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tv   Squawk Box  CNBC  September 1, 2016 6:00am-9:01am EDT

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2016. it's still summer, as far as i'm concerned. actually, it is still summer, isn't it. "squawk box" beginning right now. >> good morning, everybody. welcome to "squawk box" on cnbc. welcome to september. i'm becky quick along with joe kernen. andrew is off today. august is officially in the books at this point. here's hour the markets closed out. check it out for the month. dow and s&p 500 breaking multi-month win streak because of the losses they saw yesterday. they weren't major. looking at possible advances until we saw yesterday's close. both of them actually fell fractionally for the month. see the dow was done less than .20%. s&p down just over .10%. the nasdaq posted though its second positive month in a row. up nearly 1%.
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take a look at the u.s. equity futures at this hour, you'll see green arrows. s&p look like they would open up 2.5. nasdaq just over 13. overnight in asia the knnikkei s up .25%. the hang sang up just about as much. if you take a look at the early trading in europe, at this point, the dax is higher. the cac is france is up .80%. the ftse is down .10 pkts. >> strong over there. the scuttlebutt yesterday looking at it. i wasn't here in the morning. adp was strong so the market was weak. there we go again. >> it was that, but also the idea with some of the chatter in the morning that, look, we already knew this number was going to be around this. a lot of it already baked in.
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do you believe the fed will raise rates if it's a strong number on friday. >> no. >> i need to see it. >> who knows. maybe they want -- >> i think they want to. >> they've cried wolf so many times. it wouldn't kill them to do a quarter point to reestablish credibility. >> once a year you get quarter point. >> usually it's once every ten years. we got one quarter point in ten years. then in the next decade they will need a quarter point within the next decade. the fed futures are 34%. >> there had been some people, did you here muhammad the other night on cnbc was saying 60-80% they're going to do it in september. >> i wish they would. >> before the election? >> i think that's part of it too. not only are they itching to do this for the credibility factor. it's also we're going to prove that we are not being sidelined because of politics or that equity pay any attention to that
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too. >> they've been pretty accommodative for most of the tenure. if it's really a good jobs number, that's going to be good. obviously the gdp is going to be sharply revised upward on october 31, i would think. that's when i would -- >> that's when you would do it. >> hold it back. we think it's 1% now. be like 4.5% and then we'll have -- no, we'll see. stocks to watch today. salesforce reporting rise in revenue. thanks to strong sells of cloud product. sees soft nks primarily in the u.s. salesforce ceo addressing the outlook with jim cramer on mad money last night. >> you saw the mna activity we have done this quarter. that of course has weighted on
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the numbers and we are delivering great quarterly numbers. number two, we did have the foreign exchange situation that we just talked about and number three we did see a bit of softness in the united states at the very end of the second quarter. these three things together really are kind of what is giving us, i would say, an appropriate conservative view for the third and fourth quarter. meanwhile, some consumers are reporting the batteries on the new samsung galaxy note seven caught fire while the device was charging. announced it would delay shipments for quality control testing. shares falling on that news sharply hitti inting two-week l definitely put a crutch in your plans. >> quality control, make sure it doesn't catch on fire. >> wiping nearly $7 billion from samsung. box reporting another quarterly loss on higher spending. the loss was smaller than
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analyst expected and revenue rose 32%. this is a file sharing company. also raising full-year earnings in revenue outlook. united states corporations hold $2 trillion in cash overseas. looks like some money may be coming home. in an interview with irish broadcaster, apple ceo says the tech giant expects to repatriate billions of dollars to the united states next year. didn't say how much would be returned, but apple has about $180 billion parked offshore. that is more than any other company from the united states. cook also weighing in on apple's fight with european regulators over taxes. ruled ireland has to recover $14 billion in unpaid taxes from apple. in an interview, cook rejected the eu assertion that apple's irish tax bill for the year of 2014 amounted to just a small fraction of 1%.
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he said apple paid $400 million which he believes made apple isla island's highest taxpayer for the year. cook who is a mellow guy, told the paper, no one did anything wrong. ireland is being picked on. it's unacceptable and total political crap. again, he's a pretty mild mannered guy most of the time. don't hear tough talk from him like that. obviously this has him fired up. >> he was fired up about the whole hacking case. >> yes. >> how about air and go, they leave -- we're looking for irish exit. >> fits in with it. >> now we also now somebody
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because remania. they are leave if they want. go mania. >> weekly jobless claims out at 8:30 a.m. eastern. along with labor cost and at 10:00, look for the august services index and july construction spending. the big auto makers releasing sales throughout the morning. cleveland fed president voting member on the fomc is speaking this afternoon. let's get to the campaign trail. gop presidential candidate donald trump giving a big speech on immigration just hours after meeting with mexico's president yesterday. john harwood joins us from washington. >> reporter: good morning. it was an unusual day on the campaign trail. at the same time holding the political base that got the republican nomination. also adding to it. with the latter goal in mind, he
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went to mexico, stood on a stage with president meania knee yeah toe. he said before reporters that they did not discuss the payment for that border wall that he has been promising. after the speech, president pena nieto told donald trump he was not going pay for a wall. hours later in phoenix giving the speech and here's what he had to say about that issue. >> mexico will pay for the wall. believe me. they don't know it yet, but they're going to pay for the wall. >> reporter: he reiterated he's going to create a deportation task force to remove the 11 million illegals in the country. although he did not indicate what priority or how quickly he
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would do that. here's how he expressed that goal. >> we're going to trip it will number of ice deportation offices. within ice, i am going to create a new special deportation task force focused on identifying and quickly removing the most dangerous criminal illegal immigrants in america. >> now, donald trump went on in that speech to talk about rapists and about child molesters and other potential predators who are coming into the united states. the more you amp up that side of the rhetoric, the more you die lu dilute the effect of appearing calmer and reaching out to swing voters. take some encouragement from recent polls, the lead hillary clinton had has been reduced to ten points to six points. six points is still a big gap. got a lot of work to do. the challenge is if you're going
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to try to convey a different message and a different image of yourself, you have to do it in a sustained way. if you oenl do it for a fleeting moment and go back to your own persona, difficult to make it stick. >> i think that misses a lot of the significance of watching yesterday. i thought it was extraordinary listening to the mexican president agree on so many issues, agree it's a two-way border and we don't like guns coming in here. we have a southern border where a lot of people are crossing our border that aren't allowed to come in. >> from mexico. >> from down south. and i thought the cordiality was pretty phenomenal and also just having -- >> sounds like it worked with you. >> well, i know he was trying to appear statesman like. i know that. it's a big jump for him, obviously, but just after watching it and to go down there and accept to gikly and go into
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some people -- not the lion's den, but he's not popular down there. >> pena nieto had compared him to hitler and mussolini. >> and watching it was kind of funny. i don't need to say mainstream media because you could start with poe december ta or the democratic sur gattis and it's immediately picked up by the media. grasping for some way to trash it. the initial way to trash it was the state department, which has been like a gauntlet for hillary clinton. state department said what are you doing going down there. it's ridiculous. any private citizen can go down there. grasping for something. until they had him in an huh-uh, he lied because they did bring it up. the president spokesman later
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said mr. trump didn't lie. when they brought it up, there was no discussion. that's what -- at first, they didn't know where to tread. that happens in politics. extraordinary to go in there and the press conference, he had -- trump had command of that press conference. it almost looked as if the president of mexico sort of -- not deferring to him, but there was no bowing anyway from trump. >> going to be interesting to see the effect of that press conference on pena nieto who is not popular in mexico. immediate criticism after yards. >> he got criticism before. >> it was a weak performance on pena nieto. >> his approval ratings were 23% heading into this. >> that's your adjective, prominent. there's a lot of -- he's. >> he is. >> he's got a little bit of --
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he has said there's no need to be objective when you have someone like trump. >> fine. my point is that he went after him and i think other members of the mexican press did too. >> there were people. >> a lot of people went after him. >> pena nieto popularity would drop from 23% which is the lowest level for mexican president. >> almost looked when they put out the statement when he wouldn't pay for the wall, they were scrambling to repair some of the damage from the meeting. he didn't say it right in front of him. >> exactly. that's what was strange. if you want to make that point, you got a whole bunch of worldwide television cameras right in front of you. >> the meeting was probably someone says something and translated and press conference and translated and it's not a perfect way of getting -- >> not necessarily.
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pena nieto can speak english. he doesn't in front of the media. >> fox, we saw that as well. it was pretty extraordinary day. they didn't expect trump though take him up on it. not in three days, anyway. it was pretty -- it's a chess match, i guess. he invited both candidates. trump immediately accepts and the guy was saying we haven't heard from candidate clinton at this point. >> he was definitely bold move by the trump campaign, no question. >> hey, john, thank you very mu much. good to see you. >> you bet. let's get more reaction to trump's immigration speech and visit to mexico. how playing out here. former senator, judd greg. good to see you. >> thank you. >> what was you take away on this, both on the visit to mexico and the speech on immigration afterwards. >> i think win ston churchill said that consistency is the hot
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goblin of small minds. donald trump proved that yesterday. when he was in mexico, i thought it was an extraordinary performance, presentation. the fact he went was rolling the dice so to say politically. he handled it extremely well. then he came back here and went back to reality tv mode on what he was going to do on immigration, throwing out a lot of very highly volatile lines and creating a lot of disturbance in the sense he basically charged up the troop so to say. so the two exercises were very different and reflective of a little bit of erratic approach to how you run for president, i think. >> you know, it reminded me of older politics where you know your audience and you are speaking to your audience. it's harder to do today and at least for 10-15 years with media everywhere, social media building up. he has been trying to thread the
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needle. to say, look, we are going to take immigration more seriously. and here's how we do it. what to you would you like to hear in terms of after immigration policy. >> i don't agree with his policy. i haven't for a long time. we all agree on three basic things, which is you got to secure the border, you got to make sure employers hire legal individuals, not illegal individuals. you've got create some sort of opportunity for people we want to come to this country to come easily through visa programs. the idea you can take the 11 million people who are here illegally and probably more than that and tell them to leave. and hope they come back legally is hard to say. >> he stopped a little bit ahead of that idea that 11 million are going to be deported, but he also didn't say there's any way for amnesty. do you believe in an amnesty clause? >> no. there should be no path way to
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citizenship to people here illegally period. >> what do you do with 11 million people then? >> i think he's got the formation of what you should do, which is basically if they have commit add crime or criminal or act instead a way which is inconsistent with our laws, they should be deported. they've been here and been constructive citizens for a period of time, you put them through a program where they have to pay some sort of penalty, some sort of -- i don't know, civil responsibility where they can build a resume of being constructive participates and then you give them some sort of legal status. >> you don't consider it. >> i don't consider that amnesty. amnesty is citizenship. it's the mccain approach. >> when he looked like he was not going to do, you know, the drak cone yan, we heard from the
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left that he was -- well, i even heard jeb bush say that's my plan he has now. that's a rubio plan. they wanted it to go from how many in the first gang, gang of eight. they wanted to mange it the gang of nine. throw trump in there. he was completely his entire campaign promise to all of his supporters, he was backing off that, not going to do it. then when he comes back and changes a little. too much. how do you win one way or the other when you're going to get, you know, criticism. you can sort of see when he was done there, there's room for negotiation on a lot of these things it seems like. don't you think? at least where we're headed with hillary clinton's view of how to do this and what trump's view of how to do this, there are two stark differences there. not necessarily either one is going to -- the worst-case scenario of what critics say is going finally happen, but there is a choice people can make
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between which way. >> you know, i think we should have her on. you always tell me she roots me on right and says what are you doing? did you talk though her about this. why do you come on here as a wish shi wash shi when you could be? talk to her. will you. get a pep talk. >> she's hard line on a lot of things, but appreciates the fact in this country we've got to have immigrants. we need immigrants in the country. >> no one is saying that. even the mexican president says we don't necessarily want our southern borders totally por rasmus. we don't want your guns coming down here. they have a wall on their southern border, don't they? >> yes, they do. i actually think that what trump is saying if he said it in language which was less inflammatory would be pretty close to where most people are on immigration issue, which is
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essentially get the people out of the country who are here illegally and committing crimes and figure out how to deal with the other folks in a responsible way. that's essentially what's he's saying. i don't think that's unusual or inappropriate. the way he says it is to inflame a lot of folks on the immigration issue. i don't think that's constructive to the dialogue then you don't get comprehensive thought. >> does mrs. greg do tv? >> we'll get her. >> if we want a real republican on, can we ask for her. >> absolutely. she would make more sense than either you or i. >> judd, i love seeing you. thank you for joining us. coming up one day away from the august job report and 20 from the fed interest rate. talk strategy right after the break.
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draconian. it's september. possibly of a september rate hike and it's september first. >> it's here. >> joining us, we all got to get
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better at probability. we got to look at exactly -- he goes to the decimal point on the presidential odd. i want to -- to two decimal points. the likelihood. >> fed funds future says 35% odd and december is 60%. just an interesting commentary to observe how tactical the fed has become because basically tomorrow's report will decide whether the september odds flip above 50. if they don't, september is off the table. >> it's tactical. i think it's infuriating. all they do is job own. the most recent conjecture they whether or not going to do anything so they felt the need they need to move the needle back the other way. drives me nuts. >> more potential because of exactly that. because of all the doubters. we don't believe you anymore. >> they don't even have the
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fortitude to do things with interest rate movements. we're going to try this and go up a quarter. they're even afraid to make a quarter point move so they're influencing things with job owning. that's the way they do things now. >> the current mo is they test the waters when they want to go. they ultimately need the market's permission basically because the unspoken third mandate is financial conditions. if they say they're going to go and the market is not ready, dollar goes up. >> wait a second, paul didn't need the market approval on this. >> used the briefcase indicator. didn't know what he was going to do and there would be surprises. >> it's a different story. we're in a global economy. the fed is the dploebl central bank. wants to tighten the rest of the world is in easing mode. >> the job owning worked when we were on the way down. a tool they put into place and it's hard to get rid of that tool. >> job own, last summer caused
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the devaluation in chinese. the markimproved and ready to d four hikes this year. they'll be lucky to get one. >> here's the problem when you're the only country in the world raising interest rating the currency becomes the great equalizer. they look at the data. they look at the jobs and inflation and say we should be able to raise interest rates. the problem is when you go do do it, the dollar rallies. the money gets sucked out of emerging markets. high yield falls under pressure. financial institutions fall under pressure. and yield curve flattens. >> it's a third man data. they can't even handle two mandates. no one said anything about the dollar. suddenly they're four x geniuses and know the level for the dollar. why do they need a third mandate? they have inflammation, employment. now they have to do currency. >> when you talk about paul
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voeker, you're raising interest rating to combat inflation. we know how combat inflation. >> what if right now the four x market is discloekted. how do they know this is the ideal away it is right now. how do they know we should not be higher and what happens happens. >> what happened in the beginning of the year is reason you can't do in. >> four x leads to so many other problems. >> the problem the headwind that you had in u.s. corporate profitability, the headwind in manufacturing the slow down you had in jobs. this is where the dollar needs to be. we played this out in the beginning of the year. >> business cycle. sometimes headwinds and tail winds. >> on a positive note, the last two times the fed hiked or tried to hike, big pressure on chinese yoon.
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basically devalued again. the chinese have sort of front run the devaluation this time. if the fed hikes this time, we'll survive. >> if it's that flaet, a weak dollar, go for it. let's cut it in half. and really get exports. then there won't be any worry. >> it's like one of those stereos. >> first rule in central banking is do no harm. inflation numbers are running below 2%. we haven't seen that huge pickup. we don't have a consumer strong enough to offset or strengthen the dollar. why would we want to do more here. >> you're sure the fed hasn't done any harm with asset bubbles. three years from now we're not going to look back and say do no harm. look at the harnl they did. >> you said three years from now. >> we don't know. your right. >> in my opinion if you look at
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where the fed's preferred inflation rate. >> we don't know whether they're doing no harm. >> he's agreeing with you there's no chance they're going to raise. >> i know. i'm not convinced it's sitting here unable to raise rates after ten-year and stuck in this box two or three years ago. i'm not convinced that's do no harm. now they're paralyzed. >> do we see signs of asset bubbles. i think what they're worried about they're worried about what happens in the tech bubble. their worried about what happened in the housing crisis and that's why they're trying to jawbone the markets. if you were to look at where the preferred measure of inflation is and global economic activity is, raising interest rates in this time of environment does not seem like the best move. >> job owning works for so long. >> we played this out early in the year. we started flattening the yeerd curve and had a huge disruption.
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we've played this out. >> if it works at zero, let's go negative. >> passive bubbles usually burst when rates rise. that's why. >> and we can't rise. what's our debt service right now? we're lucky. >> nominal growth is slow around the world. >> how much do other people own of our stuff when rates go up? the reason obama brags about the deficit coming down is because we're not paying interest. >> my sense is when you raise interest rating the debt comes down. it happened earlier nn year. if you remember where we were at this point in 2015, you had interest rates above 2%. the fed attempts to raise and the long-term rates come down. look at the borrows cost of u.s. government: what are we at, six years, five years average maturity. >> if the market perceives the fed making a policy error, the
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long rates will come down. the market will place in a recession. >> exactly. then there will be a flattening. i don't know. if i was there, things would be going much better. if i was fed chairman. >> look, around the world, nominal growth is slow. productivity growth is declining. we have huge debt overhang. central banks are not going to raise rates. >> nothing for growth, structural issues. so that's. >> that's why fiscal is going to be. >> that i agree. >> what do you mean by fiscal. don't need a trillion dollar infrastructure spend. we need lower taxes and less regulation. >> or all three. >> gentlemen, thank you. when we come back, house call is back. parent skms doctors directly and brings your child's pediatrician to your door. >> was this your idea? >> no, but i like the idea. i didn't know about it before, but it impressed me.
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i would like a doctor at the door today. the company cofounders will join us next. as we head to a break, take a look at s&p 500 winners and losers.
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holiday shopping season is here. walmart announcing it will
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launch lay away program tomorrow. customers can put items as low as $10 an lay away. you have to wait until december 12 to pay off account. releasing annual top toys for the holidays. tested, reviewed, and chosen by kids or like adults that go back to being kids like tom hanks. the best seller on the list right now, a ride. >> that's life size. >> a ride on a disney princes carriage that's priced at 398. that's nice. that's a nice ride. my daughter thinks she's getting a car. she's 17. >> buy her one of those. >> i don't want her going faster than what that goes. frightening. >> i know. be grateful you live in new jersey. other places is 16 when you get
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yours license, as you know. >> we're practicing now and be afraid. actually, you guys are nearby, be afraid. be very afraid. i'm afraid. >> right now it is time for this morning's executive edge. city dwellers can add pediatrician to growing list of services. health care startup baby doctor connects parents with doctors and facilities house calls at the click of a button. they are the co-founders of baby doctor and welcome to both of you. >> had a sick child home last night reading and thinking this would be a great idea. the idea to hitting a button and having a doctor come to your house. >> works like you push a button and a pediatric professional comes to the parent's door in 60 minutes or less. brings back the 1950s house call medicine of the them coming to
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your home. >> where would doctors do this? i think it's a great from my perspective, but why in the world would a pediatrician drive to my house and meet me. >> as per the u.s. bureau of labor statistics, the median sally for the pediatrician in new york state is $72 an hour. we pay well above market rate for the pediatricians. also, giving them the opportunity to engage with patients in their homes. to really have a prolonged helpful visit with the patient in their environment. >> how much does it cost me? >> so currently we have a flat price of $200. currently a promotion the first visit is $40. >> insurance for the most part has not teamed up with in idea. >> you will. we provided the parent with an itemized receipt to submit.
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you find the average cost of an er visit is over $1500 and two-thirds are nonemergency anyway so you have parents visiting the emergency room unnecessarily for an ear infection or tumny ache. it's a win, win, win for everyone. insurance companiers can save money. the parents can save time and money and for the sick kids and not get pediatric care to their door in 60 minutes or less. >> how many doctors do you have right now. >> currently over 50 providers. that are in our network. >> am i -- i'm not guaranteed the doctor. you are guaranteed all of our providers are board certified vetted either pediatricians or pediatric nurse practitioners with many years of experience.
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we do four background checks on all providers and an inperson interview. we have over 50 in our network. 30 many manhattan. we are only in manhattan, but we are looking to suspend. >> brooklyn, queen, bronx by the end of this year, then take it to new jersey and northern new jersey as well. in addition the other service we have is circumstance schimpfs which we do in the greater new york area and new jersey. we'll do a circumstance schimpf wherever you need that service. >> what's the hold up in terms of biggest hurdle you have to overcome. money to expand? convincing doctors to sign up? is it convincing insurance companies? what's the biggest thing you have to conquer before you expand. >> we have the doctors for northern new jersey already and we have many doctors in brooklyn and queens.
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i would say the hold up is really just the overhead. providing doctor kits for all the doctors. >> what happens when someone calls from a family that can't afford it and -- will you end on the same compassionate care problems that -- not problems, but no one gets turned away from the emergency room obviously so if someone can't afford it, i can't pay that, do you then say call the er, we're not coming. >> that's where our first visit $40 promotion. >> two weeks later and the kid is sick and the mother is really worried and says i need you, but i don't have $200, are you going to go. >> you pay for it on credit card. our goal is to give parents on demand access to pediatric care. there is a service fee for going such a thing, but by giving people who can't afford health insurance an opportunity to have a house call. >> to joe's point brings up the weakness in the hospital right
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now. they have to treat everybody who comes in the door. if you. >> you might end up saying no to people and that's going to be hard for you to do. as doctors it's like an thet cal to the hippocratic oath. >> it's obviously a charge for medical care, always there's a charge for everything. we find giving people an opportunity to try it where it's $40. pay for it on credit card. we know we have a community give back program. we do free talks and pediatric health care with local schools, community organizations, religious institutions. so if it's not a house call, leading freel pediatric health talks. a way to give back to the community and promote education to parents of trendy topics, zika, back to school health. how can parents learn more to care for their kids. that's our mission. >> i want to thank you both for coming? coming up, eunice yoon sits
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here's how all the sectors in the s&p did in the month of august. best performer financials. worst performers telecom and utilities suffered 6% decline. this car is traveling over 200 miles per hour. to win, every millisecond matters. both on the track and thousands of miles away. with the help of at&t, red bull racing can share critical information about every inch of the car from virtually anywhere. brakes are getting warm. confirmed, daniel you need to cool your brakes. understood, brake bias back 2 clicks. giving them the agility to have speed & precision. because no one knows & like at&t.
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welcome back to "squawk box," everybody. eunice yoon sitting down with alibaba founder and executive earlier this morning. joining us from china with more on that. we can't wait to hear this. >> reporter: thanks so much, becky. jack ma was weighing in on the concerns of the anti-trade sentiment rising globally. globalization is going through growing pains. the founder of alibaba is sharing discussions among hundreds of businesses here around the g20 summit and a lot of those businesses are international. as you guys know, the many
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companies within the international company p community here have really been complaining about the rise of protectionism and nationalism within china itself. that is one of the reasons why china has become such a punching bag within the u.s. election. jack ma said he wasn't so concerned about the campaign rhetoric. >> i'm 52 years old now. i've seen olt of presidential elections. always before the election they're anti-china. many years ago anti-soviet union. now anti-china. we understand it's an election. i think after election, people will calm down. trade is a trade. business is a business. world economy is society. i don't worry about it. i think after election people will go back to themselves. >> reporter: jack ma did have a
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message for g20 leaders. if there were to be a reversal of globalization, that would be a disaster. also spoke to jack ma about the company's future. alibaba specifically. he says he believes the company going to be relying less on core e-commerce business. that change is reflected in the way the company is reporting the numbers. no longer will the company rely so heavily on gmv or gross merchandise volume and that is a key gauge of e-commerce businesses. this is what he had to say. >> when people focus too much on the gmv and forgot that we have a much bigger business on the financing. we have a much bigger business on cloud computing. we have a big business on the entertainment side. so i think in the past two years, we are learning how to communicate with the investors.
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we're so popular in china. we're such a big household name in china. investors in the states don't know anything about us. >> and becky, he said one of the key reasons why they made that change for reporting is to do just what he said, which is he wants to improve the communication with american investors about the company and its future. >> fascinating stuff. thank you. i'm sure we'll see a lot more this morning. great interview. thank you. coming up, if you have not been to the world trade center recently, you might be surprised how much has been rebuilt t. project is the subject of a new documentary reported by jim cramer. that premiers tonight on cnbc. we'll give you a preview, next. the number of units we'll make next month to maximize earnings. that's a projection. no, it's a fact. based on hundreds of proprietary and open data sets folded into a real-time, actionable analytics model.
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nine. eight. three. five. two. you're not gonna round that up? you don't round up facts. powerful analytics driving decisions for the world's most valuable brands. hewlett packard enterprise.
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hadn't thought of that either. it's going to be 15 years. we're approaching that anniversary of the 9/11 terror attacks. and today ground zero and the downtown area has gone through a transformation that includes a retail resurgence. courtney reagan now joins us with that part of the story. hi, courtney. >> reporter: good morning to you, joe. there's been a lot of changes since the tragedy of 9/11 15 years ago. and retail has played a big part in the revitalization. according to the downtown
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alliance for new york, lower manhattan has added 2 million square feet of retail space in just the last two years. by 2019 it's projected to hit a five-year growth rate of 67%. two week old westfield world trade center is fully leased. not everything is open yet because of course it did just open the doors two weeks ago. brookfield place is higher end and that is nearby. there's a gucci there, a saks will be opening soon. the sea port district is set to reopen sometime next year and that's going to be more of a marketlike feel with smaller merchants like custom leather maker. the foot traffic is key. westfield said 15 million tourists will come through lower manhattan next year. plus the lines shuttle shuttle
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300,000 commuters every day to the area. the downtown alliance estimates the spending power is around $6.5 billion annually. back to you guys. >> okay. courtney, thank you. be sure to watch -- or please watch "ground zero: rising freedom versus fear." it's a new original documentary that gives an unprecedented look inside the redevelopment of the world trade center hosted by jim cramer. it premiered tonight 10:00 p.m. eastern and pacific. there you can see it. when we return on "squawk box," the job number could give the fed idea whether or not to raise rates. that's coming later this month, that decision. we are just half an hour away from early jobs data we're getting today. the challenger report on layoffs. after that looking for weekly jobless claims. stick around. "squawk box" will be right back. will
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today's test for the market, data, data, and more data. wall street will be coming through all the latest reads on the economy following a disappointing august for stocks. what you need to watch as we head towards jobs friday. donald trump doubling down on his pledge to build a wall along the u.s./mexico border. >> we will build a great wall along the southern border and mexico will pay for the wall. >> we'll have reaction from the former u.s. ambassador to mexico straight ahead. and mission to mars. >> in your face, neil armstrong. >> could humans be there sooner than you think? plus -- >> to infinity and beyond!
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>> -- not buzz lightyear but maybe his name sake buzz aldrin. "squawk box" begins right now. ♪ live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and wilfred frost is joining us. you get up here quickly. >> i know. i've been here for 15 minutes. >> it's coming up against traffic or -- >> no. he beats it. >> no traffic is as long as you leave promptly from new jersey. >> promptly. >> promptly. >> promptly. >> good, good. >> as long as you beat the traffic it's fine. >> there you go. pretty good. >> were you looking at twitter on your way up here.
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>> sure. twitter got some attention. e-mail. >> wow. >> you're good. >> a little bit of -- >> you know who you sound like? you sound like the guy in "die hard," what was his name snake or whatever? remember he was pretending to have a german accent as hans gruber. then he had to pretend he was a german guy talking without an accent when he ran into bruce willis. that's who you sounded like. >> now you're saying i have a slightly german accent? >> i thought he pulled it off well. >> it was pretty good but you could tell it was -- >> better than your british accent. >> yeah. or madonna's for that matter. the futures at this hour are indicating higher. up 44 after -- i didn't like -- i didn't think the market was closing up yesterday. it was done over a hundred for awhile yesterday. anyway, that's after europe is
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putting in a good session. and nothing happens in shanghai anymore. >> what do you mean? >> i don't know. we never worry about it. it's 3,100. remember when it was. >> for the 12-month high. the nikkei's had a good week because of the yen weakness. some decent pmis out of china this morning. what else is happening this hour? let's have a look. investors have an abundance of economic numbers today even as they await the jobs report. labor costs and jobless claims, construction spending, and the service economy all coming out later this morning. also, august sales for automakers expected to drop from a year ago. general motors expected to post a decline of 4.7%. toyota expected to be down 2.7% according to estimates from edmunds.com. chrysler is expected to post a small increase of 0.6%. costco says its august
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comparables same store sales came in flat compared to a year ago. had expected at 1.3% increase. >> i like promptly though. >> you didn't say it right. promptly. >> but it's we don't use the word promptly. it's not in my lexicon. it's just not. like rubbish. i'm using that all the time now. >> you're expanding his -- >> garbage. insurance. u.s. corporations hold about $2 trillion worth of cash overseas. just saying that infuriates me. but it looks like some of that money may be coming home. in an interview with irish broadcaster rte, today apple ceo tim cook says they expect to repatriate next year. he didn't say how much would be returned. they've got about $180 billion parked offshore. more than any other u.s. company. cook also weighed in -- i was
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going to say something but i think it'll be in this story. he also weighed in on apple's tax fight regulations who they need to pay taxes. in an interview with the irish independent newspaper, cook rejected the eu's assertion that apple's irish tax bill amounted to a small percent. he said apple paid $4 million which he believes make them the highest irish taxpayer. he's also made the point it's probably the highest tax that i think the u.s. government gets more revenues from apple than any other corporation as well. so let's not ruin, you know, cull the goose that laid the golden egg. cook telling the paper no one did anything wrong. ireland's being picked on and this is unacceptable. then his favorite quote is it's total political crap. >> i love that. you can't say those words on
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british tv. >> you can't? >> i enjoy it. >> you're on british tv right now. >> but we're not broadcasting from here. >> you can't say bolllocks either. >> no. >> what about buttocks? >> i think that's fine. >> i think that's worse than bullocks. >> does fanny mean something different? >> yeah. >> do tell. >> i don't want to. >> we were told because she used it on british television and the guy who was interviewing her, his mouth was open. >> if i said they aren't going to raise again because they have no bollocks -- >> that's correct. >> they need to grow some bolluocks. >> that's right. i just wouldn't say it. >> i'll say it for you.
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she says was not political. >> this is a decision based on the facts of the case. looking into apple sales international. how they are arranged within ireland. and with the profit recorders there. how they're taxed. that's the case. >> vestager is planning a trip to discuss tax issues with jack lew. i'm not going to say i told you so, wilf, but, you know, you see sovereignty -- some stupid committee of unelected bureaucrats and this is what happens. >> but he's not going to tell you he told you so. >> nor is he going to accuse me as representing brussels. which has happened before. >> you know joe so well already. >> i need someone here to
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represent -- >> that's fine. do i have to put on a belgian accent as well? >> that i would not be able to -- i have trouble -- you know, this will insult you. i have trouble between aussie and english. which is you have to be a real idiot not to tell that, right? >> i'm not going to tell you that. >> ding ding. >> but you just did. >> but you're insulted if i said that. >> never insulted but i could tell the difference. >> we're glad you're here, wilf. >> i love being here. it's good. we'll see how the markets are fairing as we count down to tomorrow's big jobs report. joining us now is steven parker from jpmorgan private bank. and covering the economic angle is lindsey piexa. before we get to the markets perspective, lindsey i want to start with the perspective. the numbers we got from adp was pretty good. it was in line with 177,000
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jobs. what are you expecting for the friday jobs report and how big of a fluctuation might we see? i've been told that number often is off by about 70,000. 70,000 lower than came in. what do you think we'll see? >> well, that's absolutely right. the august non-farm payroll report has been disappointing for a number of years. looking for consensus around 180,000. but it's unlikely we see a number to the downside coming in around 150,000. the big question for the fed is if we do see that moderately still positive number, is that enough to justify a near term rate increase. i would argue no. as janet yellen said in her speech last week, as the argument for a near term rate increase is strengthening, the committee remains data dependent. meaning while the market is looking at friday's report as the one variable that could really make or break that december rate decision, it's
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about the broader evolution of the data. and a moderately positive pace of job creation does not offset the fact that we've seen 18 consecutive months of negative business investment. it does not offset the fact that inflation is still sluggishly low. and does not offset the fact that the u.s. economy grew at a sub-1% pace. if we do see even a moderately -- >> but if the -- go ahead. sorry. >> if we reduce the number that was in line with consensus, it doesn't give the fed that needed justification. it bolsters the argument, but doesn't have the argument to move forward with policy removal. >> people who watch the fed closely say they really are itching to go ahead and get a rate hike under their belt. steve leisman says he thinks there's a very good chance they'll raise rates if that number is 100,000-plus. what do you say to that argument that, look, they want to get this done and want to -- put some points on the board?
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>> well, i think steve's been relatively optimistic about the fed tightening for the past six to seven months. and certainly the fed does seem desperate at this point. but december's decision to raise rates was very preemptive. it was an anticipation of further improvement down the line. as the data has failed to evolve as the fed has expected, i think some members on the committee are gun shy to pull the trigger on a second round increase without seeing that improvement come to fruition. >> so steven, let's talk about the market reaction. let's say we get a strong number of 150-plus or strongish since the market is looking for 180. how does the market react to that? do they want to see a strong enough to know the economy is improving? or are they hoping the fed doesn't raise rates? >> i think we want to see a strong number. without question you need a better economy. markets are fully valued right now. the thing that's going to drive us higher is better earnings. >> how come the market fell yesterday on the adp report?
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>> look, it's noise. that's great if you're a trader. but for our clients we're thinking as long-term investors. as we're looking at markets right now, we're seeing growth gradually improving. we're seeing a fed who may tighten but is going to be very gradual and data dependent. more importantly when you look at the rally the market is sending you. led by a lot of the bond proxy yield. what's leading now is the more cyclical sectors. that tells me that markets think the growth dynamics are getting better even if the fed may end up raising rates. >> but then was a rotation. in essence the markets were flat for the month as a whole. just deeper rotation opposed to new all-time highs again? >> we think so. given where the s&p is right now, our thought is until you see signs of broad based better growth, you're probably not
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going to see significant upside in the short-term. but there are more targeted for sectors between more growth oriented sectors like the consumer health care technology and others like energy and the banks. >> what needs to happen to actually push the markets to higher highs? is there some sector that you think needs to lead? >> well, i think certainly the -- you know, the leadership from the banks would be important. >> but we're not going to get that unless the fed raises interest rates. fed raises interest rates, it'll put pressure on a lot of other areas. >> i'm not so sure about that. i think in the short-term traders are looking at banks for a proxy of what's going to happen with the fed. when you look at the banking sector, it's a sector that's been changing the way we think about doing business. because we recognize the rates are going to be lower for longer. if you could start seeing loan demand pick up because the economy's getting better. if you continue to see banks raising dividends, i think you could see great market leadership there. and i think that's something
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that people are underappreciating at the moment. >> you pointed to this idea that business investment has been incredibly week for 18 months at this point. what do you think has to happen to accelerate loan demand? >> that's a very good question. because really the intention of the fed if you think about it, longer term to bring interest rates down to these near zero levels was to spark that investment, was to spark that loan demand. what we see from businesses big and small is that they are still on the sideline hesitant to develop in this environment amid tax uncertainty, apple regulation, rising health care costs. so i think a lot of loosening up that cash comes not from the monetary policy standpoint, but really from the fiscal policy standpoint. so we may begin to see a better business environment depending on the outcome of the presidential election. >> but on the consumer side, loan growth has been pretty strong. you might even say worringly strong in some areas. they've got a balancing act to
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play. overall what is your takeaway over the summer of both loan numbers and retailers earnings with the strength of the consumer? >> i think you're right that temporarily we have seen some strength on the consumer side. some willingness to take on new amounts of debt and certainly the consumer was leading and supporting the economy. when we look at this april to june. but going forward, in order for the consumer to maintain these heightened levels of spending, we're going to have to see that translate into not just strongish job numbers but we'll need outright strength in the labor market. and in wage creation. or income growth. now, incomes are still positive growing around 3% on an annual basis. but that's about half of the growth that we saw just 18 months prior. it's clear that incomes are on a steep decline. >> i didn't know about dog whistles. now i hear dog whistles all the time now. i hear them but i don't really hear them like all the other people that say they exist. so i just heard you say
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depending on the outcome of the election, we could have better business -- a better business environment. >> that was a very optimistic comment, but yes. i do think it's dependent on the fiscal -- >> but -- >> i'm not saying that. it's not a republican or a democrat comment. it's about whether or not we can see capitol hill issue pro-business policy. >> kind of is though. kind of is. the economic policies are pretty different. pretty diametrically. i'm just wondering in minnesota because you've always been a free market person. do you wear dark glasses in -- i mean when's the last time minnesota went for someone besides like russ -- no, he's wisconsin. but that's the psalm thing. huebert humphrey -- >> point well taken. >> are you okay there? or do you sort of travel in disguise around minnesota? >> no, i think i have to keep on a pretty hefty disguise and just kind of keep one foot in another state here.
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>> and hulk hogan was -- wasn't he governor or something? >> jessie ventura. >> what's the difference? >> i think we're mixing up states here. >> both wore boas. >> folks, thank you. good to see you both. >> good to be here. coming up, donald trump -- minnesota is very yeah -- defining his immigration policies -- great place, beautiful. >> land of 10,000 lakes. >> lots of lakes. hear what we're playing? through with buzz. although we're not yet. >> no, no. >> do you know what his twitter account is? >> the real buzz. >> yeah. he's the real buzz opposed to buzz lightyear. i should be the real morning joe. i should change mine. but during a major speech last night just hours after meeting with mexico's president, we're going to have his reaction from a former u.s. ambassador to mexico after the break. where, in all of this, is the stuff that matters?
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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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donald trump addressing his immigration policy last night in a speech in arizona. >> to all the politicians, donors, and special interests, hear these words from me and all of you today.
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there is only one core issue in the immigration debate. and that issue is the well being of the american people. >> and that speech coming just hours after a visit with mexico's current president. and a twitter back and forth with the country's former leader vincente fox. joining us now antonio garza, former u.s. ambassador to mexico. mr. ambassador, thank you for joining us. you were -- you are ambassador to mexico but you're still -- former, but you're still in mexico city, is that true? >> that's correct. still very much a part of the u.s./mexico dialogue. >> and you must be so -- did you get the papers today? what are the papers saying today? >> well, it's a combination of
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ridicule and derision. they have directed it mostly at the president. one, yesterday morning most people woke up to great surprise that president pena nieto had in fact invited both candidates but that donald trump had accepted it. throughout the day the twitter feeds were lit up with the kind of sarcasm, anger, frustration that this would be allowed to happen. there was a moment yesterday afternoon during that press conference when you thought, these two manage to be accomplishing their directives of having people talk about something besides in pena nieto's face about security and corruption. and in donald trump's case something besides this apparent movement he's shown on immigration. but that lasted about as long as the press conference. in the wake of that they went back and forth as to whether or not donald trump had indeed spoken to the wall, the issue of who would pay for it.
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he said they left it pending. pena nieto said he made it clear mexico would not pay for it. so by sunset, we were pretty much back where we had started the day. and, you know, very heated ret aric. >> i thought -- just in watching there, there are a lot of things that maybe it's just because i live here, but i didn't realize some of the mutual concerns that the border is two-way. and that, you know, money flows into the cartels from north of the border. guns flow into mexico from north of the border. and mexico a its own problem with its southern problem and has a wall down there because there's so much influx into mexico from other parts of central and south america. do people -- people don't see any -- they don't feel that?
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it made sense to me. that doesn't resonate at all with mexicans? >> i think when you're having calm conversations about the nature of the relationship, both sides, both u.s. and mexican leadership and u.s. and mexican businesses know there's issues as it relates to security, rule of law. issues of border security. the southern border. those are all conversations that are had each day. i think what's important is that they be had with proper tone and that the focus be on a shared sort of set of objectives in terms of how can we best leverage this north american platform. we have an amazing opportunity in america with the united states, mexico, and canada to build on trade. to build on production sharing. on the integration of supply chains, the creation of jobs and opportunity for all of north
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america that i think ultimately has been good for the united states and mexico. and so there's no -- there's no -- it's not that people are oblivious to the challenges, but it's necessary they be talked about calmly, cool headed, and with a real focus on getting things done. not simply scapegoating one country or the other. >> right. as we go forward here, i mean, obviously tensions were running hot based on the way not just what was said. obviously in the hyperbole that sometimes mr. trump uses. but also i think on the way that it's covered as well. because i've heard that, you know, people here will say, you know, he's anti-immigration, anti-all immigration. then they go on a big speech about how the united states is composed of all -- we were all immigrants once and it's been a great thing. and i don't think the candidate has ever said he's anti-immigration. i think it has to do with, you know, securing our borders and illegal immigration.
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do you ever think cooler heads are going to prevail and will actually look at what is a real problem for both the united states and mexico? and try to address it in some rational way? >> well, i think so. quite frankly i think we're at that moment where if you look at the immigration flows from mexico, they have certainly plateaued, perhaps even we've had a negative for a period of time. and so i think this perhaps is the moment. but when the discussions are focused on building walls and quite we already have wall along the 2,000 mile border. when they're focused less on safe, secure, and efficient borders and the tone is more about closing the borders and deporting 11 million people which is impractical, then i think you've moved away from the ability to have a calm, level headed discussion about immigration reform to simply demagoguery.
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>> ambassador, asked about the mexican peso. it has sold off quite significantly recent. some reports suggest that's because of the presidential election. do you believe that's the cause for the weakness in the mexican currency? >> no. i think that might be one of the factors. you see it tend to strengthen a bit to the likelihood of a trump presidency. but more likely are the issues of rule of law, investment, security. but you look at the manufacturing platform here in mexico, it's quite strong. automotive, growing aerospace. their presence as an emerging market and one of the more competitive ones i think is solid. and to president pena nieto, you've had fiscal, telecommunications. but the overall market has been weak. >> ambassador, thank you very much for joining us.
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ambassador garza joining us from mexico city. >> what the hell were you doing? you didn't see that? >> what? >> i can't believe -- go ahead. this what you do on the morning -- well, i -- >> no. go ahead. yo go ahead. hey, jesse. who are you? i'm vern, the orange money retirement rabbit from voya. orange money represents the money you put away for retirement.
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welcome back, everybody. among the stories front and center this morning, we'll be getting revised numbers on productivity in an hour's time. that would be figured on an annual basis nap is slightly worse than the prior estimate of 0.5%. campbells soup out with quarterly numbers. 4 cents below what the street was expecting. revenue slightly shy of the
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street's forecast. it cites execution issues and the stock is down by about 3.6%. the chinese territory of macau reporting a gambling increase there. you have to go to may of 2014 for the last time. that's been helping shares of the companies that help operate the casinos in macau. breaking news on the state of employment in the united states according to the latest report by challenger gray and christmas. august job cuts are at the second lowest level of the year with employers planning to shed a little over 35,000 jobs. here to break down the results, jon challenger, ceo of challenger gray and christmas. a good morning to you. thanks for joining us. is there clear sector or regional breakdown in this data? >> well, the standout for this report was the computer and tech
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sector. we saw 6103 jobs that were cut in that area. and really since the beginning of 2016 we've seen cuts from many of the big companies in that sector. hp, intel, dell, microsoft. and now in the month of august, cisco announcing major cuts. so it does seem like the tech sector is now going through some of the same changes that the energy sector wuch has been the only area of the economy has been cutting jobs consistently. now we're seeing a second sector begin to come in and show signs of weakness. >> and john, some of those tech companies that you just named that have been cutting jobs, they sound more traditional ilk in terms of what they do in the tech sector. is this quite pc related? these job cuts? >> i think certainly it seems to be more hardware related. more business investment. but certainly there's always push in the technology sector as
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new technologies come online. the big companies -- now, there aren't that many big companies. when you do see layoffs that are heavy and we've seen 55,000-plus for the year in the sector, they often come from the big name companies because they're material enough to make this kind of impact. >> are companies in the sector also moving jobs abroad? i mean, apple's been much in the spotlight. of course many jobs in ireland. do you think developments we've seen this week might slow down that number of jobs that are moved abroad? >> well, that's an interesting question. certainly those apple moves will affect other countries in europe. kind of part of the fallout from the brexit vote, i think, as the european union moves further to the left and starts to enforce some of these kinds of policies that maybe england was the blocker for. so sure, american companies are
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now going to be looking at just where are they going to be able to locate their factories and their outsourcing. >> just quickly, you also mentioned the only other area of significant cuts over the year has been energy sector related. is there an oil price you have in mind from your research where we start to see bigger pickup in the sector? >> i don't have that price. we've seen successive waves. we've seen another wave of cuts this year and the tech sock tor does lead the way for the year with over 97,000 cuts in the area. but the question really is will there be a third? have we hit the bottom? there's some indication that maybe with oil rigs, hiring beginning to do better. maybe we've seen the bottom. one other interesting one when we saw cuts in the entertainment sector and it was mostly from the trump taj mahal with over 2800 cuts. >> john, thank you for joining
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us today. john challenger. when we return on "squawk box," former chairman and ceo of sharing plow fred hassan will join us to talk about drug pricing. and later our mission space segment continues, we're excited about this, "squawk box" is ready for takeoff when buzz aldrin joins us. we have a lot of questions for him. right now we take a look at the u.s. equity futures. they've been up this first day of september. dow futures up about 44 points. s&p futures look up 4 points and the nasdaq by 17. stick around. "squawk box" will be right back. 3w4r
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3w4r57. welcome back, everybody. we all know drug pricing has been a huge issue that the public's been focusing on this year. mylan just the latest. the pharmaceutical company feeling the heat after hiking the price of its epi-pen. now it's launching a generic version at half the cost. raising questions how to fix the system without damaging innovation. joining us now to talk about is fred hassan. he is also a cnbc contributor
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and the former head of sharing plow. and fred, it's great to see you this morning. thanks for joining us. >> great to see you again, becky. >> you know this industry very well. so the drug pricing issue is certainly something that's caught a lot of attention this year. consumers are fed up with this, congress is weighing in. how big of a problem is this in the industry? >> i think it's a problem. because it's an election cycle and also deductible. the people with the deductibles, they're growing in number every year. now about 49% of people in commercial plans are in deductible -- high-deductible plans. the average is about $2,500 per family. which is a problem. because you are now facing the full list price of the drug to get to the deductible. and that's causing people to become much more price sensitive to drugs. this is a big difference versus four years ago where only about half as many people were in these deductible plans.
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they want to do it that way. they want to make people more price conscious. and they want them to be price sensitive. >> we talked for a long time about -- we've talked for a long time about how transparency and pricing consumers actually have to keep a little bit of skin in the game would change this trajectory of health prices that were far outpacing inflation for years and years. that's probably a good thing to see some of the pressure put back on it. but what is happening in terms of the industry in terms of raising prices like this? can they survive without jacking up prices on drugs like this? >> i don't think one should have to do it so aggressively. in this case especially when you're dealing with a purchase item. very, very special product. and i think the large size of the product, i would have probably been more careful about the size of price increases. it was an unexpected event that
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occurred where the competitor took the product off the market and the new competitor did not show up, but i think when circumstances like this occur, one should be very judicious about how one takes price increases because you do get this big blowback from society if you overdo it. >> so what about the mylan case in particular? the idea they are now talking about launching a generic. i didn't realize some of these drug companies controlled their own generics. what does that mean? >> this is pretty customary. there's a generic channel and a brand channel. and the whole area of discounts, rebat rebates, those things, it's quite different for the generic channel compared to the brand channel. what they're trying to do here is to sell the same product for half the price -- at $300 -- and even at this $300, they're getting a bget ing a bigger take than the price they're getting in the list price sector because they're having to give up more than $300
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in rebates -- sorry. $300 per unit in rebates to the insurance companies and the pbms. so what they're really saying is we're going to bypass the existing channels and go direct. and try to sell this at half the price. what we don't know yet is whether this is really going to work for them or if the existing channels will find a way to fight back. >> moral of the story is, you know, competition solves all this. i just listened closely. you said you got to be judicious because you don't need the blowback. so it's not like you need to somehow come up with some fair, you know, egalitarian notion of what a fair profit margin is. because that's not really what anyone can do. because democrats sitting in congress or republican sitting in congress has -- everybody's
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got a different idea of what a fair margin is. if you let people decide, we may cap margins across all industries if bernie sanders had his way. i thought it was interesting saying the blow back, it would be nice to do it as long as there's no blowback. that's the only thing that keeps people honest. you try to maximize shareholder profit, but you can't do it based on competition because that's what everybody's trying to do. >> it was a competitor who applied to go ahead and try to make the generic issue. >> it's an fda issue and regulatory issue, right? >> absolutely. absolutely. and it's impossible to justify any price because you've got all these complexities in the system. >> exactly. >> in a free market system. what happened here was a temporary exclusivity period on an item. i think management teams need to be careful about the impact of
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society if they raise at that pace. >> thank you for joining us. good to see you. >> good to see you. coming up, mission space. could humans be heading to mars sooner than you think? morgan brennan is at the kennedy space center this morning with more on that story. plus a special guest. morgan? >> hey, a special guest, indeed. he was the second man to ever walk on the moon. buzz aldrin. he's going to join us. we're going to talk about mars and the business of space travel. it's going to be -- i'm going there -- out of this world. stay tuned. we'll talk about it after the break. no matter where you go. you want an experience that feels highly personalized. with watson on the ibm cloud, travel companies like wayblazer can apply cognitive analytics to social data to understand what a destination is really like. and who exactly, it will appeal to. today watson is helping businesses create experiences that revolve around you. because that's what the ibm cloud is built for.
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welcome back. our mission space series now takes us to mars. humans may be heading to the red planet sooner than you think, but it's going to take the most powerful rocket ever built. morgan brennan joins us live from the kennedy space center in florida with nasa's plan. >> good morning. so this is going to take nasa's journey to mars is going to take a tremendous amount of technology, money, and power. and we certainly learned a little something about that power recently at a space rocket engine test fire at nasa's space center in mississippi.
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the exhaust blasting out of this rocket is moving fast enough to get from new york to l.a. in 15 minutes. an engine like this one will propel the space launch system, the most powerful rocket ever built. packing a half million pounds of thrust each, it will take four to power the sls as it launches orion on its mission towards mars. and mars isn't as far off as you may think. >> we hope to get astronauts in the martian vicinity. that's based on the level we're seeing today. >> that's about $3.5 billion annually. just for this nasa project. in 2018 the sls constructed by boeing will power the lockheed built orion spacecraft on an unmanned lunar mission. in 2023, astronauts will go to the far side of the moon.
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first trip into deep space since 1972. then they'll travel to a captured asteroid in lieu nar orbit. the research, nonstop. including simulations of living on mars in hawaii from which scientists emerged just days ago. if it all goes according to plan, nasa's team will make the maiden voyage to the red planet in 2035. >> there's a lot of technologies we're going have to develop that don't even exist today to get there. >> and so some of those technologies include space propulsion and what nasa calls closed loop life systems. being able to recycle air, water, generate fuel. that's going to be very crucial to the journey to mars because it is very costly and it would be very timely to be sending those types of necessary supplies out to deep space. so joining us now, we have a special guest to talk a bit more about this. he's a former nasa astronaut. he was the second man to ever
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walk on the moon. he's also the author of a recently released new book titled "no dream is too high: life lessons from a man who walked on the moon." please welcome buzz aldrin. thanks for joining us. >> it's special to be here especially these surroundings. they're so much improved. i haven't seen them. but they're even more than up-to-date. >> yeah. and you've been a big proponent of colonizing mars. you came ut with a plan on how to do that. do you see as the single biggest challenge of getting man to mars? >> a commitment and the funding to carry that out. instead of just talk in billions of dollars. we should talk in percentages. >> what do you mean by that? >> well, 1967 we had 3.5% to 4% of discretionary funds. that was the maximum. it dropped off.
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we landed a couple of years later, two people for one year -- i mean, two people for one day at the end of the apollo program, two people, three days. what since then? 0.5% of funding of discretionary funds. do we have today? 0.5%. can we possibly go and colonize mars on 0.5% of discretionary funds? it took us 4% yet there are people who say, oh, yeah, we can do that. that's not the message to send to a president. >> but i would imagine that's where commercial enterprise comes into play. which i want to ask you more about. i know one of our anchors back in new york has a question. joe? >> yeah. i always -- all my questions are usually self-serving with things i think about. we'll get back to mars, but just having mr. aldrin on again.
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we've had him on before. i don't know whether you remember, buzz. but i try to put my finger on what's different about men like you. they made a movie called "the right stuff." i know i don't have the right stuff. but when you were sitting on top of that thing and, you know, i made the point the other day monkeys sit up there and have no idea they're on top of a lit candle. you know what the odds are. did -- what were the chances you thought at that point that this might be the last thing that you did as it was starting? were you 99% sure you were going to be okay? or was it closer to 80%? >> well, i think the three of us believed the numbers and they weren't 99%. they were around 95%. but anything up there, certainly for what we were doing. i was in combat. what do i think the chances were for surviving combat in the korean war or combat today?
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they're not 95%. but the more interesting question that we worked on as a crew, what is the chance that we will successfully land on the moon? a lot of things that can happen before we get there. we figured out 60%. because there are a lot of ways to leave halfway through or almost touching down. apollo 13 kind of showed that. and we succeeded in landing six out of seven times. not bad. close to 60%. >> impressive. let's go back to this idea of funding real quick. real quick. the fact that we're seeg more and more commercial start-ups get into this space. it's becoming a competition. you can call it the next space race. the business model's changed a lot since you first got into space flight.
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has it changed for the better? >> it's got a long ways to go. we are about to replace government transportation to low earth orbit with private sector commercial crew. it gets a lot of money from nasa to do that. because of the task. but it is still cheaper than government transportation. we went to the moon on government designed rockets. elon musk's spacex rockets are cheaper than government rockets. >> yeah. well, buzz aldrin -- >> we are still planning to go to the moon and mars on government rockets. i think it's time to we need to have a change. not just in who makes the best
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but who makes cheaper rockets for the american people. >> and we'll have to see how that plays out. buzz aldrin, thank you for joining us. back over to you. >> morgan, thank you. and thank you mr. aldrin too. we'll be back with more "squawk" right after this.
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still to come this morning, reaction to donald trump's immigration speech. former senator rick santorum will join us.
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and programmers i teach them to talk.es, so yeah, ge is digital and industrial. so it's indigital. digidustrial. indigenous. shhhh... let's go with digital industrial. for now. digidustrial. yeah. or, digital industrial.
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we're just one day away pr the jobs report. the report might jolt the market out of its summer doldrums and could be a game changer for the fed. we'll tell you what to expect. trump talks tough.
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doubling down on his immigration policy. >> mexico will pay for the wall. they don't know it yet, but they're going to pay for the wall. >> reaction from former presidential candidate rick santorum is straight ahead. plus americans are getting higher than ever and fewer people think marijuana use is harmful. the numbers from a pot study. 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 worldwide. i'm joe kernen along with becky quick and wilfred frost. andrew is off today. we're less than 90 minutes from the opening bell on wall street. the futures continue to be up 40. if it were to open right now. the nasdaq is up about 16. nice rebound in the s&p up about
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3.5. and checking the price of oil. below $45. must have been a rough session yesterday. we were at $47 last time. >> yes but for the month oil still ended higher. >> down 3.5% yesterday for wti but still up 6.5% for the month. let's get you caught up on other stories this morning. tim cook weighing in on the tax fight with eu regulators. who ruled ireland has to pay -- cook said no one did anything wrong. ireland is being picked on and this is unacceptable. it is total political crap. but eu commissioner vestager said this morning she believes it is not political. she will be meeting with jack lew later this month to talk about tax issues on both sides of the pond. and on the data front today, we'll be getting a read on the
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auto sector. figures for u.s. automakers expected to drop from a year ago. general motors expected to post a small increase. in corporate news, consumers are reporting that the batteries on the new samsung galaxy note 7 device caught fire while it was charging. they will delay shipments of the devices for quality control testing. shares falling on that news. down 2% in trade today. check out shares of campbells soup. the food company out with quarterly results earning 46 cents per share. 4 cents below estimates. revenue shy of street forecasts. the company says it's not pleased with the results citing execution issues as you can see campbells soup best part of 5% this morning. the countdown is on. we are just over 24 hours away
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from the release of the august jobs report. i know we say this every month, but this month really matters because we want to know what the fed's going to do. steve leisman has more to get us ready for those numbers. >> thanks, becky. following those numbers, the jobs report is likely the linchpin for the rate hike when the fed meets in september. but there's a potential problem with the number. first let me tell you what the estimate is tomorrow. we're looking for up 180,000. that's down from that big number that we had in july but still pretty strong. unemployment rate seen ticking down to 4.8%. average hourly wages also down a tenth but up 0.2%. and there's the adp private payrolls at 177,000. the trouble is that august for the past five years has been the most revised month of the year by a long way. here's the data. you can see it right here. there's august. the average revision over the past five years is plus 70,000. >> what? >> and the average month is
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revised up 29,000 or has been between 2007 and 2015. >> so why can we say this is such an important number and the fed's going to be basing off a number that's been faulty for five years running? >> i'm going to get to how they might treat this. but first i want to show you the numbers. 2011 it was shy by 107. 2012, 100,000. 2015 under by 23,000. they may yet come back and say there were more jobs in august. >> over a year ago? we still don't know? >> no, it takes -- they get the actual payrolls from the states and they rebenchmark and they true up the number zblps it's a stupid number anyway. what's the margin of error? >> plus or minus 100 anyway. so i can talk about why it may be that august is so bad. we can go over this.
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maybe auto shutdowns, whatever. september's only slightly worse. in general mark zandi said during expansion, jobs numbers are understated on the first because of the government model. so numbers tend to be revised higher. zandi has lowered his forecast by 25,000 to account for the underreporting in august. i think the fed's going to look through a weak number. to a point. many have said payroll growth as low as a hundred thousand is enough to keep the unemployment rate steady. a weaker number could still be enough if the other data cooperate during the month of december for the hike. >> no way. 100,000? >> you think that's low? >> i don't know if 200,000 is enough. >> you're really skeptical. are you one of those wishful thinking things where you think they're not going to do it. then be surprised. >> fool me once, shame on them. >> crying wolf. what are the -- >> 27%. >> so why do you think? someone tell you something? >> no. i just thereon what people said
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out there. >> everything's -- between now and november, everything is going to come in strong and then be revised up consistently. >> because of political reasons. >> yeah. >> joe, wasn't it more fun to talk about the things we agree on like how great steely dan is? i mean, that was more fun before. and we disagree -- >> this is a commercial break conversation. >> i mean, i don't think the numbers are going to be politically revised. i don't think there's any evidence of that. in fact, i think i've shown there's evidence they're not revised for political reasons. >> either way, do we only get one this year? i think we'll get one this year. i don't know when. i think if it is one, it doesn't matter if it's september or december. we'll get excited about it obviously the day it comes. >> speak for yourself. >> the move in the dollar and stup over a two or three month period will be the same. but if we got two, that would be a positive surprise. >> i think it depends a little bit on what happens in europe.
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whether or not there's further indication they go more negative. the fed relatively has tightened. >> we don't believe the gdp numbers then? >> it's not they don't believe them. the analysis is that they do not see the gdp numbers, the weakness of the gdp numbers as weakness. they see the strong consumer. and those things make them feel like the economy is on solid -- >> we choose which data we choose to believe and have faith in? >> absolutely. when the data's contradictory. i think we've been through this 1,000 times. when the jobs numbers and the gdp contradict each other which they have for quite a long while. the fed and most -- >> anticipation on wall street agrees with the gdp numbers. >> why do you say that? >> because it's at a 40-year low or whatever. there's so many people that have just checked out and aren't even attempting or are doing just
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fine by not working. >> or they've retired. >> that's the big excuse. >> it's not an excuse. 10,000 baby boomers a day reach retirement age. >> for some boomers. not all of them. >> the bigger thing -- >> did you see buzz was just on. he's 86. >> awesome. >> you see brooks, mel brooks getting emotional about the great gene wilder on the talk shows. did you see him? 90. standing up, running around, yelling. >> my grandma just turned 90 a few weeks ago and she is in great shape. just went to france for her birthday. >> the real economic story there is we knew people were going to live longer. we did not know they were going to live that well. and that has changed the dynamic of the economics of aging in ways we could maybe talk about another time. but people are older and in the workforce and still productive. and part of the thing is --
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>> by the way, that's part of what keeps you young. >> we figured that out, right? >> who was it -- the most recent one? and then it happened with john mclaughlin. missed a show. >> he missed a show because he was sick. >> that was the first one he missed in 34 years and he was 89 and he died the next week. >> look, work keeps you young. keeps your brain there. >> so does music. >> all right. we've come full circle. >> i don't know about this fed mush. talking about this -- >> what about -- >> this dulls my senses talking about what they're going to do. anyway, now to the campaign trail. donald trump meeting with mexican president enrique pena nie nieto. joining us now rick santorum who has endorsed donald trump. it's so -- senator, it's -- i don't know. it's frustrating but it's tough to know exactly what to do
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because i think it's tough to hunt and seek out 11 million people. and everybody says that. and it's -- we're probably not a country that's necessarily going to do something like that. but the minute he backs off it all, then you hear that he's waffling and flip-flopping and he's going to be added to the gang of eight. what's the right thing to do here? is there some plan in between jeb bush and mark rubio and where trump is right now that would satisfy everybody? >> what i think donald trump did yesterday would show, number one, he can go on to the foreign stage and meet with foreign leaders and handle themselves well. have a constructive conversation. i think that was a big question. a lot of questions people have. you know, what kind of international leader is he going to be? is he going to be someone we can trust with the nuclear codes. someone to trust to have rational conversations with foreign leaders. and i think he handled himself well. check that box. and i think his speech last
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night in phoenix actually from my perspective did what you suggested. he talked about, you know, a tough enforcement strategy which the overwhelming majority believe we need to have a border and that we need to enforce that border. the real controversy comes what do we do with the people who are here and i think donald trump laid out a plan saying we're going to prioritize those who are criminals. we used the term priority. which means we're going to focus on certain people. we're not going to focus on others. i think that is at least for the beginning part of dealing with immigration, a middle ground that i think he's grabbed. >> do you think that he can make up his shortfall with republicans -- the never trumpers. i don't know. romney had 90% backing with republicans and still lost. and i don't know how you get some of these guys.
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you know, i can't -- bill kristol finally said that trump had a good day yesterday. it killed him to say it. can he make that up? that shortfall? not getting all the republicans, he's going to get enough from somewhere else to do it? >> i can tell you i look at my home state of pennsylvania. they had the largest primary turnout ever. they had a turnout in the primary that rivalled what they get in most general elections all driven by donald trump pulling out new people. i think that's what's going to happen in the fall. i think trump is going to pull out a lot of people that traditionally are not voting. i think he has some attraction at least in my state he has attraction to democrats and independents. and is he going to -- would it be great if he got the same percentage mitt romney did among republicans? yes. do i think he can get there? i actually do. if he continues as he has behaved here in the last month, last week or two, you know, staying focused on the issue, staying focused on hillary
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clinton and her policies and the differences between the two. the winds are behind him. this is a race that donald trump should win. what he needs to prove is that he can be disciplined, someone we can trust to be able to execute on the things he says he wants to do. >> so what are his chances in pennsylvania? that's an important state. and he's still behind significantly. but who knows which polls are accurate. >> look, i can say that in my state, he's going to do exceptionally well in the western part of our state. he's going to pull votes from democrats as well as republicans out there and he's going to do very strongly. the real key for him is how well he can do in the middle of the state among conservatives. i think his speech yesterday helped him there. i think his visit to mexico helped him there. just building confidence in the kind of president he will be showing the character that we want to see out of a president.
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someone who can stick to the issues and be articulate on those issues, i think conservatives are looking for that. he delivered that yesterday. >> okay. senator, thanks. appreciate your time this morning. >> my pleasure. when we come back, if you are getting ready to hit the road for the holiday weekend, good news for you. gas price tracker gas buddy is predicting less pain at the pump. the company's petroleum analysts will join us right after this with the numbers. stick around.
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welcome back to "squawk box." it's been a great summer for road trips here in the u.s. gas buddy says this was the cheapest summer at the pump in 12 years. joining us now patrick de hawn. good morning to you. just how good has this summer been relative to recent summers? >> believe it or not, it's been quite some time since we've seen summer gas prices this low. in fact, all the way back to 2004, a time it was worse than today, motorists have saved $18 billion over the course of a summer. far removed from the prices of the early decade when gas prices were well into $3 a gallon
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territory for labor day. >> between the end of august and the labor day weekend, things can tend to tick up a bit, is that right? >> surprisingly of the last ten years the national averages actually declined going into the weekend. what we're seeing now is an uptick in the national average. as we progressed through the weekend, we'll start to see more and more states declining and beginning next week after the holiday, gas prices really should start stumbling a bit more. >> what kind of time lag is there in terms of when we see moves in brent and wti and feeding through to e the pumps? although august was overall a strong month for wti, the last week we've seen quite a significant selloff. >> yeah. that's right. it really depends on the magnitude of the shifts in wti and brent depending on how much of a lag time there is at the pump. we started to see a real strong uptick at the pump. about a week after wti started surging close to $50 a barrel.
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but the stronger the lift in oil prices, the quicker you generally see that hitting the pump. and so right now the national average has really caught up. it's priced in at about $49 for wti. so now as wti has fallen back to about $45, there is some downward room expected at the pump as the lower oil prices soon catch up at the gas pump. >> and so patrick, it's been a good summer at the pump. you're hopeful that lasts through labor day for consumers. what about the outlook for the rest of the year? and factor in the election for us. is that something that's likely to move gas prices? >> well, as we progress into the fall months, just like gas prices spring forward in the spring, we fall back in the fall. much of the nation will be going back to cheaper winter gasoline as of mid-september. that's going to put some downward pressure on gas prices. so, too, will the drop in demand that generally happens after labor day. so we're going to have a lot of downward pressure on gas prices that should last much of the autumn. the national average will likely
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drop back to under $2 a gallon by perhaps halloween. maybe as late as thanksgiving if there's a disruption via hurricane. but it's looking fairly good for the rest of the year. >> patrick, thank you for joining us this morning. >> my pleasure. everything okay over there? >> i'm sorry. i'm sorry. >> did you fall? >> he was trying to help me. >> all right. coming up, the number of americans smoking pot is higher than ever as attitudes about marijuana shift. the details next. but you might end up with your hair looking like that. so beware. as we head to break, here's a look at the top performing s&p 500 sectors for the month of august. "squawk box" will be right back.
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♪ marijuana use keeps going up according to a new report. the number of american adults who smoked pot in the last year increased by 10 million. and people who used it daily jumped by more than 4 million since 2002. study found that less people fear the reefer. only 4% of those surveyed think there's a great risk from
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lighting up once or twice a week. compared to the 50% of people thought what it was doing to them 15 years ago. researchers also said the legalization of marijuana in several states has impacted the way the drug is perceived by the public. >> we knew that was an inevitability, right? >> in the last year. >> in the last year it's gone up because it's legal to do. >> do they date it a calendar or 52 -- >> last 52 weeks. >> i'm fine either way. >> that's what i assumed. >> well, yeah. you know. i turned into paul mccartney. i did. he used to be a big stoner. >> how he drinks white wine. >> he says it doesn't do it anymore. >> got to protect the voice. >> that's not why. but he said what i like now is a nice margarita and some white wine. and that is me. >> they don't go together well. >> they don't have to follow each other. >> two drinks you like.
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>> you know, you have four margaritas and six glasses of wine. you don't drink -- >> full bottles. >> what? >> bottles. right. still to come, breaking economic data on deck. we're minutes away from jobless claims and productivity. we'll bring you those numbers as we head to break though a look at u.s. equity futures. we lost a little bit yesterday. enough to take the s&p down to negative territory. the nasdaq, though, finishing august up 1%. we're back in a couple minutes. tokyo-style ramen noodles.
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♪ welcome back to "squawk box." good morning to you. the chinese territory of macau reported a 1.1% increase in gambling revenue in august. that's the first increase in more than two years since may of 2014. that's helping shares of companies that operate casinos in macau like las vegas sands
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resort moving on that surprise increase. wynn up 4.2%. we are just a few seconds away from jobless claims and productivity. the futures ahead of that number look like they have been higher as they have all morning. dow futures up by about 35 points. s&p futures up by three. let's get down to rick santelli in chicago. >> well, here's the data. in terms of productivity, always key especially when you're monitoring growth. exactly as expected down 0.6%. following sequentially down 0.5% was the last look. unit labor costs, double what we were expecting. and that follows our last look at 2.02%. continuing claims, they rose to just under 2.16 million. and initial claims, drum roll, rose 2,000 from 261,000 to 263,000. as i look at the board, i do see
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a 1.6%. i guess welcome to september. every single trading day in august except for jackson hole friday settled in the 150s. so we will monitor the slight rise in interest rates and of course we're going to monitor what's going on with equities today. we do have construction spending. and many people looking forward to the ism national manufacturing index out today at 10:00 eastern. back to you. >> all right, rick. so what are the chances we get one raise this year? you think we'll get at least one, rick? in your view? i haven't asked you that. >> i think it's possible we can get december. i don't think we'll get anything before the election. and i do have a feeling that we may see more normalization as we kind of get past the political season and get into next year. of course depending on the economy. but we have a lot of room, joe. rates will be around 1.5%,
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1.25%. we'll have to wait and see the yield curve probably is going to be flat as a pancake over the next couple of years. >> you think we can add a third mandate and just de facto that now they have to make sure the dollar doesn't get too strong. that's a third mandate. how many you think they can handle? >> it's better than that. it's better than that. they'll give us a little piece of paper every day. and it'll have what they want the market to close at. yeah. it's getting a bit ridiculous. you notice the lack of volatility in the equity markets. i think that's very interesting. because in the end, if managed markets are the new norm and negative interest rates are something that europe and japan may have to live with, my guess is that you're going to see markets pretty much come to a certain level and rest for a long period of time and maybe periodic as they jump the fuse
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and want try to deal with meetings and what personnel and policy makers say. first is the ongoing fundamentals like in the old days when we used to use a phone and a desk. you remember those days, right? >> you know, maybe a fourth mandate is the economic stability of cipres. how are things? that island is back to -- we're all right there? i don't want to putting off another fed increase, leisman. anyway, thank you. >> thanks, joe. >> i was thinking big thoughts on productivity and you're talking about cyprpscypress. >> that's got a rate hike. it did, remember? i was very concerned because i thought they were talking about the golf course out in monterey. that had me worried. they were like, it's an island.
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everything's fine at the golf course, by the way, thank god. >> but everything's not fine in productivity which is falling and it's been down for several quarters. i want to tell you there's a big debate that's been going on as to whether or not the numbers are truly measuring growing efficiency in the economy and it's the conflict between, you know, stuff like this. all this technology around. and the people who you guys have on every morning. we do a great job here at "squawk." how is it possible that quarter after quarter we've been less productive? guys like marty feldstein argue that the numbers do not pick up the growing efficiency in the economy. >> how do we measure it? >> well, we measure output. how do you punish output on things like services? much easier to do with things like automobiles and things that you sell and buy. one of the interesting things marty was talking about recently
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was this idea that google does not really show up in gdp. there's actually no way to measure google. google's sales are ads. doesn't show up in final sales. so google doesn't exist. we've talked on this show about wikipedia replacing the sales of something like encyclopedia britanni britannica. it's unclear. the anecdotal evidence tells us technology continues on pace. robert gordon who is out with a popular book right now, this idea of the rise and fall of american growth argues that we are past our prime in terms of productivity. that all the great -- not all the great inventions that really ratcheted up our efficiency have been invented. >> it is hard to measure. i wouldn't even know how to begin to measure google on how that comes in. part helps me with my job.
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but part of what i go to google for is all the stupid questions i think of during the day i want the answers to. >> what is the output on that. >> what are the earnings at the end of the day? >> their earnings did not show up in adp. what's that? >> i can't believe you present that as a plausible opportunity. they wanted to close down the patent office in the late 19th century. you could have done it before the internet and said there's nothing else. then things like google came along. and you know that the great discoveries -- >> okay. can i put it in context? i hear you. i hear you. i believe you. >> every -- these huge developments are getting shorter and shorter between huge developments. >> right. >> something huge is coming. >> yes. wasn't that hal in 2010? said something was going to happen. no that was -- there was a
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secret to it. which is a binary increase from 2001. >> nerd. >> you said feldstein. let me give robert gordon his due on this. >> oh, please. >> what he says is -- >> nothing -- >> we've had him on with crap. i'm allowed to say crap now. >> am i allowed to make these arguments? >> no. >> yes, i'm going to make it. >> preposterous. >> what he says is the stuff we invent now is not as monumental to our increase of productivity as things like running water, things like the air conditioner, electricity, the automobile. he points out, by the way, joe. we have not increased the average speed of, say, the airplane in 50 years. >> is pokemon go as important? >> it does not register.
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but all of the enjoyment becky gets from pokemon go. >> i do not play that stupid game. >> but do we have a crisis of productivity or a mismeasurement problem? >> plus it's pokemon. >> i don't know. >> that's one of the -- >> and that could be the reason for it. i have another theory. when older productive workers retire, they're replaced by younger workers and they're less productive. >> we take that as older folks. >> i can do eight stories in six minutes. how many can you do? i've been doing it for a long time. i'll take you on wilfred. >> you're right. i stand -- >> but you would do it with a better accent than i ever would. >> you guys got me beat. >> that's the story and i'm sticking to it. >> steve, thanks very much. auto sales also due today. phil lebeau joins us with a look from chicago. >> hi, wilfred. this is going to be interesting
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because the sales pace is going to be expected to be slightly over 17 million. you take 17 million any month. anybody in the auto industry would be great. but compared to last year, the individual sales will be down anywhere from 3%, 6%. take a look at what we're expecting. this is according to edmunds.com. this is in comparison to august last year which was a huge year for the industry. fiat chrysler expected to be slightly higher. the interesting thing that's going to be coming out later today is what happens with incentives? there was a pretty substantial step higher in terms of incentives in june and july. have the automakers and the dealers said hold on now, we're going down that bad path of sweetening the deals too much and eating into profit per vehicle. have they pulled it back a bit and focusing more on retail sales. retail sales that matter. in other words, not just
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throwing it out there and throwing a lot of cash on the hood. and that's why when you take a look at the annual sales rate which will come out later on today, we usually get it during the closing bell, most are expecting the sales pace to come in about 17.2 million, 17.3 million. not up to the 17.5 million which was the pace for all of last year. any time near 17 million, it's hard to say you're seeing a dramatic slowdown in sales. quickly let's take a look at shars of gm and ford. and compare this with the s&p 500. they haven't broken out as many people would have expected them to since we're at the top of the auto cycle. keep in mind this is always a group that moves early in the cycle, not late in the cycle. and that's where we are right now. >> smart money. >> thanks, phil. coming up, the future of carried interest was a heated topic on the campaign trail. alan patricof will join us next. the heirloom tomato.
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welcome back, everybody. in a "new york times" op-ed, our next guest asking for the close of a tax loophole. this is something that does benefit from this. joining us now is alan patricof from gray croft. thanks for being here today. >> thanks for having me. >> this is an issue that's gone goth brought up in almost every election season. at this point just about every elected official who's running say they are in favor of getting
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rid of this loophole. you actually came out in favor of that yourself. why is that? >> actually i come out for a long time. i've spoken about this in the last couple of years. and i just decided it was time to write an op-ed about it. because i think it has to do with the realities of the times we're in and the conversation about the 1% and the differentials going on in this country. and the reality is in my opinion -- i'm not campaigning for this. i just believe that carried interest by the definition of what capital gains was intended to mean really doesn't qualify. capital gains treatment which goes back to 1909. 1913. it's been legitimaslated so man different times with different holding periods. but it's always been one definition. it differentiates between labor and capital assets investments, taking your money and putting it at risk. and the fact is i just was reflecting on the reality that
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in the capital -- excuse me. carried interest doesn't really involve any capital at risk. and lots of my brethren would argue with me. it's interesting that there was legislation actually passed last year. and i wish more venture capitalists would focus on that legislation which was the path fact which section 1202 of the code. it's referred to very often. which gives absolute incentives and covers this issue and i think the people ulg stead of taking van of regulations that exist. and instead of trying to preserve carried interest. >> you talk about to david rubenstein about this? >> i'd be happy to debate him. i've read his articles. >> i can't remember the case he makes for it being his capital
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that's at risk. but he's very -- and he -- he's with you at the white house boogying down with michelle obama. he gets invited to those parties too. >> it's one of the reasons reading what he said is what stimulated. >> his thesis is that by taking a deferment through a profits interest, that it's an extended period of time that you're working to earn that over a period of time. and therefore that is your form of equity investment. >> almost like deferred compensation? >> yeah. i think at the end of the day it reflects your labor of making investments and profits. >> he's not a greedy, selfish guy. so is he doing it out of -- it's self-interest. at least i think -- it is self-interest? >> i certainly didn't write this
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op-ed in self-interest because it's going to hurt me. but i think it's -- and i can't believe it under the new administration. congress is ready for this. it is. >> aren't there non-fat cat types that will be affected and you don't want the unintended consequence? >> well, i think the real estate area is -- >> aren't there a lot of different people that have this structure and many of them do? >> they're all taking advantage of this. >> really? >> it does create a division between the haves and have nots. >> if you look at section 1202 of the tax code which says if you hold something for five years and you -- the company has not raised more than $50 million, that if you invest nothing but you own stock in that entity, you have a -- you
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can have $10 million of non-taxable gain. >> which would take care of the problem. >> and is not offset. granted, it's not going to take strang of the few cases where you have extraordinary gains. and it also -- if you invest, it gives you up to ten times your matter of investments. so for people like general partners of funds, they would be able to be eligible for $10 million for each individual investment that's made. not just the whole fund. >> i know you think that the u.s. government can use that $2 billion or whatever it is. >> drop in the bucket. >> it is. but in the apple case, i mean, do you feel bad that the eu didn't get its tax money? >> as an -- >> apple's okay with it. it's the eu -- >> the eu's ruling means that ireland gets the money. the eu doesn't get the money. >> why is ireland pushing back?
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>> they have a lower tax rate. >> you're comparing apples and oranges ironically. the apple issue, it seems to me from reading -- and all i know is from reading. is this gets back to the issue of what's been discussed here. again, of tax loopholes of letting corporations shift profits overseas. and that's what apple has been doing. and if -- >> if the corporate tax rate was zero, they wouldn't do that, would they? >> okay. but if the corporate tax rate -- if there was some -- >> right? corporate tax is 10%. we could make up for that and let our guys compete globally without any of these shenanigans. >> but at any rate, right now people are shifting income overseas. i think that this is bringing it right up front now and saying to the u.s. congress, okay, guys. you know, this is what happens. and now someone else is going to tax those profits. which you've let be tax free and
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i think they have to figure a way to repatriate some of those. >> so you're in favor of corporate tax overhaul too? >> i don't want to come out. i haven't studied the issue. but i think that there is a lot of of free non-profit -- corporations not paying taxes shifting income overseas and that's an issue that should be, you know, taken into consideration. the government needs more money. people want to see more quality in the country. i think that patriotism doesn't hurt anybody. >> alan, thank you for being here. >> when we return, jim cramer will join us live from the no stock exchange and a preview of his documentary "ground zero rising freedom versus fear" premiering on cnbc tonight.
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15 years after the september 11th attacks, a new world trade center is open for business, its center piece tourre is the hallest building in the western hemisphere. jim cramer reports in a new documentary, world trade center
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was designed to be the biggest and safest. >> the unique safety features are a key reason it cost $3.9 billion. $2 billion more than any other skyscraper in the world. it was designed precisely to survive a 9/11 type attack. which makes it both a shield and a bull's eye. >> the world trade center remains a target. it remains a target for the al qaeda groups or isis. >> don spent 25 years with the fbi. and helped lead new york city's anti-terrorism task force after 9/11. he's now an nbc news analyst. >> do you think there have been any credible threats even during the time of the building of this? >> lots. >> lots? >> i would say lots. >> and learn more about the new world trade center in the new cnbc documentary, "ground zero rising freedom vs. fear" tonight at 10:00 p.m. eastern.
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jim cramer joins us now. our friend tells me this is unbelievable to watch and moving and everything else, jim. >> well thank you. look, we talk about honor. re. but we also show resilience and fight back. i think people will be surprised at how, frankly, it's come together. there were many, many different coalitions down there and you would think that there are frankly i'm surprised anything happened. people feel how could it not happen years ago and not have finished this. i was energized by this, joe, because those of us down here when it occurred, kind of got used to it just being a gigantic construction site. it's no longer that. it's an incredible building. it's an amazing 16 acres. i urge everyone -- obviously i want everyone to watch my documentary, but more importantly i urge everyone to go there and make up their mind also it's too mcommercial, remembers correctly and makes sense. because some people feel there
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should have never been a building there. we kind of tackle all the big issues. i'm very happy about the doc team and how much support they gave me and i'm excited about it. >> there's a lot of reasons to watch it. i will say, jim, that was the sound bite that we used, was pretty interesting and compelling too, that there have been multiple, multiple threats since then. we forget that was the second try at the world trade center when they got it and it remains a target which is -- >> scary -- >> but go ahead. >> well, i did feel at the beginning i was fearful when i went there. i went in the building. and then i decided by the end of the documentary it was many months i was too fearful and people should make up their minds. that's how i felt. i was too fearful of the place. >> all right. jim, thank you. >> really appreciate it. >> thank you. >> see you in a couple minutes. >> when we come back today's top stories. stick around. "squawk box" after a quick break.
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customers can put items as low as $10 on layaway with a $50 minimum basket and have until december 12th to pay off the account. >> wow. wilfr wilfred, ten seconds to waste. we can get you to say like twitter once. probably. >> or something else. >> twitter. >> which -- >> we're out. >> now we're down. >> sorry. >> thanks. never mind. >> join us tomorrow. "squawk on the street" is next. twitter. ♪ good morning and welcome to "squawk on the street." i'm david faber with jim cramer and we are live from the new york stock exchange. carl quintanilla continues to have what is a very nice week off. we certainly hope. let's give you a look at futures this morning as we get started for trading here on this thursday. after a down day yesterday, not substantially, but down, we are up a bit. interestingly, the age

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