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tv   Squawk on the Street  CNBC  May 18, 2018 9:00am-11:00am EDT

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millennial's. >> i have tomato soup. >> i called it blushing bunny. >> the ten year at 3.1 or so which has been the story of the week, i would say. i don't know what it means for the fed. >> thank you to michelle. >> thank you. >> and we don't agree on much but we agree on laurel. >> on laurel well, i don't know join us on monday. >> we flip-flop. >> "squawk on the street" begins now. good friday morning. welcome to "squawk on the street." i'm carl quintanilla david faber here dow futures are 82 as the major averages try to erase a small earnings for the week. europe is mildly red
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battle with control. the cbs postpones the annual meeting. >> plus high stakes trade talks. turning into a case of he said he said. china denying reports it made a $200 billion trade offer to the u.s. and campbell ceo abruptly resigning effective immediately. shares are down sharply. we'll start with cbs versus its controlling shareholder national amusements. some shareholders trying to make sense of developments late yesterday in which the cbs board got together and decided yes, they would vote to issue a dividend that would have the effect were it actually declared effective to dilute national amusements current voting control from roughly 80% to 20%. you can see cbs shares look to be up a bit in the early going
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here we'll see, of course, how it begins trading in 29 minutes or so from now. yesterday the shares down about 4.5% they had been down as much as 7% after a judge did not issue a temporary restraining order as requested of chancellor br broushard. fast forward to today, well, it's hard to imagine that if this does end up in court, as it seems likely, he'll reaffirm the rights of the controlling shareholder, therefore, it's unlikely that dividend is ever going to be made effective by the way, keep in mind under delaware law, can be rescinded any time before the record date. in fact, even if it were to have been made effective, given there's no tro, national amusements could replace directors and then rescind it. all that, though, is so sort of
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a shied show to the main show which continues to be the increase in hostility between the controlled shareholder and cbs' board and management. by these two people shari redstone and leslie moonves, the highly successful executive. she hoped would run a combined cbs and viacom this is where it all started cbs' special committee had been engaged in trying to get a deal done with viacom, and their special committee, the board of directors. the two, as i reported, had largely agreed on an economic ratio, but never were able to agree on who would run the combined company in the sense of the role for a number two and/or at least a board role for bob backish at viacom. that's where it has broken down completely and leads us to this current mess where do we go from here, of course, is a key question many people ask i don't have a clear answer
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other than to tell you it's probably going to be awhile until things sort of clear up. until you get a better sense as to what the future holds for these two companies. cbs' special committee didn't want to do a viacom deal by the way, they could have said that they could have come out on monday instead of suing and said no we're not going to do it. we don't feel as though this is something we can do given that we want the management team in place that we think would be best positioned to deliver on the synergies, on the promise of a combination. and you're not allowing it then shari redstone would have gone home for awhile and maybe over time replace directors and try it again instead they sued. it's got much nastier. the question now is, well, what does she do now? sue them for a breach of loyalty, she could there's personal liability for directors, if you get sued with breach of loyalty.
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that won't get your attention quickly. or does she sit around and wait and eventually replace directors and along with that mr. moonves. >> and the market, meanwhile, throws up the hands and says, you know, to that point it looks like it's going to be unresolved for a long time. there was a discount in both of these stocks, perhaps. you had the control feature. but, you know, national amusement statement they said we never intended to slam these companies together so i just wonder where you're left meanwhile, i mean, together if they were put together, if it was a new world of what scale means in media, even together, you know, $50 billion -- >> it's a good point to make even together it's not clear they have the scale necessary to compete in the new world which a rupert murdoch made the decision to sell -- >> when he's a larger company.
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there are those who believe it is redstone's belief that together they become a more attractive target for somebody who wants to get bigger in media and content. she clearly did not want to sell cbs separately that's something else that was in the original complaint we got on monday where they alleged that there was an interest, i think it was verizon, of course, but we had them on tuesday saying we're not interested. but you're right, mike it wouldn't be any easy task to succeed with these two together. but she certainly feels they have a better chance than they do separately. even though cbs had a good quarter recently and, of course, all of this goes back to the fact that cbs doesn't necessarily believe a lot of projections coming out of viacom in terms of their finances. >> on squawk this morning pointing out has huge success in prime time and broadcast television. >> yes. >> makes more money now than ten years ago. some media companies you cannot say that about. >> no. and all access has gone fairly well for them.
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the streaming service. there's no doubt, and, listen, they -- she wanted moonves to run this combined company. he doesn't want anybody looking over his shoulder in any way, shape, or form that would be in the form of one bob backish which has been the key here he wants his guy on number two he doesn't want backish on the board. that's where we finds ourselves. it could be months. >> whatever advantage cbs has now in terms of its relative immunity to over the top and success of prime time and all access and all the rest of it, it doesn't go away within a combined cbs viacom. it just gets kind of mixed in and maybe diluted by other stuff. which is all the, you know, kind of basic cable it's not as if you destroy it. it's the way the market views it as, you know, they're a better position therefore a better evaluation or should not really. >> cbs also believes, i think, that were they to put themselves up for sale, there would potentially be a buyer of significant premium. that would take care of a lot of
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their problems mr. moonves, by the way, is 68 years old. it's unclear how much enthusiasm he has certainly not a lot to have his shoulder looked over, but even without that, you know, how far would he go. how long would he want to go in terms of running a combination given the challenges they'll face we look forward to many more weeks of this. i'm sure you do. i have 20 or 30 more years as a media ceo. >> that's another good point. >> he's not a founder. it's usually those guys that go the longest. meanwhile china is in the news again denying reports that it offered the u.s. a package which would cut the trade surplus with the u.s. by $200 billion eunice in beijing to clear it up hi eunice. >> reporter: there were reports that china was going to meet president trump on his demands to cut the trade deficit by $200 billion. today the foreign ministry said
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that those reports are not accurate the spokesperson said it is not true according to what i know, the relevant discussions are still ongoing and are going in a constructive direction he wouldn't provide any further details. those reports which have been quoting u.s. officials suggested a steeper reduction would mean that the u.s. would see bigger sales of boeing aircraft and natural gas and there could be some cuts to existing tariffs on agricultural products like pork and sor gum. never the less, it looks like they're moving toward an agreement. the commerce ministry cede said it's -- the anti-dumping investigation into imports of u.s. sorgum. the ministry said imposing duties would negatively impact chinese consumers. that investigation was seen as a way for the chinese government to pressure president trump by threatening the agricultural imports from the united states
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to china now, all of this comes after president trump had invited the chinese delegation lead by vice premier to the white house and he had suggested that a trade deal could be challenging. both sides are very far apart. i think it's going to mean we're looking at another very tough day of negotiations in washington over to you. >> we're going to watch that eunice yoon, thank you very much light heizer did say that the nafta countries are nowhere near close to a deal as talks between the u.s., canada, and mexico past thursday's deadline he added that gaping issues remain on agricultural, energy, and ip you have them monopolisticing nafta. . >> you know yesterday afternoon it did seem as if the market took a little bit of a reflex
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move down when the president did say that all though pretty much recovered toward the end it seems like it's a diminishing effect on the day-to-day markets. i think if you rounded up all this it comes close to status quo. as it's not as if we're talking about big swings in policy so i think the market sort of is like until we have something we're trying to price in here with details, what are we talking about? >> yeah. on the initial report that there would be this agreement, boeing was considered, in some reports, reuters, at least, to be a major beneficiary. >> got to get to 200 billion. >> yeah. >> keep buying planes. eventually they'll use them if they have to put them in hangars for awhile nafta, also important. not clear what we're getting there. certainly doesn't seem to be making the progress it needs to, i think, for it to come up for a vote in time if the house.
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>> trudeau made it sound like things were going along. the canadians said positive things about talks. >> they have top keep it moving a perception of having them move and it was it yesterday the supposed maybe deadline for what paul ryan said you could get the vote. >> squishy deadline, some argue. they needed to make it work another way, they probably could. >> the dollar keeps getting stronger. >> yes indeed fresh five month highs highs for the year we'll watch that when we come back, a lot of other news changes at the top of an iconic brand. the ceo of campbell's soup amid challenges facing the company. stock is down today on earnings along with the shares of nordstrom and azn all with earnings and all in the red. premarket here is a look at the futures. more "squawk on the street" in a moment
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campbell soup down nearly 10% in the premarket the company announces that denise morrisson decided to retire as ceo effective immediately. board member keith mclaughlin has been named interim ceo this is what mclaughlin had to say. >> we're unable to share a
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detailed plan today, we anticipate that the combination of persistent heads winds, the issue we're facing and stepped up investment spend willing make 2019 a challenging year. >> they cut their full year guidance despite a quarterly earnings beat. they announce a strategic plans. our sara eisen is off today but is working the story she'll have more later on this hour for the year they see 285 to 290 prior 310 to 317 the changes of packaged food and protein are enormous. >> packaged food, obviously having an awful time the older brands having a harder time and campbell's within that is in some of the toughest areas condensed soup you basically have the old core of the business is declining faster than the overall food industry so the stock is cheaper than it's been on the existing
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numbers in decades you know, 12 times earnings. it's under $12 billion market cap. but those points -- lauren hirsch said 15 ceo changes in packaged food since the beginning of '16. >> it tells you there's not an easy answer. >> and everybody wants to believe there's consolidation
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coming and your name you own is going to get taken out it hasn't happened it's hard to imagine, to a certain extent, somebody stepping in. even they're trading very cheaply. >> right exactly. >> wilbur ross came on and held a can of campbell's soup. >> i do. he had a beer and all sorts of things that had tin or aluminium in them. >> yeah. apparently they can't get the pricing for the two cents per can. >> right when we come back, art cash will join us what to expect from today's market action as we count down to the opening bell the dow, s&p, and nasdaq trying to erase some small weekly losses the nikkei was up. back in a moment
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♪ about nine minutes until the opening bell we'll bring in art cashin. how would you characterize the week we crossed over some april highs. >> yeah. we separated out clearly you see the russell two days in a row made record highs. that underscores the idea that the trade talks, tariff talks, and whatever are somewhat of a handicap russell paid up in smaller caps. mostly domestic businesses now we're having a couple of na
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>> sure. i can see the potential impact on iowa but what about the markets? do they care >> yeah. they actually do care. but the problem is, as they say, the headlines and conversations that are conflicting we had early reports that china was going to look for a deal and
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maybe $200 billion to the year that would be handy. cut some of the deficits in half then the president mid afternoon yesterday should know no way it's not happening now china seems to be backing up on it. we had a list of trudeau of canada saying we were very close. and then more trade representatives say we're a mile away nothing is close that's got the market confused here if they could get a solid look where things are going they would be able to discount. >> you mention the russell obviously conspicuous strength there. energy sector up ten days in a row. despite the fact dollar going up crude is holding, too. that's the other theme that is obvious. >> yeah. there's no question. crude is holding up in all the above. and in the last two inventory reports, people thought we would start to see inventory pushing back up. it's not
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we had strange anomalies there they're still pumping. they don't have the pipelines to get it to market so we're producing more oil but it's not coming into the market. >> how do -- how do you play the whole trade thing then do you ignore it until you know something? or do you have to every day kind of make sense of it. you don't want to make a big bet either way i'm sure the president realizes he needs a deal. but getting there and the bluster that goes with shaping those deals you can get very badly hurt in the short run of the market so i would say you play a little light and try to take your lead where things are going. >> yeah. you have nafta, china, north korea, and now iran. >> there's no question about it.
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and the president seems to be not concentrating as much on the middle east. that's a little dangerous because that could explode even he's concentrating on north korea. he has his eyes on a nobel peace prize. overnight he said that if kim doesn't cooperate, he better be prepared for full december make. >> opening bell about five minutes away every fire department every police department is part of a bigger picture. that bigger picture is statewide mutual aid. california years ago realized the need to work together. teamwork is important to protect the community, but we have to do it the right way. we have a working knowledge and we can reduce the impacts of a small disaster, but we need the help of experts.
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and can focus more on the things they're passionate about. talk with your advisor about shield annuities from brighthouse financial- established by metlife. the opening bell is brought to you by brighthouse financial. established by met life. you're watching "squawk on the street." live from the financial capital in the world the opening bell in just under two minutes. a busy friday here as the futures continue to go a little bit soft from their highs from the session. watching trade, as we discussed. some of these earnings reports the cbs shareholder meeting today postponed. does it feel like a summer friday yet >> almost. >> the market has been flying at a low speed. it's interesting we got up to the levels pretty much above the april highs. almost a two month high and then the market this year in the last
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few months hasn't been able to sustain anything last year we spent the last four months the market was above it i think it was an obviously point to stall it's gone sideways we were set to open today in the s&p 50027.15 or something. we went down to 150 points below that in two weeks. now we're in the middle. that's the process for the year to date. it seems like a level that has some magnetic force to it. >> right some of the earnings today nothing to write home about. nordstrom with an eight cent beat up .6. about half of what we were looking for. >> macy's the couple of days before it maybe got people excited
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[ applause ] >> the opening bell. >> hiv aids prevention care and advocacy mark the annual aids walk in new york this sunday so keep your eye on campbell's soup as we said, 70 cents does beat by a dime they lower their guide for a year denise morrisson retires effectively immediately. the strategic review, i'm told now, guys, with the departure s&p now has 23 female ceos 4.6% of the s&p. >> wow. >> she was one of the more high
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profile ones. >> absolutely. from an earlier class, to over six years i can remember in the '90s people wanted campbell's soup. >> right. >> they have a decent amount of control in the representation. >> yeah. terrorist in doubt about it. it's interesting to see what the intriguic review might entail. there are discreet business lines. there's soups, snacks, other stuff. as i said before, it's like $11 billion market value now there is some debt it's not as they can do anything aggressive. >> the biggest laggard now on the s&p the worst three performers for the moment campbell's fouled by two other earnings stories nordstrom and amat
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amat is 1.22 but below consensus for the year on revenue. >> yeah. that's been the automatic response, almost to earnings season it continued through the tail end. i don't think there was anything with amat or people said there's a reason to be concerned very rodely, you know, about the chip cycle or anything like that. it does seem as if, you know, the marketplaces the huge earnings growth for the quarter in this book it's about what you can tell us for the six or nine months. >> it's still up pretty good. >> yeah. >> but the turn in sentiment on semiwas one reason last two weeks have been good. >> it's true. >> i mean, they've maintained this kind of leadership spot it's not as if something replaced except for energy. i think it's kind of interesting now. because energy was sort of came into the year as a con trarn trade. it's up like i said 8% year to date so the question is, not that carry the market but the market is getting very collective in what works today and what works
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this week as opposed to the longer lasting trends. >> right we have some m & a to talk about. over at paypal. >> yeah. >> buying the square of europe. >> yeah. 500,000 different customers. putting paypal squarely in focus when it comes to competing with square or the customers in smaller businesses even my guy out here has a square the stand, as well, at the coffee shop. $90 billion company. >> paypal, yeah. >> sometimes you miss that it was not that long ago it was split with ebay. it appears they lost the ebay business the only thing has been one set back but overall it's been strong. >> yeah. >> i guess i said it was poised to do an ipo so paypal came in and said, you know, we'll take it. which usually means other
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potential bidders were around. you know, somebody is going public you want to take a a look. the question is where the space is going you know even the mastercard and visa is trying to do their own point of sale stuff. it's so interesting how it's a little bit of a arms race in this area that everyone says is, you know, nafta forever. >> yeah. the square had a meanfully positive run for the last couple of years well, since going public. >> jack door si was in washington yesterday "washington post" today reports that he was urged by lawmakers privately to testify on the hill we'll see if it happens down the road you mentioned higher cost, mike. deer was amiss revenue shy they hold the guide for the full year we're experiencing higher raw
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terrib material and freight costs. >> not a surprise. the market is a little tolerant of this announcement this news. it seems like maybe they're primed for it. it was obvious it was going to be that way. and any seasonal effects in terms of of the last quarter but stock underperformed it seems as if maybe there was -- >> as far as research today, got an nicinitiation of invidia. they initiate invidia price $3.25. it's a nice move and then rayjay another initiation on spotify. everyone is at 1.9 0 on the name, i have no idea. >> it's about 20 to 25% gain from here. i wonder if that's kind of the threshold for bullishness. if you feel like, you know, this is a good kind of long-term play
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it's fascinating once the market shows it has an appetite for the strategy and it was put a decent value on it probably gained confidence for analysts to say okay we can raise our sites a little bit again, if it gets redefined as the netflix of music. >> yeah. youtube yesterday is going to be coming with the own pure streaming music product. unclear what that is going to be all of it is positively for those produce and own the music itself whether it's sony music or aventi those have been big beneficiaries, to a certain extent the artists say they're getting a smaller portion of the pie than they deserve. >> i guess that relies on the fact that, you know, listener
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hours going up or is everyone fighting over the same time? >> right. >> your media names are barely moving at all. >> yeah. a few cents on the major names >> yeah. it started up but it's flat. i think you're in the period of uncertainty that can continue for some time when it comes to cbs and viacom or the likelihood or lack thereof in terms of getting the two companies together at the very least, it delayed, of course, what national amusements posted up for by now you have a deal and would be underway. by the way, the regulatory review for said deal would be short given you have both control. we're not anywhere near that and it's unclear where it ends up the dividend announced yesterday by the board of directors at cbs that would have the affect of diluting national amusement not expected to take effect. but more likely they do end up
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in court maybe it's to take a look at the bylaws in question and whether they were in effect at the time. that changed it was made earlier this week by national amusements. and then the question of, well, all right, does redstone replace them now or wait wait a long time a little time? i still believe, eventually these two companies will be put together one way or the other. how long that's the part that is unclear. >> one final note on cars. >> board is resuming f series. stocks not really reacting and quickly musk not talking tesla last night but more the tunnel systems he wants to put underground in l.a it'll cost less than $1 to ride.
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>> i don't know how that plays anymore with regard to tesla you know, the musk change the world and fly to mars doesn't necessarily have the halo effect it did over tesla that it used to. >> do you know anything about the finances he raised is it public do we know has he raised money against the idea in a real way is it privately -- >> i haven't looked. >> i don't know. >> yeah. all the talk about environmental impact statements and city council reviews and that kind of thing. take a trip from downtown to dodgers stadium ten minutes and normally would take an hour. >> that's the place to do it, if you can pull it off. >> if we had high speed rail in our country like china we could go from new york to chicago in four hours. >> yeah. >> it cost a billion dollars something to keep in mind. >> yeah. now to bob
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we're flat and that's a big victory for the bulls. sideways is good nor this environment. take a look at the sectors we know the leadership semiconductors and banks, to a certain extent industrial up a little bit of course, consumer staples are weak and the packaged food companies are weak this is a victory for the weak here look what is going on with the markets overall. we had concerns about inflation earlier in the week on the higher gasoline prices and the empire state was up. ten year treasuries up 11 and 12 basis points that's a lot the dollar is eveover 2%. these are generally negative for the markets but look what is going on sideways essentially this week and sideways is good in these circumstances. the russell we've been saying over and over historic highs leadership banks and semis are holding in there a little bit of sideways hope from energy which is 6% of the s&p here this is a very satisfactory
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outcome given the issues the market is dealing with here. there were concerns we might roll over on monday. that's not even happening right now. food companies we've talked often about what is going on they're down, of course, campbell's and kraft and general mills. we talked about the crisis where more than a year most of these companies are dramatically, 40% off their historic highs we talked about the battle over pricing and shelf space and overall external crisis going on in packaged foods. higher material costs. we've talked about the consumer moving from processed foods to fresh foods. and i think that's the most important thing going on the middle of the aisle to the sides over there so you see it with campbell's and what they said u.s. soup sales were down 1% that's the condensed soup we know about but their fresh sales, these are
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refrigerated soup sales, among other things are up 1% the old traditional business is not doing so well. speaking of higher costs, we heard it from deer again it's one the big themes we've heard. you can see what they're doing the street is well aware of what is going on with the crisis. most of these companies are 40 and 45% off the highs from 2016. some of them were in 2017. speaking higher costs ceo of deer was talking about the higher raw terrematerial costs d fright cost -- frigeight costs. they're going to try to raise prices some people can pass on the prices and keep their margins up a lot of people can't. we've seen it with the packaged food companies they can't do that that's why they're getting margin erosion we've heard it time and again. proctor and gamble, dunkin'
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donuts talked about higher milk costs. dooer down a little bit this year overall that's a major, major topic. if you can raise your prices, you're in good shape now we're flat on the dow jones industrial average now up just over 10 points have a happy weekend. >> thank you very much let's turn to the bond pit now rick santelli in chicago good morning, rick >> reporter: good morning. not a data friday but a wild week in treasuries look at one week of twos we're down today we're down on the week as a matter of fact, if you consider we're unchanged now on the week for a two year. down three on the day. tens are up 11 on the week down three on the day. i think the performer of the week to pay attention to is the longest maturity 30-year bonds we see the one-week chart there. it's down three. it's parallel shift today. all maturities
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guns hot on the long end continuing to hold and take off, to some extent 30-year bond taking off. 2018 high of the year which was 3.22 and now hovering at the best level since december of 2015 if you open up the chart to bunds, this is fascinating from early april you can see there's a boat load of support around 50 basis points it doesn't seem as though it's really taken off above 60 and others at 61.5 one of the main reasons that there's some buying coming in on the high quality curve versus the german curve is the italian ten. unbelievable it's now over 220 basis points what a week. if you open the chart up since july, you can really see we've screened higher. there's a lot of issues here some of them, of course, mixed with politics and markets and
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politics especially in europe is never going to be a tasty appetizer. we look at the dollar index. a good week. not up a lot but up a significant area on the charts so traders paying close attention as we now hoover at the best levels since the 15th of december for the dollar index. so from santelli to you, it's all yours. >> thank you very much. >> when we return, an update on the shake up at campbell's soup. "squawk on the street" will be right back
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shares of campbell's soup down nearly 12% this morning the company announces the immediate retirement of ceo denise morrisson replaced on an interim basis by board member keith mclaughlin. announces a review of the strategic plans and portfolios our sara eisen is doing reporting on this morning, on her day off. she joins ounce the phone. what do we know today? >> caller: good morning. the slowest decline of america's
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oldest and most recognizable soup company is claiming another victim the ceo of this company has been since 2011 i got off the earnings call where the interim ceo, the former ceo of electrolux he's going to manage the company for now. he told investors that big changes are ahead. listen to this. >> beginning today, we will undertake a thur row and critical review of alls a spebl -- aspects of our plan. that work will inform our capital allocation and resource deployment priorities. everything is on the table there are no sacred cows. >> clearly not inspiring a lot of confidence from investors this morning with the stock down more than 10% all this call. they promised more information on the plan and a time table august 30th. that's the next earnings call.
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you mentioned this decision of morrisson and the board was abrupt and the fact that she is retiring as of today somewhat unusual i can tell you that it was a mutual decision. morrisson is 64 years old. from an activist situation there's no immediate m&a to be announced, no bombshell or anything like that no health concerns, some reasons you might expect a ceo to be out suddenly if you look at the stock performance and recent results, that's the stock campbell is down 40% over the last 12 months the only stock doing worse before today was kraft heinz, which has also been struggling with its big brands. all these package food companies are having troubles. campbells is seeing sales declines over the last three years. it's not just soup morrison has been trying to diversify the portfolio, and so
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the company blames execution problems along with external market problems. it's clearly led to a difficult path for this company as well as so many others i would note also on a personal note, this is another example of a female ceo leaving an s&p 500 company. i don't know if you've been talking about this, but only 23 left 4.6% of the s&p 500 are female ceos just another ceo to leave the package food business. >> sara, we did not mention that, but it also is to be pointed out, female ceos tend to get the job when a company is in some kind of trouble or at a strategic cross roads, this one has claimed a lot of victims a lot of ceos in the package food space have not been able to get this sorted out. >> just in the last few years the ceos have been placed ofm t
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mondelez, kellogg's, hershey's, it speaks of these big storied food brands. millennials are not shopping for the brands our parents went for. despite that campbells food has been making ingredient changes, becoming aggressive when it comes to acquisition morrison just acquired snyder's in december to diversify into snacks so making that move it still isn't getting done whether it's other private label and younger internet-focused brands are taking share or the fact that these big food companies are having trouble competing on a mix of brand changes, preference changes, and problems like inflation. campbells soup, they expect margins to be down for 2019 thanks to the steel and loom alm tariffs.
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what i know about the next ceo, they have some internal candidates but they are looking externally as well but there's a dearth of leadership in this entire leadership i expand it beyond food to beverages and household products as well. >> b & g did say they would like prices of cream of wheat yesterday. maybe that final stage inflation is done and we'll make up some of those lost margins. >> everyone said the retailers now, the pendulum swung in their favor. they're getting tough. they realize they have the advantage because people need shelf space. >> try to enjoy some of today. thank you for that when we come back, jim stewart with his take on cbs/shari redstone
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eisen -- morgan brennan and david faber. safer s sara eisen is off today. dow is off 14. we have media, cbs, packaged goods with campbell, some negative headlines on trade. our road map begins with the cbs power struggle the board slashing the biggest shareholder meeting and gearing up for another legal fight. and trump and cli thehinese officials downplaying a deal. and campbells down as the ceo resigns effective immediately. looks like you'll be with this story for a while longer with cbs >> discussing this with people as well. let's bring you up to date on where we are in terms of this ongoing battle, and what has become more heated than many of us could have imagined it would
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have, despite the fact we knew there was bad blood even a couple weeks ago last night the board of directors of cbs met they voted to issue a dividend, contingent on the court in delaware allowing them to do so. if that was allowed, that dividend would have the effect of vastly diluting the voting power of national amusements led by that lady on your left, shari redstone cbs will say we had no idea how the court will rule. that's a fair point. many lawyers who are unaffiliated here, who are well acquainted with delaware law do not believe that the same court that would not allow a tro to go in place yesterday in a sense affirming the rights of the control shareholder will in any way, shape or form change that what may be at issue is the bylaw change that took place requiring a super majority vote of the board, two votes more
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than 20 day ace part to put in this dividend. the cbs board said it wasn't in effect yesterday national amusements -- this will be litigated that's where we are now. we will end up in court, over the next few weeks potentially even longer than that. but none of it has been resolved as many hoped it would be in terms of the fate of cbs and viacom the cbs special committee decided this is not a deal we want to do instead of saying that, they decided to sue their controlling shareholder, seek a tro to prevent her from replacing directors. clearly heightened what was already extreme tension between the two camps, cbs, its management, its board, and its controlling shareholder, shari redstone hard to imagine that over time she won't try to replace directors, but it doesn't appear
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she will do that in any near-term. so we will wait and see what occurs in delaware, we will sort of have to wait and see whether or not there are is it any movement there may be a potential lawsuit from national amusement to those directors saying there was breach of loyalty. if you were to bring such a lawsuit that would bring personal liability to those directors, it could be expensive for them that's one weapon that has yet to be used here. but it's ugly. of course you can see shareholders trying to figure out what does it mean for cbs and the likelihood of its independence or not, whether or not we're going to see this deal despite the fact that cbs's special committee feels it would not be in the interest of shareholders, at least based on the structure that was potentially desired by viacom.
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let's get to our next guest. he's sitting here. he has more to say on this battle far more at stake than the control of these two entertainment companies. joining us now is "new york times" columnist, jim stewart. you spent some time with this. >> not as much as you. >> delaware law, of course, plays a key role here. >> it does, but, you know, one extraordinary things about this is we have never seen anything like this before an open revolt by a board of directors against a controlling shareholder. so the delaware judge said in his opinion, he said i'm looking for precedence here. there just aren't any. when people are betting how the delaware courts will go, it's anybody's guess. there are no precedents here traditionally delaware law has sided with boards of directors, but it's also sided with controlling shareholders here we have the two directly at loggerheads. i wouldn't want to bet on that what did you make of the
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colorable claims comments, one side, cbs saying that gives us leverage to pursue claims, or national amusement will say it means nothing. >> i think the judge in his own way was kind of coming down on the side of cbs. he couldn't get to the high standards for granting a temporary injunction but he was basically saying i don't like the feel of this last minute bylaw change to prevent a vote to seek control he seemed to say you come back to me, come back to us if something actually happens, where you feel shari redstone is not acting in the interest of all shareholders, we'll hammer out a remedy there i thought on balance -- obviously he's inviting them back into court, but in a subtle way suggesting there's merits to the cbs claims >> this idea that there are not many precedents that have been set legally for a battle like this, that makes me wonder how long this could stretch out.
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meaning no matter how the delaware court rules >> if it stays in court this could go on for a long time. there will be suits, counter suits. remember when shari redstone was trying to gain control of the trust, there was litigation in california, massachusetts, new york, it was a welter of lawsuits this is even more complex and complicated. i think an issue is can the companies function effectively with this legal cloud hanging over them? that's a real question this is open warfare now wouldn't you have liked to be in the boardroom where les moonves and shari redstone faced each other down it must have been unbelievable there was a complete breach there. i don't know how you put that genie back in the bottle >> do you think it affects operations or things that require board approval >> everything.
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it puts uncertainty over both companies who will be in charge. as it looks now, it looks like the moonves end game if he loses this deal, the whole management team will leave there. that leaves a whole company hanging there with uncertainty >> we should point out the court in delaware will likely rule quickly on the bylaw change itself which is the key here if they rule the bylaw change was effective, the dividend will never happen that will get resolved then the question is what is next, and does she replace her directors, as is her right to do so under written consent she can do it at any time she wants. in a sense they're saying she was planning on doing it, but it's not clear she was >> i don't think she was >> they told me she wasn't they made it clear in their public statements that's not the case >> if she wanted to do it, she would have already done it
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a lot of people on wall street are saying why didn't she already do it. this is kind of a no win situation for her. if she prevails in this thing and has the ability to fire them and replace moonves and the management team, is that so great? i don't think she wanted do that she thought she was getting alon fine with moonves. that track record is incredible for a broadcast network. she has these two companies she controls, she loses her best management team, that's not a good outcome if she loses, she loses control. that's one thing that national amusement said, we are not giving up control. we're not selling to somebody else that's hovering in the background we know now that acquirers are circling cbs it's an attractive asset like verizon. >> lowell mcadam this week seemed to indicate they were no
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longer interested. >> that could be >> i find it hard to imagine that a delaware court would allow a control shareholder to lose control over what reason the precedent set there. they cited hollinger >> at the root here is the inherent conflict of interest when you have a controlling shareholder whose personal interests are not aligned with the public shareholders. shari redstone is uniquely here the controlling shareholders of both parties to the proposed merger her economic interest is what is the maximum value of the combined assets of viacom and cbs. that's different from either the interests of the how old shareho viacom and cbs so are you looking at the blended value of the assets and trying to maximize them?
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the court may want to weigh in on that, in theory a controlling shareholder is not allowed to act in their personal interest to the detriment of public shareholders >> right that was very well said. i may use that in my future reports. >> that summed it up >> you have some companies in silicon valley who must be watching this with interest. >> yeah. again, this is an issue of a controlling shareholder, which is someone who has the voting control of the company but not an economic majority or a controlling interest of the shares and that has become the new model in silicon valley. entrepreneurs don't want to give up managerial control even when they take on shareholders. we have facebook as dual shares, alphabet as dual shares, snap as dual shares. there's been interesting proposals that maybe it's okay for several decades, but at some
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point, you get in a sumner redstone situation where it shouldn't go on forever it should lapse that's all being fiercely debated now. >> jim, thank you. >> sure. >> look forward to further discussions. >> i'm sure we'll have many. >> when we come back, the chinese delegation arriving at treasury a few moments ago china denying that report of a 2$200 billion offer to reduce te trade deficit. the latest on that and it's no macy's nordstrom beats earnings but the weak sales number and comps up driving the stock down inw hanging on to a one-point ga feel that? that's the beat of global markets, the rhythm of the world. but to us, it's the pace of tomorrow. with ingenuity, technologies, and markets expertise we create the possible. and when you do that, you don't chase the pace of tomorrow.
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i know. find your phone easily with the xfinity voice remote. one more way comcast is working to fit into your life, not the other way around. welcome back high stakes trade talks turning into a case of he said he said the markets are taking it all in let's go to eunice yoon in beijing for the details. u.s. officials have been quoted as saying the chinese have been preparing a package that would help reduce the trade deficit by 2$200 billion today the foreign ministry said the chinese never said that. the steep reduction meant that
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the chinese would cut tariffs on certain agricultural products like oot, pork and sorghum there are still some signs that the two sides are moving in the direction of some type of agreement. the commerce ministry today said it is ending its investigation into its -- the antedy t diantig investigation into sorghum saying it was not in the public's interest because it would negatively impact chines consumers. that was seen as a way for the chi nooz gonese government to p up from by limiting agricultural products into china. i've been speaking to some american people here in the business community they said on the second day of discussions they're concerned about where the talks are headed jerry waterman of the u.s. chamber of commerce said he is concerned that the trump administration is too fixated on
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the trade deficit and that could mean some structural issues that the u.s. business community here faces could be sacrificed at the end of the day >> eunice, huge story over here. appreciate your insight on it as well >> rising oil prices, the ten we're above three are making some waves russell is hitting another all-time high for the third day in a row joining us for more, jeff kleintop and jim lowell. gentlemen, happy friday to you both good to see you. >> thanks for having me. >> jeff, how do you trade these contradictory trade headlines and how much damage is implicit in a deal truly falling apart, if that were to happen >> obviously global trade is important to profits most companies profits come from international sales. so we know it's very important here is the thing not to lose
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sight of global trade volume growth is up over 6% year over year that's the fastest pace in seven years. global trade is actually booming right now. despite the headlines. i think that's most important forinvestors to focus on these trade talks have a long tail to them both with china and nafta. >> jim, you as optimistic? >> well, certainly optimistic in terms of the fundamentals suggesting that interest rates are low. earnings are reasonably good economic data here and globally suggests that we continue on an expansionary course. not a recessionary course. that said the trade war talk, unless and until it comes down to trade war facts will be something we're watching and analyzing, but not making investment moves based upon what others would have us fear or believe. we tend to invest only on the facts we know. >> jim, in light of that, where would you invest now >> we continue to like healthcare
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we're overweight that sector we think anything related to the strong u.s. consumer makes good sense. in terms of the global market plays, certainly the small, the mid cap names that are less prone to things like currency issues or trade war talk let alone trade war actions continue to be, i think, an attractive space. especially in the established foreign and emerging markets where valuations are more attractive >> jeff, based on everything we know so far, what's the bigger risk to the markets, nafta or china? >> nafta is a big risk to mexico and maybe u.s. auto producers. china is a far bigger and long-term issue with the u.s not just for u.s. producers and trade and in business products, but we need to be able to access chinese consumers. that's incredibly important. that's where the growth is if you look at starbucks, nike, they are focused on china as a growth market with the middle
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class. it's not just about chinese companies selling products to the u.s., but u.s. businesses getting access to that market. long-term that's incredibly important to profits and the trajectory of u.s. revenue. >> jeff, the action in the russell, is that a reasonable way to play geopolitical uncertainties and trade uncertainties? >> i don't think so. i think small cap stocks could be very near a peak. we are looking at a ten-year peek in the relative performance of small cap stocks versus large cap stocks we know there are regular cycles between the asset classes. the gap between the two is at an extreme for a number of reasons including financial conditions late in the cycle. a number of factors and we think that may begin to reverse and large caps may outperform along with value versus growth and international stocks those areas may be near ten-year trends catching unprepared investors by surprise. >> yields rising, the ten-year
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hitting close to seven-year high how much higher do you expect that to go and what is priced in for equities >> it's something we have been paying attention to. there was word on the street that a 3% yield on ten-year would send stock investors running for bond cover that has not happened. we think we have to see the ten-year at 4% plus to look dramatically more attractive relative to the stock market if you're investing in balance sheet, blue chip stocks yielding between 3%, 4%, you're able to offset some risk you're seeking for not just near-term but long-term capitalization better we think in the equity markets >> a lot of risk management going on we'll continue to watch the tape jeff and jim, have a good weekend. >> thanks. coming up, the latest on the cbs drama, bob wright, former nbc ceo will join us
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the sun goes down. you did a million things for your family today. but speaking to pnc to help handle all your investments was a very important million and one. pnc. make today the day. . the u.s. is said to have
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scrapped a recent training exercise with south korea involving b-52 bombers and south korean jets. the action happened after south korea expressed concern ahead of the meeting between the president and north korean leader kim jong-un we'll see if that raises the chances of that summit taking place. etf spotlight here jackie deangelis is looking at energy once again. >> crude prices are bouncing around, just turning to the south side here. no real direction at the moment. definitely some support for wti over 70 and brent certainly over 79 in the last month wti is up about 4% brent up around 8. so they won't make these big moves every day, even though the momentum seems to point higher energy stocks are mixed today. the etfs are look weak, the xip
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lower. energy has had a nice run alongside oil prices the sector seeing a 2% gain on the week, about a 6% gain on the month. where do we go from here probably higher according to analysts, maybe not in a straight line. more reasons right now to go up than down. guys >> all right jackie, thank you very much for that we'll watch wti closely today. when we come back, the battle for cbsrages on the cbs board voting to strip shari redstone of control. and we'll talk to bob wright when "squawk on the street" mebacos ck let's begin.
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i thought after sandy hook, where 20 six and seven year olds were slain, this would never happen again. it has happened more than 200 times in 5 years. dianne feinstein and a new generation are leading the fight to pass a new assault weapons ban. say no to the nra and yes to common-sense gun laws. california values senator dianne feinstein good morning i'm sue herera here is your cnbc news update. a training exercise between
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b-52 bombers and south korean planes was scrapped earlier this week after the south korean government expressed concerns that it would generate tensions with north korea the move follows repeated assertions by the trump administration it is keeping up the campaign of maximum economic and military pressure on pyongyang. gunfire erupting early this morning at president trump's golf resort in florida as a man shouting about the president draped a flag over a lobby counter and exchanged fire with officers one officer received a broken arm and the suspect was wounded. former russian spy sergei skripal has been released from hospital two months after being poisoned bay nerv eed by a nerv. he and his daughter spent weeks in critical condition. and keps insington palace ss prince charles will walk meghan
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markle down the aisle tomorrow this after markle's father was hospitalized back down to you >> 7:00 a.m. eastern, sue. >> we got to be there earlier. 6:00 a.m. for the warm up. >> all right thank you. welcome back to "squawk on the street." i'm carl quintanilla with morgan brennan and david faber. dow is up 41 watching a lot of headlines and earnings packaged goods, trade, and now media. the company's board votes to slash the shareholder power by half, postpone the annual meeting. joining us on the news line today is bob wright. also senior adviser at lee equity partners and founder of the suzanne wright foundation. good to talk to you this morning. good morning >> thank you, carl good to talk to you. >> we were chatting about whether or not any of us had
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seen anything like this. board of directors in open revolt of the controlling shareholder. have you what moves do you think cbs makes now? >> let me just state a couple things there are two really, really good media executives in this country. maybe in the world it's bob iger and les moonves. focusing on les moonves now, there's no way in the world that they can get rid of him or would want to get rid of him i think the nonsense going on here, you may be seeing the very last days of these dual share companies. which usually helps new companies coming in. so the owners, the guys that built it can protect it for a while. cbs is a 90-year-old company i think the delaware courts will
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look at that saying this is a silly situation. we're we're -- where a shareholder who owns the majority of it, and this may go down the beginning of the end of that type of ownership. >> bob, it's david you worked for comcast a bit we do. >> right >> they have it, too >> there's an economics versus an ownership there that's very large. you think that delaware is going to set a precedent that says forget t we'shg it, we're throw all the dual class structures? >> maybe not right away, but i'm saying this is the beginning of the end of that whole thing. the reality of it is this exposes it, it's negative to shareholder values there's no benefit that shari is bringing to the table with 10% ownership and trying to control
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all the board. it doesn't make any sense anymore. i think the other thing is viacom has little leverage now in the community now in terms of revenues with advertisers or cable tv les knows that what's the solution? the solution is easy it will be -- it will be quiet because she could lose the whole game so i think the real solution is he gets to be ceo, he has control over the board, he has -- she limits the voting that she has for her "b" stocks. her "b" shares can only be voted in x, y, z, a downgrading of that "b" series of stock and they make a decision they could merge the two companies together the best guy to handle that
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would be les that will happen if she's smart, she'll get rid of it there's no reason to have that ownership structure like that. she's abusing it >> bob, i have to respectfully disagree based on the reporting that i've done the likelihood that would happen in delaware is highly unlikely based on the attorneys i'm talking about. >> you're missing the point. i think that she is going to realize that she's going to be deluged with shareholder suits if he goes away. >> if she replaces districters and fires him, you mean? >> anything. it won't happen. i don't think there's a real economic value for her to do this having that control is not creating any value for her, her family or anybody. >> this is a unique situation, bob. there's no doubt it's a unique situation, control shareholder in two companies and trying to
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put them together. many people make the argument when it comes to these situations they feel emboldened to make longer term decisions than quaurtd tore quaurrter to decisions, if they want to do a large -- >> that's good in a startup. that's good for a few years. it's six years now with facebook probably time for them to get out of that. once it becomes a mature company that thing you're talking about doesn't hold water anymore what could happen here, you might see the s&p delisting companies to do this you may see dow jones saying we don't have anybody in there. pretty soon you see the obviousness of it. i think it's the beginning of the end. >> don't go anywhere
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let's bring in larry haggerty, long-time media watcher. it's good to have you. >> hi, carl. >> what do you make of the conversation >> i'm fond of bob, but totally on the other side of this. i think one of the first things i learned about 30 years ago in the media business and it was columbia pictures, there is a difference between management and ownership. at the end of the day ownership wins there's an old latin expression, and clearly these dual class shares can be treacherous to an investor, but if you buy them, you understand that that's a risk that you take you throw your has the in the ring with management if it's google and facebook, you win here, it's uncertain if you throw in with bon ton stores, you get totally wiped out. the structure is legal it will be upheld by the court
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i would be betting against moonves here i think he will leave. i don't think it will kill the stock. but for reasons that people are not -- >> why don't you think that? i think leslie moonves felt the leverage he what is this idea if i leave, and bob was discussing t i'm the best executive out there. i'm the best guy to lead this country, when i leave the stock will plummet >> two reasons, if you look at his tenure, he grew the earnings of the company but improved the multiple by moving it to a better neighborhood. his contribution to cbs was collecting fees for transmission from the cable networks. that probably produced after the cash flow. that's a one-off it wasn't the brilliant programming that created the shareholder value, it was creating the dual revenue stream which -- >> you don't think big bang theory at number one for whatever it is, ten years --
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>> no but i think $2 billion of retransfee at 8 5% margin moves the needle why don't i think he's essential? monday the court agreed there would be sports betting. cbs has a make jor, major seat t the table in sports betting. they're not as well located as disney this will legalize quickly cbs runs the ncaa tournament that's one of the great betting events in the history of the world. >> colliding with the gambling trend >> mississippi enabling legislation specifically allows college sports even if they do, they have the nfl contract they're really in the game the ad dollars will explode for sports viewership because the viewership will explode. maybe the leagues will get it
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back when they renegotiate contracts, but broadcasters here will walk to the bank with or without moonves. >> somebody who watched these two companies for a long time, you think she's going to put them together as i've reported she desires very strongly? >> i do. delaware law will go with the owner of the business. she's the owner of the business -- >> she will need to get rid of moonv moonves. >> i hope they make peace. >> my bet is moonves shows up as ceo in a short amount of time, she dilutes her ownership rights and they move on and he puts it together, he runs the company. he could be a great guy to run the beitting, too >> i knew her father for a long time, i don't think that will happen blood is thicker than water. sumner was a very, very good lawyer >> you're too much into the lawyers here there's a certain amount of reality of what's going on
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i do think the opening-- there's so many -- i sit on boards and control corporations, we are inundated by groups that want that to stop. it's picking up a lot of momentum there's 16% of companies that have this methodology. most of them are new, i understand that. but most of them are new, not 90-year-old companies. >> right though media has typically been controlled for the longest time. time warner and disney were the only ones out there that weren't. >> it's not proven to be worth anything it's not proven. the one thing about delaware, if you can show shareholders are being disadvantaged in some meaningful way by it -- >> bob, you don't think comcast benefited from the roberts family control >> i think they have -- it's
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because -- in this case, roberts is not shari he is an extraordinarily good executive. they benefit because they have him as the ceo whether he has control over the stock or not he and his team are excellent. >> larry, really quick, your trade, if we can distill it would be long cbs short -- >> i think the problem with this is it could go on forever. the shareholders are plague tyie role of belgium and it's the spring of 1940, and there will be huge legal fees but if viacom wins, which i think they will, and moonves leaves, which i think will happen, and cbs stock goes down, i will be all over the stock i think the asset is good and the exposure to sports is tens
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if not hundreds of millions of dollars in no capex cash flow. >> tens of millions of dollars have already been spent by shari and her family to protect this anarchyistic form of management. the litigation they've taken over the last five years has been incredible. this will add to it. the waste for shareholders in this whole process is becoming extremely obvious. >> bob, larry, really good discussion on the story of the month, maybe the year. we'll talk to you soon thanks >> thank you very much hi, larry. counting down to the royal wedding. wilfred frost is live in windsor and joins us with a look at what is coming up hundreds of millions on tv around the world
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hundreds of thousands on street of windsor 600 lucky guests within the walls will watch harry and meghan wed tomorrow. how much will it cost? we'll break down those numbers when "squawk on the street" returns. as a control enthusiast,
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emerging markets flirting with correction territory as the dollar soars, but some say relief is in sight nduthyn
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we are counting down to tomorrow's highly anticipated royal wedding. wilfred frost is live in windsor with a preview of the pageantry. wilf >> reporter: yes, less than 24 hours to go until the doors open of st. george's chapel for 600 lucky guests to celebrate the
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wedding of prince harry and meghan markle. within those 600 guests, there's plenty of royalty, plenty of hollywood celebrities. in fact, far fewer politicians than at the last royal wedding in 2011. around 300 government officials from the uk and around the world attended william and kate's wedding. why fewer politicians? this is not a state occasion in the way william and kate's wedding was. we also don't expect president obama to attend, despite the fact he's a close personal friend of prince harry's that reduces potential embarrassment for theresa may, had we seen president obama here but not president trump. by the way, prime minister theresa may also not expected to attend the fact it's not a state occasion has another big important implication. that means that the queen will be paying for this wedding not the government picking up the tab but rather her majesty the estimated costs, some $45 million.
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the vast majority on policing of the event. can she afford it? of course she can. perhaps not quite as he'sly as everyo as easily as some expect, she has a personal wealth that comes from various sources of the state. so a lot of it will be spent tomorrow, but i'm sure she'll survive just fine in the long run. the money, of course, not the important thing. we just can't wait for all of the pageantry in the wedding to kick off less than 24 hours to go >> yes i think many of us are setting our alarms bright and early for saturday morning state side. i know a number of americans who are flying to the uk and to london to be there and be in the mix for the wedding. how many tourists are expected
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what could this mean in terms of business for london? >> indeed, lots of americans flying here. including our brilliant own courtney reagan who is here in windsor to celebrate as well the numbers overall expected are around 200,000 100,000 to 200,000 on the streets of windsor in terms of additional visitors to the uk, the estimate is 50,000 to 100,000 overall, gross terms, not people just getting away for the weekend that will be split between london and windsor windsor is not big enough to fit an extra 100,000 people arriving what economic impact will this have in 2011, we did see retail sales in the uk jump to 2.1% in the month of april the average for the first half of that year was less than 1%. so a bit of a boost, but nothing too significant overall. either way, well worth whatever the net cost is overall. back to you.
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>> wilfred, thank you. wilfred frost in windsor guys, are you getting up early and watching this tomorrow >> no. you have had a busy week working the phones >> i will. i have to wake up to walk the dog. >> little league >> i will go to sleep. i will not be watching >> i will be >> okay. time to send it over to another guy who i know loves that royal family. jon fortt has a look at what's coming up on "squawk alley." >> david, how did you guess? i will not be up early in the morning u but joining us on "squawk alley," ben silverman, former co-chairman of nbc entertainment. we'll talk the drama at cbs and the tech-driven changes sending waves throughout the media industry
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welcome back kaiser permanente announcing a $200 million impact investment this morning we're joined now by the ceo of kaiser permanente. thank you for joining us today. >> thank you great to be here. >> $200 million investment that's a sizeable investment why should kaiser be making this
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investment and this specific cause? >> it's part of our understanding that this is about total health and kaiser permanente looks after and in our geographic area we. coalition of mayors and ceos allow us to come together and solve what we consider to be an unacceptable issue in the 21st century, that we have people living on the streets. >> and certainly it's an issue that's gaining more and more attention these days you're the ceo of a company that's headquartered on the west coast. what do you make of the move in seattle by officials to implement a $275 tax per employee on major employers in that city? >> yeah. we haven't really analyzed the
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city by city specific actions that are being taken however, i am noticing that a lot of these questions are being asked around the country now, and it all has to do with inadequate funding and so while we're trying to help to solve the problem and to bring total health in our communities around the country, that includes the homeless, we also acknowledge that we can't do this alone. and that's why we're happy to do this with the coalition and we're inviting other businesses to get involved. and there are many who are involved, and there are other solutions that are being looked at, such as the seattle situation that you've identified. >> bernard i want to shift gears a little bit, given the fact that it's been a week ago today that president trump unveiled his drug pricing plan. i want to get your thoughts on that and this idea that we could see some drugs shifted to part d of medicare from part b. would that actually drive down the costs? >> well, you know, it's a
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complex problem all the way around health care is still unaffordable in this country and even though we've made great progress, we have a lot of work to do. and so part of this is to make sure that all parts of the industry are at the same table, solving to this collective problem, which is making health care more accessible and affordable and having the pharmaceutical industry at the table is a critical piece of us working together. >> when you say all parts of the table, do you think all parts are at the table look that the issue more broadly >> i think that -- >> is that a fair question >> all parts are at the table but we're not there together, as we should be and this is another move, in my view, to get us all there. pharmaceutical pricing is a major issue as it pertains to affordability. but i also don't want to take pot shots at the pharmaceutical
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industry they are producing drugs that's critical for the american people and so it's all of us working together to deliver the best quality care possible in the 21st century. >> and, of course, i have to get your thoughts on the broader health care right now. cvs trying to buy aetna, walmart strengthening its ties to humana, on and on. will all this consolidation drive down costs as well >> i hope so i think what you are seeing is everyone is working hard on this problem and it's not unusual, as we've seen in other industries, that you would start to see some consolidation. clearly, while we've made great progress in this country, we still have an unacceptable number of americans who do not have access to the front door of the american health care system and we have a lot of americans who have access to the front door but, quite frankly, can't
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afford to get the care in some cases. so, we still have major issues to work on in this industry and kaiser permanente certainly is doing all we can to drive up quality, continuing to drive up quality, access and more access and continue to make health care affordable. >> it's certainly a complex issue. we appreciate you coming on and giving us your thoughts on this day with this $200 million investment kaiser permanente chairman and krechlt o bernard tyson, thank you. >> thank you when we come back, a lot more on the battle for control at cbs and why the pope is taking aim at wall street. markets remain mixed dow is up 8. "squawk alley" is next
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good morning it is 11:00 a.m. uptown at the moment where the cbs shareholder meeting was supposed to take place today, 11:00 a.m. on wall street and "squawk alley" is live ♪ say no no no no no just say yeah yeah yeah yeah yeah and we'll go go go go go if you're ready like i'm ready cause it's a beautiful night ♪ ♪ we're looking for something fun to do


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