a gain of 115 points expected if we were to open here s&p is indicated up by 8 points. the nasdaq up by 31 points overnight in asia, you'll see that the market there's also ended higher with the nikkei up a third of a percentage point. the hang seng up 0.8%. the shanghai up 0.59%. and the kospi up 0.84% in europe this morning, you will see similar moves. gains across the board there the dax is up by 0.55% so is the cac. ftse up by 0.8%. if you check out wti, crude oil, $50.27 wti for july broke a four-month losing streak. had its best month since april 2016 look at the dollar index, the dollar index saw its worst month since 2016 dollar is stronger against the euro and yen trading at 1.1813 and the dollar/yen at 110.34 fifth negative month in a row. >> let's get you through some big stories. the s&p 500 will start excluding companies that have multiple classes of shares. the move bars snap from the index. the company offering new investors a class of common stock with no voting rights. this is a big deal >> everyone will get kicked out? >> that are already members -- here's the important part. if you're already a member of the s&p 500, you will not be affected that includes alphabet and burke slir hurricane matth berkshire hathaway >> this is more of a move to try to tell new companies we're not doing this anymore so, if you're going to pursue an ipo, this may change the dynamics of silicon valley >> you waare left out of indexe. >> there's all the money in indexes. if you're not in an endex, prin, you're playing on another level. hbo says hackers stolen upcoming programming according to entertainment weekly the theft includes a script for an unaired ep today episode of "game of thrones. ew says the hackers have posted episodes of ballers. we get a trio of economic reports. june personal income and spending is out at 8:30 eastern. followed by the july ism manufacturing index and june construction spending, both out at 10:00 a.m as for earnings, look for results from pfizer, phillips 66, sprint, a lot of people focusing on sprint after talks with charter, t-mobile, under armour and xerox that's before the bell after the close, we will hear from apple thifrnlg thifrnlg >> can we make a pact here? it's august 1st, let's slow down a bit. let's enjoy every day of august. >> i would like that >> let's not look back and say it's labor day >> how do you do that? >> i don't know. i don't think it's possible. i'm just going to take a deep breath >> and hold it >> august 1 st august is a great month. summer is great. i don't want to have to go through another winter -- my choices are not great for not doing that can you just -- >> good luck with that >> easy. august >> are you meditating? >> i haven't can i use that as an -- >> august. that could be your mantra. >> we will go to kayla you know, we're not breathless, kayla. our top political story, anthony scare moochie smoochg scaramucci is out. the name can be worked a bunch of different ways. when it was all said and done, i will tell you it made sense to me, given watching all the general kelly commentary about how strict the chain of command was going to be, it seemed like scaramucci could survive, but looking back at the unbelievability intervieunbeliee interview, it was inevitable that it would happen >> we talked about general kelly being this new person, a new force within the white house where the buck would stop going forward. people talk about the "new york post" cover, the survivor title is outdated by two people. the start date was moved up to july 26th, because there was a worry within the west wing that people who are not fans of scaramucci's would try to sabotage his hiring. this is the third west wing departure in less than three weeks. the statement regarding scaramucci's resignation echoed a desire for a clean slate, but this time for general john kelly, the new chief of staff. press secretary sarah huckabee sanders said the new yorker article also played a role in this >> i think the president felt the comments were inappropriate. >> scaramucci has been silent. sanders says he does not have a role in the administration at this time. skybridge declining to comment on whether he will rejoin the company which he founded and is selling in order to comply with ethics rules to join the administration the buyer of his business, hna, has told reuters the shuffle does not affect the sale itself. the administration trying to regroup after a healthcare loss and ahead of a tax reform push not to mention a continued stream of stories about the russian investigation. last night the "washington post" reporting that it was the president himself who dictated don jr.'s original statement claiming that the meeting with a russian attorney was to discuss adoption policy. that's not the case. there is the parlor game about who could potentially take this job. when scaramucci was hired before, part of it was the president's frustration that the press office took so long to fill that role of communications director, which had gone untilled for about two months time >> so sean spicer i thought was still around until august 15th so they -- >> he is he was at the west wing yesterday. he's in the press office >> that's why i thought scaramucci wasn't starting until the 15th so they started him right away and spicer stays any way >> yes >> but sarah sanders was asked on whether scaramucci had taken the oath office. he was in office, and serving as communications director, but not all the books were checked >> i have questions around the sale of hna. hna says they will continue trying to complete this deal do you think that changes at all. we've seen news around hna and the ability for them to get money, bank of america and others not wanting to do business with them what are the tax implications for scaramucci will it affect how a transaction like that will be taxed? >> unemployment insurance? >> on the hna part specifically, i had a conversation last week with a person familiar with the transaction who noted the sky bridge purchase is a small one for hna. they are paying cash for it, they don't need to borrow. the banks they we s were havin about this, even though they were paying out of their own pockets. there was a piece in the f.t. where executives from skybridge were talking about the fact that if anthony scaramucci was at the white house, he wouldn't be touching investors money, that was to put at ease the transaction going through. in terms of the tax treatment, normally i don't know about this specific case, because it's going to come down to the nuance here, whether he was granted that favorable tax treatment in the first place, a lot of these jobs require a minimum number of days on the job, call it a year f you're selling stock or assets >> that's why he wanted to keep the xm bank. >> he may still. >> a lot more to talk about. kayla, thank you very much we will continue this conversation joining sus sarus is sarah faga. a cnbc contributor sar sarah, was there any other choice >> i don't think so. if you think about general kelly, the way he conducted himself throughout his professional life, you think about the way every member of the military conducts him or herself, i didn't see how anthony scaramucci could report to general kelly or report around him >> one of the things that's been fascinating about this particular white house is that the relationship, the long-term relationship to some degree, the loyalty of figures in the white house and the president matter they matter deeply to some degree anthony scaramucci had that. unclear whether kelly does, at least now. >> i think that's a great point. donald trump has a lock history of people exiting and reentering his orbit. roger stone, famous political consultant, exiled for a while but nothing would surprise me relative to the way trump order the his staff. just because anthony scaramucci is gone today. i don't think he'll come back to the west wing, but he may be back in a prominent role in government at some point down the road >> how do you think the west wing will change over the next several weeks, if it does at all? >> i think yesterday's move, while probably the right one for the staff and kelly, it was an opportunity for the new chief of staff to say i'm in charge there are new guardrails around how this west wing will operate, and you will operate within those guardrails there was a point that jarrett kushner and ivanka trump will report through general kelly, at least through their official capacity whether that happens, how long that lasts, that remains to be seen >> already buried in a new york sometimes story, a sentence that suggests that these guardrails that general kelly may be putting on may be too constricting for the president what will happen when the president is tweeting and general kelly is waking up and reading it >> i thinks that an open question general kelly certainly knows that donald trump conducts himself in a certain way, and it works for donald trump at least it has through most of his career to some degree a leopard doesn't change its spots but can he create a structure that at least stops the infighting produces a more productive staff. everybody marching in one direction, which has been the biggest challenge for president trump. president trump clearly recognizing this isn't working for him so he made the move. >> is this a pivot or have we seen this movie before >> clearly it's a pivot this week the president recognized over the past 10, 12 days, this wasn't working this was unsustainable his administration is being talked about with the likes of nixon and carter he doesn't wanted that he had to pivot. the question is will he remain disciplined and allow general kelly to put together structure that works, and get president trump out the small things of running the white house. we heard him making this person an assistant to the president, demanding this person be hired in the office. he has much bigger fish to fry certainly. >> the other question of the morning we lates to what kayla was reporting or re-reporting from the "washington post. these allegations, i guess, that the president was responsible for the original statement that went out from donald jr. will general kelly be able to prevent that >> hopefully general kelly needs to prevent those things from happening if this white house is to rally around tax reform and truly turn the corner, not just on the staffing but on the policy making, too. which is as important. the president should not be writing statements, certainly they should be approving them, but oftentimes they don't need to approve them. that should be left for the staff. the president should be worried about policy regarding north korea, tax reform through congress, giving his speeches and what he's saying relative to the important policy matters of the day. writing a statement from his son, maybe being dishonest about it what that does for the special counsel, gives him another line of inquiry, all of that is why this west wing and president is in the situation he's in today. >> sara fagen, thank you when we return, an earnings beat by an oil giant driving the stock higher that stops our list of stocks to watch. later apple reports after the closing bell we'll tell you why the iphone sales numbers could mean more to analysts than the top line or bottom line numbers. at fidelity, trades are now just $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be. and at $4.95, you can trade with a clear advantage. ♪ ♪you are loved ♪ who knew that phones would starentertaining us,ng? getting us back on track and finding us dates. phones really have changed. so why hasn't the way we pay for them? introducing xfinity mobile. you only pay for data and can easily switch between pay per gig and unlimited. no one else lets you do that. see how much you can save when you choose by the gig or unlimited. call or go to xfinitymobile.com. xfinity mobile. it's a new kind of network, designed to save you money. welcome back to "squawk box. we have some stocks to watch bp topping expectations despite a drop in second quarter profits. the company says oil and gas output increased by 10% as it started production in a large oil field in the north sea sony's operating profit jumped three fold in the fourth quarter on strong sales of image sensors. that business recovering from earthquake damage is suffered a year ago sony shares up 35% this year, but they are lower today >> honda reporting a better than expected first quarter profit as strong sales in asia offset weakness in north america. the automaker is raising its full-year forecast that stock is up 0.6%. 5:the u.s. equity computer chor features. dow looks to open up about 112 points higher. nasdaq set eight new records in the month of july. it was responsible for 59% of the dow's advances for the -- going all the way back to may. >> the greatest -- our greatest manufacturer is doing so well. the market cap is almost a third of facebook's now. i mean, it's really coming into its own. >> look at that. >> i know you can't use boeing to look at somebody else's vacation pictures or anything -- >> strong demand for airplanes >> how you are going to get to places to take your stupid facebook shots, if you can't fly there. >> yeah. if you can't fly there >> can we get our priorities straight jason pride joining us now and covering the economic angle is michael gapen from barclays who is used to being called on first, because he's 6'8" it's like look at that guy i'm not doing that >> we're all the same height here the chairs are just adjustable >> he says this is not fair. >> and we're not playing basketball >> you know what you spoke to me. your notes, your notes spoke to me are equities too expensive here? listen to this valuations are a challenge becoming a larger challenge. evaluations now sit at the top level historically historically these levels hold back returns limiting gains, restricting further appreciation and rising values as a result we expect equity markets to continue climbing >> quite inspiring, right >> no. you're right you're right about all those things, valuations usually are not enough to stop something from happening >> we actually have done the historical analysis on this, we looked through the data. we found when you're at the line between top and second quarter valuations that generally returns are limited. you get 1% to 2% less per year, but they don't go negative you have to get to the upper end of that, the top 10%, you have to get to 23, 24 times earnings before you start seeing a high probability of negative returns coming to the market on valuation basis. markets, they've passed two cycles we got to this level and they basically rode this level for five years in both cycles. we can get here and stay here and the markets can climb with the underpinning of earnings growth >> six months ago if you made this point, people would have benefitted from listening to what you're saying it would have been another 20% tacked on in an already expensive market we'll see if it continues. maybe you'll stay too long at the party, but this is the right attitude to have for the last couple years >> the one counter balance, it does make you vulnerable to corrections. the corrections can be bigger when they do come. they may not still last, but they can come and those overpriced equities are vulnerable to that >> michael, does the -- is the disconnect between the market and the economy, is it closing or widening? >> actually, i don't think there's a tremendous disconnect. >> so the economy is justifying what's happening >> i do. i think it's more than the u.s. economy. as we were discussing prior to coming on, the real improvement has been outside the u.s these are multinational corporations we've got growth in europe, that will be on par with the u.s. improvement has been globally and synchronized, a lot of the global risk back drop that come away all of this in an environment where inflation is going nowhere. any central bank normalization will be slow it's the u.s. and global back drop support these >> the fed is going up, but from low levels inflation is not a problem, at least in the pleimmediate future you have great employment numbers, the prospect for rising wages, they might not be inflationa inflationary you look at it all, why am i looking so hard to find a flaw >> the valuation argument is the one that should make you nervous. we agree it's a position where a ri risk-on portfolio will do weight, overweight equities should do well forward looking returns are pem tered by these v tempered by these. >> you can take a nuanced position the international equities and international space is where we're seeing more improvement and driving growth at this point in time. they catch up to the u.s. in terms of economic activity the earnings are doing the same way. >> weaker dollar will hurt that. >> valuations are cheaper. >> but the weaker dollar could hurt that. >> weaker dollar could hurt that, but the dollar is -- >> i need to know. i wish i would 6'8". i do i don't think i would be better at basketball. >> hard to buy suits >> is it cool looking around and thinking look at me. or do you stand near a wall because you feel like you stick out? which is the more frequent feeling you have >> in new york, it's better to be this tall, when you're packed on a train, you have more freedom. >> do you ever foeel awkward? >> yeah, constantly. yeah >> i'm envious i would take it. i want it. it's not going happen for me.shg >> doors are 6'7", so some downside >> i'm sorry i'll get something for you next time >> okay. coming up, earnings alert. pfizer expected to report in the next 20 minutes. we'll bring u osyothe results and reaction from wall street. "squawk" returns in a moment hi. 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. welcome back you're watching "squawk box" live from the nasdaq market site in times square. good morning welcome back u.s. equity futures triple digit gains indicated at this point. dow up 115 points, that would be a record that would put us above 22,000 s&p participating after a couple of down sessions the nasdaq showing some good rebounds, if it were to hold where it is now, up 31 points. venezuelan president nicolas maduro slammed president trump as desperate yesterday after the u.s. government slapped sanctions on the venezuelan leader the trump administration denounced sunday's election as a sham vote and froze all of maduro's assets that are subject to u.s. jurisdiction americans are barred from doing business with the venezuelan leader critics fear rule also be changed to cement the socialist government's power in the middle of the night last night two venezuelan opposition leaders were taken from their homes by the government intelligence agency. they had been serving house arrest on charges of leading anti-government protests and leading a coup against the president. hopefully that makes you feel better, andrew, about what's happening here in our country. it was a tough week last week for you. even though the healthcare thing went down in flames. it would be worse. he sounds like baghdad bob, i feel bad for trump and what's happening up there in the united states we have it going on down here in venezuela. >> only four regimes that we -- >> i don't think that's a reasonable comparison. that's okay. >> i'm glad. >> okay. let's talk earnings. apple will be reporting after the closing bell today many analysts are looking past this quarter's number at the next product cycle joining us on the expectations from the iphone 8 and what to think about earnings along the way is neely patay people are thing let's get this quarter out of the way there was one analyst who put out a note, get the third quarter ouft of the way what's coming is the iphone 8. >> yeah. it's the end of the iphone 7 cycle. if you look atriumer sites, they leaked a lot of information, firm wear firmware update. there are questions whether there will be a fingerprint sensor the design doesn't look as forward thinking as one would expected >> so not as different >> i think it looks different. if you look at the 7, it is not as beautiful of a phone as the samsung galaxy s8, but apple sells a lot of phones. the question is can they keep up the pace of growth, especially in a cycle where they are changing the design. >> the graphics of the phone >> the physical hardware >> just the phone itself is beautiful. >> the samsung 8 is beautiful. >> it's just a thing. >> it's beautiful. there's no bezel to it it has curved edges. it's amazing however what we were discussing off camera, i apologize, boy genius -- >> it's everywhere >> there are pictures of what is supposed to be the next iphone >> boy genius, he's 40 and bald now. >> whole different topic >> how he can be a boy genius. >> hear me out there are images -- so unfair. there are images -- >> he's on tomorrow. maybe. >> there are images -- >> we'll ask him >> there are images of thi supposed phone dare i say, because i know tim sometimes watches in the morning, if that's the phone it's unattractive. >> i would think -- >> it's upsetting. >> for me, it's the features >> i think that's the thing. apple's ecosystem is so powerful >> it has big bezels >> can you get that camera over here it's a blank screen. >> no, it looks similar. >> this is what the boy genius folks have at the moment a phone, they say, is the phone. >> now -- you don't think it is the phone. >> i think at this point in the cycle, we're seeing leaks off the supply chain in china. >> not the finished -- >> what makes this more accurate is, again, they accidentally release the firmware, which includes a graphic that looks just like that >> the question is can they continue the sales, no whether it excites the few people looking at the form of this before they go and buy it. you mentioned it's a sticky environment. is it something people will want to upgrade to and will it bring in new customers >> the things that are driving peoples desire for new phones is with what's samsung is doing, apple is doing, building tighter packages around larger screens >> so you don't have all this stuff around the edges that cut the screen size. >> everybody always wants a bigger screen. that's a curve that's been true for a while. the thing apple has been making better is better and better cameras. that reached a point where they can do augmented reality all kinds of demos happening it looks like there will be high-end augmented realities with the new phone that will drive a wave of interest in what this phone can do and something android is nowhere near capable of doing. >> even if it's less attractive, you think it will be a better phone? >> it's hard to get people, particularly in the united states, to switch from android to the iphone. >> what is the better phone -- right now, if you could buy a samsung or apple phone -- >> if you are not on imessage, not locked into apple music, the s8 is probably the better phone. those are huge ifs >> we're all living inside the ecosystem. >> you look at apple's other product lines, the apple watch is -- i don't see any here >> this is not an apple watch. >> it's a successful business because people buy iphones, that is the one product that can send an i messag an imessage. >> will we see more watches? >> i think so they'll narrow it to health and fitness. >> anything else we're missing is there some other thing that's coming that we're not talking about? >> i think apple's big disadvantage, i hate to call anything they're doing a disadvantage, their scale is successful because they own a bunch of stores and they are apple, but their ai machine-learning stuff is not yet at the level of competitors. what google is able to do is advanced compared to what apple is able to do. >> make that real for us what do you mean >> everyone has a speaker now. there's the echo, google home, apple is releasing the home pod. over time the capability of those isis tant assistants important. amazon has a massive lead there. there's a $40 amazon echo both that they basically will start giving away for free and er is $300 and is not out yet google has a huge advantage on what it's cloud can do, ai can do none of them have applapple's b. the home ecosystem, they'll do fine, but they have to made that bet aggressively it's unclear if they'll do it. coming up a shakeup at the white house. bill daley will join us at the top of the hour. then president trump has not given up on healthcare yet we'll talk to one of the architects of obamacare. at 7:30 eastern time, chief executive of american made company snap on will join us on set. stay tuned, you're watching stay tuned, you're watching quk x"cnbc. in the first place. at cognizant, we're turning the industry known for processing claims into one focused on prevention with predictive analytics, helping them proactively protect the things that matter most. get ready, because we're helping leading companies see it- and see it through-with digital. time for the executive edge. softbank empire may be getting bigger sources saying the head of the japanese con dmrglomerate is not backing down on its acquisition of charter joining us is ed lee let's do charter first then we'll talk about the future of the empire. >> he wants charter. he wants it. i don't know if he can get it. it's way too expensive for him at this point. >> what is he talking about? there was a bloomberg article last night, saying he could make a bid with some bank stock, some other cash thrown in, and maybe not own it outright, but control it take a 51% or 55%, of course the charter board and john malone doesn't want to do it. >> john malone only does things that are tax efficient there's not a tax efficient way to make this play. >> well sprint has bad balance sheet, a lot of losses you know, charter has debt on its books. there's some kind of tax loss carry forwards you could engine engineer who knows. if it's pitched that way to him, he may change his mind right now, it's too complicated. >> what do you think is on the shopping list for masa son >> he was attempting to buy uber, but stepped off of that because of the turmoil who is in charge who will be in charge that's a good question >> we talked about it yesterday, there's a question in the valley, very mixed some people think this is spectacular, because he will basically buy everything and let a lot of these venture venture capitalists exit that's the good side the other side is he'll inflate the heck out of the techworld and it will end badly. >> i think the latter thesis is overblown. a lot of what he's investing in now, a lot of them are startups around the world all the competitors to uber in southeast asia and asia, these are home grown players >> is it unfair to say he's the most powerful man in tech? >> yeah, because he's making bets yet, we don't know if they'll pay off. he's powerful, he has a lot of money to spend -- >> if you're at a dinner conversation with people in the tech world, used to be people would be talking about -- people still talking about elon musk. >> he's a huge factor. >> in terms of their own business, people are talking about masa son, what is he doing, what does he like >> we hear the same thing a lot in terms of we don't know what he's trying to do. that's the reaction we get from other vcs or entrepreneurs in the valley softbank has been around for a while, so you're familiar with that masa son himself, it's like i don't get his thing. >> the thing that fascinates me about this, he has such ambition, he raises the 1$100 billion. what is to keep sequoia or marc andreessen who is in the valley to do this >> here's the thing. guys like marc andreessen or sequoia, these well-known venture firms, when they go after lps and raising funding, they are tapping certain sources they're used to doing. they're not tapping global sources the way mrasa son does >> is the fee -- what's the fee structure on this deal >> on his vision -- >> is that similar to what a $2 billion venture fund would be? >> i don't have a report, but it's similar to other lps. >> he's just minting money printing it. >> he's printing money basically. there's a lot of opportunities now in the space, whether it's ai or virtual reality thing. he's realizing he needs to jump into it. >> the one and only, ed lee. thank you. >> thank you >> say hello to cara for us. >> will do. >> she was making hay on twitter. >> profane >> i have to follow her, before she tells me, she says it on twitter. >> she said things like that to you? >> no. no sometimes she'll have news, break it on twitter. i was like can you please write a story first before you write it on twitter. >> pfizer reporting 67 cents adjusted revenue was a bit below, 12.9 billion. estimate was 13.08 billion the range for the mid point of the year is up slightly. 254 to 260, street at 255. revenue, 52 billion to 54 billion, better than the 52.7. the shares as a result are up 0.6% we'll talk to barbara ryan and a pfizer analyst at the top of the hour. when we come back, a potential disaster in crypt to curre crypt crypto currency has been averted. a quick check of the markets. you can see the dax and the cac are both up by a half percentage point. the ftse in london up 0.7% stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come 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happy with new febreze. ♪ all right welcome back, everybody. we have a follow-up to a story we told you about yesterday. today is a crucial day for the future of bitcoin. sim ma moody is here and she has more on all of this. >> hi, becky, good morning following a month of disagreement over how to scale bitcoin a software upgrade will activate in just about 2 hours time if a lot of owners take this option, bitcoin will diverge creating two currencies. anyone who holds bitcoin before the split will likely hold coins on both exchanges after the split. but make sure your exchange accepts bitcoin cash coin base says it will not support the new currency and to ensure bitcoin's price doesn't see a huge thing coin base is suspending trading activity today to avoid disruption that's the equivalent of td ameritrade or charles schwab saying we're halting trade on all stocks >> that's crazy. >> it is crazy believers in this new bitcoin specifically from china say in order for the digital currency to rival paypal, visa and other digital platforms, these updates are essential. also point out that thomas lee at fund strath who sees bitcoin hitting 55,000 in five years says essential banks are incorporating bitcoin, then it will gain more legitimacy and that's why software upgrades like this are needed >> meaning that this may not be the only time that it's taken out for an entire day? >> that's exactly right. more as we were discussing yesterday, are expected to happen just as more demand drives the software upgrade to actually happen >> i don't think i saw but seema tried to live, was it a week >> i did i lived a week on bitcoin. incredibly hard because there are not enough vendors that accept a bitcoin there were like two french restaurants on lower east side definitely went back for a couple meals since that was the only place that actually accepted it. you would expect more in manhattan. a place that's full of different restaurants. you would think we were a bit more savvy >> but yeah, your story, and you understand the reluctance or the slow adoption, and it is still in infancy >> still the early innings >> seema, thank you very much. seema mody >> okay, now to sports the olympic torch coming back to los angeles. the city has reached a deal with the international olympic committee to host the 2028 summer games that agreement clears the way for paris to be awarded the 2024 olympics part of the deal, the ioc will advance $1.8 billion to l.a. in recognition of what's now going to be an 11-year planning period, and to increase youth sports programs. l.a. has hosted the olympics twice before in 1932 and 1984 we should say 1984 was, i believe, the most profitable olympics in history. historically, most of these cities have lost enormous amount of money, and part of the pitch that l.a. made was actually the sustainable and reused many of the things you're looking at a shot of the coliseum right there, and the coliseum will play a major part in that olympics >> when the 2018 olympics are? >> excuse me >> do you know where the 2018 -- >> in seoul. >> south korea >> yeah. >> right next door >> are they thinking about that at all >> you know, it's -- for south korea it's always been a binary situation. >> right they may or may not wake up tomorrow >> i can't -- i thought about this i can't imagine -- >> oh, good. i mean, i'm -- >> i mean i can't imagine -- >> it's coming up. it's 2018. >> then tokyo. then paris >> not much further. coming up reaction to pfizer's earnings we're going to dig through the pos thn alt. at's next.anys i mean - they call him the whisperer. the whisperer? why do they call him the whisperer? he talks to planes. he talks to planes. watch this. hey watson, what's avionics telling you? maintenance records and performance data suggest replacing capacitor c4. not bad. what's with the coffee maker? sorry. we are not on speaking terms. at where instead of payinging whaa befor middlemen,em.aker? we work directly with family farms to deliver higher quality ingredients for less than you pay at the store. get $30 off at blueapron.com/cook >> >> good morning. another big white house shake-up after just ten days on the job, white house communications director anthony scaramucci is out. we have the latest out of washington, and reaction from former white house chief of staff bill daley straight ahead. a summer stock sizzler wall street rally remains red hot as we kick off a new month we're breaking out your august playbook and previewing this week's jobs report plus tool talk with the ceo of snap-on. a closer look at manufacturing, infrastructure and jobs in america. the second hour of "squawk box" begins right now live from the beating heart of business, new york city, this is "squawk box." good morning welcome to "squawk box" right here on cnbc we're live at the nasdaq marketsite in times square i'm andrew ross sorkin along with becky quick and joe kernen. take a look at the futures right now, got a lot of earnings to talk about in just a minute. impacting all this the dow looking like it would open up higher again it is hot, hot, hot. up to about 110 points maybe 111 points right now nasdaq will open higher as well over 25 points higher. the s&p 500 looking to open close to 7 points higher tell you what's making headlines at this hour on the first day of august, automakers will report their july sales numbers and they're not expected to be up. the analysts surveyed by ed monlds expects all major automakers to expect sales to climb. an overall 6.2% drop in u.s. sales. the day's highest profile earnings report is going to be coming up after the closing bell that's apple they'll issue the fiscal third quarter numbers expected to show profit of $1.57 per share on revenues of just under 45 billion dollars. but of course, everybody's waiting for the fourth quarter, when it comes to apple and its new phone this year. and then the big news of the morning, the s&p is going to begin excluding companies that issue multiple share classes this takes effect today. it doesn't impact existing s&p members with multiple classes like alphabet and berkshire hathaway but one company that could be affected is snap. which has a class of stocks with no voting rights snap went public in march. hit a record low in yesterday's trading. and this may have a big impact on how companies approach governance in the future at least that's what the goal of this new index is about. and as we know, given the rise of etfs, and algorithm trading, you know, so much of the index, being an index matters in a very, very big way >> a lot of money gets funneled into the index you get bought automatically if you're in the index. which means you don't get bought automatically if you're not in the index. >> right we talked to a number of value investors who will say the funny part of this new world is you almost have to buy a company that's not in the index, and part of the goal in terms of the value play has to be believe it's going to generate so much money and do so well it will get into the index >> right all right. all right let's also talk about today's top political story. anthony scaramucci is out as white house communications director serving just ten days on the job joining us right now is bill daley. he served as white house steve of staff under former president obama. he is now managing partner at arjentier capital. i don't know whether to call you chief of staff or secretary or -- >> i think bill is better. >> we still with bill for now. you have worn a lot of different hats in washington you have seen how the white house works, you have seen ow administrations work with john kelly coming in as the new white house chief of staff what do you think of this particularly with his first move being to oust the communications director >> well, i think it was an obvious move for a whole host of reasons. one, scaramucci proved he was not a communications guy with his tirade last week so i think kelly sent a message. but it's also probably the end of the gong show of the last ten days and i've got to say, i don't think there's been a worse ten days of a modern presidency in quite awhile, like president trump's had the last ten days. so i think kelly brings at least some order, in theory, everyone says they're going to report to him, through him, pardon me, but you still have some very large players in that team who have strong opinions, and capitol hill, who is a well respected military person, of course, has gotten a lot to prove in that he is now in the thick of the political game, which is washington and what the chief of staff has to do is mapg the politics, not just in that building, but more importantly, in the city of chicago, and on behalf of the president and his programs for the nation so it's a very different job and a very different sort of route that kelly must traverse through than he has been in his entire career >> let's talk about just chain of command because that is something that he's very used to. and having that put his legs in the white house will probably help streamline a lot of things, maybe focus the president's attention on the big thllses thh wants to get passed, correct >> in theory, that's right the question is going to be with kelly and the last military person to be chief of staff was alexander haig who basically oversaw the end of the nixon administration the last year and the question for kelly is, is he just going to have the chairs on the deck of the ship in order and stable. or is he going to try to steer with the president, this ship through a very difficult sea and so i'm not sure what it's going to be. and right now, i think he made a good move with scaramucci. but, now the president's got to not only be more disciplined himself, but they've got to get some things done and they've got to get a program, if you go back through the president's programs and his campaign and his ideas, almost none of them have been acted upon and most of them, major impactful ones, must be done by congress and that's a place where kelly has not had a lot of experience, and the president seems to be stumpageing around with his relationships, not only with his own party, but absolutely having no relationship with anybody or anything to do with the other side on the hill >> i mean we could give the white house credit for what it has already accomplished and that's getting a new security justice nominated. >> yes >> and deregulation, which were two big issues that they have made some substantial progress with >> right >> but the next issues have to be health care, tax reform, how do you handle those and that does include -- >> well, infrastructure, and the nafta agreement, and are they going to renegotiate that? are they going to cancel now one great thing about having kelly there is if there is, god forbid, a crisis in foreign policy or military expertise, kelly has that so with north korea being such a vital concern right now, kelly brings a lot of experience and a lot of expertise in that arena which is very helpful for the rest of the white house staff who have very little, if any, experience except mcmaster, of course, as national security council. >> bill, yesterday we talked to ken duberstein a little bit about what he found to be some of the most difficult things in the job of chief of staff. and he just pointed out he was dealing with reagan coming out of the iran/contra scandal and trying to get things focused and bring up approval ratings. what were the biggest struggles that you dealt with as white house chief of staff and what did you learn from that what kind of advice would you give coming out of it? >> well, my advice would be to go somewhat slow now, that's difficult for kelly, because they're in the middle of a rather chaotic period of this presidency but they've got to pick their fights and the president has to pick his fights and not be at least seemingly fighting with everybody, including his friends in the republican party so i think kelly's got to re-establish a strong relationship with the hill, reince priebus, who had a good relationship with speaker ryan, obviously was pushed out, and i don't know if there's really bad feelings on the hill for those who liked priebus, and liked the fact that he had been part of the quote establishment. >> you're talking in paul ryan in particular? >> paul ryan the speaker of the house who was close to priebus so whether kelly has some cleaning up to do with that relationship, because without ryan, without mcconnell, it's very hard to imagine the president putting some coalition together on the hill to get real things done. and when you talk about regulatory reform, the real sort of reform that the president has talked about getting done still has to be done by congress not through executive order. you can only do so much with executive orders and we saw that with president obama, and they can be undone by the next administration. but the real impact has to be done with major legislation. and that looks like it's very difficult, health care was a debacle. infrastructure rollout was a debacle. nothing happened the trade area the wall, all those things he promised, none of them have really, whether i agree with them or not, have been acted upon and so the president's got to use this as a restart, and that's going to be very difficult to do, i think >> i mean, what it sounds like you're advocating is kind of pivoting from health care and switching to tax reform and infrastructure, am i right to read that? >> yeah. i would say that because the economy, which is strong, and is doing well, is where the only reason that the president's ratings in my opinion are even where they're at even though they're pretty pathetic today because there's a perception, and a reality, that the economy is doing well. obviously much better than president obama had to deal with when he came in. so, if that begins to get weak, then you've got a very, very tenuous situation for this administration so i would pivot the tax reform. but, becky, there's a reason tax reform, major tax reform has not been done for 36 years >> it's hard >> that's because it's really hard and they think health care was difficult and complicated. wait until you deal with tax reform it's a very difficult thing. and the president must be intimately involved and have the knowledge of this, and that's difficult watching this president to expect him to do that but without that, it's a pretty heavy lift for any administration >> bill, thank you for your time >> have a good day >> appreciate it >> all right back to corporate news phaser quarterly results just out minutes ago. registering mixed quarter. drugmaker earned 67 cents a share, one cent above estimates but revenue was below forecast barbara ryan, founder of barbara ryan advisers joins us now with more on the results. i was thinking about all these different major pharmas, barbara and ten years ago, i think, you know, when merck was having problems you said you almost saw it as a bond proxy, had a nice dividend if you want to play innovation, and drug development, can you go to these major companies anymore, or should you just say, look, i got to go to biotech these are just, you know, big conglomerates dealing with patent expiration and i can't play innovation with these guys? would you do it with pfizer? >> yeah. i mean, you know, given the growth that they just put up, and will over the next couple of quarters, you're absolutely right. it is essentially a bond they return to shareholders about 8.9 billion in the first half of this year, through dividends and share repurchase the good news is that the innovative core was up 9% driven by products like i-grant which has been enormously successful in cancer. but they've got losses of exclusivity for vie rag and lyrica, nearly $7 billion and it's like trying to grow through quicksand. and, so, at the end of the day, while pfizer will say, we have blockbusters over the next five years, the reality is, it's hard to see how you move the needle given the size of this company so investors turn to what's the strategy to drive growth because at the end of the day, if you're going to invest a lot of money in r&d we want the alpha associated with that we want the growth so what pfizer did turn to was obviously the astrazeneca deal which fell apart, the allergan deal which fell apart. maybe now they move from the "as" in the alphabet to the "bs" in the alphabet and move to acquire bristol-myers. but the opportunity to break the company apart has really passed, because the older products, the essential health care business as they call it, was down 12% in the quarter, and all the comps, like the parago, like the valeant, like the mylans are substantially reduced in terms of their evaluation, so the sum of the parts, doesn't work and add up to something greater than the single entity. so i think inevitably pfizer and its piereers will turn to m&a as they always have >> right 3.8% yield if you go back 20 years or so, i mean, stock's up from, i think 20 years ago the stock was at 27 or 28, wasn't it i mean at one point. now it's only at in the mid 30s. so just -- >> yeah, i mean, it's clocked time here for a long time. you probably remember when they announced the wyeth acquisition they cut the dividend by 50% the stock went to 12 that was a huge gift and a massive opportunity. but you know, at the current prices, i mean, again, it's a very low risk, high yielding bond, which is attractive. right? >> i don't know. >> but it's not a growth stock >> not really. >> it's not a growth stock well people like to diversify, right? they have bonds in their portfolio. growth stocks. they have, you know -- >> with all the gains you have in some of your other stocks you've got to have some stocks in there that are losers, they diversify, i guess >> well, you -- >> i don't know. why would you want to have -- >> who wants to diversify into that over the past 20 years? nobody i don't need that to -- you know, if i need diversification -- >> well, people own, you know, municipal bonds. >> i know. i know >> so, you know, this is one component. it's not in the growth driver of your portfolio, but if you're elderly and you're living off fixed income, you know, owning pfizer is not so bad right? >> yeah. >> if you're 25 years old it's not a big idea >> right all right. okay, barbara, thank you we appreciate it >> great to talk to you. >> when we come back, we're going to be talking health care with upenn's medical ethics and health policy guard dr. zeke emmanuel will be joining us right after the break. then at 7:30, manufacturing in the united states. the ceo of snap-on will talk tools. the state of the economy, and much more. right now though as we head to a break take a look at the futures. dow is up by triple digits even after hitting a new record yesterday. right now it looks like the dow would open up another 110 points which would push us across 22,000 s&p indicated up by just over 6. the nasdaq up close to 25. "squawk box" will be right back. is this a phone? or a little internet machine? [ phone ringing ] hi mom. it makes you wonder... shouldn't we get our phones and internet from the same company? that's why xfinity mobile comes with your internet. you get up to 5 lines of talk and text at no extra cost. [ laughing ] so all you pay for is data. see how much you can save. choose by the gig or unlimited. call or go to xfinitymobile.com introducing xfinity mobile. a new kind of network designed to save you money. quick stock to watch quarterly results just out from under armour, the company losing three cents a share. smaller than the consensus estimate of a six cent loss. revenue beat forecast. however under armour the full-year forecast of 37.40 is below consensus on a forecast but also announced restructuring that will result in charges up to $130 million this year. we're going to speak to an analyst about the results later in the hour. looks like, i mean just from the stock chart, it's tough to go up against nike they did great for awhile. small, nimble competitor >> yep >> but the bigger you get the tougher it gets to go after -- >> well i think the other issue is that they were affected more drastically than nike has been in terms of the sports sales stores that have closed down and more of their outlets have been hampered by that. nike has found a way to work around it not only by going direct to consumer but also by going through amazon and cutting some deals there >> but there's sometime -- sometimes it's nice to be nimble and much smaller as you're taking on big -- other times the strength of being that large is an advantage bump in the road >> and president trump continuing to urge the senate to figure out a health care plan to replace the affordable care act. but the future of obamacare remains unclear. joining us right now is one of aca's architects, maybe the architect are dr. zeke emmanuel the author of "prescription for the future." thank you, doctor, for being here >> great to be here. >> you have watched this all play out in washington i know that you have been very agitated and upset about the plans that have been put forth but i imagine you're happy that they've been voted down. >> yes >> what is the future? at this point. what do you think is going to happen >> i think that there are two time lines you need to look at we need to have a time line that's over the next few months, that's going to stabilize the exchanges. but primarily try to bring the premiums down in the exchanges for people that require some certainty. we don't have a lot of certainty. requires guaranteeing the cost sharing subsidies. requires some reinsurance. that will bring premiums down between 10% and 20% in the exchanges. >> you may want that but the other side, if you will -- >> if you listen to -- >> may want to bamboozle it so that it makes it even harder >> i don't know. it's not going to be good. and they're going to own it. people are going to know that they did the manipulations they didn't do certain things to actually bring the premiums down real point is we've got a long-term issue here of affordability. we have to get the costs overall of the health care system down that needs to be the focus that's actually a bipartisan issue. and that requires changing how we deliver care. >> right >> and that requires changing the financial incentives this is where we really need to focus. in two or three years we have to get these costs down we've had a plateau. we stayed at about 18% we haven't gone up to 20% of the gdp. people thought we would be at today. but we really have to change how we deliver care. what my book does is to say look here are twelve things you can do to actually make health care get rid of unnecessary care and make it more efficient and bring the pricing down that's got to be the focus >> mark cuban was on twitter yesterday, and in a twitter storm. i don't know if you saw this >> no. >> a democrat suggesting that single payer is not the answer and that getting rid of insurance companies full stop is the answer what do you make of that >> he might not have remembered bill clinton's attempt to get rid of insurance companies and what that did to his health care reform plan. look, there's going to be an existential crisis if you get rid of insurance companies they're going to throw everything they have, and they have a lot, at you that isn't the goal and that ought not to be the goal that's a total distraction the law again, let me keep saying this we've got to get rid of this insurance company, no insurance company issue. the issue is get doctors and hospitals and all the other people in the health care system to change how they're caring for patients >> how easy are some of these changes? >> they're actually pret 'tis -- easy, it's -- >> well, easy relative to what we're talking about? >> correct so here's one big issue. the federal government already in medicare is changing how they pay doctors and hospitals, by getting more to bundle payments, or capitation or to pay for performance for improving health care getting the private sector to do that, too, so every insurer who does business with the federal government, either through the exchanges, federal employee health benefits, tricare, all of them, have them do the same thing as the federal government. you're going to get a lot more signal to the doctors and hospitals you got to change your practices. second, something called site neutral payments we know we have crises that are all over -- >> it drives me crazy. there's no transparency as a consumer, even if i want to be price conscientious, it's really difficult. >> the colonoscopy prices in new york probably vary by four to eight-fold >> not eight percent >> eight-fold. you've got to get to a price plan you've got to get them down and more uniform and one way we can do this is something called site neutral payments right now medicare, i go up, i'm a cancer doctor, right, and you do a bone marrow biopsy to check how your patients are doing, if i do that at a major hospital over $1200 i do that in a physician's office about an eighth of that that makes no sense. you've got to have one price no matter where you are doing it. these are various changes you could make that would have dramatic effects in incentive. i think another really good one is, everyone has to have a primary care doctor. and you have to recognize that doctor as your primary care doctor both in business, on medicare, and on medicaid. and that will create relationships, and i think create -- >> so you can track my performance. >> the exchange enrollment was too low, obviously >> yes >> versus projection and that put too many people in medicaid the expansion was well above what the cbo thought would be necessary. so suddenly medicaid has become this behemoth that it wasn't intended necessarily to be how do we -- should we just say medicaid is going to be it let's try to make it as good as we can make it and let everybody go into it or do you go back and try to rejigger things so that the aca worked like it was supposed to work because it didn't. >> well, all of us thought that the exchanges would be much more active there are a lot -- we can talk about all of the mistakes made, the rollout of the health care dot govern, we could also talk about the situation of allowing, and again i'm just as much at fault, the deductibles to go up so people like, this isn't a great deal, this isn't a great insurance product. we could also talk about the fact that we didn't do a great job of advertising i mean, i keep saying this, you know, google knows our income, whether we're insured, where we limp and they can tell you what your exact price will be -- >> can i take care of myself at 75 still or do i got to cash in my chips i'm planning to live to 95 >> how many drugs you taking these days >> i'm not no, really >> we have - does that mean yes good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq marketsite in times square among the stories that are fropt and center today we're going to be getting the latest personal income and spending figures from the government in just about an hour economists think personal income was up 0.4% in june, with consumer spending up 0.1%. that would be exactly the same performance as the prior month credit card losses are hitting a four-year high that's according to fitch ratings. the average charge-up rate, the percentage of debt written off as a loss came in at 3.29% in the second quarter the eight largest card issuers all say their chargeoff rates increase in which some say is a worrisome sign for the markets and the economy. and we're watching the price of crude oil above $50 for much of the morning today. still hasn't settled above $50 since may 24th but it did break above $50 yesterday morning for the first time in two months right now it's just below $50 at $49.95 a barrel. pandora is reporting better than expected revenue in the second quarter the company said advertisers spent more on music streaming service amid stiff competition however, pandora is trimming its full-year revenue forecast bp topping expectations despite a drop in second quarter profits. the company says oil and gas output increased nearly 10%. as it started production in a large oil field in the north sea. and hbo says hackers have stolen some upcoming programming, and according to entertainment weekly the theft includes a script for an unaired episode of "game of thrones. hbo wouldn't comment on the specific content that was stolen citing an ongoing investigation by law enforcement officials but magazine said that hackers have already posted on broadcast episodes of ballers and room 104, along with a script or treatment for next week's episode of "game of thrones. >> coming up the ceo of high-end tool and equipmentmaker snap-on talks jobs, politics and american manufacturing the president visited a snap-on factory back in april. we'll ask him about the visit, and the company's relationship with the administration straight ahead. as we head to break, take a look at u.s. equity futures not triple digits anymore, but they're close for the dow. and the wolf huffed and puffed... like you 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(child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit saveonsymbicort.com today to learn more. so it only made sense to create a network that keeps up. introducing xfinity mobile. it combines america's largest, most reliable 4g lte with the most wifi hotspots nationwide. saving you money wherever you check your phone. yeah, even there. see how much you can save when you choose by the gig or unlimited. call, or go to xfinitymobile.com. xfinity mobile. it's a new kind of network designed to save you money. earnings earnings of 5 cents per share compares to an estimate of 1 cent loss. matters in large part because everyone's been looking at sprint or at least sprint's been looking at others. whether there's a merger in the work, potentially, masa son still apparently wants to buy charger, charger says they don't want to do a deal at the moment. we'll see. >> all right time now for some cool talk. the president touting jobs in manufacturing. even signing an executive order back in april called buy american hire american. that event was held at snap-on's headquarters in kenosha, wisconsin. joining us now, nicolas pinchuk chairman and ceo at snap-on inc. and it's great to see you as it always is. >> good to see you >> you have a great business, and you service basically mechanics through trucks that go out -- state-of-the-art tools that you continue to develop mostly for automobiles >> sure. that's 40% of our business, what everybody this about we have like almost 3500 trucks that go around the country and sell directly to the mechanics and they give them the best tools because cars keep changing so they need different tools all the time and the other thing about snap-on which is kind of interesting, i think, is it kind of puts us apart, is that people buy these tools, they display the snap-on brand, because it's the outward sign of the pride and dignity they have in their work only somebody who is doing something special would buy a snap-on tool and that is part of the value we bring. >> you've got -- i mean, i looked through it, and some of your new products, you've got a quarter inch drive, 14.4 volt cordless ratchet that allows 35 foot pounds of torque output with an l.e.d. flash light >> right here. >> is that the one >> that's it you got it that's a good one. that's a good one. >> because i just wanted to say those words. >> it's like you actually knew it exactly. so you know a lot of these -- >> but the whole thing about this is, the thing about this is it allows the mechanic to get inside tight spaces. you look inside an engine, it's harder and harder to get inside engine compartments. that's what drives our business. generally, our businesses are based on change, and the cars keep changing. changing in ways that are mechanical but also changing in ways that are electronic >> and that to me is the weirdest thing like who can work on a car at this point with all the computer chips that are in them >> exactly there's more computing power on a car than the was the moon in '69. and the thing about it is, here's how it works. about 40% of the cars, 300 cars, 40% of the repairs need a diagnostic unit like this. 80% of new cars need this and we have the best one. in fact, you have all kinds of levels this one happens to be for the latest one for an entry level guy who is doing brake jobs and oil changes. but we have them all the way up to a mechanic who is only working on the jobs that appear on alternate mondays, you know and we have a record base. one billion records that tell people to say, if this is the symptom you see, here's what's happened, here's how it's been fixed, 92% of the time so about -- >> is that a description -- >> 15% to 20% of our business, even though everybody thinks of us as a hand tool business, 15% to 20% today is software based >> training must be huge and we hear every day about the -- you know the employment rate would be even -- employment rate would be higher the unemployment rate would even be lower if we had -- if everyone was trained and you need to train a lot of people in this and you're actively involved. >> the seminal issue for our time of the american economy is upscaling the american workforce. what's happening is there's a competition for jobs there's two things going on, i think. one is, people aren't getting the proper training out of technical colleges we're trying to help that by working on a national coalition of certification centers where schools and 85,000 certificates are telling people that these technicians are trained and these skills and you can trust it that's one so calling in the airstrikes on the education is important thing. but the other thing is, is people view mechanics, and welders, and machine programmers, as having settled for the consolation prize of our society. if you talk to people in polite company they'll say, oh, no. but when you tell them how would you feel if your son or daughter, niece or nephew told you they were going to be a car mechanic, you know what they think. they think that's what other people's kids do >> right >> so the whole thing is these are the jobs which have created a society which we enjoy today, and so we need to restore the traditional american respect for the dignity of work. >> how do you do that? >> well, one of the things is you get politicians, you know, to talk like that. one of the cool things about the president, when he visited, you can talk about the president, you have positives and negatives, but when he came to snap-on, he said what we wanted him to say he said we honor work. we honor grit. we honor the men and women with their own two hands who turn their dreams into reality. this is exactly the things we want to do we want to have people talk about these jobs as what they are, national calling. organizations like skills usa. you probably never heard of it 350,000 kids who compete at a local, state and national level to celebrate the best welder the best carpenter the best car mechanic. just like we celebrate the quarterback. >> mm-hmm. i mean, this is -- >> it's an important thing >> you said it during the elections, this type of stuff, which is why he got, you know, why he got elected and why you see the other party at this point talking about, you know, maybe we need to appeal to some of these other people that voters -- you know, what is it called what's your -- better -- what is it called, better ideas? better pizza, better ingredients? the new democratic rollout, what is it again? they got to call it better -- better something it's all better. better, better, better but obviously he tapped into this long before -- >> it's an important thing we ask people, the national association of manufacturers will tell you, when you ask people, 90% of the people say manufacturers are important. but only one-third will want their children to be in it >> let me ask you this, what if the internal combustion engine becomes obsolete you guys ready to work on tesla? >> sure. >> that drive themselves >> we've got the tools -- >> if they drive themselves -- they need better adjustments, right? you want to be driving something that's out of alignment? you want to be riding in something that's autonomous that's out of alignment? i don't think so it's not going to park itself. so this is great business. change is our currency, actually >> because you innovate. >> because we keep changing the tools that are already out there. >> what about the auto cycle does it matter -- >> doesn't matter. it's 300 million cars on the road what drives us is not how many new cars it's the existing cars and how much they're changing and cars do keep changing. both mechanically and electronically >> let me ask you a different question >> yeah. >> cars keep changing but they keep getting better built. or we like to think that the build is better. >> yeah, sure, it is >> it is >> sure. >> is the build being better is that ultimately worse for you? >> well, cars are getting older, too. the average car has gotten older. 11.6 years now >> they cost so much more. you've got to drive them -- >> the car park has gotten older every year since 1980. so we keep driving them longer and secondly the fact that they're better built just means if we look at the experience since 1995 they've only needed more tools to repair them. because, the repairs are getting more and more complex. >> okay. >> they don't break down as often but they get more and more complex. and you can see this in the traditional spending on auto repair it's an interesting thing. you just had governor walker on coming back to the workforce development. and foxconn announced in wisconsin. national association of manufacturers said 67% of people, number one variable is the workforce, where to locate a factory. i decide on a workforce. ask anybody in china if they have a positive or negative experience, it usually is pinned on the workforce well, wisconsin has a great rules. community college is among the oldest network is among the oldest in the country, and they got places like madison, and you know, the state schools, but you also goes places in marquette and carthage and places like that we know, because we're located one of our plants is located in wisconsin, and it's a great reservoir of people. and this is why -- >> interesting getting a lot of twitters and stuff, and says we went from -- you didn't build that, to how about building it here and being proud of -- like you said. >> i think that's true i think the atmosphere, governor walker, whether you agree with him or not, was a bulldog in trying to support foxcon and that's an important thing. politicians have to be the -- >> let me ask you one thing specifically about i was reading something where your margins are less than -- or at least the valuation of your shares aren't as great because as analyst said that some of your profitability is because of the financing unit, the way you're dealing with receivables >> 13% to 14% of our profitability is a financing unit because -- because a portion of the things we sell to technicians is fairly large and we finance it through the credit company. but we've been doing that for 50 years. >> that's the way you've been -- >> for 50 years. actually everything is sold off one of those little trucks is on credit it's either a big ticket item like a tool box, a tool storage box, you wouldn't believe it but it costs $5,000, $7,000, $10,000. it gets financed over three or four years >> have the bills gotten more expensive as the equipment has gotten more expensive? >> it's gotten more expensive, but technician wages went up 4% last year. >> and how much of the equipment costs has it gone up -- >> i don't think so. not in terms of pricing. but the valuation has gone up. people love to have snap-on tools. but the other thing is, even the small stuff, even the smaller stuff gets financed by the driver himself he boils it down into weekly payments and so snap-on is built on the idea that they interact. these drivers go around, they call on the same 200 people, roughly 200 people, every week, and they know them if you ask a snap-on van driver who's the tallest technician on his third stop on his route he'll tell you, and he'll tell you who his children are, how many children he has, who his wife is, and how much he owes him and what he's likely to buy next >> nicolas, that's the quarter inch drive, 14.4 volt cordless ratchet. did you bring in a exact manual torque multiplier for me >> i did >> is that it there? >> unbelievable. >> you are unbelievable. >> is that the -- >> we just acquired. you are a savant in terms of -- >> you guys can't believe. you see that thing, andrew that survives a five to one multiplication ratio and up to 740 pounds of torque >> i'm glad you're reading that -- >> please. it's basically what this does is we just acquired a company, you know, that has this kind of product. because, autonomous cars, autonomous trucks, precision is getting more important therefore we have to tighten fasteners to precision and what this will do is allow you to take a torque wrench and put it at the back end put this up to the front end, 100 full pounds of force here. 500 full pounds tightening specific -- >> i didn't know you were bringing this. that is cool thank you. thanks for coming in great to see you >> i enjoyed it. great to see you guys. loved that >> are you going to take those back with you? >> you do want them? >> i might want the cordless ratchet. >> run away. >> okay. coming up we've got reaction from earnings from under armor the athletic apparel company reported earlier this morning. we're going to run you through the numbers and find out what wall street this about all of this after the break at the top of the hour dealing with north korea what options are on the table for the u.s. and its allies when it comes to dealing with the anfor r ip there and what it mes oueconomy. "squawk box" returns in just a moment 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 new car replacement™, you won't have to worry about replacing your car because you'll get the full value back including depreciation. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™. liberty mutual insurance. we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley. welcome back to "squawk box. dow looks like it would open up about 1 04 points higher nasdaq up about 23 points. and the s&p 500 looking to open up a little over 6 points higher becky? >> athletic apparel maker under armour reporting second quarter results just a short time ago. the baltimore based company posting a smaller than expected loss for the quarter but it did give weaker than expected forecasting guidance it also announced a restructuring that's going to include some job cuts. shares of under armour are down by 3.8%. that's off the lows of the session. they had been down quite a bit more earlier on this so, let's talk to an analyst about what to expect out of all these numbers, and what we can expect to hear on the conference call today managing director of u.s. research at canafor ingenuity. what do you think of these numbers. why this kind of erratic reaction from the street this morning? >> well, you know, i think these numbers tell a few things. number one, it tells us that the north american market for athletic apparel is definitely a challenging market to be in right now. there's a lot of promotions in the marketplace and under armour has certainly succumbed to that promotional activity number two it tells us more as we look into this more deeply tells us that underarmer is in a transition phase you know, for the past decade this business has been growing at a trajectory, you know, unlike any other in retail and i think it's come to a point in time where that growth is now transitioning to a more profit focused, and a return focused business and that happens when, you know, that maturity curve starts to reach another level, and that's where i think under armour is right now. clearly we're seeing the focus, you know, the company took down their sales growth target for this year by about $100 million. you know, they took their estimates down there's a lot here to digest but the reality is, is that the things that under armour is trying to change, the things that led to its stumbling last year, will take some time to recover. and those most importantly are its transition from a north america focused business to a global business. it's transition from a performance focused apparelmaker to a broader lifestyle apparelmaker and its transition from a reliance on sporting goods to a multichannel business. >> you know, the company lays out this kind of change that's taking place, this restructuring that they're going through and they look at it from pretty positive terms which isn't a surprise if you know kevin plank at all just talking about how they're going from a u.s. mostly apparel centric to a global apparel footwear and accessories portfolio. the way they see it is going from good to great operations. do you see that? >> transitions from good to great are never linear we do think that over the long-term this is the right path to take. i think in the wake of the last ten years of growth, there's been a lot accumulated on the business and a lot of inefficiencies in particular i think this is the pruning of the inefficiencies to make the company more smarter, more agile. and more profitable. that's really what this is all about. in that transition phase, you know, there would be some bumps along the road i think this is what we're seeing today so, you know, we love the brand, we think the brand has trajectory, and has broad global appeal certainly the opportunity to do so but, you know, in the interim, that transition will definitely be a bumpy one as it has been. >> very quickly, would you be buying today when the stock is down >> no. not right now. we need to see a little bit more traction before we think the coast is clear >> all right camilo, thanks for your time today. >> thank you >> coming up, anthony scaramucci stepping down as white house communications director. an update from washington just minutes away plus, the north korean threat. what options are on the table for the united states? and its allies "squawk box" returns after a quick break. for your heart... your joints... or your digestion... so why wouldn't you take something for the most important part of you... your brain. with an ingredient originally found in jellyfish, prevagen is now the number one selling brain health supplement in drug stores nationwide. prevagen. the name to remember. live-streat the airport.e sport binge dvr'd shows while painting your toes. on demand laughs during long bubble baths. tv on every screen is awesome. the xfinity stream app. all your tv at home. the most on demand your entire dvr. top networks. and live sports on the go. included with xfinity tv. xfinity, the future of awesome. jerry garcia's birthday today. the late front man for the grateful dead was born on this day in 1942. he'd be 75 today special events taking place. bob weir putting on a special tribute concert at the red rocks today. and the san francisco giants will commemorate garcia this thursday with a grateful dead tribute night at at&t park when we come back, the latest on the white house shake-up anthony scaramucci out after just ten days on the job plus, the north korea threat and later the ceo of box is taking shopping to a whole new level. what if stores could predict when you will run out of toilet paper and already have it shipped to your house before you even realize it? or order it? the e-commerce site rolling out a new feature that does just that we'll talk about that plus much more right now as we head to a break, take a look. futures are still higher dow futures no longer up by triple digits. looks like the dow would open up 98 points after closing at yet another record level yesterday s&p 500 up by 5. the nasdaq up by 20. at blue apron, we're building a better food system. where instead of paying for middlemen, we work directly with family farms to deliver higher quality ingredients for less than you pay at the store. get $30 off at blueapron.com/cook a market rally stocks point to strong gains as dow is within striking distance. >> the trump white house shaken up again anthony scaramucci out as white house communications director. >> i think anthony wants general kelly to be able to operate fully, with a clean slate, build his own team >> a live report from washington, straight ahead plus martin shkreli may still be on trial. but the pharma bad boy taking to facebook to weigh in on the mooch's ouster we'll show you what he said as the final hour of "squawk box" begins right now ♪ 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 marketsite in times square i'm joe kernen along with becky quick and andrew ross sorkin let's get a check on the markets right now. futures have been up for most of the morning. triple digit gains indicated again for the dow. 104 points the s&p indicated up 6 the nasdaq indicated up 22 we're also watching oil prices which were finally above 50. above the -- announced they're not again down 31 cents but they had closed above 50 after more than a few months, where they had not. that would be a big surprise if it went 55, 60 that's not -- >> no, part of it is the venezuela story that's been pushing oil prices up the last several days >> see whether it gets any traction that's sort of the contrarian viewpoint now is that -- >> it can't go >> it can't go higher. contrarian viewpoint is that it could go higher. >> oh, right the consensus is that -- yeah. >> coming up, let's talk about the stories of the morning this is the big one. the s&p has a new decision out, it's going to prevent snapchat parent company snap from being included in the index. now the s&p 500 will start excluding all companies that issue multiple classes of shares these are new companies, rather, not ones that are already in the index. this decision represents a new emphasis by index companies on corporate governance companies with multiple share classes that are members of the s&p index like alphabet will currently not be affected. this could be a major change in the way that new companies that think about going public in terms of what the setup looks like >> they say it's in terms of shareholder rights >> right >> issues for these things because if you have two classes, generally one has much higher voting percentage than maybe buying a piece of the company but you're not going to be buying an equal vote in the company with those shares. >> what's so fascinating about this moment is you have exchanges like the nasdaq, and the s.e.c., and others, saying, we'll even -- we want more people going public. so we'll create less transparency in terms of when you're going to find out about some of the details, you can now do it privately for a long time. so there's a lot of things that are, i don't know, shareholder unfriendly, but friendly to the companies because we think that that's going to help improve the economy. yet on the other end, on the business end, not the government's side but the business side, you have people like s&p 500, s&p and others saying actually from a gompance perspective we don't want some of these things. i think there are sort of two things moving in opposite directions >> it seems weird that all these companies are grandfathered. and the new companies that made these decisions thinking that they would be treated the same are now after the fact that seems a little unfair but, we'll see what happens. see if it actually changes the company. my guess is, it would. but if you were trying to decide how to form your company, and how to -- >> you wouldn't do it this way >> you wouldn't do it this way thinking you're never going to be allowed into the s&p 500. >> the question is will s&p at some point change its mind is this like -- >> say never mind you can go in. or say forget it we're not going to grandfather the rest of you in >> the rules can change. it's sort of like the mooch is in, the mooch is out you know, is snap in is snap out? this is going to be the question >> how about read up on your whole class of stocks i'm going to get excited about this, too you call it fascinating. >> there's a couple of interesting things happening about both governance in terms of the different share structures everybody wants to go public but pretend they're not going public >> remember al franken, how does this affect me al franken. comcast is not affected, right >> not at the moment >> not at the moment >> maybe i won't look into it. it has nothing to do with me joe kernen >> unless you're investing in companies with -- >> actually -- >> does it have to do -- >> actually it does. it does. if you realize that comcast owns a stake in snap. >> there you go. >> for -- >> there you go. it will make snap less valuable. so as a content -- >> the expiration -- >> bigger deal >> but this could turn into a big deal if long-term this company -- >> if this company can never be in the index >> six degrees of separation >> on my radar now it can affect khcomcast. if if you're a value investor, if the s&p doesn't change its mind it will never be in the index. >> it will take an entire class of shareholders and remove them from being shareholders. >> that's a remarkable thing >> and the indexes have grown in -- for technical reasons because people will buy. you got to be in it to for an index fund >> but the money -- nobody's buying it -- i mean not nobody but very few people are buying into the individual stocks if you want access to investors. every company is saying i want access to investors. this is effectively saying no you can't have access to the biggest pot of money that exists in the world that's a remarkable statement. >> okay. >> all right let's talk about some other stocks to watch today as well. you can check out shares of under armour rebounding. the company lost three cents a share. that is smaller than the consensus estimate of 6 cents a share. revenue beat the forecast. however, the athletic retailer's full-year earnings forecast came in below estimates i think 42 was where the street was. company also announced a restructuring plan that's going to result in charges of up to $130 million this year the stock has bounced back it was down by 3.5% the last time we looked at it it has been down even further earlier this morning the stock is bouncing back and we just talked to an analyst who said he thinks long-term this is the right play wouldn't buy it right now but he does say long-term this is what needs to happen for the company. >> and the top political story today, for now it's only 8:00 >> for the moment. >> anthony scaramucci -- >> i got to go to the twitter. is there anything going on twitter? >> the white house -- he's out as white house communications director let's get over to kayla tausche. she's in washington. don't -- i mean, you can't really charge your phone up and leave it somewhere, kayla, i don't think, in your new job i would keep that thing close. >> i have it plugged in almost all the time, joe, because constantly refreshing, constantly using it. to try and reach out and report. but as you say, the day is young. but the hiring of anthony scaramucci a couple weeks ago led to the resignation of sean spicer and reince priebus. and now his departure, the third administration official in three weeks, cites like spicer's a desire to leave a clean slate. but this time its for new chief of staff general john kelly. press secretary sarah huckabee sanders told reporters yesterday all the slates are now clean and that from here, all members of the west wing staff will report up to kelly that's a structure aiming to smooth over factions within the west wing. a tweet from president trump yesterday touting the economy denied there was any chaos at the white house, but former house speaker newt gingrich, who is now an adviser to the president, says trump, in fact, is tired of the chaos among his staff. telling "the wall street journal," quote, trump, of course, reserves the right to cause chaos himself, but he likes an orderly system. that's how his golf courses work he thinks the cooks should be cooking, the caddies should be caddieing, but that doesn't restrict him as for scaramucci, sanders said he did not have a role in the administration at this time. meanwhile, the company he founded and is selling in order to have taken a government job declined to say whether he would rejoin but there is now a large vacancy in the office with new details emerging about the president's role in john jr.'s confusing statements on the russia meeting last month and ahead of a tax reform push that could begin as early as today with a small business event happening this afternoon, joe >> yes i was just making sure i'm following the general twitter feed nothing yet. hope springs eternal though. >> you can be sure he's monitoring it though because that is where the president likes to communicate likes to let himself be known. >> saw wilbur is back -- wilbur's been quiet lately, kayla. we're going to talk about that now. there's an op-ed piece there he is. >> he's got a lot of irons in the fire right now >> that's for sure >> all right, thank you, kayla >> we're going to tell you about one of those irons right now commerce secretary wilbur ross penning an op-ed in "the wall street journal" and what he calls the true free trade agenda the piece is titled free trade is a two-way street. the commerce secretary writing until we make better deals with our trading partners, we will never know precisely how much of our deficit and goods is due to trickery he also writes, the u.s. is working to restore a level playing field and under president trump's leadership, we will do so president trump tweeting quite a few days ago, our foolish past leaders have allowed china to make hundreds of billions of dollars in trade a lot of questions, a lot of tough talk and then in the meantime, tensions remaining high after north korea's latest missile launch for more on this let's bring in bruce clinger. he served as the ceo deputy division chief for korea, and is now a senior research fellow for northeast asia, at the heritage foundation's asian study center. we've had some pretty dire proclamations. things look increasingly tense with north korea and i haven't found anyone who seems to have a good solution on what we can do to try and stop north korea from becoming a nuclear power what do you think? >> the nuclear power is already -- we think that north korea has 16 to 20, perhaps even more nuclear weapons, they're medium range ballistic missile already is nuclear capable, which means south korea and japan are under nuclear threat today. and north korea continues to work on additional missile systems, the submarine launch ballistic missile as well as two different intermedia range missiles that can hit u.s. bases in guam, a key note of the defense of the pacific, including the korean peninsula and also, obviously, the icbm which this secretary successful icbm test now extends the range of that icbm certainly it can reach l.a., chicago, denver right now. perhaps even new york and washington, d.c. >> so, we are in a situation where there's probably not much we can do. we tend to think that if we put pressure on china, china can cut off trade with north korea, and that will force the north koreans to the table but if we make them feel more cornered, is there anything to stop them from using the weapons they already have? >> well, we -- you need to have sufficient defenses to deter and if necessary defend and defeat any north korean attack on ourselves or our allies. and a key component of that is ballistic missile defense. but also on china. the president complains that china's not doing enough on north korea, which is true china is not fully implementing the required u.n. sanctions. but the u.s. can do things using its own laws that can influence the chinese banks and businesses that are engaging with north korea. the vast majority of all international transactions in the world are denominated in dollars, which means they have to go through a u.s. bank, regulated by the u.s. treasury those chinese banks and businesses, they have to go through a u.s. bank either through their own accounts or correspondent accounts so the u.s., with existing laws, can influence those -- the behavior of those entities >> even if we put pressure on north korea, i guess going around and around in my head trying to figure this out, what's the best hope that we can reach, if we realize that south korea is going to face all kinds of massive problems if things get much uglier there. and as you point out, it's our job to defend our allies, too. >> right well, we have to use all the instruments of national power. but we've been underutilizing pressure when president trump said north korea's the most heavily sanctioned, the most cut off nation on earth he was wrong the u.s., the eu, and the u.n. did things that -- to iran that we have not yet done to north korea. that's why iran came back to the table for the nuclear deal whether you like the deal or not -- >> i was going to say -- >> -- that's why they came back. >> are we faced with nothing but bad options here >> well, with -- as people have said, korea is the land of bad options but we can't throw up our hand and surrender so right now when people talk about negotiating, you know, we've been there, done that. we've had eight international agreements with north korea that all failed we've tried two party, three party, four party, six party talks. they all failed. and north korea has said from kim jong-un down to every major component of the government, we will never, ever negotiate our nuclear weapons away i would argue that is under present circumstances when we've been pulling our punches on u.s. pressure and u.s. enforcement of our own laws >> bruce, can you tell me what you think the best case scenario is what we should be striving for right now? >> well, i think if we could get them to an iran-like deal but we need to show not only is the door open for diplomacy, but north korea's been the one that's refused to go through that door. but, to induce that we need to increase the pressure on them to change their calculus. and also, you know, we need to enforce u.s. laws by giving them in essence de facto immunity, not only north korea and china but from our laws, that's not furthered the cause. >> all right, sir, thank you for your time today. >> thank you coming up when we return an e-commerce company that can predict what you need, when you need it. bulk item retailer rolling out a new platform that brings ai to your shopping cart the ceo is going to join us next plus a heated debate in the economics world. president trump's impact on growth our resident economic reporter steve liesman has a rundown of the arguments at 8:30 a.m. and later, lyft is getting a disney styled makeover that's why you're hearing that sound track in the background. minivans as in minnie mouse. welcome back to "squawk box. check out the shares of sprint the wireless services provider earned five cents a share for its latest quarter compared to forecast of one cent of a loss revenue came in above estimates. sprint added 61,000 net wireless subscribers. i saw this in the rundown and said oh, probably about sears because sprint would have been fon so it shows you that you're not -- >> not sears >> got to keep on top of these symbols and the changes. when an individual -- when a single letter comes up -- >> it's in demand. >> nickel -- >> "a" with allegheny. they're all different now. >> "w" -- >> we're in a f.a.n.g. world now. >> you're aging yourself >> i know. >> we're going to talk e-commerce right now e-commerce start-up says it has a new weapon to take on the likes of amazon. artificial intelligence bulk item retailer box rolling out a new future that uses machine learning to predict when you might need more of a particular item and automatically ships it to you no clicking is involved in any of it. let's bring in box ceo and co-founder good morning to you. >> thank you very much for having me. >> so explain what this is, and i thought that amazon's doing something very similar >> yeah. >> with the little dash buttons. >> yeah. it's really interesting. so you know, if you take a step back, you know, box we do everything in bulk 1600 items delivered right to your door so you don't have to go to the big warehouse club what we found over the last years is folks order eight to nine items for "b" to "c" order on average from us >> business to consumer order? >> business to consumer. now after about four years of data we now can see roughly when folks are going to reorder and when they're going to run out. and so we piloted something called box consequencall ed box concierge where for b-to-b customers you don't have to order unlike terms of clicking an order or a dash button, we click a box view because we think you're about to run out. the craziest thing is we write a note saying sorry if we took liberties with this and on the reverse we haven't had any returns. >> you push it out without even asking >> that's right. so we ask you to opt in, of course, in the beginning >> okay. >> and from there on out -- >> so it's like a subscribe and save program or not? >> it is like a subscribe and save program but it's not a single item. like you do on amazon. >> right >> because we're all about stocking up. >> you just say we're going to send -- when we think you need it we're going to send it to you. >> exactly >> nobody returns it >> tend send it back to us it's totally free to return it folks just end up using the item the machine learning algorithm is getting better and better >> you say from business to business but not for consumer, because how would you know if i was on vacation >> exactly so right now, for consumers, we're actually turning it up to about 50% of our audience this week for consumers you still have to come in and interact with us we show you on your first session, hey, we think you're about to run out of these. and then you tell us, snooze, don't like the item, or don't like the price and so then we learn more about you. so that over time, hopefully one day we can then push that box view without you even -- >> so are you sending me an e-mail saying hey i think you probably need "x"? >> oh, absolutely. whether it's text or e-mail we'll tend it to you at least for b-to-c. for b-to-b it's set it and forget it. folks have really liked it the revolution has been our company being okay you don't have to spend three hours in the store anymore. you don't have to think about going to the store how we think about it is in the future you probably won't have to think about even what you want to buy at the store you know so meaning that you don't even think about driving you're just not thinking about it at all. >> what has it meant for your bottom line in terms of sales? does it mean that you retain customers? you don't give them the option of going out and finding another vendor >> yeah, e-commerce there's three main factors all it is is how much money you're making for order. how often are the folks coming back and how much are you paying to get a customer? this absolutely helps the retention numbers. without needing to come back we're pushing that to you already. >> during commercial break when you first sat down -- >> wasn't off the record >> we were having a conversation about what the s&p has decided to do, around companies with dual class shares. >> yeah. >> and you were commenting that you only have one class of share. >> we have one class of shares >> have you thought about doing two? >> yeah, so luckily our last company was a success, and so when we started this company, i remember thinking, i remember getting the advice that we actually had the leverage to potentially have a different, dual class voting kind of shares system, and cofounders and i just thought you know, if we are still at the helm and we deserve to be at the helm, we should stay and by that time we had so many shareholders and they decided we weren't the best then we should go that was very idealistic of us four years ago so i'm still on the fence of whether we regret it or not but we've got great investors. >> now you can't regret it, right? >> yeah, well it's not -- unless we don't want s&p money. >> doesn't everybody want s&p money? this is like getting sovereign wealth money >> it's a big move like when i was in the green room before i was just watching you guys live and just thinking wow, that's going to affect some legal documents in silicon valley starting tomorrow >> right okay thank you for coming in this morning. >> thanks. >> appreciate it >> am coulding up, lyft is heading to disney world and taking minnie mouse along for a ride we'll have details next. annie anns is asking customers or did ask customers for their input on a new pretzel flavor the results are in it's going to be a sricha flavor it beat out savory and sweet competitors including taco, buffalo wings, apple pay, and a pink lemonade pretzel. the world's largest pretzelmaker will roll out the new menu item for a limited time this year i was suggesting tuna or clam. >> that would be -- >> ew. you know you don't have to -- pepsi, i got some -- fritos -- i got some jalapeno. >> too spicy >> or fritos, which are good anything that ends in tos is good >> fritos. >> tostitos. >> fritos. >> cheetos >> cheetos >> i thought that's not on the scarsdale diet >> i eat like two of them. >> you know what this is going to translate into? you like toes. >> i like toes, exactly. you know with almonds. you know, this is how insane diets are, you're allowed to eat some almonds once in awhile. >> five? >> no, half. >> half? >> you know how they sometimes -- you're allowed to eat like five halves >> instead of 2 1/2? it sounds better, five halves. when we come back some breaking rsal iomanews. peonnce d spending about to hit the tape. "squawk box" will be right back. oh. what's with the dog-sized horse? i'm crazy stressed trying to figure out this complex trade so i brought in my comfort pony, warren, to help me deal. isn't that right warren? well, you could get support from thinkorswim's in-app chat. it lets you chat and share your screen directly with a live person right from the app, so you don't need a comfort pony. oh, so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. we're just a few seconds away from june personal income and spending data. let's take a quick check on the markets. look at this yesterday the dow closed at another record it was its eighth record for the month of july. this morning you are looking at the dow futures indicated up by triple digits. if we were to open here, the dow would be well above 22,000 first time crossing above 22,000 if this happens. s&p is indicated up by six points this morning. the nasdaq indicated up by about 20 points. we're also watching oil prices, which have been right around $50. right now down by about 40 krepts to 49.76. we were above 50 most of the morningen. rick santelli is standing by at the cme. >> all right, becky. june read on personal income is a big disappointment goose egg. unchanged. nada we were expecting up close to half of one percent. if you look at last month originally released at up 0.4. we end up with up 0.3. we look at the spending side shall we looking for up 0.1 that's exactly what we received up 0.1 last month we also gained a tenth from 0.1 to 0.2. if we look at personal spending, real spending, it was unchanged. deflator month over month, unchanged. at 1.4 year over year on the deflator, following that 0.1 increase to 1.5 personal consumption expenditure, 1.5 that's following a 1.5 you know, as i look at these, i see that the personal consumption expenditures do not have a two handle. i get it growth, growth does have a two handle it's probably why. the big story continues to be 118.18 on the euro versus the dollar an unbelievable move to say the least. i remember when we were talking about 10 when it was at 110. a lot of people gasped at that now we're hearing 125. i can't tell you where the top is going to be but i urge everyone to look at a four-year chart at the euro versus the dollar 120 just jumps out at you. joe, back to you >> yeah, that has been interesting to watch the whole dollar trade rick, thanks steve liesman is here. with the debate the economic world has about growth, i guess. on jerry's birthday. >> yeah, whether or not the president is responsible for the recent growth. he recently took credit for the growth in the numbers in the second quarter so we asked a bunch of economists whether he, indeed, has had an impact. the answer, most see the second quarter as a bounceback from the first quarter and say hey, these are early days for a president to have major influence on the economy but there could be some limited positive and some limited negative economic effects from the trump presidency here are the positives we gathered from them, deregulation, the stock market gains creating something of a wealth effect. maybe a couple tenths of a basis points, over the next year this rise in business confidence perhaps leading to some business investment and the negatives, the policy uncertainty. the aca failure raising questions about tax reform immigration, and trade are listed as the negatives. the american action forum think tank says the end ofrising regulatory costs under president obama could be having a positive effect on confidence and maybe on investment. you can see some of these numbers. this is theircalculation based on government calculations of the cost of complying with new regulations. a lot of them, by the way, in the environmental side, including something like 164 billion dollars worth of finalized regulatory costs in the last year. and moving on, looking at some other -- whether there's a rise in business investment, is debated. it did go up in the second quarter. take out mining and the result of higher oil prices business spending actually declined on a percentage basis according to economic advisers jpmorgan says the u.s. has been an underperformer globally maintaining a 2% average while the rest of the world is accelerating and it's about what was expected before the election. steven moore of the heritage foundation says president trump's positive effect on confidence simple enough quote, he's pro-business but more said getting to 3% is going to take real legislative changes. and not executive orders >> i like that a fair and balanced take on the conversation in the u.s. >> -- beth ann >> we left beth ann out because we knew she was going to be here to give us more information that we'd carry on for the rest of the day. >> let's talk to beth ann, a u.s. chief economist at s&p ratings services what do you think? you heard steve. positives? >> positives well, we ahad said after the elections we thought markets got ahead of themselves. we thought policy promises are not, you know -- promises are not policies we're in a wait and see mode we did not expect -- we did not expect a lot of what was proposed to get through. at this point in time, all we expect is a minor tax cut, probably later, actually early next year at this point in time. no mention of infrastructure spending that was also on the campaign but there's no mention of that and that doesn't seem like that's a possibility >> the markets didn't listen to you, that they had gotten ahead of themselves. >> yeah, well one other thing we mentioned on deregulation one of the things that's slowly getting the process of deregulation through is not a lot of people in the white house who actually sign the forms to deregulate one thing positive if we're not seeing the deregulation getting through, businesses know that the bad part is over and even if we may not see some of this activity get through, no new regulations are likely >> i think that was a point that doug made. it's not necessarily the deregulation now, we can debate whether or not there is some and that may be already having a positive effect in the mining world, for example ex-oil you look at some of the copper mining apparently coal production is up quite a bit but the idea that the trajectory of increasing regulation appears to have flattened out is a positive for business. we haven't necessarily seen it in the business investment numbers. and again, these are early days, and steven moore actually asked the question, should the president be taking credit now because, since he hasn't had a big effect, if things turn south in the third quarter, which they're not expected to, by the way, then does he really want to be responsible for this train that he essentially isn't driving, and probably won't be driving for another year >> i would just add real quickly in terms of the impact of the presidency, you know, our growth rate has been around actually before the election was around for 2018, around a little over 2%, about 2.3. now it's 2.1 so i don't want to blame the president for that, but i could say nothing has changed. >> right, you tried to take my head off yesterday for a conversation similar to this this seemed a little more -- >> not at all. your point was that obama, you give credit for the stock market advance. >> i said if you want to give trump credit for the stock market advance, great, then give obama credit for the stock market advance -- >> you give obama credit for -- >> or try to give nobody credit for anything >> which is it with you? >> i don't know. so obama -- >> i think you either -- >> which do you feel about president obama? >> i just think there's got to be consistency here. continue to give credit to all the presidents and say -- [ everyone talking at once ] right? >> we historically have given credit to the leader for whatever happens -- >> so then you must do it for trump then >> correct >> okay. that's all >> no, no, but you weren't prepared to do it. >> guys -- >> the point that a bunch of people i talked to gave trump credit for the initial increase in stocks. >> yep >> what they say now is that increasingly they believe the market is not trading on the presidency and they look at the trade and they see negative things happen to the trump presidency and they don't see the market sell-off. and they do see the market reacting to earnings, to growth, and to dividends, and so, whatever was the initial impetus, it seems like the foundation for the trade is apeers to have changed >> given the dire warnings about the consequences of trump being elected, even if it was just for -- >> i agree with that >> even if he just broke even. >> it is true. and i reported that stuff from -- >> all said the same people, if the market were down 10%, 15%, 20% from the election, you don't think that they would blame that on trade, blame that on immigration, blaming that on trump? so it's the same thing >> fair enough >> beth ann, so there's a lot of things coming out today about john kelly, about the trump administration now pivoting to democrats. here's one from the daily beast, i'm sure andrew has seen this, that's the big alert goes off at the bailey beast writes a piece, right? >> i haven't been an alert -- >> even white house -- okay, trump's new chief of staff john kelly is making overtures to democrats. for tax reform so your idea probably makes sense with that because you're talking about 28%. you're talking about something very small, very -- that would be barely move the needle for what people -- gary cohn would resign, won't he, sorkin he wants something big if it doesn't big he doesn't even want to do it >> he's not going to resign. he's going to be the fed chair >> i don't know. did you see one of our former anchors, i don't know what he does now, he was on, he wrote something at cnbc.com. that's like putting a gambling alcoholic in -- or a gambling addict into running a casino gary cohn into -- >> look the question about his own disposition, whether he -- he is a mover and a shaker he likes to do stuff it's different than what the fed chair historically -- >> the criticism was that he didn't have the education, didn't have a hpd. wasn't ray trained economist >> people forget paul volcker was not an economist >> right >> so would it help with 27%, 28% move the needle. >> i would say that's one positive thing is that if it is indeed the case that one side of the aisle is reaching to the other side to get some kind of maybe it's not going to be comprehensive tax reform, but some kind of tax reform, that will be -- that would lead to a real big part of it. something that could actually -- >> so anything >> if we could get 60 votes in the senate, you're going to need the democrats. and it could become more permanent. we see permanent not temporary as a real positive and that, i think -- >> beth we're going to be out of time i want to point out the income number was unchanged but wages and salary go for strong 0.4%. that was june. real quickly we talked about this idea of the second quarter, does it continue in the third quarter? >> you're talking about -- >> gdp groethd >> gdp growth. we're expecting -- we're expecting gdp growth to be in the again kind of in the mid twos we're not expecting any big bump >> that's a good number. if under -- potential is 1.8, 2.5 is a beautiful number. >> good enough we're saying about 2.3, 2.4 for the second half of the year. that's a lot betters -- >> but count your blessings. >> while we have you here and i know this is totally off topic are you involved at all in these corporate governance decisions at s&p regarding what goes in and out of -- what goes in and out of the index >> not at all. not at all >> we had the big debate earlier about what this is going to mean >> not at all. no i do not -- >> -- out of the dow -- beth ann -- >> nobody tells me anything. >> did you put visa and nike in there? was that you >> i swear they tell me to leave the room you can leave the room now when they make those decisions. >> okay. you know andrew in the clinton years, washington had a lot to do with the stock market rally gingrich go ahead anyway and congress >> the big debate that's taking place on our set, when we come back, mayors across the country are speaking out about health care reform. they will be heading to washington to meet with congressmen. we're going to talk to one of those mayors right after the break. stay with me, mr. parker. when a critical patient is far from the hospital, the hospital must come to the patient. stay with me, mr. parker. the at&t network is helping first responders connect with medical teams in near real time... stay with me, mr. parker. ...saving time when it matters most. stay with me, mrs. parker. that's the power of and. 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 new car replacement™, you won't have to worry about replacing your car because you'll get the full value back including depreciation. switch and you could save $782 on home and auto insurance. call for a free quote today. liberty stands with you™. liberty mutual insurance. welcome back to "squawk box," everybody. in our headlines this morning, athena health has announced a series of strategic initiatives including the separation of the chairman's role. jonathan bush will continue as the ceo but the board intends to seek an independent chairman the company's also taking measures aimed at saving about $100 million annually in costs although details have not yet been announced and it's retained a search firm to fill the roles of president and chief financial officer. mayors from around the country head to d.c. this week for meetings with congress on health care. our next guest will be there let's bring in columbia, south carolina mayor stephen benjamin, the vice president of the u.s. conference of mayors mayor, it's good to see you. you've been mayor for awhile in columbia, right? >> i've been here many years i've been mayor for seven years. i'm wrapping up my second term as mayor >> second term you seem to love that part of the world, obviously a lot of great things. in general, though, would you say that looking at the -- what the federal government is designed to do, and what your concerns are locally, wouldn't it always be great if the federal government just did everything for local government? i mean would you ever say no, no, we don't need help from the federal government i mean, you want the federal government to help as much as possible, right? you have to do that to represent your area of columbia. >> i'm not sure if you try and pitch me a softball or what but i tell you what, american cities want a partner the reality is that 86% of america's population lives in cities 88% of jobs are in cities. 91% of our american gdp is created in cities and metropolitan economies what cities want are a partner in washington, d.c. and we've seen over the last several years incredible destruction in washington, d.c., it's begun to affect our state capitols, as well and we want to just make sure we have a partner that allows us to continue this incredible american experiment. this incredible growth that we're seeing all across cities and metropolitan areas across the country. a partner is what we need. >> actually, mayor, it was the opposite of a softball i was kind of making a point, when you look at, for example, governors that took medicaid, and the federal government was, you know, sort of they entered into that deal where they could get 92% or 95% or whatever could you really look for governors or local officials to, if you were looking to reform an entitlement, is that the place you'd look for someone to say, no, we want to put a cap on it we want to slow the growth of this entitlement because we're not going to be able to -- that's not where you would look. you can't look to local politicians and say no, don't give me the money. they're going to want the money to keep on flowing from the federal government >> well certainly. well, first of all, it's always important to realize that money doesn't fall like manna from heaven from washington, d.c. these are our taxpayer dollars that go to washington, and yes we like to repatriate them back to the people who actually pay those dollars every april 15th in america's cities we're seeing great fiscal management, incredible financial economic growth and in our city alone we not only have the largest gdp in our state but we finished five of the last seven years with a budget surplus we've been upgraded by standard and poors and moody's twice over the last several years we have the same tax rate that we had ten years ago but we've seen almost $2 billion in capital investment flow to our cities, and we're seeing we enjoyed an unemployment rate lower than the national average. across this country, mayors, republicans, democrats, independents, are required to balance our budget, required to run good, strong, healthy fiscal houses, and if we are able to share our message, as we will be doing on capitol hill with some of our senators tomorrow, our message of working together, working across the aisle, just to solve some of those vehiclesing problems facing america and health care and infrastructure and public safety, how do we make sure that if we are going to jump in to significant tax reform, how do we make sure that we don't destroy some of the things that are working really well like the tax exemption and municipal bonds. there's a lot of work to be done, and our goal is just to try and work with the federal government to have a real partner in solving the issues facing america's citizens. >> not all mayors are created equal. they don't have your -- you know, the positives that you just mentioned, there's a lot of places where that would be the envy of mayors and maybe some of the bigger cities that we think of, and i guess you'd even say that in some of those cases, you'd say, thank god the federal government is not run like some cities >> well we have -- we've had some really good opportunities over the last several years at creating an environment where capital investment feels welcome. when it hitsed ground you treat it right and it gross. and that works we've got to have good, strong policies that don't fall into the false choice that if you're pro-business you got to be anti-work. you can be pro-business and pro-worker create good policies that allow and encourage good capital investment and things happen. this discussion around infrastructure is something that's really important to us. we know the president made a promise. we met with him in december. that he was going to invest in american infrastructure. and we use this big word infrastructure, in reality we're talking about bridges that are safe we're talking about roads from our homes, our schools, and our urban corridors, we're talking about water and sewer infrastructure that keeps our rivers and tributaries healthy and also keeps our families strong and growing in our city alone, over the last several years you spent about a half billion dollars modernizing american infrastructure, putting hundreds of people back to work. if, in fact, we accept the most conservative estimates as the $2 trillion in additional infrastructure needed to make america competitive on the world stage, some of those numbers go up to $4 trillion. we can put americans back to work it's going to require the type of bipartisan, thoughtful partnership between state government, local governments and federal governments and the capital markets just to make sure that we're working on solutions that work for everyone america's mayors are committed to making that happen. and nthat's the message we're going to be taking to washington this week. >> mayor, thank you. appreciate it. all good point. >> thank you. >> thanks for your time today. we do have -- i wonder where -- it doesn't necessarily mean the president was watching all the stock market discussion we just had, but he now is saying, donald trump, stock market could hit an all-time hig hi high again 22,000 today. was 18,000 only six months ago on election day. mainstream media seldom mentions. >> hi, mr. president when we return, jim cramer will join us live from the new york stock exchange meantime, take a look at the futures as president trump just said, we are in the green and looking up up 111 points higher the dow they are the natural borns enemy of the way things are. yes, ideas are scary, and messy and fragile. but under the proper care, they become something beautiful. going down to the new york stock exchange to say good morning to our good friend, jim cramer >> andrew, maybe we're not mainstream media we are so focused on this new high, everybody says is that all you think about is new highs so i don't know. maybe i'm not mainstream maybe i'm sort of other stream like upstream. >> if you're waking up this morning, have cash on the sideline, see we're at new highs, do you say to yourself, i'm buying in or chasing the new highs, getting on the train at the wrong time, right time >> i think a ton of stocks just sold off last thursday when the bears came out and said this is the big break. lot of health care stocks are down, bank stocks are down tech stocks are down i think there's plenty to choose from because these new highs, a lot of them, mr. president sorry to focus on this, but from verizon moved up, boeing moved up any company that he attacked is a buy. boeing, united technologies, lockheed martin is a buy he must be thinking about some other station. >> what do you think about this s&p 500 station? >> you know what i have been with lots -- i totally like your idea that that's the biggest basket of money to flow in ceos who said every time the market is down, s&p, my stock goes down even though i'm doing great. it's a little more mixed little more mixed. >> interesting jim, we're going to -- >> i like your theory. a lot of guys are not -- by the way, we're almost at a new high. did you know that? >> i did not. >> oh, no. you guys talked about it all morni morning. >> we will see you -- >> do you think the failing "new york times," which just had a blowout quarter is going to talk about it, though, or will that be fake news >> new york time. >> made a fortune this quarter failing. failing up. >> thank you, jim. >> failing higher. >> we'll see you in a little bit. martin shkreli is on trial that's not keeping him quiet on facebook 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. ♪ ♪you are loved ♪ pharma bro martin shkreli is banned from twitter so he used his facebook page to chime in on anthony scaramucci's firing. in for communications director conspiracy to commit both securities and wire fraud. >> i didn't realize being banned from twitter must be painful for him. >> he's a bro. >> what do you mean? >> guy millennial guy. >> the way he talks, that bro-ish thing we do so well. >> here is squa"squawk on the street." good tuesday morning welcome to "squawk on the street." i'm carl quintanilla along with david faber and jim cramer on "squawk on the street. only about 100 points from dow 22k. oil has held around 50 auto sales and ism headed our way today. road map