today. thank god you're here. >> we have some news >> comcast is reporting and when you report on a company like comcast, there are many different things that people watch. not necessarily the bottom line number but let me give that to you any way. earnings per share, 52 cents that was up almost 27% year over year it was 3 cents ahead of expectations consolidated revenue grew 10%. 9.8% to 21$21.2 billion. that is above expectations of 20.855 consolidateded revenue was one of the things that people might look at, but maybe more so is ebita growth strong revenue and ebita growth increasing by 10%. first half ebita growth the best in six years a lot of this, sorkin -- you see the main cylinder? >> "squawk box." >> part of it. >> film revenue up >> crazy >> nbc universal, outstanding quarter according to the company, grew ebita by 20% comcast cable delivered what the company is calling a great quarter is a strong balance between financial growth and solid subscriber metrics you watched this over the years. what do we need to look at in terms of ads high-speed internet ads -- >> those are the ones people care the most about. people will look at video subs >> down -- >> 34,000. >> but that's -- for the most part, there were a handful of quarters where -- i would argue this is close to flat. there were a handful of quarters they were up marginally, people thought that was remarkable. >> theme parks up 15.6% revenue to 1.3 billion higher attendance and per capita spending on the success of harry potter and hollywood the openings of minion park in japan, and volcano bay in orlando. the ebita for theme parks up 17.3% to 550 we went over most of the metrics in comcast cable cable revenue was up 5.5% to $1 billion. cable ebita up 5.4 to 5$5.3 billion. anything else? >> what do you think of this talk that comcast should buy verizon? >> the report from yesterday came out while "squawk" was on i think that it's not going to happen the wireless business is a terrible business. >> yes >> so the question is whether you need it streej it strategicy defensively at some point. if you look at sprint and t-mobile, do you let them merge s that a bigger bite five years from now or smaller bite i think you have five years. i don't think you have to do something right now. i do think long-term, if you own the pipe, you want a wireless option you need more of a wireless option tofrnlgt your point right now we saw they're able to raise prices still actually increase the number of broadband consumers. verizon has to lower prices. the churn is terrible. >> you don't need to be in that business >> why do that >> you don't have to you have time. >> i think time is on your side now. the problem is you never know when time won't be on your side. that's the harder part to figure out. >> what i find most interesting about this issue is actually nbc-u has a product that they could use on their own for wireless except the government doesn't legal them we have spectrum that was given to us because of the titanic remember all of this broadcast is done over spectrum that could be used for ovther things if the government would loosen up the rules they have about it you wouldn't have to go out and get somebody else's spectrum >> that's another subject. >> that's my free market utopia down the road. >> remember when ge was selling nbc? that network was mired in -- it was in fifth place it quietly has become number one. >> three or four years or something. >> quiquietly. >> while you're competing with this new content >> finding it in different places >> talking to the producer about how kids view media. my kids don't have a show on tv that they tune in to >> you mean at a certain date or a certain time >> they watch netflix, youtube and not on a tv. >> did you see fate of the furious? >> i haven't seen any of those >> they're great so campy >> minions, that's what we did >> i watch old movies. i don't know >> in media deal news, viacom reportedly out of the running to buy scripps networks that leads discovery communications as the sole suitor scripps and discovery have agreed on a price believed to be at least $90 a share 95 maybe even. everything needs to be finished before the deal is done. everything is expected to be finalized in a few days. facebook shares rising to an all time high based on better than expected numbers across the board. jowl jew julia boorstin joins us now. >> advertising surpassed expectations revenue grew by 45% to 9.32 billion, earnings growing 19 cents higher than expected i spoke with sheryl sandberg last night, the coo about where they're pushing to drive revenue next >> our goal is to be a platform for content advertisers. we're making early investments and kick starting the system to get video views on facebook. >> on the call last night, mark zuckerberg talked about potential business that messenger can generate down the line >> we're starting to put some ads into the product just to see the basic parameters on how that performs how people like the ads or they don't. how they work for businesses get an understanding of that. >> zuckerberg warned that the ad volume on messenger would be very small but it's important to get businesses to use messenger to interact with customers. >> thank you very much for that. for more on facebook's earnings, we want to bring in an analyst from mones cristi harden & co it seems like it never ends. >> the street was looking for 43% growth in advertising. they post 49 it doesn't stop. >> so is there anything you're worried about with the company >> yeah. a couple things you have to consider right now you could be operating in an environment of peak margins. as we move towards video, there's going to be a rise in content cost associated with that when you look at amazon and netflix spending a combined 10 billion, at what point is mark zuckerberg willing to go to compete for those tv audiences >> so the news feed is maxed out. they can't stuff more ads. unless they charge more for the ads. video, when sheryl sandberg says episodic video viewing, does she mean episodes of television? charging commercials like we do on a tv network? >> exactly it's two prongs. one is the short-form content they're trying to do, which is on the cheap the long-form more premium types of experiences we will startiversary th promotional data plans the average revenue per user has been slowing for four quarters so they will need new levers like video to yuf soffset the decline. what do you think the stock is worth? >> theoretically you can make the case for at least 25% higher from here. i'm neutral rated becaus af aforementioned risks, but it's not that hard to sharpen your pencil >> in terms of a value play, how do you compare this to google to snap, we have not mentioned snap yet. >> yeah. >> or even twitter >> i think google is without question the most favorable risk/reward tradeoff it is trading ten times ebita. numbers continued to grow. commentary from them on the new growth levers like youtube and hardware will be -- and the cloud are bullish. when you consider facebook, there's more risk to the story there as it relates to the margin on snap, we'll have to see on august 10th. >> is julia still with us? i was going to mention the regulatory risk on facebook. we saw the fine that google paid we know about the potential overhang of other fines or payments that may have to get made to satisfy regulators in europe where do you see facebook? >> i mean, i think a lot of the risk that facebook faces on that is related to the multiple, and could be driven from amazon. i think amazon faces the greatest risk. if you see greater scrutiny placed on amazon that could translate to heightened concerns on facebook. >> we want to switch gears to amazon you've been writing about regulatory risks in the wake of the whole foods deal what do you think will happen to amazon >> honestly this could be the first trillion dollar company. there's very low risk for the ftc to not approve this deal if they do rubber stamp it as yes, there's very little to stop this >> have you read his piece he thinks it's not a good idea for them to approve it. >> you think this is -- you think this is a transformational deal for amazon. amazon will say privately, no, no, no, it's a small transaction. hopefully it will help consumers. we'll run it independently you don't believe any of that? >> no the argument is it's only 2% of growth stream. here's the play. once you enter into that, what you do is you drive gross margins to virtually zero on the food side. another deflationary component of the economy, which will drive more and more demand and touch points for the consumer. then you go to prepared foods, an 8$800 billion industry, which is bigger than grocery that they can tap into the restaurant market then with the rollout of 5g, better ability to predict preferences, which will drive people away from brands and more into privately labeled goods, making every product about function and price rather than branl brand. i talked about the depth of the energizer bunny -- >> now i will push back. both of you should be excited about this isn't this what capitalism is all about? isn't this what's called progress >> yeah, absolutely. i'm pro capitalist i work in the financial services industry >> he's pro capitalist >> did you read the -- >> but his piece really raises a concern about this deal. >> here's the way i look at it the internet has changed the game as companies get bigger, it's better and better for the consumer you are getting better prices, better experiences, better data. the question is to what point is it better? >> for the consumer or better for society because so many people you think won't be working? >> what's the negotiaative? >> you also have to think about tax revenue to jurisdictions, to local and federal just jury dictiric jurisdictions. >> things i don't worry about. >> let's assume you're right at what point is it the role of the regulate toor to step in? to believe you're correct, a regulator not only has to decide that that's happening now, they have to more importantly predict that this will happen in the future that's a much higher hurdle. >> i don't know if this is correct, all i'm doing is pose questions. >> i love when people pose smart questions. >> totally novel idea for you. >> the way i print it in the report, i call it amazon's contract with america. the contract is we'll let you get bigger as long as you give us better and better prices. is that a good thing ultimately at the end of the ay when you think about retailers and whatnot, it's all the way down the supply chain. when you talk about restaurants, it's not just food it's down to the seat. down to the cow. >> i'm trying to nail the harm harm is employment, loss of tax revenues to jurisdictions. what else? >> loss of brands. >> so. so what? >> well, i mean -- >> loss of brands -- >> i'm not -- >> can i add that i think you assume total success from amazon the brand -- it's all going to be private label all i hear is millennials want to know it was crafted by hand from some individual in a developing country and it sounds totally ant antithetical to everything you're discussing that amazon will do to the world >> amazon has been nothing but good for society to date the whole foods deal may be a turning point and people need to consider the broader implications of this deal. >> i agree >> there was a world before brands, before somebody wanted -- >> i hate to say it's different this time. >> but you think it's different the. >> any time i say that i'm wrong, but ultimately the internet changes the equation. and it's just to be considered i shop on amazon i have so many brown boxes i'm on prime >> i think it's a great conversation i think they are important issues the question is what do you do about them we will continue >> if anything >> we will continue to talk about them >> if you haven't read his piece, it's very interesting when you say this guy thinks amazon is going to a trillion dollars, buy, buy, buy it's not, you have a hold on the stock. >> i have a hold on the stock. >> if it goes through, there's nothing to stop it. >> why do you have the hold? >> because you're seeing escalating conversations and growing chorus of concern on the regulatory side. that could impact the multiplei- >> will you upgrade it >> i can't say that now. >> >> you have some company with people that have mentioned one guy who has not been right in 10, 15, 20 years about anything short -- said to short amazon at 1,000. i won't mention names, because he would love to have his name mentioned. but he shorted 1,000 he just tries to get his name out there. i'm telling you, worry when you're in the company with this guy. he has been wrong -- >> no one is talking about shorting >> this guy was at 1,000 >> over the next 12 months, are there opportunities that could appreciate faster? that's the premise >> i'm just warning you. you're on the wrong side with this clown >> i'm hedging effectively >> who is the clown? >> i would never mention -- that would make his day believe me he's invisible basically >> can't get on tv anymore >> i wouldn't dare short amazon. especially not until the print tonight. >> if you say -- never goes back and checks what he say no one else does either. i don't think he manages much money. >> thanks. >> thanks. coming up, senate republicans -- >> i know who it is. >> thank you >> the next step -- possible skinny repeal. kayla tausche will explain what that means next. whuuuuuat?rtgage offer from the bank today. you never just get one offer. go to lendingtree.com and shop multiple loan offers for free! free? yeah. could save thousands. you should probably buy me dinner. no. go to lendingtree.com for a new home loan or refinance. receive up to five free offers and choose the loan that's right for you. our average customer could lower their monthly bills by over three hundred dollars. go to lendingtree.com right now. a used car, hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. welcome back to "squawk box. big movers in europe to tell you about. shares of astrazeneca having their worst day ever after the company's experimental lung cancer drug failed a major test. shares of the pharmaceutical company are down 6%. shares of diageo shooting higher after the company reported better than expected results. the company announcing a $1.9 billion buyback. the ceo of diageo will join squaux stre squawk on the street later this morning. shefrn >> she said -- shell said. i'm sorry. you're supposed to describe companies in female form >> that's hurricanes >> companies, you should do it >> shell says profits triple last quarter despite a pullback in oil prices. europe's biggest oil company reporting revenues of 72$72.1 billion in q2. 4.3 billion more than expected deutsche bank shares are under pressure after revenues dropped 10%. the fixed income trading business underperformed. >> that's a bank in the spotlight a lot lately senate republicans falling short of the votes needed to repeal obamacare for the second time in 24 hours leadership is working to pass a stripped down skinny repeal. kayla tausche joins us with more on what that means and whether it will pass. >> >> they're getting creative here skinny repeal would repeal the mandates from the affordable care act and the medical device act, but still require a fuel agreement at a later date. when the cbo scored a similar bill in the past, it found 16 million people would be uninsured. a senior democratic aide said the cbo told lawmakers that premiums would rise by 20% the likelihood of passing appears slim, with a group of bipartisan governors urging to write lawmakers to work with governors to solve problems that we can all agree on. the white house spent yesterday celebrating a deal to bring a new foxconn factory to wisconsin. the deal will bring about $10 billion in investment. the possibility of up to 13,000 jobs >> when this investment is complete, foxconn has the potential to create more manufacturing jobs than we've seen in many, many decades chairman, i thank you for your investment in the american worker they appreciate it they will not let you down >> at the white house the president was flanked by house speaker paul ryan, chief of staff reince priebus, and his son-in-law, that would seem to provide university between the white house and lawmakers despite reports overnight of potential infighting and palace intrigue at the white house. >> what is the latest with smooshsmoc scaramucci >> he was condemning a leak of his financial forms, showing what he made and what he was worth this year. but in the tweet where he talked about contacting the fbi and the justice department about the leaks, he tagged reince priebus which led some to believe that he was going to be notifying the fbi and the justice department about reince priebus, which there have been reports that scaramucci believe reince has been out to get him. the fbi was contacted about investigating reince, but then scaramucci tweets this morning, nope, that's not correct i want to read you the exact tweet. he said wrong, tweet was public notice to leakers that all senior administration officials are helping to end illegal leaks at reince45. the timing and the content and the people you tag in the tweets -- >> in the history, supposed history between those two. a lot of intrigue. you -- how about you, with your timing you're a genius. genius genius when you went down there >> i am not going to dispute that >> all right >> did you catch her joke? chances of repeal are slim >> i like that fat chance >> we talked about one of our -- you remember j.w. wald, our friend he said -- he pointed out that skinny isnew adjectiv for everything skinny margaritas, skinny bundles. great minds. coming up, wall street's fear gauge trading at an all-time low. we'll talk strategy as we head into the busiest day of earnings here's a look at yesterday's s&p 500 winners and losers hatter ] [ intense music playing ] it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the gle350 for $579 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing. i'm the one clocking in... when you're clocking out. sensing your every move and automatically adjusting to help you stay effortlessly comfortable. there. i can even warm these to help you fall asleep faster. does your bed do that? oh. i don't actually talk. though i'm smart enough to. i'm the new sleep number 360 smart bed. let's meet at a sleep number store. note no welcome back, you're watching "squawk box" from the nasdaq market site in times square >> look at u.s. equity futures at this hour the train continues to go towards washington boy, have i not been on it the dow up another 9 points. looks like it would open 9 points higher. the nasdaq 30 points higher. the s&p 500 looking to open 3 points higher. >> stocks to watch today pay pal raising its earnings outlook after reporting results that top analysts expectations users of pay pal's venmo platform transferred $8 billion last quarter shares of buffalo wild wings taking a hit in the premarket. the company reported earnings 66 cents a share, well short of $1.05 analysts were expecting. stock is off almost 8% company blamed high chicken wing costs and operating expenses fed is complaining about a lack of inflation, there it is. whirlpool cutting the full-year outlook after reporting a drop in the second quarter profit the company says it is weathering a sales decline in europe and a higher tax bill dollar has been quite weak verizon is reporting 1.07. that's on a gaap basis, on an adjusted basis, 96 cents that's the number to use that's in line with expectations the adjusted number excludes special items, acquisition and integration related charges associated with yahoo! in the second quarter verizon wireless added 614,000 post paid net additions, including 358,000 net phone additions. it said it built on momentum since the launch of the verizon unlimited plan in mid-february the customer growth exceeds analyst expectations a srelease there's a strong quarter in adding and retaining wireless customers. did you see a revenue number on this verizon revenue, 30.55, above the estimate of 29.9 the stock up a bit right now we'll go into some of these. we have churn and all kinds of metrics when we mention verizon. at this point, after it's all said and done, it's up less than half a percent softbank has been busy over the last three months. barely a week has passed without reports of a new investment by the $93 billion vision fund. it is in shared space work space company wework that investment was lead by softbank, a chinese private equity firm. softbank is leading a 2$250 million funding round in startup slack. that brings slack's valuation to about $5 billion softbank has taken a 5% stake in ro roomba maker irobot and considering an investment in uber softbank bought alphabet's ro t robotic's division boston dynamic in june. they have some robots that look like animals that are really moving >> they're cool. >> life-like >> life-like is the word >> let's take a closer look at the markets after hitting the record lie thigh trifecta. joining us is knnoah black steen and j.j. kinnahan. i look at him and i see the vix. that's what we always talk about with you, joe. it hit an all-time low again does it still matter is it telling us something do we start to value the information we're getting from it less? >> i think, joe, it's working theoretically as it's supposed to >> okay. >> everything i always learned about options is when the market goes higher, theoretically slol untility should go lower because there's less fear. when we go down, fear comes back into the market. what's different this time is for so long the bigger groups were buying vix protection what i understand is happening with people now, they're saying we're going to buy less. there's less demand for the protection right now what they're saying is we're willing to take a 30% or 40% risk on the vix because we'll be buying it at 14 or below they're willing to do that for so long they were buying protection and getting punched in the face month after month after month as these options went out worthless it's sort of a show-me move. people realize the risk is that everybody may be heading for this same door at the same time if we have some skoort of sellof as much as there's all this political intrigue every single day, you guys have a great story to report every day from d.c., the market is saying it doesn't matter it's all background noise. the things that truly matter are earnings we're in the middle of a good earnings season so far >> i could make a case for the vix, but it makes me nervous i could make a case why it's so low. you have interest rates on a historical basis still so low. they may be going up but still so low inflation is under control globally you have synchronized positive developments on economies everywhere, stock markets, earnings. but it worries me because it's a measure of complacency you don't know what's coming half the time. you don't know why you should be nervous. >> like i said, the problem for many people is that door will get small when everybody heads for it at same time. again, if people are willing to take that risk, right now they are, if they lose 40%, 50%, you're at a 15 or 14 level, that's still low for the vix >> noah, you point out that the rally has broadened recently do you worry about the vix and complacency? should we just not -- keep it still p simple, stupid and keep buying >> i think the market is broadening i think if you earnings, you have stuff gapping up and down. individual stock volatility is still. there the hedging programs are all interesting for the macro tourists and those people, but individual stock vol is definitely there that's based on earnings we're moving into a much more earnings driven market you can use options, i guess, if you want to hedge individual companies. you know, that's not what i do i'm focused in on individual companies. there's certainly volatility in individual names >> it's refreshing what you said, earnings driven market the fed made a decision yesterday. have we mentioned anything about them >> their decision was no decision >> no decision but there was a time the federal reserve, the day before, the day of, the day after we would be parsing everything they say. >> the ten-year is stuck >> i hear this over and over again. buy vol. buy volatility it's cheap it's a big trade that a lot of people want to put on. do you think about that? is that something that the average person at home should consider doing >> no. i think in terms of what i do, i try to buy companies that have the overall ability to grow over the next number of years look at what facebook has done since it went public and how much wealth was created there. buying vol, selling vol. it's an interesting thing. i'm not sure it's for the average investor it's not for me at all i would rather search for the next facebook or netflix fli i'll leave the vol selling to somebody else. i'm not sure how to make money doing that >> michelle, what i would say on that, i think people can buy volatility but again, it's not that hard a concept, if you buy options, you're buying volatility overall. but people are trying to pick the low. catching the falling knife is not a good game for the average retail trader. that's what we do is talk to retail traders all the time. the one thing i will say is occasionally i hear people say i will buy -- i'm nervous about my stock. i will buy a bunch of puts to the down side. so i get protection. not the worst idea but if you're nervous about a stock, why are you longing the stock? one thing that retail traders have to take away there this market, if you're nervous, lighten up in your position. that's what professionals do all the time look for other things to do rather than trying to pick tops and bottoms. >> yeah. we don't need bottom picking >> oh. oh >> that took me a second >> the second he said it -- >> well played, joe. you have to hang out well enough >> well done >> well played >> thank you, gentlemen. then this next story, i immediately thought -- >> straight to the gutter. >> why would someone go on "dancing with the stars. >> i don't know. >> should we read it to them >> i think he would. >> can we explain what's going on first >> people know >> "dancing with the stars" wants to waltz with sean spicer. sources telling page 6 the dancing competition show reached out to spicer about joining. rick perry competed last year. he was voted off in the second week he looks like he would be a good dancer >> why would -- >> what are you paid to be on "dancing with the stars" f >> not enough. >> i think you get 80 -- you get a lot. >> for a short amount of time? >> if you stick it out long enough, do you get more? >> do you want to pause? >> there's no way. no way >> you would, right? if they asked you? >> i'm such a bad dancer >> yeah. but that wouldn't matter for you. you're not that great at this, but you do it every day. >> my gosh >> i'm so glad i woke up this morning. came in. >> tucker carlson -- usually you think of it at end of -- >> you hugged me yesterday you gave me a hug. >> you did >> he gave me a hug. >> we hugged >> why >> i'm not sure. >> you must have felt bad about something. >> no. no se no seriously, the mainstream media think sean spicer is somebody to laugh at now they're setting him up here to have him laughed at more. does he know that? >> did you tell him? >> they wanted to get lochte? >> is it worth it when you're the butt of the joke and you don't realize you're the butt of the joke -- what about you >> i would never go on "dancing with the stars." >> really? i thought there was a lot of money in it. >> you look at -- >> maybe trying to reposition your brand. >> he was in government work >> now he's doing something else >> i think he said no? we don't know? >> if you don't know what page six is, that's the gossip column of new york city >> a finalist makes about $345,000 on "dancing with the stars. i don't know what you get fryar to that. >> you have to be good work hard. >> this is according to the internets. i don't know if it's accurate. $1 $125,000 to participate in the show is the baseline you can step it up after that. >> hey >> coming up when we return, we have an earnings alert procter & gamble set to report at the top of the hour john moeller will be here first. and then we'll talk about foxconn's plan to build that $10 billion plant in wisconsin reed cordish will join us. then we will talk to wisconsin governor scott walker. i'm going to go dance with the stars now. . time for the executive edge. if you're selling your home right now you may see the highest profit in a decade diana is in washington to explain why. i don't know what i'm going to do tell me. >> two reasons here you go. home values have shot up quickly in the last few years and homeowners have stayed put due to the recession add it up, those who sold in q2 of this year saw the highest profit in a decade on average $51,000 that represented a return of 26% on the previous purchase price again, that the highest in a decade all of that according to a new report from adam data solutions, which also found that home owners who sold had been in the home just over eight years that's the longest tenure going back to the year 2000, which i guess is when they started tracking this. so with all that profit, why are more people not selling? because they're afraid they won't be able to find or afford something else to buy. part of that is because cash is king the share of cash sales in q2 increased annually for the first time in four years nearly 29% of all single family homes and condos were cash, up from 27% a year ago. so, where were the biggest profits? san francisco, san jose, of course seattle and denver, which have high demachbd annd and exty low supply homeowners are being put longest in san jose and san francisco also but it'sso expensive. you will boston, providence and hartford back to you. >> wow prof providen providence i like providence. >> no dancing there. >> would you do it -- we'll ask this question of all guests. >> diana would do great >> push-ups of the stars no dancing >> yeah. we've done that. >> we've done that i mean -- one of us. >> you've been -- >> one of us >> right >> you've been training, too just in case there's a rematch >> i haven't been. >> you haven't >> i need to >> thank you >> you are not overfat at least you're not overfat. you know overfat, half your waist has to be half your height >> bmi thing >> yeah. >> you measure your waist, it must be less than half your height >> okay. >> he's like so far under. >> how are you doing >> i'm right on the -- >> on the cusp. >> on the "dancing with the stars" diet. >> if i go eat something, i'm over if i don't eat anything, i stay under. >> starvation is an option coming up, the cnbc iq 100 is an index of the 100 large cap companies best using technology with their own proprietary technology business is up 20% since the election we'll break out the index leaders next. and we're expecting reports from procter & gamble and twitter at the top of the hour ray's always been different. last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques. remote moisture sensors use a reliable network to tell them when and where to water. so that farmers like ray can compete in big ways. china. oh ... he got there. that's the power of and. >> i think getting them close but making sure these are significant cuts. >> their coverage estimates we believe are significantly in error. when they work on the numbers on how much something costs, they do a pretty doggone good job. >> are you at this point a proponent of single payer. >> i think eventually it will happen. >> this is a great day for american workers and for everyone who believes in the label "made in the usa." the cnbc iq 100 index up over 20% in the last year. joining us to break out the index leaders is david martin, founder and ceo of mcam, helped cnbc develop this index. you only make it in this index if you have a lot of your own intellectual property patented that you benefit off of. >> yes and if you actually have anticipated where that future margin price is going to actually make a difference, so it's not just having the property, it's actually anticipating where you need to have property to take advantage of market opportunities. >> in other words, using it. >> yeah. there's a lot of people that defend things. this is about going after new opportunities and making sure you're anticipating the market. >> so terradyne which i think of as a testing company, best performer, up 20% for the quarter. >> yep >> why >> so terradyne is in this space we like to refer to as augmented intelligence they're look at ways both at the manufacturing level and at the product level they can integrate sensors intelligent manufacturing processes. they're bringing state-of-the-art both manufacturing and utility into applications where the market actually can use those kind of things to make smarter devices, smarter manufacturing lines, and then ultimately have better testing, sensitivity measurements and everything else so they have actually anticipated where that miniaturization, smaller, more intelligent device is going and they have actually won big, because they actually saw where the market is going. >> amd, advanced microdevices, a name everybody has been familiar with so long when it comes to chip manufacturing, they come in number two they're up 16.5% in the quarter. >> yeah, so they moved away from just wholesale and they went into precision that was the smartest move they could have done. when in a world of semi conductors there was a glut, if we remember even 18 months ago or 20 months ago we were talking about this massive oversupply, moving into spaces where you're integrating analog sensing, you're integrating a bunch of precision sensors into intelligence on a chip, intelligence in a conductor, those kinds of things are why amd is not only soaring but why their outlook looks so positive, because they're going to actually supply precision custom technologies into where the future of the internet of things is going. >> i remember i thought of amd as a commodity producer, just like copper and a copper producer, just like gold and a gold producer. >> if you go back to a few months ago when cnbc had the draft for picking stocks for the nfl draft period too, one of the things that we said was amd is going to actually have a beautiful surge this year, and cramer had this skeptical view and it was great to see yesterday when their results came out and people started talking about it, you actually start seeing people say, hold on a second, how did this sleeper come to life that's what the index is measuring, the sleepers that actually have those technologies that are where the market is going to go and not just where the market has been. and that's where amd has a strategic advantage because they have anticipated the future market. >> applied materials this is the company that helps amd make the stuff. >> there you go. >> they're up 14%. >> not unlike teradyne you have people that understood that being part of a supply chain is actually critical, so you're actually part of the intelligent machines that are making intelligent machines. this is that giant fearful thing that elon musk is worried about. we're anticipating where intelligence can be applied to make a more effective production line, a more effective device, a more functional utilitarian framework, is actually a smart thing. >> all of the companies we've talked about are near all-time highs or 52-week highs, they're all kind of in the chip space. that's true right now. what is it about the moment right now that makes almost all these semi conductor companies in some form or fashion. >> manufacturing has gone from what we call the rough robot, that giant device that actually welds and builds and everything else to the intelligent robot that gets into that smaller, more precise, more integrated chip design, everything else it's the guys that are controlling that entire supply chain. smart lines, smart products and smart augmented intelligence. >> wow you're a smart guy thanks. >> thanks. >> that's why you invented the iq index good to have you on. >> great to be here. >> foxconn, electronics is foxconn, taiwanese firm investing $10 billion to have a manufacturing facility in wisconsin. we'll talk to reed cordish about it, assistant to president trump. and then wisconsin governor scott walker, big win for him. "squawk box" will be right back. , good morning today's top stories, at least for us, earnings we've heard from verizon, we've heard from comcast up next, procter & gamble. the company's cfo will join us live after the results. plus tech talk facebook shares soaring for an all-time high on its earnings report probably about $400 billion now. twitter gets ready to roll out results next we'll bring you the numbers and the instant analysis. and then a big bet on america. apple supplier foxconn plans to invest $10 billion in the midwest. we'll talk to two people with close ties to the deal, presidential advisor reed cordish and wisconsin governor scott walker as the second hour of "squawk box" begins right now. ♪ >> announcer: live from the beating heart of business, new york city. this is "squawk box. >> good morning, welcome to "squawk box" right here on cnbc. becky is off, she'll be back tomorrow we do have some earnings that are crossing the tape as we speak. twitter results just hitting that tape. julia boorstin joins us with the details. good morning to you, julia. >> that's right. twitter beating expectations on revenue and earnings but its monthly active user numbers were flat from q1 at 328 million users. analysts had been expecting monthly users to grow to 32.5 million. twitter did announce revenue of $574 million it's down 5% from a year ago, but beat projections of $537 million. twitter changed its accounting methods but said using comparable numbers -- they have earnings of eight cents per share. twitter, despite those monthly active users that were flat pointed to daily user growth didn't announce a daily active user number but said they grew 12% from a year ago, which would be the third consecutive quarter of double-digit growth i spoke to twitter's ceo, jack dorsey, who stressed the importance of that daily usage saying they wanted to build something people use every day and they're seeing improvements to the timeline, notifications and replies all making twitter more relevant. dorsey telling me they're seeing the impact of those improvements and that gives them confidence in twitter's core use case i also shoek to tspoke to the co and he said video is twitter's fastest growing business and they had a strong debut with its digital content at the new fronts they're seeing the decisions they made last year to restructure, to close vine and to sell fabric are paying off. as for guidance, earnings guidance was on the lower end of expectations twitter forecasting adjusted ebitda of $120 million instead of $146 million. the stock is trading down 2.5% we'll be listening for more on the earnings call which starts at 8:00 a.m. eastern >> julia, so the stock had a great quarter in part because last quarter it actually surprised with a big increase in the number of monthly active users and also daily active users. everybody was wondering is that for real, is that going to continue or is that a blip the stock is acting like maybe that was a blip. >> yeah, absolutely. i think one of the issues is when it comes to monthly active users, it is a seasonal thing. you might gain one in one season and fewer in another wall street is interested in the monthly active user number but the company has been trying to shift attention to the growth of the daily users. they don't tell us how many daily active users they have, they're just telling us what the percentage growth is so certainly a different messaging from the company as they try to stress that daily growth but i think there's still real questions about how big the potential audience for twitter is maybe this is a product whose core use case is to appeal to 330 million people and that's about it, so i think that's really something that's going to be pressed on the call coming up. >> sure, because it certainly looks like a much smaller number thanks to the facebooks of the world. thanks, julia. procter & gamble is also just out with results. earnings at this point, at the company a couple of numbers. we'll use the adjusted number of 85 cents that would be above the 78-cent estimate the net number was 82 cents. sales, i don't know how this will play. sales basically flat because of some negative currency effects organic sales were up 2% in the period and then for -- this is the fourth quarter, so fiscal '17 is now done, so now we're seeing some comments from the company about next year, about fiscal '18 core earnings per share growth is seen at 5% to 7%, although gaap earnings per share down 26 to 28% for the first quarter it will be the lowest organic sales for fiscal '18 this is the first report since activist investor nelson peltz launched a proxy fight against the company. joining us now, john moller, cfo and a member of the cnbc global cfo council. so you had some currency headwinds in this case, john the dollar has been getting weaker why? >> as you said, we just finished our fiscal year so those were earlier in the fiscal year we had about $600 million after tax and commodities, but a strong set of results. we delivered or exceeded every objective that we set for ourselves over the fiscal year period about 2% organic sales growth is what we were targeting we delivered that. 5% or mid-single digit core earnings per share we delivered 11. 90% free cash flow, we delivered 94 it was a huge year of return to shareholders, $22 billion through a combination of dividend, which we increased for the 61st consecutive year, share exchange associated with the beauty deal with coty and share repurchase we also completed the important work to strengthen and focus our portfolio going from 16 categories to 10, from 170 brands down to 65, and so significant progress which we're singularly focused on improving as we head into next year even further. >> it's hard to grow revenue for a company the size of procter & gamble, is it not, john? >> you know, i truly believe that the best days for our company and the consumer product space are ahead of us. the fundamental drivers of consumption or categories are population growth and income growth, which are both alive and well, albeit with some bumps along the way. also if you look at category development in different parts of the world, in the top 14 markets that we compete in outside the u.s., category development, in other words, consumption per capita is only 18% of what it is currently in the u.s. these aren't back waters, these are major companies. so there's significant opportunities to continue to grow this company. >> what is the -- what's affecting gaap next year >> we had a big gain this year in the transaction that i mentioned, which is the sale of 43 beauty brands to coty in the form of a split merge. so that gain sitting in the year that we just completed it won't be in next year >> how is the first quarter, typically in terms of organic growth, that's the weakest of the year, organic revenue growth >> we expect it will be next year for several reasons one, market growth was much higher in the first quarter last year than it currently is. second, we took some price decreas decreases, for instance, in the u.s. and that won't annualize until later in the year. so the first quarter will be a little lighter than the balance of the year but for the balance of the year we're expecting 2 this year to 2 to 3 next year sales growth trying to increase operating earnings from 2% this year growth to 5% to 6% next year, which should yield, as you said, 5% to 7% growth and just continue to -- >> john, there are some nonbelievers i had someone message that really in six years there hasn't been a lot of revenue or earnings growth and andrew has pointed out the multiple a few times, and then you've got activists swarming around the company too. what puts you in a position to where they're looking at, i don't know, steps that need to be taken to increase results >> well, first of all, we have lots of activism, as you would expect, inside the company as i mentioned, we're in the middle of our biggest transformation ever as a company. the portfolio focusing and strengthening, significant cost reduction, productivity up and down the income statement, across the balance sheet $10 billion in cost savings achieved another $10 billion we're working on currently to reinvest and fund that top line growth that we're all looking for. >> john, just to the specifics of what nelson pelten has suggested and maybe there's something else, but they made the point that organic sales have grown just 2% a year, which they say is just half the industry average and the volumes are just a total of 3%, which compares to 15% compared to peers. what do you make of that >> well, first of all, if you just look at the quarter we just completed, 2% organic sales growth on the top line, the companies in our space that have reported thus far, that's well ahead of the average it reflects the implementation of the program that i've talked about, which is just starting to take effect and improve results and we expect that acceleration to occur as we go through the next fiscal year. >> one other thing real quick. what about on the r & d side, because you're spending money on r & d, but there's an argument to be made, at least by some analyst investors, that it's not effective. that you haven't come out with new products that really have been able to move the needle >> well, if you look at innovation in our space as measured by outside firms, level of new retail sales, for example, we have more new offerings in the top 10 and top 25 than most of our competitors combined things like tide pods which took a category that was declining and turned it into a category that was growing 3%. 90% of the growth in the laundry category in north america has been driven by unit dosed detergents another example is always discreet, a female incontinence product. our objective was to bring a better product to the marketplace and double the rate of market growth in the category, which we've done in the u.s. and done in europe. so there are many examples i think the cutting back on innovation at a time like this would be the biggest blink of all time it's something we need to continue to invest in and drive. >> he brought up some other -- sometimes there's a metric that really stands out. nelson peltz hammered this a lot. they have a 40% price advantage in these big categories. you're number one, and yet your margins aren't better than the other guys that really stands out why is that? >> first of all, our margins last year, for example, on an after-tax basis approached 17% that's second highest in our industry over the last four years, we've built margin 270 basis points on an operating level 620 basis points excluding foreign exchange profit per employee is up 45% over the past five-year period so we're going to continue driving top line, we're going to continue improving the margin with a productivity program that we have in place and we're going to continue leading this industry. >> so that criticism is essentially wrong, you think >> the notion that we have a margin that's lower than the average is definitely wrong. >> oh, no, he just thinks it should be higher than where it is considering all of the advantages that you appear to have. >> first of all, if you have a product -- why do we have higher price points in some categories? it's because we have products that carry higher advantage and preference for consumers often those products require more cost to produce there's better juice in them and so it doesn't -- just because you have a higher price doesn't automatically translate to margin. to the point of being able to grow margin, fully agree and that's what we're fully committed to do. >> did it bother you when he talked about how what a large percentage of the employees have been at the company for so long? you're a 29-year veteran of the company. you seem to sit right in the square -- center of that kind of criticism where he thinks there should be far more turnover and new blood coming in from other companies. >> first of all, i'm thrilled to work with a team that i work with it's a terrific group of people, a terrific group of talent top to bottom. there are many situations where we can improve that talent profile by selectively hiring from the outside for an experience that people aren't getting here i do that repeatedly in the finance and i.t. organizations where we don't have a skill that we need or where the skill set is better outside, by all means we need to be open to that option but again, this is a fantastic team that i work with. >> a lot of tough questions today, john. i might as well get it all out on the table the reds, 19 below .500. they're horrible they're horrible >> i think it's 2019 that we need to be looking to, joe. >> god almighty. >> and tell them don't bother. >> okay. look, and they're not the worst. the giants are even worse and then the phillies are worse. but i don't know pitching pitching, right? you've got some hitters. >> football is not far away. >> oh, good. oh, good, that makes me feel better the bungles. okay, thanks, john we appreciate your answering all of the questions today we'll see you next time. thanks >> great, thank you. >> you had to know they were coming, right? >> that's okay he's here. >> i give him a lot of credit. coming up, tech talk twitter topping estimates this morning following the beat by facebook last night. we'll talk about both companies with an analyst, next. hey you've gotta see this. c'mon. no. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. welcome back to "squawk box" this morning foxconn announcing a $10 billion investment in wisconsin. president trump praised the deal yesterday. >> when this investment is complete, foxconn has the potential to create more manufacturing jobs than we've seen in many, many decades chairman go, i thank you for your investment in the american worker they appreciate it they will not let you down >> joining us right now to talk about it, assistant to the president, reed cordish, he's also part of the office of american innovation. good morning to you, sir thank you for joining us congratulations on the investment how did it happen? how did it come about? >> thank you so much for having me on. this was the culmination of many months of negotiations and discussions, negotiations that were led by our office but personally involved the president on multiple occasions to attract a company of this stature to return manufacturing to the united states it took a full team effort and that's what we did. >> you talked about 10,000 construction jobs over the next four years to build this and then workers that will be paid $53 or close to $54,000 plus benefits you say it could eventually employ 13,000 workers. is that just in wisconsin or are we talking about investment that's much larger across the country at this point? >> well, both is really the answer the stats that you just said is just in wisconsin. that's what foxconn expects to reach just in wisconsin in the coming years ahead, but they also then fully expect as part of their overall ecosystem they're creating to grow to other states and create thousands more jobs in that effort. >> just to clarify one point, the headline number that was talked about yesterday, $10 billion that foxconn is making investment, is that in the united states broadly or is that in wisconsin itself, because that's a lot for one factory. >> i want to be very clear it's $10 billion in wisconsin itself yes, that's a lot for one factory, but you have to understand the size of this factory. this is multiple lambeau fields. this is a factory that would be equal to any that we have in the united states and any that we have -- that there are in the world. it's a gen 10.5 fab, which makes it the most absolute cutting edge technology and one of the largest sized factories in the world. >> by my math, and you can tell me if i'm wrong, foxconn's total property plant and equipment worldwide is $10 billion >> well, foxconn is one of the most successful companies in the world. they're a fortune 30 worldwide company. and their holdings are immense so i don't want to call you on your specific math, but they are more than capable of doing this. they have plants that are similar in china and in japan, so this is nothing new for foxconn. this is just their most state-of-the-art technology. but they have done this and achieved to this scale before and they'll be successful in the united states. in fact, they'll be more successful in the united states for a variety of reasons. >> reed, one of the existential questions that so many in the country talk about when it comes to jobs is robots, and whether robots will take people's jobs foxconn employs tens of thousands of people but they have also been a big proponent of using more and more robots. have you had conversations with them about that? >> well, i think what you have to look at is this is an example, and this is a clear demonstration, that we shouldn't fear advanced manufacturing, robotic manufacturing, skilled manufacturing, because it still creates thousands of jobs. someone still has to run the plants, someone still has to control the machines, and there's still plenty of labor needed to run plants like this but this is where america can not only compete, but we can be dominant globally in advanced and skilled manufacturing. with the policies of the trump administration and with the strength and skill of the american worker and our technology and innovation, this is where we can really dominate. >> hi, reed, it's michelle here. the president said a couple of days ago that tim cook, ceo of apple, had promised to build three factories. foxconn does a lot of manufacturing for apple and there's questions about whether he was talking about these instead or should we expect apple factories in addition to this foxconn factory. >> the president is completely committed to our best companies manufacturing in the united states our buy america policies where the federal government and companies that receive substantial incentives from the federal government will now buy american products and are required to buy american products as an example of that he's had productive conversations with apple to that end, but i'll let him handle those questions. this foxconn announcement, although they're a major manufacturer for apple, is separate from the conversations with apple >> oh, great, okay >> so it is separate, okay and the other question i'm selfishly curious about, when you're negotiating these types of things and trying to bring in investment like this, how much of the conversation is about expected tax reform in the country? >> you're right, there's -- in reality, there's not one silver bullet that leads a company like foxconn to decide it's time to come to america, there's multiple factors belief that we will pass tax reform is certainly part of it, so is belief that we'll pass a major infrastructure bill and, yeah, we're going to do that but it's also the deregulation, it's buy america, it's commitment to fair trade agreements we haven't had in decades, it's a comprehensive belief that this administration and president trump has the back of american business and the back of american worker. >> and in terms of just the timeline, how quickly will this roll out how quickly will they start digging? when will all of this be measurable to some degree? >> they're going to start right away even while they are gearing up for major construction of the large plant, they're going to start making investment in the state of wisconsin, starting to set up people and infrastructure that starts almost immediately and then you will also see the start of construction in a very quick fashion. this company moves fast, they're aggressive this negotiation for the size of it both with our -- with the white house but also with the state of wisconsin has moved very rapidly in fact they said that we are -- they were shocked by how nimble and how quick the administration and the state was. >> and, look, to me the most important part about this, and this is where i wanted to go with this, if this works, when an announcement like this comes out, what kind of forcing mechanism do you think this has on competitors in terms of really trying to create the type of ecosystem for advanced manufacturing that we talked about? >> that's a great question what i think is it gives everybody the belief that america can not only compete but can be a major global player when it comes to electronics and advanced manufacturing in general. i think that the sign that samsung -- i'm sorry that foxconn, a global leader, will lead to companies like samsung and others to start looking at america. there are so many benefits to manufacturing within the united states this is a great signal to these companies that they can not only succeed here but be incredibly prosperous here. >> reed, congratulations i hope you're right, $10 billion is an extraordinary amount of money. we love having you on and look forward to talking to you again soon. >> thank you so much. still to come this morning, wisconsin governor, scott walker, he will tell us how important this foxconn deal is to his state's economy and some of the promises he made about job creation in wisconsin. this is a good day for scott walker. plus, earnings, we will shift now into overdrive with the reporting of all these the ceo of an auto parts maker joins us with his company's latest results stay tuned you probably know this, but you're wchg quk x"n atin"sawbo o cnbc she's nationally recognized for her compassion and care. he spent decades fighting to give families a second chance. but to help others, they first had to protect themselves. i have afib. even for a nurse, it's complicated... and it puts me at higher risk of stroke. that would be devastating. i had to learn all i could to help protect myself. once i got the facts, my doctor and i chose xarelto®. xarelto®... to help keep me protected. once-daily xarelto®, a latest-generation blood thinner... ...significantly lowers the risk of stroke in people with afib not caused by a heart valve problem. it has similar effectiveness to warfarin. xarelto® works differently. warfarin interferes with at least 6 blood-clotting factors. xarelto® is selective, targeting just one critical factor interacting with less of your body's natural blood-clotting function. for afib patients well-managed on warfarin, there is limited information on how xarelto® compares in reducing the risk of stroke. don't stop taking xarelto® without talking to your doctor, as this may increase risk of stroke. while taking, you may bruise more easily, or take longer for bleeding to stop. it may increase your risk of bleeding if you take certain medicines. xarelto® can cause serious, and in rare cases, fatal bleeding. get help right away for unexpected bleeding, unusual bruising, or tingling. if you've had spinal anesthesia, watch for back pain or any nerve or muscle-related signs or symptoms. do not take xarelto® if you have an artificial heart valve or abnormal bleeding. tell your doctor before all planned medical or dental procedures... ...and before starting xarelto®-about any conditions, such as kidney, liver, or bleeding problems. it's important to learn all you can... ...to help protect yourself from a stroke. talk to your doctor about xarelto®. there's more to know™. ♪ ♪ good morning, welcome back to "squawk box" here on cnbc we are live from the nasdaq market site in times square. among the stories front and center this morning, twitter posting better than expected earnings and revenues. shares, let's take a look at what they're doing right now initially they seemed to be lower. in the premarket they're lower by 8.5% trading at 17.91 joining us is victor anthony, internet analyst at ages capital. good to see you. >> thanks for having me. >> why is the stock down if the earnings and revenue are better than expected? >> we have zero user growth. facebook reported 70 million new users last night so that's one, zero user growth. the ad growth was better but still declining. so negative 9% owned and operated advertising growth is still better than negative 11% in the first quarter, so no user growth, declining owned and operated advertising and massive gaap losses. >> so the stock had a great run for the last three months because last quarter they did actually have a rise of, surprise, in the number of users and people were wondering if that was a blip or if that was going to hold on now monthly active users, 328 million. flat and when they talk about daily active users, up 12% but last quarter was up 14% so decelerating rate of growth. and revenues are still down from a year ago are they ever going to get back to $700 million? >> it's an improving trend i do have a sell on the stock. i wouldn't buy it, i would buy facebook but the trend is improving from minus 11 to minus 9 maybe that depose to minus 7 next quarter and turn positive in 2018. the advertisers i speak with are still somewhat lukewarm. they're not getting the return on twitter that they are on facebook and other platforms. >> you have a price target of 12 and it's at roughly 37 that's brutal. facebook -- do you want to -- >> no, go for it. >> facebook stuffed as much as they can in terms of advertising down the news feed people look at so now they're expanding. >> it's good enough. listen, they reported last night, this is probably the 12th consecutive quarter of outperformance no other company i cover has done this. i'm not even aware of in imedia or ten nochnology company that' done that. 49% fx advertising growth. significant, amazing at that level of scale five years ago, 2.5% of advertising revenues mobile. 87% last night massive execution. google and facebook combined generated incremental $12.5 billion of advertising in the first half of 2015 that just speaks to the ad shift that's under way both companies are dominating. they're clearly getting that from twitter and other online platforms, traditional platforms as well. so then messenger they talked about last night, that's additive. >> because they're going to start advertising voe via messe. >> whatsapp probably starts in 2019 significant optionality. china entry. >> are you worried them spending money on content when sheryl sandberg said they want episodic viewing? in other words, people to watch tv on facebook that's way harder. we do that for a living. >> it is it's harder. >> it's expensive. >> it will take them a while to get this right, but they're invested against it significantly. i think they'll get it right at some point but it's a way to keep people engaged on the on the platform, given the fact there's multiple other avenues out there for users. so i think it's the right thing for them to do, though. >> do you have anything? >> are you on -- are you one of the 2 billion? >> i'm on facebook, oh, yeah i've got two profiles on facebook. >> are you on there all the time >> i go on once or twice a day. >> once or twice a week. >> if the thing pops up with little thing on it, you know, on your app. >> i could make it two billion and one, i guess. >> what about snap >> snap, they report in about a week and a half. i actually think the user numbers will be much better than what the street is anticipating. some of the tracking data i've been looking at has been quite positive, so i think they beat on the user numbers. the advertising is still lukewarm but it's not negative and so all is not doom and gloom for snap post this lockup you may see some stabilization in that stock. >> the interesting question then becomes from just a pure valuation perspective, given where facebook is and google or alphabet is and given where twitter is, is snap a value play >> i wouldn't go that route, not at all it's still trading even at these levels probably nine or ten times sales. twitter i think trades around four and a half times. >> you're still waiting? >> i'm still waiting i'm at a hold on snap, sell on twitter, buy on facebook i buy on facebook all day. i think it's a better performing platform the 18 to 24-year-old audience i think is captive >> astra zeneca, the shares are having their worst day ever. this is after an experimental lung cancer drug failed a major test meg terrell joins us now with the details. 15%. >> it's a huge move for as ttra zene zeneca this is a huge market and astrazeneca had been seen as behind in the immuno oncology race they tested these two drugs in previously untested metastatic lung cancer. the study did fail to show that this combination could slow the progression of cancer or death in these patients compared with standard of care chemotherapy, so you're seeing astra zeneca down quite a bit bristol meyers is testing a similar way and merck is responding favorably because keytruda is already approved this is reminiscent of last summer when bristol meyers had a surprising lung cancer result. that stock took a huge hit merck seems to go from success to success and you can see the difference and divergence in their shares so not a great day for astrazeneca on these results. they're going to have more on whether these drugs help patients live longer, but clear low not good news this morning on this metric. >> bad news for everybody. >> when drugs don't work, it's bad news for everyone. >> especially some of the real intractable types of cancer. you told me we need to stay positive we're making incremental gains, right? >> we do need to stay positive there's very exciting science happening. >> there's a glut of immuno trials maybe this one didn't work but everybody is throwing everything at the wall here to see if something is going to stick. we're going to get big stuff out of this segment of the market. >> yeah, we've seen incredible responses with immuno therapies and that's why so many companies are trying to test these drugs they're segmenting the patients based on the tumor cells, what they're signaling and is it the clinical trials, is it the drugs themselves, what's different about them companies are trying to figure this out we probably are in the early days. >> thanks, meg. let's talk autos, car component maker borgwarner out with second quarter earnings just a short time ago. the michigan-based manufacturer coming in 12 cents above estimates with profits 96 cents per share, revenue exceeding forecast joining us for a look inside the quarter and the company's emphasis on clean vehicle technology is james farrier, the president and ceo. congratulations on the earnings. your stock has been on quite a run, up 35% just this year what do you attribute that do given all the questions about the automotive industry right now? >> yeah, really, really good day for us, obviously another great quarter. and that's a big part of why there's been a run-up in the stock. it's our second quarter in a row where we've beaten and had a great performance. and that's what's driving a lot of confidence, i think, with investors. but the other part of the story that's really helping us a lot is people are getting a lot of conviction about our future long term in the space as a propulsion leader for all vehicles, clean energy efficient vehicles, whether it's electric, whether it's hybrid, whether it's a combustion powered product. that's what people are excited about, it's what we're excited about, it's what's driving our growth on the top line and the bottom line. you see it in the second quarter and you see it in our long term performance as well so a really super place for us to be right now. >> what do you see going on broadly in the automotive space in terms of sales? >> it's about a 90 million thereabouts global market right now, which is a pretty big market compared to the historical base. what you get is a little cyclicality around the world the u.s. market is a little down china and europe are a little flat to slightly up so we're operating generally in a flat market, which is okay, particularly for a company like us which has tremendous growth above the market because of our content penetration of technology so it will be cyclical but we know how to operate in a cyclical business. fundamentally we're a growth company and we have a lot of excitement. >> in terms of electric cars, when do you think or do you think that electric cars will outpace classic fossil fuel-based vehicles? >> yeah, we certainly see a rise for sure in electrification both hybrid vehicles and pure electrics. if you look at it now, a good way to think of it, about 5% of light vehicles are either a hybrid or electric vehicle if we take that out to 2023, it will be about 25% of that. i would say the vast majority of those will continue to be hybrid, so you'll see about 3% or 5% pure electric vehicles and what we're doing actually is enabling that to happen. our role in life is to get the propulsion systems needed for those electric vehicles and hybrid vehicles, so that's what's driving the excitement and the growth for us as well as the industry. >> given your excitement over electric vehicles, final question, what do you think of tesla? >> i think it's a great company. i think they have done a lot to disrupt and bring innovation to the industry, which is what the industry needs and what it's all about. they have got some great product on the street. i think they're doing well and we're happy to be part of serving the electric vehicle market all around the world and we'll continue to do that. >> james, we appreciate your time this morning. congratulations on the earnings. >> thanks. when we come back, we've got wisconsin governor scott walker. he's going to join us. his state just won that big deal we talked about that will result in at least 3,000 new jobs foxconn headed to wisconsin. we're headed there as well with scott walk back in a moment. time now for today's aflac trivia question. which food chain licensed its first franchise in 1955? x"onnucn'ssqwkn bc "ua bo cties swing.ed int huh? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy. aflac! ♪ ♪you are loved ♪ i thyou never got the brakes looked at?l... oh yeah. no. at cognizant, we're helping today's leading manufacturers make things that think and do automatically. imagine that, a world of new digital products and services all working together for you. can i borrow the car when it's back? get ready, because we're helping leading companies see it- and see it through-with digital. that's why at comcast we're continuing to make4/7. our services more reliable than ever. like technology that can update itself. an advanced fiber-network infrustructure. new, more reliable equipment for your home. and a new culture built around customer service. it all adds up to our most reliable network ever. one that keeps you connected to what matters most. now the answer to today's aflac trivia question. which food chain licensed its first franchise in 1955? the answer, dunkin brands. welcome back to "squawk box. foxconn is investing $10 billion in wisconsin, a job bringing thousands of jobs to the state joining us from madison, wisconsin, governor scott walker you had the u.s. open finally, scott. what about -- did you do this or is just wisconsin a happening place right now? >> well, we're a happening place, we're ready, there's no doubt about it we went back in 2010, wisconsin ranked in the bottom ten according to chief executive magazine for places to do business this year we're up to the top ten, the first time we've ever been on that list, and so it's years of building us up. lower taxes, fewer regulations, building a better workforce, getting rid of frivolous lawsuits, all those things combined and just being in the right time and the right place we're excited. for us it's going to be up to 13,000 new jobs and a $10 billion investment pretty exciting. >> good jobs. >> yeah, these are over $53,000 per year jobs plus benefits. on top of that to build this this is not just a plant or factory, this is a whole ecosystem. this is a campus wide -- we call it wisconn valley because of all the high tech manufacturing that's going to happen this is going to be transformational for us. 10,000 construction jobs alone in addition to the 13,000 jobs created by the investment, we're looking at 22,000 indirect and induced jobs it's a pretty big deal for any state, particularly for wisconsin. >> it always helps when a state does a little experiment with either taxes or deregulation because then you can extrapolate that to the entire country, i think, in tax reform but sometimes the results aren't as clear cut i guess people always point to kansas on the left, that kansas tried to cut taxes and it didn't work out right people would also say, governor, before this deal some of your efforts in wisconsin were falling short from your goal of, what was it, 250,000 jobs, whatever that didn't happen yet, did it they say this goes a long way towards closing the gap for what you promised to what was delivered. but what did you do and why did it fall short according to some people >> well, the bottom line for us is we have more people employed this year in our state than we've ever had before. in most of our counties across the state we have the lowest unemployment rate and a statistic you all can appreciate, we not only have low unemployment, the lowest statewide since 1999, in more than half the counties in the state the lowest ever is the labor force participation rate we're up just shy of 69% we're one of the top ten states in the nations in terms of the workforce. for us we need to draw more people in. ironically something that will require more workers will help our other employers when it comes to workforce because we think this will be a magnet and we'll attract talent from across the country and around the world. we think it will help keep our top graduates in the state which is good for not only foxconn and the suppliers across the state fueling this economic engine, we believe it will help other employers as we become an international focal point when it comes to high-tech engineering and manufacturing. >> governor, how much did you have to offer in terms of incentives you were definitely competing with other states. >> this is $3 billion. it's a combination, half of it goes for jobs. so as we've done before with other great employers, it's all tied to performance. so they will start at 3,000 but eventually as this get operational be up to 13,000 jobs that billion and a half that goes to job creation has to be earned, so if they fall short of that, the state's commitment is less but we are confident, as is foxconn that they're probably not only going to meet but exceed that jobs number. the other part is capital. you're talking about 20 million square feet. i was in washington obviously with the president and the vice president, speaker ryan yesterday announcing this along with foxconn's chairman, terry go that's about three times the size of the pentagon or for those of us who are packer fans, more appropriately that's big enough for 11 lambeau fields inside of that operational space and that new ecosystem we just think it's dynamic we love the fact that these lcd displays, which are not made anywhere in the world outside of asia, now will be made in america proudly in the great state of wisconsin. >> governor, i hope this happens and i hope it works the way it's been described a couple of investors have sent us notes this morning who have taken a look at foxconn's numbers and have wondered perhaps cynically whether this $10 billion headline number that we keep talking about is real or represents something else beyond just this factory given that their entire footprint apparently globally in terms of planting and equipment is about $10 billion and they spend about $1.7 billion on cap ex annually. can you speak to that? >> again, for us, it's all tied to performance we have a capital investment threshold, we have a job thresho threshold. again, if it falls less, our commitment prorates accordingly to that. for us, if they're more efficient in how they do that, we put up incentives in terms of the construction, a part of our deal, $1.35 billion is in the capital investment the remaining portion of that billion and a half tied into capital is giving them, for example, a sales tax exemption like we did on the new bucks arena. >> but you have no doubts about the $10 billion number you have no doubts that about actual $10 billion >> no, i think that's solid on their part again, i heard a little bit of reed cordish talk before at the white house. he was a great partner reince priebus brought us in the day after the president and terry met. we've been working with them and jared and the rest of the team to make this connection. reed touched on this a little bit. foxconn is looking ahead and realizing that this president with his trade policies, with his tax policies, with his infrastructure policies, they want to be invested in the united states not just in terms of locations but in terms of this type of manufacturing. >> ray seen or ken osha. >> they're hedging their bets to make sure they're made in america. >> racine or kenosha >> the bottom line is both those sites are great. his team has been in for months looking at this. they're looking at what the best deal is. what i love is they're just committed to wisconsin we had multiple sites from janesville, beloit, racine and k kenosha. >> chinese manufacturing grew for a reason, it was much cheaper. did you have any conversations with them about why it is that now is a good time to invest in the united states when the salaries at $53,000 plus benefits is i am sure quite high relative to what they would have to pay people in asia. what are the economics of the united states that brought them here now finally to manufacture in the u.s.? did they talk about that at all with you >> yeah, absolutely. from day one, from the day i met terry and his team and reince priebus, the chief of staff to the president's office and the white house, they talked about time, talent and cost. we knew all the way through this is a process that we had to be good partners in each of those areas. we drove down costs being close to the chicago market but in the lower cost real estate markets that we see in wisconsin was a big benefit. having a right to work state was a benefit. all but eliminated tax on manufacturing was a benefit. part of it not only in wisconsin but in america they're hedging their bets they want to make sure that their largest market for their products is protected if the president goes forward with aggressive trade policy to try to level the playing field so that it's fair and free trade. they want to make sure they have got a foot in the american market and the best place to do it is right here in the state of wisconsin. >> governor, i think it's great for the state and great for the country, i hope it works my question is now that you have it in the books, what do you do as governor to go out and try to bring more people and more companies to create a larger ecosystem given that that's what's made the chinese ecosystem work so well because they have been able to create the entire supply chain? >> literally terry and i joked about this a while back but we're labeling this wisconn valley because it's not just about securing this one location or even this one ecosystem, it's about building a larger one. so we think this will help us build a larger global focal point, a magnet to bring people into this region we think it can do for wisconsin what silicon valley has done for california, what the research triangle has done for the carolinas. we think we can really key off of that. in fact we become silicon valley's high-tech manufacturing and innovation site to fulfill the products that they dream of in places like that and others around the world this obviously is a huge anchor for us, but we want to keep building off this and we think even with our discussions with foxconn, they want to continue to build -- you know, for them to be successful, they don't just make a deal and put it in place, they keep looking forward as to what's the next great innovation for them it's not just entertainment, it's health care, it's automotive, there's so many ways to key in in this growing american market and we want to be a part of it. >> governor walker, thanks for coming on and that's great news for the wisconsin workers, we appreciate it, thanks. >> and i love the on wisconsin music on there, because we're ready to go. we're rady for this now more than ever and we're ready to bring more jobs so bring your business to wisconsin. >> excellent we'll see you later, thanks. coming up, this morning's top stocks to watch and then later, politics in the big easy. new orleans mayor michigan landrieu joins us with a look at why cities across america are paying close attention to the health care debate in washington stay tuned, you're watching "squawk box" on cnbc hundreds of dollars on youmy car insurance. saved me huh. i should take a closer look at geico... (dog panting) geico has a 97% customer satisfaction rating! and fast and friendly claims service. speaking of service? oooo, just out. it was in. out. in! out. in! what about now? that was our only shuttlecock. take a closer look at geico. great savings. and a whole lot more. hey. pass please. i'm here to fix the elevator. nothing's wrong with the elevator. right. but you want to fix it. right. so who sent you? new guy. what new guy? watson. my analysis of sensor and maintenance data indicates elevator 3 will malfunction in 2 days. there you go. you still need a pass. coming up, this morning's top story, including earnings from procter & gamble. we've got twitter, facebook and many others. plus the garbage indicator, the ceo of waste management will join us. you're watching "squawk box" right here on cnbc your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember. southwest airlines ceo with immediate reaction to second quarter numbers. will the resul ♪ what should i watch? show me sports. it's so fluffy! look at that fluffy unicorn! he's so fluffy i'm gonna die! your voice is awesome. the x1 voice remote. xfinity. the future of awesome. the busiest day of earnings season under way comcast, verizon, p & g and twitter among the big names out with results a rundown of the numbers straight ahead the skinny repeal. senate republicans turn to a narrow path for reform the latest in the health care debate is coming up. plus an update on a rockin' campaign kid rock speaks out on his run for senate and the democratic party. we'll tell you what the musician said as the final hour of "squawk box" begins right now. ♪ >> announcer: live from the most powerful city in the world, new york this is "squawk box. ♪ good morning and welcome back to "squawk box" here on cnbc, live from the nasdaq market site in times square. i'm joe kern an along with andrew ross sorkin and michelle kbrus owe tod caruso cabrera the futures right now are indicated up again, but moderated to some extent, except for the nasdaq which has added to its premarket indication as far as opening certainly facebook is not hurting the nasdaq helping other technology stocks obviously and fang stocks. facebook, is that the f in fang, andrew >> it is the f in fang let's get you caught up on this morning. so much to talk about. first up, twitter. we have the social media company reporting adjusted quarterly profit of 12 cents per share, 7 cents above estimates. revenue also above expectations. user numbers, however, and that's what investors look at these days, the numbers were flat also nbc universal and cnbc parent company comcast reporting quarterly profit of 52 cents per share. that was four cents above estimates with revenue also being forecast one of the quarter's highlights, a nearly 60% jump in film revenue. you're looking at that stock up in the premarket right now dow component verizon matching estimates with profit of 96 cents per share. verizon added 633,000 wireless retail customers during the quarter. that stock up about 3% in the premarket. and another big mover this morning, facebook. the social media company last night beating estimates by 19 cents with quarterly profit of $1.32 per share. revenue beat forecast as well and facebook's results driven by a boft ost in advertising revene on its mobile app. a big thing on the call last night inserting ads in new places, for example, on messenger we may see some of that. >> do they ever work i guess they do. >> the ads yes. we've talked about that. >> have you -- >> i have personally baought ad when we were selling too big to fail. >> has it induced you to buy a product? >> yes, actually >> really? >> there is controversy, right we've seen some of -- for social media in general, some companies have pulled back because they're not sure of the efficacy of what they are receiving from the googles and the facebooks and the twitters of the world. >> especially the video world. especially on the video side. >> all right, billboards still work >> people see them. >> that's where i am. >> that's where you're at? have you ever seen a billboard and then gone and bought something? >> i have been made awareness of a brand that may have induced me later to pick that brand versus other brands, maybe. >> you know, marketers always say that you need to -- you have to have three touch points before someone will actually buy something. >> is that true? >> maybe you want to see it on the billboard, maybe on "squawk box" and then on facebook. >> all right that's a problem for me because i don't see anything on facebook so i only get to two p & g also reporting the consumer giant's product beat on the top and bottom line. consumer products giant. earnings -- did i said computer giant's products anyway, it helped cost cutting measures we talked with john moeller. >> if you just look at the quarter we just completed, 2% organic sales growth on the top line of the companies that have reported so far, that's well ahead of the average and it reflects the implementation of the program that i've talked about, which is just starting to take effect and improve results. we expect that acceleration to occur as we go through the next fiscal year. >> all right let's get over to sara eisen she has trion's response to p & g. >> just crossing, they point to the underperformance of procter & gamble, says over the past ten years p & g's total return to shareholders is less than half of its peers and it has been in the bottom quartile. they think they need to investigate the root causes of in consistent underperformance they do say while p & g says it's addressing the underperformance issue, shareholders have heard similar promises in the past and results have not materially improved trian believes p & g can be a best in class performer but must take decisive action that goes above and beyond what it has announced, including changing its complex organizational structure and slow moving and insular culture. it goes on to talk about why nelson peltz would be a good addition to the proctor & gamble board which currently has 11 directors. he has been involved with numerous successful turn-arounds of consumer brands and businesses adding him to the p & g board will help p & g become best in class. they go on actually to attach a screen shot of the outperformance, according to them, with nelson peltz on the board of consumer companies. about 8% or more for eps and total shareholder return so a two-part statement from trian. the first point to continued underperformance shares and the earnings and a second part backing why nelson peltz should be on the board remember, trian owns $3.3 billion of a $230 billion company with a less than 1.5%. they want peltz to have a single board seat p & g indicates it's going to fight that setting up for a proxy battle. david taylor, the ceo will be speaking on the earnings call at 8:30 first public statements since this proxy fight went public, so it will be very interesting to hear why they don't want him on the board and how they're defending themselves the numbers today was a beat on the bottom line but that was driven by cost cutting the top line was pretty much a match and pockets of strength in beauty but pockets of lower in grooming. >> low margin business, global, currency fluctuations, i can't imagine. we've watched it both from cincinnati, sara, for years. tough to get the right ceo in there as well. they brought the old guy back, remember they couldn't find anyone new. >> and he -- i mean they went through a major cultural change, that's what p & g would say. they spun out 100 brands to make it a leaner company. they haven't managed to get the company growing again and the shares performing again. they also have underperformed the broader market and the consumer staples index so do they need to look outside? interestingly peltz does not advocate for changing management he's backing taylor. he's not advocating for a breakup as well, just wants the company to move faster with some of the changes like cost cuts and making the companies within the company operate faster and leaner and more efficiently. >> all the big executives, the ones with the big paychecks lived out near you in amberly village, right >> no, they lived out in indian hill >> i'm talking east side of town, not from i'm -- i always say that i had to walk to school uphill. >> do you have graders on the west side of town? >> we have graders but also sailor park and pete rose and things like that anyway, thank you, sara. waste management meanwhile is out with earnings the houston-based trash hauler beat on the top and bottom line. the company says results are driven in part by higher recycling commodity prices and volumes. joining us now, jim fish, waste management president and ceo it's good to see you. >> yeah, good morning, joe >> where's steiner >> i talked to him via text the other day. >> playing golf all the time. >> playing golf, traveling a little bit. >> one of the things that he did we talked about a lot was it's tough to make money when oil prices are this cheap with recycled waste he kind of lessened the company's dependence on that were you glad he did that before you took over? >> that's one of the things he did well before i took over. >> only a few things >> no, no, there's a lot i think oil prices have some impact on us, but we're kind of agnostic to the price of oil because we have a fuel surcharge that acts as a hedge for us. to the extent that it correlates to recycle commodity prices, we've taken a lot of efforts to derisk the business over the last year. >> economic activity is more important than anything else, isn't it >> it is, it is. i would tell you one of the reasons we're really excited about earnings yesterday is because we organically grew revenue by 7.4% in an economy that's kind of 1.5, 2% so every financial metric was up by 7.5, ebitda by 3% in kind of a slow growth economy. that says a lot for us. >> people need to pay you every week, don't they they have to that was the original brilliant observation, that everybody is generating trash you put your dumpster out there and you've got to rent that dumpster and it still works. look at the chart, it's still working. it's a great business. >> it's a great model. >> go ahead. >> are you working on driverless trucks >> so here's what i would say about autonomy we are going to have an autonomous vehicle in one of our landfills and in a recycle facility within the next 12 months there's a big difference between having it on an off-road vehicle and having it over the road. it's kid of like airplanes a dreamliner can fly -- pretty much fly itself, but when we get on it and look to the left, if there's nobody up there, we're getting off. so there's a big sea of difference between technology and public perception. >> so there's going to be -- there's a truck on the landfill site. >> on the landfill, yeah we will have an autonomous vehicle on a test basis, it's a dump truck driving on one of the landfills. >> can you see a day and age not only where you have a driverless vehicle, but even some kind of robots that pick up the trash? >> that probably happens down the road it's probably not in my career but that probably happens down the road we're at the forefront of this but we think it's a much longer term aspiration with collection because of perception on the public side and because of government regulation. there's only three states that even allow autonomous vehicles to run. >> how easy is it for you to find employees people who want to the on the truck? >> we're able to -- i'll say this we're able to hire as many employees as we need to pick up recyclables and trash. but there is this thought out there that maybe the millennial generation doesn't want to drive trucks. >> what's the cost of an autonomous truck like that >> well, we don't know really because it's in test stage right now. but i suspect like anything else with respect to technology it's going to be more expensive when it comes out initially and then the costs will come down over time. >> so you're going to -- as far as outlook, everything seems on track there too as far as the high end of your previous range as well? >> we gave a range so call it 3.14 to 3.18 on earnings per share now we'll be at the top end of that range. >> commodity prices make a difference for you, don't they >> they do, they do. >> why >> we're the biggest recycler in north america. >> you still do the recycling of the -- so he offloaded some of the waste to energy assets. >> yeah, we sold our waste energy business two years ago. >> you still participate >> we participate. we signed a service agreement with the company that bought those waste energy assets and so they bring that material -- we bring the material to them >> okay. but it matters for your recycling business ifcommodity prices are firm. >> you bet. >> i always used to joke around with steiner do you have kids >> two kids. >> so when a friend says what's your dad do and they say he's in waste management do they get scared >> do they think tony soprano? >> you really are in waste management, right? >> well, i would tell you when the girls -- >> your kids don't get bullied. >> they don't get bullied. they think -- they said my dad works for the biggest recycler in america. >> oh, not waste management. see, i'd go with the waste management. >> i'd say my dad's a garbage man. >> they say that too they say that too. >> god bless the whole industry. you only need -- have them go on strike for a week to see what happens. i mean i think there's doctors and then garbagemen. how about new york citywithout trash collection how's that going to work >> on the collection side, it is mostly men we have a number of women that work for us, but there's a physical component there that requires -- that a lot of these jobs are filled with men but we're working to kind of move with collection vehicles, make them more automated so women can drive them too. >> and you've got new advertising. have you seen it the dumpsters talk to each other. right? >> that came out last year with the phoenix open golf tournament. >> it's still being used, isn't it >> it sure is. do you like it >> i do. i mean how do you -- what do you do for waste management? you can't do the waste management duck. that's already taken. >> that's taken. >> could you license oscar the grouch >> that's an idea. >> that is a great idea. >> you know what, you're creative. >> and then the taxpayer wouldn't have to fund pbs even less because they bring in more revenue. >> oscar would be a great spokesman for you. >> really good. >> she's grouchy. >> i'll give you my address later for royalties. lots still ahead on "squawk box" next. the battle for health care continues but this time it is a bit skippier we'll talk to neera tanden. plus a war of words between a shoe company and amazon. we'll tell you which ceo called the e-commerce giant pathetic. and later kid rock's vision for politics the musician is weighing a run for senate and this morning he's on a makeshift soap box we will explain. "squawk box" returns in just a moment ♪ welcome back to "squawk box. making headlines, meg whitman has stepped down from the board of hp inc., the move effective immediately. chip berg will take over as chairman hewlett-packard split into two businesses about two years ago and hp inc. is the printer and pc business. hp enterprise is the storage company. whitman -- >> and here comes the speculation right here. >> they reported whitman was being evaluated as a potential ceo of uber. >> you know, she snoknows polits part of this job is regulatory, part is a big logistics business she'd be good at that. >> i'm sure she's very comfortable but you could make a lot more money at uber. >> and if you really think about what ebay was, if you really think about what ebay was, ebay was a marketplace. if you really understand what uber ultimately is, underneath all of it it's a marketplace that's the business. >> similar to the trash business, the dumpster -- this is different. >> not really. >> but there's certain businesses that really work well in this case it's a market -- >> until and unless they all go autonomous and need to own all their own cars -- >> don't you think there's more upside at uber than hp enterprises? >> right now >> yeah. >> yeah, probably. >> printing. driverless cars. >> no, she's servers -- >> she's everyoneservers. she's enterprise. >> that's right, they split the thing. >> i think you could make more money at uber -- >> yes ipo that business? >> i think she should do it. >> you think she should? should we call her >> tell faver to tell her. >> tell her right now. hey, meg, take the job. >> do it. >> i also like ann finucan. >> are they only considering women? other story. the senate rejected a -- are they trying to be super pc and only looking at women? >> i think they're trying to change the culture of the company and they're thinking that may be one way to do it. the senate rejected a proposal to repeal obamacare lawmakers will vote on a sear reesz of amendments on a skinny repeal the president tweeting this morning, come on republican senators, you can do it on health care. after seven years, this is your chance to shine. don't let the american people down exclamation point. joining us now is neera tanden, president and ceo of center for american progress. she served in the obama administration as a senior advisor and helped write obamacare. good to have you here. just so our viewers know, a skinny repeal would repeal the mandates and also the medical device tax but the rest of the structure essentially stays in place what do you guys think of this >> well, it's not really what we think. i mean the congressional budget office has a score of a proposal like this and it finds that premiums increase by 20% both for people inside the exchanges and outside of them. so people who aren't even really covered by the aca would face 20% premium increases as well as 16 million people would lose coverage over the next few years. so i mean i think what's -- >> you're talking about a very specific skinny repeal or are you talking about the most recent on the -- >> yes. >> the cbo report on the bigger package? >> yes i know it's a confusing process because we're discussing a proposal no one has actually seen, but the cbo scored a proposal like skinny repeal, which was eliminating the mandates, individual mandate and getting rid of the medical device tax as well as something on planned parenthood which we expect in the bill and that's what they're findings were you know, i think most people probably recognize that health care is a slightly complicated topic. so the fact that the senate is basically looking at passing a bill tomorrow that no one has seen today, the public hasn't seen, legislators haven't seen, it's a little ridiculous. >> the most recent cbo i've seen is from june 26 where they do highlight that a lot of people would lose nsurance, but that' because they think 15 million people would just choose not to buy it at all. >> right so there was a cbo score last night. the democrats asked to score a skinny repeal. in their findings, they found that there would be what they expect to be a 20% increase in premiums the president has said that we should have lower premiums almost every republican has said a condition of their support of a proposal is that it lowers premiums >> so you must like the other one that they thought about passing, right when you look at the june 26th, cbo they say that if they had gone with that package, average premiums for benchmark plans would go down 30% by 2020, so that would be good, right? >> yeah, so i like a plan that does not drop 23 million people from coverage. >> that would be one that forces people to buy, right >> no, that would be -- >> that would be one that forces people to buy. >> that would be one where you have a system where people have insurance. you know, i guess what i would say to you -- >> one that they have to buy it. you absolutely believe that individuals must be forced to buy insurance? >> i guess i agree with mitt romney and a bunch of republicans who are voting against all of these proposals that there's a system where you have insurance >> he didn't win. >> i guess this is a big question, which is do we really think we should have a system where premiums skyrocket, right, and we drop millions of people from coverage. many people who just lose coverage themselves. that's the question we have before us. and i think what i find fascinating is, you know, republicans have attacked the process for years and now they're on the verge of passing a bill that no one has seen. isn't that disturbing? would a ceo run a company this way in which you discuss a proposal that could radically alter your business or your consumers or what your consumers or doing and no one has seen the proposal no one knows what it is except for 24 hours before you're supposed to vote on it >> wouldn't you be happy with the fact that medicaid would stay in place? i thought you'd be thrilled with that because that's not going to get changed. >> i am, although i think what's interesting about what's happening in the senate is the senate majority leader is telling moderates that you can get skinny repeal and it won't touch medicaid but he's telling conservatives, don't worry about what you vote on tomorrow, what will come back from the house is going to get medicaid. and i think moderates have to recognize that in any negotiation with house conservative, they will be gutting medicaid, so that's the decision they have in front of them. >> neera, the 20% increase in premiums is very troubling to you. did some of the premium increases that you've seen over the last five years under the aca, did those trouble you, the 150% increases those must have troubled you as well i just -- to be consistent >> i find premium increases troubling. i think what you have to do is look at cbo's analysis i welcome you to do it which is what would the premium be without the law, what would the premium be with the law. what we found under the aca is that premiums were in line or lower than what they should have -- would have been without the law. that's what we're finding in this proposal. and this is -- and this is -- could i just finish. actually premiums have been in line with -- lower than what cbo scored in the exchanges themselves they had a rate check increase last year. we would get -- we are looking at greater rate shocks this year because of what president trump is doing in not paying the insurance companies and jamming them but i think that what you see in the cbo score yesterday was that if the current law is allowed to stand, you'd have premiums where they are and then they go 20% up from what republicans want to do >> i'm so sorry, we've got to go, but thanks for joining us. >> thank you. >> coming up -- >> you did a great job. >> jobless claims and durable goods orders about to hit the tape we're going to bring you the numbers. welcome back to "squawk box. we are just seconds away from jobless claims and curable goods. rick santelli standing by at the cme in chicago rick, the numbers coming up in 15 seconds, sir. >> well, you know, 16 seconds, a lot can happen in 16 seconds you know, we had the statement out yesterday and it took the markets about 16 seconds to figure out that there weren't any changes. rates are pretty much about where they were before the statement was read yesterday equities have gained a little, dollar index a little soft 244,000, andrew. we were expecting 240, that is up 10 from a slight revised 234 from last week 1.946 million on continuing claims let's get to the meat of the matter june preliminary read on durable goods up 6.5%, almost double what we were expecting if we look at last month, the minus 0.8 ended up coming in a little bit better at minus 0.1 now, remember, this is preliminary so this may change, but if we look at ex-transportation, you can see how much transportation kicked in, because it moves to up 0.2, half of what we expected, and down 0.1 on capital goods orders, nondefense ex-aircraft irate that as one of the most aspects of this number we need more power there but we did get a nice revision. last month up 0.2, it's now up 0.7, so up almost three-quarters of 1% trade balance, which is a deficit, comes in at 63.9 billion. that's actually about a billion and a half less than we were expecting and sequentially following a minus 66.3 billion, so i guess that can be considered pretty good news. on june wholesale inventories, wow, litany up 0.6 when you look at inventories, i would think the biggest area you want to pay attention to are the retail inventories as well and those are up 0.6 if you're making more widgets, that should give you better horsepower on your measurements like gdp but do remember these are june numbers we'll see, of course, if the making of widgets translates into the selling of widgets. we've seen some pretty good earnings so far, especially from some of those fang stocks. back to you. >> speaking of which, thank you, rick santelli. a lot of meaty economic data there and we'll discuss more in just one second. twitter's analyst call is under way and julia boorstin joins us with some highlights. >> twitter shares are trading down on the fact that it didn't add any new users in the quarter. ceo jack dorsey on the call has been trying to shift focus to daily active usage, which grew 12% from the year earlier quarter. dorsey saying that those gains indicate changes are working >> we're shipping products faster than ever and this empowers us to build features that can enable strong future growth people are reporting significantly less abuse on twitter today than they were six months ago we take action on ten times the abuse of accounts daily compared to this time last year >> on the call just now, cfo and coo anthony noto also stressed the value of video on the platform, both for twitters' users as well as its advertisers. >> by taking the video and bringing it onto the platform that people are talking about and cure 8ing below that video a timeline of the best tweets into an experience that makes the individual feel like they're at that event is an incredibly powerful differentiator for us. >> noto saying as they move toward 24/7 programming, they believe more people will watch twitter on their tv. that would give twitter a shot at more ad dollars with all those bullish comments about ads and daily i don't sayage, investors seem to be concerned by the lack of user growth twitter shares down 10%. joe, back over to you. let's bring in steve liesman, cnbc's chief economist. steve, i guess you need to say -- >> we can do this any way you like i am the senior economics reporter. >> if you were chief economist. >> the thing that stands out to me is a nice durable goods number unfortunately, it looks to be driven -- not unfortunately, but it looks to be driven by civilian aircraft. i know you had a good profit number yesterday from boeing apparently they are making plenty of airplanes and shipping them the ex-transportation part not quite as strong and the investment part, look, i think beginning 15 years ago, one of the main value-added on this number i told you was that it's incredibly volatile. you were up 07 last month, you're down 0.1% this is the last bit of data you're going to get to estimate that number. so we have had something of a rebound in business investment the fed yesterday upgraded its take on business investment. that's going to be a key for economic growth in the months ahead, because we have had a real lack of it in the economy if we can get things going on the business investment side, that could help overall growth and also help productivity in the future and i think we want to bring in right now bill nelson. he is chief economist at the clearinghouse and maybe more importantly the former deputy director of the division of monetary affairs you left the fed in 2016, is that right >> that's right. >> so let's talk about yesterday. i think everybody got the message right yesterday. one is that they're going to start reducing the balance sheet in september and two is we're not quite sure about that third rate hike this year. >> i think that's right. overall as you note, there were two big changes. there was really one big change. they indicated that that balance sheet rundown was going to begin relatively soon. they also said that they were going to only hold the balance sheet constant for the time being. last time they said for the time being was in november when they said they would leave the target federal funds rate constant for the time being and raised it at the next meeting the signal is pretty clear they'll make an announcement for the rundown in september, probably with the rundown beginning in october at the same time, the rest of the statement was virtually unchanged. the changes were very minor. they said that 12-month inflation was running below rather than somewhat below their target of 2% overall i think it was consistent with a continued message that there would be one more tightening, most likely in december but like you said i still think -- >> bill, i want to get to this balance sheet reduction. one of the things out there, one of the ideas is that the market is not paying attention. and when the fed actually does this, it's going to frequent out eventually, interest rates will rise, take stocks with it. at the same time, every -- almost every mention by the fed of this coming balance sheet reduction has essentially been greeted by the market with a big yawn what's the right answer here is the market aware of what's about to happen and it's not a big deal, or is the market going to freak out when the fed starts doing this >> i think the fed has done a great job telegraphing this change they have been communicating it for a while. they indicated what their plan was at the last meeting. now they're giving some signals about when the timing will start. they'll start the timing it's a very gradual rundown. i think overall there's good reason to think that the market will not overreact to the commencement i guess ten-year rates did rally a bit yesterday, partly on the announcement -- or the lack of the announcement of a date so it does seem like the market participants are paying pretty close attention to what the fed is saying. >> bill, i want to turn to something else that you -- obviously you work for a group that is owned and run by banks, but yet you're also a monetary specialist and a banking specialist you feel as if the liquid tee rules in place as a result of dodd-frank are hurting lending and hurting the economy. explain, please. >> i wouldn't say liquidity rules are having that consequence. overall the post crisis regulatory reforms have resulted in a much more resilient banking system at the same time, there were some flaws in the way that they were designed that i think can be improved to reduce some unintended consequences, particularly ones that have made monetary policy more complicated. so i'd point, say, to the leverage ratio requirement, which is twice the international standard it makes banks hold a lot of capital against riskless assets, like treasury securities and deposits at the federal reserve and that in turn makes it more expensive for banks to comply with liquidity rules >> so you support the idea that we can loosen up the banking regulations and provide more lending and not make the banking system less safe >> i think that the banking regulations can be improved. i think there are changes that can be made that still maintain the resilience of the banking system while at the same time encouraging growth. >> bill, thanks very much for joining us this morning. >> thank you >> bill nelson from the clearinghouse. joe. stocks to watch this morning, u.p.s. is on the list beating street forecasts thanks to a jump in e-commerce. $1.58. 11 cents above expectations. revenue was above forecast the stock not responding mastercard reporting quarterly profit of $1.10 a share, 6 cents above estimates. bottom line got a boft frost fra 9% increase in the volume of card transactions. that's too bad i guess we're out of time. buffalo wild wings, we were going to talk about that yeah, i guess we'll do it later. higher chicken wing costs. >> i know. >> they refuse -- >> wing inflation. >> they refused to take my advice. >> liesman, that's not in the cpi? >> i think it is in the cpi. i don't know how much of a weighting it has is it six or 12 that you're ordering spicy or not >> if science could deliver a gmo 8-wing -- >> 8-wing chicken. >> why wouldn't you do this? >> he's been on this. >> i have an idea. i mean you need one chicken for two little wings >> support it as a way to reduce inflation. >> everybody needs a side. >> do you know how many wings are consumed like on super bowl sunday that's a big strain on the chicken population >> why are you on that >> why not have an eight-wing chicken if you can do it. >> it might actually be able to fly at that point. >> i still don't know what happens to the rest of the chicken. the health care is playing out in washington. thank you, guys. mayors across the country, they are also weighing in on that reform we'll talk to one of those mayors, this one from new orleans. michig mitch landrieu will join us in just a moment. . this is the new guy? hello, my name is watson. you know wine, huh? i know that you should check vineyard block 12. block 12? my analysis of satellite imagery shows it would benefit from decreased irrigation. i was wondering about that. easy boy. nice doggy. what do you think? not bad. welcome back to "squawk box. foxconn is making a big bet in america. the company is investing $10 billion in wisconsin in its first manufacturing plant in the u.s. we spoke to governor scott walker in the last hour. >> this is not just a plant or a factory, this is a whole ecosystem. this is a campus wide, we call it wisconn valley because of all the high tech manufacturing innovation that's going to happen this will be transformational for us 10,000 construction jobs alone in addition to the 13,000 jobs directly from foxconn's investment, we're looking at 22,000 indirect and induced jobs it's a pretty big deal for any state, particularly for wisconsin. >> wisconsin's unemployment rate, by the way, is the lowest since 1999 but i think we have some low unemployment rates around the country. what's the 10 billion, have you figured it out is it real >> it could be real. i genuinely want it to be real it would be great for wisconsin and great for the united states. >> i saw your tweet. >> the complicated part is that this is a company that spends $1.7 billion on cap ex every year, foxconn. >> right. >> it looks like their plants and equipment for their entire company is $10 billion the tappan zee bridge costs $4 billion. 10 is a lot of money of the having said that, there's an intel plant that's going up in arizona. looks like could cost 7. so maybe this is welcome back the realm. the giga factory that elon musk built in las vegas i think is 4 or 5 but 10 is a lot. we should -- i don't want to -- we're professionally skeptical, but i want it -- i legitimately genuinely want it to work. >> it's also possible, right, that there's a lot in that number that legitimately gets you to 10, but, you know, when -- i think back to when i covered crime and the cops would always say that the cocaine street value was x, because that's the bigger number, but what they actually had -- >> why do you have to tell people that you genuinely want it to work why would anyone doubt that you want that to work? that says something. >> because one of our viewers -- >> i saw it. >> was skeptical and thought that i was being too skeptical let's get to our next guest. we have one of the great mayors of america on the program right now. he's calling on the senate to scrap its health care bill and work with the mayors and governors around the country to come up with a fresh plan. joining us is new orleans mayor mitch landrieu good to see you, sir, newly elected president of the conference of mayors good morning what should happen at this point? >> well, i mean if this wasn't so serious, it would be laughable watching the senate torture itself into a pretzel to try to figure out how to take health care away from americans. i think most mayors, bipartisan, are very practical get everybody in the room, really let everybody talk, everybody bring their ideas, let the public opine about it and then get us to a good result that's not what's happening in washington right now so mayors across america, both democrats and republicans, are saying, listen, why don't you get together with some governors, some mayors, some other folks and let's start over again and see if we can put a bipartisan proposal together that's going to deliver on the president's promise, which was give more americans better health care for less money we don't think any of these options that are being discussed right now or the process that's being used is going to get us to where america can be healthy and strong. >> mr. mayor, the big question, of course, is just mathematically can you do that meaning can you do what the president has suggested? can you make health care better, more accessible for more people and ultimately cost less >> well, let me say this other countries in the world have done that we have in this country struggled mightily to do it. i'm a supporter of the affordable care act. it gave more people insurance but obviously had some flaws so mayors would say fix the problem. don't throw the baby out with the bath water there's clear low a way to do that unfortunately because of the senate rules or house rules only republicans talk to republicans and only democrats talk to democrats and that's not going to get us where we need to get us they should get everyone in the room, stop the shenanigans and get down to work. >> mayor, what if the baby is the bath water what if it is the entire structure of obamacare is the problem? >> well, it's not -- i wouldn't say it that way. it's not the structure of obamacare. the health care delivery system in the country has always been a problem. of course bending the cost curve, giving access to more people creates problems. but the way that the republicans say obamacare was crafted, they're repeating exactly the same mistake and they're not talking across aisles. there are better solutions there are middle road solutions to the problem that could be dealt with but you don't just because you have to fix the private market, you don't take health care away from 32 million american citizens that's not going to make us strong, it's not going to make us competitive i just saw the interview with governor walker. i hope that new plant works in wisconsin as well -- >> but mayor, when you say take it away, when you read the cbo scoring, they say in fact the largest percentage would come from people who would just choose not to buy it so -- >> well, that's clearly -- >> that means you want people to be forced to buy it. am i drawing a correct conclusion >> well, first of all, there are a lot of different ways to make sure that you spread the risk across the entire market you're talking about the problem in the private market right now. one of the things mayors are concerned about is there are emergency rooms being filled up because you're going to take away the medicaid expansion. so obviously this is very complicated. it's not easy. but the one place where it's not going to get hashed out is in the individual caucuses in the senate where they're talking about skinny or fat or big or small or this or that. it doesn't seem to be going anywhere the american people see this for what it is, which is an attempt just to kind of fulfill a campaign promise that should have never been made the way that it was made mayors would say fix the problem, don't throw the baby out with the bath water. if we have to go back and reconstruct the system, let's do that the overall objective is to make america strong by doing that, you have to make america healthy. it doesn't make any sense for american citizens not to have access to health care so we can actually do the kind of things that we need to do in this country. >> all right, mayor landrieu, thank you for your time here this morning unfortunately, we have to get to a commercial break but it was great to have you on from the beautiful city of new orleans. >> thank you very much. jim cramer will join us live from the new york stock exchange 'lget s ter this wel hitake on today's earnings frenzy. we'll be right back. your insurance company won't replace the full value of your totaled new car. the guy says you picked the wrong insurance plan. no, i picked the wrong insurance company. with liberty mutual 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take out transportation and it's not as good transportation's part of it, isn't it >> oh yeah i mean, look, these are numbers that are just kind of picture-perfect. why? because they let us focus on earnings going into the earnings season, this would be determined the numbers were better. we'd stop thinking about the fed, we'd have to focus on individual companies and individual company focus has been right, the macro people, they may have to be -- let's say they are subservient and don't get in the way of story, please. >> when i watch at 9:00, what will take the lion's share of your time for the companies reporting in the last 24 hours >> well, we have to focus on facebook because this is perhaps the greatest growth i have seen quarter over quarter in my career now, i know correctly you identified that we should be thinking about boeing and the size of boeing why? american is the greatest american manufacturer. it deserves a lot of time on our network. facebook, two billion people, it's an american people. maybe we're not celebrating these companies enough frankly the only constraint, only 7.4 billion people in the world. they need more people. >> i said i could make it two billion and one, jim, but i'd top it out it'd be time to sell >> i see why they need satellites there are whole parts of this -- i don't know, they've got to put people -- they've got to get people on mars go get musk. because they need more people. this is an incredible story. two billion people this product didn't even exist -- guys were doing facebook at harvard. >> kind of self-fulfilling, no one's having kids because they're all in their basement having facebook. it's self-defeating. see what i mean. >> they're not playing "call of duty," i mean, that's wrong. "house of cards" really, they're ordering dominos pizza and taking out from mcdonald's, mostly they're hoping for red dead to come out. >> good or bad that the vix is an all-time low, jim >> i don't like vix? i use afrin. >> so it's not a measure much complacen complacency. >> people who talk macro >> okay, jim see you in a couple minutes. coming up on "squawk on the street," don't miss ups cfo rich peretz, that's at 10:10 a.m. eastern time a big e commerce deliveries for ups. we'll be right back. h? don't you mean dad kind of ruined our hawaii fund? i thud go to the thothpital. there goes the airfair. i don't think health insurance will cover all... of that. buth my fathe! without that cash from - aflac! - we might have to choose between hawaii or your face. hawaii! what? haha...hawaii! you might have less coverage than you think. visit aflac.com and keep your lifestyle healthy. aflac! chances are, the last time yoyou got robbed.an, i know-- i got a loan 20 years ago, and i got robbed. that's why i started lendingtree-- the only place you can compare up to 5 real offers side by side, for free. it's like shopping for hotels online, but our average customer can save twenty thousand dollars. at lendingtree, you know you're getting the best deal. so take the power back and come to lendingtree.com, because at lendingtree when banks compete, you win. welcome back, a new program from am distance to buy products from third party merchants to bulk up it's voirlt. they are buying at retail prices and says it'll be able to deliver customers more quickly using the global supply chain. but the ceo is slamming the program as an assault on decency. in an e-mail to the resellers, he calls amazon's move a quote, pathetic attempt to create a back channel means to sell products not offered on it's site, unquote. they stopped selling to amazon due to concerns over counterfeit products and unauthorized sellers. as part of that program, they offered to buy them from other retailers. threatening his retailers, anyone who sales a single pair to amazon will be closed forever. clearly, birken stock has had a lot of problems with amazon. on the flip side i talked to ceos who say that amazon is one of the best when counterfeit product goes up, you can call them and they'll take it right off. i've heard great stories and in this case we've heard the opposite >> uh-huh. i used to sell those in boulder -- >> birkenstocks. >> did you wear them >> i never wore them >> i wore them in college. >> i'm not surprised. >> did you wear them with socks on >> let me get this in. we know that kid rock is weighing a run for senate, but the detroit rocker offered his most direct comment about the future in politics in late night post on his website, musician said he'll be scheduling a press conference in the six weeks. he also said if i decide to throw my hat in the ring, and hit does wear a hat, for u.s. senate, believe it's game on believe it kid rock announced an initiative to promo voter and the opposing party, writing the democrats i are shaten in their pant loons followed that by says, diggy, diggy, said the boogie, said up jump the -- >> greatest rock and roll songs of all time. >> he's been planning that all show >> fantastic >> i know it, but i didn't know the lyrics we've got to go. make sure you join us tomorrow "squawk on the street" is next good thursday morning, welcome to "squawk on the street." futures are steady as they chase for more record highs continues, it is the busiest day of earnings season, results from verizon, twitter, and of course, amazon intel starbucks tonight slight moves in europe this morning. the tenures has

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