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tv   Squawk on the Street  CNBC  July 19, 2018 9:00am-11:00am EDT

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educated workforce in the world? he thought about it. i'm taking credit for what's happening today, i guess back to you guys >> joe, thank you for bringing us all those interviews. we look forward to the big one which we'll see tomorrow we also want to thank you the other joe on set with us, thank you for a great -- >> thanks for having me. >> we will see everybody tomorrow "squawk on the street" begins right now. ♪ great show, guys good thursday morning. welcome to "squawk on the street." i'm carl quintanilla, with jaime cramer and david faber of the new york stock exchange. you just heard comcast dropping its chase to focus on sky. europe is mixed 10-year near $2.88. china firing back at comments
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larry kudlow made at delivering alpha yesterday. steve bannon also not pulling any punches on trade we'll make sense of what all the comments told us yesterday comcast officially drops its bid for fox saying it will instead focus on the acquisition of sky we'll tell you what that means for the players overall in the media industry some big tech names on the move this morning. we'll break down what's driving all of the moves and there are a bunch of them. comcast kicks us off david has that to start us off >> not a surprise, guys. we've been talking about it here we spent a lot of time on it on monday when we reported it was highly unlikely comcast would follow through on any attempt to compete with disney in terms of a higher bid than the $38 deal that disney already has to acquire those fox assets making it official this morning, interesting -- i've tried to make the point -- that neither side of course can talk to each other really in any sense of collusion here you back down on that, i'll back down on this but they can try to signal each other. i think that is in part what's going on with comcast's decisio
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to put out a public press release. the chairman's ceo says i would like to congratulate bob iger and the team at disney and commend the murdoch family for -- and fox for creating such a desirable and respected company. what we were showing you is that decision they said not to pursue further acquisition of fox and focus on a what is now a recommended bid from the board of -- special committee at sky that's a process that's going to move now on its own. let's now focus on the july 27th fox vote of its shareholders that's going to happen they are going to vote in favor of the disney deal it is the only deal they have to think about right now, then move towards flows. when i spoke to bob iger this morning, of course, chairman and ceo of disney, i reached him and he was not aware of the news itself i was able to read the statement to him, as you might imagine, he
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was fairly excited about receiving that news, and said as much he also said, listen, it is an exciting development we're now going to focus on gaining regulatory approvals, closing the deal and integrating assets those regulatory approvals do, by the way, to another conversation we are going to have, include china. i believe there is a great deal of confidence in the disney part that they aren't going to have a problem there, shanghai, d disn is a huge operation. any number of other reasons. but let's not forget, even though they've gotten doj here, they still need eu and china in terms of antitrust approval particularly as it relates to putting studios together which is the only thing you can see some questions about given they'll be spinning off or -- not spinning off excuse me. selling all of the rsns once they acquire them. for comcast, the question now is are they going to face any competition from disney/fox on sky, which currently they have a $1,475 bid i've been reporting again
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importantly this 8k that came out on friday in which disney said, 21st century fox may elect not to increase the price offered in the sky acquisition and any increase in the debt financing for the sky acquisition would require disney's consent, which disney may elect not to provide that was an important message being sent i can't stress that enough by disney an important message being sent i think by comcast today, guys we'll see if this is where it all ends it has ended now for fox they can't be upset really 28- to 38 a huge percentage increase now the question is sky, where by the way they accepted bid at $1,075 and now they're at $1,475 and will that be the end and will comcast walk away with a very important and large asset there. then is there nor dealing to be done down the road with disney and comcast regarding the 35% fox owns and the 39% hulu owns
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>> one thing we are plagued by you break the story, then comcast trades up a little it is confirmed today and the stock trades up a lot. do people -- look, there are delayed reactions to a lot of different pieces of news but this was not so much news. most important thing was that brian roberts congratulated -- >> i think you are right listen, i can't get into what people think of my reporting or why they choose not to -- i said highly unlikely so i left the slight possibility that they could change tacks people are just dig in on the belief this thing would keep going into the mid 40s, if not higher despite the fact when you understand the real leverage comcast would have to take on particularly because you have to sell the rsns at a lower multiple than you pay for what you're buying, the numbers start to work against you when you get to 41, 42 when you get to the
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leverage comcast would have to take on. even then, they were wondering, would that be enough and disney would come back they started to ask themselves we aren't going to end up with the asset we want. it has to be disappointing in some ways to mr. roberts so's been so aggressively focused on this for so long and was dispaidi disappointed the first time around that he did not get the audience he felt he wanted that fox board felt like they did not get the assurances they wanted on netanyaantitrust. >> the narrative can change for comcast. story had become they can't buy anybody in america it's done. they are further growth is capped then you want it international because growth isn't capped. some people say, it doesn't matter the end's going to be capped some day because international will be filled out the fact is some day's very far off. so you have a growth story again which gives the stock a higher multiple and i don't think analysts will think worse of it because of all the cash flow
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now the cash flow, comcast has used probable cash flow. they were getting no credit for it none >> you are right this also raises the prospect of additional buybacks. a big beneficiary of tax reform is comcast a lot of that's gotten lost in this battle. the question becomes will they be able to return more capital sky is not an insignificant asset. it is not a done deal yet. they are going to be taking on a decent amount of debt to finance that large acquisition there is no doubt about that but to your point, comcast has never really had a down year unless you were to have some sort of deep recession we are in interesting times in terms of people disconnecting. but they don't disconnect their broadband. >> but comcast wasn't getting any credit for broadband and no credit for the probable -- really unbelievable profitable goet >> and t growth >> analysts will say, we always thought once the last
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acquisition was blocked it was over for comcast growth other than broadband now you can put on numbers about secular growth -- they're still putting -- no one's cutting the cord over there because they haven't started putting the cord down >> that's a big part of the netflix story. also reminds me of what the "times" wrote about a deal, a different set of circumstances not going through perhaps with qualcomm and how that would also transiffer to additional buybacks, $20 billion to $30 billion. >> another confirmation about something we've been reporting, it was made clear according to "the new york times" interview when it comes to their pursuit of nxp, they will drop it if they don't get approval by the antitrust authorities in china >> i thought larry kudlow very subtly -- there was no subtlety. it was an anvil -- hammer/anvil that president xi doesn't want
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anything good. it made me think immediately, sell nxp that's where the old kudlow grammar days it was a dramatic statement by larry kudlow that i think the clinz are chinese are reacting to. >> the country not happy with what the country's top economic advisor told cramer. >> i do not think president xi at the moment has any intention of following through on the discussions we made. and i think the president is so dissatisfied with china on these so-called talks that he is keeping the pressure on. and i support that >> in response, a spokesperson for china's foreign ministry says, quote, the relevant united states official unexpectedly distorted the facts and made bogus accusations is shocking and beyond imagination." sort of a direct swipe at what
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larry said >> my take-away was they watched. frankly, in terms of signaling, i think larry kudlow was always considered to be the guy within the administration who's not the peter navarro -- peter navarro on this morning. he was a regular guest it was like kudlow, cramer and navarro. to hear what larry said was a lot harder than anything navarro said listen, there really isn't any movement and xi is intransigent i think we have to start thinking, not only are we not done -- i was thinking of putting tariffs on all $500 billion. let's not oddly bid up shares after what larry said. it was a major impactful statement. chinese statement back is basically, yeah. it is just getting hotter and hotter >> toward the end of the day steve bannon talked about how relative to russia and china is
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the challenge for the united states that we're going to go into a bit of a dark valley, he said, regarding trade and trying to undo some of what they've done to the united states. take a listen. >> we're at war with china there's three types of war the chinese look at it information war, economic war, and guns up. kinetic war. they've been at economic war with us for 25 years >> he says we can -- i think in his words we can take the whole thing down depending on how we play this. >> yeah. look he's obviously not official with the president. i do get the sense that -- remember, larry put in something that was very positive about europe, contrasting china. i think there is still this notion that china can fall back -- remember what larry said he said "other than xi, many people around the table would like to do something." xi obviously president for life. but i guess i'm trying to be a
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little more hopeful and more constructive >> remember, xi's original quote, when we get hit on one side, we don't turn away we hit back. i'm screwing it up, carl >> that's essentially right. now everybody today is looking at the yuan and what this continued passive devaluation. >> passive aggressive. it really is we have to focus on that >> when it comes to trade i can't help but notice the "wall street journal" today again focused on auto tariffs and the possibility the president, despite what is strong condemnation from the auto industry, from many members of congress, both right and left. it is interesting, the only placeis he getting support is from the union >> i know. the old days of -- remember when i first articulated similar to this on ""kudlow & cramer,"" it was a very pro-union position. these days bernie sanders is very much in agreement with president trump. i don't even know if there is
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anyone else in the democratic party that is that far left to be equal with what the president's stance is. >> there is an interesting circumstan circularity to those politics. >> senator warren may not be that far left. we'll get to some tech movers this morning. ibm last night tesla downgrade. ebay under pressure. s&p within 2% of its all-time january high -- 2,871. we'll monitor the ongoing developments in media today. quk t see iback in a moment. you're awesome and xfinity would like to say, "thank you".
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we're on to something. come on. and it's all on us, and it's all week long. so you should probably start canceling your plans. you've got some serious watching to do. the president tweeting a couple moments ago -- i told you so the european union just slapped a $5 billion fine on one of our great companies, google. they truly have taken advantage of the u.s. but not for long of course, he is referring to that record $5 billion fine levied yesterday over alleged use of android to thwart rivals. haven't necessarily heard him come to the defense of big tech in the last few years. >> no, that's true
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people often feel big tech is diametrically opposed to the president on a lot of different stands tim cook has developed, according to larry kudlow, a good relationship with the president. i point out that the only leverage here again is autos autos are really -- when i looked at the stock, alcoa was the first quarter that we really had a kapow against tariffs. all bets are off it comes to autos because autos are just a gigantic part of the european economy. >> you referred to alcoa cutting their ebitda >> it is difficult to -- you need greenfield aluminum plants. the president wants that to happen it will take six, seven years to do that. but i think if you start going down the path of changing the tariffs on the autos, then you are really going to have a smooth falling situation >> i can't believe he comes to
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the defense of google is argue because it fits the narrative of us versus them that the president has been laying out when it comes to europe which frankly he seems to think is more of a foe than many other countries that typically have been considered foes of the united states. and this -- where else was this going to go? not for long >> what's not for long >> it continues to just add -- we can go into the reasons why they chose to do this, but it lends into this narrative, where else is he going to go other than he is going to try -- there is going to be something punitive done here is. >> other than asml, a great company that makes great semiconductor equipment, you can't hit them there's nothing other than autos. like i'm wearing a great european suit so he can go against them no what matters is autos. you just don't -- this one's
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actually a 180 this is killer no joking around autos -- this doesn't have to mean the end of the world because you can always pull back you just don't get any comfort that the president is talking to a lot of people when it comes to autos. because the auto companies don't want -- nobody wants it. >> yesterday kudlow tells you that he thinks maybe younger when he visits on the 25th is going to bring some kind of olive branch on autos. today more reports the eu is actually preparing tariffs on coal and pharma and some chemistry products if in fact that meeting goes nowhere. >> look, i felt it i said yesterday at the top of "mad money" that one of the reasons a market went up because larry was saying they're going to come here next week and you could get a surprise positive. that's why i'm a little surprised with google. i was thinking before you get too meeting we could have a
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really good week next week with the europeans. alphabet, they came after microso microsoft, 11 years ago. actually it was 2004 they came with something that you could argue proportionally wasn't any bigger but wow, the president's really kind of forging his own path you like that, forging his own path >> that's a true statement >> that's absolutely true. >> that's not fake news. >> no. >> we'll hear from him tomorrow. joe kernen, 6:00 a.m. on squawk. when we come back, we'll get cramer's mad dash and a look at the opening bell "squawk's" back in a minute.
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welcome back to "squawk on the street." we'll start the trading day about seven minutes from now from the nyse. time to get to the mad dash. we haven't got ton important earnings >> senior vp martin, the quarter was better than expected for ibm. there is enough positives that outweigh negatives negatives basically are, frankly, it is not a great growth stock even after all this has happened it is not a great growth stock the analysts are very split. i would say five think it is good and four thinks it don't get ahead of yourself.
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look, it is an inexpensive stock that can have a nice trading -- i would say more than that only if you started seeing the kind of revenue growth that you see from an accenture, from an sap which reported -- their revenue -- >> what are the chances that you will see that in the future? we do know these impair tifs ere growing at a much more rapid rate representing a larger whole. but that takes a long time >> it was a big shift. one day adobe said we're taking a big hit, taking out of the slow stuff and you can sell our stock all you want amazing moment they hit the stock and it was to the moon ibm still has legacy to them it is making them money. tremendous cash flow but remember what people want out of tech. they don't want big buy-back in dividend they want sales force growth
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that's going to be very hard for ibm. better story than it was but not enough story to convince these analysts that it is a brand-new ibm. i thought some of them would bite and they didn't >> interesting we'll be keeping a close eye on shares of ibm. opening bell about five minutes away number of important earnings to follow this morning when you rejoin us on "squawk on the street" after a very quick break.
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a u.s. bank wealth management advisor can help make them a reality. talk to one today. u.s. bank - the power of possible. you're watching cnbc's "squawk on the street," live from the financial capital of the world. the opening bell in less than two minutes. business thursday. as david told you at the top of the hour, comcast dropping its chase for those fox assets to focus on sky we've been through earnings. ibm, we'll talk about ebay microsoft of course tonight. currencies remain a fierce issue as dollar strength continues the yuan versus the dollar another year low for all the discussion about trade at delivering alpha, forex was the thing some managers are
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truly worried about. at least volatility. >> right it is changing a lot of people's view because this sudden shift in the strong dollar -- which larry kudlow by the way praised again today because it keeps inflation down -- is making it so whatever they would like to guide up and they can't. they just can't do it because the currency, it is back to that x currency thing it happened so quickly that it is taking a lot of these executives by surprise they don't want to be as bullish as they necessarily would like to be. a lot of these analysts can't figure out how much of this is dollar adjusted, how much is not. we're really in die-down it is making it hard for analysts to do their job than i've seen in a long time >> market doesn't seem to care a whole lot. fewer than 2% of that 2,872 that we got in january -- >> if you're going to have a
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brian moynihan set, it is very hard to take down numbers unless there is a secular challenge like a juul, ebay -- [ opening bell ] >> wow, you got to screw it up to do bad. >> there is the opening bell the s&p and the big board today, sola s vivint solar >> i didn't like that conference call american express is spending a lot of money and it will work and they're still getting hurt
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i listened to -- also, by the way, there's some challenges to stub hub they're not doing well in theater, they're not doing in entertainment. they're not doing well in major league baseball. in baseball they say it is the weather. groupon's taking a big share of baseball i don't know whether the weather is a factor. but in the end, at the ebay conference call i said, no, this was one of the weakest of the quarter and i can't come up with a reason to buy the stock. i just don't have one. >> wow >> it was not good >> it is down sharply. >> looks like paypal got the better end >> what's paypal's money cap at? >> a note out this morning, morgan stanley saying $105 billion. >> we ought to be thinking about buying financial tech companies. are you kidding me visa mastercard paypal they're like the stars of the show that's like saying you ought to
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start thinking about looking at the -- >> payments. >> visa's market cap, just because it is so enormous -- $315 billion >> mastercard, too near a record high today we'll get earnings from both companies next week. >> they better be crazy, for this money >> tesla downgraded over at nitum. big topic of discussion. >> look, it is the huge cash burn, slower model, sx sales, cannibalization model. credits, unsustainable cash burn it is just -- it is like captain renault at the end of casablanca, line up the usual suspects of why we sell tesla. there was nothing new. it didn't talk about like a new tweet. there's some guys that tweet these days, david, it is the
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craziest thing you read their tweets and you can't believe it couple guys. >> couple of guys? >> couple of guys. >> which guys are we talking about? >> don't try to pin me down. >> oh, really? >> oh. elon musk. >> and >> donald trump. >> who has tweeted again from a moments ago, the summit with russia was a great success except for the real enemy of the people, the fake news media. i look forward to implementing some of the many things we discussed, stopping terrorism -- >> damn first amendment gets in the way. >> a real up-lifter, isn't it? really helps >> faux foe. >> our parent company, comcast, decision this morning to make it official and dropping its bid for fox. we had already reported, of course, the high likelihood of that but it is official now in a press release this morning,
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brian roberts, chairman and ceo of comcast, also goes on to offer some niceties, saying, i would like to dplat bob congratb iger and the team at disney and congratulate the team at fox comcast now fully focused on completing its deal to try and a acquire sky. they own a lot of content assets and sky news as well sky's coming down, perhaps in the prospects now people believe there will not be a bidding war there. disney and fox were at $1,400. we tried to tell everybody on monday with the ak and the wording we got from them on friday where it made it very clear at least for the first time that disney might not give its consent or elect to provide its consent to allow fox to go any higher in the bidding. lot of signaling going on here lot of messaging, including today's press release with,
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again, that quote from mr. roberts so i think it is fair to say at this point the likelihood is comcast wins sky. disney's clearly won fox, a deal shareholders at folks vote on july 27th. highly likely it will be approved what's now left for disney is what bob iger told me this morning. which is basically, focussing can on gaining regulatory approvals, closing the deal, and integrating the assets not an insignificant thing to do, though of course to point out, they've already received the approval from the department of justice in this country given their willingness to divest the regional sports networks but they still need china. and they still need the eu in terms of those approvals but it could be -- who knows could be soon as november. it is possible one never exactly knows with china but there is confidence in the disney camp they won't have
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problems the way qualcomm's had on nxp down the road once they own fox and the 39% fox owns, is it possible disney could use that as an opportunity to sell to comcast, raise capital, pay down debt yes. is it possible comcast could turn around and say we got this 30% of hulu, you already control 60% of had ulu, would you like that 30% po consolida to consolidate your ownership even more? now to this director consumer future disney's paving the way for. >> you mean the fundamentals >> yes, the fundamentals >> it's been a while since we talked about the fundamentals. fundamentals for disney were actually getting better. we kind of obscure this. i think what you are seeing now is the stock reacting to a clearer path where you take espn as part of your model and you make it less >> i want to make something clear. based on my reporting, i think there is a willingness in the disney camp to absolutely
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consider selling that 39% of sky. nobody's going to say that outright, but certainly there is a willingness to do that the price, of course, will be a key consideration, as will comcast potential thoughts on selling 30% of hulu and whether there is a deal to be done there. but that's something to look for. >> when you see that kind of congratulations to mr. iger, doesn't that mean -- hey, come on >> i cost you $20 billion. but hey! >> is it the handshake after a beat-down at the end of a football game? >> that's what i said when i called mr. iger with the news. i was able to tell him he was very excited to hear it by the way, on china, jim and carl, nxpi down another 3% to $103. the qualcomm ceo gave an interview to the "new york times" which he again confirmed something we've been reporting, which is that qualcomm is not going to extend its deal to acquire nxp beyond the july 25th deadline they currently have the question is are the chinese
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antitrust authorities going to approve this deal in the next day or two don't know if you've talked to kudlow offline >> i honestly debated that versus asking about actual policy i came so close to asking. it was in my list but a lot of other things -- why didn't we give -- a quid pro quo we do this for zte why don't we get nxp i thought that was a little bit in the weeds larry kudlow pointed out the actual companies that have full-time business in china that he doesn't think will be retaliated against -- that's apple. but he talked about joint ventures in movies and how little or movie companies get. >> he did say that 25%. maybe that's why they'll let the disney/fox deal go through >> that's why i bring it up. because if these critics of mine that you talked to, tell them i talked about disney more than zte.
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small-minded little people who are these small-minded little people that criticize the best interview i've ever done? >> who didn't believe that comcast was actually going to fold for fox >> well, those people should watch you. >> who would believe the nxp deadline wasn't going to be extended the hubris they have is far beyond anything we could ever have they get paid tens of millions of dollars to do less than the market >> i told them you didn't -- not one cent was on the line for you. >> the hedge fund managers they came out really they hate tesla. >> got to be true. because i did the work sorry. >> hedge fund managers >> nice little rip there, guys >> by the way, they don't like tesla, hedge fund managers wean's seen interesting action in industrials. >> this is what we wanted. the one division that wasn't doing that well was the dental the dental actually picked up a
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little bit but they're getting rid of dental. now they'll be a pure clay that looks a lot like thermoand that's why you get a higher multiple i thought this was magnificent again you are dealing with one of the smartest managements in the world and they heard the market, they read it right this thing has been on a tear. danaher, by the way. and another one yesterday i didn't get to say -- abbott. the stars of the show. they want to know how to throw a conference call. one analyst says, is this how you are going to do this today "you know what, sonny boy? i've been around a long time go do your homework. it is what you want. you want these ceos to say i'm really tired you 32-year-old pencil-pushers who really don't know much because i've been around next question. that's what i want >> he's a tough guy. >> who, miles? >> yeah. >> the best there is
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he pea a tou he's a to have guy >> tonight you've got domino's >> jackals were just all over this i think we'll find out that things are just fine stock has moved up a great deal. pizza company that's really in play is papa john's. >> yeah. these headlines that prior to its implosion -- >> wendy's is too smart to take on that new-found risk i don't think that's a buying opportunity, so to speak it is kind of a third rail >> let me go buy that third rail and hook it up to the operation. they got enough problems with the baconator. that's over a thousand calories. he's off the reservation but i do think that when you look at wendy's, they did have a pretty good run and the company is incredibly, incredibly well run. they don't know that headache. but i like -- look, domino's we
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will have on tonight pat doyle put together the best numbers of any company in the s&p from the time that he took over and i think he gave ritch a good hand. >> fortune tech had a good conference yesterday in 1980 the percentage of pizzas that were delivered. 4% today it is 45%. >> that's funny you mention that pat doyle, i always said are you taking share he said, jim, it is not -- the pie is still so big -- "pie. then he was showing me, look, are you ordering pizza on your watch, your apple watch? are you ordering it on twitter they have a he really figured out the technology i like that you can even order one on the beach they figured out how to send it to you on the beach. >> i haven't done the beach delivery but i'd like to try >> some people are betting this was a big decline on domino's.
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company's smarter than that. guys that try to color the trading by knocking it down at the beginning, "they're drowning," send me a couple of extra cheese pizzas. >> right now ibm leading the dow along with disney but it is down 59 bob pisani >> happy hursday, everybody. you're right, carl, ibm's adding 50 points to the dow because of its decent earnings and decent outlook. other than that, it is tough american express weighing the dow down looking at the sectors, very defensive today. staples are down because philip morris didn't do too well. techs up, ibm leading. nice to see an old-school stock leading things banks which have done well in the last several days after the initial earnings reports were down we've done well in the last few days banks down a little bit today. we've seen some movers today danaher up, ibm up, alcoa and ebay and philip morris to the
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downside guidance is a lot more mixed generally the last couple of days the reason the markets are up is because guidance is good today danaher raised guy dance ibm affirmed guidance ebay gave a very mixed but lower guidance for the rest of the year philip morris as well. that's i think weighing on the markets a little bit the much more mixed guidance that we've been seeing at least up until this morning, markets have been in a very slow-motion melt-up for the last couple of weeks. we were up 8 out of the last 10 trading sessions the trends right now is momentum's generally been good on the up side earnings have been solid the valuations are still very reasonable we're at 16, 16 1/2 times forward earnings trade fears have lessened a little bit as well i think negatives of course, we talk about the concentrated leadership in the semiconductor
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stocks strong dollar is showing up again on people's radars but right now trading sentiment is sort of on the neutral side i think that's probably proper given the fact that the trade fears have certainly not gone away, though we do have positives overall. elsewhere, busy week for ipos. we haven't had a chance to talk about it so much with so much going on, but we had an interesting company over the nasdaq, medical cannabis company. look at this -- 9 million shares at $17 above the price range. they'll probably start trading in about and hour and a half you think in the middle of summer nothing's going on, but we've had a very active ipo season 113 year to date, well above last year's numbers. right now we are sitting off of the lows for midday, the dow's down 74 points >> got some economic data out this morning rick santelli at the cme >> the data was fairly interesting. jobless claims moved a bit lower. although that doesn't garner a
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lot of horsepower in marketplaces anymore because they're at such historically low levels i continue to say the news for jobless claims will be when it breaches initial under 200,000, or it starts to move higher. but philly fed was pretty firm as you look at one week of 2-year note yields, you see that we continue to climb in the short end, even though we had some brief -- very brief -- bouts of steepening here and there over the last 24 hours for the most part, we're unchanged along the entire curve. we're down a basis point it really is a pretty close call one week of 10-year, you can see that we popped earlier looked like we were going to give 2.90 a go, but we have eased off a bit. lately $2. 2.87%'s been an inte chop but today, session 21, over a month worth of time that we've closed in the 2.80s.
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basically the way it is sitting right now, i have no reason to doubt that will continue looking at the dollar index, that's where some serious action is if you look at long-term intraday chart, today's highs, right around 95.60, took out all the recent intraday highs. i will concentrate on the close. if we look at july of last year, the dollar index most likely going to make another pass at a fresh one-year high going back to july. but there is another relationship that's right around that same time frame -- the dollar versus the chinese currency, the yuan obviously this isn't really moving the dollar index directly internally it is mostly the euro that's the biggest percentage but nonetheless, they are comping the same that yuan just keeps weakening almost on a daily basis as you see on that chart. back to you. still to come this morni morning -- what unp's latest results are telling us about the economy. the ceo and what tariffs could
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don't be gloomy and doomy in an overboard sense the american economy is in very good shape >> the perception is that the market has gone up the perception is that everything's going great the reality is that if the market is low, it's actually under valued >> i like where we are that '08-'09, that was just vicious. >> i think reading too much into the news of the day can get you very nervous and as investors, you may say, i got to pull back, and get everything out of the market and wait for the all clear sign and i think that's a mistake >> one thing was the notion that the back half of the year could
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be an exciting time to own stocks, jim. >> i say that repeatedly, and i would say yes if we have no auto tariff you don't want world trade sent down it's hard to answer questions about tariffs. at one point in the evening call, one analyst said, what about tariffs? and they said no, there's no tariff what about union pacific you're going to be interviewed the ceo. >> you think the question is whether or not the eu autos, is that the key >> you can't be on board with everybody. it's an unpleasant development >> watch that, dow's down 125. stock trading with jim is in a moment ♪ it is such a good time to kiss ♪
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in competition with sysco. it's just not true but the stock is getting back all that it lost but this is kind of where we are now. amazon knocks the stock down, and thin we find out it's not true and the stock comes back, but a lot of -- i call it fake news the amazon coming to destroy cisco was fake news. >> there were rumors in the old days too, they just didn't travel quite as quickly. >> it was friday afternoon and we didn't have an opportunity to shoot it down and it's all kind of strange, amazon is not killing everything amazon, to make pizzas and dominos goes down, and i had dominos on tonight and they say it's not true, and the stock goes back up new corps goc down riging down w
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>> well, on dominos, dominos, i don't know, can it get down to cheese it's going to be cheese. >> maybe >> guys, it's wisconsin? >> you can handle it, you're up to it, jim, we'll see you tonight. "mad money" 6:00 p.m. eastern time more reaction to comcast dropping its bid for those fox assets, choosing to bet on sky with the dow down 143. play just got serious
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good morning, welcome back to "squawk on the street." david favor is on the phone. take a look at the markets here, dow is down 138. despite some pretty decent earnings over the past few hours. we got stories in media, and currency and trade >> comcast dropping it's bid for
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fox. plus the ceo of union pacific joins us talking about the economy and the impact of trade on the rail industry >> comcast not unexpected, time actually ran out so from comcast's point of view, why not put a press release out to a certain extent and confirm the fact that we're not going to bid for the fox assets it was monday before we told people that come cast would mount a counter bid to the $38 million comcast deal comcast confirming that and adding a nice quote from brian roberts as well. congratulating bob iger,
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disney's ceo and the disney it is a company by the way that murdock's perhaps even surprised himself in termsz of where it l went with the bidding. it will end at $38 a share comcast chose to come back with a $35 all cash bid this has been going on for many months, even back to last fall, when we reported on the talks between disney and fox, and comcast being aware of that came in and immediately joined the fray, trying to wrest those fox assets away from disney's clutches and then disney signing that deal with fox, 28 bucks for those assets, but comcast coming back after that ruling from judge leon allowing at&t and
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disney to go ahead with that potential comcast bid. but we have said many times standing in the way of comcast 38 was a fairly high bid from disney, so what would it take to beat it? particularly in light of the fact that the d ooj has once agi sued to appeal the merger between at&t and time-warner it's already received dod approval the fact that rupert murdock seems to at least in some ways to favor the idea of having some disney paper and disney ownership of these assets. and to say we're focused on sky, 45 is the bid there, that has been recommend to sky from the board. disney, for its part has only said what we told you about on monday in an 8k that was filed
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on friday, where it said we may not give consent for fox to raise more debt to raise its bid for 4.6% a lot of signaling messaging going on, peace as potentially broken out here, no morbiding for fox and it would have to appear frappes strongly no more bidding for sky, unless disney should choose to want to try and make it even more expensive for them, trying to return the favor, with those comcast assets 40 billion dlr$40 billion dlrs, stocks up including disney and of course sky and 20th century fox. of course we're going to start having more of a conversation with that new fox. because 38, 45.83. 75 is where it's being valued
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right now. for that we can look to some help from moffett research analyst partnership michael nathan son i'm curious, i mean new fox, we can now see what the market's valued at, there's no more chance of a counter bid here, is it cheap >> oh, david, i would say to you it's definitely cheap, we would say it's $12 to $15 of new fox value. a $38 bid on the table the stock should be 50, 55 when it's all completed i think what's happened is that people were just caught out on fox or hanging in for a couple more bids. but i would think today's stock price is actually capturing the value of new fox so we tell people today we would buy fox with the new fox's value, that's clear in our mind. >> let's see how you back into a far higher value on new fox, michael. >> one is the biggest piece of
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the earnings is fox news, i would think almost all of us would agree that fox news is undropable it's gotten incredibly high pricing power relative to distributors so fox news is probably a more highly valued asset in a smaller company. the number two is the fox broadcast network is only going to make $200 million into next year it was once targeted to make a billion. but a big part of the drop in profit is because of all of these sports contracts they signed which will be offset by revenue growth you're looking at a point in time where the stock's making a minimal amount of money. so we feel pretty comfortable that on a two to three-year view, we feel pretty confident about fox news and fox broadcast network. >> let's go to your partner craig to talk about sky and
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comcast, but according to disney, they're paying a lot more than they perhaps anticipated paying originally. do you like the stock? do you think it's worthy of going up another 2.5% this northe morning? >> we thought this was going to be a prolonged bidding war a few weeks ago, it stopped at 38. there's a lot of pressure on disney, this is going to be a more expensive battle than it was. of course 28 for all the stock, is a better outcome than 38. and second thing to your point about sky, when we hear it from our disney shareholders, they don't want disney to buy sky, they would love to let out of sky and let comcast buy the 3$3 stuff. if disney walks away with the first assets we thought they were going to get which is a
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comcast studio and -- i think people are reacting to it's more expensive as an outcome, but the asset mix is a better asset mix for disney investors we have heard that for the last three or four days from people >> i think there is a potential likelihood they would choose to sell that 39%, although that is a price negotiation. and conversely, i have also been saying comcast might be selling hulu, would that be seen as a positive as well >> what did any also wants, sky also has a lot of disney's movie rights for the next few years, disney would like to have those rights back for their own service. our best outcome here for a disney shareholder would be a negotiated settlement, where you get hulu, cash, and some of those movie rights that are owned by sky across europe
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yes the price is a little bit higher, but if you were writing or reporting, that's a great outcome from where we were a couple of weeks ago. >> does this shut the door for other media deal. i was just looking at the discovery stocks on a media deal or do we have to wait for the att stocks and time-warner >> i remember these stocks running, i think david was kind of looking at them and saying this doesn't make much sense on these asset moves on these media stocks i would agree, i would think this is a separate auction, this cannot be read across other assets today and to your point on the doj appeal you need to see where that settles out. so we're not telling anyone to go after a slew of assets here, because fox, disney and a few other assets have come close to
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settlement >> comcast is up as well, i know it's run by your partner craig moffett. is this also a positive day for comcast, and does sky make sense to you guys as moffett says in terms of an acquisition? >> at first we would say that comcast fell way too sharply on the back of this news, starting back in january. so we would say, it really overcorrected on fears of al location we would say on that first question, yes, the stock should bhe higher, we don't love this idea for comcast, as much as comcast wants to pitch this as the next nbc, as a better asset than satellite we think that american investors will look at sky in a more negative light than comcast does so in a perfect world, the stock's going to rally, but the
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asset, the requiring of sky is going to put a cap on how much higher this thing would go >> i'm not happy to hear that. michael, thank you, as always, appreciate you phoning in and giving us your insight >> thanks. when we come back, former white house advisor steve bannon speaking out at deliveringalpha yesterday, and hearing his tough stance on nato and the ceo of union pacific lance frits will join us getting a look at the major averages, dow's down 118 year, i am sorry about that. [music playing]
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we're on to something. come on. and it's all on us, and it's all week long. so you should probably start canceling your plans. you've got some serious watching to do. former white house advisor steve bannon talked at cnbc's deliveringalpha conference yesterday. he defended the president's demands at the nato summit and michelle joins us with more on what they talked about. >> good morning, carl, nato members are supposed to spend 2% of their gdp on their defense budgets and the majority haven't done so for decades. and trump wants them to do so immediately. steve bannon is right there with the president. and bannon says the president is not trying to destroy nato but save it. >> the president's done more for
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nato, all that could have waited until after november 6, they want to do it. fine, that visit, if you take the totality of it look what he did with nato i mean trump is trying to save this alliance. what he doesn't want is a protector. is problem we have got ourselves in this post war rules based order, and if you go from europe to the persian gulf to the south china sea to the northwest pacific. it's a series of commercial relationships, capital markets, trade relationships and american security guarantees. we under write the whole thing if you want to know why we have a structural deficit of a trillion dollars a year, it's because we underwrite the entire thing. none of our allies kick in to the till and the europeans are the worst. and germany's the worst of the entire lot, so they can't sit there and tell me what a big
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threat they think rush ssia is e 15% of the german people don't want to pay 2% >> a long discussion about china, he's said repeatedly that china has been at war with us already for decades. and we also discussed facebook he's extremely critical of facebook we're going to play that in the next hour. and bitcoin as well, you can see the full interview with steve bannon on cnbc.com we have an entire page dedicated to deliveringalpha >> fascinating, everybody should go look and everything on the china pacific, he talked about delivering this dark valley, what is he talking about? >> he sees the war with china continuing, he thinks it's going to get worse before it gets better he thinks there should be full economic war by the u.s. against china. that's why he is so supportive of the tariffs he thinks there should be even
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more, he thinks the president should use every lever he has to push back against china because he thinks that china is trying what they call in the political world, which means they want to dominate everyone in the region and perhaps the rest of the world. so he thinks it's going to be a hard fight but ultimately he believes the united states will be victorious >> and finally on a week in which trump-putin has gotten all the headlines, of course the cover of time today, he really doesn't seem to mind the fact that the president has you said appears to like putin. >> i asked him, it seems to me that the president likes vladimir putin, does he? and he said he's attracted to strong personalities, even e
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erduon of turkey i asked him if it bothered him he said look at all the things he's doing around the world that i support, that doesn't bother him. >> as mia quick programming note as well, do not miss an exclusive interview with the president, that's tomorrow morning 6:00 p.m. eastern time and j some disappointing earnings, joining us now, john kelley, senior strategist. and so we have cut our losses a bit, the dow is down less than 100 points at this point brian, for the most part, earnings have been better, ebay was a disappointment american express is a disappointment so it's not all positive news. >> it's not all rosy, i think three-fourths of companies are leaning on the bottom line
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i wouldn't call this a bad earnings season, we're off to a decent start and if you link about where we are globally, if we don't get too deep into trade wars, global growth looks really good to me the concern is a stronger dollar, if we keep seeing a stronger dollar, then that will be disruptive and that's what we need to be watching. >> that's apparently a lot of investors concern. stephany was here yesterday saying that more questions on the strength of the u.s. dollar than on trade tariff head winds. and i guess this is the quarter where the dollar stops being a tail wind which it is right now in terms of the outlook and starts being a headwind. dollar is almost at the strongest point we have seen in the last ten years. >> the dollar seems to move in these long periods, you see this 6, 7, years offed advance and t it start toss change in 2016, we were moving into a
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longer period of dollar weakness u.s. deficits giving into fiscal deficits the trade war has reversed that. if we go too far on monetary tightening and tariffs then strength of the dollar would ultimately derail this cycle >> there's a lot being made about the uncertainty around tariffs. and everybody's wondering is this going to impact investment decisions, hiring decisions, for all the hiring over that, no signs of that, jobless claims reaching a new record low today. >> the tariffs are negative, all the the tariff talk is, but this economy is extremely strong, i mean we're still tracking about 5% of real gdp rate, and unemployment claims 200,000. i think we're eventually going to see a trade war we really don't want to go into election day having just imposed
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$200 billion in tariffs, still confusion in the auto sector because of tariffs so it will be much easier for the president to say i talked to xi jinping and say i got a better deal because i was tough here the political imperative to be working toward lower tariffs than higher tariffs is very strong so i think we're going to get a good deal at some stage. and i think that could help stocks and help diminish uncertainty. >> how much is built into even the cosmetic deal between the uk and china? >> i think the deal is hurting the markets and holding the markets back right now if you look at earnings, this quarter, earnings per share will be up. so i expect the stock market will get a lift if we get a
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relaxation of these trade tensions or some signs that we really want to get a deal instead of a perpetual war involving higher tariffs >> this tough talk, i guess yesterday at delivering alpha, the ceos we had on the show, all seem to think that rationality will prevail the president this morning talking very tough on the eu at least has to raise tariffs on eu automobiles, does that raise a concern for you in terms of the the broader market >> it would, and we also have to think about political ramifications, if you go into the election with the economy faltering a little bit if the economy is sewing down, democrats could take the house or the senate and they could roll back the president's
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ability to wage this kind of war. he can't really go it as effectively with constant opposition with congress i still think that eventually it's still too costly. political rationality says you don't want to impose big tariffs because it hurts both sides. >> guys, we'll leave it there, thank you. as we go to break, take a look at shares of ibm in the green today, reporting results on both the top and bottom line, revenue now up for three straight quarters after falling for nearly six years, dow's down 91, don't go away. because you've made sure this sensor and this machine are integrated. atta, boy. & yes, some people assign genders to machines. & with edge-to-edge intelligence, you'll know your customers love this color,
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the u.s. dollar index is about 57% allocated to the u.s. dollar it's interesting because the dollar is rallying right now it's not some single news item that seems to be propelling it obviously u.s. growth differential is propelling obviously the trade stuff is hitting dollar against the chinese currency, and arguably against the euro too, and then of course, hard brexit noise is out there, so all the collective seems like it's dollar positive and negative so it's becoming a topic on our earning s calls, then you have the effect on commodities. it's an actual weighted commodity fund it's in a pretty sharp downturn right here all this stuff knits together and it's financial tightening at the markets, not necessarily a
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shock, but it's something i think is going to become more of a story. >> just as u.s. national companies were loving the weak dollar, what was happening the rest of the world was a mess this is the relative vat on the u.s. >> capital flowing here, and i think it's probably under appreciated how much currency was a factor in the first quarter and fourth quarter earnings call, as a tax cut tail wind >> get more guidance from conference calls in the next few weeks. scott wapner is over at the floor. >> russian president accusing president trump's opponents of trying ing ting to undermine hm facebook ceo mark zuckerberg clarifying his stance pertaining to holocaust deniers he said that facebook posts
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denying the holocaust would not be automatically removed today he said he personally finds holocaust deniers deeply offensive. an explosion on fifth avenue in new york city, sending chunks of asphalt flying. the billowing white steam went 100 feet into the air, forcing pedestrians to take cover. no one was injured but several blocks were evacuated. this fire in oregon has now burned more than 50,000 acres. one person died while trying to create a fire break to hold back the flames two homes have been burned while several communities have been forced to evacuate getting some news this morning on wells fargo for that we'll turn to co >> crites sources familiar saying that the consumer
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finances protection bureau is probing wells fargo for add on customers. customers may not have had full understanding of these wells fargo add on products. they are in the process of refunding hundreds of thousands of customers for account add on products as well pet insurance, possibly legal insurance, identity theft protection, especially in a bank that's been beleaguered and another one coming to light here the bank according to the story in the process of trying to remediate some of these issues we'll see if that happens in the coming weeks when we come back, trade war fears could be here to stay, a former director of the national economic counsel, james sperling will be here to talk about that. a lot more on the trade war,
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watching shares of papa john's founder john schnatter had preliminary talks with wendys before he stepped down last week. >> yeah, i mean investors got excited about the prospect of a deal here, but i can tell you from sources familiar with the situation, these talks did occur, but that was before schnatter stepped down both stocks are lower after they got a pop yesterday. papa john's is going to have a lot of cleaning up to do, it's got reputational damage, lit thra - literally with john in the name. >> you're absolutely right about the marketing sort of
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reinvention that they have to do, not to mention the difference that sport s rights partnerships are made over time, and you have dominos today contributing to the overall trend in comps as they disappoint jim's got dominos on "mad money" tonight. >> and they have a new ceo and he's got big shoes to fill with patty doyle, i think expectations are just so high. priced for per speception. it's dominos, pizza hut and then papa johns. >> the second biggest category behind burgers, it's a giant business >> it's number one in burgers >> and two and three >> it's ice cream. >> pizza every single day. and not be unhappy about it. >> he'll swim it off down the
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road >> i'll try. >> when we come back, the ceo of union pacific will weigh in on how trade wars could impact the rail industry, we'll get the major averages, "squawk on the street" continues in a moment. who would have thought, who would have guessed? an energy company helping cars emit less. making cars lighter, it's a good place to start, advanced oils for those hard-working parts. fuels that go further so drivers pump less. improving efficiency is what we do best. energy lives here.
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union pacific lower this morning despite beating on earnings and lower profits this morning's call they said they only feel a slight impact on the tariffs larry kudlow joined us tomorrow to discuss ongoing trade tensions at delivering alpha listen >> i have been a long-term
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critic of china. it's all a matter of public record on the tape and i think the president is doing exactly the right thing here this should have been done years ago. a, the world trading system is broken the world trade organization is broken just had this discussion at the g-7. b, the biggest culprit is china. >> joining us this morning and first on cnbc. lance, always good to see you, thanks for coming up again >> thank you for having me >> you went into this discussion a little bit on the call, talking about tariffs, whether or not it's going to be a -- consumption on u.s. products going overseas, how do you explain it to viewers and investors? >> in the simplest terms,
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tariffs are taxes on consumption, whether it's tariffs on products that u.s. customers provide. it makes those goods for costly. and supply economics demands that the higher the price on the supply curve, the more you're going to drop down on the consumer curve to be equitable and fair on the trade platform, we just think that tariffs are a blunt tool that are probably going to do more damage in the short-term. >> and in the short-term, what are we seeing exactly? is it more acute in ag is it more acute in steal? can it be more aggregate than that
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>> it's got chemical structure that we don't get in the u.s we actually pay a premium for that trail and the first 25% steel tariffs cost us $6 million more. so that was an kmeed direct impact, and we have already seen steel prices go up in the u.s. something like 30% plus. so it's having an impact there we can't say that it had an impact in the second quarter on our top line which was pretty strong growth of 4% overall. and sound revenue growth at 8% but i'm pretty confident if they stay in place over the medium and long-term. we will see impacts. >> lance, wanted to ask you specifically about china if we do see those threatened tariffs go through on those $200 billion worth of goods, would that hurt you more than your competitors given your location to the west coast?
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>> there is a discreet impact on us if those -- the bigger concerns i have are on the u.s. economy and whether this disrupts consumption and industrial production, those are two big drivers for us and then the other thing i'm concerned about are supply chains as manufacturers, they're very sophisticated in today's economy, and once they set up supply chains that continually drive productivity and efficiency through the chain and if a tariff or a retaliatory mechanism force a manufacturer to inchange their supply chain, and once that retaliatory mechanism goes away, they don't necessarily go back to the old supply chains, which could mean a really bad thing for u.s. manufacturing and for us disruption in our current trade flow >> fitch ratings has a note out
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this morning on cap and trade that have been in the news, like harley, gm and alcoa do you expect unp to get more vocal on this and try to push back on policy >> we have been out there pretty aggressively already, mostly in support of doing the right thing when it comes to trade and nafta. and in nafta that means modernizing but staying in in global trade, that means making sure it's fair and eck wit taeck -- equitablequitable. i'm already deeply engaged i would say when you talk about capital, our capital spending this year is going to be about $3.3 billion and that's built on the promise of a robust u.s. economy and that could be impacted in the future if those
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things get disrupted. >> let's revert back to a subject that we talked about a lot earlier in the year, the tax reform, you had an increase in your packs tax rate. in terms of the cap x, where is it actually going? >> let me talk a little bit about tax reform overall and the benefit to the u.s. economy. the u.s. economy is really poised to do well, and we saw that reflected in our top line numbers in the second quarter. i think the capital -- or the tax reform act that passed the administration's approach to sensible regulation, those things are creating an environment for u.s. manufacturing and industrial economy to really get its legs under it and compete more aggressively and more competitive globally and we see that. and for us, it absolutely has
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made a lower tax rate, we are a domestic company, virtually all of our assets are in the united states so we pay an incremental or marginal tax rate drop, that marginal tax rate drop is good news for our shareholders. our end game is generate an attractive operating income and then use that to fund the railroad for attractive returns, which we are to pay an attractive revenue for our investors and putting that into buy backs which we are doing as well. >> i notice you cited crude shortages which seemed to create a headwind in june, how extreme is the worker shortage right now, lance >> what happened to us, we got a little tight because our network got a little congested coming out of last year and into this year, so we have had to recharge
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our training pipeline for particularly training crews and graduate them at a very rapid clip, call it 250 a month right now. what that does is it means our training pipeline is full, but when you look at the workforce that's actually doing the work, it's actually about stable which in the end it's really a good productivity. our second quarter overall employee population was essentially flat and that's pure productivity what we need to do with those train crews is get that service product back to a place where we anticipate it should be. we're on that track right now. and when that happens, we'll be able to take some of these excess costs out of the network that we talked about on the call this morning >> lance, obviously it's always good to talk earnings, and we look forward to hearing from you again. lance fritz of union pacific let's send it over to john
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ford, he's got a look at what's coming up on squawk alley for us >> it is a busy morning in media, we have got pandora ceo tim westerman to talk about what's going on the streaming world and also about his ipo that's coming up on squawk alley. mplicated, you know? well sure, at first, but jj can help you with that. jj, will you break it down for this gentleman? hey, ian. you know, at td ameritrade, we can walk you through your options trades step by step until you're comfortable. i could be up for that. that's taking options trading from wall st. to main st. hey guys, wanna play some pool? eh, i'm not really a pool guy. what's the hesitation? it's just complicated. step-by-step options trading support from td ameritrade
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impact of trump's proposed auto tariffs pushing congress to have a hearing. this as a host of current and former officials heat up the trade war rhetoric joining us, gene sperling, former director of national economic council, assistant director for presidents clinton and obama. good to see you, gene. >> thanks for having me. >> you have toyota writing open letters to the president, chair powell talking about rising chorus of concerns is this having any impact? >> i don't know how much it is having impact on the stock market at this moment. >> on stocks or just the policy debate. >> i think there's a definite risk i'm one who would have supported a tough coordinated approach on china where you unify our allies
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and try to get them to cut capacity in steel and stop the tech transfers and other abuses out there. so i would support the administration's tough approach there, if it was strategic, and i would even tell them don't worry about day by day fluctuations of the stock market over that, but what you're seeing right now is you're seeing that the president's behavior himself which seems to be erratic, doesn't seem to allow his team to pull off much strategy, is taking away off ramps, creating problems that shouldn't exist. we should be coordinating with the eu and canada against china. instead, what are we doing we're picking fights with canada and eu that really have no -- should not be our major focus. i think they're going to take away from what could have been the good trade fights that the administration could have engaged in. >> what did the administration say, well, why wasn't that done, why wasn't there a coalition,
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why wasn't chinese policy tackled and confronted a decade ago, five years ago? >> you did see under the obama administration more aggressive trade action against china, wins in the wto you saw through oecd bringing people together to form a coalition that was well poised to take a unified approach against china on steel capacity. but now look what we're doing. we're fighting with canada we have a battle brewing on auto eu where the administration had to i think twist the arm of the uaw to even give a mildly supportive statement you know, even there you had the eu deal you could have worked on i think what's happening is you're seeing so much erratic behavior that it is making it difficult to pull off a tough strategy now the question people are going to be looking for is are there decent off ramps or are
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they going to lose control and we get into the tit for tat trade war that would damage. >> the president throwing another jab at the eu this morning. he tweeted on the big fine from the eu towards google. told you so. european union put a fine on one of our great companies, google they truly have taken advantage of the u.s., but not for long. i thought the president would go after the eu for this. we had the antitrust commissioner that levied the fine, asked her about all of this here was the exchange. >> this protectionist, in the middle of a big trade fight between the u.s. and the eu and here they are again going after a big company in silicon valley, issuing finals, making it tougher to do business in europe. >> this is protecting european
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commerce consumers, to be sure they can have the latest at affordable prices these are our basic values, the market should serve consumers and not the other way around this is a protection that we do, protection of consumers. >> spinning trade protectionism into consumer protection it is a reminder, gene, that all countries have a lot more tools than just tariffs on import and exports. >> no doubt. even some of the auto workers care about problems with europe. they're less focused on care of europe than standards. we have trade issues with the eu we should be tough there's a difference between doing that and declaring war on what could be important allies in taking on which i think is the more difficult and systemic issue which is chinese
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overcapacity in manufacturing and i think bad behavior on tech transfer that has been a major issue. but that takes a unified approach now what we have done is open the door for them to take people to be part of our coalition and start forming one on one deals with them. that's not a good overall strategy. >> brief moment we have left, if we get a 20 or 25% tariff on eu automobiles, how will that change your view of what is happening now? >> how would it change my view it is hard for me to see again, you have 45 people testifying today and you've got one, the uaw, giving a circumscribed testimony in favor of that. i don't see why making that the number one trade battle is set up for anything other than i think president trump hoping he can get a symbolic victory by having a zero for zero auto tariff i don't think that's going to be
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this great victory it may seem symbolic and i think will be harder to pull off because if you give the united states zero, you have to give everybody zero, so there are off ramps, but you have to at least allow your team, i think he has strategic members of the team to have a strategic off ramp and the constant bullying, the constant erratic behavior is making even a tough trade strategy hard to implement. >> gene, thanks. gene sperling. see you on closing bell. bbt shares slumping on earnings. we talk with kelly king, that ceo, about the quarter, what's happening in regional banks and more about microsoft numbers after the bell w wnawk alley" up next with the dodo 8 what about him? let's do it. ♪
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