Skip to main content

tv   Squawk Box  CNBC  June 13, 2017 6:00am-9:01am EDT

6:00 am
"squawk box" begins right now. ♪ live from new york where business never sleeps, this is "squawk box. good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. yesterday we saw a bit of a weakness in the markets. dow was down by 36 points. s&p off by two after friday's selloff, the nasdaq was down by a half percentage point this morning there is a rebound. dow futures indicated up by 38 points s&p up by 5 points nasdaq up by 18 points overnight in asia, you'll see that the nikkei was down but just barely. i would call this flat
6:01 am
the south korean kospi index up by 0.7%. the shanghai up by a half percentage point in europe, in early trade, you will see that markets are hanging in there these are some positive moves at this point the dax is up. when it comes to currencies, the canadian dollar rising on hawkish comments from canada's central bank that could signal an interest rate hike. when it comes to energy prices, yesterday crude oil was up up again this morning 14 cents the fed kicking off a two-day policy meeting the central bank widely expected to hike interest rates again after raising them in march. the fed decision due tomorrow at 2:00 p.m. along with the latest economic projections that's followed by janet yellen's news conference at 2:30
6:02 am
eastern time also in the economic agenda the may producer price index at 8:30 a.m. eastern time. small business optimism held steady in may marking the sixth month of historic highs. the may data showed average employee growth of 0.3% workers. one of the highest reads in the survey's history 83% of businesses trying to hire said finding skilled labor was an issue also new this morning, nba hall of famer dennis rodman arrived in north korea mee he's making the trip as a private citizen. the state department says it was not an official u.s. visit rodman declined to answer questions about the trip back in 2013, rodman visited north korea to film a documentary and called the leader an awesome kid.
6:03 am
you know, our latest diplomatic effort >> sursurreal. i would be afraid, but i guess they're buds >> they're buds. he likes basketball, kim jong-un. >> shocking, the first time we questioned rodman's judgment >> right if you were any other american i would have great trepidation about going anywhere near there. you saw -- maybe it was on -- i guess drudge, just one step away from -- one more thing to be ability to rea able to reach the u.s. >> if he goes over as a private citizen, does anybody brief him? >> the state departmentsaid this was not sanctioned by us. >> does anyone back channel to him, by the way, please mention this can you let us know? or on the flip side, when he comes home, do they interview him privately and say tell us what you heard >> do they sit around over there
6:04 am
with an interpreter and shoot the breeze >> apparently kim jong-un is a huge basketball fan. >> right >> they listen to michel jackmie jackson together no joke. >> did you buy the glove or -- >> i tried to buy the glove. it was going to be on auction. this is years ago. i thought i would be able to steal the glove because the price was so low, but then the whole auction got pulled back because there was a lawsuit with the jackson estate then it went for $100,000. >> you really did try to buy it -- >> i actually tried. you could have gotten it for a couple thousand dollars. >> you thought you could make money on it -- >> no, no. >> you would put it in a glass class? >> i wanted the glove. i very much wanted the glove but then i couldn't afford the glove. >> in hindsight, with all we
6:05 am
know, i would say something about the glove. by i but i won't >> jazz hands. >> what? >> jazz hands. >> not helping >> for the second time in three years the golden state warriors are nba champions. they beat the cavaliers 129-120 to close out the finals in five games. seven-game series are better this is the fifth championship in the warriors history. kevin durant was named finals mvp. one fan paid big money to see the golden state warriors win the nba finals an unud identified buyer purchad tickets for $133,000 to get seats. 133,000, there are a lot of places in this country where you
6:06 am
can buy a nice house for $133,00 $133,000 >> or see a game for a few hours. >> or buy a table at wnd sit wi warren buffett >> we should congratulate half the valley, marc benioff, hanging out with chris rock -- >> you were up at 9:00 watching that you saw that this morning? >> i was -- i didn't stay up all night. i watched a bit and then saw some stuff this morning. >> need to be here need your rest >> my beauty sleep >> you do. on today's agenda in washington, attorney general jeff sessions will testify about russian interference about the election before the senate intelligence committee
6:07 am
kayla tausche has more on the top political stories. good morning >> good morning. that is the top political story. the attorney general's testimony will be open to the public this afternoon around 2:30 where he will attempt to set the record straight on his meetings with sergei kislyak, his role in the firing of fbi director jim comey and comey's comments last week eluding to classified facts that would require sessions to recuse himself in the russia investigation. press secretary sean spicer yesterday was asked whether the president would seek to keep any of his conversations with sessions private spicer said it depends on the questions. two senate committies reached a bipartisan deal to strengthen russian sanctions on cyberactors as well asmining, metal and shipping industries. another layer of intrigue to the story. president trump's personal friend, chris ruddy, seen
6:08 am
leaving the west wing less than an hour before making these comments to pbs about how the special counsel investigation into the white house is not look rosy >> i think he's considering perhaps terminating the special counsel. i think he's weighing that option it's clear by what one of his lawyers said on television i think it would be a significant mistake. >> a senior white house official said ruddy speaks for himself, did not meet with the president but would not say who he did meet with yesterday. the administration will try to stick to policy with a trip to wisconsin touting apprenticeship programs it's the focus of this week. but it's safe to say at least for today the russia investigation is going to be back in the spotlight. >> what time is the testimony before the senate? >> 2:30 p.m.
6:09 am
>> you see both sides trying to posture a lot. we read stories about mueller boning up, getting lawyers to help him gingrich and others looked at the history. most of the people that he has hired, they're -- a lot worked for president obama, president clinton. a long line of political contributions to the left. >> they're lawyers, they'll be democrats, i guess >> right away they say this guy is great mueller is known for integrity then totally flip-flopped and said look who he is hiring so far from looking fair at this point. it's just bizarre. >> it is bizarre i think one of the questions is what is leading some of these people now to become so critical of muller. yes, you mentioned some hires he has made but he wasn't a stranger to the
6:10 am
washington community before he was appointed. one of the reasons why he was universally praised when appointed to that role in may was because of his track record when he was at the fbi when he was in all of his other previous roles so he does have a very long professional background that was the source of the initial praise that now many people are -- >> but he also interviewed for the -- to be fbi director again. >> and the white house has not commented on exactly what was discussed, whether there was classified information, whether the scope or the state of the russia investigation came up in the interview. we don't know at this point what that meeting was about whether mueller knew he was under serious consideration or was just curious about meeting with the president we don't know.
6:11 am
>> all right thank you. the treasury department unveiling a plan that happened late yesterday to overturn rules for banks and financial firms put in place after the financial crisis it's a 150-page report that recommends streamlining supervision of the financial sector, takes power away from independent regulators changes would eliminate rules that affect smaller banks separately steve mnuchin testified last night about the budget >> if for whatever reason congress does not act before august we have backup plans to fund the government. i want to make it clear that's not the time frame that would create a serious problem however markets don't want us to wait >> the government hit the debt limit back in march. we have not talked about the
6:12 am
whole cabinet meeting yesterday. all the praise during the cabinet meeting, then schumer trolling the president by having his own meeting where they praised each other did you see this comedy routine >> but was it really a -- >> it is a privilege to be here this morning >> was it really obvious did it seem like that -- did it seem like they needed to do that because they know that's what he wants? i have to imagine. did you watch it >> no. >> maybe we'll do a split screen it was one of those very strangely orchestrated things. looked like it >> i could see that. i would like to give you some comments about me every morning. because i -- they don't come -- >> that's why i said it's an honor and privilege to be here
6:13 am
to be here and work with you, becky. >> what about the -- can you go into the things you like most about it do you learn a lot >> i learn a lot >> do you benefit from the wisd wisdom -- >> really the counsel. the humor? >> makes me laugh. >> bringing you along. >> it's really been an education. >> if they did it with this tone that you're doing it now, i think they'd be fired. this dripping with sarcasm like that >> i'm not sarcastic i mean it genuinely. >> okay. ben carson will be here. was he there >> he was. >> he'll be on set you know what? >> what. >> as sarcastic as you are now -- don't do it too me whit n no one is here -- don't do it with the same smartass --
6:14 am
>> i want becky to know when i talked to her, i meant it. >> joining us is peter boockvar from the lindsay group and a cnbc crontributor michelle meyer, head of u.s. economics at bank of america merrill lynch. it's a two-day meeting, boockvar, i have to ask you about it they'll probably hike at this point. finally they're doing what you want them to do, right >> yeah. normalizing interest rates unfortunately -- >> are they behind the curve doesn't seem like it 2.20 on the ten-year >> the fed wants to get to a 3% fed funds rate they're only a third of the way there. we'll have a recession and an accident well before they get to 3% waiting for the ninth year of an expansion to ramp up rate hikes while i do think interest rates should normalize, they have waited way too long to be doing this >> where do you see signs of
6:15 am
that >> the auto sector is now entering a recession timing on that is not too good >> i know. but if they're behind the curve, you would think oil would be at $100, 150 -- that makes no sense. >> it's tough to define behind the curve. i don't like interest rates on a real basis that are negative we had this alan greenspan, bernanke, yellen era of negative interest rates i would like to see interest rates level. >> the critics who worry about the unintended consequences of remaining at zero for too long were worry being a bubble. >> yesterday the fed fund rate had the flow statement
6:16 am
we can call it an everything asset bubble not in commodities particularly but in real estate, stocks, a variety of things. >> there's a real estate bubble? >> commercial real estate. >> you think the -- you have been thinking -- the stock market rally has been sticking in your craw for three years >> it's really interest rates that are the bubble. anything priced off interest rates are inflated as a consequence. >> what do you think how much of that do you agree with half of that quarter? three quarters >> so i guess i would disagree they're behind the curve by looking at inflation in the overall economy, it's still pretty subdued typical argument that the fed is behind the curve is that the economy overheated, there are signs of excess inflation and that the fed will have to hike quickly in order to fight that
6:17 am
inflation and overheating. there's very little evidence of that i think the fed has been doing what they laid out to do they're normalizing, being accommodating. normalizing not only rates but the balance sheet, which seems given appropriate where we are in the business cycle. >> how about the stock market? i know that's not your thing, but -- >> yeah. >> is it priced off cheap money? >> i think there's a question as to how much generally central bank liquidity in qe influenced asset prices it's because that's the design of qe. part of the way qe works is by boosting wealth. in theory households are supposed to spend out of that wealth, put it back into the real economy, that generates overall economic growth and inflation. that mechanism is a bit broken you saw the inflation of asset prices but not the powerful wealth effect stimulate consumer spending is the stock market overvalued
6:18 am
or not i'm not prepared to speak to that, but i would say that the amount of global central bank liquidity probably resulted in some of the support for asset prices >> peter, will we ever at any time see an 8% ten-year again? >> that's a good question. the average ten-year healed yies 5%, 6% not for a long time. >> does that mean the baby boomers are a bunch of geezers what is that telling us about the world? >> with the economy and too much debt you have some speed bumps in getting faster growth maybe we can grow with the right policies 3%, a quarter here, quarter there but on a secular basis u.s. growth is slowing, just based on debt and demographics
6:19 am
>> i would say 8% ten-year would come more from the inflation side >> it would be for the wrong reasons. >> not because real growth is so powerful but because you see inflation shock on the upside. >> even though there are more millennials than baby boomers? >> yes the baby boomers have more money than the millennials >> life spans are extending. >> yes they just spend less, the baby boomers, as they retire, just by behavior >> peter, michelle, thank you. it was an honor for both of you to be with us today. >> yes >> not for us to have them with us >> no. right? >> don't you think that -- >> we should praising you guys >> otherwise -- >> we feel honored >> it's an honor and privilege >> you could say something about the show itself. >> one of the best on tv
6:20 am
>> michelle? >> you're doing a great job. >> don't stop. keep going >> i can't wait to come back >> great to have you guys here >> totally ran out of things that was all i had coming up, we'll talk about uber's culture crisis. the changes recommended by eric holder are due to be released today. we'll tell you what to expect when "squawk" returns in a moment the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.
6:21 am
6:22 am
live-streat the airport.e sport, read it carefully. binge dvr'd shows, while painting your toes. on demand laughs, during long bubble baths. tv on every screen is awesome. the all-new xfinity stream app. all your tv at home. the most on demand, your entire dvr, top networks, and live sports on the go.
6:23 am
included with xfinity tv. xfinity the future of awesome. welcome back to "squawk box. a much anticipated independent investigation of uber conducted by eric holder will be introduced today >> this will be a pivotal moment for the start-up and possibly a reset. it's also one that could see travis kalanick himself step aside as he weighs a three-month leave of absence we're told from a source that around 1:00 p.m. today, 10:00 a.m. local, a summary of the investigation will be released to uber's 14,000 employees while we don't know exactly what's in it, we know uber's board committed to fol loi tlow
6:24 am
recommendations. we know this reset reached the highest levels of the company shaking up the leadership and leaving a bunch of vacant spots at the top of the work chart emill michael announced his departure yesterday. he was behind a lot of uber's deals and broad strategy initiatives. his exit raised the prospects of others at the top who could be leaving or pushed out, making it harder for kalanick to step aside if he wanted to. the question is who would step in for him not a lot of people at this point because so many have left. >> all right thank you deidre it's a fascinating story we'll see where it all lands see you later today. a lot of you coming up, ceos sounding off on the economy we have the results of a new survey from kpmg next.
6:25 am
and later, investment picks from ron barroon he will be our guest host at 7:00 a.m here's a look at yesterday's winners and losers
6:26 am
6:27 am
and the wolf huffed and puffed... like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day.
6:28 am
symbicort contains formoterol. medicines like formoterol increase the risk of death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing. watch out, piggies! (child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit today to learn more.
6:29 am
welcome back to "squawk box. a look at u.s. equity futures at this hour. dow opening up higher. nasdaq up about 19 points. s&p 500 up about 5 points. a quick look at the pound. it's rebounding nearly trading theresa may meeting with the head of northern ireland's democratic unionist party today in a bid to save her job and avoid a second election. let's talk about some stocks to watch today toshiba is being sued by another group of foreign investors for 3$399 million in damages over a 1$1 $1.3 billion accounting scandal. hyundai unveiling its first sub compact suv in the united states, europe and south korea the launch comes as the company offsets sliding sales in china and works to catch up to rivals in the suv market. >> hyundai >> hyundai
6:30 am
>> i like to say hyundai >> you say a cross between honda but you pronounce each -- >> each letter >> hyundai >> hyundai >> hooked on phonics >> hyundai >> hyundai >> good cars now >> they are. >> i know. deutsche bank reaching $170 million settlement with an investor claiming the lender conspired to manipulate the benchmark european interbank offered rate a preliminary settlement was filed yesterday. it does require a judge's approval let's talk about a new study. kpmg releasing the findings of its u.s. ceo outlook a study of 400 ceos. the survey covering views of the economy, key areas of investment, hiring and much more joining us now with results are lynn dowdy, kpmg's u.s. chairman and ceo.
6:31 am
thrilled to have you >> thank you for having me afrnlgts l >> a lot of studies, everybody says they're confident how confident are they >> this study says the same thing. u.s. ceos are more confident today than a year ago. a lot of that has to do with the uncertainty of the election a year ago and they're looking at areas around technology and how they cannot be disrupted but be a disruptor in this age of emerging technology. >> what's different about this study is you're asking people what they think about the next three years. >> yes >> so we're not just talking about the current state of confidence about the next six month months >> that's correct. we're asking them what do you think about growth prospects over the next three years what are top priorities, risks. >> how much of this is about the broad economy versus their own businesses >> it includes the broad economy. it includes the industry it also looks at business
6:32 am
themselves when you look at all o dimensions, they're highly confidant. the survey is a global survey. their counterparts in other parts of the world are less confident today than a year ago. >> why >> in the u.s. they're more confident. i think the increase in the u.s. is primarily around the geopolitical aspects, where they're feeling confident about the possibility of tax reform, regulatory relief, and i think that's increased the confidence in the u.s >> let me ask you, we heard from some ceos, the emerson ceo who was here, people saying they're waiting to put money to work until the tax plan comes through, all the change, is that they expect to see happening that they are confident about it but as a result they're not putting money into the plan.
6:33 am
>> that came up in the survey as well they're doing so much around scenario planning. not putting it to use yet, but doing the scenario planning. also re-evaluating the global footprint in a big way so that came out in the study. >> because we're seeing the tax receipts for the u.s. treasury below expectations maybe that's part of it. >> let me ask you, there's an article in today's "new york times" by a guy we know, headlines ceos voice confidence but deals say otherwise. >> that's your article >> written by this guy >> andrew ross sorkin. >> that's me what's fascinating is all of these surveys say confidence, confidence, confidence, yet the one sort of -- >> it's a fascinating article? >> it is it is. i wrote it myself. one of the great truth serums about confidence in the market has been mergers and acquisitions activity. when ceos are confident, they do
6:34 am
deals. when they're not confident, they pull in. it's the opposite of all of the surveys. which is to say since donald trump won the election, deals have fallen off a cliff in the united states. we're now at 2013 levels so what does that say? and on the other end, talk about your european ceos or foreign ceos being -- saying they're less confident, they're doing more deals than ever what does that mean? >> that's fascinating. last year in the survey there was a push towards looking for deals over the next three years. this year that's not high on the list they're look at things more from the standpoint of how are we implementing new technologies, how are we taking advantage of disruption how are we getting the most out of data? looking at cognitive and really intelligent automation in a big way. >> when you look more broadly, how long have you been doing the study? >> three years >> three years there hasn't been a way to track -- one thing i'm
6:35 am
fascinated by is tracking this against the s&p. do we think there's a correlation? >> we'll see i'm not sure if there's a correlation or not but we have seen this growing confidence over the last three years, particularly in the u.s >> andrew, there have been times where a lot of deals were done because that's the only way to either grow revenue or -- >> yes >> if you thought organically things will get better, i'm not going to financial engineer, i will just be in this better environment and thrive -- >> by the way, we may be on the cusp of a huge sort of deal boom on that. >> but maybe defensive deals and offensive deals. maybe fewer defensive deals. >> all i'm suggesting is if you look historically over the last 40 years at deal volume and you match it up against the market, it's actually been an amazing
6:36 am
barometer both of confidence and as a leading indicator, not a backwards looking indicator of where the market is going. so there's a question mark about that i want to talk about risks that's one other thing ceos talked about cybersecurity is a big one what are others? >> cybersecurity is big top of the list this year and last year a new risk not in the top ten last year but is at the top of the list this year is operational risk many organizations are looking at how are they focusing on bottom line, how are they going to get the money in capital to deploy it into new eamericans te emerging technology areas. so operational risks were high >> operational risks because of the technologies that need to be invested in, not because they're worried about how they operate >> yeah. when they looked at top
6:37 am
priorities, they were saying speed to markets, digitizing -- >> getting there faster. >> being more data driven. but then the things they were concerned about, do they have the technology capabilities? do they have the innovation? sensing capabilities as well as they were not confident that in the reliability of their data in this new technology age where data is more important than ever >> the other piece, before we go, sort of asked what i described as the warren buffett question they have the warren buffett answer if they could do business anywhere, it would be in the u.s. which is where they think the growth is. >> yes which is historically different from india last time >> last year it was india, china. this year 90% saying the u.s. is where the growth will occur. >> those are global ceos saying this is where growth will happen >> yfrmt. >> we'yes.
6:38 am
>> we'll see whether it happens. >> when we come back, ron baron will join us at the top of the hour he will reveal his latest portfolio picks and give us his read on the economy. first -- chris ulman is managing director at carlisle but also four-time whistling champion and author of the new book "find your whistle." he will join us next stay tuned you are watching "squawk box" on cnbc ♪ ray's always been different. last year, he said he was going to dig a hole to china. at&t is working with farmers to improve irrigation techniques. remote moisture sensors use a reliable network to tell them when and where to water. so that farmers like ray can compete in big ways.
6:39 am
china. oh ... he got there. that's the power of and. it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average? at crowne plaza we know business travel isn't just business. there's this. 'a bit of this.
6:40 am
why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly.
6:41 am
welcome back u.s. equity futures are rebounding a bit this morning after a pull back in all the indices. there's the treasuries the yield is 2.221 ahead of the two-day fed meeting. we've all heard of whistling while you work, but our next guest wants to inspire people to
6:42 am
find their whistle in life let's bring in chris ulman from the carlisle group, that's his day job. he's also a four-time international whistling champion and now the author of the book "find your whistle: simple gifts, touch hearts and change lives. thank you for being with us today. great to see you >> becky, andrew, joe, thank you very much for having me. it's awesome to be here as a guest. >> we've known for years about your whistling, how amazing it is i don't know the back story behind it when did you first start knowing this would be your thing? >> i was around 5 years old when i started whistling. i wasn't very good at the beginning. more volume than quality i kept practicing, got better and better over time one time i came out of a grocery store whistling, a guy walked towards me and said beethoven, second concerto.
6:43 am
i said you're right. so i started entering competitions and won it four times. >> what distinguishes a professional whistle and an amazing whistle from me. >> i enjoy whistling at all levels, whether good or great, it's important three factors, air, lips, tongue you have to arrange the three until you get a nice pretty sound. then it's all about musicianship just like telling a story. >> about feeling something and soul, not just -- >> joe gets it he feels it. >> he thinks i'm a horrible whistler >> terrible. >> chris, here's my question this book is as much about whistling as it is about the idea that everybody has a gift >> yes >> but i think there's a distinction, try to make the distinction between a talent -- people have talents, which i think are learned. >> yes >> then people have gifts, meaning you think everybody is born with something.
6:44 am
>> i do. >> how do you find that something? what i'm try doing with the book is entertain people. because the stories are crazy. i whistled for the president in the oefrl oval office i whistle happy birthday over 400 times. i whistled for a wonderful handicapped child who can whistle but not speak. so amazing stories, but that underlying thing is that there's a thread that runs through them that everyone has this ability to touch another heart this is really the key i'm trying to empower people so they realize what they are capable of doing you don't have to change the world to make the world a better place. >> how did you find it is the question when i say there are people who are talented people can learn different talents. >> yeah. >> gifts are a different thing >> gifts are talents >> it's too fine a distinction one thing i do is feature ten people who se so-called whistle
6:45 am
touched my heart one guy makes me carrot cake once a year. it's so sweet, it's nice i feature my mother, her gift is empathy. i feature a preiest who runs a homeless shelter >> i think gifts are just talents that you share >> that's what it comes down to. i've met so many people in the past two years who say i don't have a whistle i say, well, i bet you do. you just haven't named it. if you don't, it's time to start looking. >> can you do, like, the -- can you -- >> no, i'm a finesse whistler, not a power whistler >> you can't do it >> i literally can't >> i literally can't >> but he can do like bee bop and funk >> i need to know a few more things in competition, is pitch incredibly important >> yeah. this gets back to becky's question musicianship is all about the quality of the sound, the pitch -- >> but the soul behind it, too you have to feel --
6:46 am
>> the vibrato >> i also hear more than one sound in a very short period of time what is that called? tremelo? >> a warble. >> a warble. like a bird. can you compete with the best birds? >> that's actually a subspecialty of what is already a sub speciality without the bow toy you wouldn't be as good a whistler. do you always wear a bowtie? >> i do. >> you have to be as a professional whistler. with a regular tie on, i would say this guy is weird. >> i see you have something. chapstick, blistix or aquaphor >> chapstick it's my instrument, i have to keep it in good shape. >> chapstick is your brand are you sponsored by chapstick
6:47 am
>> i'm not i have an important prohibition, no kissing 24 hours before performance. you don't want your lips mushy >> your wife signed off on this? >> does that happen -- what kind of kissing -- what are you doing? >> you don't know my wife. >> so your lips can get mushy, it will last for hours >> you want to be able to sustain a pucker >> wow you do >> moist and puckered. >> pucker up >> right >> does the treble -- the warble, does that come from your tongue >> it's a lateral flapping of the tongue it gets technical. we can discuss it later if you like. >> trying to figure out how do that >> we should say hi to your boss >> david rubenstein who thankfully is a fan of my whistling and wrote the forward to the book. and he actually read the book. it's clear based on what he wrote. i'm truly grateful i work at carlyle, it's an amazing supportive group and
6:48 am
it's a blessing to have colleagues who think this is cool >> we think it's cool. >> can you do a cat call >> no. no i whistled at symphony orchestras >> glenn miller band bb king's place. >> there's times you can't get a cab. >> uber. >> right they're driving by, you're like stop, stop you can't whistle. your instrument is not used for that >> no. no but on the way here, i was whistling a beethoven piano concerto >> did people stop you on the street >> this is new york. hopefully i made some people happy. >> we wanted to thank you for being here "find your whistle." we appreciate your time. will you whistle us to break on your way out >> sure. this is belle from "beauty and the beast. ♪
6:49 am
♪ >> joe was doing duet. ♪ so familiar ♪ >> do you know this? >> yes >> love that i do >> thank you, chris. >> thank you very much >> thank you >> that's a show tune i do love.
6:50 am
6:51 am
6:52 am
6:53 am
welcome back, everybody. opec releasing its monthly report on supply and demand trends for the month of jay. jackie deangelis has the details. >> the head line is that opec is confirming what has been widely speculated in the market production went up month on month. a little less than half a million barrels per day. not huge but we are supposed to be in a cutting period here. so the cheating has begun. the biggest offenders, not a surprise, libya, iraq, nigeria, and here in the u.s., it is also projected increase, a little less than a million barrels per day. that's also not surprising counts have been on the rise steadily since january and producers are taking advantage of the opec cut. here's where the numbers fall apart. on the demand side the projection is for a little more than a million barrels a day in growth from last year to the end of this year that's not enough to give the boost that we're seeing in production elsewhere that we just talked about. so remember, at the last opec meeting i said the saudis played it wisely by not delivering a steeper cut. they held the card back in case
6:54 am
they need it later and they might the saudis just saying that they're making steeper cut in july, cutting some shipments to the u.s. and asia. bottom line is that supply is still an issue for this market that's why we're under $50 a barrel opec may need to pull out that big bazooka to try to balance this >> you know, so we're talking about 1.5 million barrels a day and production increases, and a demand increase of just a million barrels a day? >> right and a projected cut of only 1.8. which doesn't sound like anybody's really adhering to >> how do we get these numbers we know who the cheaters are at this point >> it's hard to know exactly even opec does a survey. these numbers aren't really recording -- these countries rather aren't reporting the numbers exactly. we've been telling people they're estimates. so you have to assume what they're reporting is probably under. this is probably a case like take the chinese data with a grain of salt when it comes out. you have to assume the situation is a little steeper. so the saudis to come out today
6:55 am
and say look we're going to cut steepner july you can tell that they're moving towards taking a little bit of a more serious stance on this >> and they're not willing to concede any market share at this point? >> exactly you know, they're in a tough position because the u.s. is not cooperating with any of this they're not a part of it even if the russians do comply you need the united states to stop, and right now we've got those costs down so far, that we're actually making money at these levels so they're just going to continue to ramp and take advantage. the saudis are in a precarious situation here they want that price around 50 they've got an aramco ipo that will hinge on it essentially next year. they need to figure thisout. >> jackie, thank you very much >> sure thing. >> coming up when we return our guest host for the next hour, billionaire investor ron baron he's going to tell us why he's betting big on tesla, under armour and leisure companies we'll talk to ron in just a moment think again.
6:56 am
this is the new new york. we are building new airports all across the state. new roads and bridges. new mass transit. new business friendly environment. new lower taxes. and new university partnerships to grow the businesses of tomorrow today. learn more at the power of innovative thinking. the power of 100 of the world's top companies. the power of an etf. the power of qqq. the thinking we put in, clients get out. power your client's portfolio at before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.
6:57 am
looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
6:58 am
hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying?
6:59 am
go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote. the markets in focus as we get ready for the fed's decision on interest rates. stock picking guru and billionaire investor ron baron is here in the house he will join us for the hours. we're going to talk markets, politics and much more the fate of travis kalanick. uber is set to release the findings of an independent study that could lead to a management shake-up details straight ahead and dennis rodman returns. to north korea that is what the former nba star is doing there. and why now. that story and more as the second hour of "squawk box" begins right now
7:00 am
live from the beating heart of business, new york city, this is "squawk box." good morning welcome back to "squawk box" right here on cnbc live at the nasdaq marketsite in times square i'm andrew ross sorkin along with becky quick and joe kernen take a look at the futures this hour we are looking up. dow looks like it would open up higher about 31 points higher, s&p 500 up a little over 5 points and the nasdaq about 19 points higher headlines to bring you the fed set to begin a two-day policy meeting today with an interest rate decision policy statement coming out tomorrow afternoon. the central bank widely expected to hike rates by a quarter of a point. this meeting will be followed, of course, by news conference with fed chair janet yellen. i imagine our steve liesman will be peppering her with questions from the peanut gallery. also policymakers will have some fresh inflation data as they consider their latest rate decisions. the may producer price index coming out this morning with the head line number expected to be unchanged. tomorrow morning ahead of the two-day meeting, the may consumer price index will also
7:01 am
be out and a longtime blackrock fund manager stepping down. dennis statman retiring after 28 years with blackrock's global allocation fund has $40 become under management he will retire in august according to an internal memo seen by reuters. so the investment class will be chattering about that this morning. >> all right now, to the day ahead in washington attorney general jeff sessions heads to capitol hill today to testify before congress at a public hearing he'll be appearing before the senate select committee on intelligence sessions will likely face questions over the firing of former fbi james comey as well as his contact with th
7:02 am
7:03 am
shares of excel ron pharma are progression free down 5% merck has caused enrollment in studies of a blood cancer treatment. the decision follows a recommendation of a data monitoring committee >> we are joined right now by our guest host for the hours, legendary investor and the ceo of baron capital ron baron ron, it's good to see you today. good to see you, too >> thanks for coming in. >> thanks for inviting me.
7:04 am
>> really nice, coming in. >> you felt good about coming in to times square. >> felt like the donald trump golf course. >> which you would know a thing or two about you've been down to mar-a-lago >> right >> ron we are looking at stock market that has taken off since the election, probably stocks up about 15%, 16% and i know you are more of a bottoms down guy instead of a top focus guy -- >> bottoms up. >> versus top down >> yep >> i know that you look at companies but how are you feeling about the stock market overall. >> the stock market overall we're optimistic about the outlook and that doesn't matter very much. what we do for the most part, for the only part, is do research on companies and try to invest in prices where we think we can double our money in five or six years over the long-term, we've been able to accomplish that. and of course, the opportunity that we have is that everyone, like yourself, and -- is focused
7:05 am
on what's happening today. what's the news and the impact it's going to have on the stock market and that's not the sort of thing that we for the most part have an interest in, or i think we can predict, and we don't think it's predictable so whether it's trump being the president, or whether it's brexit or whether it's interest rates or oil prices, there are things you can't predict but that's what everyone spends their time trying to focus on and predict. yet if they can predict it they don't know if that's going to have an impact on what the stock prices do shortly afterwards trump elected, stock market went up people were surprised about that brexit came in stock market went up, people were surprised about that. and interest rates didn't go up, people were surprised by that. stock market went up and so, oil prices, everyone this they're going up, and we don't happen to degree with that so -- but, so about the stock market itself. the bottom line that i think
7:06 am
about, that we think about, is that for a very long time interest rates are likely to stay much lower than people think, because the country has so much debt, and if interest rates went up, you couldn't afford to service it that's number one. number two, oil prices we think for a very long time they're going to remain much lower than people think. the reason being we've discovered this enormous amount of oil in our country. so all we have to do, any time the price of oil goes to $50 and it becomes economic to produce it so you're flooding the market with oil the united states, they have a car tell, 1973, the oil price went from $10 a barrel to $30 a barrel and that was i guess, the iranian crisis and then it went to $130. and it basically was extorting the united states. countries that use oil and now, they can't do that anymore. the united states companies can't participate in a cartel so therefore prices go up, they may produce oil. so it's going to be hard for oil
7:07 am
prices to go higher for quite awhile so, oil prices -- and then number three is that, with lower interest rates, than we think and lower oil prices than we think, we think the economy is going to grow much faster than it would have otherwise. and so, stock prices as a result are cheaper than they should be. and finally, gdp is significantly understated. and significantly understated because the more you introduce technology into the country, then what happens is that there's less gdp so when you have autonomous driving, that means you're going to have fewer accidents that lead to -- less people going to hospitals and getting sick going to hospitals, and less repairs of cars. those are all elements that are part of gdp. >> those are top down decisions that sound like they are leading you to investment decisions at this point >> well, my investment decisions are always the idea of the stock market and the economy are
7:08 am
closely intertwined. and they always have been. so since 1960. and that i've been following the market and watching it. and so, you know, for 16 years when i came into business in 1970, for 16 years the stock market, 1966 through 1982 was flat, between 1,000 and 600. and then started baron capital in 1982, and in 1982 the dow jones was 880 when we started in march. went to 1,000 in the summer and then it went up eleven times by 2000 so it was flat for 16 years. then it went up eleven times between 2000 and 2011, the stock market again was flat at 11,000. the economy kept growing and therefore, the stock market had to start increasing. now what's happened is that for the past, i guess six years the stock market doubled so baron capital is in business for 35 years this is the 35th anniversary that has a long-term view and a
7:09 am
short-term view. my short-term view is 2030, 13 years. and i think that in that period of time, 13 years, that's my short-term, i got a 2117 idea also for baron capital of course i don't think -- but you never know so to 2030, i happen to think that the stock market and the economy are both going to double just as they have every 12 or 13 years for my whole life. and that means that the dow jones is going to be somewhere around 38 or 40,000, 21,000 presently, and that means that gdp, which is now about 19.5 trillion is going to be about 38 trillion then. so basically gdp is going to double and the stock market is going to double. and you know, what we try to do is instead of doubling every -- you can make 6%, 7% just invested in iron decks fund. most people should do that what we try to do is do much faster, try to build the money every five or six years and we've been able to do that so i'm hoping that in 13 years, we're four times as big as we are right now and the stock market and economy are twice as
7:10 am
big. >> let's talk about some of the specific stocks you're betting on that gives you that outsized performance. you just came back from a trip out west to see tesla, and spacex what happened? what did you see >> so, can talk about tesla. and so tesla, i've been going, we've been investing in tess what for 3.5 years i bought a million six shares. average price of $208, $210 for 3 1/2 years. in fact, last year the stock was down 11% so the background on that. we manage $23 billion. in 1992 we had $150 million. now $23 billion, and since 1992, 25 years we made over $20 billion in profits
7:11 am
and of that 20 billion in profits, 11 billion has come from 15 stocks the other 10 or 11 billion has come from the rest of our stocks so in the case of tesla i have this long-term view, 15 years we're going to make 30 times our money. 20 times our money i don't know but so we've been investing for 3 1/2 years, and for the first 3 1/2 years takes me awhile to buy at the right price, bought the stock at an average price of 208, 210, and i just said last year was down 11%. this year the beginning of this year, one of the executives at tesla asked 3450e what i thought the stock price would do this year and i told him i thought that considering that this is the model three coming on this year, last year they did 76,000 cars and year before 50,000 and year before 20, when they announced that they would have, these are $100,000 cars, when
7:12 am
they announced that the model 3 was going to come out, and it was going to be a 35,000 or $40,000 car they've got 378,000 orders last year, they did 70,000 cars in six weeks or four weeks or five weeks they got 378,000 orders the orders have tend to go with people putting down deposits this year the cars the 76,000 they sold last year will probably do 100,000 of those this year and they think that they're going to have a rate of 5,000 cars a week by the end of -- by the end of this year and 10,000 cars a week by the end of next year and they will sell a million cars in 2020 so a lot of people say so to go on out there every three or four or five months we go visit tesla and i have for the past 3 1/2 years. so first started 23 research reports that have written about tesla. 23 i said well how many of those
7:13 am
people have been here to this company? three. how many people have spoken to elon one. and how is that possible and then i think about it, we've been investing in charles schwab since 1992 and made 50 times our money since then maybe 60 something in that range. when we invested in charles schwab at a time 600 million market cap is now 40 billion, to add 60 billion in management now 300 -- you know, company now 3 trillion when we started investing, for every dollar of asset at charles schwab, i'm getting to a point, research, every dollar invested at charles schwab by their clients was generating 80 bits of revenues. and 60 billion now it's 3 trillion. and every dollar of -- assets generates 35 bits of revenues. then of the 70,000 -- of the 80 bits of revenues 70% of that was
7:14 am
commissioned of the 35 bits less than 10% is commissioned commissions have collapsed that mean there's fewer analysts, no budget for research and when you talk about companies not being visited by analysts, the sell to buy side visits you know people like us, and but the sell side is they don't. >> so this is just a case where wall street you think has it wrong? >> there is no research -- >> they haven't taken the time to dig into it >> yeah, there's research people on rault are salesmen they're not analysts and they're regurgitate well this is what the company earned and this is what ford is doing and general motors is doing and baron had an article two or three years ago recommending that you purchase ford and they're saying it's seven times earnings you've got to buy this company it's great now five times earnings. it's down 30%. the guy got fired. >> but part of the issue with tesla is not about the cars or looking at the car company itself, it's what happened with some ar city and having that brought in and people have all kinds of questions about that.
7:15 am
when did you think when you first heard that announcement as a tesla investor were you happy when you first heard it? >> when i first heard it, no because i didn't understand it then the more research i did on it i realized it was very important that they make that acquisition. and the reason for it is that they expect to replace -- they expect electric cars to replace all of the internal combustion engine cars. in the world at some point. and it's going to be much sooner than people think. if that happens, and every time you put 40% of the electricity in this country is being used by homes. and every time you put a car in a 2500 square foot home that car uses about 30% of the electricity of the home. and if there are two cars in the garage, 60%. the 60% and how 40% that means you're going to have a 24% increase in electricity demand over some period of time -- the electricity grid. so the problem is how are you going to do that
7:16 am
the way they're going to do that is with solar city they've got the panels of course and they can do that for industrial and then they've got the coolest roofs you've ever seen one of my friends just sent me an e-mail this morning, really early in the morning and what he wants -- yeah, that's it what he wants to have is he says building a new home in aspen can i put him in touch with someone at tesla so that they can have these new roofs, the new roofs, they can be slate, they can be tile, they can be cedar -- >> these are all solar >> they're beautiful solar roofs. the question that comes down on this, though, is, is that viable right now for people who don't have a lot of money, if you don't have the government kind of backing you up? the government saying resell the excess energy back to the grid at a set price >> this is very disruptive for utilities, also. this guy is disrupting not just cars he's disrupting oil -- >> but wait. let's not confuse the point on that though. the regulators say you have to buy the excess utility -- electricity back, the utility has to pay -- >> which is unfair -- >> has to pay an above market rate if you say you have to pay the
7:17 am
same as the market rate, it doesn't make this all that affordable a solution. so it's a subsidy that's being handed out >> the subsidy is good on the other hand you're avoiding an electricity bill it's not economics yet >> okay -- >> but on the other hand this is going to last 40 or 50 years it's going to last longer than your house >> no question it's beautiful. no question it's beautiful and no question that you can make money. but can you is it an affordable proposition if the regulators aren't -- >> well tesla has acquired solar city and since they have begun to offer it in their stores, only seven or eight stores i think they're offering it so far, when you go into a store, you go in to buy a car and all of a sudden they show you oh, my god you've got this incredible roof, but in the markets, they used to sell it door-to-door so they get rid of all that selling extept and what they're going to do now is they're just going to offer it in the stores. they're up 70% in the markets where they've been showing it and it's only in a few markets so far and it's only for a short period of time.
7:18 am
the demand is enormous will it be okay to have a $30,000 or $40,000 roof compared to a $15,000 roof and you get a subsidy. it's okay. it's good obviously until they don't have it anymore. but you have to transition to renewables you have to do that. you can't just, you know, when people see it in a car and they turn on the engine, and carbon dioxide it fills up the garage and they die, what do you think is going to happen to -- >> carbon monoxide i think you think carbon dioxide. but it's carbon monoxide andrew the market's going to double you're like hitchhiking outside newark trying to get down with a washington or bust somehow you going to get on the train? did he convince you? get on the train -- >> -- on the train >> washington or bust? >> i am on the train >> okay. >> i'm partially on the train. >> okay. waiting to get on when it comes back >> ron is going to be with us
7:19 am
for the rest of the hour >> you've got to keep some powder dry for the big opportunity. >> i've got to tell you why tesla is -- >> we'll talk about that after the break. coming up much more from ron baron. up next the downtown to cnbc's top states for business. we'll get a preview of who is in the running for the top spot with help from our advisor, we made it through many market swings. sure we could travel, take it easy... but we've never been the type to just sit back... not when we've got so much more to give when you have the right financial advisor, life can be brilliant. ameriprise the power of a low volatility investing approach. the power of smart beta. power your client's portfolio with powershares. before investing, consider the fund's investment objectives, risks, charges and expenses. call 800-983-0903 for the prospectus containing this information. read it carefully. distributed by invesco distributors inc.
7:20 am
7:21 am
containing this information. read it carefully. hey you've gotta see this. cno.n. alright, see you down there. mmm, fine. okay, what do we got? okay, watch this. do the thing we talked about. what do we say? it's going to be great. watch. remember what we were just saying? go irish! see that? yes! i'm gonna just go back to doing what i was doing. find your awesome with the xfinity x1 voice remote.
7:22 am
welcome back to "squawk. we are less than one month away now from the most eagerly anticipated cnbc event of the year our eleventh annual top states for business report. scott cohn crunches the numbers every year he's here with some of his initial findings and a preview of this year's study scott? >> hey, andrew we're putting the final touches on this year's numbers and i can tell you that this year's rankings are the most competitive yet. with a mere five points separating the top three states. and the battle's not just competitive because we say it is remember this? >> and they can leave from state to state, and they can negotiate good deals with the different states and all of that, but leaving the country is going to be very, very difficult. >> that was then-president-elect donald trump on december 1st, setting the ground rules in a battle we handicap every year. now remember how it works. we grade the states based on the criteria they themselves
7:23 am
consider the most important in business so 2500 possible points in ten categories of competitives -- competitiveness. the weight of each category based on how often the states site them in their economic development marketing pitches. here's how it all shakes out this year and there are some important changes. now workforce remains the most important category worth 450 points with surveys showing as many as half of all companies having trouble finding skilled positions. that's followed this year for the first time by infrastructure we found more states touting their infrastructures then ever before just as the trump administration rolls out its infrastructure plan we'll find out who delivers. next we've got cost of doing business, including taxes, wages, utilities, incentives to balance those out. then economy, quality of life, then we go to technology and innovation education. business friendliness. access to capital. and cost of living we've got all of this, our whole methodology sources and more on our special website launching today,
7:24 am
our eleventh annual top states coming next month only on cnbc guys you can start your guessing now. where will i be? >> texas >> interesting and why do you say that? >> because texas always scores well >> texas has never done less than second place. it's been top state three times. but hasn't been top state in awhile see if it can crack number one again this year. any other guesses out there? >> virginia. colorado >> they all -- well, you're getting the ones that perennially do well. we'll have lots of hints coming up over the next few weeks and tuesday july 11th is the day of the countdown happens >> all right spy around see if we can figure it out before then >> good luck >> thank you >> okay. all right still to come on "squawk box," housing and urban development secretary and former presidential candidate ben carson will be our guest at 8:15 eastern time this morning. up next, dennis rodman returns not to the nba, but to north korea. details after the break. "squawk box" will be right bk.
7:25 am
ac ac so new touch screens... and biometrics. in 574 branches. all done by... yesterday. ♪ ♪ banks aren't just undergoing a face lift. they're undergoing a transformation. a data fueled, security driven shift in applications and customer experience. which is why comcast business delivers consistent network performance and speed across all your locations. hello, mr. deets. every branch running like headquarters. that's how you outmaneuver.
7:26 am
7:27 am
7:28 am
7:29 am
looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country. discover how we can help find your unlock.
7:30 am
7:31 am
good morning, everybody. welcome back to "squawk box" here on cnbc we are live from the nasdaq marketsite in times square among the stories that are front and center this morning, small business confidence remains near-record highs. the monthly index from the national federation of independent business came in at 104.5 in may that matches the april performance and it beat analysts forecasts. business owners are optimistic that lawmakers will at some point take action on tax reform and health care. tax preparation giant h&r block will be out with its quarterly numbers after today's closing bell that company is expected to earn $3.53 a share on revenue of a little over $2.3 billion the stock is up 15% so far this year mylan is defending recent actions by management and its board in a new letter to shareholders the generic drugmaker says an off by teva to buy mylan was not
7:32 am
good for the company another offer was a strategic move all of this comes ahead of the june 22nd annual meeting nba hall of famer dennis rodman arriving in north korea earlier this morning this is his first visit to the country since president trump took office. rodman has received the red carpet treatment every time he's gone there on each of his past visits he's been criticized for making the trips during times of high tension between the u.s. and north korea. all right let's get back to our guest host for the hour, ron baron, ceo and chief investment officer at baron capital we're all obsessed with tesla. when will you hear when you were talking about 350 to 400, ron? >> six months ago, maybe >> six months ago. >> so at the beginning of the year, one of the executives at
7:33 am
tesla asked me what i thought -- >> below 200 >> and he asked me what i thought the stock would do this year and i said i thought with the introduction of model 3, i thought the stock sometime this year would be 350 or 400 and i think it's going to be 500 or 600 next year and i think it's going to be 1,000 in 2020 when there's at that time i think they'll be doing $70 billion in revenues and making $10 billion in profits, operating profits, before they spend it to grow more and that's with a million cars a year, and beginning of a contribution from, you know from solar moves, from batteries, nothing from mobility yet, but that's -- that's just a million cars there's 91 million cars in the world. that are sold a year i think they may have a significant portion of those at some point i think that this is just, you know, when you asked me before to come on and take a victory lap because it's gone from 200 to 300,that's not a victory lap. this is just starting. in my opinion. and that was before, by the way,
7:34 am
before an investment in this company. ten cent do you know who they are? >> yeah. >> chinese company it's the largest publicly owned chinese company, the fastest growing 300 billion market cap, 320 billion market cap they bought 5% of tesla there was announced a couple months ago a month ago and they paid a billion eight. so they paid an average price of 217. this is ten cent and so i think that and it's a passive investment right now but they're studying it and i think that the reason so we have an investment from ten cent in our emerging market fund and our guy met with them recently and he was telling me that he thought that they made their investment in tesla because they wanted yet investments before bidu and before alibaba they wanted to beat those guys to investing in tesla. >> what's in that price where tesla is today what does it imply about the likelihood that production targets are met for this really
7:35 am
important new car and does it matter if it takes -- if it is delayed six months or if they don't hit production numbers does it matter long-term or does it not matter? >> matters to some people. i think that i think there's a very good chance they're going to make it >> are they scrambling when you were there -- >> when i was there, this parking lot was jammed and there were these machines being installed. 1100 of these robots welding machines being installed there was a buzz in this place i've never been in a place that was more action. will they make it in time? i don't know will they miss it by a couple months maybe. will they hit a million cars in 2020 maybe. maybe it will be 2021. but if your target is not a million cars, if your target is 10 million, 15 million, 20 million, what difference does it make and so, when people say to me, gee, isn't it too high, it's
7:36 am
$350 i think i'm going to make -- >> what's wrong with bmw and what's wrong with -- >> those guys will be survivors? i think you know they have this family orientation and they're very deliberate -- >> -- great electric car >> when you look at the technology, what is it -- how far ahead is what elon doing relative to them and how quickly can they catch up? or can't they? >> i don't think they can. and so i think that when you have -- for bmw and mercedes they're going to do fine over the long term -- >> with electric cars? >> electric cars i think all the cars, in norway you're not going to have any cars except for no more internal combustion engines in 2025 germany i don't remember what the year is, but same kind of a deal you're going to ultimately have all electric cars everywhere that wasn't the conversation three years ago. >> how many shares do you own now? >> a million six i own the most of my mutual fund -- can't buy it small cap, mid cap emerging market.
7:37 am
international. real estate. they don't fit so very small number of our funds can invest in this company. and the ones that they can invest are principally -- >> but you're not buying more at this price are you >> if i could, i would >> if you could you would. >> yeah. i just don't have the spot for it right now but, you know, when -- when we start something different, that is allowed to invest in that, then we will with the companies, the funds that we have, own as much as they can own >> that's the same question. you want to -- you can see the pullbacks coming, and you're going to get in on the pullbacks, either tesla or the market >> good question >> someone is always saying to me, to ron, i'm really interested i have all this money. i sold the business. i'm really interested. i got to invest with you call me when it's the right time i say okay pb it's the right time >> i've got a different question how much cash do you -- what percentage of the baron family network do you keep in cash waiting for the rainy day?
7:38 am
le >> i don't have a rainy day. >> there is no rainy day >> no. i have always been -- remember i started off in 1970, i had a negative net worth of $15,000. i owed $15,000 and so now i'm the largest, my family and i are, the largest shareholders in the fund hundreds of millions of dollars in mutual funds. i think over $600 million. so basically i'm the largest shareholder in our fund. and i think that in, you know, look that that's going to grow significantly over the next three or four years. it's going to grow significantly -- talking about my long-term goal and my short-term goal. i think that in 2030 i have a goal of where i'm going to be. i have a goal for our company in 20 -- i have a 100 year idea not as good as my 13 year idea the 13 year idea is pretty solid. i hope there are businesses that are going to last 100 years. >> let's talk about another stock under armour that's another company with an
7:39 am
energetic and amazing founder, that you put a lot of faith in very early on. under armour has run into some troubles recently. what do you think has happened >> he just called me this morning. >> did he? >> before i came up here to say good luck and so we invested ten years ago in under armour. and at the time there were 500 million in sales it's now 5 billion >> another self-starter built entirely by himself. >> yep, from the ground up with a bunch of mildewed t-shirts in the basement of his grandmother made that whole business happen. and so i think you know, took the eye off the ball a little bit with some people, and you know, going too many directions too fast and ran into a very competitive environment. he's got a great brand it's a young brand he's got a big opportunity in shoes. got a big opportunity in women's. got a big opportunity in internationally. connected fitness is a big opportunity. but i think you're in this
7:40 am
period now so in our firm i was the largest shareholder, in under armour at our firm i sold 10 or 15% of our stock -- of the stock that i oend, two years ago, three years ago, right near the highs, and other guys here were more prescient than i was and they sold all their stocks, and so i had a painful period of time in that company. and i think that we still have a good opportunity -- >> how many shares -- some of the other funds that -- >> -- we probably sold half our stock. >> before this trouble came up >> yeah, before. >> okay. >> two years ago >> okay. >> two or three years ago. >> would you buy back at these levels would you buy more >> for -- i -- i -- the funds that i have, i have the appropriate amount i want to see how quickly it
7:41 am
recovers i think you're going to need this period of time where yesterday was very strong as a stock. i think you're in this period of time where it has to -- a lot of things are starting up, they have to gel. so i think you're in a six month holding period >> distribution channels ran into trouble a lot of the -- >> yeah, right, they -- distributors going bankrupt. and they have half as much distribution as nike for example. but nike does what nine or ten billion shoes and our guy does a billion and that's the united states and twice as much worldwide big opportunity there international is growing like a weed people are really interested in the brand. i think that this is a -- this is not going to be a near-term performer. i don't think. but maybe. but his plan was to go from 5 billion to 20 billion but you know, sort of, you know, missing a point a little bit you've got to get to 10 before you go to 20 and now totally focused on this again incredibly driven man, and
7:42 am
very talented, and i think he has a good chance to accomplish it we'll see. >> all right ron, stick around. we've got one more hang coming after i don't know we've got something else to do here don't we >> in the meantime when we come back, findings from an independent investigation of uber set to be released today. the report could mean some pretty big changes at the company, including for travis kalanick we'll give you the details right after the break. and then in the next hour housing and urban development secretary ben carson is going to join us. "squawk" returns in just a ment it's all yours. wow! record time. ♪ at cognizant, we're helping today's leading life sciences companies go beyond developing prescriptions to offering subscriptions with personalized, real-time advice for life-long, healthy living. honey? you almost done? nope. ♪ get ready, because we're helping leading companies lead with digital.
7:43 am
we're drowning in information. where, in all of this, is the stuff that matters? the stakes are so high, your finances, your future. how do you solve this? you don't. you partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. morgan stanley.
7:44 am
over hereno!ver here! (dog barking) whoever threw it has to go get it. not me! somebody will get it... ♪ (dog barking) anyone can dream. making it a reality is the hard part. from the b-2 to the upcoming b-21, northrop grumman stealth bombers give america an advantage in a turbulent world. and we're looking for a few dreamers to join us.
7:45 am
the much anticipated independent investigation conducted by eric holder will be released to uber employees today. julia y deirdre joins us with me >> we could see the shake-up continue and we could even see ceo travis kalanick step aside for awhile as he's reportedly considering a three month leave of absence the holder report at uber's corporate culture has already claimed some high profile casualties and led to some high profile hires. on the now outside there's uber's engineering, 20 employees fired last week as a result of the internal investigation, and
7:46 am
the latest, emil michael, the chief dealmaker at the company others like former president jeff jones left of his own volition citing differences over beliefs. and more firings or resignations could follow later today with that report. i also want to note that some big names have been brought in to uber, as well, recently see them here, all women including boz st. john from apple, and wan ling martello also remember uber has been searching for more names likely to be added to this list, as well the leadership overhaul may be an overdoing necessary for uber but the real work could just be getting under way. remember the board met for more than six hours over the weekend, and unanimously approved all the recommendations in the holder report today uber employee also finally find out what those are. guys >> okay. thank you, deirdre >> when we come back we're going
7:47 am
to wrap up our special hour with ron baron. in the meantime take a look at the futures this morning they have been higher. through most of the session. right now dow futures up by 29 points s&p futures by close to 5. the nasdaq up by 23. "squawk box" will be right back.
7:48 am
7:49 am
nice golf courses out there. >> welcome back to "squawk box." want to turn once again to our guest host for the hour, legendary investor ron baron the ceo of baron capital
7:50 am
i just wanted to finish up one thing on under armour. it's reallynot an under armour question it's a retail question which is i know that you don't like to look at this sort of short-term moments in the market but do you think there's a transformation going on in retail that's going to fundamentally change the business >> yes >> you do? >> yes and so you have to more move and more online. did you see anything about the amazon store, food store, grab and go in seattle? >> yeah. >> you know how that works you're supposed to sell more prime memberships. do you know how this works >> no. >> there's a turnstile in front of the store and you have your prime card and you go in through the turnstile. you can only get in with a card and then you go in, and they facial recognize you and when you're carrying around your card, there's cameras everywhere so you're going up and down the aisles and you're taking things off the shelf, and putting them into a bag, and there's nobody to help you, and every time you take it off you're being charged. and every time you put it back you're being credited. and then you just go around and
7:51 am
walk out the store, and they all -- >> there's no checkout >> they facial recognize you and then you leave, there's no people in the store. and except for restocking. is there changes going on? gigantic changes >> do you own or do you wish you owned amazon >> i wish i owned it you know, one of the biggest mistakes i made in my life was in 1999, so we had investments in sotheby's this was the worst investment i ever made in my life >> sotheby's >> i thought they could take it onto the web i thought that they had, you know, too big -- you know, but the events that we had, we bought 500 million dollars of sotheby's at $20 a share and went to $40. and so, delighted and i'm talking to jeff bezos all the time trying to convince him to buy sotheby's. in 1999, talking to him, how could i see this and not invest in amazon? and then the guy who is in charge of sotheby's gets indicted, price fixing with christies, goes to jail the stock goes from 40 to 10 we end up losing $250 million instead
7:52 am
of making $500 million crazy. and now, you know, but the bottom line is the number one i lost money in sotheby's and number two, that what happened is that i could have invested with amazon. i saw him, i would meet with him, and i didn't invest with him. how crazy. so that was what -- >> how do you think about tech is tech hard for you >> it was in 1999. we didn't have a single technology stock we didn't have a single internet stock. so, in 1999 for 18 months, we underperformed, we were up 60% and the market was up 110, 105, something like that. and then -- then for the next eight years, the market was correcting, and the market went down 4% a year weent up 3% a year so we outperformed by 700 basis points in early 2,000 per year and but we didn't have tech. so now we're trying to find technology that has some competitive advantage that's sustainable for the long-term.
7:53 am
a lot of people using data companies that don't have technology, it's an important part of their business they're finished so it's about you have to invest in technology if you run a business otherwise your business is not competitive. >> but we have not talked about facebook or kwoolg or things like -- these were not investments -- >> they're not my investments but we have a fund that's doing exceptionally well this year up 25% >> so this is a hard question we talked about it a little bit during the break you have 13 funds now. >> yes >> 13 baron funds. and i know you like all your children however if you're an investor out there just looking for long-term yield, not in diversification play this is long-term yield -- >> do you mean yield or -- >> return. >> or capital appreciation -- >> well, what do you do? >> you mean capital appreciation >> capital appreciation. >> because yield you're implying dividends or something >> just -- >> for the long-term and you
7:54 am
keep talking -- >> you don't have a yield fund, do you >> no. we're only equities. all the time so for us i generally tell my friends there's five or six mutual funds that come to me and i give them a package. look here's five mutual funds, to invest in but people who -- we had this in i guess 2006 we had 60 people at our firm we now have 146. in 2030 i think we're going to have 250 or 300. >> right >> we have people, exceptional guy worked for hedge fund, my friend for a long time, and when he joined me in 1997, 1998, all of a sudden it became credible for other people to join, too. then we got andrew peck. this incredible investor and then we've got 36 other incredible investors 33, 34 others. so they're all amazing and they're getting better and better and better. >> what do you make of warren buffett's argument, and really
7:55 am
an argument is made across wall street these days that active management is out of style that ultimately, after fees, you'll do much better in a -- >> i agree with that >> -- in the index you do >> i think that most people can't beat the indexes and i think that the consolidation going on in this industry and all the people are very highly paid in this industry, they're going to lose their jobs they're going to have to do something else but as far as people beating the index, 99%, a lot of mutual funds, beat the indexes. beat the bench marks 98% are in the top 15% of mutual funds, and 78% or 79% are in the top 10%, and we've got, you know, two or three that are number one for the time that they started not 1% number one >> does it change the business though for you if most of the -- if most of the market loses to an index is that better for you >> i think that's great. because we're the way that people, i think, can enhance their returns. i mean, people aren't going to
7:56 am
find, you know, andrew peck's now at shimon skis, and mike p lippe lipperts, not going to find them and we've got them at our firm michael cass oh, my god so for this guy we hired cliff and i know him for 15 years, and then we hire him i don't know eight or ten years ago and say here manage this paper portfolio international and then we have an emerging market our emerging market fund is just going from, you know, 10 million or 15 million when we started eight or ten years ago to 3.5 or 3.billion six probably 10 billion so he is a star and he's -- analyst and traveling around i walk in to the conference room they're filled all the time our office with companies coming in. so you can't find these companies without people like that >> we want to thank you. it's always great to have you here >> thank you >> you always give us hope so we appreciate that very, very much >> thank you, ron. >> coming up, housing and urban development secretary ben carson is our guest and later, the exclusive
7:57 am
findings of the latest cnbc fed survey with the nation's top economists are saying about tomorrow's rate decisions. "squawk box" will be right back.
7:58 am
7:59 am
8:00 am
"squawk box" newsmaker, hud secretary ben carson, is here with his plans for the department the trump agenda, and why he's focusing on millennial home buyers yellen takes center stage. top money managers and economists weigh in on central bank's $4.5 trillion problem results from cnbc's exclusive fed survey straight ahead. plus watch out amazon. best buy gives its customers new reason to buy gadgets from the big box retailer, instead. the final hour of "squawk box" begins right now ♪ live from the most powerful city in the world, new york, this is "squawk box. ♪ good morning, everybody, welcome back to "squawk box" here on cnbc we are live from the nasdaq marketsite in times square i'm becky quick along with joe kernen and andrew ross sorkin. let's take a look at the futures this morning they're up after a slight losses yesterday for the markets. the dow futures indicated up by
8:01 am
30 oints, the s&p futures up b 4.5 and the nasdaq up by 25. when it comes to the treasury market, take a look at the 10-year note you're going to see that it's yielding 2.216% as we kick off a fed meeting today for the fomc >> yeah, yeah. so write that down and try to control your -- your excitement among the day's top stories, the fed is kicking off a two-day policy meeting an interest rate decision and a policy statement will be out tomorrow afternoon we've got that going for us. on flag day. the central bank is widely expected to hike rates by a quarter point. the meeting will be followed by a news conference with fed chair janet yellen and we'll also have results from cnbc's exclusive fed survey, the all-america survey in the next half hour different, isn't it? >> all-america all-american >> but this is the fed survey. this is not -- okay. treasury department meanwhile unveiling a plan to overturn rules for the banks and
8:02 am
financial firms that were put in place after the financial crisis it recommends streamlining supervision of the sector, takes some powers away from independent regulators and gives political leaders more influence over the process changes would also provide relief for community banks attorney general jeff sessions will testify about russian interference in the election before the senate intelligence committee whenever i say that i think it's -- senate intelligence. senate intelligence. i don't know just something about that. sessions will -- they don't go together they don't go together sessions will likely face questions over the firing of former fbi chief james comby as well as his contact with russian ambassadors during to the u.s. during the 2016 presidential campaign okay some stocks to watch this morning toshiba being sued by a group of foreign investments for $399 in damages over an accounting scandal the company is trying to book an
8:03 am
additional provision for the lawsuit. and hyundai unveiling its first subcompact suv -- >> who >> i get to say it however i like you get to say it however you like >> all right come on -- >> okay. you say it like that but say it the correct way so we know that you actually know. >> hyundai >> so you say -- >> but i like it hyundai you can say hyundai. i say hyundai. you say tomato, i say tomato >> all right >> okay. >> as the company is working to offset sliding sales in china and catch up with rivals in the small suv market and deutsche bank reemping a $170 million settlement with the investor contending they conspired with other banks to -- a preliminary settlement was filed yesterday that requires a judge's approval >> a few more stocks to watch. shares of science applications taking a hit the defense contractor reporting revenue pleau the street's targets as well as lower margins. and shares of excel ron pharma
8:04 am
slipping after the company says that a phase two trial of a key kidney cancer drug was not successful in increasing progression for survival that stock is down by 7.8% merck is causing enrollment in study was a blood cancer treatment after a recommendation of data -- of a data monitoring committee. that stock is down by 31 cents coming up, we're going to get another "squawk box" newsmaker hud secretary ben carson is in the house he will join us on set right after the break. stay tuned you're watching "squawk box" on cnbc at fidelity, trades are now just $4.95. we cut the price of trades to give investors even more value. and at $4.95, you can trade with a clear advantage. fidelity, where smarter investors will always be.
8:05 am
and at $4.95, you can trade with a clear advantage. and the wolf huffed like you do sometimes, grandpa? well, when you have copd, it can be hard to breathe. it can be hard to get air out, which can make it hard to get air in. so i talked to my doctor. she said... symbicort could help you breathe better, starting within 5 minutes. symbicort doesn't replace a rescue inhaler for sudden symptoms. symbicort helps provide significant improvement of your lung function. symbicort is for copd, including chronic bronchitis and emphysema. it should not be taken more than twice a day. symbicort contains formoterol. medicines like formoterol increase the risk of death from asthma problems. symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. you should tell your doctor if you have a heart condition or high blood pressure before taking it. symbicort could mean a day with better breathing. watch out, piggies! (child giggles) symbicort. breathe better starting within 5 minutes. get symbicort free for up to one year. visit today to learn more.
8:06 am
8:07 am
get to our newsmaker of the morning. housing and urban development secretary ben carson, ringing the closing bell at the new york stock exchange to commemorate national home ownership month. secretary carson joins us now with some insight on the state of the home ownership in the united states. it's going back to the financial crisis, we still have, i do anyway, scars, trying to automatically increase home ownership as if it's a good thing when not everyone probably should have owned a home we're at 63% isn't that down from where it was prior to the crisis? >> we're actually 63.6%.
8:08 am
but, you know, the fact of the matter is, it is the principle mechanism of wealth accumulation in this country. >> yes >> and you look at a homeowner, average net worth is $200,000. a renter average net worth is $5,000 so obviously it's a worthy goal to get to. but if you put somebody in a house they can't afford you're not doing them any favors because they lose the house, they lose their credit, and they lose their future opportunities. so you know, we have an opportunity to learn from those mistakes that were made by exub rent people who perhaps didn't really think things through. and we're putting in the appropriate types of safeguards, the kinds of educational resources so that the consumers actually know what they're doing and what they're getting into. but we -- there's plenty of progress still to be made. no question about it >> what is the role of hud or the fha in trying to promote this and when do you -- when do you make it -- once again, when do you go too far with subsidies or whatever it is
8:09 am
>> well, the role is to be able to provide affordable, safe, decent housing for the people of the united states. and, also, to create a market that encourages the development of our people. economically, as well as in every other way. so it's a fairly big goal. it's one of the reasons that i was attracted to hud versus some of the other things, because there's so much potential there. and we have to recognize that we only have 330 million people china has four times that many india has four times that many if we don't start in terms of developing our people, into the future, we're not going to have a chance we have so much potential. >> i wish we didn't have -- go on my millennial rant again but man that's not a group of people i want to rely on to spur home ownership.
8:10 am
we have to, though, because we're stuck -- they're the ones that are coming in to the -- >> they're the biggest group >> they have to be the biggest group. well what are we going to do >> well, they want to buy homes. there's no question about that recognize that millennials are in a difficult situation many of them have, you know, huge educational debt. it's almost like having a mortgage to start with before you go out into the housing market now, you know, some interesting things are being done, you know, fannie mae has a program where they're rolling the student debt in to the mortgage >> right >> and a lot of other people are starting to look at these kinds of creative solutions that will work >> but that -- i mean at that point, you have all of this debt that's unsecured debt that then becomes secured debt and you can lose your home if you don't pay off the debt that you've incurred over these other issues
8:11 am
>> again by rolling it into one debt, at a low interest rate, it creates a much better situation than having two debts, one at a high interest rate, and one at a low interest rate. so it's a creative way of doing things we're looking at lots of creative ways. you know we're looking at relaxing some of the rules for -- because that recently is the first entrance into the homeowner market you know, changing the debt-to-income ratio in a favorable way, but also, you know, merging that with facts that we know, in terms of who's likely to default and who's not likely to default. so using evidence in order to create the policies, as opposed to ideology. >> does president trump like hud? or is that one of the agencies that ripe for streamlining, and turning into a more private sector type organization how do you fare on the budget recently are there cuts
8:12 am
aren't there >> well, there were some cuts that had to be made, pretty much across the board because we do have to recognize that there is such a thing as fiscal responsibility. which people for years and years have talked about but no one has practiced. now, we're actually practicing but at the same time i must say we brought in a coo, because you need an operator eu learned that in my mean years on the board of kellogg and costco you can sit around the table and talk about things all day long but unless you have an operator nothing's going to get done. we're actively searching for a cfo. somebody who really understands the financial world organizations, we're bringing on a cio, so that we can take a holistic view of some of the problems i'm sure you're aware of some of the material weaknesses that have been found, in hud's organization over the years. and i'm not satisfied just to
8:13 am
sit back and say well that's just the government. we're going to change it into a business oriented, logical organization you're going to get a lot more done we're already seeing tremendous savingses in some areas. it can be done, no question about it and as far as, you know, whatever money we have, if it's $10 or if it's $10 trillion we're going to use it efficiently and effectively. that's going to be the difference >> andrew's long -- what was the -- millennials are in over their head -- >> no, not millennials thesis among investors right now -- >> okay. you got to hear this >> no, no. and it's scary, actually, which is to say that baby boomers. >> yes >> haven't saved enough, all of their savings is in their home, and by the time they get into their 70s and their 80s, they're not going to have enough cash. they're going to end up having to sell their home -- >> or take one of those reverse mortgage >> or take a reverse mortgage or sell their homes and move into a
8:14 am
mobile home park which is -- and there's a huge number of investors now going into this space because they think that's where the opportunity is going to be. >> ron likes tesla but are there publicly traded trailers -- >> i don't know if there are publicly traded version -- >> reits >> and a lot of private equity folks. >> have you cornered the market? >> i have not personally cornered the market. but it's an interesting investment thesis -- >> it's a scary investment thesis about where we are. >> really? >> i know about this the fact of the matter is, the way i look at it, necessity is the mother of invention. and you know, mobile homes, that's one thing but there are also organizations now that have created like a little capsule that can be put on a flatbed truck that has all the inards of the house. heating, cooling, electric, you take that to a location, hook it up to the local infrastructure, build a module around it, for
8:15 am
less than $100,000 you know, and they're beautiful. these are the kinds of things that happen when you have this kind of necessity, because we americans are creative and innovative people. all we have to do is remove the regulatory burden that stifles our innovation you'll see all kinds of things happening. >> all right we -- we delve into water cooler once in awhile i expected you to take the lead on this. but what was your compliment for president trump yesterday? were you around -- did you -- how did that come about that everyone -- that the -- there's a conspiracy theory that everyone had to come up with something to -- was it spontaneous? were you warned that you were going to have to come up with something? what did you say >> no, he just said let's go around the table, and everyone sort of say a little something that's easy. you know that's easy. >> we're going to adopt that and start doing that
8:16 am
andrew's already done it, i'm going -- >> did anybody prior to that meeting whisper in your ear or anybody else's ear and say, hey, by the way, the president's going to ask everybody to say something, effectively nice, about him? >> no. >> no? >> no. >> so it was totally spontaneous? >> totally spontaneous, absolutely >> so you know people, i don't know if you saw schumer was trolling all of this and did his own sort of mock version, had his staff -- they videotaped it having a meeting where they're all praising him and people are laughing >> but isn't it sad that everybody's become so skeptical? about everything because they think that everybody does things the way that they would do it. but people are different >> minority leader he's got to do something i mean what else is he doing at least he gave him something to do yesterday. he got nothing else going on >> he's got plenty to do >> he's not doing it >> he can represent the people of the state of new york
8:17 am
>> oh, yeah. >> and he can stop representing a party. we've got to get away. people are so wrapped up in their party they've forgotten about our nation this is a problem. on both sides. >> mr. carson, can i ask you just in terms of the amount of loans, the percentage of loans that fannie and freddie and the other government backed entities support at one point after the financial crisis it was something like 90% of all loans were going through these government sponsored entities, and i know they've come down slightly what do you think the appropriate percentage is in terms of what the government should be backing versus what the private sector should be backing? >> let's talk about fha. and you look at the spectrum, you know, when credit is difficult, and the financial situation is difficult you see their proportion go way up when credit is easy, and the economic market is doing well it goes down. that's the appropriate function.
8:18 am
it's like an accordion it goes up and down to keep things stable. >> so it should be the -- the party that steps in to make sure -- >> absolutely. it's basically it's the backstop it's the safety. it's what gives people confidence in the market you know, it's what allows us to sell, you know, repackaged loans to the foreign market. brings confidence. helps us stabilize our whole economy. >> you're -- mr. secretary, about senate efforts on obamacare repeal, about the house working on tax reform. is that -- you'd think nothing was happening if you just read the newspapers all we're worried about is sessions today, comey last week. are those things going along or bogged down? >> there's a lot going on behind the scenes the unfortunate thing, of course, is that as i just
8:19 am
mentioning people are so into their party, that they would happily see the ship sail off the cliff rather thanks you know, not adhere to their party platform we've got to get away from that. you know, when we're looking at something like health care it's such an important thing for everybody. we all are going to need it. and yet millions of americans right now, you simply don't have health care, even though they may be signed up, because their premiums are so high, their deductibles are so high you may as well not have it. we can't continue with a situation like that, and we had the ability to fix it, if we would simply drop the partisan -- >> it's a tough sell -- >> and get to work >> access versus coverage is a tough sell it's essential that that message gets out but you need access coverage doesn't mean anything if you can't access the health care >> i can guarantee you that it is doable. it can be done we have the resources, and we
8:20 am
have the ability what we need -- >> in the senate's hands -- like earlier senate intelligence that doesn't even equate. that's like those two words don't go together. is something going to happen they've got to do it it's in the court. mcconnell -- >> it's going to be the people we the people. >> great >> have got to put pressure on our representatives to represent us and unless we do that, they're going to continue to devolve into a political animals that dwell in the swamp >> well, doesn't take a brain surgeon to run hud but i think it's good. i think it helps it doesn't hurt. right? >> well, what you need is somebody who is a problem solver i take a problem solver any day over somebody pushing papers >> i agree and you've done plenty of management responsibilities at hud. thank you. >> mr. secretary, thank you. appreciate it. >> thanks a lot. >> appreciate it >> when we come back, the results are in some of the nation's top economists and money managers speaking out ahead of the fed's
8:21 am
two-day meeting.
8:22 am
8:23 am
the fed kicking off a big meeting. let's get to steve liesman he has results from cnbc's all-american -- >> no, no. >> all-america >> all-america survey. >> no. >> fed survey? >> see, there's two surveys.
8:24 am
we do one of money managers, and economists that's every time before -- becky's not confused >> no. you've been saying this morning would drive you crazy. >> i know. this is a fed survey this is economists -- >> and then next week by the way -- >> here we go. there is some talk on the street about a one and done when it comes to the june fed rate hike. that is not the expectation of the june fed survey. 100% looking for a rate hike tomorrow which by the way would bring us to a whole number between 1% and 1.25% haven't had a whole number in a very long time the third rate hike about 54% see that coming in september and the balance sheet decline by december six or seven months earlier than we believed earlier this year. here is what the fed fund rate hike would look like a little separation here as you go forward in to 2019 up 1.4 this year, 2.1 in 2018. 2.6 as opposed to 3% our market participations include money managers, economists, and fund managers
8:25 am
don't think so and then 2.8 for the long run taking a look at some of the commentary peter bookyar says there's nothing like raising interest rates just as job growth is slowing, auto sales are rolling over, capital spending is no different than it was ten years ago and the consumer is reluctant to spend renaissance macrosays does anyone seriously think that fiscal policy will be a tailwind this year? no any hope has been completely priced out 2017 is shaping up to be a year of investigations not legislation. responders to the survey see the fed reducing the balance sheet by $2 trillion and taking about 4.5 years. so a very long time for the fed to bring it down and not a lot of people are especially worried about it. most people think the fed ought to do it >> doesthat keep the pace of interest rate hikes much slower because they're trying to do that at the same time? >> we don't see them -- we don't really see them trading one off the other. the funds rate is really sort of
8:26 am
mostly unchanged while they have moved back the expectation or sorry moved ahead the expectation for the fed to reduce the balance sheet >> you would think there would be some impact from shrinking the balance sheet that would maybe double or who knows what it would do. but it would be some impact along with raising rates at the same time. >> becky, i know firsthand that the fed is very worried about this that they were not expecting but they were ready for the markets to freak the market has not freaked and i think one of the interesting ideas i had, i've heard, is that a dollar of bonds bought in a crisis has much more effect of a dollar of bonds sold not in a crisis. >> yeah, that's a theory we've never really tried it. >> we've never seen it but if you watch the way the market has reacted to every single hint of qe or sorry of -- reducing the balance sheet, anti-qe, whatever you call it, it's been almost no effect >> i don't understand that >> and by the way, just want to show you one other chart,
8:27 am
reaction to why are bond yields so low and just why does it add up to 100, all the things that matter and here are the numbers here 50% say it's because the less belief in fiscal stimulus. that's another reason. 45% say lower inflation outlook. and 37% say lower growth outlook. and then the music is playing. those are the reasons given why bond yields are lower. >> okay, steve liesman what do you got? >> i've got the -- >> stay over there stay where you are coming up ne, xta key read on -- >> he's squirting this on my suit >> - the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals. and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?
8:28 am
this is a story about mail and packages. and it's also a story about people. people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪
8:29 am
8:30 am
welcome bhak to "squawk box. breaking news. our may read on producer price index. head line, unchanged strip out the all-important food and energy, 0.3 higher now if we look at exfood and energy on a trade basis month over month, down 0.1 2.4 and final demand year over year, and food and energy year over year 2.1. and on the trade year over year, also 2.1 so arguably we could say some of these data points are a smidge hotter, like the trade year over
8:31 am
year but when i look at something like the head line number, of course, that is going to be somewhat affected by energy as we can see ex-food and energy being higher but it does give it a degree of volatility these numbers aren't by any means cool but most are going to be cool to this number until they see the cpi number later in the week yields didn't budge at all 2.21. dollar index of course it's down on the day statistically that's an easy call you say down you're right about 75% of the time. it's not down big, though. of course, we have the first day of the fed meeting and i was listening to steve earlier. most traders on this floor don't get very nervous when they talk about reducing the balance sheet. but they say they may get a little more nervous if they actually do it back to you. >> all right, rick, thank you very much. we'll see you a little later this morning you know a great spooi and a great ceo may have more in common than you think. joining us is ambassador henry
8:32 am
crumpton one of america's most distinguished cia operatives he believes the intelligence discipline when it's applied to business decisions will provide very distinct competitive advantages ambassador crumpton is a 24-year veteran of the cia's clandestine service and founder and ceo of crumpton group a strategic international advisory firm. and sir, thank you very much for being here today >> thank you let's talk a little about this the discipline that you learn in the intelligence industry, and how that can be applied to business i know there are some ceos who have great backgrounds on things like this. someone like a fred smith. but what are the lessons that you take from the intelligence agency, and how do you translate that into the business world >> well intelligence really is a discipline for learning. and for informing, and there are several key characteristics. you have to think about the right questions. they have to be relevant and you have to be accurate. and this is particularly
8:33 am
important in the environment we're in today, which is volatile, uncertain, complex, ambiguous, and fake news, and propaganda so, what is the truth? or the closest approximation of that the third element, intelligence needs to be timely and the fourth, it needs to be actionable because you need to make a decision. and these are all the things that business leaders have to think about, particularly in some complex, difficult markets overseas >> you know i mentioned fred smith, but are there other examples you think of in the corporate world of people who have been steeped in the process and who have really made that transition >> well, i think it's a continuing process some leaders are certainly better than others those that exercise a deep intellectual integrity, and challenge their biases, they have advisers that are respectful but or challenging, and give them different viewpoints.
8:34 am
that's key also, we see business executives who travel, and not just go from their private plane to a luxury hotel to a board meeting but get out and meet their customers, look at their operations, and have a granular understanding of their businesses this is all part of the learning process. and the better that business leaders do this, the smarter they are, and the better decisions they make. >> you know, it's really interesting. you say that and i think of the classic example of someone who surrounds themselves with yes men. i guess that's what you're describing, you want somebody who is a group of people who are willing to challenge not only each other, but also the boss? >> exactly if you think of our different biases, the business insider had a great publication not too long ago about the 20 different biases that we have. and we've been able to apply the intelligence discipline to look at those biases, and challenge
8:35 am
the thinking, the decision making, and even the operations. one of the most common is a confirmation bias. you see people that look at one news channel or another or listen to the same advisers, yet the world is changing lap italy. accelerating and in this complex volatile world it's not only new risk, but there's just tremendous opportunities. whether you're looking at china or latin america, there are lots of opportunities, but decisions in some ways are going to be harder and that's where we think that exercising this intellectual rigor, that really makes a difference >> we've always thought of big global companies having a huge advantage over others simply because of their size, and their scope. but when you start putting it in those terms i guess i start to wonder if big companies are maybe more at risk of falling in to patterns of not thinking ahead, if they are more at risk than ever of being tumbled by some start-up that's going to
8:36 am
come in and do things differently and take their business away. is that a realistic assessment of things? or how do you see things >> oh, sure. if you look at some of the big businesses that embrace the status quo, and they're not driving change, they're just trying to keep up with change, they're not going to make it in some companies fall into that category others do challenge themselves and i think that the start-ups, are certainly more nimble, they're more creative, they could be more dynamic, and they make the marketplace better. this constant churn, even with some constructive disruption, i think that's important you look at the businesses today compared to just 20 years ago. you've got only new businesses but new industries being created. going in to new markets. particularly if you look at latin america and the growth of the middle class there enormous opportunities, but you've got to have the right
8:37 am
partners, the right vendors, the right advisers, and make the right decisions. otherwise you can go down the wrong path and the other part is not only entering these markets, but how do you exit? what if things go wrong? do you have a contingency plan in place and this is all part of the intelligence discipline that needs to be part and parcel of your strategy. and another market, of course, that's probably the most volatile and uncertain is cyberspace >> true. >> how do ceos think about the cyber risk and the opportunity in the digital marketplace? i think only recently, are business leaders learning that it's not just a risk to data but it is a risk to their entire enterprise, and their strategies should reflect that. >> ambassador it's hard to have you here on a day like today, without asking given your 24 years experience in the intelligence community what you think about the state of the intelligence community today well i've been out of government in the private sector now for more than a decade
8:38 am
so my perspective is obviously dated. i think the value of intelligence will continue to grow, whether it's supplied in the geopolitical space or the battlefield or the marketplace so i think for young professionals in the intelligence business i think there is a very bright future. i am concerned, particularly, about the relationship between the intelligence community, and the customers. the government leaders that they serve. right now there seems to be some confusion perhaps even a degree of tension and that needs to be clarified and that is first and foremost the responsibility of our political leadership they need to understand and appreciate intelligence and put it to good use >> ambassador crumpton want to thank you for your time today. >> thank you >> when we come back, best buy has a new weapon in its fight against amazon we have the details right after the break. "squawk box" will be right back.
8:39 am
8:40 am
8:41 am
welcome back to "squawk box. futures right now indicated to bounce back from some weakness yesterday. the dow was down yesterday but remember it was up the day before two straight days down on the nasdaq and one of the biggest two-day loss of 2017, nasdaq rebounding
8:42 am
sharply today. up 28, and the s&p indicated up another 6 or so. okay best buy has a new weapon against amazon the retailer's going to start advertising try before you buy rentals on its website later this month recode is reporting the deal covers cameras, audio equipment and fitness trackers so for example, you could end up trying out an apple watch, if you wanted, for a week, for about $50 before deciding to buy it pretty incredible. amazon does not currently offer a similar rental service this could be a way to really differentiate what it's doing. i mean, as a gadget guy, i kind of like the idea of being able to test it out a little bit. and i actually -- well i don't know if it's going to be good or bad for their business i would be the guy who would go in and be renting all sorts of different gadgets all the time and probably not buying. so i don't know -- i don't know if the economics is either actually good or bad for them. the other question is, let's say you use the watch, for a week,
8:43 am
then do they have to -- later do they have to -- >> they keep renting it. >> sell it later as a refurbished watch? >> they could do either. but my guess is you probably have some models that you rent out -- >> i don't know this is sort of like the lease versus buy model. i'm not sure >> i've seen you go through gadgets. all i see is a rolex you had the apple watch -- >> i never had the apple watch >> i had fitbit, jawbone, all of the -- they were great >> you still have them on your arm, i think >> yeah. >> what does that thing do tells time >> this thing tells time >> what a concept. >> but you wear it >> i do wear it. >> you see how that works? >> one day i might break down and go apple watch there are people who do. a lot of people -- >> wozniak loves his i don't know people that wear them say it tells me when to stand up. you know okay i guess so >> stand up, joe >> you know what anyway general electric -- why don't
8:44 am
you buy a drone? i can't believe you don't own a drone. >> i have friends with drones. friends with drones. >> general electric has started testing drones to respect refineries and factories according to reuters the drones and robots are able to go inside remote and dangerous areas and then they can measure temperature, gas, vibration readings, ge is aiming to capture some of the $40 billion the companies spend each year on inspections. andrew >> when we return we're going to go hang out with our friend jim cramer going to join us from the new york stock exchange. we'll get his take on today's top stories. take a look at futures right now. we are still in the green, even better dow looks like it would open up about 30 points, nasdaq 30 points, s&p 500 about 5 points can we push the offer online? brian, i just had a quick question. brian? brian... legacy technology can handcuff any company.
8:45 am
but "yes" is here. you're saying the new app will go live monday?! yeah. with help from hpe, we can finally work the way we want to. with the right mix of hybrid it, everything computes. it's been over 100 years since the first stock index was created, as a benchmark for average. yet a lot of people still build portfolios with strategies that just track the benchmarks. but investing isn't about achieving average. it's about achieving goals.
8:46 am
and invesco believes doing that today requires the art and expertise of high-conviction investing. translation? why invest in average?
8:47 am
general motors just out with an announcement about its self-driving vehicle effort. its completed introduction of 130 chevy volt electric vehicles equipped with the latest version of the company's self-driving technology the company will deploy the test vehicles in san francisco, scottsdale, and detroit, where it is already testing more than 50 volts with an earlier version of that self-driving software. i want the later version
8:48 am
if i have to choose, jim cramer. let's get down to the new york stock exchange you said something on your twitter that the force be with you in terms of maybe its coming back to the nasdaq or something, jim, that the shorts could get -- hurt a little >> you needed something negative other than cheese cake factory preannouncing, and scott's miracle grow preannouncing you needed something related to tech the analysts come out and they're coming out sporadically saying hey, there's a good opportunity to buy so we're in some sort of dead zone, where other than the apple downgrade, the special sunday apple downgrade we got there really isn't that much to talk about. so people are just saying, all right, well why did we sell advanced micro what was that? and so short memories. so short memories bring back the buyers >> just saw tesla go by on the tape, it's up about seven, that's a bounceback from the
8:49 am
last couple of sessions but ron baron, i don't know if you saw a lot of that. >> i thought that ron moved the stock. i mean ron has been a main reason why people buy tesla. >> it's going to 1500, you see -- i mean when i listen to him, it sounds like nothing could ever possibly go wrong i'm just -- if it did go wrong what would it be somebody else learns how to make an electric car or subsidies stop or production gets -- >> i mean i know that subsidies stop in one country in europe, it hurt them, but i think that it would have to be that the -- that the model three that they just can't make nearly as many and that the numbers have to come down dramatically but if the model 3 is on target -- i mean that one factory just can't make what they need. if the model 3 is on target then the morgan stanley plus 500 thesis plays out but i think look it's a tech stock and we know from amazon, we know from netflix, you can keep the balls in the air forever, if it is indeed a tech stock i was, by the way, in waymo which is the self-driving car
8:50 am
from google from al if bet and i think that's more of a tech stock and less of a search stock in general but people if they like it and make it into a tech it's not going to be compared to volt it's going to be compared to facebook and if that's the case, then it goes higher. then it goes higher. >> all right, jimbo, we will see you in a short amount of time. on "squawk on the street," starts at 9:00 a.m when we return how one email prankster tricked two top bank osheweomback
8:51 am
usaa gives me the peace of mind and the security just like the marines did. the process through usaa is so effortless, that you feel like you're a part of the family. i love that i can pass the membership to my children. we're the williams family, and we're usaa members for life. at crowne plaza we know business travel isn't just business. there's this. 'a bit of this. why not? your hotel should make it easy to do all the things you do. which is what we do. crowne plaza. we're all business, mostly. this is where i trade andrs. manage my portfolio. since i added futures, i have access to the oil markets and gold markets.
8:52 am
okay. i'm plugged into equities- trade confirmed- and i have global access 24/7. meaning i can do what i need to do, then i can focus on what i want to do. visit to see what adding futures can do for you. they call him the whisperer. the whisperer? why do they call him the whisperer? he talks to planes. he talks to planes. watch this. hey watson, what's avionics telling you? maintenance records and performance data suggest replacing capacitor c4. not bad. what's with the coffee maker? sorry. we are not on speaking terms.
8:53 am
20 to i happen to think that the stock market and the economy are going to double as they have every 12 or 13 years for my whole life and that means that the dow jones is going to be somewhere around 38,000 or 40,000, up from 21,000 presently and that means that gdp, now 19.5 trillion will be about 38 trillion then. >> that was ron behren our best host for the last hour he talked about what he sees in the stock market he thinks stocks will double between now and 2030 he lays out a very logical case
8:54 am
for how this happened in the past and why you should be invested in stocks now he said you're losing money to inflation if you don't >> if you went to bed early last night you missed a big became for the second time in three years the golden state warriors are the nba champions they beat the cavaliers 129-120. this is the fifth championship in the warriors history and the first they won on their home court. kevin durant was named finals mvp. for our friends in silicon valley this was a big evening. many in the audience including who paid a year's salary, one fan paid big money to see the golden state warriors win the nba finals what if cleveland had won? an unidentified buyer paying a whopping $133,000 for the
8:55 am
tickets in oakland they made the purchases through the warriors tickets resale site run by ticketmaster. >> a lot of business guys, so dan gilbert on one side. >> from the cavaliers. >> unfortunately on the losing end of this. >> they won last year. >> and chamath, who we've had on the show and along with other people who are in ownership of that team and also new this morning, nba hall of famer dennis rodman arriving, yep, north korea. he's making his trip this time as a private citizen the state department says it is not an official u.s. visit at all. rodman was spotted our reporters at beijing international airport but declined to answer questions about the trip back in 2013 you might remember that rodman visited north korea to film a documentary, i think they did it for vice back then and called north korean's leader an awesome kid he will be back. we don't think the state department briefed him in
8:56 am
advance. i wonder whether he returns they'll want to get a meal with him to try to see if they learn anything prominent banking ceos want to check their email carefully before responding. the "wall street journal" reports lloyd blankfein and corbat responded to an email pranker it they performed similar stunts on bank of england governor mark carney last month. "the journal" says no sensitive information was disclosed and the responses the pike emails were designed to embarrass the executives rather than to find out any secrets. >> man, that is nerdy. i'm going to prank you but all going to be banksters that i am pranking >> yes but a little scary, too this is like phishing or spear phishing or whatever it's called in terms of getting people's, this guy wasn't doing that >> different than cat fishing. >> jeff staley went back and forth with this guy thinking
8:57 am
that he was a board member >> so he had to respond or something. i don't respond to anybody >> no? >> do you? do you respond to anybody you don't know >> no, pretending to be people they knew. >> i know, i know. did they use a name -- >> they faked the names looked like it was coming from the person probably easy enough to misspell it by one letter >> what did he say he was to blankfein? >> i was under the impression -- >> thought he was a goldman guy. >> saying he was an employee >> and my guess is they mask it so it looks like it's coming, if i were emailing you you'd think it was coming from me but off by one letter >> if you email i don't open it, i just delete it doesn't matter no, that's not true. because i'm looking for, you know, the email how you tell me all the great things about me, like that you said you're going to do from now on, cabinet
8:58 am
members, like the cabinet member >> what a privilege and honor it is to be here. >> i like it keep it. small business, optimism held steady in may marking six months of historic highs according to the national federation of business showed average employee growth of 0.3 workers hmm. i can't help but imagine-- one of the highest reads, that's like having 2.2 children or something average. reads in the survey history 86% of the businesses trying to hire said finding skilled labor was an issue and more business owners reported on capital spending plans >> the treasury department unveiling a plan to overturn rules for banks and financial firms put in place after the financial crisis, recommended streamlining the financial sector and takes some power away from independent regulators and would give it to political leaders give them more influence over the process the changes would also provide relief for community banks and many of the banks applauding this, this morning
8:59 am
>> president trump is hitting the road to talk jobs today. the president and his daughter ivanka are traveling to wisconsin, where they will visit a technical college skills based education, this is part of the president's push to expand apprenticeships to close the skills gap between manufacturing and other jobs later in the day he'll speak at a political fund-raiser for wisconsin governor scott walker who is up for re-election next year, and i don't know if i'll stop by aaron hills, but that's where the u.s. open is going to be played. >> golf. >> in the fescue, some of the players love to whine and cry and stuff, but they're already talking about the fescue, once it's in there. >> how heavy it is >> you can break your wrist trying to get out of the long stuff, it grabs it, wraps around -- >> the ball. >> like the hosel, not the ball, but the club going through and you can hurt yourself, strain a tendon in music news, i'm not, i was going to try to say i was a
9:00 am
beleeber, he's beating the beatles record having two top billboard songs for the most consecutive weeks. his songs "desposito" and "i'm the one" spanning 13 weeks at the top of the charts. the beatles had 12-week runs, two tracks in the top three back in '64 and '69 we're done the biebs might move to montclair, new jersey, the garden state >> he was here with styx, daughter's rehearsal >> make sure you join us tomorrow "squawk on the street" is next ♪ congratulations to the golden state warriors winning their second nba title in three years. welcome to st"squawk on the stree street". i'm carl quintanilla


info Stream Only

Uploaded by TV Archive on