Steady. Road map on a busy day for earnings including apple, coke and boeing. Apple surging in the premarket on the sfwheets more from the dnc. Less discord from inside the convention. President obama, joe biden and Vice President ial nominee tim kaine are on tap to speak today. Another tough quarter for twitter and jack dorsey, the stock plunging after results disappoint. What happens to the company next. But first up, apple shares are surging after the Company Reports a beat on the top and bottom line. Revenue did fall for the second straight quarter. Iphones saw the steepest sales decline year on year but that number was less than what the street was expecting. Analysts expecting an uptick in iphone sales when the new 7 is released later this year. Revenue guide not too bad. Jim, cost control, margin guide, okay. Yeah. I think there are probably people at home saying how could they have a huge decline and the stock run. The answer is in the number of iphones that they sold a lot of the analysts had done this kind of mosaic, looked at skyworks, looked at Texas Instruments, corvo, whats corvo and broadcom saying and believe because apple hadnt placed a lot of chip orders apple was stuck with inventory. Turns out when i looked at it apple didnt build enough inventory. It sold through the this large form factor, they still made a lot of money. The bottom line is that the analysts thought that there was going to be a lot of price cutting because apple couldnt set its phones. Apple sold through rather well, Service Revenue pretty good and they got i dont want to say they got snookered, they snookered themselves. Average selling prices fell to 595, which i guess was better than some anticipated. They somds a lot of the lower sold a lot of the lower end phone. People that listened to the call, you were amongst them, said the tone from mr. Cook was more positive than theyd heard in the last couple calls. We spoke to him where he was citing macro challenges so many times in the past, didnt do it quite as much and seemed to be more confident in the switcher rates from android, saying at the highest level ever. I thought that was important. Also the dumb phone switch. Spoke to him, obviously quite bullish. One of the reasons why russia, brazil, turkey, india, canada called out for strong sales which is important. Youre right, there have been this kind of drag where Just International wasnt so good. I think a lot of whats happened by the way, ipads come back. Proving difficult to kill. Hard to kill like Steven Seagal one of the great movies ever. App store revenues up 37 . The analysts that there have been a bit of a rebellion on the last couple calls, basically saying listen, your time has passed. Not unlike calling gillis incredible call the day before, tim cook peaked. Like in yen, going into this quarter basically that cook is a washed up has been. Cook actually played a good game. Made it like tommy john surgery or something. You think estimates have bottomed on the name. I think i can make that case. Yeah. I can make that case. Service revenue he said to me that look, its going to be next year at this time equal to fortune 100 company. Hitting fortune 100, 28 billion last 12 months 23 billion and then the next 12 months you would imagine its going to as you say pass a fortune 100 company in terms of revenue. Wasnt going to pay bigger than bread box when i said 28 billion northwest mutual, he said no well in excess of that, fortune 87 call, i dont know. A lot of people feel the Service Revenue didnt grow quarter to quarter. I get that. The Gross Margins on Service Revenue dont do anything i mean thats kind of facebook. Theres no costs. Enormous margins. Youre going to see that business become a mover. Now theres lots of very smart people saying, look, only reason this is going up because everyone expected so little. I happen to think if they can pull off the services and break out the revenue and get a new apple watch that has some some gravitas you will say yeah. One last bit. He would you argue was more cautious on china . Talked about going into emerging markets with mu miltie. Humility. Did that strike you at all . A little more about how theyre developing. China is challenge, hong kong is challenging. I saw louis vuitton, the first time that they said china sales for highend champagne is good. I have not seen anything good about high end out of china. Revenues down 33 . The wrap on china all these companies the cheaper phones, people like that. People are also moving up. Whatway has a jaw me has a competitive highend phone. Tim citing on the call that the satisfaction is high. China has a problem. China is not that good. But i think that he reiterated again and again a great market but india is going to surpass that market. In 2020. Finally just for me quickly, m a, you and i talked about the possibility of a large deal by apple because in the last calls, in the previous calls, mr. Cook seemed to be preparing people for that very possibility even though it is something historically apple has never really done. Right. This call, hardly mentioned m a at all and didnt seem to be going down that road. Not sure what could he have bought with 127 billion, buyback. I dont know. Rolled up the fortune theyve added a netflix and market cap today. Maybe they could have done it the oldfashioned way. Remember netflix. Yeah. Oh, yeah, jay bought a lot of stock. Nothing going on. Lead director not buying stock if theres a deal going on. Youre saying the karaoke deal they announced after the close is not a driver. What is that about . Doesnt make sense. No. Versus what were hoping is that they would buy nintendo. Pokemon go, im on the blue team, i pay anything for it after nintendos decline. Or tesla given that money to spend on a car. How much r d are they spending on a car at apple. Very much like mcdonalds had a disappointing number but remember when it went from hundreds of millions sold to billions sold. Dont you think that thats what musk has got going . Billions and billions sold. When you listen to him, you really now by the way, linear technology, which were going to talk about later in a faber report. We are . Im doing a faber report on buying you know what programming programming the faber report. They have bms. Bms. Bought they were afraid of being bought by somebody else. Bms. Whats that. Battery management system. The electrical vehicles in china, 300,000 sold last year double this year and double again. The parties like them. Battery management systems. What do you do when your bat it terry dies . I dont know. Thats what linear figured out why they got a buy. 86 of the business is not consumer. I remember the linear like a play on the pc. This reinvented itself, industrial company, 44 of the revenues, 25, 26 are auto after that is communications. It made all the sense. A faber report and then some. So you can do comcast. Appreciate you doing my faber report. You can sub in for me any time. Thank you. Wow. Did get fascinating pictures of the gigafactor yesterday as musk said need another capital raise. Made a lot of money. It was a historic night at the Democratic National convention. Hillary clinton becomes the first woman to be nominated for president by a Major Political party. Joining us from the Wells Fargo Arena in philly is john harwood. Good morning, john. Good morning. The Democratic Convention had two missions last night. The first was to make history by making Hillary Clinton the first woman nominated by a major party for president. And the second was to show americans that history was being made by a real flesh and blood woman, not the public figure americans tell pollsters they dont trust. That was president clintons job and he did it with the skills weve become familiar with over the years. He painted an intimate portrait of Hillary Clinton as a girlfriend, wife, mother and a lifelong advocate of social justice in ways and places that most americans have never seen. If you were sitting where im sitting, and you heard what i have heard at every dinner conversation, every lunch conversation, on every long walk, you would say, this woman has never been satisfied with the status quo in anything. She always wants to move the ball forward. That is just who she is. And then we had a visual demonstration of the shattering of that Glass Ceiling that she cracked eight years ago when she was defeated by president obama. Hillary clinton then appeared and thanked the delegates by satellite. What an incredible honor that you have given me. And i cant believe we just put the biggest crack in that Glass Ceiling yet. Thanks to you and to everyone who has fought so hard to make this possible. This is really your victory. This is really your night. Tonight were going to hear more of a political case from her Vice President ial running mate, tim kaine. From the current Vice President joe biden and from president obama. Tomorrow well hear from Chelsea Clinton and, of course, the nominee herself. I have to say, we had a demonstration after that incredibly effective speech by bill clinton of some of the controversies that follow her. Her close friend Terry Mcauliffe, the governor of virginia, telling a reporter she was going to flip on the Transpacific Partnership which she now says shes against. President obama is for. And that underscored why some of those Bernie Sanders supporters just like Many Americans, have concerns about how straightforward she is. Were going to learn more tonight. Thank you for that. John harwood in philly. When we come back it has been a tough year since jack dorsey retook the helm at twitter. The Company Reported the slowest Revenue Growth since going public. A closer look at the numbers. Our Parent Company comcast rising in the premarket after beating estimates. Well talk to chairman and ceo Brian Roberts in a few moments. Another look at the premarket. Dow first backtoback losses of july. S p has alternated gains and losses for nine sessions now. More squawk on the street from post nine after a break. W glass . They are. Do i look smarter . Yeah, a little. Youre making money now, are you investing . Well, ive been doing some research. Let me introduce you to our broker. How much does he charge . I dont know. Okay. Uh, do you get your fees back if youre not happy . dad laughs wow, youre laughing. Thats not the way the world works. Well, the worlds changing. Are you asking enough questions about the way your wealth is managed . Wealth management, at charles schwab. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. Two dow stocks moving in opposite directions. Boeing in the green after its loss per share was less than expected. This was concerning that onetime charge stemming from the 787, a 747 program and those refueling tankers. Revenue and forecasts came in above expectations and then coke falling after a revenue miss. Company saw troubles in international, headwinds more severe than anticipated, pricing did help with the top line. We will talk to the companys president and coo james quincy in the next hour. Organic revenue up three but almost all price as volume was flat. Yeah. I mean, the problem with cocacola does have a smaller form factor bottle doing well. Dont want to just do it by lease liters. In the end pepsico has a better model because they have snacks and did better. Global volume for cocacola grew 1 year to date, even in the quarter not what you wanted. I have to tell you i look at cocacola and think its not going to go down a lot. Still generating a lot of cash, still a loved company. People never feel like they went wrong buying cocacola. Margin expansion 100 basis points. Not bad. They are if there werent such a thing as pepsico you would say this is a company doing quite well, not great, better than mcdonalds versus expectations. But no, i cant rave about it. I cant rave about it. I see core sales going up 3, prior 4 to 5. No. I cant rave about it. Was not as good as i expected versus pepsico. You feel pepsico is the better choice in that arena. Oh, no. I i believe and strongly that thats the case, my travel trust owns pepsico. Pepsico, what had adjusted total bang up quarter, one of the best organic growth and people love fritolay. Boeing, despite the cut in guidance because of the charge, its still above the street, and revenue guide is affirmed. Geez, boeing, kind of set you up. Put that charge in. People were very worried. Boeing has an unbelievable cash flow. Look, you look at american air and delta and the stocks, remember american air was deferring order. American air kind of footballing the price. I think they were trying to get a better price in planes. Air space demand, remember it is still expected to grow double digits next year. Boeing makes me feel more confident about that. The stock is not expensive. Generating a lot of cash. Good quarter. Both these stocks coke and boeing have similar dividend yields. On the miss environment you have to believe that helps. 3. 2 . Im not going to panic coke because you get that people will say its a bomb with potential upside. Boeing, look aerospace we saw it yesterday, they said aerospace was terrific and greg gas, is a tough guy. Straightforward guy. A sense this industry is not going away and a lot of this is going to see tremendous orders from overseas. Boeing, look, you have to buy the planes in dollars. This is not a strong dollar. You have to buy the planes in dollars. One of the few Companies Like that. Cisco another one, buy their equipment in dollars. But people are buying their equipment and a lot of people felt with a weak weak euro, and then by the way air bus does well. The bull market is robust. In an area where globalism is under attack is there a more globally produced product than an airplane . No. I mean, greg hayes with impassioned defense of free trade. But look at u. S. Steel, letter x, we have shut down china. Were not importing anything. You shut down china and korea, letter x had an unbelievable quarter. That stock could go up 50 . China and korea shut out of our market. Still 5 billion market cap company, right now 3. 3 billion. I mean hyman roth business was bigger than steel, even back then in 1959. When u. S. Steel had a big business. Exactly right. When we come back well get cramers mad dash and count down to the opening bell and another look at the premarket. We still havent gotten to panera and twitter and comcast. We will talk to Brian Roberts, opening bell in about 12 minutes. Resident of the north face, we are working on the prototype to match customers to gear. Watson, lets give it a try. Say its midjune and im backpacking in yosemite. Of our 353 jackets, i can recommend nine. Watson, what if it rains . There is just a 3 chance of rain, so i recommend the breathable stretch fleece fuse form dolomiti jacket. A Perfect Choice watson. No wonder our Customer Loyalty numbers keep climbing. I believe we can do even better. I like the way you think. Everyone talks about what happens when you turn sixtyfive. But, really, its what you do before that counts. See, medicare doesnt cover everything. Only about eighty percent of part b medical costs. The rest is on you. 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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. Options action all right. About no, we got we have a long time before the opening bell but we will move things quickly because we want to get to Brian Roberts to give him adequate time. I dont want to mention any analyst name but yesterday stiefel put out a devastating sell on panera, saying panera is going to report a number, comparable number well below and urged you to sell this stock. They did 4 , ron shay, who will be on our network by the way, talking about panera. They delivered a blowout quarter and panera 2. 00 is doing great. The sell seems premature. Maybe created an opportunity. The stock went down, down hideously, my travel trust owns this. I said sell . Sell . Like playoffs, playoffs. And the asian Chicken Salad one of the great bargains of all time. What do they retail that asian Chicken Salad. 4. 39. Big portion, too, right. Dont take the bread. Take the apple. Keep an i on panera. Other names, including twitter, we havent had a chance to discuss but we will around the opening bell. Down sharply. Join us for that opening bell just a few minutes from now on squawk on the street. As a supervisor at pg e, its my job to protect public safety, keeping the power lines clear, while also protecting the environment. The Natural World is a beautiful thing, the work that we do helps us protect it. Public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. We want to keep the power on for our customers. We want to keep our community safe. This is our community, this is where we live. We need to make sure that we have a beautiful place for our children to live. Together, were building a better california. Youre watching cnbc squawk on the street live from the Financial Capital of the world. Opening bell will ring in about five minutes. Busy session as we take stock of the announcement of more stimulus in japan overnight. We will get details on that we think next week. Fed Statement Today at 2 00 p. M. Day three of the dnc, as kaine and biden speak tonight and then all the earnings that we havent finished wrapping up including twitter. Beats by 3 cents, but the revenue is a miss. The slowest since the ipo. Favorite stat of the day, since dorseys return theyve added about a million users in the u. S. Yeah. Facebook worldwide has added 165 million users. Say again. Clown show. Clown show . Clown show . Clown show . I never liked clowns. Little scary. All the things that they talk about, return on investment, they havent figured out what the return on investment is. Cocacola did tell me by the way theyre at least using twitter. Honestly, theyre they talk about were learning how to do this, learning how to do this. Its a school. I also felt by the way theyre going to go direct response, thats the worst business in the world. That shows you, you really are kind of scraping the bottom of the barrel. Video budgets and what they will do with the forecast. This was a this forecast well lets tell people about the forecast because they are blaming continuation of trends from the First Quarter in terms of less overall advertiser demand and they go to a revenue guide of 590 million to 610 million for the Third Quarter, the street had been well above that, the company had been guiding people above that. So whats going on in the Advertising Market . Why is social Marketing Budgets only going up. Digital is only penetrating more and more people get everything digitally in terms of how they get their news. Why are these guys not taking a bigger part of the pie, given this implies Revenue Growth is decelerating further when you expect it to be going the other way with the olympics and everything else. Whos taking a bigger part of the pie, see the stock based compensation, 165, 175 million. Theyre doing well. I would be if i worked there i would say give me cash. I mean, this stock is the forecast was so bad, that i found myself saying guys, i have like three or four business lines you to get into right now, stop talking video. I know that theyre a big why stop talking video . Heres what happens. Salesforce. Com should buy them and integrate them with an exact target product so that what you would do is you would be overseas, all right, get this, they would basically be in charge of your email. You are using your chase credit card, chase blocks you because they dont know where you are, you use twitter to go instant message chase and say, were or email to instant message, sales force would think of doing this, instant message chase saying it is me, please remove the block. Now that business is worth 4 to 5 billion. Im giving it to adam bain, giving it to im giving it to im not giving it to dorsey because i would he square my taken. My view is good. Salesforce. Com knows how to do this. Pay 23 no stock pay 22 bucks, set up my plan, go to jamie dimon, were using instant message to improve ripped my suit. Good suit. But thats what they do. They have to get out of this business. Go to transactions. This is a home run business. I dont understand youre saying give up . They can keep doing this video but like facebook, Sheryl Sandberg, be do you know how embarrassed she would be to say listen we dont know what return on investment would be. Gives it to me, like ten times return on investment. Cocacola uses twitter. I dont know. I mean cocacola sales not that good. 4 to 5 billion because i cant get into my bank account from mexico . What are you talking about . I am talking about ecommerce, i am talking about a way to converse with your clients. I am talking about a 360degree way to know where your client is at all time through instant messaging. I am talking about cash on the barrel head. Talking about facebook. By the way, theyre going to report after the bell. What are you transitioning . Im not done. Im transitioning. Im getting you away interest this from this i dont know what youre talking about thing. Sales force thing is a good idea. I like it. All right. Nobody is going to buy twitter right now with that by the way all that comp you to well sales force has a lot of comp to. Offering an alternative. More than they did. Comp issues and got bought. Yeah. Thats true. Thats true. Very good point. Go ahead. Facebook. Me. Lets get the opening bell and the s p at the bottom of your screen. At the big board today, Pharmaceutical Company cadman holdings celebrating its ipo. Carlin will join the halftime today. Nasdaq, commerce hub, a network connecting supply demand and delivery for retailers and brands. Speaking of twitter and folks who are active on twitter, tmobile comes in with net ads that basically beat all the rivals. John legere apologizing to us for not being here today. That is kind of embarrassing. Sent me roses yesterday. What am i supposed to do with roses . By the time i got them home they were dead. Couldnt give them to the wife. Look, good quarter. Everyone keeps adding. Everyone keep people still getting new phones and still getting new lines. Second lines. More data. Watch out in terms of other devices added. Second lines, third lines. Yeah. I know it is interesting. You think comcast wants to play in that world . Its possible. You do . I think its possible. Yeah i do. Well ask Brian Roberts. Wireless is an opportunity. 5g, when that really becomes more ubiquitous and you can potentially get kind of broadband quality in the home. You do that, broadcom, 175 when you do 5g. 5g, yeah. Look, one of the things i want to ask Brian Roberts is that nfl, the package, thursday, streaming rights, verizon now. Not yahoo . 5g. Right. Its a new competitor. Just get in the home. The nfl may have gone too far with this. Because the thursday rights are on verizon and cbs and youre paying 45 million a game. Its worth asking whether its fair that verizon is not your competitor because i have to tell you, 5g, cell phone. Whats not to like. I it will be interesting you like that . I do. I gined that up last night. That makes more sense than being in mexico doing your because you got to analog i understand customer relations. I understand the larger idea with twitter and salesforce. Thank you. Can we talk about facebook and your expectations after the bell. The company will report. People wondering are they going to have their engagement negatively impacted by snapchat, the one question going into the quarter given the expectations that are very high because theyve had just two perfect quarters in a row. It will trade erratically. The stock is up very, very big. My travel trust owns it. Been a position for years. I would say that if they the opposite of twitter, i think that theyre going to talk about how big customers like them, little customers like them, everybody likes them. They do add people. Look at the twitter additions and those question about daily versus monthly. The twitter additions are so bad, the additions to facebook, i think they will talk about ai. Sure. Thats not allen iverson. Understood. Artificial intelligence. They will talk about Virtual Reality and give you a good case for whatsapp is a big number in 2017. How many sell ratings there are on fb. One. Colin gills . Thats a good question. I will have to ask colin if theres a haiku for facebook. One sell, 40 some odd buys. Does that bother you . On the 2018 numbers it trades like clorox. Its cheaper than clorox if you use 2018. High Growth Companies were in 2017 once you get july 1. 2018 is very reasonable. Seem to be selling at 30 times earnings, 28 times earnings. Why wouldnt you want to pay that. Well i do think unless they have a particularly poor quarter which i dont think anybody expects but they are expecting not priced for perfection is your point. Not priced for longterm perfection. Overowned. Institutions under owned apple one of the reasons they can fly. But facebook is over owned but i think that and youre going to get a headline and people will trade it and be knocking it down. But the com Conference Call will be unless one of these people steps aside, if Sheryl Sandberg announces shes in philadelphia. For the Democratic Convention. That would bother me. I think shes fabulous and she runs a portion of the call. Look, there are calls that are great. They are hamilton. Theyre hamilton times ten. Or fiddler. Thats tough. You havent seen hamilton. Zuckerberg a big fan of the show. We know that. Hamilton or our show . Both. Does he know we have a show or like my wife who hasnt figured out in five years i have a 9 00 show. Couple restaurant stories buffalo wild up almost 6 as they say they can work with sh shareholders. Panera beats, raises, comps up 4. 2. Panera was better than expected. I didnt like the Buffalo Wild Wings quarter. I didnt. First of all if theyre going to make it on takeout, 80 of their revenues comes from nonalcohol food but i have to tell you something you want the profits thats alcohol. So if you take it out youre not going to get it. Doing a fast break lunch for free if you dont get it in 15 minutes. Commodity basket going down. Positive. Talking about rio. David ortiz made an unannounced appearance in a new york Buffalo Wild Wings and trash talked the yankees. They have an Analyst Meeting in a couple weeks. Maybe give us something. Minus 2 comps and the last time they had this was 2010 and took almost a year to come back. Wow. Okay. But there is an activist there. In Buffalo Wild Wings. I didnt know that. And sally smith said they talk to all people. But no, it wasnt a great she would tell you wasnt a great quarter. She was not thrilled about the quarter. Well so they underperformed the industry. Stock still up. Speaking of stocks down, though people were short it. Right. That may be speaking of shorting sprint. Panera. That move up the other day such a small float there. Which one . Sprint. Won me over. I know he won you over. Thats what happened. Take a look at akam, down 15 . They did not lost two big clients. Did not have a good quarter. Two. Going inhouse. Customers going inhouse. Apple, microsoft, facebook going to get worse in the Third Quarter before it gets better. That was tough. You can see that stock is getting rocked. Thats the todays no that was bad. By the way, walgreens didnt mention that loser. My travel test owns that loser. Kkr selling another. What is that . They keep selling at the same level. I mean why dont they let it run a little . Do they need the distribution that badly . I thought they were done. I guess not. No. Theyre not done. They still have more. Theyre just a curse on that stock. That company will be much higher. Of course the by the way see it that is an important thing to remember when you have the private equity owners of companies they will sell stock and keep a lid on things. You want to make sure once theyre done, there was another name last week where we nxpi they did it ten points. Theyre cdone. I talked about that secondary that took place that was encouraging to many people. Dont know how much stock is following. Can i do a special faber edition of a cramer substitute faber report. Yes. Linear tech, wouldnt that have been a better acquisition for Texas Instruments which seemed to be ready after that great nat semi deal. Some talk that texas was looking at Analog Devices. Analog. Really. And Analog Devices may have done this from a defensive posture. Thats speculation. Maybe analog this isnt over. Does not require a shareholder vote. So they can do it. Cash, stock. No 20 . Analog. Analog . Maybe. Yeah. I mean, again, we talked about it yesterday before we heard about the deal but the constant did you kill the texas and analog deal. I didnt kill anything. Im joking hes been killing the takeovers. He hasnt killed anything. He kills nothing. Serial murderer. He killed kellogg the cereal murderer. We havent heard anything. Buyer said nothing on its call. Reported better than expected earnings, stock up on monsanto, were talking and not saying anything beyond that. Okay. And mondelez i dont believe has said anything on hershey although irene rowsen field will join us on the show. Good booking. Dow up 60 points almost all going to be apple today. To bob pisani on the floor. Hey, we have the dow, yeah, just up about 0. 3 and the s p up 0. 16 and the reason because of apples influence on the dow. Earnings today, so lets just stick with earnings right now. Steel companies, you see u. S. Steel at a new high right now, but the story is simple. A smaller loss than expected. Steel prices are higher. They had some favorable rulings here in terms of trade with them. And their costs are lower. Thats a Perfect Little storm for them on the upside. Industry facing overcapacity, unfair trade practices with a lot of comments in the Company Reports, but bottom line very favorable. U. S. Steel at a new high and similar story from new cor and ak steel. To oil some of the big oil companies, anadarko one of the biggest exploration of Production Companies out there, much smaller loss than expected, loss of 60 cents. Heres whats going on. Asset sales, much higher than expected. Oil at 40. These guys cant stand around and sit on assets. They have to move them. Cant wait for higher prices. Selling a lot of stuff and getting price for them. Production at record levels, guidance still going to have production at record levels in q3. There is the bottom line, still losing money. Its a horrible year, but its improving. Take a look at andarkos chart. The narrative from the oil companies, narrative has been, q1 was the trough. You saw where we were, 30. Were up 60 . Is it worth that much . I dont know. But the narrative so far has been holding. Its slow but steady improvement. Lets go on here to talk about some of the big industrials here. Northrop grumman beat, revenues better than expected, aircraft demand seems higher than expected, did raise their full year eps guidance. I love goodyear, tires, half their sales are overseas, they reaffirmed their guidance and had a beat overall. Demand seems strong. Volumes were up 2 . Doesnt seem like a lot but in the tire business for them thats good. The fundamentals seem pretty favorable overall. Goodyear up 3 . The one disappointment ingersoll rand. I love ingersoll rand, heating, ventilation, air conditioning, behind the walls of companies and businesses all over the world. Theyre big in refrigeration and earn thermo king, theyre down. Earnings were good but the guidance is very conservative for them, 4 to 4. 10, analysts have 4. 09, taxes thrown in there, i think there was disappointment on that. Not bad just a little disappointment on the guidance. An ipo we have today. Its right behind me and unfortunately we dont have any indications up. Cadman holdings has come in. A biotech firm. Involved in Drug Development for a whole range of different disease. 6. 3 million shares at 12. Thats a bit of a disappointment because the price talk was 5. 6 million at 16 to 20. So they notably lowered the price. Raised the shares a little bit but the bottom line theyre raising about 25 less than they would have hoped to at the mid point. This is sam waksals venture of imclone systems. Not with the company. Left any kind of management positions as part of the agreement with the sec. We will have his brother the ceo of the company on very, very shortly. Right now the dow up 54 points. Back to you. All right. Thank you very much, bob pisani. To the bond pits and Rick Santelli who joins us from the cme group in chicago. Good morning, david. I like to remind all our viewers and listeners it is the second day of a fed meeting. No press conference. We will get a Statement Today although i havent heard much talk about it. Probably with good reason. Look at interta of 10s, fairly Swift Response to weaker than expected preliminary durable goods. One week charts puts us at the bottom of a tight range. Pay attention at 1. 54 yield level. Opening chart up to mid june and ive talked about this many times, that low close at 1. 57 on the left, is pretty much where the market couldnt get through on the right. And that 1. 60 area is a good pivot. Look at a one week of bunds easy to see what pivot there is. Goose egg, zero. Seemed to have backed off at zero. Open the chart up to early june, you can really see how pronounced that is. Big psychological level. Lets look at year to date of the dollar index. Journal had a great story, weve been talking about it for quite a while. The dollar just doesnt auger that theres some secret tightping by the fed, at least in the eyes of investors. Keep it simple, right. Were below where we closed last year, end of story. Finally, abe throws the sink, throws a bigger sink, throws the whole countrys sinks and what happens . Lets keep this simple too. Lets start out the beginning of 2015, theres the nikkei. Sure, its had some bounces but its still lower. Why do it . Why is he listening to all these people that write newspapers on economics . Maybe should look at the performance or think about the following. In 1989, their nikkei was over double its 16. 6 level of today. That doesnt spell success. Carl, back to you. All right. Rick thank you so much, Rick Santelli in chicago. When we come back, he is widely believed to be the lair apparent to muktar kent. Cocacola president james quincy will join us on the back of the earnings, after the break our parent comcast with earnings as well and well talk to chairman and ceo Brian Roberts in just a couple minutes. Harl harlan. Comcast out with earnings that topped estimates this morning. Joining us from philadelphia is Brian Roberts the chairman and ceo of comcast. Of course it is our Parent Company. Always nice to have you with us, brian. David, great to see you and be with you again. Interesting, the stock had looked like it was going to open higher but down a bit right now. Not sure if there was anything on the call, i havent heard anything, that concerned people. Video subs continue to move in a direction many would not have expected, namely, up. I know when we look at it in terms of quarter to quarter, i think you lost 4,000 year over year in seasonal video subscribers but overall up. Can you keep that going in an environment where we all know cord cutting keeps taking place and the skinny bundle will begin to pro live rate . Well, i think youre right. This is the news of the quarter. This is the best Second Quarter in ten years for video. Continues a trend weve been seeing. Weve seen the number of customers with disconnect reduce every month for Something Like 27, 29 months in a row. And i think its x 1 or video experience that we give our customers with the new box. Its the additional content. Its our improving Customer Service. Its our better operational focus. Its a really good trend and we do believe we can continue this momentum that weve created in the first half of the year. And, you know, were not seeing a slowdown and were really excited with whats with our product and the response were getting from customers. Best quarter in ten years. Where are these people coming from . If youre barely losing anybody and gaining to a certain extent as well where are they coming from, brian . I think one area is satellite. You know, the bells for the last ten years have been building more and more new footprint that overbuilds us. These are tremendous competitive headwinds and i think our product at different times over that tenyear, 15year period, sometimes is better or worse than our competitor. Right now, i dont think weve had a better product which is what matters customer first, when you can just talk to your remote control. Were putting out 800,000 voice remote controls a month. And people are using it 200 million times a month. Thats a game changer. Nobody else has that. We have 150,000 plus pieces of content on demand. What were going to do for the olympics as weve demonstrated is unprecedented. So theres a widening gap between what you get when you buy cable from comcast and what you get when you buy one of our competitors and thats that innovation that weve been talking about and its paying dividends right now. Brian, jim cramer. Hey, jim. The technology is very exciting. I wanted to get to what i think some people may be misjudging, which is that you lad some really big movies last year at this time and the numbers dont look as good at the same time, a little conjecture. I know that the secret life of pets was not the previous quarter. But im projecting it could make 370 million and could end up being a great series of rides at theme parks. Could you talk about the past and maybe give us a sense of how you take a franchise like secret life and make it into a ride . Its the big news in the Film Division in quite a while, which is one of those great breakout franchises thanks to chris and donna and jeff and ron and the team we have at universal doing a fantastic job, but particularly, in animation, which is why we wanted to buy dreamworks. Animation where you can have these, you know, incredible franchises and with our company, with theme parks, with consumer products, with china, with the ability to move sequels it did occur in the Third Quarter, youre totally right, last Second Quarter we had Jurassic World and furious 7 so this was always going to be a down quarter if you just look at that 90day to 90day glimpse thats not what i like to do. Nbc universal had a strong quarter, fantastic first half of the year, and big part of the second half will be secret life of pets and a movie at the end of the year from the same team called sing which were really excited about as well. And thats what gave us the confidence to want to buy dreamworks. So we just got back from a trip to china and looked at, you know, the theme park possibility in beijing and its all fueled by this great content that we now have in the company. Brian, its carl. Just on the to stick with the studios, animation aside there are people who argue that hollywood paradigm of going for ten pole, blockbuster superhero movies is endangering the movies in general over the long term as fewer young her people go to the movies. Will hollywood back off of that . Look, i cant speak for all of that because its a whole community of creative endeavors. We can only speak for what were doing. We have a nice balance. I think when we started with Nbc Universal we had too much and highprofile misses. I think weve evened it out and last year was the most profitable year in the hundred year history of universal and the year before, was the best year since we had owned the company. This year if things hold up i think we will be at or better than what we had budgeted which is fantastic performance. Not every year as you know in film, especially in sequels, they dont come every year. They come every other year. Next year is a big year when furious comes back and mignons, despicable me 3 and wonderful end of the year sing. We think 2017 will be an equally great year leading into 2018. I think our strategy is working. Cant speak for others. Again, part of being part of a diversified company like comcast fl comcast Nbc Universal you look at cables results. The fantastic quarter. We just talked about broadband. We didnt mention 220,000 broadband net ads. Thats the best in Second Quarter in eight years. Well so its a wonderful mix of companies. Its youre being effective, brian. The stock has turned around since you started talking. Keep talking for a while. Were happy to have you as long as you want. You are the boss. I want to get to wireless because a lot of talk about potential of acquisitions. I know on the call you said, wireless represents a significant opportunity for the business. And there are those who feel that 5g, which is coming, could represent a real threat to the business. As people are able to get almost a broadband experience wirelessly in their home. Where are you on wireless . Why did you say its a significant opportunity for the business and would you consider an acquisition . Well, were not looking at an acquisition. What were focused on is really a bunch of ways to look at wireless. First and foremost is we have more wifi hot spots than any company in america and we have the best wifi of any company in america. Thats a strategy dating all the way back, frankly, to a conversation i once had with steve jobs. He said why dont you put wifi in all your cable boxes before anybody had heard the words wifi. So the datadriven, silicon valley, changing the perception of what, you know, even broadband is, to wireless being the front end and wired doing the fast connectivity, that hybrid network is what we see for our strategy and so first is wifi, second is activating the mvno which means we rent the Verizon Network on a wholesale basis, whatever that network becomes, its today lte, and voice, tomorrow its 5g and 6 g and wherever the world goes, we have that agreement that goes where the technology goes. And then can we find a way to marry in a special way that adds value to our customers the wired, wireless, the wifi, and thats what were working on. We will have more to talk about in the future. And then finally is 5g itself, and we believe the internet of things is a whole new market. Theres no reason we cant capture with our Business Services group, which grew 17 in revenue again this quarter, in a 5 billion run rate business, we should go into both residential and Business Services into this new world which we think is where 5g looks particularly interesting, so therefore we think its more of an opportunity. But look, there are always storm clouds and thats what keeps you sharp. Our broadband we had the best broadband in eight years. Im pretty happy about that. Im sure you are. You mentioned storm clouds and the story is, well how will you eventually get Revenue Growth if, in fact, there is a decline in video subscribers, as people expect will take place over time, and protein live rags of skinny bundles proliferation of skinny bundles. What happens to the average user . Youre describing the reasons that may not happen but that is one reason why people at least are wearily of comcast in future growth. One of my jobs as we joke about the stock is run the company have management teams and motivated employees building great products and in the long run the market figures it out where it i believe the market figures out your real success or failure as a stock. And so we shouldnt really care day to day. We should focus on the business. To that end, the advertising up front for Nbc Universal as a, for instance, ended for us last week. We had the best up front since weve owned nbc. 12. 5 growth in cpms, cost per thousand cost up 20 12. 5 at nbc. Similar double digit at usa network, our big networks, strongest up front weve had in six years. That tells you something about videos health. Another data point in the last 12 months, trailing 12 months, weve added between residential and business, weve added 100,000 video customers. So maybe theres changes. We each company has a different way of reacting. We made investments in x 1, improving our Customer Service and customer experience, and made that the goal of our employees. And at nbc its to be the Number One Network which we will be again in the 1849 demo and have a Wonderful Group of cable channels including cnbc and there you go. And you know what were having a wonderful run and very optimistic we can continue this growth. Well, we appreciate your joining us. We have to go to pay bills which youre happy about as well. And the olympics the chairman and ceo. He will have plenty of time to talk to carl about the olympics in coming weeks. Brian, thank you as always, appreciate it. Thanks so much, guys. Jim, whats on mad before we go . We got ppg. Which is just delivered another great quarter. Weve got dave steiner keeps hitting the ball out of the park, waste management, but we have centene. This stock has been crushed. Find out whether thats right or wrong. See you tonight, jim, 6 00 p. M. Eastern time. More squawk on the street after the break. This just got interesting. Why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card tempurpedic mattresses is that they contour to your body. Stop taking cialis and get medical help right away. It keeps us comfortable and asleep at night. Can i take a nap now . vo change your sleep, change your life, change to tempurpedic. Good wednesday morning. Welcome back to squawk on the street. Im Carl Quintanilla with sara eisen, simon hobbs, david faber. Watching a lot of earnings. The bank of japan. Fed statement this afternoon. Dnc tonight. Market right now holding on to about a 60point gain. A lot of that, all of it, is apple and boeing. Also, watching this ipo kdmn, kadsmon holdings, Harlan Waksal running it. Big story of the morning apple shares surging after the Company Reported selling more iphones in the Third Quarter than wall street expectedp iphone sales did drop as demand for the device cooled off in china. But as i say it is better than many expected. Weve added about 40 billion in value. To that market cap. Tony saga knack ki analyst at bernstein who lowered its price target on apple before the announcement. Welcome to the program. Hi, simon. Good morning. Is this a game changer in terms of our expectations for apple here or just a kneejerk reaction to beaten down expectations . I think its more of the latter. I mean, clearly last quarter was disappointing. Apple had provided relatively somber guidance for this quarter and this was clearly a case of this was a better than feared. If you look at numbers, revenues were still down 15 year over year for the company overall, and earnings per share were down about 23 . So those numbers in and of themselves were not celebratory. But i think on net iphone units were better than expected and evidence that the new iphone, the low priced se, actually had some impact in the quarter and that is encouraging. Well, yes. Priced at 399 and, of course, the cfo said they didnt produce enough for the demand and theyre going to ramp that up for the quarter. The conversation on that, obviously, on that cheaper iphone is whether or not theyre basically propping up revenue at the expense of margin . Do you care . Well, i think theres an opportunity to do both. And so, you know, our analysis says that typically in this quarter, iphone units would be down about 20 . What happened this year was that they were only down about 14 . Probably could have been down less had it not been for the fact that they couldnt produce enough iphone ses. That was encouraging. And as a result, you saw eps come in pretty strongly and margins werent dramatically compromised. I think there is an opportunity where yes, they will have lower margins, but net elasticity on profitability is positive. We are, of course, now within a stones throw effectively september 16 of the launch of the iphone 7. What view are you taking of that . The reports dont seem to be its going to blow anybody out of the quarter with out of the water with the innovation we have, but at the same time, theres this very strong argument that a lot of people have had their iphone for a couple years and due for an upgrade and, therefore, to an extent the innovation may not be as important. What view do you take on that . Yeah. And i think its difficult to know because we dont know exactly what the phone will offer, but heres how i think about it is that iphones in base continue to grow quite substantially and we estimate that the iphone install base entering the iphone 7 cycle will be more than 30 larger than when the iphone 6 cycle came. So it is certainly possible that fewer people will upgrade, in which case units may not be very exciting. But our belief is at some point, upgrade percentages will stabilize, and ultimately, iphone units should start to grow. Now whether that happens with the iphone 7 or whether that happens the following year with the 7 s or iphone 8, is difficult to know. I think where i take some comfort is, clearly what happened this year is that the upgrade percentages went down and iphone units contracted. But i think over time upgrade percentages are likely to stabilize and if the installed base is growing that should be good for iphone unit growth. Hundreds literally hundreds of man and woman hours have been expended on the results overnight. 104 where we trade, fair value for the market, as best we can ever estimate. Why are you calling it at 125 . Well, i think that right now, the stock is discounting about a 4 decline in Free Cash Flow in perpetuity for apple. I simply think thats pessimistic. The market is still saying, were not really sure if iphone units are going to grow going forward. And my belief is, given the growing install base, iphone units will grow. Up 3 in fiscal 17 and up 11 in fiscal 18. If iphone units will grow that valuation is incorrect and the market will need to see that before it can afford it that valuation. Thats the basis for our price target. Good to see you, sir. Thanks for the analysis. Tony joining us there from bernstein. Historic night at the dnc as we kick off day three today. Our john harwood is in philadelphia and joins us with a recap of last night. Good morning, john. Good morning, carl. You know, two missions for this Convention Last night, the first was to make history by nominating the first woman on this floor in a roll call vote. The second was to show americans that that history was being made by real flesh and blood woman, not the two dimensional public figure Many Americans dont trust. That was bill clintons job. He painted an intimate portrait of his wife as girlfriend, wife, mother, and tried to align her with the publics demand for change. If you believe in making change from the bottom up, if you believe that the measure of change is how many peoples lives are better, you know its hard and some people think its boring, speeches like this are fun. Actually doing the work is hard. Some people say well, we need change. Shes been around a long time. She sure has. And shes sure been worth every single year shes put into making peoples lives better. And then the delegates on this floor saw a visual demonstration of the shattering of the Glass Ceiling she cracked eight years ago against president obama. And then the candidate herself appeared live from new york. Via satellite. I am so happy. Its been a great day and night. What an incredible honor that you have given me. And i cant believe we just put the biggest crack in that Glass Ceiling yet. Well hear the political case for Hillary Clinton tonight when we hear from her Vice President ial running mate tim kaine who just a few minutes ago did a walk through on the stage behind me. Well also hear from Vice President biden and president obama. Tomorrow were going to hear from Chelsea Clinton, her daughter, and Hillary Clinton herself in her acceptance speech, the most important event all week, but we did have a demonstration last night of some of the controversies about being straightforward that foled her. Her friend Terry Mcauliffe the governor of virginia, said that she would reverse her stated opposition to the Transpacific Partnership trade deal after the election. The Clinton Campaign immediately came out and said thats not whats going to happen. Terry mcauliffe clarified to our colleague Andrea Mitchell this morning that this would likely be done in a lameduck session and its president obamas priority, not Hillary Clintons. John, dont go anywhere. Want bring in veteran democratic strategist steve mcmahon, Founding Partner at purple strategy. Good to have you with us as well. Good to be here. Thank you. Get to policy in a moment. Im first interested if you agree, or if you think that the framework clinton gave last night is an Effective Response to the notion that being a career politician is a negative . I think so. I mean, obviously, change is a theme in this campaign. Its a theme donald trump is driving quite hard. Its something that, you know, a lot of democrats were interested in the primaries, see that in the results for Bernie Sanders. So i think tell story about how Hillary Clinton is not just the establishment thats been around for 25 years, but actually is somebody who has been on the forefront of many positive changes, that have made a difference in peoples lives, is an important story. I also think what the president or former president did last night in terms of humanizing Hillary Clinton and telling a story as john said, to make her more of a three dimensional person, somebody who, you know, who had a life before politics, has a family she cares deeply about and does these things not because of some political calculation but because she genuinely cares and been doing it for a long, long time without any fanfare or getting ne credit and any credit and its an important story to tell. Contrast the degree to which the rnc and now dnc are making an attempt to go after the middle. Is this about that or deepening the base . Well i think for Hillary Clinton it is about going after the middle more than it is for more than it is for donald trump. And on that change desire that you mentioned, Hillary Clintons not going to get the people who want to bulldoze washington. Thats the force, the anger behind Donald Trumps message. Blow it up, tear it up. Hillary clinton is more tempered but shes counting on that appealing to College Educated white voters, suburban voters and see if she can pull that off. Is it going to be a challenge for her to talk about the economy . Because a lot of folks see her as a continuation to obamas presidency, which has seen some strong progress when it comes to jobs and Overall Economic growth, and yet theres so much discontent and frustration out there about wages and the fact that it has been so unequal. How does she do that . Well, i mean i think this is a challenge that barack obama faced in 2012, because you had a lot of the same dynamics at play. There were a number of months of pretty strong job growth, the stock market had been doing quite well, the economy was recovering and improving and getting stronger every day but a lot of people who frankly didnt feel it. A lot of people who once had manufacturing jobs that are no longer here in this country. And theyre frustrated and so Hillary Clinton does have to kind of walk that line and i think the message that shell be coming forward with is a message that economy is working pretty well for a lot of people, for a lot of folks who watch these programs, but its not working as well for many of the middle class and we need to do a little better to strengthen the middle class and to make the economy work for everybody. I think thats the argument she has to make. Notwithstanding the fact that the economy does seem to be pretty strong and getting stronger at the top line. There are people who feel differently and she has to speak to those folks as well. Steve, how dangerous is this flip flopping going on on trade. The journal, the lead editorial in the journal today, is very critical. When people worry about the trust worthiness of a career politician, isnt that writ large in the way shes gone from side to side on whether the trade policies were correct, even trade policies that she was involved in negotiating. Its very disconcerting once you get into the detail. Well, its difficult to explain, but the fact of the matter is, and frankly, you know, i understand why it is, but when youre part of an administration the administration drives the trade policy and the trade deals and youre sort of expected to toe the line. I think when Hillary Clinton sort of left the administration, looked more closely at the trade deal that she had been part of negotiating, and looked at some of the things senator sanders was pointing out she had a different view. Shes going to be a different president than barack obama. Shes going to place different emphasis on different aspects of trade. I mean its a complicated issue. Its a policy thats obviously divided the democratic party. Many democrats who support it and who voted for it. The president , obviously, supports it. So its not an easy situation for her to navigate. But i think she probably for the sake of, you know, unifying the party, and moving forward, i think she landed in a pretty good place. Steve, appreciate your time. Always good to see you. Steve mcmahon, john harwood joining us from philadelphia as well. Programming note, make sure to tune in tonight 10 00 p. M. Eastern time. Kelly evans and mish carusocabrera and myself hosting special live coverage of the dnc. We will be there. In the meantime breaking Economic Data at the top of the hour, pending home sales. To diana olick with the numbers. Well, just up 0. 2 . Thats a miss. The street was looking for pending home sales to be up about 2 in june from may. Theyre up 1 from a year ago. They were expecting better because this is based on signed contracts in june. Remember, in june, we saw some of the lowest Mortgage Rates weve seen ever. Thats postbrexit. To see this flat is a big miss. The realtors are saying that this is all due to inventory. Inventory down 6 at the end of june compared to a year ago. There arent enough homes for sale. Only the northeast which has better supply than the rest of the nation saw gains up 3. 2 in pending home sales for the month. The midwest and south basically flat. Sales in the west down 1. 3 . And in the west, where supplies are the most limited, were seeing sales down 1. 8 year over year. The realtors are saying the one bright spot to all of this is that theyre seeing investors moving out to a much lower share in june than they were at the beginning of the year. That they say will help firsttime home buyers get in but firsttime home buyers can only buy if they can find something affordable for sale. Back to you. Thank you very much. In the next 45 minutes of the show, well have the ceo of panera, the president and coo of cocacola. Fed at lunch time, former fed governor mark olson and return to the dnc with billionaire financier blair efron. Squawk on the street will be back. Panera out with Second Quarter earnings, Conference Call beating the street. The share price reaction up 3 . The stock up more than 17 over the last year. Ron saich the founder and ceo of panera. Good to see you. Good morning again. How are you . The results were a standout in what has been a slowdown for the Restaurant Industry in the Second Quarter. Disappointing numbers from mcdonalds to starbucks. What drove the growth for you . Well, weve had the Strategic Plan that weve been working on for three to four years. The reality is the vision that under lies that has been right. Its been a commitment to initiatives like clean food, delivery and technology. More importantly, tooii think pe are talking about the consumer slowdown. Over the 25 years ive been involved with the company have not correlated with the consumer environment. When the Great Recession hit, our comps were stable throughout it. When gas prices went down and fast food benefited, panera didnt. The reality we have a better customer, more fluent customer. For them, a slowdown doesnt mean they brown bag it. It probably means theyre not buying that. Okay. You break down the Sales Numbers here, notice that the comps are 4 , which is strong for the Company Owned stores, but little less than half of that for franchised owned stores. Why is there such a big gap there . This is actually the highest gap weve ever seen. Our 4. 2 compared to theirs. It is a byproduct of how powerful our initiatives are. Panera 2. 0 is at this point only been rolled out essentially into the company stores. It is really a forerunner of what the future is and why our franchisees are excited. How long is it going to take them to catch up with your plans . Well, thats the advantage of a system like panera, where we own roughly half the stores. Were testing it, have been testing it with our own money, further down the rollout curve and theyre following. In addition we have a Delivery Initiative under way which is now in roughly 10 of our system will be in almost 15 of our system by the end of the year. Thats working simultaneously in company and Franchise Stores and everybody is equally excited about that. I know you played down the idea that chipotles pain is your gain, but the company again reported a more than 20 decline in samestore sales. Are you not winning any of that business . Oh, i think we get something. Maybe its a tenth maybe 10 basis points, 20. If you do the math and you realize chipotles 4 billion brand, billion dollars a quarter they lose 20 , thats 200 million, this is a heavily fragmented industry. What are we getting . 10 million in sales. What is that compare to our billion dollars in sales a quarter. 10 basis points. The reality is the Restaurant Industry is a fragmented industry. People dont wake up and say i want to go to a fast casual restaurant. They say, im in the mood for a mexican or pizza or soup salad and a sandwich and they frankly choose one of the options available to them. There are, however, that said, a number of people, particularly this week, who have begun to call a top in the Restaurant Industry saying maybe the cycle is turning, maybe in lodging but in restaurants because of the capacity thats come online and, of course, the rising wages. Broadly, what do you see happening . Well, i think that generally the restaurant is doing, in particular fast food, is focused on a lower Income Customer and that customer is most sensitive in an economic downturn. As i tried to indicate, panera over 25 years has never correlated heavily with the economy. So i think that the reason panera has had such a positive reaction today, to our announcement last night, is the strength of our sales, the strength of our comp store sales, and the fact that unlike almost everybody else, weve continued to come through what people are warning is a recession thats coming. Particularly well. And i think it speaks to paneras individual issues not the broader Macro Economic. One of the metrics that the bearish analysts are using, ron, is Labor Turnover within the industry and they say it tends to peak right before recession begins. Is your Labor Turnover in that neighborhood . Our labor tends to be half the industry averages. So we tend to be far less at the effect of it. Weve all seen Labor Turnover go up modestly from where it was in 08, 09, 10 when we were in the midst of a recession and people didnt want to leave their jobs. But i would say for us, its been a very modest uptick and i dont think its indicative of a recessionary environment, at least concerning our company. I think the broader comment ron, good to see you just to make a point, is that the street is responding to this longterm plan that we built and the transformation thats under way and how powerful the initiatives to underline that are working. Thats the story for panera. The stock is up 4 . Ron saich, the founder and ceo of panera. Consumers in focus today. We will sit down with the president and coo of cocacola, james quincey, a brit, later on squawk alley. And sara will be joined by the ceo of mondelez. Irene rosenfeld, an interview on earnings and, of course, the attempted takeover of hershey. We have a fed statement at 2 00 eastern this afternoon. The markets have rallied in the wake of brexit on the idea there will be no rate hikes for long time from the fed. You may find this afternoon they put a september option back on the table. Well see what effect that could have on markets. Back in a moment. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Good morning, everyone. Im sue herera. Your cnbc news update at this hour. John hinckley the man who tried to assassinate president reagan in 1981 and shot three other people will be freed after 35 years. District judge Paul Friedman releasing hinckley to live with his mother saying he no longer poses a danger to himself or to others. Prosecutors dropping the remaining charges against Baltimore Police officers in the death of freddie gray. Bringing an end to the case without a single conviction. Three of the six officers accused were already acquitted, a fourth ended in a mistrial. Russian president Vladimir Putin says the olympic ban on russian athletes is discrimination and that a Political Campaign is being waged against russia. He addressed members of russias olympic team in the kremlin. And the cost of attending a wedding is rising. According to american express, spending and saving tracker, the average Wedding Guest is expected to spend 703 per wedding this year, 5 more than a year ago. Millennial guests are expected to pay more, about 893 on average. Many happy returns. Thats the news update this hour. Lets get over to Jackie Deangelis with the eia inventory report. Good morning, jackie. Good morning to you, sue president the department of energy out with the latest energy numbers from last week. Looks like we got a build in crude oil, 1. 67 Million Barrels and also a build in gasoline, 452,000. We were expecting to see draws in both. You can see a big reversal in crude prices, up over 43 before this number came out. We took about 50 cents off and turned negative after this number. It brings back into focus we have a supply glut on our hands and shouldnt be building this time of year, we should be drawing, even though the draws will come in to be a little slighter as we get towards the labor day holiday. The only thing positive about this gas prices have been pushed down. The average 2. 15 according to aaa. It was 2. 71 last year. Back to you. Jackie, thank you very much. Staying on earnings, cocacola out with secondquarter results this morning. Earnings there beating by 2 cents. But sales missed analyst targets and the company did cut its organic revenue forecast. Joining us from the Company Headquarters in atlanta for an exclusive interview, its coke president and coo, james quincey. Good morning again, james. Good morning, sara. When we spoke this morning, you summed up the quarter as solid progress. But with sales falling and missing the mark and the lowered Sales Guidance where should investors be looking for progress . I think the i think theres two parts to this story. One clearly were being buffered by some for rex and the asimtry of where we own our own bottling operations. When you look beyond that you see the company of the future emerging. Weve got the refranchising on track, really solid Revenue Growth and profit progress in developing markets, the u. S. Being a great example, and in the emerging markets, were being buffered by the macros but resetting the business to set it up for growth in the future and thats the company thats going to power us forward and the company that drove the 4 underlying revenue and meeting the profit expectations as you said. A lot of people look at the company and see falling consumption of soda and, indeed, you did report that sparkling volumes fell 1 . So with that longer term trend in place, how do you turn that number around . I think this is when we need to look at that segmented revenue strategy. When you look at our total business in the developed economies and developing economies, sparkling volume was positive. We were in growth. And actually going into the future is about taking that growth adding on smaller transaction packages and turning into a really solid revenue and Profit Growth story. A bit like what the u. S. Has been playing out the last few years. In the emerging markets, yes, we were impacted in a couple of places like china and argentina and venezuela in volume but were resetting those businesses. Volume growth will return and come with revenue and thats what will put together a puzzle of a future longterm growth trajectory. Can you just map out the time frame . Last year was a transition year. Heard a lot of word transition on the call this morning. So when does coke actually return to growth . You know, cokes underlying business is growing. I think 4 x we cant control and we have to live with that. The refranchising which will remove the midst and confusion around the underlying number weve set out a goal of finishing that by the end of 2017 and were fully on track to do so. You mentioned venezuela, some of the tough Macro Economic environments. Im curious what youre seeing in the uk, not just because that is your home market, but coke sells in the uk, ink about 3 of total business. What did you see before the brexit in terms of Consumer Impact and after . Look, i think the brexit was clearly a surprise to many and i would unfortunately include myself. Inn that. But our business continues to be robust in the uk. We had supply chain problems that was more of the story in the First Quarter. But we got a strong marketing program, innovation, we just relaunched coke with zero, with a more improved formula and improving execution with our new bottling partner Cocacola European Partners which came into being at the beginning of june. Clearly there will be uncertainty around the uk and european connection but our business is set up to return to growth in europe and the uk. Curious how youre viewing m a right now. We did see a deal in beverages this quarter, danone bought whitewave and what youre thinking after we saw the investments in munster and keurig what will see from coke in m a this year. I couldnt comment on whether we looked at that as it would be an m a deal, but we have made a number of acquisitions this year. Whether it was, you know, one of the leading juice and value added dairy businesses in nigeria, which is, you know, a quarter of the african continent in population, were in the process, we close a deal with dubai, a plant based protein drink, which is very big across latin america, weve made investments in china. We are making a series of bold acquisitions which we believe combined with our organic innovation is the model of success that has allowed us to move our stills portfolio in the last ten or so years from under 10 of our business to almost 30 of our business. Wanted to get your thoughts on the soda tax that got passed in philadelphia. Passed in the uk that will take effect in a few years. Is this movement gaining steam and how is it going to affect coke consumers an your business . Look, i think the philly tax i think the mayor has been very clear hes after more money for prek. Its a laudable objective. That should be supported. Unfortunately hes chosen a vehicle not only do we to tnot e with because its targeting us, in all theory and practice says if you want to raise money, he says he wants to do, broaden the base about which you apply it the better. Its disappointing this is the vehicle. A laudable aim. Hopefully that can be changed at some point no. On the broader political environment what are you seeing in terms of the consumer in the u. S. . North america continues to be a bright spot and do you worry about election uncertainty hitting the consumer going into november . I mean, i think maybe there will be some buffersing of the consumer as we go forward. In the end we have a really great run going on in our north American Business. The Beverage Industry is growing dollars. Were growing dollars. Weve been expanding our portfolio, sparkling is growing dollars. Our stills befrms beverages are growing dollars. Were confident we found the right mix of marketing, innovation and execution to drive our north American Business forward. Its had a good run and we foresee that continuing into the future. James, thank you for joining us to talk through those results this morning. James quincey the president and coo of cocacola. Thank you, sara. When we come back today, the fomc wrapping up the twoday meeting getting ready to release its policy statement, 2 00 p. M. Eastern time. We will talk to former fed governor mark olson next. Plus coming up on squawk alley, 11 20 a. M. Eastern saras exclusive with mondelez ceo irene rosenfeld, dow up 11 points having lost its highs for the day. In the middle of the huge week for corporate earnings, where can you find the best opportunities . Our traders weigh in at trading nation. Cnbc. Com. More squawk on the street coming up. You know what, guys . Theres a lot of tree branches and dry brush over here. We should probably move the bonfire over there. [smokey whistling a tune] im guessing smokey liked that idea. News flow ramps up in the second half of the week. Were flat on the markets. Lets get to Rick Santelli at the cme. Thanks, simon. Would like to welcome my special guest mark olson. Thanks for taking the time this fed morning. Thank you, rick. Good to be here. All right. Lets start at the top. Just give me general thoughts you have. Were under 50 of any type of tightening as described by december fed fund futures, although i question its predicative value. Any thoughts on the fed today . Yes. I think that this is going to be like a page three or a page four day. Very little is going to happen and not much excitement, i think with respect to the meeting. I think that interesting thing is to watch for the statement and to see how the fomc members describe the status of the economy and then subsequently three more weeks out what it says in the minutes. When we look at the last minutes, what they were talking about was being very slow in terms of raising rates and im not hearing them talking about a return to the normalizing the balance sheet. So im thinking with whats going on in europe and in the u. S. , theyre going to its going to be a very quiet meeting. All right. Lets look abroad. I personally think as much as i have anxiety about what the fed is doing is going to affect americans five, six, seven years down the road, i think what other central bankers are doing is much more explosive and i think were all tied to the policy of other central banks. So we learn that abe is looking at a couple hundred billion plus of stimulus, core rhoda, of course, is with the bank of japan they have to have formal numbers put on this, its floating a balloon, is there no end to what japan is going to try to do and its kind of scary. I mean if you look at their debt to gdp, long slides since 1989 and almost 40,000 in the nikkei currently under 17,000, why do they keep doing something that, obviously, doesnt seem to be working . Its a tough question to answer, rick, but your fundamental point is exactly right. The interrelationship of the economies globally, money does not know borders as you know. The money will find its own level. And i think what happens in japan, what happens in italy, what happens in turkey, clearly affects what happens in the rest of the world. And i think that if you look at another factor that was discussed in the last meetings, the normal rate of employment, in other words the neutral rate of employment, the where there is no impact on inflation by rising employment, is also up for question. Were even challenging some of the fundamental precepts on which Economic Policy or Monetary Policy has been built over the years. In the final 40 seconds we have left, mark, you know, our fed now has regular comments about the dollar somewhat usual based on history, they take global events, whether its klein or brexit and discuss it, will i ever hear them discuss and maybe slightly scold or discipline or school the bank of japan, mario draghi or are they just in for a penny, in for a pound on all fronts . Final question, final answer. Rick, the only way youll ever hear about that is if you get a chance to sit in on their private meetings. Those discussions happen privately, but theres a lot more respect to not do them publicly unlike much of political america. I got you, mark. I dont know, a scary set of variables here on central bankers. Thank you for taking the time. Simon, back to you. Thank you very much. When we return one of Hillary Clintons economic advisors will join us, partner cofounder blair efron will talk about hillarys relationship with wall street and the big deals his company is currently advising on, including sab miller inbev. Stay with us. Youre watching squawk on the street. Approaching medicare eligibility . Dont put off checking out your Medicare Options until 65. Now is a good time to get the ball rolling. Medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement Insurance Plans insured by Unitedhealthcare Insurance Company come in. Like all standardized Medicare Supplement Insurance Plans, they could help save you in outofpocket medical costs. Taking informed steps really makes a difference later. Thats what it means to go long™. Call now and request this free decision guide and explore the range of aarp Medicare Supplement plans. 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Supporting Hillary Clintons Business Outreach initiative is Centerview Partners blair effron he joins in a first on cnbc interview from where the convention is being held, philadelphia. Typically we talk deals, maybe well talk a bit at the end of our interview. But when it comes to Economic Policy you, of course, are often times in conversations with ceos, with leaders of businesses, not to mention the finance community overall. Why should they support Hillary Clintons economic policies versus those of donald trump . Great question. So i think that first and foremost, it comes down to who will provide steady leadership focused on a longterm growth agenda for the country. I think what youve seen from Hillary Clinton is a lot of discussion about how we think about reinvesting for the long term, in companies not focused necessarily on quarter to quarter, and getting into a discussi discussion on how you build on the progress weve had, 75 months of straight employment and really focused on generational type returns rather than quarterly and annual type returns. Obviously important but i think its a dialogue youve heard from several ceos. Larry fink among them. The notion of reinvesting for the longterm. Big point number one. Point number two, the notion of experience and steadiness as it leads to certainty. The markets and the Business Community like certainty as a general map of landscape. The more we have it, the more we are established and the more i see lieaders willing to make investment in people and in assets. Are you surprised its funny sitting here given particularly when we speak to ceos of international or Global Companies and theres so many that we interview regularly here they seem loath to take a position or a side in materials of the candidates. Are you surprised that the Business Community would be moot to the idea of globalization . What i say is this, more ceos are willing to take a stand this election than several cycles in the past. You have leaders from warren buffet to Aaron Schmidt to Sheryl Sandberg coming out. Meg whitman and hank paulson. Theyre not allowed to publicly endorse because you are the ceo of a public company. Im surprised that there is so much support and our u. S. Companies that are global are nonu. S. Companies that have a lot of business here and actually are speaking up more this election than in previous cycles. In the event that Hillary Clinton loses this battle, she will lose it in no small part and were that to happen because of the argument that donald trump appears to be making very effectively that people lost their jobs and industries have been destroyed because of trade and behalf because of Energy Policy and coal and steel. Are you able to articulate an argument as a group of people that cuts through in important swing states and brings people back on board to the Democrat Party . Very simple. Hillary clinton is for broad based growth. She appreciates more than anyone the need that the rust belt in particular the manufacturing has been and she will continue program reinvestment and recognizes that we live in a work place understood and fundamentally you have to protect American Workers and you have to increase employment. You have to increase wage growth. You have to train workers in the skill sets of the 21st century and she has committed to it here. Youll hear a lot of it tonight and thursday night. She spent 40 years thinking about how to have a broad based growth that works with everybody. People like yourself who are in the broadly speaking finance community seem to be to the key democratic voter these days. I wonder, for example, antonio weiss, could not even get confirmed as an under secretary of the treasury because of opposition from elizabeth warren. Can we expect people like yourself will have a choice in this administration . It would be hard to imagine any of you getting a job given the opposition to those that worked on inversions or done anything in the finance community. Its more about does every american want to see a better country . Of course. The idea that the finance community was in a different place today than historically . Of course it is. But many people absolutely appreciate the responsibility to see growth that works for everybody. Right now the financial community, 26 of gdp and thats not a ratio that works for the broad populous for the longterm. So fundamentally theres plenty of people in the industry that appreciate and embrace the responsibility of an economy that works for everybody. Its an interesting environment right now. Not to mention one in which the government plays an increasingly important role. Only last week another deal or two deals being challenged by the doj. What are you seeing right now in the environment . And perhaps they wont get the approvals they need here and in other countries . Its fairly more difficult to get large strategic transactions completed. It takes longer from a signing to a closing but that said, im actually quite surprised with the level of confidence in a board room and what is the risk reward of getting it done. Taking 12 or 18 months to see something through to completion has the risk of the business youre buying and what you think youre buying and your base business as well. Despite that the m a market this year will be just fine. Were on pace to be the second highest since 2008 and theres a level of confidence particularly given what i wouldnt have expected coming out of the Second Quarter, a level of confidence that its the right environment to think longterm and strategically. Blair, always appreciate your joining us. Cofounder of center view partners. Thank you very much. Next on cnbc, it is squawk alley. Stay tuned. Hey gary, whatd you got here . This bad boy is a mobile trading desk so that i can take my Trading Platform wherever i go. You know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade gain the freedom to fumble with the new water and shatterresistant Samsung Galaxy s7 active. Exclusively at at t. Good morning, its 8 00 a. M. At apple headquaters and 11 00 a. M. On wall street and squawk alley is live
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