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tv   Squawk Box  CNBC  August 2, 2016 6:00am-9:01am EDT

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>> good morning, everybody. welcome to "squawk box" here on cnbc. i'm becky along with andrew. joe is out today. let's check out the u.s. equity futures. dow down by about 26 points. dow has been down sixth days in a row. if it ends down again today that would be the longest losing streak in a year. these have been pretty small declines we've seen throughout the time. it's not a massive decline. you can take a look at what's happening with the s&p 500. the nasdaq closed at the highest level in 52 weeks yesterday is down about 12 points with the future this morning. overnight in asia the hang seng was closed. nikkei was done. after stocks closed in japan, prime minster shinzo abe cabinet approved a stimulus passage. we knew this was coming. finance minister says the bank
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of japan was fully consulted on this and as a result check out currencies. the yen jumping to a three-week high on that news. let's take a look at europe. this point the european markets are in the red. germany down. the cac in france is down 1.25%. the ftse in london off by half a percent. take a look at crude oil this morning. this was a huge story yesterday. wti dipped below $40 a barrel. ended up closing at 40.06. this morning up about 26 cents to 41.31. this is a key number here. this has been the point where the s&p has kind of linked back up with crude oil as crude oil comes down so have stocks at least at these levels. we'll continue to keep a close eye on this today. >> all right. now to the day ahead on the street. sit another busy one. you will see the june personal income and spending numbers.
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both are expected to rise. roughly in line with may's number. also out today july's auto sales. dallas fed president rob kaplan speaking at a conference in beijing china in the next hour. in earnings news, pfizer, pa proctor and gamble. and royal caribbean reporting before the bell. after the close, aig, electronic arts. fitbit and etsy. jamie domon offering a rather upbeat view of the future. >> i wouldn't overreact to short-term data. what we see is more household formation. maikel franco peop more people buying homes. hopefully keep the economy growing. i wish it was growing faster.
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>> now dimon also said he would like to see for stability in the crude oil market, but cautioned what he called reacting to wabls in price. >> we're talking about a decline of over 20%. so you are looking at bear market just in the short-term. >> not sure i described that as a wobble, but that's what he said. short-term data. >> tlilt news for everybody this morning. warren buffett joining hillary clinton on the campaign trail in omaha yesterday and took issue with donald trump's refusal to release the tax returns on grounds he being audited. >> now, i've got news for him. i'm under audit too. and i would be delighted to meet him any play any time between now and election. i'm bring my tax return. he can bring his tax return. nobody is going to arrest us. it is not -- there is no rules against showing your tax
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returns. and just let people ask us questions about the items that are on there. we can all sit there and ask questions. just to see what's in both of those. >> clinton said after she is elected, she would come back to omaha and dance in the streets with buffet. of course nebraska historically voted along republican lines. it's an interesting state because of the way the elect rats arat . >> has one electoral vote. >> getting a trolly for the day or something like this where he's going to take people to vote. he's going to drive some people to vote, but renting the troil to do it. >> just trying to get the vote ut. >> how does this cut. so we have three billionaires who support donald trump, rather hillary clinton, or against
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donald trump in the past couple of days, mark cuban, buffet, and michael bloomberg. some people say that's great for hillary clinton. other people say that's terrible for hillary clinton. >> this is a different election cycle. i think people are looking at voices from the past. choices who have said things before. i'm not sure. there are some people that's going help with. there's others it won't. >> how hard do you think this is for him. that's the most outspoken he's been in the world of politics. he come out in support of certain people over the years, but this to me much more or is vocally. >> i don't know. >> okay. meantime at a rally in pennsylvania. donald trump had harsh words about hillary clinton. trump said he made a deal with the devil. >> if you would have just not done anything, just go home, go to sleep, relax. he would have been a hero, but he made a deal with the devil. she's the devil. he made a deal with the devil. it's true. >> trump said he expects to win
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sanders votes because they have similar views on trade. italian banks in crisis mode. digesting the last friday stress test. julia chatterley joins us from rome. >> reporter: thanks so much, becky. the banks is exactly what we talked about. he said he viewed the stress test results as a success and the progress is being made. on the third largest bank, monte dei paschi, he said the final solution, this private sector recapitalization scheme they've come up with is the best option they've got. first time they're dealing with nonperforming loans. this is what makes this credible. he also more importantly says he'll continue to fight against imposing any losses both on international investors, but also on retail investors. the bondholders in the banks here in it live. he said impoedsing the losses
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the so-called bail-in would be a toxic procedure. listen in. >> i don't agree with the new legislation in europe, but obviously i respect that. i don't agree because i believe the priority in this moment is give confidence to the citizens and if we continue with terror of bail-in, is this a problem for the sentiment of confidence of european citizens so for me thrks , this is a mistake. >> attacking the bank is not a financial issue. it's also a critical political issue ahead of a key referendum on political reform to be held here in october. it's basically becomes seen as a confidence vote on prime minster renzi. a confidence vote on italy in the eu and we've seen how shocks
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can happen in regards to the brexit vote we saw just a month ago so tackling the banks is part of the problem, but this also has become a fight for the political future of the italian government. back to you. >> julia, thank you very much. for our viewers that are not following italian banks and i certainly understand why you wouldn't, it is incredible the losses that we've seen. the best performing italian bank stock is unicredit. that's the best performing italian bank. you have as you mentioned bang of monte dei paschi, 80% loss in 12 months. banco popular down 81%. you've got unicredit down 70%. i know these are not household names, but these are the biggest banks in one of the biggest economies in the world and they're down 60, 70, and 08%. it's simply incredible what has happened to the banks. >> we saw that happen here in the united states back in 2009
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with some of the financials too. obviously the that i think so needed to happen to those banks, it's been put off for far too long. >> jay my diamond yesterday. he said yes the european banks probably need recapitalization. i know it's not getting a lot of play here. these are not household names or banks most of our viewers are going to use. they've got a little -- it's hard not to say. there's a mini financial crisis happening in europe. >> long overdue. let's talk more about the markets right now. the dow logging a six-day losing streak to kick off the month. we are joined by jonathan. chief u.s. market strategist. covering the economic angling for us is bruce kasmon. gentlemen, welcome to both of you. >> jonathan, why don't we start
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off talking about the markets. people are getting nervous heading into august. what do kroi think happens in this scenario because there are so many moving pieces right now. >> you know, first the earning season was good enough. we had negative growth, but the beats were reasonably abundant. the back half of the year expectations the earnings continue to improve and go back into positive territory, but i think the real big issue here is the return of capital that shareholders are getting from companies is so much higher than what they're getting in the bond market that it really continues to force investors into stocks. >> you're still talking about there is no alternative. >> i wish that it was more complicated and interesting than that, but i think that's probably the truth. >> bruce, the big question really has been what do we do now that we look at gdp numbers that were so disappointing last week. we're still watching the jobs number ofs closely this week. do you think the economy is going to be able to hold up the
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second half? >> i think the economy is going to grow. i think what you've seen -- it's better than we've been the last few quarters. the corporate sector that has had to adjust to pretty significant hit to profitability related to the rise of dollar. the energy sectors. and also productivity performance. there was ra risk here that would magnify and we saw the job numbers starting to slow. we've had some good news lately the dollar is no longer going up. energy prices is no longer a significant drag. >> but the energy sector i would echls also has moved down a large amount as a share of the economy. its ability to provide impact outside of financial linkages has gone done. >> i don't think -- well, it's always depends on why energy prices mover. we're seeing globally is goods demands picked up.
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i don't think the fall in energy price is reflecting a new shock to global demand. the u.s. corporation sector is the key issue right now, and i think obviously the payroll number is central to this. i think what we saw in the june report and what we expect to see in the july report with 175,000 jobs being created is telling us that things are great, but they are not magnifying to the downside of what we saw in first half growth. >> you're talking about the u.s. corporate sector because of corporate spending and ability to put money back into thele economy has been one of the big hits we've taken on gdp right. >> that's exactly right. the problems really relate to the profit drag we've had over the past year. dollar is part of it, energy is part of it. we don't want to forget the weak productivity performance. we've been living in a world where the economy is growing just over 7% in the last year. we still had unfloimt go down. that's good for labor income and showing in the consumption
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numbers. that's been one of the central problems we've been facing. >> we got this really lousy gdp number the market rallied and people were asking is bad news good news, but the reality is the big downdraft in gdp was on weaker inventories. a weak inventory tends to bel self correcting. you're right in the trend of 2%. i don't think the market looked at this as a sign of real weak nts. remind you 2% is not a gang buster economy. >> what is really a quote, lousy gdp number. consumer side which is 70 to 75% of the economy did pretty well. to you point, bruce, you've got lack of business investment. much of that is coming from oil and gas. remember the oil and gas is the only industry in america that created jobs dregtly arodys
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vizcaino the financiafter the f crisis. much of that is gone. we see the price of oil tick back up we might see a resurgence, but if not, we could see a lousy gdp number. probably going to be centered mostly on that one sector. >> we also had at the beginning of the year all this esession nare concern that caused business to pull back a little bit. this is just a follow through of the market downturn in february. i would think you're not going to see the back half have anything like this. >> we did segments especially a year or two ago where we talked about energy being so important. it might skew the data to give the me exception the economy was stinking it up, but in reality things were okay outside of that sector, but if y. reality you're probably doing okay. you just need to help in that
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one subject. >> i speak from personal experience. >> same with corporate profits. if you look at x energy, we haven't had a single down profit quarter in the last year and yet everybody talks about this having beena disaster. >> to ignore the effects tofs dollar, the energy sector hasn't shown up new a broader adjustment to business spending. the inventory side is a good thing because it's gotten down lean. it's been there. it's been a drag. it showed up in hiring. the important thing right now is we're starting to see that set of drags fade and that's why friday is so important of course, but to lose sight of the fact we have had this big adjustment in the u.s. economy has been in a soft patch is missing the point about what's driving the world here. >> very quickly, on friday, what's a number you would say this is a reasonable number thrks is a fair number, what
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something that below it would be. >> we think the trend is now settled into something around 150,000. something in that range around that. obviously one payroll number as we've seen could be very volatile. also keep in mind, we also think it's about an 80, 85,000 number that's consistent with the stabilization. the unemployment rate. we have markets. we're looking for the number. hit a cycle high of 2.7. without a pick up in productivity growth. the underlying economy is going to be down. trend like basis of corporates recovering the lost profitability they've had. >> bruce, i just -- do investors get the fact that 85 thousand is the new normal in terms of keeping the unemployment rate here. my gut is that they'll look at 100,000 print ads being a deceleration and what i'm hearing from you and other economists is that's where the tren
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trend needs toe be to keep the economy on track. >> we have to realize, 85,000 trend on payrolls is probably consiste consistent. we have a set of other issues about momentum and behavior. >> we heard from dudly and others in the fed is if the u.s. economy sharply improves, they are not going to raise rates any time soon. they have set the bar higher themselves by saying they are looking for strong improvement. >> i think that's right. i think they're going to be very patient here. if we're sitting here on the second half of the year, core inflation, pc inflation is moving towards two and growth is sitting at two, you can decide on timing, but the fed is going to have to start reconsidering whether normalization is right. they have one forecasted tightening in there projections for the year. that seems about right although it will be at the back end of the year. >> thank you for coming guys. all right coming up on
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"squawk box," the cdc making history. , first travel warning within the continental united states. it's all because of the zika outbreak in miami. at the top of the hour, cdc will join us live from atlanta with everything you need to know about zika right now. "squawk box" will be right back. i'm just a guy who wan.
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welcome back to "squawk box." nick denton personally filing for bankruptcy yesterday. this comes after several appeals to prevent hulk hogan from collecting. gawker's media groups and brands will thrive under new ownership when the sale closes in the next few weeks. on this birthday for me, i'm consoled by the fact my colleagues will be freed from the tech billionaires vendetta. neck denton is going to join us today. we'll talk to him all about it. in the meantime officials in florida confirms 10 new cases of zika. bringing the total to 14. florida governor rick scott calling on the cdc to activate a an emergency response team to assist in the investigation.
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eamon javrs is here. he joins us with the latest. >> good morning. white house officials saying the teams are in fact on the way from the federal government to is the state of florida and they're also saying they are warning pregnant women not to travel unnecessarily to a north miami neighborhood. here's what we know as of right now. as you say, 14 cases have been determined to have developed locally. that means people who caught the vice in miami in that neighborhood not while traveling overseas. active transmissions are occurring in wynwood neighborhood. cdc is sending the emergency response teams in addition to teams that have been on the ground for months now in the state of florida. apparently this is the first time the cdc has issued a travel warning for a place inside the continental united states. there is some good news here about zika and one of the good pieces of news is that the mosquito that carries zika, the
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versus, only travels about 150 yards during the course of the life cycle so that means this can remain relatively lowballized. that's why that one neighborhood right now is pretty much the focus for officials, but the bad news is it can be very damaging for pregnant women or women who become pregnant in their in facted with zika. could have very bad outcomes for the infants of those women. officials very concerned here, but not necessarily expecting this is going to lead to a massive escalation. they do worry this is just the beginning. >> eamon, i think that's the key point. this potentially being just the beginning. this is something the cdc has warned about. they thought there would be active transmission cases in the united states. this is proof of it. look, wherever you have people coming back from south america or other potentially infected places you could see other mosquito transmissions cases pick up.
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we haven't heard much about it yet. >> the particular challenge is this type of mosquito who carry this is type of virus. eradicate the tiny little drops of water. under a storm drain or in a gutter, all of those places can be hiding places for these mosquitos and officials are worried the spraying that they've been doing so far is not effective. it might be the case that these mosquitos are developed a resistance to some sprays they're using. they're trying to rotate the types of sprays they use. limit the spread of this virus. >> thank you very much. by the way, we should tell you thomas freeden will be joining us at the top of the hour. >> what a story. i know we're all interested. i know you are an expert in this story and worried. we're all worried.
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>> coming up founder elizabeth holmes making her first public appearance since being banned from an operatediing clinical l a look at s&p winners and losers.
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welcome back to "squawk box" right here on cnbc first in business worldwide. take a look at u.s. equity futures ahead of the markets this morning. we're looking at some red at the moment. dow looks like it will open down. nasdaq off about 12 points in the s&p 500 looking to open down as well off about 5 points. recapping this morning's top story. this may be weighing on the shinzo abe cabinet approving a $274 billion stimulus passage overnight. you think that's good. in some ways it is. the yen jumping to three-week high on that news. there's a good side to that. and a bad side. >> i heard this morning coming in listening to worldwide exchan exchange, this is japan's 26th stimulus passage since 1990. >> worked well. >> too early for that kind of sarcasm. >> 26. >> will i was actually surprised
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by the move in the yen, too. >> the yen is stronger only because the stimulus program was not quite as big. >> as people had thought it would be. >> 26 stimulus programs in 26 years. >> right now it's time for your executive edge. founder elizabeth holmes making her first public appearance since getting banned from operating a clinical lab. she joins us now. this is the first time she's spoken in quite a while. >> that's right. everybody was looking for data. looking for transparency. wanted information about how this miraculous shomachine work looking for data and also looking for an emission they had done something wrong. this is what the experts were looking for. one of these things she started out with her her pent takes was the closest she got to that. >> i wish that i had started earlier in the context of
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building the scientific and medical board we've had the privilege to build and now working towards the peer view publications. that's not going to happen in one day. that's going to happen over time. >> that frustrated people in the audience and moderators who have been critical. a lot of people wanted to know about this machine we know as edson. this is what they were doing for the last few years we thought and they were open to the pluck through walgreens. when she talked about was a new machine called the mini lab. this is completely different than what they were doing before and working through getting the tests going through the fda now. >> in other words, edson doesn't work. we talked to colby from the cleveland clinicic who agreed to sign off and take it in house and see if it worked. the last we talked to him, she never handed other any of this stuff. >> you're right. what you're expressing right now is sort of tone of frustration that was flowing through them yesterday. we have another from elizabeth
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homes trying to ask her about the past. listen to this. >> the technology we presented today is the latest version of our mini lab technology and all of the capabilities that we presented, what we wanted to do today was introduce the invention which we're pretty excited about in the context of the ability to integrate multiple methods on to a single platform for a first time. there's a lot of questions about the past and in the appropriate forum we'll address those. today we're hoping to engage on a scientific platform. >> this was the message over and over. don't think about that, think about this. >> were there people whispering in the room the whole time thinking what is going on with this person. >> it got worse than that. when people asked for specifics, people would applaud. are you going to make this available for other lab tests and she said we're working on that right now. no specifics.
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we sat down with experts. take a listen to david cook from emeory university how he reacte. >> i'm a bit disappointed. i can use that word fairly. after all these years and all this excitement and intrigue about it and a lot of us were very excited and intrigued about what she was talking about, what the promise was, i don't think it's quite there yet, but at least the positive view, what i am encouraged, she said i should have come years ago. >> these folks were being very, very fair. very open minded. they hoped the technology worked and what we heard about was a present take on something else. >> there was a lot of promise. there was a lot of excitement. a lot of us were excited about this and i think that's where the frustration comes from. that's it. the idea that you've promised for years that you were going to deliver on this.
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your were going to show us that and not you're not talking about it anymore. that's where the frustrate trags coming from. >> that's right. what happened for the last three years when we heard presentation after presentation about how incredible this technology was. i had one person describe it to me as sounding like magic. they wanted to know what made testing on so little blood possible. what they did present is pretty cool. it sound cool. you're talking a home lab and uting it into a box. they have a zika test. >> prove it. >> give it to experts. >> particularly after the troubles you've gone through for many years where people have not been able to follow through. at this point, prove it. >> have you ever heard the term vapor wear. when a software company says we're coming out with this and a stock moves or people invest, but you're waiting for that product. bas based on your reporting which has been awesome by the way, all
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of people you talked to, there's one of three outcomes. the product will work, it just needs time. the product may not work no matter how much time they put on it and the product doesn't really exist. based on everybody you've spoken to, not personal opinion, but people you've talked to, which one of those do you think is the most likely outcome. >> the reaction i heard from people yesterday was perhaps something is there and they're making the right stems by coming to the conference and presenting some data. we need to see more. accomplish in peer review journals. >> what is the economics of her and the company at this point. they have a lot of cash still. no one is asking them to return the money. >> it's unclear. i'm trying to figure out if there's a secondary market here or if people are trying to get out of the original investment. nobody can get out even if they wanted to. nobody would buy the shares in the second dare market. >> the shares are worthless.
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>> and no idea about the cash flow either. not transparent. >> they can't raise more money. >> let me ask the same question you just asked in a different way. is there anybody you've talked to again, real people, in the scientific communities that feels like maybe there's just not nip of there. inni i think there's a real possibility there won't be an edson. >> ever. >> oh, i think people think aside from they a atheranos. whether it's there, lit railly the phrase i kept here was being switched. hey, look over here. we're doing this now. i think there's more questions
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than answer. >> and there's a lot of skepticism because they haven't followed through on promises they made at this point. >> that's right. there's hope the scientists they bought on the board, many are very respect instead this community will turn them in the right direction, but have to wait and see. >> own deck, what are the best investment ideas in technology and health care right now. you're going to find out plus a new way to invest in 3d printing. what's working series continues and as rehead to break. let's get a quick check at the european markets. italy dragging down europe once again. the dax is down. we are back on "squawk box" right after this. mary buys a little lamb. one of millions of orders on this company's servers.
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there aren't captures because it's being powered by deflationary forces. >> first to that point. we'll get to your second point first. yesterday jamie dimon said i don't think the gdp numbers are that accurate. sounds like you feel the same way. >> absolutely. there are going to be more and more misleading. if you look at auto sales. we think ford is right it's peaked. it's a secular peak. this movement towards ride sharing is going to eliminate a lot of auto sales.
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>> okay. >> now let's get back to your first point. does it bother you that facebook's market cap is more than exxon despite exxon having ten times the revenue. >> it doesn't bother me at all. we think energy prices. >> justify that valuation. >> first of all, let's talk about energy prices. if we're right and electric vehicles are going to take off, electric vehicles are four times more energy efficient than regular cars. a lot of people say yeah, yeah, yeah, when you put kas lean into your car, you loose 80% of it when you're putting the wheels forward. we think oil prices haves a big problem as electric viex. >> i'm nor interested in facebook. justifying the facebook valuation. >> facebook is really taking massive share. it's changing all of our lives.
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seems to be getting into everyone's media company face so we think it's worth ten times the sales. if you look at it as a multiple of cash flow, we're not talking more than 25%. we just talked about an acceleration in top line growth of 52 percent to 59%. something is happening out there. big share shifts and facebook is one of the major beneficiaries. >> the idea of this pace. >> this is what people have been saying for o long time. the key thing they do is measure engagement. they're user engagement. if they see that falling off at all, they change the strategy. so far, so good, right? >> amazon, again, google. i'll call it goog.
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alphabet. the figure on the top of my head is double that entire small cap 600. 600 companies doubled that. three companies more than that. i don't want to be cynical, but having lived through 1999, 2000. is there any fear you've got across the board that eventually people will stop paying for the multils in the reference cap. >> well, if the growth continues, the stocks will continue to appreciate. the growth is going to continue to surprise on the high side of expectations because these are network effects taking place. the bigger getting bigger. we think each one of those companies could be a trillion dollar company. that sounds crazy and a lot of people who used trillion valuations back in the tech bubble, i was there, regretted it. it set us up for what we're experiencing now. >> that was 16 years ago.
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>> there you go. >> let's talk about a stock you like, aluminum. what do they do, why do you like them. >> alumina has 90% share of all the base payers of dna sequenced in the world. it's a dna sequencing company so it will understand your diseases and how you metabolize drugs, and also for people with cancer, it analyzes their cancer tumors and understands where the mutations are, so that it -- this is any dna sequencing, alumina doesn't do this itself, but it sets other companies up to do this. >> alumina, facebook, google, and amazon. we appreciate you coming in today. >> pleasure. >> thank you very much. >> folks, we have just been taking a look at some of the things. we do expect numbers out from two dow component this is morning. fiezer and procter and gamable. we are awaiting those numbers.
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should be coming soon. >> we're going to talk uber selling the chinese brand and rival. we're going to talk to an uber a adviser, bradley tusk, right after the break. every year, the amount of data your enterprise uses goes up. smart devices are up. cloud is up. analytics is up. seems like everything is up except your budget. introducing comcast business enterprise solutions. with a different kind of network that delivers the bandwidth you need without the high cost. because you can't build the business of tomorrow on the network of yesterday.
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welcome back, everybody. take a look at pfizer share. the stock trading up. the dow out with earnings. looks like earnings per voluntary came at an adjusted bases. also if you look at revenue it came in slightly above at $13.1 billion. that is just above the $13 billion the street had been anticipating. they're also talking about for the full year, they're seeing adjusted to 2.48. and that does straddle where the street is. pfizer making a few comments saying the performance was driven by all areas of the company. they are talking about second quarter revenue reflecting % operational growth driven. and we will continue to dig through some of these headlines. we're talking with barbara ryan coming up in minutes with more on this. uber announced it's selling
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china portion of business. are they throwing in the towel or is this is savvy business move? brandon tusk is with us, he's been an uber consultant on policy and political matters. we're thrilled to have him here this morning. >> good morning. >> if you look at "wall street journal" this morning, headline right here. uber's retreat shows limits u.s. companies face in china. similar here. even uber couldn't bridge the china divide. this is in "the new york times" this morning. >> your ft headline, if you want to point that out. >> we can show this one too. as it pulls out of battle for china. three for three. >> you raised two possibilities in the intro. i would argue that any time you can take a $2 billion investment, turn it to $7 billion in equity that will likely be worth three, four times that in the next few
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years, that's a savvy business move. >> the larger question for others. can you do business in china. >> at least if you look at it from a tech standpoint, on one hand travis got further than anyone else had. 150 million rides. now 20% of didi. but he is in my experience the most aggressive, most savvy of anyone i've dealt with. if you are a sharing economy company and you were integrated into the local economy, so local drivers, local hosts, everything like that. then how the local culture works, local laws and regulations are important. much, much harder. if you're a hardware manufacturer. if you're a btb company and selling software, i think it matters less. if i were looking at it, it depends on the business you're in. >> all right. long-term policy -- here's a policy question for you. the segment just before you was about amazon and facebook and
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google. and now we're talking about uber/didi. and there's an argument to be made all these businesses are ultimately -- it's what peter thiel said. ultimately a monopoly. >> right. >> long-term, do you look at what's going on in china and look at all these businesses and say they will become monopolies and is that a good thing or bad thing from a competitive perspective? >> right. it's a great question. based on the history of business in china you would think they probably will become monopolies. and i think the uber/didi merger is probably a good sign of that. obviously the u.s. government has been aggressive in trying to prevent that. worried that microsoft was a monopoly. they took that on and eventually split it up in many ways. i think it depends on where the rule of law is being applied. one is didi had been a major
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partner of lyft. uber is a much better company than lyft. if i'm lyft, i'm worried about that. does that mean uber has monopoly in the u.s.? maybe, maybe not. >> when you say this is bad for lyft, ultimately you say didi merges with uber globally? >> i just say if you've got a stake in uber and lyft, you'll double down on uber. >> what does it say on apple which has a stake in didi? >> basically everyone owns everyone now. so there are so many different people that have ownership in uber, in lyft. i think where it gets interesting is there are five companies and a few other big players working on autonomous vehicles. now they all own pieces of each other. they're competing on who is going to be first so how that
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plays out is going to be interesting. >> the last time travis was on, he sat there and said he wanted to avoid an ipo for as long as possible. it's been a mantra of his for years now. does it change in that you're no longer going to show these losses in china in a way that was shown earlier? >> i was asking you that question before we went on air. i've been working with travis for five and a half years now. whenever i think he's going to go right, he goes left. i remember acquiring whatsapp. as an investor in uber, i learned trust in travis. >> i was in an uber three weeks ago and the driver tried to sell me on a different car sharing app. he said have you tried juno.
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he literally texted my phone and said download this app. i thought, uber's own drivers ar trying to get me to use a competitor at discounted rates. it doesn't seem like there's a large barrier -- >> i would say this. about the s there a monopoly, the answer is no. there's a lot of people who can enter into a field. for competition, that's a good thing. what it also says is drivers are truly independent contractors. you saw class action lawsuits about trying to make drivers full-time workers. but the fact your driver is trying to sell you on another service, they are on their own. >> uber, look, their ultimate plan is to get driverless cars. they have shown no loyalty to their drivers either. >> the fact you have more uber drivers than taxi drivers in new york city, if you assume people are rational actors, they're choosing to become uber drivers for a reason. but at the same time if they can make more money on juno, then that's what they should do. >> okay. thank you. >> appreciate it.
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when we come back, results from procter & gamble. we'll have the first on cnbc interview with the cfo jon moeller. that's next.
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you know what, guys? there's a lot of tree branches and dry brush over here. we should probably move the bonfire over there. [smokey whistling a tune]
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i'm guessing smokey liked that idea.
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new this morning, an urgent and extraordinary new warning for pregnant women after a jump in the confirmed cases of zika in south florida. we are joined for the latest on what you need to know about the virus and how to protect yourself. procter & gamble out with quarterly results. the cfo is here with the latest. plus pokemon go hits a milestone. the mobile game hitting 100 million downloads. it is now being used more than
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facebook and twitter. how the game has also led its creators to a courthouse. details straight ahead as the second hour of "squawk box" begins right now. live from the beating heart or business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm becky quick along with andrew ross sorkin and brian sullivan. we've been watching the futures this morning and they have been under a little bit of pressure. it's been easing off over the last hour or so. the dow futures now down by about 16 points. s&p futures right now off by just over three points and the nasdaq down by nine. we've also been keeping an eye on oil prices. wti this morning, it has picked up some ground. it's up about 54 cents to $40.60. yesterday crossed below $40 and that set off a lot of alarm
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bells. that's why we're keeping a close eye on it today. brian? >> i'm trying to understand these numbers, by the way. sometimes on live tv you want to look at the camera and be like, i know everything. i do not. here's what i can tell you at procter & gamble. the revenue and we care more about top line than bottom line, came in better than expected. $16.1 billion. had an estimate depending on who you asked about $15.8 billion. so on that basis, sales better than expected. here's what's confusing about png's numbers. that they're coming out and from the release which is just bizarrely written even for an earnings release, they're warning of two things. they're saying that eps growth in the first quarter of fiscal 2017 will, quote, be disproportionately impacted by foreign exchange headwinds. okay? they're saying currency translations are going to be a
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bad thing. they also note the impact of lost finished product sales to their venezuelan subsidiaries. so the point is procter & gamble, revenue looking a little bit better. the eps number and i'm not going to give you one now because i don't have a clean number. but it looks like p&g is saying next couple of quarters, we've got headwinds and venezuelan issues. so starting off with a relatively concerning tone. but last quarter revenue did beat. >> there are a lot of different numbers here. the estimate of the quarter was 74 cents. they say diluted earnings per share were 69% but that did include the -- >> 69 cent. so basically they missed on the headline. >> but they also say core earnings per share was 79 cents. and a higher core effective tax
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rate versus the comparison period. >> the difference is what we're looking at. >> i know this. one of the issues is that they sold a bunch of brands to cody. so the comparison from when they had these brands and now is going to be different. because cody bought a couple billion in business from procter & gamble. so that's gone. you can't make the clean comparison of one year ago because it's a different business. but i will say this. core earnings you said 79 cents. they talked about increased marketing investments, lower gains. it appears the gap eps number here is a slight miss. can we agree on that? >> i would say probably the 69 cents. we're going to have jon moeller with us, the cfo, in just a moment. they do talk about how the fourth quarter was a period of progress in what they call strong top line growth, bottom line growth, and cash
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generation. they say they grew organic volume in sales and all reporting segments and innovation and advertising funded by strong productivity improvement. >> okay. if the 79 is what you're going for, it's a beat. and that's our headline right there. but they wiped out 10 cents because of sales and whatever. they talked about currency headwinds, they talked about lost business to venezuela. thank goodness the cfo of procter & gamble will be joining us here. you can't mess with the revenue number nap beat by $300 million. jon moeller is going to join us in a couple of minutes. nothing better than live math at 7:05 eastern time. in your headlines this morning, dow component pfizer with 64 cents per share. that was 2 cents above the consensus. revenue also above the consensus. pfizer saying results was driven by strong across the board. more on pfizer's quarter coming
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up. also a busy morning for etna. announcing it is withdrawing all public exchange expansion plans citing significant structural challenges. and it announced a sale of some medicare advantage. of course the justice department has sued to block that deal. there's no clear indication that the deal with humana will happen. meantime, mcdonald's saying it will no longer use corn syrup in its hamburger buns. also breaking news that there was corn syrup in their hamburger buns. instead they're going to replace it with sugar. that their hamburger buns. mcdonald's also eliminating artificial preservatives from the chicken mcnuggets as well as several breakfast items. >> i'm with you. i know there was corn syrup in there. >> a little sweet. >> somebody told me there was
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more ingredients in the bun than in the burger. >> it's possible. think about it. anyway, in the meantime, jpmorgan offering an upbeat view of the future. dimon was asked about the gdp report. >> i wouldn't overreact to the gdp data. what we see is more household formation, more people buying homes with b more people with jobs. those are all a good thing and hopefully will keep the economy growing around 2%. >> and dimon also said he'd like to see more stability in the crude market but cautioned against overreacting to wobbles in prices. the cdc issuing a warning to pregnant women to avoid traveling to the area of miami that's seen 14 confirmed cases of the zika virus that were transmitted here. joining us is dr. thomas frieden.
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sir, thank you for being with us this morning. >> good morning. >> you know, you warned us about this a few months ago. you said that it was very likely that the first transmissions of zika would occur in the continental united states this summer. are you surprised by what we've seen? >> well, what we're seeing with zika is we're always seeing it behave in ways we've never seen a virus behave in before. we've never had a mosquito borne virus cause birth defects or that can be sexually transmitted. now we have an area north of mid-town miami -- downtime miami we have an area where there have been a dozen cases where infections spread by local mosquitoes. we're not yet seeing the knockdown of the mosquito population there. that's why we've advised present women not to travel to that specific area and for women who must live or work in that area, to do everything possible to prevent mosquito bites.
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also pregnant women all over the southern u.s. where this mosquito lives should take steps to protect themselves from mosquitoes. >> i think that's the bigger question. people are probably panicking at this point trying to figure out if they're in danger. this is someone you say anyone who's been there in six weeks should make sure they get tested. . and my guess is pregnant women everywhere are panicked about this. what are you telling them? >> it's hard to protect yourself from mosquitoes. putting on deet on all exposed skin, long sleeves, long pants when possible. staying indoors in air conditioned or screened space. that's not easy to do. and it's particularly important in this area. but until we're through with mosquito season, anywhere in the u.s. where this is present, there's a potential risk. that's why we're advising women to protect themselves. >> where is that in the united states? where should women be particularly concern snd. >> about 30 states in the u.s.
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generally in the southern u.s. that have this particular mosquito. there's also a mosquito that's less efficient at spreading zika in 41 states. so it's really in most of the country in the southern part. but this also shows how important it is that we invest in better ways to control mosquitoes, better ways to diagnose zika and ultimate a vaccine. >> practical question. i'm going down to rio and i recently asked my doctor. when i get back, i'd like to get tested. he said actually not so easy. it's not that you can just send this off to quest diagnostics and they'll take care of it. can you do it and how do you do it? >> well, cdc has developed a couple of tests that are now available through health departments. we have produced actually a million test kits for use throughout the world, throughout the u.s. that's what's being done to document the infections in the u.s. and globally. we've offered those tests to
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private labs and we hope in the coming weeks they'll begin offering them to the public. but really -- >> but they're not doing that now. just to put a fine point on it. >> it's a little more complicated than that. if you have symptoms, yes, you can get tested. if you're pregnant, you can and should get tested. if you're just curious to know if you're infected, that's a little more complex. you can get a false negative result from that. the bottom line for a male who visits rio or any other place zika is spreading. your partner is pregnant, use a condom until the end of pregnancy. if you're considering pregnancy, you may need to wait some time depending whether or not you had symptoms before getting pregnant. >> what's the risk of the diep of mosquito evolving. >> it's resistance to insecticides. where we've seen explosive spread of this virus, the mosquitoes there are resistant to almost all of the first line of insecticides. we don't yet know whether the
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mosquitoes in miami are resistant to this insecticide. if they are, that could explain why we're not seeing a knockdown no the populations. it's also difficult to get rid of standing water that the mosquitoes breed in. these are difficult to control. quite different from the mosquitoes that spread other infections. they live indoors and outdoors. they breed in tiny amounts of water. they're difficult to get rid of. >> dr. frieden, i saw the warning from the cdc yesterday and it really said that women in the first or second trimester were the ones who needed to be most concerned and they were the one who is should get tested. i've spoken with an infectious disease doctor saying, look, that's when microcephaly occurs after 22 weeks it's probably not the likely scenario. but we don't know what zika does to development beyond that. we know it will pop up in all sorts of places. so women in third trimester
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shouldn't feel like they have a free pass, should they? >> absolutely. we are saying women should be tested in the first and second trimester but all pregnant women should avoid this area north of downtown miami and any area where it's spreading. but the recommendation is for the first and second trimester. but the point is important. we know that microcephaly occurs and is caused by zika. what we don't know is for the thousands of children who will be born to mothers who don't have microcephaly, will they have other neurological problems? we may not know that for months or years to come. >> not to scare people, but what multiple of people out there do you think actually have sica in the united states and don't know it? >> well, about four out of five people with zika don't have symptoms. we've already had 1600 reported cases of zika. the vast majority of them with symptoms. so we have there have been thousands of people in the
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continental u.s. with zika. puerto rico has high infection rates. we anticipate unfortunately by the end of this year, around one in four people in puerto rico with a population of more than 3 million will be infected. >> just to put a fine point on even back to this miami example, if there are ten people that are now listed, if you will, you're arguing or suspecting that we're talking about -- or 14 now -- you would multiply that by five? >> no. because actually what happened in miami is the health department there was very proactive. they went into the community and did testing and they identified both in community and in work sites people without any symptoms. so they're infections but not formally cases of zika. that indicates they're finding the symptomatic and those without symptoms. but i have no doubt as they look more, they'll find more cases. the question is going to be where are those cases and how recently did they occur?
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>> how confident do you feel in the testing we have? given the problems with the testing, the negative false positives or false positives you could get with one of these things. could there be pockets here in the u.s. right now and we don't know about it? >> there's two questions there. the testing in the laboratory is pretty accurate. we don't have a way to test if someone had zika 6 or 12 months ago. that's something we need to research. the other question is will we find it when it's happening? because four out of phi cases don't have symptoms, it is possible there are small local transmissions we won't see. what we've seen with dengue and chikungunya, it starts to spread in a local area in florida or texas or somewhere, it stops after one or two cases. occasionally we see an outbreak or cluster as we're seeing in this one neighborhood right now in miami. and our focus now with our
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emergency response team is to work with florida to do everything possible to stop it there. >> dr. frieden, my doctor -- i'm pregnant. my doctor has told me for months i shouldn't travel to florida or even places in the south of the united states. are they being overly cautious or in hindsight it looks like they gave me good advice? >> every individual, every doctor has to make their own decision. that's their decision. our role is to give the data. and the data is as far as we know zika has not been transmitting in the u.s. until the last six weeks. we continue to look at the information every day and to provide that openly and rapidly to the public. >> you need help from congress at this point? >> it would really be helpful to have the robust resources we asked for so we could mount a robust response. that includes coming up with better ways to come up with
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testing and resources. and ultimately a vaccine. >> thank you for your time. coming up, the cfo of procter & gamble will walk us through their quarterly results. plus italian prime minister matteo renzi speaking out. and then earnings from pfizer also out a short time ago. we're going to run you through those numbers and hear from pharma analyst barbara ryan about whether or not she likes them. a lot more to do. don't go anywhere. "squawk box" right back after this.
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welcome back to "squawk box" this morning. procter & gamble just out with quarterly results. joining us is jon moeller, cfo of procter & gamble. he's also a member of our cnbc global cfo counsel. looks like you beat on the top line. i don't know if you heard us trying to understand how to think about eps. i know there's a diluted number, a core number, there's a couple of things moving around there. help us through how we should think about this. >> generally a pretty decent quarter. we continued reducing costs, reinvested that on top line growth as we work to drive balanced top line, bottom line, and cash generation across the business.
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organic sales were up 2% versus a year ago driven by volume growth. sales was up -- were up in every segment. and we addressed a nice triple digit basis point with gross margin improvement. a good base to build on. >> hey, it's brian sullivan. we like clean numbers here. and our audience does too. is 79 cents, then, the correct number to compare to the 74 cent estimate? >> that's correct. >> okay. so we could say it was a top line beat and a bottom line beat as well? >> correct. >> okay. because there was a 69 cent number there as well. you talked about foreign exchange headwinds. the transfer of some of the assets to cody and also venezuelan problems. >> we got a lot going on here. which is a good thing. we're on the middle of the biggest transforms of this company. totally transforming our cost
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structure, our balance sheet. as you mentioned. working to strengthen and simplify our portfolio. rebuilding our product supply symptoms around the world. so unfortunately in the midst of that there are moving pieces. >> you talk about restructuring the company trying to take $10 billion of cost out of thus thing. where are you on that? >> well, we started a $10 billion cost takeout program in 2012 which we've exceeded. we're targeting $6 billion in cost of good savings. we delivered $7.2 billion. we were looking at a 10% reduction in overhead enrollment. we're now at 25%. two and a half times our original target. we're down about 25% on the same site basis and enrollment in our manufacturing basis. we significantly reduced the cost of our agency and production costs. so really a strong track record which we intend to build on
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going forward. delivering up to another $10 billion over the next five years. much of which is going to be reinvested to accelerate top line growth. >> a lot of investors have been curious how things are going in china. there's been market share there. what's the latest? >> china in the quarter we just completed was even with a year ago which is an improvement from where we've been. now even. so we're making progress of getting back to market growth rates. long-term china -- it's our second largest market in terms of sales and profits. there's nothing not to like long-term. if you look at what's happening in that market in terms of the premium of the market, the top two prices are growing. a far cry from kind of the 2% of consumption they represented when i worked in china in the '90s. moving from one family -- one-child households to two-child households. moving from manufacturing-based
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economy to hopefully more of a consumption-based economy. it's an important market for us. we have a little bit of work to do to get our portfolio balanced and get in the right channels of distribution. but we're making progress. >> if the u.s. dollar continues to strengthen, what is that going to mean for you in quarters to come or are you hedged enough to deal with it? >> we have not assumed any move in the currency beyond current rates in our guidance. so that would be a challenge we need to work to overcome. much as we've done the last four years. over the last fur years we've had $4 billion of currency impacts on our bottom line. which we've overcome with this. nondeliverable or are difficult to hedge. we need to be hedged operationally in terms of pricing and cost reduction. and we've got a numb of scenarios.
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>> are you writing off the venezuelan business at zero? >> we did that in the quarter year ago. >> do you see it coming back? a lot of people don't realize that's a big market. there's a lot of people there. what are you anticipating from -- is it a broken country? >> well, i can't read into the tea leaves of politics across the world. what i will tell you is we want to continue to serve venezuelan consumers to the extent we can. it's been a great market for us over many years. very profitable and growth market. we're hopeful that things get a little bit better there coming forward. >> jon, i have a philosophical, exteistential question. every time you come on i mention dollar shave club. one of the things that's happened since i last saw you was the sale of dollar shave club. that deal shows that no company is safe from the creative
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destruction of technological change. of changing becoming smaller and leaner with far fewer employees. when you look at that transaction, what does that say about what's going on in the business? and what does that say about these big brands like gillette and others that you own and the ability for for newcomers to jump into that business? >> there will always be new entrants. but to brands, our billion dollar brands have grown faster recently. the brands that are half a billion dollars or bigger have grown four points faster than the rest of the portfolio. that's one of the reasons we're streamlining. take pampers, for example, our biggest brand. $8.7 billion brand. the largest shampoo brand in the world, head and shoulders has grown for the last ten years. so we continue to believe in the
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power of brands. if you look at the grooming business in the quarter we just completed, organic sales growth were up 7% on a segment basis. profit was up 12%. you know, gillette and p&g has spent the last hundred years creating the better shave experience. that will continue. >> i used my fusion this morning. so thank you for that. we appreciate you coming on. we will talk to you hopefully very soon again. in the meantime, when we come back, the creators of pokemon go catching some heat. this is the app topping 100 million downloads. details after the break. then pfizer's latest quarter, out with results a few moments ago. we'll talk big pharma with barbara ryan when "squawk" return bs.
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all right. welcome back. among your stories front and center on this tuesday, we are just an hour away from the first economic report of the morning. the government is going to unveil its personal income and spending numbers for june. they are both expected to rise by 0.3%. it's not all we get today. the nation's automakers are going to release july's sales numbers. industry sales should be up 0.8%
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from a year ago. focus ond the number of how many cars we should sell this year. meanwhile, donald trump, you've probably heard of him, says he fears the november election could be rigged against him. he repeated that assertion twice yesterday. once at a rally and again at a fox news interview. republican national committee declined to say whether it agreed with his assertion. pokemon go hitting 100 million installations and downloads worldwide. that's by app ann knee. downloads up 25 million from just late july. literally a couple weeks we added 25 million more downloads. this despite some feature bugs. however, the hunt for these pokemon has led the popular game's creators to a courthouse. a new jersey man because new jersey has filed a lawsuit in
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california federal court claiming the game is creating a nuisance by leading people to his house and back yard. the lawsuit claims the game's gps sought after pokemon stops or gym adjacent to private properties without the owner's consent. >> wow. >> of course it's new jersey. that's just where weird things happen. new jersey is where bad things happen. >> says a new jersey resident. >> i'm raising my family there. but let's be clear. it's got problems. meanwhile, italy's prime minister is backing his nation's banks. julia? >> reporter: thanks, guys. italian prime minister matteo renzi pushing back on concerns
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about the italian banking sector saying the banks are good. he's also trying to shore up confidence by saying he'll fight not to impose losses on bondholders here. as far as tackling the non-performing loans and we're talking $90 billion that don't have cash set aside to deal with them, a unique solution. he said better economic growth. listen in. >> the best way to solve the problem is the growth. and this is my priority, my dream, and my nightmare every day i think about it. growth, growth, growth. >> reporter: the other thing he wants to tackle is bankruptcies. guys, would you believe it can take up to eight years here to handle a bankrupt firm. for inforvestors that's a real
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turnoff. but ultimately the message he gave me is the action will continue, the work on the banks will continue, and judging by the performance of he shares today here in italy, the action's certainly demanded by investors. back to you. >> yeah. we were talking about the levels these shares have dropped over the last year. a lot of pain already on the shareholders in these companies and it makes you wonder what else they stand to bear at this point. >> reporter: you are absolutely right. these banks are trading at a fraction of their book value. so shareholders have already taken the pain. i think the critical thing he said for investor confidence in italy was not to impose losses on the bank. the bondholders in the banks. i think if they did that, it would have a ripple effect. not just the bonds. but also the sovereign bonds in italy too. this is something that he's really ultimately focusing on
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here. can he continue to fight brussels on it. we know what they want. back to you. >> julia, the best-performing bank stock in italy is down 40%. many of the biggest banks in the eighth biggest economy in the world are down 70% and 80%. 80% losses for multi-billion-dollar banks. when you're there and speak to people, is there a sense of panic? is there a sense of we're going to be okay? because you don't see 80% hair cuts in major banks that often with a positive outcome. >> reporter: there is no sense of panic. absolutely not here in italy. but i think people are concerned. but that's more about about economic growth and the spillover of the weak banks. the lack of growth still concerns about jobs. i think you see that in the political situation here. the fact that renzi's losing support here. because the people are saying the economic recovery isn't happening soon enough. and of course that ties right back to the banks and the fact
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that they're saddled with so many non-performing loans. they're not lending. so i think there is a real necessity here to do something bigger for the banks. the question is what. when you're bound by the new rules in europe bailing in bondholders. it's a tough one. italy didn't bail out their banks soon enough. that's the problem. >> julia, thank you very much. again, julia chatterly. when we come back, we'll get reaction to pfizer's earnings. then nick denton filing for personal bankruptcy as a result of hulk hogan's lawsuit. he joins us to discuss. for now look at the equity futures. dow down 31 points. 3w4r57 tokyo-style ramen noodles.
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. pfizer out with second quarter results. joining us how to break them down barbara ryan. all right, you've had a bit to look at it. your take on pfizer's quarter, good or bad? >> morning, brian. you know, i think they beat modestly on revenues and earnings, maintained guidance for the year. similar story to merck which i discussed on here last thursday. really being led by the innovative products business
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organically was up about 9% in the quarter driven by new products. their oncology agent had revenues of $514 million in the quarter. nearly double a year ago. and actually came in at just under $1 billion for the first half. and merck and pfizer have both talked about, you know, the continued commitment to rnd in immunooncology and have a pipeline of new products they've both discussed. also pfizer returned $8.7 billion to investors in the form of share purchase and dividends in the first half. and $5 billion of that came from share purchase. i think one of the things investors will be listening for which they were silent on in the press release is what their plans are in terms of splitting the company into two separate businesses, one the innovative core and the other called essential health. i imagine they will get asked a
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lot about that on their conference call. they have said they will make a decision this year. >> let's dig into both those. we're going to start with the drug side. you have really the strongest here. all performing better than the consensus. was there anything you saw that concerns you about the drug sales side? >> no. looking through the products that i was able to see this morning, everything looked either in line or better than expectations. you know, pref nar did have a big expected -- that was expected to come o off in the quarter as it did. you get some government sales outside the united states as well. that business looks strong. this a massive company to grow the innovative business by 9%. we saw similar types of benefits of rnd at merck. you know, these companies are
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generating strong sales with a portfolio of new drugs and pfizer, too, did give an update on other programs. immu immuno-oncology coming on in collaboration with merck. and an jul update on their new cholesterol drug. >> okay. >> so certainly they're -- >> sorry to cut you off. i wanted to move to the second part before running out of time. the splitoff. if you own pfizer stock at home right now, do you care about anything really until you get clarification on what they plan to do? you know, cutting the company into pieces? >> no, i mean, i think the company has been very transparent in these two businesses for quite some time. so investors are able to look at the performance of each separately. i think one of the questions, kwi quite frankly, is that pfizer has done relatively well. so the question is how much value from here is this in this
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split? in addition, the essential health business essentially the generics and spec pharma side, that part of the market has been aurnd lot of pressure. and the performance of that business is fairly modest in their pricing pressures. so the question is what would there be a compelling one plus one equals three if they were to separate. and the essential health business might have to pay out a big dividend to investors to be attra attractive. and pfizer as well as other pharmas, most of their cash is outside the united states. they pay a big tax to bring that bag back. >> all right. barbara ryan, it was a pleasure. >> great to see you. when we come back, nick denton officially filing for personal bankruptcy yesterday. this comes after several failed appeals from hulk hogan collecting on the jury verdict.
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right now the dow futures down by about 33 points. s&p futures off by six. the nasdaq which closed at a 52-week high yesterday, this morning looking down by about 14. "squawk box" will be right back.
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♪ 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.
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♪ beautiful shot of rio right there. if you're heading down there for the olympics, there may still be plenty of places to stay. airbnb has taken bookings and it's still rising. the surge of hotel rooms, airbnb has been named the official alternate accommodation. the average guest is paying $136 per night staying six nights. >> i am impossibly jealous you are going. i'll tell you why. for the first time in 90 years, you know what's coming back to the olympics? >> zika. no, i don't know. i'm joking. >> too soon, andrew. rugby. >> oh, right. this is true. >> rugby is coming back. sport of kings. go eagles. >> i'll go and take pictures. >> thank you. please. >> you're welcome. when we return, nick denton will be joining us. "squawk box" will be right back. with the xfinity tv app,
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now you can watch nbc's coverage of the rio olympic games live at home or on the go. welcome back to "squawk box." another round in the gawker media saga. founder nick denton filed for personal bankruptcy after the corporate bankruptcy protection. facing pressure after hulk hogan won that $140 million legal fight against the company.
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that battle was, of course, being bank rolled by silicon valley billionaire peter thiel we know now. denton tweeting i am consoled by the fact that my colleagues will be -- now joining us in his first interview since his tough day yesterday. help us with this just to understand what's going on. we said the battle's not over in terms of this court case. there's a series of appeals. >> like you said, it's a saga. >> but where is this in terms of what comes next in the case you have to file personal bankruptcy protection because you do owe this money now. >> yeah. i have an apartment. i have stock in a company i spent 14 years building and i don't have $125 million to pay hulk hogan in advance of the appeal. >> and your sense is or your hope is you'll still win the appeal. but right now -- >> yeah. for the moment i owe $125 million. >> you're selling your
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apartment. >> the apartment is up for rent, yeah. >> up for rent? so you're not selling it? >> i hope to move back. but we'll see. >> what does it -- >> you've never had anyone on who's been bankrupt before? >> we might have. can i ask what it feels like? did it feel like anything or just a legal issue? >> i think ever since the florida judgment and, yeah, you could argue since peter thiel set his sights on the destruction of gawker.com, this has been sort of inevitable. it is what it is, yeah. >> we've talked about this company's now up for sale going through this process. davis is the underbidder or has put a floor in. how many are you talking to? >> i think officially 15 people have signed confidentiality agreements. >> is there a certain type of company that you would like to see buy this in terms of a home for this?
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>> well, we're a media company. to get to scale without any outside investment. and i expect that a media company that is looking for increased scale, millennial audiences will be the acquirer. >> how much time do you spend now running the company versus dealing with the lawyers? >> most of the time i'd say is running the company. i try to keep the lawyers to a minimum. i'm just totally focused right now apart from the hour or so yesterday of actually having to file for personal bankruptcy. but i'm focused right now on getting the best price that we can for the business. getting safe homes for the great journalists and other staff that we have on our seven brands. >> did you watch the republican national convention? >> i did. >> did you watch peter thiel? >> i did. >> and you thought what? >> i thought he did a pretty good job considering people expected him to come out with more of his outlandish political
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ideas. and he kept it down the line. it was one of the saner voice os the convention. >> have you had any conversations with him since this happened? >> i think if i had, i couldn't say. >> which suggests maybe you have. >> if i had, i couldn't say. >> if you have, you couldn't say. why couldn't you say? >> i think i'm going to have to repeat. if i have, i couldn't say. >> if he were to walk out right now, what would you say to him? >> you bankrupted the company. you bankrupted me personally. why are you still going after sam bittle, a journalist, the executive editor, judge journalists because you're upset with coverage. >> peter thiel's lawyer or the one that he's been funding recently threatened deadspin which is one of your other units. how many more lawsuits have come or are you aware of?
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>> the creditors committee actually consists of three people. hulk hogan, shiva iadorai, and ashley terre terrell. >> if i told you that peter -- if this had been disclosed from the get go, would you have the same problem with it? meaning if you knew that peter thiel was behind this? >> i think money speaks. billionaires have power. and unless we want to restrict them in their funding of political campaigns and in other things that they can do with their money, they're going to spend their money as a substitute for speech. i do think it would have been easier to have a dialogue and an argument about the issues. if he'd been out in public rather than hiding in the shadows. >> peter thiel is, i guess, not behind it. the lawsuit occurred without
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him. he just funded the hulk hogan side. so the lawsuit would have occurred. do you believe you would have been victorious but for his cash infusion to the legal team? because that was not the issue. that was just the money. >> he was waiting for ten years. you've got to hand it to him. this is a degree of persistence, it's a movie plot. it's a novel. he was waiting ten years to find a point of vulnerability. we published about a million stories. and he found a story on which we had some vulnerability. a popular local celebrity down in tampa. and with whom the jury sympathized significantly. and he took his shot. he's a chess player. he's a chess player. he boasted being a great chess player. he happened to have a few extra pieces on the board in this game. >> nick, we appreciate you coming in after what i imagine was a tough day yesterday. we hope it all works out.
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>> thank you. when we return, we're going to talk former ebola czar ron klain. then theranos revealing a new blood testing device but will this be enough to save the company? we'll discuss that. "squawk" returns in just a moment.
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zika threat. new this morning an unprecedented travel warning from the cdc after a surge of confirmed cases in miami. now the pressure's on washington. the latest on the funding fight next. the countdown is on to the juls jobs report. we're minutes away from the read on small business employment in the united states. and is this a second chance for theranos? revealing new technology but can the embattled company recover? 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." >> welcome back to "squawk box" here on cnbc, first in business
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worldwide. i'm becky quick along with andrew ross sorkin and brian sullivan. joe's off this week. let's look at the futures this morning. they've been you should a bit of pressure. you could see right now the dow is down about 25 points. the dow has been down for six days in a row. if it closes down today, that will be the longest losing streak we've seen in just about a year. nasdaq yesterday was up to a 52-week high. this morning down by 12.5 points. and the s&p values are down by 5. look at oil prices. wti yesterday down below $40 a barrel. this morning it's up by about 37 cents to $40.44. japanese prime minister shinzo abe's cabinet approving a stimulus package that includes infrastructure, spending with b and cash payouts to low income earnings. not as much as people expected. that caused the yen to move
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higher. pfizer beating estimates on the top and bottom lines. also better than expected quarter of p&g. jon moeller joining us earlier morning on "squawk." >> organic sales up driven by volume growth of 2%. volume was up in every segment. sales were up in every segment. and we delivered a nice triple digit basis point gross margin improvement and 145% free cash flow productivity. a good quarter. app good base to build on. >> take a look at shares of p&g this morning. you've got some stocks to watch. >> we do. sodastream posted better than expected earnings and revenue. sodastream up 14%. now a $28 stock.
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mallinckrodt topping estimates. in the specialty brands business. this stock very heavily shorted. one of the stocks have been on andrew's radar. a mixed quarter for cvs health. revenue did miss a bit. the company's lowering its guidance. it did not give a current quarter forecast. or it did slightly above estimates fop focus on the year. still the stock is up 0.6%. new this morning rob kaplan speaking in beijing. he says he's looking for a healthy margin of 120,000 jobs per month. kaplan wants to see more information to evaluate how slower gdp growth reconciles with strong job growth in the u.s. the 14th confirmed home grown zika case announced in florida. rick scott calling on the cdc to
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dispatch an emergency response team there. cdc director thomas frieden joining us earlier this morning on "squawk box." >> it's very concerning. it's hard to protect yourself against mosquitoes. it means putting on deet or another repellant multiple times a day, wearing long sleeves, long pants when possible. staying indoors in air conditioned or screened space. that's not easy to do. and it's particularly important in this area. but until we're through with mosquito season, there's a potential risk. and that's why we're advising women to protect themselves. >> by the way, he mentioned that area in the united states covers about 41 states here. joining us to talk more about it is ron klain. and ron, thank you for being here today. >> thanks for having me. >> we know that you followed through with ebola. that was a threat that was confined. it was something that scared a lot of people, but was definitely put down rather quickly.
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how do you look at this situation and how do you think it compares? >> well, i mean, it's obviously a very different kind of virus, presents different risks. but unfortunately we didn't learn our lessons from ebola. with ebola we got into it late and put in a massive response, stopped the disease in west africa, protected the american people. here president obama he got ahead of this one. he sent a package to congress in february looking for a robust response. congress sat on it for six months and now is gone for the summer. that's where we've really fallen down here. we need congress to act on that response package. we need to give dr. frieden and husband state and local counterparts the resources they need to really fight this disease and to prevent what we've seen in florida which is the local transmission of zika on our shores. >> now that we have local transmission here on our shores for the first time, what do we do? we spoke with dr. frieden earlier this morning. he mentioned how difficult it is
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to make sure you don't get bit by a mosquito the entire summer. what should people be doing at this point? what should they feel about it? >> i think dr. frieden laid out a number of steps and discussed how hard it is to stay inside, stay in air conditioning and all these things. we can't ask people to fight this on their own. that's why we have a government and lawmakers. just yesterday some airlines, some operators started canceling people's vacations to miami. it's time for congress to cancel its vacation. it should come back to washington this week or next week and should pass the president's response package. it should get this help on the way. we need to accelerate research into vaccines. there are some positive things done. we need to spread it up and need
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more intensive programs. those things could only come from washington. congress needs to come back and get the job done. >> is zika has been around since 1947. you can't just blame this administration. why do we always seem caught off guard with viruses that have been around for 70 and probably longer than that years suddenly pop up and everybody's surprised? >> well, i'm far from blaming this administration. i'm crediting the administration because they weren't surprised. they put this package before congress in february six months ago. if congress had quickly acted on the zika package as they did on the ebola package, if they had done the same thing with zika we would have had this response in place in march. >> i understand that. what i'm saying is why are we blaming congress and zika pa kages? this has been around for 70 years as a virus. >> but it hasn't -- >> it wasn't expected to break
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on our shores. >> it hasn't been in the western hemisphere. >> that's the root of my question. avian flu, ebola. every year it seems like we have a new scare. >> yeah. so this is a new normal because of globalization, perhaps because of climate change, because people are traveling more, because humans are getting more incursions on different parts of habitat. we're seeing this kind of new, more rapid rise of emerging and re-emerging viruss. we need to step up our game. one thing washington is bipartisan to create a public health emergency fund so we don't need congress to rush back aech each time. we need permanent structure to deal with it. >> i've been frustrated myself. the problem is both sides of the aisle tried to cram all kinds of ridiculous things into this
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package. there was no clean funding put through. the democrat hs things that had to do with climate change that were put into it. the republicans put all kinds of things having to do with abortion and paying for different things to go along the way. both sides really bogged this down. how do you get a clean bill? >> well, i don't necessarily agree with that. there was a lot of back and forth but i think the democrats would have been happy to pass a completely clean bill. the thing is president obama as i said he led on this, did a great job on this. congress as they did with ebola should just pass it, get the money o the field. let's win like we did. >> one of the things that dr. frieden pointed out earlier to us today is the testing at times is faulty. this is a disease that's asymptomatic in four out of five people it affects. so it makes you concerned that the cases are much more widespread than the numbers we've heard. >> i think that's absolutely
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right. and it is a concern. i think it should have been a red flag to people that yesterday or two days ago we confirmed local transmission. that local transmission actually started in mid-june. >> yes. >> so people in that area six, seven weeks ago were in risk of zika. >> and they admitted they were testing as earlier as july 2nd. that is a month ago. they said nothing until yesterday. >> i think clearly we need better diagnostics. we need more on that. we got it early in 2015. it made a big difference in finding the cases quickly and helping to really get the disease under control. we need better testing. again, research dollars could help accelerate the diagnostics. you've got to have them in the field. sending to labs takes time and adds to delay. we've got to have point a of care diagnostics. >> thank you for your time today. >> thanks for having me. coming up, elizabeth holmes speaks out. the ceo of theranos talking
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about a new blood testing machine. yeah, another one. at a conference in philadelphia. kara swishier is next. she'll join us after the break. tokyo-style ramen noodles. fresh ingredients, step-by-step recipies, delivered to your door for less than $9 a meal. get $30 off your first delivery blueapron.com/cook.
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welcome back to "squawk box." transparency was wanted from theranos but instead got a product launch. holmes unveiled a new blood testing device she said could run tests accurately with a few drops of blood. that's what she said. but a lot of people just thought it was more -- can the one-time silicon valley darling recover? here on the set to talk with us is kara swishier, executive editor of recode. good morning. >> morning. >> what do you think of this? >> i don't know. >> what's going to happen here? >> i'm not sure what she's doing. i think it's sort of done. stick a fork in it kind of thing. >> but there's so much cash behind this still. >> that the true. they do have backer that haven't quite abandoned it. they've got all this money. so there might be some technology there that's saveable. i mean, you think of a company like slack which was going down
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because their glitch game wasn't working. then they had this communication service and turned it around. >> when you say put a fork in it, you think -- >> i think the credibility is just shot. great reporting from "the wall street journal" and others around this product and she has little credibility. i think that might be the issue. it's sort of an issue of the ceo. >> do we know whether she has any money? left? >> we do not cover theranos. but from what i understand all her money was wrapped up in the company. i don't know if she pulled it out. a lot of these people pull money out. >> and there's a secondary market. >> there might have been. >> past tense. >> could have been. but a lot of them do. quite a few entrepreneurs take out money when certain investments were made. i don't know if she did or not. >> was this is a fraud? >> i don't know. i think the government will determine that, right? >> i know. but kara swishier does reporting. >> i've done no reporting on it. >> i didn't ask if it was odd.
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the product exists and will never work or the product doesn't exist at all. >> it would be nice if it would work. i did not do any reporting. i'm not a good television personality. >> let me ask you a topic that you've done work on. bloomberg. we talked about it earlier. every newspaper this morning reporting with some kind of headline that something like, even uber couldn't bridge the china divide. >> yes. >> do you look at this transaction and say to yourself this was a failure? this was a great win for uber ultima ultimately. >> that's uber saying that. i think it's acknowledgment this is a difficult market. and now in hindsight nair saying what we really did was got in there and got a piece of another company. and now we've turned -- i think $2 billion a year there. these investments into more money. by being part of this. that said, you're also saying
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it's $100 billion market you've given up on. so i don't know what the number is in china. it's enormous. so they've given up on the market as uber. did they say this is a win to us? >> they always say they when they lose. could they have been successful in china? maybe, maybe not. probably not. it's an incredibly difficult market. they have tried to get in there. why did they try to get in in the first place? if they had tried they must have thought -- i don't think this was the end game. it's just like linkedin. when you sell you're not saying -- but they all do this. >> do you think there's hope for any u.s. or western blanded tech in china. you've got uber which is now
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didi. window installations in china a couple years ago were pirated. 91. can any u.s. company do business there? >> it doesn't seem like it. the most successful company is yahoo which bought a piece of alibaba when it was tiny. that's a win 100%. but it was a great win. it's a nice trade they made there. >> what does that mean? we get ceos on all the time. they're like, we're really optimistic on china. you want to look at them and be like, why? >> exactly. the thing is how many are successful here. and i'm sure -- if you think that alibaba could ch buy -- they could have been taught buyers by yahoo. lots of other companies and they aren't. it's not the same country, for sure. but it's a hard country to break into. >> will we see an uber ipo in
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the next 12 months? >> i think 2017. it feels like this is the step before that. >> what sounds like a fair valuation? >> you could just pick a number. it's just made up. right? >> just throw darts at a board. >> right now it's $65 billion, $70 billion. and here they've got the rest of the world. the interest k thing is didi is going to compete with them. >> yes, when is this with everybody else? >> lyft. it's hard. they're going to have to sell. i feel like it. i just saw john zimmer. he's going to hit me. >> but who would he sell to? >> gm. >> they already have a big stake. >> would gk take it? >> yes. of course. >> i doubt that. >> you've got to be in this game. >> i don't know if they would throw good money after -- >> this is technology and
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reservation system. >> it's actually -- we were talking about this in this break earlier. high-tech, that's gps with a car reservation. ultimately get in a car and someone takes you somewhere it's not the highest tech. >> except that once you get into autonomous vehicles -- >> but would you pay $60 billion for that? >> if you want to learn fast and get in -- >> i want to grab your favorite here which is ya hoop. ena that's values. you have a headline calling the relationship thorny. >> i didn't say thorny. someone else did. but it's going to be hard. >> recode, this is you. >> yes. i'm quoting someone saying thorny. and i'm using the quote thorny. i don't use thorny in my normal life. i think that it's difficult to
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gauge the problems until they got in there. and they haven't gotten in there. they aren't done much really in terms until now and so there's a lot of great stuff, geet ad teches. but there's a lot of overlap and all tiends of things. >> and what's the expectation? >> i think a lot of what i wrote about in the story is all the executives, getting fired is a good thing there right now. you get four years of automatic vesting. if you get fired within 18 months. what does that say? >> why does marissa mayer want to stay? >> she's not staying. she wants out. >> she wants the package. >> she doesn't have a choice. like, i know you're -- >> she's essentially getting booted then. >> you know, i'd like to get booted that way. >> with that kind of package. yeah. >> it would be great. >> what's going to happen to
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katie couric? >> that is a good question. she's under contract until 2017. and the content is terrific. she's done a great job -- i think she has. >> i think from wh-- >> do you think he's going to be able to turn this around? or is there a dreaded curse? >> i don't think there's a dleded curse. it's not like the hope diamond. maybe it is. i think that it's -- i think he's got a difficult thing but he's inside of verizon which is what? 135 billion? you know, you're not going to see it. and as i noted in the article, they have been struggling with the integration. they put the numbers up with the deal then they don't meet them. that's what happened here. that said, there's got to be an alternative to facebook and google. >> nobody thought of verizon a year ago. now everybody look at us. quick question on theranos. >> it's differentiated from facebook and google.
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>> this is something maybe too big from here. but i've been thinking about it. theranos. you had some others ones like sun edison. high-profile and smart people behind some of these companies. it seems like some really smart people are making some really big mistakes. >> big bets gone good. you know, airbnb, uber. there's all kinds of success. i think the issue is how they're going to -- i think they just get ahead of themselves. >> theranos sending a chill tli the valley. if travis and jeff were russian i didn't mean nasts, i would give them a ten. >> and you nailed the end of
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that segment. when we come back, you've got mail and it's coming at all times of the day and night. new study on e-mail exhaustion on the cost on workers and companies. that's up next on "squawk box." like centurylink's broadband network that gives 35,000 fans a cutting edge game experience. or the network that keeps a leading hotel chain's guests connected at work, and at play. or the it platform that powers millions of ecards every day for one of the largest greeting card companies. businesses count on communication, and communication counts on centurylink.
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all right. can you make it through the weekend without checking your e-mail? i can't even make it through a commercial break without checking mine.
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a new study says it's exhausting. employees are growing exhausted by the expectation that they will always be on and available never knowing what kind of work requests will be asked of them after hours. employers should cut setoff times for after-hours e-mail or telling employees when a response can wait until the next work day. we've all been as you guys hunch over your e-mail furiously, we've all been there. coming up, breaking economic news. stick around. and a parade rained on the sales team's parade. and they still made the meeting, without actually going to the meeting. before any of this, cdw orchestrated a mobility solution, using the hp elite x2 1012 with intel core m vpro processors. mobility by hp. orchestration by cdw.
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welcome back to "squawk box." breaking news, june read on personal income spending up 0.2% on headline income. a little shy following an unrevised 0.2%. on spending, a little hotter. the tenth we lost on spending moved over to income. let's look at personal spending on the real scale. and that's up 0.3%. deflating month over month. half of the 0.2 we were looking for. half in the rearview mirror.
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but here's where maybe it gets interesting. personal consumption expendture year over year. that's up 1.6%. it was expected to be up 1.6%. the high read for the year was february at 1.7%. the low read was april. 1.57%. the last time we had a number higher than february's read, you'd have to go back aways. you'd have to go back all the way to december of 2012. the last quarter of 2012 when it was 1.72%. that's worthwhile to pay attention to. listen. there's many oracles of the market place. yesterday jamie dimon with a great interview with frost. he said he'd be wary of buying treasuries. i remember when he came out and talked about stocks. also participated in his own bottoming formation in the equities. when you run a world class institution, crow get to see a lot of flows. i'm not sure what jamie dimon
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does know or doesn't know, but it seems like interest rates is getting less moshl by the day. jgb seems to be leading the charge of a selloff pushing rates out of negative ter foir. we are at 1.55. does that sound like a lot? no. it's a lot when you consider you're spending time at 1.46 yesterday. back to becky and the crew. >> hey, i wanted to get your thought on the yen. it was at a three-week high after the announce m of the additional stimulus package from the government. what do you think is happening with currencies? >> i think that when it comes to them, there's a lot of counterintuitive issues there. to carry trades and other areas of the globe, i think the important story here is how we are now under minus teb boy sis points. i think stimulus isn't necessarily the ticket. i think kainians are on notice
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it didn't fail year because it wasn't big enough. but i think there may be a light at the end of the tunnel. maybe they can create other with trying to stimulate an economy without reform. but is in and of itself is victory if it continues. >> all right. thank you, sir. steve leisman is here as well. and steve, what do you think of the numbers? >> people ask me all the time are we really enemies. how can you not love the guy with a report like that? rundown on what's happening in the bond market. let me set the landscape here with what's going on with the economy based on what's happening with these numbers. we had that gdp report which we knew jupz was implied in there. what we see is the consumer doing just fine. now the landscape is kind of shifting beneath our seat.
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yao got the decline in oil prices under 40 hovering at the 40 level. that's another six bucks. i don't know what that means. you know what that means for gasoline. 10 cents per dollar or something like that? >> we should see gas line prices falling. >> can you write me a three-page essay running it down by region. >> that drop is oil in probably contributing to the lag we had. >> no doubt about it. you see the oil and gas sector declining at a year over year late. that's not even the worst of it. >> oil and gases drop skewing all the data to give the perception -- >> but i tried yesterday -- we're just continuing over this conversation. we should have had this conversation last night instead of spilling it over to "squawk box." here's the story. i try to look at things not affected by oil and gas. and they're still lackluster. mind you, they're not falling at double digit rates. what bothers me is we're not
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seen spending and manufacturing on the non-oil and gas side. that's what i hope to see. and by the way, where is the surge in consumer spending that's from the windfall in gasoline. >> at retail stores. >> pop tarts are your thing. when you go in at 2:00 in the morning. >> confusing me with the guy who normally occupies this seat. but i buy a lot of the gas. >> we're looking for a couple of ideas out there. one idea is that business -- because labor is essentially cheap or cheaper than it was, then it pays businesses to go in and to buy and hire. a worker now is competitive with a machine in ways they were not before. and maybe that thesis is proved a little bit this week on friday if we get another round of
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strong employment, the street looking for 177,000. still bringing on workers but not buying machines. >> get anything over about 85,000 then that is a number that keeps us above the sustainable level. >> that's the story we've been talking about for over a year now. it's a very weird thing. what we put up and i don't have that chart with me, we have people from the fed, people from all over talking about what is the sustainable rate. how many jobs you need to create in order to keep the employment rate stable. it's a low of maybe 70,000 to 120,000. the question is in the street ever going to be satisfied with that. and there's still substantial slack many the economy. >> thank you. >> pleasure. breaking news on small business employment in the united states. the latest paychex survey.
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joining us now paychex ceo. marty, thank you for joining us. it sounds bad eight of nine sectors dropped in july. what's the headline takeaway though? >> well, i think it was just a small drop in july after a pretty good increase in june as well. so we've been a bit choppy this year on the overall index. but year to date we're up. so the job rate growth and small businesses is up 3%. so i think it's still positive. it's cautious but it's still positive. >> okay. so the drop not big enough in your professional opinion, marty, to be something we need to worry about in terms of a slowdown. >> not at all. we saw a good pop-up in june. we're up so i think the interesting part is across the country, the southeast -- the east coast is the strongest
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growth year over year. but you're seeing in the northeast that's coming back. the washington, baltimore areas, they're coming back from lows. in the southeast of the country, that's where you're seeing the best sustainable growth in the georgia, florida, that area. and its new home construction. sales of new single homes are up like 25% from last year. so new single homes, good construction numbers there and across the country it's a mixed story. >> what are you hearing about wages and the impact of localities is having on hire. . >> yeah. our data shows where it increased, it brought the job growth down. generally it seems to correlate with that. so the index is about a half percent -- the growth rate seems to be half a percent lower than
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where models have gone up. there is some impact there. >> and what about the availability of workers and skilled workers. it's been an issue where they can't find the people they need for the jobs they have. >> well, i think what that's done is that we've seen the wage -- the increase worsening about 3.7%. that's a nice jump from where it was a year ago. it was closer to two or little over two. we're seeing closer to 4% wage include now. we're getting to that full employment number. >> that's a big story. >> it is. because as you're saying, there is unfortunately people in the workforce that are in demand. there's 5.5 million open jobs according to to the jolt data. but what happens to everybody else? >> you know, i think the tricky thing you've got to look at it
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is some of the wage increase and hiring is part-time. we're seeing part-time employment as a prt of the total. almost up to 10%. that's a big chunk. >> marty, it was a pleasure. thanks for coming on and bringing your data as well. we appreciate it. >> thank you. coming up, fireworks on the campaign trail. a rough few days for donald trump on the defensive after some controversies. representative dave bratt will weigh in on the race for the white house straight ahead. thank you. (speaking japanese) exactly. i can understand nuance, context and idiom in seven languages to help companies all over the world with everything from retail solutions, to banking, to cyber security. (speaking japanese)
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welcome back to "squawk box." warren buffett joining hillary clinton in the campaign trail yesterday. he took issue with trump refusing to release tax returns on grounds he's being audited. >> i've got news for him. i'm under audit too. and i would be delighted to meet him any place, any time between now and election. i'll bring my tax return. he can bring his tax return. nobody's going to arrest us. there are no rules against showing your tax returns. and just let people ask us questions about the items that are on there. >> buffett said a monkey throwing darts at a stock page
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would have had better results at trump's atlantic city hotel business. fighting words there. meantime, donald trump had harsh words of his own for hillary clinton speaking about former candidate bernie sanders. trump said he made a deal with the devil. >> if he would have just not done anything. go home, go to sleep, he would have been a hero. but he made a deal with the devil. she's the devil. he made a deal with the devil. it's true. >> trump said he expects to win sanders' voters because they share views on trade. >> congressman bratt defeated eric cantor in 2014. his new book "american underdog: proof that principles matter" makes a case for fiscal responsibility. congressman brat, thank you for
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being with us today. >> thank you for having me on. you have a great show. >> we're thrilled to have you here and thrilled to hear about this new book. in it you lay out the entire reason that principles matter. and you say that that's really why you won your election. you were out spent, by the way, by about $5 million to $200,000. what happened? >> yeah. my own party, right? i don't rail on my own party, but we put out all these principles. i ran on the virginia republican creed that has commitment to the free market system, fiscal responsibility, et cetera. i just heard your past guys talking about that. the problem is we don't do any of it. we created a vacuum where there's huge discontent out there. i heard your market review and we're still waiting on a full recovery seven years later. and the american people get that. they haven't had a wage increase in about 30 years for real. and incomes are down for the average family about 4 grand over the last seven years.
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so there's huge upset on both sides. right? trump, bernie, elizabeth warren. when we're all saying the cron cronies in d.c. are running everything and the system is rigged you've got a fundamental problem on your hand. the republicans want to go free market and bernie et cetera want to go more federal control. and all the federal systems are already insolvent. right? used to be 20, 34 or something for med cower and social security. now we've got about ten years left. and unfunded liabilities we promised to pay into those major systems and the money's not there. so in about ten years we're going to have a major government finance problem. and so i ran on those principles. i put those numbers out. the press made fun of me all the time. they said you're giving boring economic lectures. turned out the people in my district loved my economic lectures. so some in d.c. are just out of
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touch with what's going on for small business like you guys were just reporting on. and they create all the jobs and so we've got to do right by them. not just the people that can afford the cronies and the lobbyists and the lawyers in d.c. they're doing fine and dandy. >> congressman, i've got to jump in here. listen, i went to high school and college in virginia. >> yeah. >> virginia tech graduate. okay? >> all right. >> my parents live in winchester which is like 70 miles outside of d.c. to the west. >> yep. >> i hear some of the stuff you're saying and i'm not saying you're wrong, but i do find it a little tough. you're from virginia, sir. >> right. >> no state has benefitted more from government largesse spending than virginia. there's a giant new fema headquarters about a mile from where my parents live in virginia. you've got the d.c. area doubling in size. hundreds of thousands of new jobs because of government spending. i'm not saying that it's right or wrong. but i'm just saying i find it ironic that a virginian is
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criticizing the government when the state was almost built entirely on government spending. >> yeah. i wouldn't go that far. i know exactly what you're saying, but that's part of the problem. >> you're in richmond, that's a different story. but up north you know what i'm talking about. >> i know exactly what you're talking about. that's the problem. when your economy becomes too dependent on government like all of human history, economic growth didn't start until 1700 because all of human history chose to go with rome and building aqueducts and infrastructure, that doesn't cause economic growth. right now the virginia strategy from the side, their goal is to diversify the economy and get back to private sector jobs. so you're right in the past we've always out-performed by 1% unemployment growth et cetera. that's true but right now we're not. we become too dependent on government spending. and the numbers i just gave you make it clear what's coming at us in the next ten years. the best thing we can do is get back to the private sector.
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and of course everything's good. when you're doing a half trillion dollar deficit like right now. >> virginia gets more money back than any state i think is what it is or -- you know what i mean. >> number two, yeah. >> oh, you're number two. so every dollar virginia taxpayers pays, you get back. i think we're dead last. so would you support getting less money back from the government? >> i don't think -- that's really the way to think about it. i always am in favor of what is best for the country as a whole. and so when you're doing military bases, you should place them where it's best for the country as a whole. when doing infrastructure spending, highway spending, entitlement spending, it should be principle based. that's precisely the wrong way to think about it. right? this special interest for your state or for your county, that's what got us in the ditch. >> congressman, i want to talk about this particular election. i want to talk about the economics of it. >> sure. >> we're a business show and you have a particular view which is you're supporting donald trump.
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here's what i want to understand. you talked about the need to scale back entitlements. nominee trump says that he doesn't want to touch medicare or social security. do you have a problem with that? >> it depends say you have to scale it back. but any fifth grader knows if you are a hundred trillion unfunded you got a problem. and i go and talk to the kids all the time. so the systems were set up to be actuarially sound because the average death anyone was 65. so it worked back then. 40 years going to set up. now everyone lives to 83 and healthcare is phenomenal. but the costs are driving the system broke. so we need to reform that. everybody knows it. >> would you have a problem with his economic platform which third parties have suggested could cost the company 10 trillion dollars. >> i'm more on the fiscal hawk side but i trust these guys.
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kudlcukudlow who's a good frien the shop and all the guys. if we get a pop and stop the corporate inversions from going overseas. >> the -- his economic platform would cost that much? significantly more than hillary clinton. >> that could be but hillary clinton doesn't know what causes economic growth. she wants to go back to the rom roman aqueduct school of thought. reagan's trajectory ten years after he won set us up in great shape. and we need to get back to that growth path and that can pay for a lot of what's wrong in the country right now. >> thank you for your time congressman brat. it's been good talking to you. >> any time. thanks for having me on. >> when we return, jim cramer is
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going to join us live. we'll get his take on the big movers and what's on his radar coming up. >> ♪
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let's get down to the new york stock exchange.
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jim cramer joins us. how about the pfizer earnings, procter & gamble and what you think about oil? >> i think pfizer is prepping for a nice set up of is essentials and growth. it's what we want to see. the fact that the stock is down the probably near term stuff. that's not long-term stuff. probably a buying opportunity. and the procter & gamble, they have had the growth that others haven't. particularly on grooming. so i like that. oil is teetering. and the canada oil sands came back on and that is where the big glut is coming from. i am not as negative about oil as others because everyone's gotten really. -- seems very krar to right now what the traders are doing but the traders have been wrong repeatedly with oil. >> do we need worry -- seems like yesterday all of a sudden the s&p was correlating with oil
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prices again. first time we'd seen that in a few weeks. do we not worry about that? >> we have to worry about it. because there is still pressure on the banks. but a lot of oil companies raised a lot of equity. so i'm not as concerned but i think others are. i just think the -- is going down. china gets weaker. oil is signaling things are getting weaker. i think it is supply based. i -- >> the pay rates could be coming into this too. >> there is labor shortage. but there is also no gain in the average wage growth nationwide. it is hard. industry to industry. every day is something new. you will get an outfit that does texas road house. they were doing incredibly well. suddenly the numbers are no good. and they can't even figure it out. everyone is so mystified about
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what's going on quarter to quarter. maybe we should think longer therm. >> when we come back, we'll have more of the mornings stocks to watch. "squawk box" will be right back what powers the digital world. communication. that's why a cutting edge university counts on centurylink to keep their global campus connected. and why a pro football team chose us to deliver fiber-enabled broadband to more than 65,000 fans. and why a leading car brand counts on us to keep their dealer network streamlined and nimble. businesses count on communication, and communication counts on centurylink.
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join us tomorrow, "squawk on the street" begins right now. ♪ >> good morning and welcome to "squawk on the street." we're live from the new york stock exchange. let's give you a look at futures this tuesday morning. we're set up for what appears to be another lower open. >> six straight down. >> and of course because you asked, how did the european markets fare? how are they faring right now? >> ftsi down. 10 year yield, yield's been moving up a

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