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Afternoon. Some economists are cautioning investors to remember that this fed meeting were going to hear about took place before june jobs numbers were out. Meantime, the start of earnings season is always a driving force for the market, as well. Scott has the details on some of the first reports. Alcoa beating the street on the top and bottom line. The company says it saw strong results in its engineered products business. Meantime, its looking to cut costs. Shares are up nearly 40 so far this year and out after the dow last night, results from the Container Stores. The company posting a better than expected loss and lowered its full year guidance. The ceo pointing out what he calls, quote, a retail funk saying the Container Store and its fellow retailers are experiencing slight traffic declines in what he describes as a surprising tepid retail environment. Shares down sharply in extended trading. A mixed story for bob echts. The food earnings beat expectations, but revenues fell a bit short. The company cut full year guidance. Bob evans is defending itself against activist investor sandell Asset Management which is pushing the company to split up, and buy back stock. Citigroup reportedly nearing a 7 billion settlement to resolve a government mortgage probe. That announcement could come as early as next week. Officials have been probing whether the bank defrauded investors on Mortgage Securities in the run up to financial crisis. Joe . Thank you, scott. Youre welcome. You are welcome. What the hell is the Container Store and why do i care . What do they sell, containers . Dont tell me youve never been in a Container Store. A retailer that could only work in america because we have so much stuff. Thats a microcap, basically. What do they do . You cover everything. Theres nothing too small or too uninteresting i dont want to confusing by the name Container Store, but they do sell containers. I can understand selling cup cakes and crumbs, but we love the Container Store. Is it like a Tupperware Party . Pink boxes for all your stuff, orange let me get this straight, we do the former dow component alcoa, which some people think is a proxy for the global economy, although its not. It has more to do with Aluminum Prices pb we go from that to the Container Store and you think that okay. Whatever. I dont you know what . This is all well, i mean, a day after this is below my pay grade. When you have the walmart ceo cautious about what is happening in the retail environment, then you have the Container Store talking about yeah, lets see, youve got a can happen company that does 100 billion in sales in a quarter and then you have a company thats worth 1 billion total market cap. Do you think thats comparable . So we shouldnt even where do you draw the line . 100 million . Well, you dont think the ceo has any vision on what is taking place in the market. I dont know. How do you extrapolate whats going on in the container selling business to is it i mean, maybe people store things in a recession and they need more containers. Maybe its counterproductive. Maybe its yet another example following walmart of a ceo who sees some trouble in the retail sector. I dont know. Alcoa goes from 7 to 17 or 15, i would say and we get the jolt number yesterday, im not looking for weakness here right now, are you . I think this actually is is not a time when id say things arent going better. They are going better, but i i dont know. Well, the people will factor in addition to the geopolitical news in israel, they can factor in that Container Store story. The israeli army we did that store just for you. Thanks. Do you think its on the front page of the times . Definitely not in the ten points here, i dont think, in the wall street journal. Lets see if we can find it. The Container Store where they sell basically its a Tupperware Party. Is that what were talking about . They have hangers, closet organizers. Let me try and find it. Do i look under the or container . Lets see. Container oh, boy. Scott, try to find it if its not in the journal, i dont know. Can you at least try and find it if its in here . Is it in here . It happened too late . It was a good buy. Consumer funk. The range on it is 25 to 47 . I dont know. When did they how long has it been around . The Container Store . More than ten years. Im embarrassed that you even know what it is. Anyway, in geopolitical news, the israeli army pounding the we buy containers, but what are you storing . Are you pickling things . I like to be aware of all i know you do on weekends at times. The army pounding when did this suddenly yesterday afternoon. Yeah, i know, but when did the whole suddenly along with Everything Else in the region . I know. The gaza strip in the region. This is i guess one of those things that theyve had to deal with. It seeps ms to ebb and flow. You can never assume that a rocket is not coming, i guess, and thats a tough way to live. Eamon joins us now and noer theyre talking about possible ground action, aman. Yeah, good morning, guys. Thats correct. There is this growing concern among israeli officials that perhaps an air assault will not be enough to stop the rockets. Thats not just based on what is happening this time around. Keep in mind, israel has fought about three different wars with militants in gaza over the course of the last six or seven years. So they know from experience that palestinians have been able to move rockets away from the front lines to keep them concealed and ultimately regroup and over the years keep them supplied. Some of these roekts, as we saw yesterday, are now reaching tel aviv and jerusalem and beyond and thats going to away major cause of concern for the israeli system. They have a Missile Defense system to intercept some of these rockets. They have been using them. Throughout the course of the day yesterday, we heard sirens in two of israelis largest cities. That is an issue in trying to suppress the rocket fire and for emergency medical services, they have canceled summer programs in the south of the country and have put hospitals on high alert. But its a very different story inside gaza. Gaza doesnt have the Early Warning system, they dont have the bomb shelters. And years after being under siege, their medical infrastructure has been decimated. They simply dont have the ability to cope with the casualties as a result of the Israeli Military. This is not a war between two equal sides, the Israeli Military one of the most advanced, sophisticated militaries in the world fighting against a largely civilian population in gaza and the Palestinian Militants with their rocket capabilities. But it giveses you a sense of how quickly the issue can escalate. Israel has called up 40,000 soldiers. There is a push to invade gaza using a ground force to try and suppress that rocket fire and that is a major concern on both sides, that neither side is prepared to back down at this point. Guys, back to you. Thank you so much, ayman. Despite the rising unrest there, check out the markets this morning. The futures suggested a bit of a slight recovery from two days of selloff. The dow would have been higher by 24 points, the s p 500 by nearly 4 and the nasdaq a little more than 10. Show you whats going on with the price of oil, as well. Wti, 103. 42 per barrel and brent is at 108, almost 109. And the tenyear yield ahead of the fed minutes later on today, 2. 56 . The dollar sorry, im sipping my coffee. Right in the middle of doing the board . Right in the middle of doing the board. Im tired. What kind of container do you have for the coffee . Youre using a paper cup. And flat against the you know, to me did i mention, by the way, like nine minutes into the program how fantastic it is to be with you again . Nice to have you here. Did anyone notice the overall market yesterday . Seemed like kind of a story. Not Container Store level. It looked like it might actually start to decline . Decline a little. After what happened yesterday. The New York Times and the front page asset bubble story. And then i thought it was interesting that the day after the New York Times said that, the Washington Post was it the Washington Post or was it i havent seen the post this morning. No. It was the financial times, that the buoyant market is actually putting short sellers on the back its still contrarian. Well, thats the opposite of what we saw yesterday, isnt it . Yeah, but this speaks to the whole contrarian idea short sellers have put on the back foot. That means now would be the best time to be a short seller, right . That would mean that the New York Times was right yesterday. Weve got two major institutions giving opposing contrarian one of them is going to be wrong. Yeah. The New York Times is a little confusing because they said both possible bubble or just buoyantsy, right . They wouldnt declare you know were going to go over the chairs and continue this. Yes. Thats all were going to talk about did these guys call you and ask you, okay to be totally honest with you, i dont get excited about it. Alcoa is 17, but alcoa is not a dow component any more. They do lead it does lead off earnings season. Because it was aa and it was like acme or something, the first thing you see. If youre looking for aluminum in the yellow pages, youll find alcoa. But, you know, i would even argue that real earnings season is probably this friday or when the bank does that first bank day is when we get it. We always mention alcoa because it means its coming. And such a Big Industrial company that speaks to so many. And its not in the but it is important, but its more specific even than you cant really call it an economic proxy, necessarily, because it has so much to do with aluminum and box size and all the different aluminum. Its almost a commodity where it speaks to its own, so its hard to extrapolate. But nothing compares to the Container Store. Were going to go to jack lew. Selling mason jars. Hes going to be with Steve Liesman and john harwood . And . Carl icahn . And . Jim cramer. And . Miller. There you go. So you did that for me . I did. Now, thats good. You see . That is significant. We have this sympatic arm. Were going to do chairs where you have to have the camaraderie and love with fellow people. With andrew gone, i hope you can step into that position. No pressure. Yeah. Where we have that type of love and mutual admiration and Everything Else. Are you ready . I am. Treasury secretary jack lew will be the key note speech on july 16th. And you will be able to see it right here on squawk. But today, he is in china. Lets find out more about his trip from eunice yoon in beijing. Eunice. Hey, guys. Secretary lew doesnt have those people that you mentioned here in beijing. Instead, he has the company of secretary john kerry, who is here in beijing for the strategic and economic die rog, which is a major annual summit between the u. S. And china where senior officials get together and really try to steer this very complicated and important relationship forward. Now, these talk res coming at a time when the relationship is very tense. So for a couple of different issues. One is Cyber Security. The u. S. Has accused china of cyber theft and of issues in the south china sea. China has been more assertive there and thats been angering and upsetting a lot of its neighbors who happen to be u. S. Allies. Now, today on the first day of these talks, the focus has been on cooperation. Now, both sides have been playing that up. The chinese president xi jinping has been saying that a confrontation with the United States would be, quote, a disaster. Also secretary kerry has said that theyre hoping to find Common Ground. Now, one area where they are hoping to find Common Ground is on economic issues, more specifically a bilateral investment treaty. Both sides have been talking about the importance of this treaty and that they want greater access to invest in each other. Another area is on a global trade pact for i. T. , which would potentially bring down barriers and terrorists for high tech goods. Now, in terms of some of the other issues, secretary lew is here pushing for Market Access issues and for more flexibility in the yuan. But overall, no one is expecting major breakthroughs on those issues, although they are hoping to see both sides re pair overall relationship between the u. S. And china before president obama makes his way here to beijing in november when he is expected to sit down and have talks with the president of china xi jinping. Guys. Eunice, thank you so much. Eunice yoon for us. Remember, secretary lew will be the key note speaker next wednesday, july 16th. You know who else . Honestly, this is the most excited pooifb about it, because im going to participate for once. Governor christie delivering the key note. Thats huge. That is huge. He is on and he is man, hes very talented and whenever you think of him in terms of just interacting. He does like to talk. Once he gets going more than carl icahn . Can it you one thing about containers . Yeah, sure. Container stores or containers in general . Many of them, many of the containers themselves use aluminum. One of our viewers figured that out. We do alcoa to give you the aluminum situation. And then i see. You see, that i didnt now i sort of kind of get it because a lot of aluminum goes into the container. A lot of them are cardboard. These are big box stores. They have great big youve never seen a Container Store . And all they have are containers that they sell . Yes. Thats why things like crumbs exist. You see, i dont know someone really thought this was a good idea . Yes. Its so american. We have so much stuff we have to put everywhere and organize. Absolutely. Its a very american concept. Do they sell boxes . Yes. They sell boxes in every color, every pattern. So it could be this small . Yes. You can keep your fleas all the way to your or lies all the way to where you keep huge amounts of stuff you can find all the golf junk that you probably have at home. We have stored a lot of stuff reasonly. Its possible someone in my direct family has gone to the Container Store. Do you burp the containers . Some of them can be burped, yes. Some are waterproof. I prefer tuepper ware partie to anyway, lets go to a break. Coming up, the fallout from brazils horrendous loss of germany. Fans may not get over it anytime soon, but the brazilian government is worried about protests and almost about reelection following a huge defeat. South americas biggest economy be accepted by a soccer fan . And a typhoon is heading into japan as we speak. An update on that, next. Financial noise financial noise in india we have 400 Million People who dont have electricity and i just figured that its time i do something about it. What were doing right now, along with ibm, is to actually transfer data through a satellite from our wind farms directly onto the cloud. I think we could create a far more efficient system across the whole network where we could actually draw down different kinds of energy based on when its needed by the consumer. A smarter Energy System is made with the ibm cloud. A typhoon is heading to japans southern most island today with torrential downpours. The typhoon has lost some intensity, but it remains strong and tokyo could feel the effects by friday. In other international news, were watching the Ripple Effect of the world cup this morning. Brazils brutal, brutal loss to germany. Questions about whether or not it reignites anger among brazilians. Protests by the millions last summer and whether they are once again protesting against president bill marusef. The country is on high alert to the new antigovernment protests the. Joaning us now, jeff from Market Strategy at ubs. Jeff, good to see you. Good morning. The journal has an editorial on it. Yeah, i know. I read that editorial. And the style of the german team, they have to start being careful because they almost actually, if you watch military. They are. They move across and the brazilians play lyrics. The germans say you cant have everything resting on one player. What do you think, jeff . Leading up to the world cup, theres been a consensus that the president of brazil needed a successful world cup, it needed to go off with any major problems and brazil needed to perform on the ground because she faces reelection in october and soccer is so important to brazil. Is there some kind of connection between what happened yesterday and the possibility of the reelection . There is a possible connection. I mean, i think you have the analysis dead right. What brazil needed was the world cup to golf without a major disruption which happened, anyway, and what was needed was brazil to win the world cup. Obviously, that is not going to happen. This was a humiliating run yesterday. The concern people will have is weather this will set the protests off again and whether it will reduce the possibly that she is reelected in october. Football in brazil soccer, i guess, is that important . It could affect the outcome of the election. Would that be good for brazilian stocks . Victory for brazil in the world cup would have been negative for the market because it would increase the chances that he will win the election. Early defeat for brazil or in this case a humiliating defeat would be good for the market because it would reduce the chances of his reelection. That is i think too neat in this environment for a couple of reasons. One is this is such a massive defeat, i think it will affect the brazilian psyche. I think it will be a potential negative for Investor Sentiment from this stroid defeat. Secondly, our view is that he will probably win the election anyway. So even if it was a knee jerk reaction, hey, this means he is going to lose by the market, lets get more interested in the possibility of a change of government, at the end of the day, we think thats probably a very unlikely outcome. Okay. You think its unlikely. But what if it did happen . Who is the other candidate out there . Are they more market friendly . They are definitely more market friendly. There are two candidates, nevez and roberto campes who are perceived to be, correctly in our view, to be more right wing, to be more reform minded. The problem we have with that very neat scenario, that you have a change of government, everything looks good is first of all the economy in brazil is very weak. Its growing at probably around 1. 5 currently. Thats going to be a challenge for whoever comes in to be the new president , whether its one of the opposition candidates and secondly, more importantly, if brazil is going to perceive structure reform, which is why the market likes these certain candidates, the structure reforms are painful. Its to cut Public Sector wages, its to cut Public Sector pensions. If you do that when the economy is weak already, youre probably going to trigger a recession. Weve seen it in europe, absolutely. Yeah. Were not comfortable at all with the idea that you get a more market friendly government, suddenly everything is okay because actually the challenge its facing, whoever is the new president in brazil, are very severe, indeed. Can i push back against that . She runs this country and the companies within it as if shes the ceo. She pushes around valley and pet petrobas as if they should be following her dictate. I agree with that. I think you have to make a distinction between getting some of these Major Companies behaving better if you like and behaving less like government entities. Although the government has as ownership role in a lot of these staterun enterprises by definiti definition. It is easier to do, i think, and between that and getting the economy performing better, which is a structural reform issue which is much, much more which is much, much harder. So yeah, a new government can make these state run enterprises behave that dividend is better, policies, Less Government interference. Thats relatively easy. The bigger challenge the new government has is what are you going to do about the economy . Inflation is too high and investment is too low. Thats a formidable challenge for whoever wins the next election. Hey, jeff, the gain of the day, if its an all euro final in brazil, does that do people get even madder or should we be hoping for argentina so that the political tensions go down or do brazilians not like argentinians . What are we supposed to hope for for world peace . My gut is the brazilians probably dont care who wins today. That might cause some tension if its an all euro i think an all european final would be pretty interesting in south america. Youve got that accent. You know, you i didnt say that. You probably call football, right . Weve discussed this before, joe. Its got a round ball. So who is your team . I hate to say its, but ive got family in germany and my daughters engaged to a dutchman, so im pretty no, i mean when were not in world cup plan, do you follow arsenal or do you follow who . Unfortunately my team is knot in the premiership any more. Its not even forest. Theyre in the Second League now. Gunther. Really . A little umlat. No kidding . Yeah. Do you have any german friends . I dont know, the no, im not comfortable. Im a lot of things, i think. Yeah, maybe i will. Maybe ill adopt you know, its not theres whinners. Totally they beat chicago yesterday in a double header. You know what . I may need to apology guise. Im looking at the website. This is impressive. The caper store . It almost looks like it could be what they do with organizing your closet, it could almost be like a housing indicator. Yes, exactly. So this might be. We need to go over those earnings again, i think. And also they have a happy organized home sale going on right now. And their motto is theres a home with a heart inside. It takes take me home, i am yours. Im starting i see why they have a time of locations. I see why you spend rainey saturdays, you go there and mill about, especially if theres a bed, bath beyond next door. Right . Its easy to walk from one to the other. Whats wrong with that . Hes recovered. You have agreed to assume the mantle of in a perfect world, theres chipotle next door. Coming up, mr. Gloom and doom mark faber says asset bubbles are starting to break. Should investors start to worry about the markets or stay bullish . That is coming up next. Theres unlimited talk and text. Were working deals all day. You get 10 gigabytes of data to share. What about expansion potential . Add a line anytime for 15 bucks a month. Low dues. Great terms. Lets close. Introducing at t mobile share value plans. With our bestever pricing for business. Good morning and welcome back to squawk box here on cnbc. Im joe kernen along with Michelle Caruso cabrera and scott wapner. Becky and andrew are off today. Making headlines, abe is getting caught up in british takeover rules. Theyre being fortsed to retract comments about its ceo about shareholder support in its bid for shire. Yesterday the ceo said he believes investors were generally supportive of this transaction. But uk rules require written statements to make such claims. And it is kind of i believe shareholders are supporting it. It seems like, you know, toupt be careful that you earn that position of saying things that i mean, i would want to know. They do have fairley nuanced rules over there, right . Im sure. Look what happens with pfizer and everything. And boeing announced it has finalized an order for 150 777x planes. The dealer, 56 billion in prices. Emirates, boeing, xm, do they get subsidies . What do we you happen, theres a huge even in the republican party, theres a huge divide on who is for xm and who is against xm. And i dont know, you dont want any xm, you dont want any subsidies for boeing even though airbus is totally yeah. Right. You dont want to help Small Airlines order planes from boeing even if theyre abroad . Youd rather have them go to airbus which is also subsidized . Uhhuh. You would . Uhhuh. Youre on the far right. I am. I thought bush was too liberal, remember . Right. The second time. Where are you . You cant rate that. You cant rate trade on this, either, right . You dont know whether to go we go to the Container Store. We buy subsidies. This is support for tcs shares. If you dont think were going the trade the Container Store you are today, arent you . I saw you message egg over there. Is there a big segment today your xliening with the guy with the ponytail . I blew it up even bigger since you reacted. Facts change, im willing to change my opinion. You were right. You were right, i was wrong. Can you guys mark this moment . Apple has lost a patent change in china. A beijing court ruling against upholding the patent held by a Chinese Company. Apple had taken that patent to court. The decision clears the way for the Chinese Company to continue its own case against apple for infringing intellectual property rights. By the way, did you know na, that they dont play the music any more, the Peoples Court stuff . For you. Right, what happened . I dont know. And you know we were right in the middle of a story and you totally stopped. I keep waiting for it to kick in. I love that, that you do that. That youre secure enough to do that, that work. And you know what . We dont have the right audio guy. I dont know if you can find hes been on vacation for two weeks. There it is. Isnt it much easier to read a story when thats playing . You know what, though . You used to do it, you sort of thought we were making fun of your name and no, i like it. Its branding. Wapner. Why dont we play the section from rainman where we hear time for wapner, time for wapner. That would be good, too. We can do that. No one has any idea, we should probably roll back. What were you talking about . Perfect. In other media and technology news, amazon is stepping up pressure on hatchet, the ecommerce giant is proposing they keep all the ebook revenue. Theyve been in contract dispute for months. Do you want us to do to give that information to Halftime Report . That they can play it during theyve never done that on your show. No. Just here. Yesterday, after people were making something out of a 40point move on monday and i thought it was weird. Yesterday we started thinking, maybe we are in the middle of maybe a shortterm, intermead i cant knowat term, you never know. Its what everybody has been looking for for three years. The funk. You never know. Another down day for the markets tuesday extending the pullback from last weeks record highs. But were still were just a little bit below 17,000, about 100 points below. Markets just skittish as we head into the Second Quarter earnings. Are they just pulling back with the normal small consolidations . Joining us now with more is jim dunigan, chief Investment Officer at pnc in philadelphia. 130 billion under management with assets and on the economy we have nariman behravesh, chief economi economist. Jim, i dont know how many times youve been asked this, whether its the start of something other than an ordinary pullback. Ill ask you again, do you think its the start of anything other than an ordinary pullback . I dont, joe. And good morning. I do think as we get to these new round numbers, 17,000 on the dow, maybe 2000 on the s p, investors will get a fear of heights here and well see some consolidation. But i dont see the makings of a possible pullback. I dont see the makings here of anything more than some consolidations at these levels. Do you think we have seen the highs for the year . Do you think that the game from here on out in 2014 will be sort of harder to come by or i mean, where are you on that . Because rates we are getting closer and closer, presumably, to when rates finally go up. That is a great question and a question on the minds of many investors. You know, after a very quiet first half, up 7 , i do think we continue to grind higher. I do think we will see new highs for the years. You know, we have an improving economy. We saw that in the job numbers. I think that will continue. Midterm elections, which are typically after elections, positive for the markets. So i think we will see new highs above 2000 for the s p before the year is out. So continued gains ahead. Modest gains, but gains ahead for the markets. Nariman, that employment report is a pretty big number. And then the jolts number yesterday, a lot of these things have some people thinking that the economy is starting to do a little better, but they worry that that means the fed might do something at the beginning of 2015 in terms of fed funds. What do you think . Well, i think youre right, joe, that the economy is doing a lot better. And the First Quarter was a very weird quarter, a lot of funny data. But if you look at the jobs numbers, very strong. Five months over 200,000. Thats an awfully good sort of run here. Probably continue along the same lines for a while. As to the question whether does the federation rates, you know, we and others have been saying mid 2015, maybe september or Something Like that. I think chances are now. Higher theyll be early 2015. I doubt very much theyll go for a rate hike before the end of this year, but certainly the spring of next year, i think the likelihood of that increasing quite considerably. And do we people then invest. Does that make us happy or sad . Do we get nervous when they start or do we say finally getting back to normal . Well, i think this has been long anticipated. So its like, what a relief, they finally did it. The same thing happened with the tapering thing. Initially, markets got jittery. But when it happened, big deal, markets shrugged off the initial part of the tapering and subsequent tapering. So i think it will be very similar this time around. Really . So after all of this, after five years of all this fed action, its not going to cause any consternation because we know it was coming . Exactly. The anticipation typically does. But rates are still very low. Theyre not going to be any rush to hike rates on some kind of continual basis. Its okay. They dont need to . What if we start cranking in the economy and, you know, wage pressure, what if all that actually comes to were going to have krueger on today, Allen Krueger for two hours. Hes the guy that said the wage much has much less flack than people think. Wage rates are still very low. So from that perspective, the fed doesnt have a worry. The cpi numbers have been bouncing around, food prices, energy prices. I think the fed will look past those. Thats not where the worry would be. It would be wages and so far nothing. Jim, im looking in the notes this morning and we had a, you know, considerable debate and discussion yesterday regarding the front page story in the times about asset bubbles. You say you do not think the Economy Policy weve seen has led to any asset bubbles . Is that true . I dont think theres asset bubbles in the equity markets. At this point, when you look at characteristics of what a bubble would be, which would be overvaluations, theyre certainly not overowned. You dont see you see some euphoria. But theres some Asset Classes that possibly are in those areas, money flows in certainly. But not as i look at the equity markets from an asset bubble. You look at where we are with asset bubbles, a lot overowned and risk income as you go forward. But certainly on the equity markets. Okay. Gentlemen, that you can. Nariman, appreciate it. Did you nigan, thank you. Dont be nervous, jim, 130 billion, its only money. Its a lot of money, though, under management. He looked calm. I dont need that kind of you know, you . Stress . Yeah wsh pomt. With great power comes great responsibility. Reagan said that or spiderman no, spidermans father or uncle . Yeah, uncle ben. Not the rice guy. One of the worlds richest men is being forced to bow to government reform in mexico. Were talking about carlos slim and was going on there with america movil. As we head to break, a quick check off whats happening in european markets right now. As you can see, theyre negative. We needed 30 new hires for our call center. Im spending too much time hiring and not enough time in my kitchen. [ female announcer ] need to hire fast . Go to ziprecruiter. Com and post your job to over 30 of the webs leading job boards with a single click; then simply select the best candidates from one easy to review list. You put up one post and the next day you have all these candidates. Makes my job a lot easier. [ female announcer ] over 100,000 businesses have already used zip recruiter and now you can use zip recruiter for free at a special site for tv viewers; go to ziprecruiter. Com offer2. Welcome back. Carlos slim has announced america mivil is ready to cut assets to cut its share in mexican telecoms to below 50 . Next, why teenagers are growing up more conservative, supposedly. This was yesterdays piece in the New York Times by david renoff. We talked a little bit about it. But i had time to read it in detail and i was kind of r on osl, maso after reading it. 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The new york sometimes i times, obviously, a lot of people that work there in both the opinion pages and elsewhere feel maybe thats the way to do things. I understand thats fine. This is david leonhart, he was born in 73. I think i was a senior in high school, a junior in high school. Hes very, i think you read him before on obamacare. He was on board so i think hes looking in horror as its possible that some young people might not just be knee jerk liberal. He point out it did happen in the past with reagan even after the 60s. Some kids became conservative again somehow. Anyway, at this point its happening again for some reasons that are unfortunate. Because theyre totally out of democrats control. This time around, in the simplest terms, the democrats control the white house and the senate at this time when the economy just happens to be in this. Just happens to be that. In the book. In fact, he says, with the advantage of being right on all social issues, the democrats, they had with this disadvantage, however, comes a funny kind of problem. The democrats are the Majority Party when the company just happens to be in a bit of a funk. Now, its true the republicans are rocking everything, he points out, that would help this funk and the president , its not his fault he cant get anything through, hen he goes and sed says the problem is, a lot of the kids these days, many of the problems obviously have their roots in george w. Bushs presidency. They were born after that. So they dont know that everything thats happening right now. Is bushs fault. Is because of bush. They say, think about the people born in 1998 the youngest eligible voters are too young to remember the bush years and all the excitement about president obama, theyre coming of age with the democratic president who seems unable to fix these problems. I like your horrifying tone, hes horrified. Theyre conservatives, they dont realize that nothing obama or the democrats have done have been self inflicked. Auto disincentives to work or productivity, none of that stuff matters. Health care reform. In the beginning, hes funny, he goes, most kids usually are liberal because they care about the poor, which as you know, republicans do not. They dont want to economy a good economy doesnt help lift people out of poverty so it just the whole stance. I thought it was route do you live if manhattan . I do. Everybody that lives if manhattan, this is really right on. I live where you live. Thats right. You live in montclair near the sopranos old house, right . Was that near there . I dont think it was in montclair. It was. The actual house they filmed. I dont know if they were actually supposed to live there. Yogi, i loved him. I think his wonderful wife carmen recently, she was so nice this week. We are talking lebron going back to cleveland. Johnny manziel, and the Republican National convention. Coming up, Israeli Forces they are trading rockets and our guest host is on the way to the set alan kruger, hes got some issues with the feds strategy and the jobs report next. Chocolate is very individual. White chocolate lovers dont like dark chocolate. Milk chocolate lovers dont necessarily like dark or white. Before we couldnt really allow customers to customize their preferred chocolate. We needed a scalable Cloud Solution allowing them to select what they are looking for. Now there is endless opportunity to indulge. Customization is made with the ibm cloud. Is good morning, welcome to squawk box on cnbc. Im joe concekernan, becky and w are off. The former chairman of the White House Council economic advisers Allen Krueger, currently t at princeton university. How old are your kids, scott . Five and eight. Thats young. Hes young. We love him. I was in princeton for the first time not that long ago. Beautiful. It is cool. A beautiful school. If you need a tour. You are good with economics, too. I am available for a you are to. I dont know if you foe this princeton was once the capital of the United States. Right. Really . Iam told its in new jersey. People think. And its pretty. Its pretty. They think about it. But the reason im excited to have allen here, do you hear we talk to you all the time. There is no slack in the work force yellin doesnt believe you. I think the more data and you were kind of an outlier at the time. It was also something that people wanted the fed to stay full bore didnt like the stuff you were saying at that point i think the economy isnt where they want it to be for 2014. Did you get any calls complaining to you . I heard some complaints. I bet you did. We will, i just wanted to have you, its nice to have people that are right number one, also, we got to figure out when the fed raises rates for the first time they can be earlier, based on what you are saying. I think the fed has been closely monitoring the data. You are being nice. We will go back. Have you been watching, scott, we have been talking about him a lot. I want to see how you got to that data and which, there are sectors of the job market that are much tighter, thats a part of the data, is it not . I have been following the unemployed for a long time. What i found is the longest say they have more out the door in the job market. Thats what we have seen in past recoverys. We have a lot unemployed now. They say they can be following the exact same path they followed in the last recovery they withdraw from the labor force. You think we have this pool out there. You say its basically half of what it is. Some go back to school, eventually, they will come back to the labor force. Its a growing group of prime age men who arent working. That group has been growing. Is eight part of the benefits . She is leading you down, you dont want to go where she is taking you. I dont think you have gone there in terms of the disincentive of all these people on disability, people on food stamps, you heard that you feed to make 50,000 a year to leave the benefits you are getting by not working at all. Then you got to put on a suit, shave, get some child care. Did it work . Its easier to stay home for some 92 Million People, isnt it . I think they would prefer to work if there were jobs available. I think the longer they go unemployed. You dont think there were incentives from these . You think people want to sit at home . I think there are you really think that . I do. If you got to make more than 50 and its an 85 track record to go back to work. I think everybody wants to i dont want to suggest that. They want to set their alarm clock again . I think that they have a lot of self dignitary they want to work. Do you remember how bill clinton got flack because it does bring dignitary back. To be on welfare, you had to actually get a job. They were forcing people to work. It was very different than what existed before and has been now partially dismantled by president obama. I dont think that thats correct but it was a much stronger economy in the late 1990s, you cant forget how that helps to draw people. Thats another topic of debate. You can make 50,000 or 1300,000 that is the dignitary of being alive. I think people around the world are realizing that. I think its unfortunate. You do understand, if going to work means you will make more than when you receive benefits. Its actually much more beneficial to stay home. Its an economically rational decision to make. Theyre not on its into the an easy existence. We got to go to other stuff. We found out where these prime age men are. Not so much. There is a funk. Allen says he has paid for things at the Container Store, you, yourself, have not been to one. He will not admit to one. When i said bed, bath and beyond you said sign me up. I have written checks for my kids. Rockets exploding over the gaza strip. The contributor for the wall street journal. Josh, what is the latest this morning after we saw this erupt Late Afternoon here in the United States but fight time there in israel . Well, this morning we had more rockets up from gaza into central israel. The israeli army said it shut down at least two rockets over tel avivened israel has renewed palestinian mill and thes commanders it says are integral in the hamas rocket launch and they have been attacking residents in ga za. The death toll is continuing to rise in the strip the Israeli Army Confirms for the first time hamas has in its weapons n 3023 rocket capable of reaching about twothirds of the israeli Population Centers with a range of 80 miles from the gaza strip capable of reaching jerusalem beyond tel aviv and out in the south. It looks like theyre setting up for a full scale going back into gaza. Is that what we will watch here with the israeli army . That is what theyre trying to signal. The cabinet yesterday authorized 40,000 reservists call ups. They have already put in two Infantry Division on the border. But its a mixed bag forisse ral. Many israelis know that hamas has the advantage when israel is on the ground in the middle of the urban Population Centers where hamas has embedded much of its capability. Israel knows when it sends its troops if there, there will be casualties. There will be risks of kidnapping, abductions of soldiers, hamas height might have the upper hand so Prime Minister netanyahu will think, give this one a very good think before he orders that. So far he hasnt done that. You work for the wall street journal. So just like when here at cnbc, we are always looking to see if there is some kind of market connection. Do you find one here . Im thinking the markets are saying, here we go again. Its been for now decades. Yeah, i think there has been i think there has been a little bit of a falloff in the israeli equities market. But we havent seen the israeli sheckel weaken significantly and i think that people in the market are used to this. I think they think that eventually there will be a ceasefire even if the government is saying today it might take a week. They saw there in 2012 with hamas, be every that in 2009 and if 2006 with hezbollah, israel not a month war. It didnt affect the economy significantly. All right, thanks for joining us on the line. Thank you. Michelle in the headlines this morning, shares of alcoa rising in premarket trading. They beat stills by 36 cents. Revenue walls also above consensus, though alum number prices have been weak. Alcoa has been able to ramp up sales in its downstream business which sells products like truck wheels and fuselages, citigroup is said to be close to a millionbillion settlement. Dow jones saying they can settle charges related to sales of Mortgage Securities ahead of the 2008 financial crisis. A deal could be announced as early as next week. Pfizer has a class action suit accused investors about the safety of celebrex and extra pain killing drugs. Merck withdrew viox if 2004. Pfizer pulled bextra a few months later. Celebrex is still being sold. No word on the Container Store . It has a quinn martin, i see, you dont remember a quinn martin production if San Francisco . Am i dating myself . You dont remember back then . It works very well. It worked well for you. More of the aaron spelling. Exactly, 9023130 we date ours. Now you say it was your pass. Love boat fantasy island. You are telling me you didnt watch fantasy island. Come on, friday nights at 130 00 or was it saturday . You can give me the Container Store, dont give me the fantasy island stuff. Mad about you. One ting i want to ask you, there were a lot of hot spots brewing. Yes. Are you discussing . Shes our chief international correspondent. She goes to these places can you talk about it. What the next . I think there are next dangerous. If we see lashlg scale like last summer, absolutely. Gaza . Absolutely. Ukraine, you dont know what he will do. We are always looking for something with a Business Marketing equity. We discussed this. You are taking people behind the curtain sort of seeing how we crack the editorial process . Hes a chief international correspondent. There is a lot happening. When we return, value market will be happening. Why investors may be able to find big names in the financials and tech sectors. More squawk is next. Michael douglas. Welcome back. No Michael Douglas. I cant work with that. Checking the futures right now this is not a quinn martin production. He never heard of him. He had a top show 21 straight years including the fbi and streets of San Francisco Barnaby Jones when you got the blank stare, you are really playing, i you a sumd the role. Making headlines short selling. I thought it sound like this Michael Douglas, wall street, fatal attraction. Streets of San Francisco. Honestly, you did not know jed clampett was Barnaby Jones. I knew he was breakfast at tiffanys. Oh the father, the husband. He looked like the father of audrey hepalbertan. Short selling fell to its lowest level since the collapse of lehman brothers. Thats the lead article one in the fp this slow meltup has short sellers on their heels at this point. Market data showing hedge funds sharply scaled back their bearish bets. The drop suggests the industry is still unwilling to bet against the rally at this point because there is an expression. You probably know it from halftime. Its like the ability to stay short depends on how much one, you cant stay short forever as things are rising, right . You can lose unlike a long investment. Can you lose two and three times your money. Unlimited amounts. Put some money on it. What about you want to turn in some market fundamental also . Physically turn . Turning no you to market fundamental also, our next guest many are focused on whether the s p will cross the 12,000 level. The head of the u. S. Intrinsic Value Equity Team and a global Asset Management division of ubs. Our guest host alan kruger is still with us as well. Michelle, joe and i were talking about these gentlemen opolitical risks we have seen, we have seen this before, though, flash points, the market may get a little nervous takes a pause. Will we see that . Its escalated i think much quirk than anticipated. Im in the a geopolitical expert. I would say if you go back to the 80s and the 90s, that was not a time without geopolitical risks. There were quite a bit of things going on, not all good. I would say right now it wouldnt be the primary focus from an evaluation perspective. How would you say this pullback. We had a pullback. It doesnt feel like there is much fear in the market. It speaks to complacency for weeks. And there could be. That said, i dont think the markets really rich. I think its trading around fair value. It has had quite a rally. You have to remember where it came from. When you look, i think within sectors in the cross sectors, it really is a time for i think Stock Selection because there are opportunities there but i think when there is complacency you dont get the differenceship that you normally get. Its hard to find the market. Many experts say the market is fairly valued, however you want to put it. So where are the values if there are some out there . I think the values, the big financials, they are not loved by the market or the federal government. The city is trading below tangible book. I think its a company where the situation is where will they place the bets . You point out the financials have disappointed. Yes. The environment that theyre operating in both from a regulatory standpoint and a sheer where we are. When that normalizes, people forget, thats how banks make money. If you get any kind of loan growth, which we should start to see the banks have a tail wind there. What object the fact that we are solidly talking about fed losing Interest Rates sooner than it being pushed back. When you say you, me, market i think if the fed will surprise, it will surprise the rise. Is that the right thing . You foe this guy here . You know his work, right, maybe you will say it. You are still nice. Your work shows that theyre behind the curve and you say theyre behind the curve i think. They have been very transparent. The Economic Data has to be so strong for them to raise. Theyre not going to do it. There is a lot of good Economic Data and if you were in a time capsule and you showed someone a historical place where fed funds usually are tad say they cant be. I think now the fed feels there is no harm. The harm comes when money is free, you have poor allocation of capital. If you say, where is the misallocation right now . Where is it . Look at the ten year creating it. Whatever that is. We have this global fight to safety. Does it worry you . Is it dislocations . Are people going to be on the wrong side of this . I think theyll be on the wrong side. I dont think investors looked at it move from threeandahalf to a four and ten year on and bo portfolio. Right. It can move fast. Then Equity Investors who said i have to move back to the exposure, theyre in the pseudobonds, utilities are trading at high multiple, low growth. Its frightening. Thank you. We will find out how you got to this more specifically a. Lot of people say its people getting old and retiring or why their Participation Rate is going on. Something else. We want to work. Coming up, why where the United States ranks when it comes to Financial Literacy. We have hemmed at times and for old tv shows and a lot of different things. Squawk box will return in just a moment. 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Coming up 21 years of this . The new jerseyty. What is this from . I cant remember. Coming up, staying home and letting the help come to you . Thats the focus of the baby boomer er series. The Media Conference is speaking of a hot series from the 70s. Welcome back to squawk box. Its 7 30 on the east coast. 99. Making headlines, the number of people rising in the latest week. The increase happening, it kicked up slightly. Acura is recalling more than 2013 and 2014 ilx vehicles. They need to be replaced. Acura says if it is parked with low beam headlights on, they could melt plastic components. The Senate Intelligence community approved the Cyber Security bill. They encourage them to exchange packing attempts and Cyber Security threats. The new media landscape Takes Center Stage this week, the conference hosted by allen and company. Kayla is there and joins with us more. Good morning. Good morning to you, scott, the sun valley mediafest began in ernest. Tiny jets in monita hayley, idaho, with some 12300 mobiles from the tech and media landscapes to mix and mingle. This year can it includes mark zucker berk, media titans and social media execs jeff weiner, dick costola of twitter. Nick woodman is here, a newbie, apples teddy cook andrea hoo ceo marissa meyer, some repeat attendees are notably absent this year. Uber ceo and venture capitalists. Sun valley is one of the few conferences that count as work also alibaba. I think it would be safe to say he has a few busy weeks ahead as they gear up for that all important ipo. Panels on education, politics, philosophy and who could deliver and he was talking about a cap stone panel. A joint interview of warren buffet and jeff besos. Why does any of this matter . Beyond this beautiful mountainous vista behind me. What happens in sun valley doesnt always stay in sun valley. This place sews the seeds for consolidation footing cable. We will bring you the latest. Back to you. You have to go to the pio the pioneer, a great place. Reporter best potatos if town. You get the surf and turf. And hash. We serve great hash. I was thinking when you flew in there, thats where bergdahl is from. Right there. I think they probably have signs and stuff, ten miles and haley, right, that was where bergdahl was from and bruce willis. I saw browse willis. I have to say, most of the signs here are hailing the olympic athletes. There were several gold medallists that hosted and thats the talk of the town several months later. Thats good. You have been there, you have been there tonight. Or you dont know the pio. Reporter to the tineer . We havent gone this trip yet. We have stayed close to our kniting or lives to be able to talk to as many people as possible. Exactly right. Thank you. All right, kayla. I bet she has been to a Container Store. She probably has. I v. I love the Container Store. See. You know, i dont know how many times apparently. Not enough to stay i was wrong. I said it. Ive never sit, ive already said it to you in your second day here. I enjoy hearing it so much. How, you know, for someone that didnt know Michael Douglas, where he got his start. I few the Michael Douglas thing. How money smart are u. S. Teams . A new International Study finds american 15yearolds right now are just in the middle of the pack, behind china, belgium the czech we public poll. In latvia, one in six didnt reach the baseline level of efficiency and Financial Literacy the countries at the bottom, croatiaia Slovak Republic and italy. I dont think if i were in italy, i dont think i would be studying finance either. Our guest host this morning alan krueger is headed to d. C. For a briefing on the literacy report. Is that true . Thats true, this afternoon. Watching squawk box might help. A bunch of different purchase suits, how important is it that were starting out . I think its very important. You know, i think kids are dealing with. Their whole lives, making decisions about how long to go to school, whether they should take out loans for college. I think you could trade some of the financial crisis to awful Financial Decisions that people made. So having a more Financial Aid literate public i think helps the economy. When i look at this, for example, supposedly American Kids are less financially literate than chinese kids, but theyre only looking at shanghai. Thats right. There is a billion people who live in deep poverty in china. I mean, is it right to compare the United States where every kid can go to school for free versus whats happening in the hip lens of china . Not necessarily, right . I would discount the numbers from shanghai, but i think the general thrust is we were in the middle of the pack thats not so surprising. Thats where we do in math and reading on these and most kids who take Financial Literacy in school take it later in high school. This provides us a baseline, they will be doing the international test. This is the first time we have internationally comparable data for teenagers. So what are you going to decide today . What is, this is the last of what we will talk about. How should we move forward on this . I will teach Financial Literacy as american literacy. Exploration, economic vehicl vehicle. It doesnt look like a textbook. It has nice illustration. Color. Yeah. This is after quinn martin. Im sure his shows were black and white. I think economics will excite kids about Financial Decisions, they get very excited about playing the stockmarket game in high school. They learn about going for risk but just teaching them the concepts is a helpful start. En fewership is something they are trying to have for the ages. Its such a great thim thing. Maybe you cant count on the big Company Giving you a job for life. Therefore we need to inspire more Small Business creation i think. Its exciting. People can do it. Right . I agree with that they will invest in 34013ks. I have a wonderful set of interviews with jeff besos, what he was thinking ability, what his path was. There are many different paths to becoming an ent fewer, i think teaching students what it means to be a startup business. How businesses behave in the economy, what banks do. You think postcrisis people are spurred would be it comes to financial stuff . I think its extremely difficult. I think people tend to put them off which is one of the people we face. I think the government can do. You know the poor lego movie the name was lord business the yogi bear movie was a guy trying to take over yellowstone park. If cars 23 it was an oil company. Its constant. We talked on the fugitive. The movie that was made, it was an unskrup lus drug company, its constant. Its nonstop. I dont think kids grow up thinking Business People are good people. I think they think its much more noble to be something else. We have a funny attitude towards business. I dont think it helps us with the guy you work for in the white house. We have the First Business school. We used to embrace it for business than other countries do. I think people like to be their own boss. Thats a part of the american individualism. I think we continue to have a lot more. In washington, you do hear a lot of times they feel comfortable standing up for Small Business. A lot of times you cant find anyone that says, yeah, im for big business or large corporations. I dont know, its where we are living at this point. Anyway, appreciate it. Coming up, we continue our special baby boomer series with a higher rate of illness and an aging generation of boomers. The cost for longterm care can be tremendous. The option, staying home. The ceo of homestead joins us, later, a burger beat down with the ceo of wendys the sec largest food cane, bringing back one of last summers most popular offerings that interview is just ahead. Squawk will be right back just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. [ girl ] my mom, she makes underwater fans that are powered by the moon. She can print amazing things, right from her computer. [ whirring ] [ train whistle blows ] she makes trains that are friends with trees. My mom works at ge. He cadillac summer collection is here. My mom works at ge. During the cadillac summers best event, lease this 2014 ats for around 299 a month and make this the summer of style. We are continuing our baby boomer effect series. We will talk about aging americans, whether its making plans for yourself or your parents, where theyre going to live or being taken care of. Its a major decision. Domenic brings us more. Dominic chu. We will start with the real estate side of things. The ameritus corporation. The shares are up nearly 50 just this year alone, making it worth about 13. 35 billion over the last five years. Its up 80 . There is brookedale living, same business, its worth about 34. 35 billion. Its up 2380 over the last five years. They are merging to create a huge health care player. 1,100 centers between the two of them. One of the biggest players, though, a Real Investment trust health care read is up 19 billion up 82 over the course of the past five years that lags the broader market. Then there is the Home Health Care Services Side of things. The bigger players here are names like gentiva worth about a half a billion. Its struggled flat over the last five years, these guys are the struggle from Kindred Health care. Theyre trying, havent succeeded yet. Another one, enson group up 36 yeartodate. A larger Company Worth about threequarters of a billion. Its up 3230 over the course of the last five years. These guys did a spinoff of their properties into Real Estate Investment trust. Then there is kenmed worth 1. 37 billion up 23 yeartodate up 133023 over the past five years. Can you tell this is a very bill demographic trend. All these companies are trying to merge, spinoff, create some kind of action all to position themselves better for that aging population in the next five, ten, 15, 25 years. The baby boomer effect we are calling it. Thank you. I know that company. It sounds like a chemical company. It was. They bought a hospice company. I think my parents are gone now. I remember they do hospice as well as Home Health Care, dom, it came a much bigger part, chemed bought the whole thing out what did you say 1. 37 billion. Its in cincinnati. A cincinnatibased company. Absolutely. They got more from a hospice provider became basically a Home Health Care company instead of a capital company. I think thats the way it works. Thats great information. Thanks, john the leading trend in this space is staying home and receiving care at homestead of moving to a retirement community, for example, what people in the industry call aging in place joining us is paul hogan, its a private company, not publicly traded yet, maybe, it provides nonmedical assistance in the home. Thank you for having me. The trends are going your way the demographics are going your way . Certainly tailwind, we have 130,000 or more people turning 65 every day here in the u. S. , around the world, were a lot of organization. We have over 1. 1 million every week turning 65. 85, 90 want to stay in her to own homes, so, absolutely. What do you provide so they can stay at home . Not medical, basic making dinner or . Well like companionship. House keeping, medication reminders, personal care, Hospice Support Services you were mentioning earlier. You dont necessarily go to hospice in the last year of life, there are things you need to be there all night long, dont you, taking care of when bed pans, all that kind of stuff, right . Its 24 hours it seems like its so expensive, i dont know how, when you get towards the end . Whether its hospice, families are under pressure with children and parents. It seems like it will be interesting where you can do 1300 at once, how do you compete where you have a lot of beds where one nurse or Health Care Giver can serve as 130, 20, 30 people . We have a lot of help from the consumer. Thats what they want. They want to stay at home. They have a bit of resources and have some family support. You combine the two. You will be well off. The latest. There is a supreme court, there was a woman last week or the week before on whether they would. What was it, unionizing or . Home health care workers. It will cost a lot more. The whole once again availability will shrink because you have to medicaid more. Ours is private paid how much do you charge . Our prices vary, 15 to 26 an hour, depending on where you are at. The average client asked for how much . 15 to 20 hours a week. Thats just enough to keep them at home for quite a long time. You can get a 24 hour care at home. How expensive is that . That depends what part of the country you are in. Its about the quantity, not so much the quality. That can be anywhere from six to 12,000 a month. Can you do this alone or as many of your competitors are doing looking for strategic opportunities . Well, the nice thing ability franchiseing, we are a franchise organization. Were in 13,3040 franchises in 17 countries. Its a little hybrid. You get local ownership. So you get people that have equity in the company as they build their businesses. How are you assured quality . We have a ram we worked with, several partners, j. D. Powers to measure the satisfaction of our client and our care giver and thats layered on top of the selection process, the training the supervision and the support services we provide our care givers. All right. Thank you, paul. I like that aging and price. I think squawk box is going to be 20yearsold i think like next year. I have been sitting here. You look at the 25year and you see someone aging while theyre. The shoulders get a little more. The wrinkles, the hair, youll see. Fast money is you are aging in place. Are you aging in place as you are sitting there right now. Its better than the alternatives. It is. All right. Coming up, thank you so much for coming on. We appreciate it. Coming up, more on the markets, fixed income, Jeff Rosenberg whether join guest host allen krug tore talk fed, Interest Rates and more. Later, its burger time. Its before 39 00 in the morning, wendys will give a boost by rereleasing the pretzel bacon cheese burger. We have them right here on set. Yay the company ceo joins jane wells in the next hour to talk about them. Up next on squawk box, dont start your day without knowing the names that can make you money. Joe has your list to watch next on squawk box right after the break. I take prilosec otc each morning for my frequent heartburn. Because it gives me zero heartburn. Annc prilosec otc the number one doctor recommend frequent heartburn medicine for nine straight years. One pill each morning 24 hours zero heartburn. Okay. Lets take a look at some stocks to watch this morning. We have been telling you about alcoa, ushers in the earnings season, its reported better tan expected earnings in revenue. Stock has been getting back to levels it hasnt seen if years. The company says its looking to cut the alluminum smelting segment t. Retainer store, the retailer is lowering its full 84 guidance the company ceo warning of what he calls a retail funk as traffic declines and consumers are not spending to buy containers. He said he would like to focus on that on containers store and garmin downgraded to sector performance, they cite potential head winds including the potential apple iwatch. Which is, what is garmin sells . Gps. Gps. So that iwatch will have a gps component. I guess. I saw the samsung earlier. The paper yesterday. Coming up, black rocks, Jeff Rosenberg, off to sun valley and allen and company Media Conference, Tim Armstrong is ceo of aol. He will join us live. Kid hey dad, who was that man . Dad hes our broker. He helps looks after all our money. Kid do you pay him . Dad of course. Kid how much . Dad i dont know exactly. Kid what if youre not happy . Does he have to pay you back . Dad nope. Kid why not . Dad it doesnt work that way. Kid why not . Vo are you asking enough questions about the way your wealth is managed . Wealth management at Charles Schwab its all about latency. About speeds and feeds. Its all about how fast does it run. I often sit with enterprises who ask me about how Mission Critical and hows the performance of the cloud. And i tell them, if you can make gamers happy, you can make anybody happy. Speed is made with the ibm cloud. Welcome back to squawk. Im joe kernan along with beck qui quick and andrew ross sorkin. Alan krueger, a former council of economic advisers chairman and professor of economics at presenceton, are you alan krueger . I am, indeed. Your fame was spelled wrong. Thats the first time. Andrew is not here, becky is not here. Scott wap fer from halftime. I should introduce you first. Michelle carusocabrera will give you the headlines, thank you for getting up and educating me. Really. Educating you over the Container Store. The school in me. I may go later today. Did it say the story of the day or did you adlib that . I adlibbed that. You knew it was good. Making headlines, boeing announcing it has finalized an order for 1350 triple 37 explains from Emirates Airline the deal is valued. Citigroup is reportedly nearing a settlement to resolve a mortgage probe, officials have been probing Mortgage Securities in the run up to the financial crisis. We continue to watch the typhoon yesterday with torrential downpours. Homes and streets were flooded. The typhoon has lost some intensity. It remains strong, tokyo could feel the effects by friday. In geo sorry, scott, a positive start to the earnings season. You did it. Itis like tiger was age do that. I really was thinking. Two days, a positive start from alcoa, its taking center stage from investors, our guest host continues alan krueger from frins princeton. It was quite endearing to see you Exchange Business cards. Right at the top from the very beginning. It was nice, allen was featured in the last minutes and his paper he talked about all morning is absolutely critical for the debate we are having and the marks. We havent focused. We started the top of the show, yellin knows exactly who this guy is. All the people in the Federal Reserve i mean theyre probably naming his name quite a bit. It matters. In the paper, you were pretty circumspect act not describing the policy, the macroeconomic policy that implications for the fed of your conclusion being on the margins are not affecting the outlook for labor market there is a lot of labor slack. It should be much tighter. Is that the policy you should draw . You said theyre fine, theyre not behind the curve. I have been kaurks ill tell you why, there are a lot of factors. Some of the shocks have been on the upside which have been raising inflation like we seen with energy and food. The fed thinks their transits, they may be right. They may not be right. I would focus more on clear signs of inflation i tried to stay focused on the economy to stay away from the policy because i knew the paper would be controversial. And i also think the fed has mr. Inflation worked for so long, we have been below 23 for so long. Its okay to be a bit asymmetric in terms of overshooting a bit. I think theyll still have the capacity to contain inflation if it goes up twoandahalf, 3 . So i dont think theyre behind the curve yet. I think theyre getting closer. I heard them use the word crimp you know the fed is supposed to be independent politically. But there is an election coming up. The economy is still not where people want them tovenlt its in the best interest to have them full boar continuing. When a former White House Obama Administration official, you know, basically says that theyre behind the curve, they dont like that, they dont like hearing that, it means they will hold back and they dont like the investor process. I think theyre mad at them. Do they take your calls anymore . Theyre very cordial. Cordial. You didnt see his farks you said behind the curve. That is a question that begs asking. Its absolutely the question. To the topic of today the fomc minutes the market is on edge that the fed is getting behind the curve. There was a bloomberg article yesterday ab comparing janet yellin to arthur burns. They dont have a tv service, do they . The point is if you are seeing that kind of stuff banddied about, there is a lot of uncertainty in the economics. Do you think theyre behind the curve . I think alans work is very important in that the separation between the long term and short term, if you look at it from short terrell, there is no slack. Does that mean they will be raising rates faster or go longer and as a result by on inflation . What do you think the response is going to be . Heres the thing, in the bond market following junes fomc meeting in the statement, it was a very benign statement and the market is very convinced that its going to be low for longer, so is the market going to be surprised. There is a low hurdle for that surprise because bond market yields are so low in the front end of the curve. Yes, i think the market is going to be surprised. But it doesnt take very much given the 237b8 place ency. We talk a lot about financial stability. The question of the minutes, the financial complacency get a higher degree of focus this time around t. Bis report. Some of the stuff from the boe, mark carney and his commentary, whether or not that was discussed. There was a lot of complacency. The biggest source is shifrts around federal policy. Is there a shift at the end of the year reach 3 . It certainly should if you have the kind of Economic Data and recovery recent data have been suggesting. You are always asking me about the ten year, i come back to say its not the ten year you should be worried about t. Twoyear Interest Rate is 50 basis points. Were talking about normalizing Interest Rates, thats 350 or 34 . The much bigger increase . Interest rates to worry about. What kind of recovery are we talking about . Thats noise from the First Quarter. Hoich is good stuff and the 2378 or scotts points are good i think you will see the fed looking at the data and saying, hey, ma ib the Second Quarter data is really recovery from the First Quarter . Lets see water going on in the third quarter. What i keep coming back and worried about, if the bond market puts its foot down to the fed, it feeds to be here they take things up much quicker than the fed anticipated. Then i see europe and i think everybodys got cover. Because over there, nothing is happening it doesnt matter the vigilantes wont move. Europe is very different, draghi, its to add qe. In the u. S. , were pulling back. The bond marks cant overreact because theyre waiting for aal from the fed. The issue is will you ever get an issue from the fed . In july, it will be more interesting. Can we bring up the chart of the twoyear yield again . We can. Lets bring in the long run had before. Its still low, still bouncing around. Still markedly different from the ten year one, thats a kos lapse . Thats right. You see that curve, you see we are breaking through certain key levels. The higher rates in the two year is the bond market trying to say, hey, were getting a little bit worried about wlornt were mispricing the first time period of liftoff . Is it really going to be as late into 2016 as we thought . If its not. 1615 or 16 . 15 into the early part of 16, so markets are moving a bit more forward. Thats what you are seeing. First quarter 15 is not concensus now. It should happen based on what we are seeing. I think so. I dont agree with it. Your work says that. I think my work. You do this great work. You wont make the next leap. Thats why i asked him the question. Im not ready to spike the ball in the end zone yet. Since i work on that paper the data have come in i think more supportive tan people have expected. The logical conclusion of what your paper said. I think the logical conclusion is it should be moved up from where people are thinking if it moves up to the First Quarter. There is another conclusion which is critical or another question, is Monetary Policy the best tool to address longterm unemployment . I dont think it is. I said on the show its not. I said id like to see a tax credit to encourage employers to hire the longterm unemployed. We had that a few years ago. I think that would be much more effective. Monetary policy is a very blunt instrument instrument. We are facing multiple problems. 20 express some form of depression. The longer they are unemployed the more they face a job. I think if congress could arguments it would be much more effective. What are you going to do . Have you lunch. Can we have lunch like at michaels or something . What were you planning on . We saw you do it. So we balance work. He gladly gave you his car. Its good for you. There are a lot of stuff in the paper. I had a few questions. We were trying to replicate the results. Not yet. You know, there is a great tradition of exchanging business. I was in asia. Its remarkable. I have never gone to asia and come back with business cards of mieen own. I never bring enough there. High School Students have business cards there. Cool. Good timing. Im glad we can bring you guys together. Lets take a look another futures after yesterdays down day on the street. It looks like we will have a snap back off the open Dow Jones Industrial average would open about 52 points higher right now. At least thats the implied open, s p and nasdaq would follow suit. Nasdaq off its worst die in more than a month. There is energy, how the complex looks today, crude, brent, both falling. That gas is down as is gasoline so that is how the pick shaped up. Squawk will be right back. Coming up, we head to sun valley, Tim Armstrong ceo of aol joins us to talk online media and more and later, a squawk exclusive with the ceo of wendys, we talk about how they are planning to eat up the competition. Squawk box is coming right back. In a world thats changing faster than ever, we believe outshining the competition tomorrow quires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Welcome back to zwaux making headline, celgene shares are coming under pressure, the experimental arthritis drug fail to meet the main goal the drug ru drug is designed to treat a type of arthritis that expects that affects specifically the spine and thats a stock. You watched that over the years . Celgene, genzyme. Both of those became big market. Skating billion. Remember it was solidimide then a blood cancer drug took off. Skak billion. Gilead is the other one that has just, whats the market. Stocks that had big, big runs. Gilead doctor 133 billion. Market cap. Its a lot bigger than the Container Store. I wasnt going to say that. It was implied. A billion Dollar Company that you have been beating me over the head with all morning long 1333 billion. Thats okay. The conference taking place in sun summit if sun valley, kayla is there. She brings us a special guest this morning. Nice to see you again. Reporter you guys may not know Container Store. I know you know aol. Tim armstrong as the conference kicks off late last night with a barbque, first panels are today what are you most interested in learning . Who are you most interested if talking to today . I think first and foremost this is a great opportunity. Its an event where you can find threads across all the industri industries i spent a lot of time listening. Its a great opportunity to run into literally probably hundreds of people. To see or hear. Its a fantastic event. You have said aol is making a big push into live event streaming. We know text disrupts we know some conferences that get live streams, where will aol users see this content and why is that the right content . Four years ago, our theory was that the center of media and tech following really where culture meets code will be the futd of mobile and the as specs of higher band width. You see the entire industry leaning towards content. We invested specifically in live video content. We are number one in womens lifestyle right now as a company. I think you will see us continue in investment. Very heavily in video. The future of mobile and from our standpoint, context and consumer will ride on all the distribution platforms. I think when we mix that with advertising, thats a powerful place to be. Were excited about it. As consumers stream set tops and televisions, who foots the bill for that . A distributor or the content company . I think it will end up in the offline world, the distributors will make. From consumers from offering distribution the content will provide great context. Were in a period where there is a lot of discussion. Really there will be great content companies that get paid great content and i think that game is just starting. Thats the first inning right now. I think the changes with multicast and mobile, you will have a numberal shift, twice the amount of video content, thats a really big opportunity. Where is aol as an Advertising Company . I know you made a push into ad tech. Now are you competing with some of the biggest ad agencies around on that. There is also word on the street you could move into native ads, water the truth there . We were an Early Company investing in the mechanization, terrorizeing is a trillion dollar industry globally less than 10 is mechanized with machines to really trade in the marketplace environment. Aol is one of only a couple companies that has a full solution in advertising endtoend, which is the planning of advertising all the way through the analytics. Even we just acquired a Company Recently which does attribute shun modeling. The internet bought the the attribution and the longer maker quote about half my advertising works, im just not sure, there is two or three companies, aol is one of them that are getting closer and closer to 1300 of my advertising works. I know it all works. That will be a big fundamental change in the next decade. It all sounds good. Its definitely a alongterm play. I know investors have been frustrated with earnings over the last fourplus quarters. You are in a quiet period so we cant talk specifically about numbers. Do you feel that sailing will start to be smoother sometime soon . I would say as an investor, im a single share holder. And we can look at our track record, aol when we spun out was down 20 or 30 quarter year over year, we are back to growth in terms of revenue and profits. I think if you look at the amount of cash we have been able to give back to shareholders an invest in the future. Few look at it, we had record earnings as a company for the last, you know, couple years and not many people expected us to get back to growth. If you look at the businesses were if right now. Which are in video, were in mobile. Were in global content. Those are the businesses getting talked about at sun valley the week. With realso one of the companies that partners with everybody. We have partnerships with every major Internet Company and the major Offline Companies as well. We want to be the worlds best at distributeing culture and code together. Its a big opportunity. For investors, shortterm investors will focus on shortthem things. If are you a longterm aol shareholder you have done well and you think you will continue to do well. Reporter we were talking during the commercial break how we consume video, what devices we use, you have a samsung and you have a blackberry and you said mostly every ceo has one, do you hope the Company Turns around and they should get back to the btob model . I think the nobody activity is big i have an iphone, they are excellent for the web viewing, entertainment video, those type of thingsism i use those two phones every day t. Blackberry for seems to me a you till. If you look around sun valley and your studios, you see people that have to do utilities. I understand from a value standpoint, i hope blackberry does as well and its a great utility device. I love my samsung note. I love my iphone, but this stuff about blackberry is the future, hopefully, it will be driven by youtive. I dont know what their plans are. I will be happy. Have fun at the conference, thanks for an Early Morning visit to our set here. We will catch up with you after evenings if a couple weeks, too. Coming up, another day, another auto recall. This time its a japanese auto maker. Details after the break. Later, wendys offering a few twist on plet sell pretty selz, squawk box will be right now. Welcome back to squawk box. Acura the Luxury Division of hondas recalling investigation to replace their hal ogen projector beam headlights. The manufacturer says if it is parked with the low beam headlights on, they could melt plastic components resulting in a fire. There was one fire reported but there were no related crashes or injuries. Coming up, more from our guest host princeton professor alan krueger plus a pretzel bacon cheese burger. Wendys is bringing back the burger. We will hear state from the ceo. Todd, whats the best trade you ever made . Trading my old platform freeal. Really, whats the difference . With esignal i get the same Real Time Data substitutional investors rely on every day. You can trade wage from the charts. There is a reason they say what you pay for. Exactly. Esignal, trade like the pros. Welcome back to squawk box. Ahead of the wednesday open, dow component American Express says card spending and balances have been improving for the industry as a whole. We are watching shares of Reynolds American it may become a part of the reynolds for 75 per share. Check out american airlines, they say revenue per available seat pile will increase 35. 35 to 36 this quarter compared to a prior range of 35to7 . It says increased capacity will increase as it increases to more larger depths. You said wednesday, it is wendys day. It is spelled like that. Thats the next segment in. Tomatos. A salad, burger. Allen, you got to meet jeff. You get a burger. Were on a roll here. Lets get back to our guest host this morning. Alan krueger. You have some really important substances stuff or talk about what we were talking about on the break . I want to talk about the container storm im serious in a way. You are. We were talking michelle says that i saved you from her, what what you were going to have an ideological onslaught. Its a strong statement. How are we . We are fine, we are on the same page in a lot of things. You said my support for entrepreneurialship. We asked you, does the president , when you are meeting with him. He supports the private sector, entrepreneurialship. You say he is moderate in terms of all these things . I have been with him. We met with Companies Bringing jobs back to the u. S. The president said what can we do to help you bring more jobs back to the u. S. . Nobody complained about regulation, nobody complained about taxes. They said we need better infrastructure and training. When theyre not in the room, they all complain about it. What is the territorial system, what about our tax rate . Even on a everybody else moved out in front of us. The president po posed Corporate Tax reform. He wants this at a minimum tax. Thats the dynamic, of course, what we call loophole i dont think we will see. You can look me straight in the face and say the demonization, pick an industry. You didnt. There it is. You didnt build any of that stuff. None of that ever struck you as sort of demonizeing business or antisector, are all these Government Solutions wrong on thi this . The Financial Sector had taken irspribl risks and the president preserved our system. That doesnt answer the question, you didnt build that, that embodies the attitude of whether or not he believes in ent fewership and business. I think thats why we are skeptical. I dont think you understand what he means by that. There is a whole ecosystem. We depend on each other to get products. They should be present for that. The highway trust fundch we need to collect taxes to do it. Would you admit Congress Gets tons an tons of money for infrastructure. Yet we dont get infrastructure. Congress is not allocating tons and tons. Before they were willing to actually allocate it to things we need. I thought you dodged this bullet. That was the whole point. He saved you in the first block. I will save you again, im sorry, you are right the consumer, what itself the story . Is the consumer sluggish . You go, go. People say the economy is the underlying economy is getting better. Were going to have a good quarter from a gdp standpoint. Thats clear. Yet, walmart, u. S. Ceo says the consumer is cautious t. Container store, even though theyre not a tremendously large market cap company. Only in the billions from says people are in a funk. Ive heard that from other retail ceos privately. Whats the story and how good is the economy really if the consumer is struggling . I think the story of the whole recovery has been that the consumer has been struggling. Few look at Consumer Spending in this recovery compared to other recoverys, especially Consumer Spending on services and discretionary goods has lagged behind. Whats been strong has been durables. Automobiles, the numbers, 69 million is rather remarkable. If you look at adorables as a whole, they have been strong, i think a good part of the explanation is so much wealth has been destroyed during the financial crisis. Were back up now to the level of wealth the country had in 2007 and, you know, this is seven years later, we got inflation and we have population growth. So worry far behind where we might otherwise be if it werent for the drop in housing prices and the financial crisis. And scott for years we have been talking about the high end thats going great. Sure. The low end not. This seems like its continuing. Then that plays into the disparity and wealth that walmart is having problems, tiffany is not. I dont know why, then initially with the Container Store, i think companies when they have bad quarters, a lot of times you never know when target was having problems, theyd say it was the consumer when it was target. I never know when theyre using an excuse on the overall economy. We are under the impression things are percolating now with the economy and every time you hear about a sluggish consumer, it begs the question, is it specific to the company or is it overall . Well the gdp numbers show sluggishness on the consumers. We dont foe what it is. Its broader range. Its broader than target. You look at the consumer, it is sluggish. How is the fed thinking about the consumer in the way it makes its decisions . Im sure it is thinking about how the job market comports consumption. It wants to see more wage growth. Up next on the wendys day, look at that. Someone wrote this, wendy has some nice buns. Jane wells is going to explain. You cant get me on this that was in the teleprompter. So, sue me. Heres the deal. Wendys is now the number two chain and it is spending hundreds of millions to transform itself into what . We talked to the ceo live right after the break. Time to talk burgerers, wendys bringing back the pretzel bacon keys burger. Were going to do this but you will thank us, the home of wendys headquarters, she has a special guest. Go ahead and eat, joe, while i talk. I am with the ceo. Thank you for joining us, we sewer appreciate it. You are in the middle of what you call a brand transition, part of it is seen in these stores. You are doing a home makeover. It has a chipotle feel. What is wendys, is it panera meets burgers and frosties, what are you . Jane, were the cut above brand. We have been that 45 years and about great fresh state ofing fruit from day one. We will always think about that. When you think about that in the context of our competitors, we are giving an experience, can you see with the great tasting food. We do it at a competitive price. You put that into the context of the new excecompetitors you mentioned one in your comment were giving great value to them. How do you do that . These prices are at all time highs rbc capitals says wendys has the most to lose. Minimum wage going up, how do you do that, when you make this makeover and you make eight chipotle fast casual experience, how do you do that . You are right. Beef prices are at levels, beef costs are only 19 to 20 of our overall commodity basket. Thats a lot. Isnt it . Thats if same proportion of chicken. So we have a balanced commodity basket which helps us a lot. Our margin guidance is three to 16, eight. Remember thats on top of trooen 15, four last year. When you look at the trajectory we have been on, its been extremely attractive. Are you going to raise prices or have you . We have kaen taken some price increase, we are sensitive about that. We dont feel we should pass all the costs along to the consumer. We have done a great job of taking costs out of the business. Doing that in a way that doesnt impact the consumer. Lets talk about the pretzel bacon keyes burger. You brought it back. Phenomenal. It drove same store scales e sales up 3, , suns took it all off, same sales growth bell e fell below burger king. You brought it back. If its a winner, why mess with success . This is one of the ways we learn what the profile is for consumers and because there are operating implications in terms of complexity of operations, because this is a quick serve restaurant. We have to be able serve fresh hot food on a quick basis. So we have brought the pretzel bacon cheese burger back. Some say will we keep that and we have a little surprise later on. All right. A little surprise later on. You are moving to a much more franchise business model. 85 . Is that going to go higher . Yes. We finished selling 3418 Company Restaurants the First Quarter of this year. We are at 85 and as we talk about system optimization. We feel because we are substantially a north american restaurant company. We have to provide the growth and set the example for our franchisees. We are doing that with image activation with reinvesting in terms of our pos system you are likely over time to see that percent annual decline. How much does it cost . I think another 2300 stores have this by the end of the year how long is it going to see the impact of all this money on same store sales growth . Will they see it afterwards . You see the impact of this upgrade instantly t. Average investment on our ultramodern standard design is 3450 to 3500,000. Those restaurants are up in the 130 to 20 . They are seeing the impact immediately. When you look at a new build or a scrape and rebuild where you level the restaurant were seeing a 25 to 35 increase in sales on those, significant intree intreess. Joe, you talked about 20 beef, when the chicken. Jane, im surprised you didnt ask what is bacon. You have done the bacon bowl, the go see pigs in iowa there is bacon on this sandwich. You are bacon obsessed. I am, exactly. Bacon is more than beef. Youve got it on everything. On cnbc. Com later today is there some suggestion . Maybe we should throttle back on the pig a little bit or is it so hot you may have it on everything to succeed . Our apple with smoked bacon is absolutely fantastic. You will continue to see us both on salads as well as on sandwiches. You had your contract extension for one year. Thats a little different and what does that say and what sort of benchmarks do you have to see . It seems a little unusual. No, i have a fantastic relationship with nelson peltz and the board of directors im very exited to their success. Guys did you want to Say Something real quick . Alan krueger wlorks is, of course, a famous economist commented on how yummy the bacon was. They have good stuff, too. You. You also brought up the square hamburger. But, jane. You got the pretzel bun. Jane, have you found a food that bacon does not go with . That you were going to try to do. Im not willing to say out of hand it doesnt go with ice cream. There must be a bacon ice cream. Of course, people put bacon on top with a car pell sauce. Right. Have you found something . Bacon and milk. Bacon and milk would be gross. Im not convinced of that. Bacon and mayo is pretty good. A bacon milk shake . I dont think there is any, anything you can come up with anything. I put it on tuna fish. Thats natural. That has a salty sweet, bacon and broccoli is good. Now youre overdoing the pig. Gene, that was great, thank you. Thank you. She did a thing that showed bacon bowls. They advertise them on tv. Yeah. Thats overdoing it. You can make bowls of bacon. Yeah. We went full circle. You are right. Coming umm. Jim cramer from the new york Stock Exchange, squawk box will be right back. E financial noise financial noise financial noise dad hes our broker. He helps looks after all our money. Kid do you pay him . Dad of course. Kid how much . Dad i dont know exactly. Kid what if youre not happy . Does he have to pay you back . Dad nope. Kid why not . Dad it doesnt work that way. Kid why not . Vo are you asking enough questions about the way your wealth is managed . Wealth management at Charles Schwab lets get down to the nokz Stock Exchange where jim cramer joins us now. Jimmy, you know, we had a long history together. Earlier, we talked about twin mark and came up with the fugitive. Remember that stuff . Well, that was before it was a tough drug. The only if they switch, obviously, the data made it happen. I expect them to raise numbers, and it turns out it was a bust, so mcgregor, used this for a long time, strong sell, reincooperating in dublin, who knows. Could do an inversion. When you work we could be married. That was a tough set of data, and, you know what . Seems like richard was nuts in that chicago hilton, but he had the right data. I dont want to embarrass the judge, but he asked me, jim, whether the fugitive movie was based on a tv series or something, and really . Production you know 1 00 eye . That is not about swiss alarm clocks, but the eighth air force. And a one arm guy. The bad guy. Maybe in the finale. He found him on a chicago subway. Hey, jim, happy birthday to your pop. Oh, thank you, pop is 92 dead, thank you so much. Good genes, good genes. Thank you so much. The Container Store the retail funk, the funk that exists at the Container Store but not other stores . This company came public and disapointed since. Its kind of they are still telling a story about opening store store, but this is the disappointment i wish they said was negative, but they stuck by it. Conference call. Did he said it was a consumer or specific to the store or consumer . Broad retail funk, thought it was the weather, but its the customer. Blame the customer thing has never been a really great thing. Customer loves the bay don customer loves that pretzel role thing. The numbers just went down furiously when they took it off. Which was one of the finest things ive eaten. Thats right. Darn good. The nation turned vegan after they took that off. No, its retail funk. First three go down smoothly of these things. Didnt they . Our wendys is nice, john. I dont know if you went to the remodel its beautiful. I was going to mention that. Watch world cup there. Those machines where you get a caffeine free diet cherry that mill la coke and it comes out. Heaven, man, just heaven. I love it. We were the first customers when it reopened. Not kidding. Thanks. This is you, isnt it . Oh, you go ahead. We may play some. What investors expect from the fed minutes and the Economic Outlook for the remainder of the year, and on squawk on the street former governor of new mexico and pot businessman gary johnson hon to discuss his latest endeavor. Squawks comes right back. Need. So prepare your car for any road trip by taking it to an expert ford technician. Because no matter your destination good maintenance helps you save at the pump. Get our multipoint inspection with a Synthetic Blend Oil change, tire rotation, Brake Inspection and more for 29. 95 or less. Get a complete vehicle checkup only at your ford dealer. Just take a closer look. It works how you want to work. With a Fidelity Investment professional. Or managing your investments on your own. Helping you find new ways to plan for retirement. And save on taxes where you can. So you can invest in the life that you want today. Tap into the full power of your fidelity greenline. Call or come in today for a free oneonone review. Lets get back now, more with alan, new jersey guy, final thoughts. We have a minute and a half. Do you foresee anything coming fiscally from the congress in the next remainder of the president s term . What would you like . Of course, it depends on midterm elections. The economy, as we see, is doing better than people expected, probably a few years ago, and so, i mean, do we need to do anything, or im not talking about Corporate Tax reform. Do we need stimulus, infrastructure . Do we need raising minimum wage, in your view, thats what we should be doing now . I think Infrastructure Investment takes a lot of sense right now putting construction workers to work and help the economy in the long run. The demand is missing that . Missing there. Government should step up . I think Immigration Reform, tremendous missed opportunity. Doesnt seem like its going to happen in the near term. Thats unfortunate for the u. S. What would that do to jump start the economy . How would that work . In a number of republics. Well face a labor shortage. Look at the demographics, and well be a labor short economy. We are facing demand constraints, and just bringing more people, consume more goods, need high school workers, comprehensive Immigration Reform taking people out of the shadows help them pay more taxes. Its a total nobrainer looking at this. Consumer services, too, thats for sure. Right. Makes you wonder. Thats always the question, i guess. Well, the Congressional Budget Office concluded it creates more jobs, and we have to do more to help the middle class. Minimum wage is part of that. Thank you. Enjoy your burger. Thank you for joining us, and squawk on the street is next. Good wednesday morning, im Carl Quintanilla with look who is back, jim cramer, good to you back, jim. David faber at the new york Stock Exchange. Good morning to have jim back as alcoa unofficially starts earnings season. Pun iring action in the momentum names, we will see fed minutes this afternoon, get a sense of what yellen and Company Think on inflation, europe is mixed and

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