes it easier to get here, the neighborhood is really changing. Im always hopping on the train, running all over portland. I have to go wherever the work is. Trains with innovative Siemens Technology help keep cities moving, so neighborhoods and businesses can prosper. I can book 3 or 4 gigs on a good weekend. Im booked solid for weeks. It takes ingenuity to make it in the big city. Wall street set for a higher open as awaiting the ecb decision on the rates. And why todays decision could be a market mover. Gabriela santos is here to discuss the fed rate path. A squawk box exclusive. Bank of america Ceo Brian Moynihan on the state of financials, the feds position in the markets, and which candidate is the right person to lead our country. Well get his thoughts straight ahead. Plus a big meeting for the board of twitter today. Will the company put itself up for sale . Who would bid for it . What does it mean for investors . Were going to break down todays big meeting as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kernen along with becky quick and andrew ross sorkin. Futures a little better today. Yesterday once again down most of the morning. Ended up. They ended down for the dow but not by much. Nasdaq was up. Which actually was in the early session too. Not much happening now. Big interview for you later this hour. Wilfred frost it almost sounds like i should say sir wilfred frost but thats jumping the gun. I think its just sir wilfred at that point. But thats not yet. Hes a young man. He will be speaking exclusively to bank of america Ceo Brian Moynihan. That interview is less than 30 minutes away. Plus will the ecb extend its Bond Buying Program . No change is expected in rates from the central bank, but well get some jawboning about whats going to happen at 7 45 this morning. Theres that beautiful symbol that is that frankfurt . Is that where that ugly thing used to be . Stars were falling off, it was cracked. Little did we know it was going to be a metaphor. Of things to come. Whats making headlines, andrew . Ill tell you, joe. Were watching the price of crude oil this morning. Lets tell you whats happening. No, it is rallying after the American Petroleum institute said that crude supplies have plunged. The Energy Department issuing its official inventory data. Were going to see if it confirms the latest drop in more than 30 years. Hows that for being an anchorman . Wti at 46. 26. Hows it feel to do it right like that . It feels a little ron burgundylike. Initial jobless claims out at 8 30 eastern time. A slight increase expected. And also a little politics for you. If you werent watching last night, donald trump and Hillary Clinton sketching out duelling visions of the u. S. Role on the global stage. The candidates both arguing that their experience better prepared them to make the life or death decisions required of the commander in chief. Ive built a great company. Ive been all over the world. Ive dealt with foreign countries. Ive done very well as an example tremendously well dealing with china. I have good judgment. I know whats going on. Ive called so many of the shots. There was a mistake. Now, my opponent was for the war in iraq. He says he wasnt. You can go back and look at the record. He told howard stern he supported it. So he supported it before it happened. He supported it as it was happening. And he is on record as supporting it after it happened. I have taken responsibility for my decision. He refuses to take responsibility for his support. That that is a judgment issue. We got a lot more from last nights interview that was on nbc. Coming up in just a little bit. Both candidates sort of getting negative reviews if you look across the board. It depends where you look. People see at this point in the election what they want to see in a lot of these things. I think the biggest question is how many undecided voters are still out there. Lets get you caught up on a few other corporate stories as well. Pier one ceo leaves. He has led that company for nearly ten kweers. The retailer also forecasting a wider Second Quarter loss. All of that adding up to a decline to the stock. 59 cents. That is over 12 when the stock is trading at 4. 21 now. Intel announcing it will spin off its Cyber Security unit known as mcafee. Selling to the Investment Firm tpg for 3. 1 billion in cash. Tpg will own 51 of the firm. That values at 4. 2 kbillion. Tesla gets a credit line. Ut means that they wont have to raise as much cash for the market as it gears up for the new model. Some people were worried about that with the solar city issue. Theyd have to raise more cash. This helps on that issue. Were also going to be watching shares of hewlettpackard enterprises today. Making a deal to sell to britains microfocus international. Valued at about 8 billion. Earnings topped estimates but revenues fell short. The firms Current Quarter guidance met expectations. A programming note for you. Dont forget david faber has an exclusive interview coming up with meg whitman. That starts at 9 00 a. M. Eastern on squawk on the street. See, i think you should gauge how things are received with i just use one thing. Thats the lead on the Huffington Post is where i get my info. And theyre mad theyre incensed at matt lauer. In connecting the dots, that means that he was probably great. He probably deserves an edward r. Murrow award for being fair. We know he is good at that. But he must have held he must have said something to hillary. Must have held her feet to the fire or he wasnt mean enough to trump. Because they immediately did you see it . Yeah. I saw the Huffington Post. Immediately got mad at kill the messenger hes not on board with us with the mainstream media. So he disappointed by not being in the tank. You ideally want both sides but he wasnt in the tank enough for the normal for hillary. And they got mad at him. I use that as a badge of honor. Wouldnt you . I dont know. You dont know. Thats what you come up with. Im going to leave this alone. Your friends are going to be mad you didnt push back more. This is ben white this morning. Oh, good oh, good politico. Hillary clinton was not great donald trump was an abject disaster. Thats the other side. Ben hasnt been on much lately, has he . Thats been true. He was when you were gone. Yeah. Hes right down there. Hes really did politico merge with Huffington Post yet in thats the merger. The synergies and get rid of what did you call it . The puffington post. Anyway, lets talk about business. The ecb is expected to extend its trillion dollar Bond Buying Program. Global rates and the investing environment. Gabriela santos joins us. Thanks for coming in today. Of course. Thank you. You see things differently than guests weve talked to this morning. Weve had people here who thinks theres not a chance the fed raises rates. You think the markets underestimating the potential far rate hike either in september or december this year . We do. And i think thats corroborated by a lot of the fed speak weve been hearing recently. Right . Weve been hearing from yellen, from fisher. Theyve been highlighting how close we are to achieving the mandate. At this point the labor market is close to full. And were starting to even get some inflation nash pressures on the Services Side as well. The problem becomes the jawboning from the fed versus talk versus action. And do you think that this is something that theyll actually septembers still a live meeting. Especially after the ism numbers both for manufacturing and services were lower than expected. And the job number was lower than expectations. It was. And i think the way that the fed would talk about being data dependent would be a mosaic. Recently the data has been disappointing. Perhaps not as disappointed. The economy is starting to improve in the third quarter. The labor market continues to be quite tight. So we would say september is a live meeting. I think its highly improbable. But it is we are getting close to another rate hike whether its september or december. Now, how will the market react to that. And do you think this is a rate hike that is a one and done situation . Or the beginning of real rate hikes where we expected a quarter point at every meeting . I think its in between. Not point every meeting but not a one and done situation like last year. Were starting to get more pressures from the inflation side of the mandate which so far has given the fed a lot of leeway to be cautious. If were right and inflation really does start to pick up next year especially, then they will be pushed i think to tighten more quickly than the market expects. And what happens as a result . To stock prices . This is something fisher said a couple of weeks ago and something weve been saying to our clients Richard Fisher . No. Stanley fisher. Sorry. Stanley fisher. We have Richard Fisher coming on. Its on the brain. Sorry. Stan fisher. What he was mentioning is that in one of his recent interviews saying rate hikes are good news. And weve been saying this to our clients for a year, year and a half at this point. If we dont get rate hikes there means theres something fundamentally wrong with the economy. Right . And thats just not the way we see it. So its more than time to continue normalizing rates. Thats a good thing to us. The next nobel prize in economics not that its worth anything, but is there a new paradigm for how inflation is done because everybodys going back to the drawing board. That commercial with all the Central Banks printing money has been on for ten years now. And everybody thought by now with all this easing money, you print more, each dollar becomes worse. Where has what caused this long period of even deflation or disinflation . The idea is that we did all this qe, all this bond buying but the banks put a lot of that money back with the fed. Right . So you didnt actually get that huge increase in money supply. Why not . And i think thats part of our argument that if you start getting rate hikes that could be a good thing for the economy. People get it while they can. Exactly. It encourages a little bit more of the urgency. You think its a little bit of supply and demand. Both. Its also regulatory constraints on who you will and wont lend to. But i think if you started to get better compensation for banks they would be a little bit more willing to lend. To take risk. Exactly. What has been the biggest miss in the last 25 years. We saw what happened in south america again and again. We remember the wheel barrels full of money. We remember volcker had to go to and now its been gone. Its been nonexistent. Japan would give anything for 1 or 2 inflation. But i think were in a slightly different situation in the u. S. From japan. Is it turning a corner now . Whether you want to look at cpi or pce, it has been trending upwards. There are inflationary trends. So you think its oil prices Holding Things down on the headline number. Exactly. And as well as the dollar. Right . You had a lot of dollar appreciation and so goods prices were decently anchored as well. But these are variables that are starting to change. And as you continue seeing these pressures, you can easily get to an area very quickly you have a different thesis than a lot of the people we talked to the past couple of days. But you have a different way of getting there . Exactly. What were saying is the economy is not as bad as sometimes it may seem. The rhetoric may seem. We see growth picking up to 2. 5. And thats a good back drop. Thank you. Thank you so much. Coming up, a twitter headed for a takeover . The Board Meeting today to discuss hot topics for the Company Including the big one. Can it remain a stand alone company . Well have more after the break. And were just a few minutes away from our exclusive interview with bank of america Ceo Brian Moynihan, his thoughts on rates, the state of the financials, and the global economy. All that straight ahead. Squawk box will be right back. Now that weve added adjustable base, my favorite part is to be able to lift your legs up a little bit, and it feels like im just cradled. Change your sleep, change your life. Change to tempurpedic. Now thru september 11th, upgrade and save on select tempurpedic mattresses and adjustable bases. Welcome back to squawk box. Twitters board of directors set to meet today in San Francisco with many speculating the meeting could call into question the future of the company and its ceo. Aditi roy joins us now with more. Reporter thats right, andrew. Good morning to you. While theres a lot of speculation about the agenda of todays meeting, what we do know is that cost cuts will be a focus. Source tell cnbcs Julia Boorstin that management is exploring ways to save money since revenues are tight. That includes possible layoffs or selling off assets. A source also tells cnbc that jack dorseys management will not be questioned at the meeting and he will have a few more quarters to execute his turnaround plan. Theres also been a lot of speculation about a possible sale of the company. But there are no bids on the table that we know of. Just yesterday the companys former ceo spoke to cnbc about all the talk in advance of the meeting. The company is under a microscope like no other company in the world. And i think its reached almost Epic Proportions when regularly scheduled Board Meeting starts to take on almost pontifflike expectations. Reporter for now twitter is focusing on its live video efforts and upcoming nfl partnership which it hopes will boost user growth. Twitter has no comment on the Board Meeting. Back to you guys. Thank you, aditi. Apple pulling back the curtains on its new product lineup complete with the new iphone 7 and iphone 7plus. And air pods. The tech giants unveiling not having much of an impact on the stock. Joining us now i. T. Hardware analyst at ubs. Can we at least agree that yesterday wasnt expected to be anything blockbuster so to call it much anticipated was hyping it . I think it was very much as expected. We look at it as a study of incrementalism. But the technology is not there to make dramatic changes this time. This is very much as expected. I think theres enough in terms of the battery life, Water Resistance to get some of those people who bought iphones two years ago upgrading. Thats whats going to drive growth this time. We take for granted what were able to do Walking Around with an iphone and its only been ten years. Any song thats ever been sung or written, i have right now i can get it wherever i am. Any movie, i can watch that. I have the Encyclopedia Britannica on my back. Just like google, the search ability from ten years ago, thats incredible. But its were done. Right . Whats the next thing . Either its a car or its a tv. But i cant imagine the phone doing much more. Its always going to be incrementalism from here on out. There is that risk. I think, you know, weve come so far that youve pointed out that it is going to be incremental from here. When you hear tim cook speak, he suggests there still more to come. Like what . We dont know for sure. But we could see things like facial recognition. Just your recognition in the phone. Obviously apples spending a lot more on rnd than they did just a few years ago under jobs. What are they working on . The car. The car, more wearables. Still claiming theyre going to do more on the tv sector. They have this ios everywhere. They want to permeate your life. I mean, Google Microsoft didnt do search. Google didnt do social. Didnt do facebook. It seems like Great Companies do what they do and then somebody else comes along and disrupts it whos like 25. Thats definitely the history of things. People are concerned about Artificial Intelligence and whether apples being left behind there. But the ecosystem theyve created makes it hard to switch. It gives permission to sell products to customers. The ball is in apples court. But they are going to have to step up the innovation over the next two to three years. What does that mean in terms of a price on a stock . First of all in the shortterm sense weve shown in three of the last four cycles the stock does well between today and essentially september 16th when the phone comes out then it starts to fade a little bit into earnings and recovers. Over time our target price is 115. But we do think in fiscal 18 with the iphone 8 next year, theyre going to return to potentially double digit iphone growth. And if you match that with a new product and Virtual Reality or better version of the watch. Because youre so convinced that the next phone is a leapfrog and this one is not. Its partly because we do think the specs will be better. But didnt you think they would be better six or eight months ago . If i asked what would this phone look like, you would have thought it would be a full turn and it turned not to be. I think for some time people thought of this to be incremental. What were looking at is the fact its in other phones already. What is olid . Its a screen technology. You can explain it better. Screen technology thats much brighter and not back lit and so forth. Samsung has it today. And they will be providing it to apple. They arent leading there. And their phones are water proof. Thats correct. I would say on the software side, apple has the significant lead. Theyre all about customer experience. Andrew, to bet back to your point. Were looking at a bulge of phone buyers. We think that rate is going to be depressed going into this next year. But in 18 we think youll see a lot of those people upgrading. Assuming they dont leave apple, theyre going to buy a new apple phone. Just going to hold your breath. Microsoft has never stopped selling windows and they do billions and billions every quarter. But it obviously was not a growth stock anymore ten years ago. Microsoft was dead as a stock for ten years. In the last few years youve seen significant expansion. My question is 108 a fair price for apple even given the upgrade that finally hits in 2018 . Will that move it to 200 . Is there any reason to think that . I think you have earnings upsides based on 18 and perhaps pe expansion as well. I think 108 is going to be a good price when we look down the years. So its a company thats worth 700 billion, a trillion dollars. You think it will always be worth that . I think theres upside. I think were not pricing an optionality. We see what we see today. They have a history of surprising us to the idea of what more is there to do. Its value not growth. It is. And it has been changing hands from growth to value investors. Value investors are looking for different things. They are delivering the multiple is no longer as cheap as it was then if its value. Its i dont think it has a whole lot of downside, lets put it that way. Really . Yeah. Could you see it again in the 90s . Possibly. But theyre going to live and die with phones. For now its phones. In three to five years, well see. I think its going to be a more diversified. Cars, tvs, or airplanes, hyperloops. Virtual reality. Sex robots. Who knows. Your wish list . I wouldnt bet on that one. You dont read drugs then because were all going to be addicted. Were addicted to the phones for now. So thats enough. When we come back, bank of america Ceo Brian Moynihan. Plus will the ecb announce an extension of its Bond Buying Program . That is the question. The decision on Interest Rates is straight ahead. Stick around. Check out the futures very quickly. Things are flat ahead of that. Squawk box will be right back. Man, im glad aflac pays cash. Aflac isnt Major Medical enough . No whos gonna help cover the holes in their plans . Aflac like rising copays and deductibles. Aflac or help pay the mortgage . Or child care . Aflaaac and everyday expenses . Aflac learn about one day pay at aflac. Com boat blurlbrlblrlbr hey, jesse. Who are you . Im vern, the orange money retirement rabbit from voya. Vern from voya . Yep, vern from voya. Why are you orange . Thats a little weird. Really . Thats the weird part in this scenario . Look, orange money represents the money you put away for retirement. Save a little here and there, and over time, your money could multiply. See . Ah, ok. So, why are you orange . Funny. See how voya can help you get organized at voya. Com. When you should be enjoying still payour retirement . Me if youve paid off at least 50 of your mortgage and youre 62 or older, a reverse mortgage might be the answer. A governmentbacked reverse mortgage stops your mortgage payments and gives you steady taxfree income. Let the home youve taken care of, take care of you. Turn your equity into a comfortable retirement, all while continuing to live in, and own, your home. Find out how much you could receive for retirement. Lendingtree when banks compete, you win. Weve been hearing so much about how youre a digital company, so you can see our confusion. Ge is an Industrial Company that actually builds worldchanging machines. Machines that can also communicate digitally. Like robots. Did you build that robot . Thats not a robot, thats my coworker earl. He builds jet engines with his human hands. What about that robot . That is a vending machine, ricky. John, give him a dollar. Oh, my gosh. 2016 nfl season kicks off tonight with a rematch of super bowl 50, the champion Denver Broncos playing host to the panthers in a primetime showdown. You can catch all the action tonight on nbc. Al and chris, kickoff is at 8 30 p. M. Eastern. Weve got another kickoff in just a moment. When we return, an exclusive interview with bank of america Ceo Brian Moynihan. Take a look at u. S. Equity futures. Were back in a moment with mr. Moynihan. Upgrade your phone system and learn how you could save at vonage. Com business welcome back, everybody. Among the stories front and center this morning, we are awaiting the latest policy moves from the European Central bank. The banks going to be issuing its postmeeting statement in just about 15 minutes time. Market is looking for indications of further easing, but the real story may come later when we actually hear from mario draghi at 8 30 eastern time. Also priceline has dumped the feature that made it famous. Its eliminating the bid for airline fares. Theyre not doing express deals. These dont reveal the name of the supplier until after the purchase. Buyer beware. Tesla struck a deal with Deutsche Bank for 300 million for a credit line. The funds will be used for the Vehicle Leasing program. Any borrowings from the credit line would have to be paid back by december of 2018. Hillary clinton and donald trump outlined their visions for security last night. Trump responded to getting compliments from Vladimir Putin. I think when he calls me brilliant, ill take the compliment. Okay . The fact is, look. Its not going to get him anymore. Im a negotiator. If he says great things about me, im going to say great things about him. Ive already said he is much of a leader. You can say isnt that a terrible thing . The man has strong control over a country. Now, its a very different system and i dont happen to like the system, but certainly in that system hes been a leader far more than our president has been a leader. And Hillary Clinton addressed her handling of classified information on private email servers. Classified material has a header which says top secret, secret, confidential. Nothing and i will repeat this and this is verified in the report by the department of justice none of the emails sent or received by me had such a header. More from last nights interviews coming up in just a bit. Meantime, we want to get down the street to wilfred frost whos with bank of america Ceo Brian Moynihan. Andrew, thank you very much. Good morning to all of you guys. And good morning to Brian Moynihan, ceo of bank of america. Thanks for joining us. Thanks for coming to our house. Its great to be here. Since we were last year in early may, weve seen push to new alltime highs. Despite some big global shocks like brexit. And were close to them again. Thats happened, though, on low volumes over the summer. Is there a sense of complacency, do you think . Its clear theres been low volumes. Its been a oneway trade. But the question really is that experts sitting out there and other places tell me where else is the money going to go . With dividend yields exceeding sovereign yields. Moneys going to go into the equity markets. Out of complacency, people say theyre missing something. And everybody every day has a view of this market. Its clear that the moneys gone into the equity markets because of that lack of yield and other return. Absolutely. And yields, of course, incredibly low and flat. So important to your business model. Is there a chance that could flip around quickly if we do get a rate hike or see inflation. In that regard is the market looking a little bubblelike . If you saw real backup in yields quickly, it would be because somebody stau a view of the economy. Nobody sees a high inflation yet rates have got to go up to choke it off. You dont see that in any economy in the world. I think itd be a low probability of that. That being said, there is a probability so we plan for that. We manage our company to be okay in all those scenarios. Lets talk about the possibility of rate hikes. Im not interested when you think they might come but what it means for bank of america when they do. The last hike didnt see a huge amount passed on. Can that be expected in the next couple of rate hikes as well. We dont charge people to keep their money with us. As rates move up, the shortterm rates especially. And thatll happen. So the passthrough rates, with technical skills. And the reality is that we run a great franchise. We get our deposits through 60 billion in the last quarter. When rates move up, that will be much more valuable for our company. And if we saw a hundred basis points over the next 18 months of hikes, how would that be passed on . The numbers fairly high. But basically 4 billion. Theres additional recovery in the way it works. Basically think about a billion dollars. Lets move on in terms of what were seeing in the space at the moment. Morgan stanley has seen an activist investor large stake in the country. Theyre trading below value. Is that a benchmark you fear investors might be hovering around to swoop while still trading below book value . The book value multiples and things have changed a lot. If you think about that we only get to use about 120 of it to make loans and take deposits and help our customers. The other has to be there for inert capital we cant take risk on. That book value multiple has less to do with the multil. 160 billion of market cap, we run about book value. And so i think, you know, we have repositioned our company. Were driving a thing we call responsible growth. No excuses. Do it the right way. Got to be sustainable in the future. Technology, the way we conduct our business and govern ourselves. That weve been driving. If somebody has a better idea how to manage our company, were all ears. Our view is were driving back to success. Were partway there. That will lift the earnings further. One of the concerns over a more median time frame looking backwards over the last couple years has been the pace of your cost cutting. From investors. And at the q2 earnings you gave a lot more detail on that than you have in the past. That was welcomed by investors both the detail an the scale of what youd expect. What drove that . Can you see the cost cutting path more now or was it a move to protect from shareholders continuing to be disappointed on that topic . Well, i dont think they were disappointed. The question is theres a bit of confusion. If you think of the Second Quarter of 16, we took out 20 billion of operating expenses on a year by basis. We said theres still more we can do on the core basis. And so what we want to do is clarify as you looked over the next six quarters, we were going to bring it down to about 56 billion. You know, thats hard work. Its continued work. But its work that was already put in course. There was no change. This is just the ongoing work weve done. The problem is people out there were going the other way. They thought you took all that cost out, you cant keep doing that. And the answer is we still can. How much is that enabled by the technology you guys are developing and the way that consumers and businesses are embracing it . Abling you to in cut in certain areas. Converting paper to digitization. How we interface with customers. How we hand out statements. Its not been a one month, one year effort. This is a long arc of activity weve been driving. Most people when they think about technology, we are a leader in technology services. But most people think about it, the way they can feel it is the consumer space. And so this isnt something we started last year. We started, you know, many years ago, 25 years ago with Online Banking and mobile banking. And its really taken off. Its enabled us across the course of seven or eight years reduce the branch count. Even a tough rate environment. We just the total people we have working but more importantly have more sales going on. And its all with higher customer satisfaction. So its really helped our business model, helps us drive that expense base. Do you fear a hack of some form . We all have to do everything we can to protect what we have most from our customers is trust. We keep their money and information. We spend a lot of money and effort. But we keep working at it every day. And your shareholders, they embrace the cost cutting measure, em brabrace technology. Think about consumers like yourself. One of your statistics i heard earlier is somebody said onethird of the people in the United States are millennials. They grew up smartphone enabled. Thats what they do. So well have 21 million mobile banking customers at the end of the we just passed it last week. Thats still growing at 15 a year. Its already penetrated heavily in our business. It continues to grow 15 in a big mature business. We have 30oddmillion banking accounts. Think of 20 using mobile every month. You cant serve customers its not for the cost. Its for the service and capabilities. Its what the customers need to do. The age cohorts people typically apply are no longer true. My mom and dad use smartphones. Theyre 80, 85 years old. Everybody uses them. Just wanted to move on to the state of the u. S. Economy. Sure. Weve seen pretty strong loan growth recently and i know you repeatedly say the Loan Portfolio is improving. Part of that is because youre removing legacy bad loans. But if you look at the quality of the loans youre writing today compared to a year ago and ignore that legacy issue, are they stronger loans than they were a year ago in terms of quality . Because the pace of loan growth in the consumer space does look a little worrisome. The consumer loans that were putting on today id say compared to a year ago are pretty much the same compared to ten years ago much better quality. But theres still plenty of opportunity to grow. The question i often get is can you grow you talk about responsible growth. Can you grow and be that responsible . Because our industry and our company have a history of, you know, good times growing by reaching for credit, reaching for terms and things like that. So weve basically driven this idea of responsive growth. Got to grow, no excuses. You have to do it the right way and on a sustainable basis. People think its impossible. Let me give you an example. Ten customers getting a mortgage that are customers today that fit our capabilities, wed make a loan to them. Three of them get it to us. It used to be too. When were at nine and ten, thats an interesting question. These are our customers who get a mortgage somewhere else. Theres plenty of opportunity to grow and stay within that credit quality. You get a great vision of the u. S. Kpurm. Whats activity been like over the summer . Well, as you look at the end of august, itll be the strongest Consumer Spending growth year over year this year. Thats even your back out. The year to date consumers on debit and credit cards are spending 4 to 7 more than they did last year. So the consumers in good shape. Credit quality wise, spending wise, and if you thought about what could slow them down, confidence in the markets, confidence in the economy, not growing as fast as we want. Am i going to have a job . Am i going to get paid more . Youre seeing wage growth. Not what people would like to see. Unemployment staying low. So the consumers very constructive. When you go to the commercial side, the middle Market Companies are making money. The credit quality is as good as its been. Their drawings unwinds higher than last time. But theyre staying around 40odd percent. Thats where they draw it. Theyre not being really aggressive. So loan growth is there. We have to fight for it. But theyre not really aggressive again because of all the things going on. Until that clears a little bit, i think therell still be some nervousness. Weve got a question in the studio from becky. Hey, brian. Its great to see you this morning. Hi, becky. How are you . Great. I know one of the things youve been talking about is trading relative to book value and whats been happening. But lets just talk about the stock itself. If you look at bank of america shares over the last five years relative to some of your peers like a jpmorgan or wells fargo, you havent performed at the same level. Are you frustrated by that . And how can you address that . Well, we have a war to fight that few other people have between the cleaning up the mortgage mess and the litigation. That wars over. And we can declare that over. We learned the lessons from that war and thats what we keep applying. We had issue shares. A lot more shares during the crisis and our peers had to do. So weve been recovering on that. If you look at it over that time period, its always frustrating to have it go up. The real question is what can you control and drive. Thats where we drive the growth. Were starting to bring the share count back down. And my job as ceo is to continue to provide Profit Growth and profit stability and returns. But use the extra capital to buy the stock back. And if people give it to us this price, well buy it all day long. Is this resonating with wall street . Have you gotten any traction there when talking to investors . They agree with that message. They want us to keep on the course. They want to make sure the costs are balanced against the opportunities. I think they see that. But they want the our story is as a stock is really about generating capital. Getting return back to normal. Up to double digit return but weve got more room to go. Then taking that excess capital that we dont need to drive the Customer Business and putting it into stock. Our investors understand that and weve got to keep producing. We should mention very quickly some breaking news. The ecb out with that Rate Decision. It is leaving the deposit rate unchanged. Its leaving the refi rate unchanged. This was expected. But the real news could be coming in 45 minutes time when mario draghi will be holding a News Conference. Again, thats coming up at 8 30 a. M. Eastern time. Well keep you apprised of whats happening. But the futures are in the same position relatively speaking. Slightly lower, flatline point. But well get more later. Brian, before you go, i have one question for you. Its sort after a local National Political question for you. Bank of america largest employer in the state. You came out against the lbgt law put in place there. Donald trump who appeared early on to say that he was with you, if you will, then reversed himself and said he was actually going to support the state. Given that, i wanted to understand as the ceo of bank of america, your position on donald trump and visavis this issue, visavis your state in the company. Let me on the hb2 issue, our company has been clear. The position hasnt changed. Weve been working with all the groups to try to figure out a solution. And you know, its impacting, you know, the economy. And we have to provide an environment where they feel they can. For the politics, ill let you figure that out. Lets talk a little bit more about the election. And trump and clinton clearly miles apart on certain issues as we saw in those clips before the interview from last nights town hall. But one area where they do seem to agree on is very tough rhetoric on the banks. They both mentioned bringing back glass steagall. Does that worry you for bank of america that this election whichever way it goes is going to mean tough siptuations for bank of america . If you think about banking regulation, all the different pieces have been put in place. You hear the regulators talk about that. Were still fine tuning. If we get the regulation we have in. The second thing what people talk about glass steagall and reinstating is the universal bank model. And it works. If you look at the statistics in trading, the business of universal bank models have commercial customers and an investing base. You see them actually more stable. Its not an annuity because trading is never an annuity. We brought the cost structure down. And it works for the clients most importantly. Why does the middle Market Company whos doing business in a foreign country need a bank like us is because they got to learn about the country, borrow money. Regulation aside, brian, banks remain the political whipping boys. Is it time for that to change . I mean, pay, for example, is soaring. Does it need to change . Are banks doing a good job . If you think about the crisis that occurred in the financial crisis. Itll take a long time for people to feel comfortable that this industry is there. But it is there. If you look at the way the stress tests works. Which says we can take us apart. You can look at the capital two or three times in our country. Look at liquidity. 500 billion of liquidity on the Balance Sheet every day for us. We have won that war. That war is over. Thats going to be a fair debate and the issues around the crisis is not the banking system. We recognize that. On the other hand our consumer scores are as high as theyve been back to mid2000. When you get down to the customers and how we work with them, were in the best place weve been with them. But if you think about it, its understandab understandable. But that war is behind us. We have to finish it up. Theres still hard work ahead. But its not like this industry wouldnt be very stable and provide strength in the next recession and next set of issues. Thank you very much for joining us this morning. Pleasure as always. Brian moynihan the ceo of bank of america. B back to you in the studio. Thank you. Coming up, were going to talk the future of twitter. Then later reaction to the ecb Rate Decision or nondecision. And Interest Rate talk with former dallas fed president Richard Fisher. Squawk box will be right back. Today, i am helping people work better. And also feel better. I am helping hospitals personalize treatments using billions of data points. And working with medtronic to predict the highs and lows of diabetes, hours in advance. And i am working with orreco to use Biomarker Data to boost the performance of athletes. Hello, my name is watson. Working together, we can outthink anything. Hwere 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 dont. 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. Its a very specific moment, the launch window. We have to be very precise. If were not ready when the planets are perfectly aligned, thats it. We need really tight temperature controls. Engineering, aerodynamics a split second too long could mean scrapping it all and starting over. Propulsion, Structural Analysis Maple Bourbon caramel. Thats what were working on right now. From design through production, Siemens Technology helps manufacturers meet critical deadlines. I think thisll be our biggest flavor yet. When you only have one shot, you need a whole lot of ingenuity. Welcome back to squawk box. Check out the futures right now. Were down about 13 on the dow. Down just one on the s p and the nasdaq is down about five after setting an alltime record yesterday. When we come back, were going to be analyzing apples iphone announcement, lack of a headphone jack and new futures. Plus twitter will be in focus today as they prepare to debate the future of the company. Those stories and much more when squawk box comes back. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . What if 30,000 people download the new app . Were good. Okay. What if a Million People download the new app . Were good. Five million . Good. We scale on demand. Hybrid infrastructure, boom. Ok. What if 30 Million People download the app . Were not good. Were total heroes. Scale on demand with the Number One Company in cloud infrastructure. Hewlett packard enterprise. When we come back, former dallas fed president Richard Fisher. And later the ecb leaving rates unchanged as expected but the bigger question is going to be will they extend bond buying, potentially move into equities. Thats what all the speculation has been swirling about. Well find out when mario draghi speaks. Thats coming up at 8 30 eastern time. Squawk box will be right back. They may want the latest products and services, but they demand the best shopping experiences. Theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Thiswell we thought geench programmed machines to talk. Ge is an Industrial Company that actually builds worldchanging machines. Machines that can talk to each other digitally. Hello . They dont talk to each other like that, ricky. Shhhh, youll anger it. He looks a little ticked off now. Breaking news. The ecb out with its latest interest Rate Decision. President draghi with a News Conference. Were going to get reaction from former dallas fed president Richard Fisher. Donald trump and Hillary Clinton tackle defense and National Security. A wrapup straight ahead. Today marks 50 years since the premiere of star trek. Well take a look back at the legacy and the next frontier as the final hour of squawk box begins right now. Most powerful city in the world, new york, this is squawk box. Welcome back to squawk box. It was george takei. It was. Yeah. I thought maybe wed run where id do my immiation of jim carrey for William Shatner im joe kernen along with becky quick and andrew ross sorkin. Our guest host for this hour is Richard Fisher. Youre the gray fox that you are. Former dallas hes a handsome man. What are you trying to say . Thats what i just said. Thank you. Hes a striking figure with that mane. Central casting. Right there. Yes. Exactly. Were less than 90 minutes away from the opening bell on wall street. The futures right now now down about 19. I dont know whether theyve turned more negative based on dont think it had anything to do with the ecb. But theres no change in the ecb. Well hear what draghi has to say. Half an hour. Checking out the markets in europe at this hour. Europe has now turned wail in a couple negative. It was positive earlier. But not a whole lot happening. As joe mentioned, among our top stories this morning the ecb leaving the rate unchanged. Mario draghi is going to be holding that News Conference in just about 29 minutes time. This is very important because were listening to hear if theyll be buying additional bonds. If they considered or are thinking about getting into buying equities. Thats been the source of a lot of speculation in the days leading up to it. We will bring you the highlights. Check out crude prices today rallying once again. The American Petroleum institute says that crude supplies plunged about 12 Million Barrels over the last week. The Department Issues its own this morning. And well see if it confirms the biggest one week drop in supplies in over 30 years. You can see wti is trading up at 46. 22. Plus well be getting the jobless claims. Expected to tick up slightly. And bank of americas Ceo Brian Moynihan joined us in the last hour. He weighed in on why the stock has underperformed its competitors. I think, you know, we have repositioned our company. Were driving a thing called responsible growth. Got to grow, no excuses. Got to be sustainable in the future. Technology, the way we conduct our business and govern ourselves. That weve been driving. If somebody has better ideas o on how to manage our company, were all ears. Driving back to the successful point. We have more to go. And thatll then lift the earnings further. Take a look at shares of bank of america. Youre looking at 15. 72 right now. It looks like a decent chart but on a relative basis to some of the other big banks out there, its not. And our guest host for the next hour is former dallas fed president and cnbc contributor Richard Fisher. Its great to see you. We love getting your latest musings on what the current fed is up to. Im thinking of how to phrase this. We still have i would say so much in the country right now kind of an even split on what people think we should do. We got one side that says theres been absolutely no rush to do this. And were we get evidence talk about raising rates. We get evidence of that every day. Today we get the idea that might even buy stocks which is theyve got no more bonds to buy. So that would seem to indicate that the globe is so slow that we still need to try to conjure up some type of animal spirits and demand something. But then the other side is people that said were waiting for they always find a reason. They were going to do it again in september. Its live, its live, its live. Then we get one crappy thats off the table again. And they should have done it months or quarters or years ago they should have started. But both sides have persuasive arguments. I dont disagree they should have done it earlier. At stan fisher, my noncousin cousin spelling his name wrong. Whats the rush . Nothings happened to indicate we should have. The real question, look. Weve seen a lot of commentary come out from stan, from the chair herself, from John Williams from San Francisco is a question of financial stability. Were getting closer to this 2 intermediate term target. Inflation is not the issue except in the service sector. We have robust employment. We have skill shortages. You can see that in the data. But it has fueled and this is the only thing ive heard don trump say that makes sense. It has fueled an artificial market. We all know that. Everybody in the market knows this. Got hammered by that from hillary. But it has fueled an artificial economy. We know this. Cap rates have come down to nil generally speaking stocks are richly priced by you dont want to secure the texas border one iota . Speaking of the texas border your statistic you had earlier, dont forget aztec announced they just found a field with 2,000 more barrels of oil. It should be left in the ground, damn it. So i think the whole issue is zero trade policy or negative trade policy is ineffective. You said the one thing that you might agree on was the and i was the same way. You have no empathy for securing the southern border or Immigration Law or any of that stuff . Getting rid of criminals, none of that . Getting rid of criminals is one thing in society. But im a child of immigrants. So the economics but thats legal immigration. You saw bill clintons speech from 95, i hope. Ill show you that. I have seen that. But heres the point. Were relatively in good shape in the United States. I dont think we should be managing Monetary Policy according to what others are going to do. Theoretically negative Interest Rates were for the first time you are seeing serious talk, the finance minister second most powerful man in germany of having a tax cut in order to effect some kind of fiscal policy that creates more jobs. That as you know joe is where we need to act. Ive said this a billion times on this show. You dont have fiscal responsibility, youre not going to have an effective Monetary Policy. So whether they raise rates in september or not, i think the real important thing is whether or not we can get our fiscal act together. And good luck on that front. Do you think thats going to happen ever . I mean, do you think in the next four years is even conceivable. What it does is drive Monetary Policy to be increasingly irresponsible. This is not responsible Monetary Policy. Where janet yellen just says, goes up on the hill and says screw all of you i doubt shed use that language. Im putting this to your court and going to raise rates to force you. They have remained accommodative. I think its more important whether they raise rates a quarter or not. Its how theyre reinvesting the portfolio. The fed owns half of all u. S. Treasuries. Theyre monetizing our debt. When you do that, you take away the incentive of our elects officials, our Great Congress people and our senate to do their job. Youre making it easy. Money is cheap for these folks. So but my point is she has said as ben would say but ben did theyve all said it. Theyll say its your fault. You yahoos need to do your job. But then doesnt mean you neglect doing your job. And you know Monetary Policy is the fuel but you have to incentivize people to use it effectively. But where doing your job becomes ineffective because of all of these issues. Yeah. I think it becomes less and less effective and can have a negative effect. The end effect has been a different kind of inflation. An inflation of asset pricing. I just wish we knew whether if you did raise rates the outcome could be positive. I watched Brian Moynihan earlier on television and he made that clear. You said you know youve primed the pump but it just lays there if theres no demand for it. People might want it if they thought rates would go its done another thing, joe, that i think is not spoken of enough. It is undermined or eviscerated. The basic institutions. They dont seem to think that. We had that argument at the table. I was there. We were going to have a wealth effect. Taken away a lot of the ability for consumers to use the savings to spend. But very importantly what one discussed is what it does to the institutional infrastructure of pension funds, Community Banks and so on. Thats where the damage has been done. Were going to talk a lot more about that. Fortunate he is with us for the rest of the hour. Thank you for that. When we come back, your money your vote. Hillary clinton and donald trump taking to the stage backtoback to answer questions about National Security. At nbcs commander in chief forum, we will bring you the highlights. To buy that truc welcome back to squawk box everyone. In political News Donald Trump and Hillary Clinton taking questions on defense and security at nbcs commander in chief forum last night. The democratic nominee defended her use of a private email server. Classified material has a header which says top secret, secret, confidential. Nothing and i will repeat this and this is verified in the report by the department of justice none of the emails sent or received by me had such a header. Donald trump also weighed in on russian president Vladimir Putin. I think when he calls me brilliant, ill take the compliment. Okay . The fact is, look. Its not going to get him anymore. Im a negotiator. If he says great things, im going to say great things about him. Ive already said he is really very much of a leader. You can say isnt that a terrible thing. The man has very strong control over a country. Now, its a very different system and i dont happen to like the system, but certainly in that system hes been a leader far more than our president has been a leader. Donald trump also addressed news that mexicos finance minister had resigned in the wake of his controversial says here visit to the country. Controversial there. The finance minister played a key role in helping to orchestrate trumps trip. If you saw what happened in mexico the other day where i went there, had great relationships, Everything Else. I let them know where the United States stands. I mean, weve been badly hurt by mexico both on the border and with taking a big percentage of our jobs. If you look at what happened, look at what happened today where the people who arranged the trip in mexico have been forced out of government. Thats how well we did. Mexicos president was criticized for not being forceful enough in rejecting the proposals by trump and his comments about mexico. Dr. Roger marshall unseeded tea partier and republican incumbent Tim Huelskamp in the republican primary for the first Congressional District in kansas. Now hes received the support of bob dole in his election bid in november. He joins us now. Dr. Roger marshall republican nominee of the first Congressional District in kansas. Good morning. Thanks for having me today. I want to get your thoughts maybe on some of the things that donald trump said last night as well as Hillary Clinton. But i wanted to also get your thoughts on whats going on in your district and in the country. One of the things thats been so important is what you got from the business community. A number of other groups that spent a lot of money supporting you. One of the things thats so interesting about this particular election season has been that business has been so out of favor. And youve been on the opposite side of that. Exactly. I think for me our race was about agriculture. What we had the support of back home was the agriculture associations. My opponent also had significant support from back east as well. But we always thought this race was about agriculture. We wanted representation on agriculture. And we felt that our congressman was not doing a good job with that. You have been supportive of mr. Trump in this election thus far. Are you expecting him to come to come campaign with you . Theres been no conversations between mr. Trump and myself. Certainly we have been supportive of him. I think we need an agent of change. We need new leadership in washington. Doing the same thing over and over and expecting a different result is of course insanity. I think our states going to vote for mr. Trump. I dont know he has to come there. Hes probably got better places to spend his time. But if he comes, well sure welcome him. Where do you stand on then immigration issue given the big agricultural business you do . Exactly. On immigration, we do have 20,000 open jobs in kansas. I think that immigration is a National Security issue among other things. First and foremost, we need to secure the border. Second, my dad was a chief of police and he taught me to respect the laws of the land. And i think we should enforce those laws of the land. And third, we need a simpler work visa program. It shouldnt take five or six years to get a work visa. We have open jobs and need more help there. Okay. Dr. Roger marshall, we appreciate your time this morning. Thanks for having me. Have a great day. Thank you. Separately we have other political news this morning. Libertarian candidate made a bit of a blunder. What would you do if you were elected about aleppo . About . Aleppo. And what is aleppo . Youre kidding . No. Aleppo is in syria. Its the epicenter of the refugee crisis. Okay, got it. Got it. Well, with regard to syria, i do think that its a mess. I think that the only way that we deal with syria is to join hands with russia to diplomatically bring that to an end. But when weve aligned ourselves with when weve supported the opposition of the Free Syrian Army, the Free Syrian Army is also coupled with the islamists. Then the fact were also supporting the kurds and its just a mess. Okay, guys. What do we think . Does that eliminate you . Other people have said its not a question whether it eliminates. Does it make him . Hes got so far to go. But the thing, hes in the teens and he might be on the debate stage. And this might make it less likely he gets the 15. So that was it, right there. Not only today in every ad to the extent anybody cares about him. But the American People think its al poe or something. You know what aleppo is as an elitist. Im not running but somebodys going to run for president. What are you talking about . A lot of people at home watched that but theyre voting for the person who is going to be president. Which is also scary. And they are maybe not going to make their decision based on aleppo. So many times you have said that most people dont know who the Vice President is. Thats true. They dont even know who the Vice President is. Pence shows up in parts of the heartland and theyve never laid eyes on him. I accept that. Yes. Default candidate. Right . People who see both major candidates are unpopular, why is he doing as well as hes doing . Because hes a default candidate. Hes not going to have much impact. [ overlapping speakers ] nobody cares about policy in election. Its all theater. Very smart ceo who you know who is an established republican who will not vote for trump. Just because its against his constitution. And i think hold on. But hes not just the average guy you see sitting on the couch. He would watch this and i think this would change his mind. So he would vote for trump. I dont know if hed vote for trump, but i think he would just maybe not go to the polls. I dont know what hes going to do. All right. So much for that discussion. Theres a lot of cities in syria. Coming up, Twitter Holding a Board Meeting today. Company reportedly that hurt, though, what he said. I dont know. Id give antibiotics for aleppo. You might try that and then maybe a salve. The company set to debate the future. Whats going on here . Im val, the orange money retirement squirrel from voya. Were putting away acorns. You know, to show the importance of saving for the future. So youre sort of like a Spokes Person . More of a spokes metaphor. Get organized at voya. Com. Welcome back to squawk box, everyone. Weve been watching the futures this morning. Take a look right now. After the ecb decided not to raise rates, again, that was as expected. The market hasnt moved much. The dow futures are still down by about nine points below fair value. Marginal declines for both the s p 500 and the nasdaq. But the big news is going to be what we hear from mario draghi. Thats coming up at 8 30. Also Technology News for you. Apple unveiling its latest product upgrades including the iphone 7. And Twitter Holding a Board Meeting today to talk about the companys future. Jon fortt joins us to break it all down. And this is a big news cycle in the world of technology, jon. It is. Starting with twitter, we dont really know of course exactly whats going to happen at this Board Meeting. But theyve got a number of issues to confront. People are wondering do they actually sell the company after founder of the company one of the founders made some statements over the past few days that suggested they might be more open to that. But theres some tricky issues that twitter is also wrestling with. One of them is just the high amount of stock based compensation the company has been dealing with about more than a quarter of revenue, actually, is being spent on stock based compensation. Lets say if they wanted to go private, that would be tricky to retain their talent giving the compensation issues. Also speculation that they might sell off some units. When it comes to apple and the iphone 7 news, a lot of mixed reception to this. If you look at the even number updates. Not talking about the s updates. But the even number updates, typically theyve come with Bigger Technology improvements. The iphone 4 came with a retina display and facetime. The iphone 5 also had a brand new design. It was the first time you had lte, that faster wireless in a phone. Of course the 6 was just a bigger phone. The 7, exactly the same size but has an improved camera, changed some things around how the home button works, and of course the headphone port is now gone. For some of us this is a big deal. Im not going to get personal on my idea for it. Its a personal thing. In all of this it makes you wonder the next point catalyst point for the stock is going to be when we see how the preorders and the first few days of sales go. If that isnt a significant increase over last year, that could give investors some pause, guys. Okay. Thank you. I dont know what to do. I want to plug in and be on the phone with the headphones on. In the car, ive got it charging all the time and i plug in the auxiliary. Now you cant do that. What if you go on the plane, you want to switch between your phone and whatever is on that little screen. It gets tricky. You think by next year its going to be a totally different amazing crazy thing . That you can bet on, andrew. They will change something next year. Coming up, breaking economic news. Were minutes away from weekly jobless claims. The numbers and Market Reaction straight ahead. Then Mario Draghis press conference about to get under way. We will monitor and bring you the highlights. Where we explore. Protecting biodiversity. Everywhere we work. Defeating malaria. Improving energy efficiency. Developing more clean burning natural gas. My job . My job at exxonmobil . Turning algae into biofuels. Reducing Energy Poverty in the developing world. Making cars go further with less. Fueling the global economy. And you thought we just made the gas. Energy lives here. Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. Were just seconds away from initial jobless claims. Futures have been down most of the session. Rick santelli has them. Hes standing by at the cme. Rick, the numbers . A drop of 4,000, joe. Not huge. 263,000 last week. Doesnt get altered in any way. We now have a 259,000, a bit below 260,000. Obviously these are low numbers but the low numbers still translate into low growth. If you look at jolts yesterday, boy, we had record close to 5. 83 million openings. Big time, right . But most likely had to be parttime jobs. It just doesnt add up. Its not congruent with Everything Else we see. Were all of course as beckys been pointing out going to wait for mr. Draghi. The euro against the dollar is floating just aurnd 1. 13. Interest rates, well, they moved all the way from minus 12 to minus 8 . I guess thats a big selloff. Were also watching corporates in the negative camp in europe. And trying to figure out whose straight jacket needs to be sent to who. Its a crazy idea. Any central banker in any country that gives credence to this notion or even doesnt question it to me history will prove to be unkind. Back to you. Yeah, rik. What kind of reaction do you think that wed be getting if draghi actually says that theyre looking at equities . Well, you know, i think that would be par for the course. Now, people of course speculating on that. Maybe reaching corporate deals. Speculate on the notion. There cant be any good future in holding something that gives you no return or takes something away. Whats it about then . Got to be about appreciation. That theyll be buying corporates. You buy a crummy corporate in the hopes to pass it along to a central bank that will buy it on the secondary market. Its a mugs game. You know, if you look at fundamentals, they can change. They can monitor the course. But if youre going by what bad policy and kind of bad cerebral cortexes, those can change in a nanosecond. Just like that without warning. Ultimately that second scenario is going to occur. We just dont know when and which country is going to blink into reality. All right, rick. Thank you. Were going to get back to you with some of the Market Reaction when things really pick up with this. As rick mentioned, mario draghi is speaking right now. Our guest host this morning is former dallas fed president Richard Fisher. Richard, itll take a few minutes to get the first of his real headlines that come out here. What do you expect to hear from him . What are the key points aside from the equities question youre looking for . I think the key question is what will they do with their Quantitative Easing Program which expires in march 2017 . The wholed idea this is setp to end in march. You have to renew these things. There are few finished bonds left. Few german bonds left. Hows this going to be allocated . One of the Amazing Things in the press this morning is italys about to issue a 50year bond. And they also have some shortterm paper at negative rates. Now, who with all due respect to italy, who would lend that government money and expect to get less back . So theyve driven this thing as far as possible. Theyre back to unemployment levels they were at just before the euro was created. I guess you can take some credit. But i think you really have to question the efficacy of these programs. And, you know, theyve got a lot of resistance from the germans who are a powerful force. Ill be interested to see how he is a great talker. He understands markets. Hes well educated. He is very adept at using these press conferences. I think theyre worth watching. What do you think is the right path . Youve been in the room when a yeah. The right path is to we have excessive accommodation. The question is do you need more. And this idea of getting into buying equities like the japanese have done, what youre doing is making Asset Allocation decisions. When you make those decisions you have to ask yourself whats the exit, how do you get out of it. I dont know once you go down that path how you get out of this. Because you artificially sustain things. And then youre afraid to pull back when you should. And weve seen that here in the United States. That was my next point. We talked forever what the exit would be. What amazes me about these conversations and we spend a lot of time here because people are totally dependent on Central Banks to drive markets. Not only drive markets but this is currency manipulation whether you want to call it that or not. Wier all doing it. Each one of these banks are doing that for their home nation. If youre the ecb and youre trying to make yourself look like a better place, the only way to do that when the u. S. Wont raise Interest Rates is to go into some of these extreme measures. Now, not that were at fault for it, but all of the combined what is the ultimate cost . And the british were able to devaluate the pound. So, you know, i think thats a mugs game. How do you get out of it and how do you correct it . You shouldnt make these decisions until you know what the exit is. And we dont know what the exit is right now. We are stuck. We are hooked on central bank policy. So if they change course, then you have disruption. And it scares the heck out of people. As a result we have seen the feds take on what a lot of people think is a more activist role. Picking up where the fiscal authorities have not been our feckless government as i like to call it. Sure. But as a result of that, you see things like what senator warren was doing yesterday. To say that theres a move to really step in and take away some of the feds independence and make them much more lets say servants. I think its one of the causes of this reaction weve had. You concentrate too much power on any one body. Its the american way. To drag that institution down. And right now the only actor. And i blame it on the fiscal authority. The only people that act are the fed. Never what you want them to do. I want them to tell us what theyre going to do. Give us some certainty to plan around. Another trillion dollar stimulus package, would that have been a positive thing . It depends how its financed. Would you have liked a trillion dollars on depends how its financed. As long as its not done by driefing us further and further and further into debt. I want a reallocation of whats important. I mean, you see europes never going to do what they should do. Thats labor laws and tax rates. Of course ours are higher. Talk about less regulation and fixing obamacare. Joe, ive always talked about lesser regulation. Regulation you touched on a key point which is regulation. But congress doesnt do anything you want it to do because both sides want to do completely opposite things. One wants to spend more money and tax with more regulation. The other wants to spend less money and cut taxes and have less regulation. So just saying theyre feckless and dont do anything, we need to agree on what to do. I tell you what i wish theyd agree upon, theres one purpose. Which is to create jobs. Jobs are the root to dignity. They ought to examine every single program. What is a job creator and what is not. It turns out monetary accommodation wasnt what we expected it to be. It took a very long time to get there, joe. Eight years in the cycle. And its not just older people. Men 20 to 50, in the tens of millions regulatories should be focused on one thing. How do we create more jobs for the american team. Guys, were going to they can both come together and figure out the right answer. Were going to come back and come back with the commentary that draghis been making. Though hes saying there is the baseline scenario to Downside Risks. However, the staff is looking at upgrading gdp growth. Gdp growth for 2016 theyre now looking at 1. 7 versus 1. 6 . So lowering that one. 2018, 1. 6 versus 1. 7 . Well have more from Michelle Carusocabrera in a minute whos been listening in. And more from Richard Fisher too. And i saw four hours of this yesterday. Of the u. S. Open. It started out like it was going to be about an hour match. But andy murray and shikori of japan. It was so good. Brad gilbert has coached them both. Hell join us to talk life on and off the court. Serena williams, i was worried about her. And hallup as well. Its scary when the lights go out. People get anxious and my office gets flooded with calls. So many things can go wrong. Its my worst nightmare. Every second that power is out, my citys at risk. Siemens digital grid manages and reroutes power, so service can be restored within seconds. Priority number one is keeping those lights on. It takes ingenuity to defeat the monsters that live in the dark. Welcome back to squawk box, everyone. Lets take a look at the futures. Theyve been right around the flat line all morning long. Continue to be there. Even after the ecb left rates unchanged. That was as expected. We are getting some comments from mario draghi of the ecb right now. And Michelle Carusocabrera has been listening in to all of that conference. What can you tell us right now . So we were waiting to hear whether there would be an expansion of the Quantitative Easing Program in europe. But because of the selfimposed rules that the ec kbrks has in place, theyre literally running out of bonds they can buy. So there was some expectation. Theres belief that they will expand qe at some point. The question was was it going to be this meeting or later in the year. No announcement of expansion of qe. However, mario draghi has hinted early on that at some point hes going to explain after mandating the committee to look at expansion possibilities how they may do that or how they are thinking about it. Remember they cant buy bonds that yield below 0. 4 . They only buy bonds based on the size of their gdp. They buy more german bonds than greek bonds. Would they change that . Would they start buying different kinds of Corporate Bonds including bank bonds which would be very controversial . Were waiting to hear if any of that gets discussed. Once again we are focused on whether or not were going to get more details about the possibility of the expansion of qe. So far nothing about that yet. Mentioned the expectations for growth are actually pretty weak. The expectations for inflation are where theyve been, pretty weak. And hes still scolding the european countries. He does this in every single meeting. Thank you. All right. Couldnt believe it. Football started and at the same time every year u. S. Open. And now, you know, as you get older i look forward to these things i guess because maybe im not as experienced as the millennials. Brad gilbert, youve gotten huge on espn. Youre doing stuff with johnny mac and his brother and youre down sitting on the court. Youre in every conversation now. My wife says i would do it for free and they pay me to talk about tennis. Is your mike on . I hear it. Im that soft . Not youve been amped up. Youve been up since 6 00 this morning. When youre sitting there i hear you whispering a lot of times. Every once in awhile theyll look at you. Sometimes i sit directly on the court. Then youve got to like. They say youre muffled. No, no. It was fun to watch. When this happens i watch all day long. Are you a fair weather fan . Yes. Kind of. I do watch the u. S. Open. So yesterday. You were there and i was there every step of the way with you with the nishikori and murray set. You guys in that first set had me decided i dont need to watch this. When it was a set and a break for murray. He was rolling. He got you didnt say slapped. He almost did. He got beat so badly and someone was saying that nishikori didnt have the divorcety of shots to compete. Do you remember all those comments . You know, in the context of things, you know, when it unfolds in front of you. You know, things can nobody called that. You got to come back with some of the calls. Was that one of the great matches ever . It was surprising. He was getting thumped. Seven out of eight times he rolled him. They had a little bit of a rain delay. First for about a minute. They played one more game. Then they had a rain delay. On that rain delay, thats when things changed a bit. What was that gong that hit . Chuck berrish. What was that sound . Thats what it sounded like. Somebody in the sound office or whatever that had a problem, so this massive sound went off early the tin the fourth set. And murray got disheveled by that. He was told by the umpire if this happened they would play through it. But it was incredibly loud. Then that really put him off for like eight games. There was unbelievable still never thought he was going to lose. I thought nishikori blew it when he had that open court when he was right up at the net. It was 400 and murray tied it. I would have pushed all the chips when he missed that volley. Yeah. It was so much fun. So can nishikori hold up against djokovic . Well, first of all, Stan Wawrinka you have to think about that. Is djokovic healthy now . Hes playing good enough to get through now with his c game. Hes had a lot of strange things happen. This event, you know two guys retire, one guy not play. And hes nowhere near where he wants to be but hes still in the tournament. He plays monfils. That guy looked unbelievable. Youd put the buy rating there. Puig beat someone too. But he was gassed. He beat rafa in the fifth. When guys beat rafa, the next round, theyre out. Semitennis question. Whats the story with not just the sound youre talking about but now the roof and the sound. Big problem or not really . Well, early in the tournament there was one match. There was an absolute monsoon. And it was incredibly loud. Obviously the rain coming on the roof. But i think the acoustics of the new building which look like the chase logo. If youve seen the logo at the bank, you look at the aerial shot it looks like chase. But the sound travels up. Wawrinka says he can hear peoples conversations on the second level. A lot of times theyve been drinking a few beers and having a couple of pops. And you can clearly hear the sound, you know, when sound travels up, down. So thats been the new thing. Getting used to how the way the acoustics go. Is this fixable . Is this fixable . Well, hopefully the gong is fixable and a lot of these things that its a 680 million renovation which will be finished by 2018. Theres a lot of things that have happened. Hopefully theres one they can deal with. Kerber beat serena recently, didnt she . Finals of the australian open. What about now . Potentially if they win their next matches, serena could be playing on saturday night for the most weeks at number one ever and 23 titles. And if kerber were able to win on saturday night, she would go to number one, stop her streak at steffi graf. To think shes gone from 11 to 1 in a year is absolutely amazing at 28 years old. Serena looked good again. Shes good every match really. Do you think kerber has what it takes at the u. S. Open . Well, to me, what serena is doing, at almost 35 years old, its just outrageous. Nobody i mean usually at 30 you start kind of like okay, im not going to say, you know, youre turning the corner, but what shes done from 30 on, is absolutely outrageous. And you have to start thinking about like, if you got the Mount Rushmore of sports like in the last 50 years, without a doubt shes the highest female ever. You have to start thinking about her in the Michael Jordan level and Wayne Gretzky level what shes done and i think shes possibly, without the best female the best female athlete to ever play tennis and would have been in any sort. Thats how good she is. Back to kerber, do you think she has a chance or serena will you know what, well i dont have any laces this morning. I have the laceless. Thats the reason we lace up the sneakers. Yesterday you would have told me nishikori was binni inwinning i happened to stick around we get out of the fed stuff and into tennis. Listen top stocks. Brad gilbert. Disheveled. I get a beep sleeping, cnbc, update notice, jeffreys. You guys are on red card notice. They downgrade my nike. What up with this guy that downgrades my nike. Some guy at jeffreys. Im giving you a red card. Thats ab surb. Youre long nike. Under amour . No. Options . I have options on facebook, yeah. I like the najarian brothers. I mean, morgan stanley. I like a lot. I think theyre under valued. Hopefully if the fed raises rates like we should, which im, you know, ive never seen my kind of guy. Waffle iron, on waffle iron. Go back to cal. Of millions of on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. Across new york state, from long island to buffalo, from rochester to the hudson valley, from albany to utica, Creative Business incentives, infrastructure investment, university partnerships, and the lowest taxes in decades are creating a stronger economy and the right environment in new york state for business to thrive. Let us help grow your companys tomorrow today at business. Ny. Gov we will check in with michele carusocabrera who has been monitoring the draghi News Conference. Waiting to hear whether they will expand qe now in the future, not now with the announcement asked by reporters during the News Conference about it in the future and he said, mario draghi said, we didnt discuss it at this meeting and reiterated he tasked the committee to evaluate options on the purchase programs, suggesting it could come in the future in order to ensure the smooth operation. I hinted the fact that theyre running out of the types of bonds to buy. Why not buy bank bonds, stocks, that was a question that had been hanging in the market and mario draghi wouldnt answer and he said our Program Effective and we continue to focus on its implementation and why are they thinking about expansion, because there is a concern about the Downside Risks and also in the economy and inflation. Back to you. Stocks by the way have turned lower if youre watching the dow futures down about 40 points. The dollar hit session high when he said they didnt discuss it. Were going to thank you, michele. We will get down to jim cramer at the new york stock exchange. I dont know if you saw brad gilbert, upset about jaffrays downgrading. I saw nike trade when he did when i was watching wilfred on and i was shocked, drop down 50, to a dollar, someone had to downgrade. I agree, that was ridiculous. Phil knights book tells you these guys have a longterm view. I think this analyst is thinking short term and b. G. Has good nose for stocks. Okay. Jim, thank you. Think short term and see you in a couple minutes. Meg whitman up with faber and were looking forward to it. Squawk box back after a quick break. Everyone thought i was crazy to open a hotel here. Everyone said its so hard to be a musician, but i cant imagine doing anything else. Now that the train makes it easier to get here, the neighborhood is really changing. Im always hopping on the train, running all over portland. I have to go wherever the work is. Trains with innovative Siemens Technology help keep cities moving, so neighborhoods and businesses can prosper. I can book 3 or 4 gigs on a good weekend. Im booked solid for weeks. It takes ingenuity to make it in the big city. Im booked solid for weeks. When you should be enjoying still payour retirement . Me if youve paid off at least 50 of your mortgage and youre 62 or older, a reverse mortgage might be the answer. A governmentbacked reverse mortgage stops your mortgage payments and gives you steady taxfree income. Let the home youve taken care of, take care of you. Turn your equity into a comfortable retirement, all while continuing to live in, and own, your home. Find out how much you could receive for retirement. Lendingtree when banks compete, you win. Welcome back to squawk box. Hillary clinton is going to be holding a News Conference at 9 15. Stay tuned to cnbc whoa whoa whoa. Its happening, my friend. Wait a second. I know. Dvr it, watch it. You have come to i do. A press conference. Shes taking questions . Yes. I believe on the tarmac. Is there an earpiece involved . Your earpiece, take your earpiece out. I need mine. Mr. Fisher before we go, given all the things we talked about in the economy, what do you do with your money really . Turn it over to my oldest son anders who runs one of the great funds up a little over 9 . What is he doing, doing so well . Hes just finding under priced, buy distressed companies, sit on them, do well, do corporate fooins type analysis, up over 9 year to date. Hell of a tom cruise imitation. Thats the other son. This is the son that makes money. Thank you. Great to see you. Join us tomorrow. Right now time for squawk on the street. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer, david faber at post nine of the new york stock exchange. Ecb this morning keeps rates unchanged. Mario draghi said the bank studying potential changes to the asset buying program. We will monitor the press conference. Plenty to work with, hpe, apple reaction, nike downgrade, futures slightly red