Transcripts For CNBC Squawk Box 20160701

Yesterday the s p turned positive for the month of june in the last minute of trading. Check it out, the s p sectors are positive year to date. If you take a look at all of them, most of them are positive. The tell kom leading the way. The worst part is the financials. Take a look at the treasury. Still sitting there. Yesterday we saw it at 11. 5. Today 1. 4. People are looking at this as a safe haven. Tell you whats happening overnight in asia. While some of you have been sleeping, things do look up there. Margely up. I dont want to get too excited about it. Lets swing over to European Equity futures. These are actually happening live as we speak. Dax, cac, ftse 100 up. Again. Marginal picture. Italy margely down. Currencies real quick. Im curious, okay. No, i know. Just stable. Im thinking when do you plan the trip . I think a trip should be in order . He had gotten from hilton saying 30 off sell there. Already sending off ems. 30 trips to london simply because of the devaluation factor. Offsetting concerns. Finally for those of you who are taking a threeday weekend and plan on filling up or buying a barrel at a time. Crude 48. 18 right now. There was a time i was selling barrels and buying cattle. Remember. There was also a time you were considering barrels. And storing them. Were right in the middle. Youre going to stay. Youre going to stay close to home. Im staying home. Yes. Then real quick on this first day of the new quarter, its the economical der. Today is the economical d. Auto sales reported throughout the morning. In london today to speak about u. S. Economy. Do you feel bad for the financials when you were talking about that . The banks . Never going to happen. Never going to raise rates. Never be able to do what theyre supposed to do. I felt bad in the last week. It was time. Remember, its a life meeting in june. It is, its live in july. Dead, dead, june, dead, july, dead. September dead. A lot of people wanted to see. Dead, dead, dead, dead. Even the people who wanted to seal them raise a long time ago think they missed their window. Those poor guys trying to you know, you see the german, its getting more negative, the tenure. What is it today. I dont know. I looked at japan and its still not guil not as bad as japan. Nice segue then to a guy who has to say its dead, i guess. Well see what he says at 10 a. M. Eastern time. Cnbc exclusive where i assume hes just going to have to say take the summer off. I think he would have done it a couple of years ago. He would have. Wouldnt have been a good idea. Among our top corporate stories in corporate news. U. S. Safety regulators opening an investigation into tesla model. A driver was killed using the auto pilot mode. The crash occurred in Francisco Lindor florida. Neither the driver nor the auto pilot system noticed the white side of the truck against the bright sky so nobody applied the brakes. The company says this is the first known fatality in which the auto pilot feature was activated. You think that this is earth shattering. You get google with the auto driving, you get tesla. Brings up two problems. First of all the problems with the technology being able to actually see hazard that are in the road, second of all, there are some indications that the passenger had a movie playing in the Center Console. This stuff is not supposed to be self driving without the passengers playing attention, but a lot of drives dont use this auto drive correctly. Its still a future. They say theres an informed consent saying you neck ni ing people arent supposed to be texting in cars either. I told you on my long trip, i used Cruise Control. My hip pointer was bothering me. You get stiff and there are times where you kind of lulled and just like, holy cow. Slow down. Thats not steering, but i can just imagine if im like this and your accelerating and youre moving around youre not sure its going to turn here comes a truck am i going to turn. Its going to be disconcerting. I hope i can take over from siri. The warning is youre not supposed to be taking your hands off the wheel at all. Its a transition problem from now until the time when you actually theres going to be a time when they dont want you to touch it. Yes, but right now the technology is not good enough and in is the example. Regulation. There you go. There are a lot of these cars driving on the roads. People dont Pay Attention to that fact. This is going to bring them down. A lot of them have just come out with features and there hasnt been a a lot of discussion on it. It is different and people are treating it different. You need to get a regular driving car before you can weigh in on this stuff. He drives. Zip cars. Were in driving school. Blake. Yes. Shes already there. Yes, and when you go in these cars lasted everywhere, student driver, everybody going by cuts them off and theyre just so mean to the people. Youre rethinking the way you drive now arent you as a result. It wouldnt have been me doing that. My 16yearold cousin got her license yesterday. In ohio. Its 17 here. Darn good law. Apple is reportedly in early talks to buy title. If tim co this is oined by jaz the rapper. Both companies are declining comment. Apple music has 15 million paid subscribers while tidal had 3 million. Gave artists and bands small stakes in it. Nike has named tim cook as the lead independent director on the board. Nike founder phil niegtd retires. Part of the plan mark parker is taking on the added title of chairman. We look forward though tho to ever year. Its the fairwork Safety Commission on the National Mall in washington. The demo warns consumers not to be victims of fireworks mishaps. In eaches scenarios that simulate real life injuries. On average of 230 people go to the emergency room every day surrounding the fourth of july holiday. You can find better videos on youtube. And even on twitter, my favorite handle now is the darwin awards. Check that out. No evolution. Hey, watch me. Right and if someone died right in your family right after saying hey, watch this. You know youre something. In the meantime, lets get over to london. Were going to talk about july 4 and Independence Day. The race heating up if the next prime minster of the uk. Wilfred frostoins us. Good morning. Yes, for all of the puns on words weve had around brexit over the last couple of weeks, this is my favorite. On the front page of the sun toot. Brex cuted with a big picture of Boris Johnson saying gove nights boris and his career is wrecked. For a red top tabloid it says fall out pages 211 showing the level of coverage this political battle is getting here. I also want to highlight the front page of the daily mail. This is a leave paper. Its a big conservative paper and it is backing theresa may for the leadership. She is now the overwhelming favorite. Seen as a safe pair of hands. All of the candidates, stefphen crabb seize as the outsider. Gove the leave person on the twoperson ballot with may. Almost certainly going to be on the ballot herself. She has been tough on immigration in the past and that was seen as having a good chance to win it. I just want to show you the ftse 100 because we did hit a tenmonth high yesterday. This of course in part because its International Heavy and weve seen the pound fall sharply so exporting names benefit, but this market the ftse 100 much like the u. S. Markets seeming to rally a significant amount since the initial falls after brexit. Some people suggesting thats because investors around the world are now thinking a brexit might not happen. We spoke yesterday how theresa may says brexit means brexit. Gove and earlier i spoke to tina, the chief political strategist at city group and asked her about that issue. Have markets started to rally too much and do they expect brexit wont happen and is that possibly a mistake. Thats very important. Its a very important disconnect with markets. We just went through the datd ta and the rally and how things recovered. A lot of investors think brexit wont happen. Its true its a process and not an event, but theresa may has been very clear, no second referendum and she will trigger article 50. Of course the rally we have seen all sorts of different aspects highlighted. Brexit as an issue rumbles on, guys. All right. Wilfred. Very frustrating for me, guys, because remember i said were going to test the counter factual. We got back 90 nothing happened, but now we may not have tested the counter factual because they may not do it. It may not be we looked into the abyss. It might not happen. The people who say it might not ever happen is the people who say its never going to ever happen. Theres no way to test a counter factual. Still clinging to the viewpoint they had. Cant let it go. I need a vacation. You reminds me of someone else when you talk. I need a vacation. You just got back. It wasnt long enough. It was a day. Its not a vacation. I needed a self driving car. Anyway, lets talk about whats ahead in in the seconds half for the market. Joining us now, eric. I would go with newtsen. He is head of Investment Strategy at proshare. Both of you gentleman, and eric, ill ask you first, was the initial whatever it was, whatever we lost, 900 points, was that the wrong move or is the snap back the wrong move . Whats the right move . Our take was that initial reaction was overdone. There was certainly going to be selling pressure when that surprise vote came through because you had to price in now this notion of kind of antiglobalization hitting britain, europe, u. S. , et cetera, but our view is brexit was not a lehman moment. It wasnt going to lead to immediately structuraldy stress. There was an overshoot. We think there are opportunities to buy in europe right now. By the time theres an election like this where you see the nationalism resurface, its been percolating and everybody has seen it percolating for a couple of years already. Thats almost like the lagging. When it finally hears the evidence it was stronger than people thought. Globalization is tough on individual economies. Thats right. There is a tail risk this does cascade into something that leads to decline in global trade. Another few dominos have to fall over in that. You already see spain the elect r electorate backed off. Constitutionally she cant they cant call a referendum. Necessarily in this country from a vibrant european economy anyway. So does it really that. What brexit just did is reminded us of two key drivers of the market environment. Number one, very low Interest Rates. Number two, weak Economic Growth. The first part of that, low Interest Rates do support the equity markets. You dont need much earning growth to get a 20 pe. Rates that low. Remember weve been in an earnings recession. We havent had Earnings Growth in four quarters so the companies that have been able to deliver will be fine. Weve seen that in the ftse performance and stocks in the u. S. That have been able to generate Earnings Growth. Do you think domestic equities are a steal right now or at least not as overvalued as they were. Our view is that u. S. Equities are fully valued and as he points out, if you can generate any kind of Earnings Growth, you can justify higher pe. We havent seen Earnings Growth. We want to see manifestation of that Earnings Growth before we put money in the u. S. Stock market. Were around neutral in the u. S. Stocks and waiting for that evidence of Earnings Growth because from here, were not going to rely on pe expansion. Weve been turning around for like 18 months. Weve gone nowhere and people said once we get past brexit, maybe we can go higher. They were assuming brexit wasnt going to happen. Just because its out of the way, i dont think its out of the question to say we do go to new highs even with brexit happening. It is back to the fundamentals. Were very material in earning season. Looks slightly better. The overhang from the Energy Sector is going to be better. The dollar ask is an issue. The companies have delivered consistent Dividend Growth and translate to earning growth. If you take the first 50 companies in the s p 500 that have delivered consistent growth, they generated 2. 4 Earnings Growth and outperformed. I dont know what happened in europe, but does the risk regard at this point favor taking a shot over there now that things have come down . Look, every country wants a devaluation and the uk just got it. If you look at the price to book in ftse 100 is a 35 discount to the u. S. Theres a chance for people who are willing to take volatility. You can almost be selective and look at the strong countries in europe that have been pulling the weight of the countries that arent so strong and if there is some sort of resolution or getting tougher on those countries, you might be able to buy the dax or Something Like that. European strox are trading at 13 times versus 17 times in the u. S. And theyre being backed by a tidal wave of monetary stimulus. They havent seen profit recovery that weve seen in the u. S. Were at secular highs and vnts seenl Profit Growth for the last 12, 18 months. All right. Gentlemen, thank you. Who would have thought its been a week. You fell asleep, now were 60 points. Nothing. Okay. Well, tell me if youre going to wake up and think something about this, coming up richard wolf saying the first days of a Trump Presidency would feel like a brexit. Which wasnt so bad. Well see. Well see. Hes going to join us to explain. Ok team, what if 30,000 people download the new app . Were good. Okay. What if a Million People download the new app . Were good. Five million . Good. We scale on demand. Hybrid infrastructure, boom. Ok. What if 30 Million People download the app . Were not good. Were total heroes. Scale on demand with the Number One Company in cloud infrastructure. Hewlett packard enterprise. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Welcome back everybody. The reaction to the brexit is what the first few days of the presidency of donald trump would look like according to the guardian. A lot of people have drawn parallels and what that might mean for donald trump, that the establishment is wrong, that the polls have been wrong and donald trump might get elected. You take that comparison a bit further. I do. I think theres a chaos that followed from brexit which may have some rebalancinrebalancing instability weve seen there i think foreshadows what donald trump is doing in terms of saying look, im going to blow up is system. Trade, i dont care what the establishment says about Financial Markets. This is the right thing to do. The collapse we saw in currency markets, the shock to the stock market, their parallels to what were going to see here. It was a short lived stock market route though what weve seen as a bounce back, particularly those in the United States and those that weve been watching too. Currency still at a low. What weve seen in the stock market is the bank of england saying were going to come in and support this. Theres a rally on that. What do you think is the most problematic of the plat tomorrows youve heard from donald trump. You look at trade. Blowing up the trade system and saying yourg going to have after the riffs on chinese imports or when hes pushed on that saying it doesnt matter about default because im going to print the money. These are deeply. Thats been donald trump is not the first to say that. Im not talking by default because he didnt say that, but thats a great argument for the left to make, but people have always said that when you have the World Reserve currency that the default is de facto probably out of the question because you can print money. Donald trump is not the first person to say that. Normal people in the past have always said we can print money. Its not a big stretch. Its not a path to sustainability. How are you going to say. Theres checks and balances in a system. Its a great pitch for a president to say ive got my checks and balances over here so doesnt matter what im going to say because im going to renegotiate when it comes to financial crisis. Your point is depression, default on debt. Have you written a hype erp bollic piece of Hillary Clinton. Will every government if shes elected be a personal lust fund. Will every Government Employee be required to have a private email server so no data is ever collected or looked at again. These things are totally equivalent. Those are our choices. You can write hyper bollic pieces. Hes a clinton operative. I let him talk. He can say whatever he wants. Whats your angle . Whats my angle. You want me to compare the two candidates. What is it with trump that youve got hes got more primary votes than any republican in history. So all these youre just c contentious of the voters in this country. If you think Donald Trumps trade policies are supported by the people who come into the studio. Are they better or worse than the democrats. I can answer any of your questions if you give me a little time. Donald trumps position on trade is chamber or commerce or by Financial Markets i dont know youre listening to the people who come into the studio. I love the left loves the chamber of commerce. You can call me whatever you like, but i think if youre talking about sustainable Economic Growth free trade has been a boom to this world. Hillary clinton is against tpp. She used to say it was the gold standard. Ting center of the Democratic Party at this point is more p profree trade. What about donald trump is about free trade . Tell me what his positions are that you think. His negotiating positions and i would have never said globalization is a bad thing until i really started looking at the hollowing out of the middle class. It does concern me to hear youre going to have efrl trade leader built up, but most of the republicans will say look, were going to talk to him. Were going to get through this. They say thats not what he really believes. I think hatch is a great senator. Hes got easier of dealing with executives, governments, foreign governments, but there are a lot of Establishment Republicans who said we can talk sense into this guy. Its going to be fine. They have great meetings with him on capitol hill and he takes to twitter and goes on the stage and back to his old behavior. I dont think theres any track record for donald trump to say im going to moderate my opinions right here. When hes on profrter and when someone else is writing his tweets, its different. A lot of positions are negotiating positions and. So you dont believe him when he says hes going to put a 45 . I dont believe Hillary Clinton when she says were going to move further left. Which one are we talking about. You dont believe when donald trump says hes going to declare on day one and slap a 43 tax. Im worried about actions. So doesnt matter what he says. Doesnt matter what she does . In terms of the Clinton Foundation . Of course it does, but which one are we talking about . I just love this. I havent said a word. You get a guy like christie. You have all these people in their somehow fooled or too stupid to see weve got an insane demagogue here ready to take the country. I havent said one thing about what people do with their experience not what they say. How do you then think about bankruptcy that took place in new jersey and the true people who have been. In atlantic city. No, hold on and the people that were truly hurt by that which were the middle class people who lost their jobs, people who he didnt pay. I mean, there was a lot of people in his world from true experience that were completely damaged. The whole Business Record, look at the whole Business Record and youre left with someone that had a lot of successes and a few failureses in terms of casinos. Its partly the environment in atlantic city. All of those casinos have done well for donald trump. Every casino he participated in underperformed the other casinos. In the private sector, theres a lot of things that go on. I appreciate that. I can understand, but to make actually to enrich yourself using the Public Sector is much i would much rather have someone operating the private sector rather than someone so influenced by their government position. Get back in here. I dont know about a ceo come on this set and say, you know what, im going to plan to grow in one country, but you dont have to medical leave whbelieve because ive got checks and balances. Hes never wanted to default on the debt. Dont worry if theres ever a crisis im going to renegotiate with the bondholders. Thats not what he said. He said the debt we have now is going to be refinanced. A lot of it is going to be retired and refinance at current levels. Nothing gives the bond market more credibility than saying were going to renegotiate these things. No. You can hold to that contention, but i was here for the interview. You werent here for the interview. You know thats not what he said either. Richard, thank you. Thank you for having me. That was fun. Now youre riled and you happen ready for the day. I dont need my coffee anymore. Go over to msnbc and everyone will just nod. If you trug toll remember your password for your password. Theres hope. Looking to eliminate all the problems with passwords. As we head to break, heres a look at s p 500 winners and losers. On the. This just got interesting. Why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help right away for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card welcome back to squawk box this morning. If you struggle to come up with ideas for passwords, youre not alone. Whats the combination . 1, 2, 3, 4, 5. Thats amazing. Ive got the same combination on my luggage. How would you like to get rid of all the passwords on your mobile device. Ive been trying to get that to happen for a long time now. A bio Metrics Company says they can do just that. The creo joins us. Good morning. You take a selfie of yourself. Its the camera thats looking at your eyes. Looking at your face or your fingerprint or you voice. How relative to the security of your thumbprint, how do those compare. Theyre all highly accurate. Heech has advantages. Its about delivering convenience to the consumer. If you want to authenticate with your voice, you can. You can swipe your finger or take a selfie. Which is most secure. Face and voice are most prevalent and fingerprint is right in the running with the three. Ultimately, youre turning mill fingerprint i imagine and my eye and Everything Else into a string of numbers. Exactly. Its a mathematical representation of numbers. So moum numbers are part of that. Well, its really if you look at a self if i its the structure of your face. What about if your face changes . The beauty of it is as you age, your face actually becomes more defined and more accurate. What about when youre pregnant. The technology ultimately this is all going represented digitally in terms of a series of numbers, isnt that stealable as anything else. The bio matt r you cant tak numbers that are encrypted and turn them back into the facial image. What about identical twins. Good question. Im glad you asked. Identical twins would have the same facial structure and if you were an identical twin who wanted to impersonate your twin, you would have to steal their device. That forms a unique key. If i was an identical twin suspicious of that, i would identify with my fingerprint or voice. There are evil twins. Just one more thing. My kids when they do like who are you and they get like almost in distinguishable when you do that program. Im just wondering a selfie is that accurate. Yes. We use the same technology as secure nations borders so the standards is very high. The nations that secure their borders. You have to find one of those first. Oncan you lose your password . Not lose like forget your password, but the idea that once if theres a massive hack attack, isnt this code going to be living somewhere that theyre going to match against . Lets say on targets website and at some point in time i authenticated with my face. They now have my face. Wruns the hackers get the code of my face, they type that in inside. Password certainly can be compromised like that. Bio metrics are stored and cant be. Whats better. The retina the answbsolute gold standard. We use a standard mobile device and within that device we have a microphone you can use for voice and a camera for face or fingerprint sensor. The cameras on phones today arent able to look at retinas. But you would do more than one. You could. Fou far are we from not using passwords at all. Very close. Youll see the Innovative Companies this year roll out major invasions. The business that serves military tear family military families, usaa they already have 2 million plus members authenticating using bio metrics. Do you use any of the other services right now. I have, yes. Do you think thats a good idea. Its one place that has the vault of every password i hone. I would like to get away from passwords so i would prefer not to have any passwords because theyre frustrating, complex and can be compromised. Start with payments, start with banks and whatnot. We started with banks and Payment Companies because they set the bar really high. And, but its haelt care, automotive, its really every industry that has consumer facing systems. How is your it cannology different than what app is apple is using. Were a Software Manufacture company so we would plug apple into our system. We also would use face or voice or other bio metric typings that are being invented around the world today. Really to provide the freedom of choice to consumers. Thank you for coming in. Thank you. Like a quick dna read would be completely. Like a drop of blood. You can get dna from a lot of different places. Do you have two seconds, can i show it . Were on the air. Its tall saall the same aro here. When we get back, a lot of stocks. The furries are back in town. People dressed in animal suits are bringing to the streets of pittsburgh. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. This clean was like pow. Everything well . It felt like i had just gone to the dentist. My teeth are glowing. They are so white. 6x cleaning , 6x whiteninga in the certain spots that i get very sensitive. I really notice a difference. And at two weeks superior sensitivity relief to sensodyne i actually really like the two steps step 1 cleans and relieves sensitivity, step 2 whitens. Its the whole package. No ones done this. Crest healthy, beautiful smiles for life. Here at the Td Ameritrade they work all the time. Sup jj, working hard . Working 24 7 on mobile trader, rated 1 trading app on the app store. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. Welcome back, everybody. The memory chip making saying it would lower costs including cutting jobs. Weighed on the firm and stock is down by over 8 this morning. A california judge ordering to pay 3 billion in damage. Server chips. Oracle is that titanium . I think its enterprises. There may be letters missing everywhere. I think it is ie tan yum. Is it enterprises or enterprise. I think its enterprise. They just have one. Thats a big enterprise. Oracle stopped developing software for hp servers which hp says was a breach of contract. Hertz announcing it has raised billions of dollars. The new company will begin trading today. Hertz also unveiling a nearly 400 million buy back plan. Happening now in pittsburgh, fill us in on this. The streets are tupaced with socalled furries. This is the annual antro con convention. Around 1500 furries are expected to take part this this yearss event. This is the conventions 11 year. Ive heard about this strange subculture of porn that has something to do with it and you actually know about this . Howard stern used to send john the intern to these things and have them interview these people and ask hem all kinds of questions. Let me ask you, how much into the details can we actually get here. I said the extent im willing to say. To people dressed instead stuffed animal outfits do things to other people. Youve tapped the extent of my knowledge on it. I know its a weird subculture so to speak. Youre clever. Are you uncomfortable. Are they part of the furry subculture that you know. I get my knowledge from howard stern. Hes on the same time we are. Coming up when we come back, were going to talk about furries, and also sorts of other related items. Also were going to talk stock picks in energy, health care and david is goicat kats is going t , to visit this company that makes smart phones, used by this Vice President , this little kid, oops, and this obstetrician, who works across the street from this man, who creates software. They all have insurance crafted personally for them. Not just coverage, craftsmanship. Not just insured. Chubb insured. Time now to see whats working for investors in the postbrexit world. Joining us, david katz, Matrix Asset Advisors chief investment officer. Well get to your picks in a second. But looking at some of the stuff that you know, your thoughts, you dont want to chase utilities and you dont want to chase winners. But post brexit, it looks like the world is going back to what weve known for the past two, three years and that is rates arent going up any time soon. Utilities, i can see theyre up 20 or whatever. I can still see them being a place to go. You think it is time to sell the winners and switch to what . Highest conviction calls that we have is dont traffic in utilities now. Youre right, conceptually it is going to be more difficult economy, more uncertainty, youd go to utilities. But utilities on a valuation basis, they is this your opinion before brexit . As utilities have gotten higher weve been less and less interested in them. Weve told them as years progress. At 20 times earnings it will be difficult to make money. I would have thought that you could sell utilities and buy financials but now i dont know if that trade makes sense after brexit because rates will stay low. There is a lot of shortterm uncertainty. There is a lot of uncertainty over the next three to six months but theyre selling at ten times earnings. If you have a six or 12month time horizon we think youll make a lot more money in financials than in the utilities. The market right now is about fairly valued. The one place we could see 30 to 40 higher over the next two years are financials. Take a longer perspective and we need to start buying them here. You going to disagree with him . No. When you make that expression youre ready to say something. You can ask your question. You like political so you going to ask him about which individual names that he likes . Yeah. Arent you a platinum portfolio guy, too . But this is not a platinum portfolio interview but give me some names. He likes comcast. You should like comcast. Did you notice that . Did you see comcast yesterday hit an alltime high . Up 1. 25 . It is a wonderful okay and an okay valuation. We think comcast is fine. Okay was not the word we were looking for in this case. We generally like to buy things less expensively. What if people dont realize all of the different working parts its a good value. I think you are looking for a different word. In terms of financials. Safe port in a global storm. I was trying to figure out what part of comcast operations would be hurt by global flux. Have you figured it out . Could be International Movie sales. To the extent theres content thats syndicated or sold abroad. But in general, you think of it as a domestic yes. But we digress. We like wells fargo, we like schwab. Oil has worked this year shockingly after a horrible first quarter. Oil is on a tear. We think Oil Prices Continue to drift up as the year progresses. Industrials had a great start to the year, gave a lot of it back in the last quarter. We think theyre poised to do better. T. E. Connectivities, ten, 11 times earnings out there. I noted youre cautiously optimistic. Thats banned. Can you go optimistically conscious . Cant you just be difference . We think the market is up 9 to 11 on the year with dividends but we think there is going to be tremendous volatility along the way. Buy the dips. Buy things like last week where the markets held off and dont chase the rallies. David, thank you. What was weird, we stayed overn overnight from where trump gave that speech on tuesday. You went from hillary and Elizabeth Warren on the way back, he was giving a speech in monesset. When we come back, jim pa paulsen is up next. Squawk is right back. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Welcome to the second half. Stocks finishing q2 with a bang but starting the Third Quarter under a little pressure. But it is early. Well hear from one cop strategist on why he thinks the postbrexit crisis is wimpy. Tesla might be pumping the brakes on auto pilot. After a fatal crash, a new investigation into the safety of the automakers autonomous driving system. It is a sandwich day on squawk. Youve never heard of sandwich day . Why, it is the most wonderful day of all. The president of jersey mikes is here. The company went from crippling debt to be the Fastest Growing restaurant chain in the country. Wheres my sandwich were going to take a taste test as the second hour of squawk box begins right now. Everybodys got a hungry heart everybodys got a hungry heart live from the beating heart of business, new york city. This is squawk box. Welcome back to scott wals box, everybody. After a couple of strong days for the markets, youre seeing red arrows in the futures but these losses have been pared as weve gone through the morning. Early trading in europe, things are looking fairly strong for most of these markets. You are looking at green arrows for most of them. Dax is up by a third percentage point. Ftse is up by. 5 . The italian ftse mib is down but only. 5 . Pound is just under 1. 3281. In the headlines this morning, uk justice secretary michael gove making his pitch to be the next prime minister. Says he didnt want to run at first but felt former london mayor and Brexit Movement leader Boris Johnson was not the right person to lead the country. Watching the way in played out, i dont trust this guy. Any anyway, he is promising financial reforms in the end to remove citizens into the uk. They were like really close. He stabs him in the back the day before that its going there are all kinds of concerns that he wasnt going to be steady, he wasnt going to be able to organize on different things. It was definitely a coup. This was as you mentioned, he definitely stabbed him in the back in the end. Right. I dont know. We cant insert ourselves by the way, did you know house of cards was originally a British Television show . Theyre good at this stuff. We need to go back a little further. But they are good at this stuff. I heard somebody commenting house of cards they think is much more realistic in britain which the whole west wing was which they thought was too idealistic and not true to life. That was an nbc show though, wasnt it . U. S. Automakers are going to release their june auto sales this morning. Ford and Fiat Chrysler expected to post increases of better than 6 . Gm is seen reporting a drop of a little more than 1 . New Jersey Gasoline prices will remain among the cheapest in the u. S. For now. The state senate tabled a bill that would have hiked new jerseys gasoline tax which is now the secondlowest in the nation by 23 cents a gallon. Governor Chris Christie wants to raise the tax while lowering the states sales tax by 1 . Well talk about gas taxes with americans for tax reforms Grover Norquist and joe bidens former Economic Advisor Jared Bernstein at 8 30 a. M. Eastern. But if having someone pump your gas and the secondlowest taxes in the country, if that doesnt induce you to move out to the garden state, i dont know whats going to. You actually could have land. Think of land where you have something that you actually the grass is yours instead of sometimes when youre driving down the turnpike, theres that wafting sort of you know what . You know what that is . You see this big city with like yes. Yes. Like a zillion people . It needs infrastructure. All right . Its there i love new jersey. New jersey is the most populous state. It is a beautiful state. It is. When you get up here and leave in the morning that special smell that you have here in new york city on certain days, is that something that appeals to you a lot . You mean when the doorman is holding the roses . You and j. Lo. Markets closing out the first half of the year. Dom chu joins us now. I believe he is in new jersey, the beautiful garden state, looking at winners and losers. Im laughing at the conversation because i had the same preconceived notions about new jersey, the armpit of america, before i started working in new jersey. I also should say that i married a jersey girl so shes kind of changed my view a lot about the garden state. But guys, lets talk about this reset for the markets here. We know as we approach the second half of the year the markets may be having at least a little bit of shortterm momentum for the up side despite the fact that futures may be pointing to some slight, slight losses to start today. We can see the do you industrials up 3 . S p up 2. 5 . Nasdaq the big loser, down 3 . But remember it took a 5 , threeday rally in the s p just over the course of this week to get us back to the positive territory. Lets look at some winners and losers overall in terms of sectors. First half best performing sectors. Telecom utilities, best performing by far. Dividend payers. The worst sectors out there, yes, maybe some of the more cyclical ones. Financials have been a huge downside story about down by 4 overall for the first half of the year. Tech, health care, consumer discretionary. Those are four of the biggest sectors out there. As for individual stocks, these are the momentum plays. The dow, verizon, Telecom Stock up big. Goldman sachs, financial, down big. S p 500. Newmon mining, endopharma. Endothe worst performer in the nasdaq. But a big trade ive been keying on all year long so far, gold trade. Gold itself up 25 . Miners as a whole, the etf that tracks them, up 117 in that time, guys. Thank you from the garden state. Youre welcome from the garden state. That was a movie, too, by the way. Great album, too. You said armpit, dom. He said he had preconceived notions. But just saying it, even though you dont think that anymore, is just not helpful. Its not. Its not. Armpit . My inlaws still live in monmouth county. I love playing golf here. I love the beaches here. Its nice here. I do. Armpit . Why dont you just go south . Just say youre right. I am going to refrain from using that word from now on even though its been dispelled and i no longer consider it that way. Drive here every day from the constitution state and still i love both places. I love where i live in connecticut and i love where i work in new jersey, guys. Geez, now i get it. Listen, our gas taxes arent as low as they are here. Theyre considerably higher. However, our property taxes are a little bit lower than where they are in new jersey. So it is all give and take. No one wants to live okay. Connecticut. All right. Hes done with you now, dom. The dow up nearly 500 points over the last two trading is exs recovering nearly 80 of the postbrexit losses. Could this signify the Brexit Impact was nothing more than a wimpy crisis . Our next guest thinks so. Jim paulsen, i have to agree with you on the immediate aftermath of whats happened. This was something that people got very panicked about for a very short period of time, then its bounced back. Could there be longer term implications . There certainly could, becky. I dont mean to i think the brexit is a very severe political calamity, no doubt of that. There will be probably more volatility down the road. But as crises go, the reaction of mr. Market here to this one has been pretty womenky. N wimpy. It is the initial reaction even. I know the s p fell 6 from right before the thursday vote to its low, but most of that was a reversal of what it did earlier that week. It was, it at worst, maybe down 3 from a week ago friday. Bond yields havent moved down very much. Bond corporate junk spreads have barely widened at all from are with they were a week leading up to the vote. The dollar is the big thing. The dxy trade weighted dollar index is maybe, maybe 2 higher than it was a week ago leading up to the vote. Against emerging currencies, the dollars virtually unchanged. Commodity prices have barely budged. Oils barely budged. I just think if you look back at past crises, whether its 9 11 or the russian debacle or 87 crisis, much bigger market reaction. And maybe you can listen to the public rhetoric on this or you can listen to the message of mr. Market and mr. Market is saying that although it is a severe political crisis, it might not be much of an economic or Financial One and maybe it is better to listen to that message and to invest accordingly. Jim, heres the question. I agree with you completely that this is the wimpiest of all wimpy crises if this is a crisis at all. The question as a political crisis and how you measure it and how the markets should measure it, the next domino, if there is one, isnt what necessarily happens to the economy in the uk per se. Thats probably already priced in. Its whether you think scotland goes. Its whether you think the rest of europe starts to break up and whether you can even conseeblce pli conceivebly or whether mr. Market can price that. Its interesting, before the vote the market was suggesting that it was going to be remain vote. And everyone kind of went with that message. Then as soon as the vote went to leave, everyone thought the market was wrong. Well, maybe it turns out the market wasnt wrong. They were wrong about the vote, andrew, but maybe they werent wrong about the impact of brexit. In other words, maybe brexit wont even happen yet. I think thats possible. Four million signatures on a petition that might even grow by the Time Parliament votes. Maybe they wont. But even if it does, at the end of the day it will take a while to do and then at the end of the day they might renegotiate essentially the same relationship with the European Union that theyve had when they were in the union. How much really changes if theyre still trading with europe, if theres still some labor movement. I dont really think that it is nearly as big of an economic and Financial Market issue, even if others start to leave. Theyre still going to be there, theyre still going to be producing. I understand now. I have a better feel where youre coming from now. I know you well. As a globalist and really as a statist, a central planner type, i thought that you would be very unsettled and unhappy with this sort of taking back independence and pro private sector capitalism. But now i see what youre saying. Maybe youre one of those maybe it doesnt happen anyway. Maybe it becomes a netherlands situation. Cant you just and 4 Million People 50 million voted, paulsen. You think 4 Million People whining is going to matter . Lets say we brexit. I guess my point about that is, joe, at the end of the day im not sure the final result is going to be much different. So why should the market really you dont think we need a global system and a statist Central Planning system. Thats good. Youre making progress. Youre from minnesota, the land of humphrey and mondale. Well, i just think the most important thing to watch, Joe Al Franken . Youre in la la land. Ive been tempered by the fact that our governor used to wear a boa and nothing really bad happened out of that period. We got through. So whether trump wins or whether the eurozone blows apart, im not sure those events are nearly as big economically and financially as people make them out to be. Youre pushing franken for veep . Huh . Well, im just i think the political season is great for entertainment value here, as long as no party gets tripower. Im not going to worry too much because i dont think they can do much of what they say they want to do anyway. Im not going to worry too much about it. I keep telling trump, hes got to think of jim. Jim, quickly, weve seen the market bounce back. Would you buy stocks here . I know you think were headed eventually to 2,200 but you think well see more chaos later in the year . I do. What i would do, becbecky, is w at selling off safe havens. Let them have them. Id buy some stuff thats more cyclical and maybe related. The key thing is the dollar. If the dollar doesnt move much, i think earnings momentum is re returning and we got no Interest Rate break on the market. I think were going higher. Jim, thanks. When we come back, clash of the retail titans. Walmart up nearly 20 pr over t past year. How the big box retailer is taking on ecommerce powerhouse amazon next when we return. This car . Came courtesy of james and patricia thompson. This tv . Margaret and tom lee. The championship game ball . That was sebastian diaz. Good guy. And all i had to do was ask for their money and pretend i was investing it. Their life savings is now my lifestyle. Female announcer dont let someone else live the life youre saving for. Find out if youre dealing with a registered investment professional at investor. Gov. Its a great first step toward protecting your money. Before you invest, investor. Gov. Walmart shares are up over 19 year to date. Looking at a oneyear chart of the dow component, the stock managed to make up most of the loss. Joining us to talk about the recovery, jay giffen. A year ago everybody thought walmart was in the doghouse, it was a disaster. Remember he came on the show . Everybody was supposed to be and now, whats happened . Is explain . Well, i will say the new Management Team has done a fabulous job of what i call retailing 101. Instocks are better. The stores cleaner. Product assortments gotten better. Pricings gotten better. Remember when everybody was unhappy about all the money they were spending . You remember that . Yes. This is not that long ago. I remember when we said, wow, will they ever be able to afford raising the wages of everybody in america, not just their own people . Which they did . I remember also saying on air here, you know, whos the biggest beneficiary of people who are at the minimum wage making a lot more money . Walma walmart. And we talked about that. I do think thats worked in their favor. But i think the main thing thats worked in their favor is they are running the business much better than they did. Theyre doing a much better job in grocery and in the consumer part of the business and the shores are more shopable than ive seen them in the last 20 years. Their customer cares about that. What do they care the most about . Price and the pricings better at walmart than it was. Thats because they are putting pressure on their suppliers, too. Thats an option. Where else would they get the ability to make the price better . Heres the question for you. It is working in store. Right . Physical deal is working. Absolutely. Is it working online . It is going to have to work online because they have to be better online than they are today. The most disappointing things to me with walmart in their last set of releases was they only grew online 7 . Target was double digits. We were double digits at amazon. Walmart was 7 . That has to change. They have to get better online. But they just introduced their new Shopping Pass changes. Theyre half the price of prime. That will help. Theyre also investing a fortune, as we all know, in making their online better. I think that, over time, they will just continue to get better online. On the digital piece, do they have the right time t team . I think they have the right team but i guess i cant tell you that until it starts working. Im glad we looked at the longer term chart. This was a 90 stock that wasnt quite in half but it went from 90 to 56. At a slow, sickening decline. Now were back to 70something. But the metrics, earnings per share, Everything Else isnt necessarily the stock has recovered but well see whether all these initiatives are worth the money. Thats what people were worried about. Target also raised the minimum wage. Target has not responded to suddenly their results have n nnot turned around. Im not a target fan. Target has done a good job of retailing 101 just like walmart but target has some strategic issues. They have a big problem with grocery because they are competing with the cheapest, biggest gro biggest grocer in it the world called walmart. If youre not trader joes or wegmans and theyre never going to be one of those you think walmart gets the new highs . Back above 90 . You have to remember, they are really successful in the grocery business and they are growing that. They will go to a new high soon . I think they will and i think they will win online relatively speaking against the group. Theyre zbgoing to win onlin. Is am son in that group . Nobodys going to outamazon amazon but somebodys got to be second online. Macys is doing a decent job online. Walmart is an enormous player online not as a percentage of their business but as player online. Everybody is getting the scale. The question is can they run the distribution. Walmart is Getting Better at all of those. Everybody is a distant second to amazon when it comes to online. And they will always be unless something changes. Amazon has a zero cost capital and it makes a big difference. Nobody else has got that opportunity. That kind of pass from wall street. Its a pass. Happy july 4th, sir. Happy july 4th. When we return, batter up. Disney reportedly inking a new video deal worth 3. 5 billion. That story next. Squawk box be right back. Time now for today he a aflak trivia question when we continue. Amazing sleep stays with you all day and all night. Sleep number beds with Sleepiq Technology give you the knowledge to adjust for the best sleep ever. Dont miss the lowest prices of the season going on now, with our bestbuy rated c2 Queen Mattress now only 699. 99. Know better sleep. Only at a sleep number store. What is the most Expensive Hotel in the world . The answer Hotel President wilson in switzerland. Welcome back to squawk box this morning. Disney reportedly in talks to buy a stake in Major League Baseballs advanced media valuing that company at 3. 5 billion. It manages and develops mlb Digital Products. Lets users watch tv broadcasts of outofmarket games. Mlb advance media also works with hbo and espn to create their streaming apps. Well see what happens with that deal. Thats nice. Im glad. Why . Because baseball is a local phenomenon. It gets overshadowed by football. There are a lot of games. Its hard to follow. But it is great. Sitting through the entire nine, there is a lot of drama. When we come back, a red flag for the golden years. A new study shows that americans arent saving enough for retirement and there is a projected Social Security funding shortfall as well. Raises a lot of questions about whether were on the brink of a crisis. Well have that debate next. Youve wished upon it all year, and now its finally here. The mercedesbenz summer event is back, with incredible offers on the mercedesbenz youve always longed for. But hurry, these shooting stars fly by fast. Lease the gle350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Welcome back, everybody. Three different stories involving apple are among stories that are front and center this morning. Apples in talks to buy tidal, the Company Owned by jayz. A Spokesman Says the two sides have not held talks. And the chief executive officer tim cook has been named lead independent director at nike after the retirement of the nike founder phil knight as chairman and Ceo Mark Parker assuming that role. Cook has served on the athletic footwear makers board since 20 2005. The brexit vote may delay the eus ruling regarding apples tax arrangement in ireland. Certain favorable tax deals with corporations are against eu competition rules. A ruling in the apple case had been expected as early as this month. In other news back here in the United States, attorney general Loretta Lynch plans to announce that she will not override decisions made by prosecutors in the investigation into Hillary Clintons private email server. According to the New York Times, lynch will still be involved in discussions involving that case and will review the findings but says she wont stand in the way of any decision the fbi makes. It was New York Times great publication. And on twitter which i also dont like. It was the combination saw that on the way in. You like the news. You didnt like where it was coming from. No. Saw it on twitter and got it from the New York Times. But my jaw dropped. I read it a couple of times. Yesterday people wanted lynch to appoint a special prosecutor right after the or to at least recuse herself and let her number two, a longtime prosecutor, decide. Now shes saying whatever comey says ill go with, which is i mean then you got to decide no one thinks it is going to happen but they thought maybe there might be like a saturday night massacre. Someone might resign because nothings followed through on. Now i dont know what to think. Whats the backup plan . Biden . What are you going to do . Have you thought this through . Im going to go with i dont think anythings going to happen and she wouldnt have come out and said this unless she knew there is a lot of pressure given the appearance of impropriety with bill clinton the airplane. Yes. This is something she probably felt like she had to respond to. Primarily social. Except for all that other stuff. It is the appearance of impropriety. Then again, i do understand, come on you can imagine. Whos going to say hes a democrat. Who is going to say no to a former president. Should have met him out on the tarmac where everybody could listen, see what was going on. Lets talk hedge funds this morning. Greenlight is up. 3 year to date. Jana partners down 5. 8 for the first half. Many hedge funds are expected to post losses for june following the post brexit Global Market rout. U. S. Safety regulators are opening an investigation in the 25,000 tesla model s cars after a driver was killed using the auto pilot mode. Phil lebeau joins us with the details. Phil, there are a lot of details so ill let you just get right into it. We knew this day was eventually going to come along, whether with teslas auto pilot system or some other semiautonomous or fully Autonomous Vehicle there would be a fatality and when that happened you would immediately have regulators saying, okay, is the system or did this system work as it is supposed to. Here are the details regarding this investigation and the accident that it is looking into. It happened may 7th in florida. A 40yearold driver. His model s was heading down the highway with a tractortrailer turning left from a per di perpendicular road crashed. Tesla said neither auto pilot nor the driver noticed the white side of the tractortrailer against a brightly lit sky so the brake was not applied. We should point out that tesla warns drivers you need to stay alert even when youre using auto pilot. You need to grab the wheel every so often. It alerts you to grab the wheel. Ive driven this system several times now. It is not one of those where you set it and you go. Although some people are saying you get a full sense of security once this is activated and youre on the highway over long stretches. By the way, we should point out that tesla tracks the data from all of its vehicles so you always hear us talk about whats the data recorder in the vehicle going to show for those final moments right before an accident takes place . Well, tesla has it not only for this accident thats what regulators will be looking at but tesla can also show regulators this is how the system has function over 130 million miles where its been activated. As you look at shares of tesla, this will really come down to what does the data show . Is this one of those unusual circumstances where because of the situation with the truck turning, the lighting, system cameras on the car not recognizing the truck. Is it a strange circumstance where it didnt work or is there a bug in the system . Thats what regulators will look at. Tesla believes this is a same safe system in development. Thats the key, guys. Its in development. Even if this is a random situation and a crazy oneoff, it is not going to make people feel any better about what theyre hearing today. The idea that the cameras didnt see it potentially because its a like the radar didnt get it because it is up high, cameras didnt see it because of the white light reflecting. I get it that might be a really random set of facts to happen but it is not going to make drivers feel any safer. I understand what youre saying, becky. You are dealing with the development of this technology. Let me give you an example. These systems have a real hard time in snow, in snowy conditions because of the brightness of the snow and delineating other objects on the road, the white traffic line in the middle of the road. Thats one of the things that theyre working to develop. Besides snow and sunshine, its good . Well, becky, wait. Im not going to sit here and debate the specifics of this accident. We dont know all the details of this accident. Thats what the regulators have to look at. Thats teslas own take on the situation. So the 130 million other miles driven by these vehicles in auto pilot mode by the way, is it 130 million miles on auto pilot mode . When auto pilots been engaged. Have other accidents not fatal accidents but other accidents taken place we dont know about . Yes. Thats part of the debate. You can find them if you go on youtube there are tesla owners who said, look, i was driving down the highway, there was a van parked to the side. Auto pilot was with a engaged, it didnt see him there and then we ran into it. It wasnt a major accident but an accident nonetheless. What tesla has said with some of those incidents, if you will, when theyve been on youtube is, look, the driver was not engaged as the driver should have been or the driver pumped the brakes, deactivating the system giving a false sense of how it was supposed to work and so thats part of what the analysis will be looking at as well. Im sure people are using this the wrong way. Im sure they feel like this is auto drive instead of a Cruise Control type of situation where you should be paying attention. I am sure thats part of the problem in the whole thing. Absolutely. Was he watching a movie . Was the rumor that he was watching a movie . I dont know where that came from about there was a movie playing in the Center Console or something. I dont know where that came from. I heard people say he wasnt paying attention. How do you know . The driver is dead. The drivers dead. So its not like there is an interview afterwards. If theres no skid marks or any way that anybody tried to slow down, that tells you yeah, becky. And these are all the things investigators will look at. That data box, thats why it is so critical. It is so important because it shows the final tenths of a second leading up to the collision. What happened . Did he pump the brakes . Did he move the Steering Wheel at all . Those are all the details that still need to come out. Great. Phil, thank you. Obviously this is something thats captured all of our attention because we think it is the wafb of tve of the future be are all kinds of human and technology issues. It is a messy transition. We will see more of this over the next 5 to 10 years as we transition toward fully autonomous drive vehicles. Thank you. If we really even want that. New report out today raising the red flag on Retirement Savings. The Bipartisan Policy Center says 40 of seniors are going to outlive their nest eggs or currently outliving it. Joined now by the cochairs of the commission on Retirement Security and personal savings, former u. S. Senator kent conrad. Former Social Security Administration Principal Deputy Commissioner and vice chairman of w. L. Ross and company, james lockhart. Gentlemen, great to see you. The brexit plays in to this. We had w. L. Loss himself talking about how messy the divorce would be but it plays into what we are talking about because i think it means yields will continue to stay low and it is going to be hard to fund retirement. Certainly yields are coming all over the world. U. S. Treasury just hit a tenyear alltime low i think. Thats hard to amass Retirement Savings. But from our standpoint the key issue is we need to fix the system. The systems not working now. We need to help the 50 of the people that dont have Retirement Savings plans. We need to make Social Security sustainably solvent and our recommendations do that. Really. Okay. So rates are going to go where they go. Stock market is going to do what it does. We need an overall system that no matter what happens we need to take care of our retirees or give them some mechanism that for that to happen. Right . Thats exactly right. Joe, what our proposals do if they are aadopted is to increase Retirement Savings 50 over the next 50 years. That is a dramatic increase. Make Social Security as jim said sustainable over the next 75 years and beyond. But at the same time, lift the bottom 20 35 over whats currently scheduled and dramatically expand Retirement Plans at work. Right now half the people in the country are not participating in Retirement Plan at work. We can change that by making it much simpler for employers, much less costly for employers. We create a new structure we call Retirement Security plans for employers with 500 or fewer employees. All they have to do is payroll deduction. The rest is done by a third party that has employers of every kind joined together to keep costs down and to expand the availability of Retirement Savings plans at work. Were suggesting by 2020 that we actually make these plans for anybody that has 50 or more employees mandatory. It forces the issue. But it is the only way well get people to save. Other proposals are increased Financial Literacy which is really important, fundamental. People arent going to save unless they understand compounding interest and some of the basics. What do we got to do with Social Security . Had. Social security, as kent said, first of all were going to increase benefits for real lower income to keep them out of poverty. Were going to reduce poverty by onethird for the lower income. But were also basically increasing the retirement age, increasing the cap, the max from 118 to 190. Were doing a whole series of changes to help people. Kent can talk about the widow benefit which i think is a very important one. Means testing, too . In a way, we do. Under our plan actually, everybody is better off than whats currently payable. As you know, in 18 year everybodys going to take a 23 cut. Thats where were headle. We say to those who are at the higher end well keep you better off than that but were going to give you less of an increase than you might have been expecting. But for the lower income were going to give a substantial increase. One of the most attractive things we do here is for the surviving spouse. The way it works now, surviving spouse keeps the higher of the two benefits. We say, no, thats not good enough because that cuts their income generally in half, doesnt cut their bills in half. And so a lot of people are outliving their incomes. At least their Social Security income. So instead were saying you keep your own Social Security benefit and you keep threequarters of your deceased spouses. Thats great. I think that would be a huge issue for seniors who are in a bind. Huge. That helps lift a Million People out of poverty. One of the other things we are looking at is home equity. Home equity for many people is their biggest asset. Were trying to figure out ways to help protect that. One of the wafof the ways is to eliminate the Tax Deductions for seconds. They dont use is as piggy banks. They get to keep the money in. When they get to retirement age the reverse mortgage system has been reformed. But said you dont allow deductions for second mortgages. So the first one you still get but if you use it for any other thing, whether it be vacations or reinvesting in your home or sending your kids to college, thats where youll run into a little yeah. But the idea is to really help them save for retirement. The housing crisis which we all talked about for a long time. A lot of people were using their houses as piggy banks and they had no home equity. Caused a major problem. One thin we should also add in terms of increasing the age im sure there are viewers out there, oh, my goodness, theyre going to increase the age . Very slowly. Two years in the next 48 years. So thats very modest increase in the age. But for those who just cant extend their retirement wait. We keep the early age at 62. So people can still retire early but theyd take a reduced benefit as they do under current laws. It makes sense for people who have desk jobs. If you can work longer, its probably better for you mentally to be working longer. But if youre somebody who is doing hard labor, working construction or something, there is a point where you cant do the work anymore. No. We recognize that. Thats why i think this is really a very balanced plan. We have 19 commissioners. Very evenly divided republicans, democrats, conservatives, progressives. We got 18 of the 19 to agree to this series of recommendations, which if adopted would make a dramatic difference. Security Social Security. Dramatically expand Retirement Savings plans at work. Next time you come on well talk about how you would actually get this through. Well, thats not going to happen this year, i can tell you that. But we are hopeful next year. You got to think and at least consider all these things. Some day something might happen. Hope springs eternal, james lockhart. Thanks, senator, good to see you. When we come back, a Small Business Success Story in the nations Fastest Growing chain for the third year in a row joins us next. Stay tuned. Youre watching squawk box right here on cnbc, first in bu Business Worldwide. \s still to come this morning it is make it. A Sandwich Shop taking the Business World by storm. Dont miss fed vice chair Stanley Fischer. His first postbrexit interview on cnbc coming up at 10 00 eastern. Get ready for the rio Olympic Games by switching to xfinity x1. Show me gymnastics. X1 lets you search by sport, watch nbcs highlights and catch every live event on your tv with nbc sports live extra. Im getting ready. Are you . X1 will change the way you experience nbcuniversals coverage of the rio Olympic Games. Call or go online today to switch to x1. Welcome back, everybody. Fast casual subshop jersey mikes is the Fastest Growing chain for the third year in a row. Starting with a single store front in new jersey 16 years ago, now they have over 100 locations across the u. S. This smells great. Guys have been eating this for the last half our or so. What makes jersey mikes different . Well, we fresh slice and fresh grill every submade to order. We use the highest Quality Ingredients and we like to say that its a hometown feel when you come in to our stores. We love it when we may not know your name but we know the subnumber that youre getting. We know you by that. Because you have repeat customers. We have a lot of repeat customers. Why are you able to grow so quickly right now . How are you doing this . We have positive momentum right now. The bottom line is that it is the bottom line. The Business Model is working which is attracting new franchisees and existing franchisees to grow more stores. They are executing at a really high level right now. We have about 400 franchisees in the system right now. 50 of them are multiunit. 50 of them are single. Just the sheer math that if every one of them did one store, wed built 400 Stores Next Year but the reality is well build about 200. Most people buying in as franchisees with be they own other restaurants . Whats their history traditionally . Were pretty inclusive. We have some guys and gals coming in that just have the passion for the business and we teach them. Then we have people that are multibrand operators in multiple things. They obviously come in with money and people and experience and we love them. But were not exclusive to them. We have a staff of six real estate folks that are out in the field. How much for a franchise . Its the franchise fee is 18,500. It is about 300,000 to build a store soup to nuts, inventory. Advertising. The equipment, package. Whats the average store do in revenues . Can it do a Million Dollars . They can. They can. We dont disclose that in our f fdd. Bottom line, comes down to the profitability of the stores. Where are the headwinds that you run into or franchisees may run into when you run stores these days . We talk all the time about higher minimum wages. How the consumer is feeling at any given point. Could you do it patat a 15 minimum wage . Peters always been above minimum wage. Hes aelways encouraged youre not at 15. No, were not at 15. My guess is when the 15 minimum wage does come into play that well probably be higher than that because well just evolve with the times. There will be price inflation. There is no doubt about that. Biggest competitor, subway . Who do you look at is it all fast food . We respect subway a lot because they put the sub around the country, around the globe 1234. Quiznos . You know, theyve kind of faded a little bit. But there is a lot of we consider ourselves to be in the better sub category. I would think your biggest competition is the local Sandwich Shop. Yeah. Especially here in the northeast. As you get further from the east coast, theres less and less of the mom and pops anymore. So we try to fill that gap. You have more limited menu than subway . No, its probably more expansive. Is it really . Yeah. We do fresh grilled subs. Im confused. An authentic philly cheese steak which is great for dinner. I personally like the cold subs for lunch and i like the cheese steak for dinner. Hoyt, thank you for coming in. Brexit and the race for the white house. Former majority leader eric cantore will be here. Later new jersey tabling its proposal to hike the gas tax but the debate is not over. Well talk to americans for tax reforms, Grover Norquist, joe bidens former Economic Advisor Jared Bernstein. Squawk returns in a moment. What are you doing right now . Making a cake ayla reminds me of like a master chef and emiana reminds me of like a monster chef. Uh oh. I dont see cake, i just see mess. Its like awful. It feels like i am not actually cleaning it up whats that make mommy do . doorbell whats that . Swiffer wetjet. So much stuff coming up. This is amazing woah. Wow. Now i feel more like making a mess is part of growing up. Stop cleaning. Start swiffering. The tune of a deal. Apple reportedly in talks to acquire jayzs Tidal Service but will this be music to investors ears . Your money, your vote. Former House Majority leader eric cantor joins us in studio. Well get his take on issues driving the conversation on the campaign trail. And holiday road. Travel, fireworks and food. We ring up the dollars and cents behind the fourth of july as the final hour of squawk box begins right now. Announcer live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc, first in Business Worldwide. Were less than 90 minutes away from the opening bell on wall street and the futures right now have turned positive. Weve got almost 800 points 800 dow points in the last three days of snapback from what was exactly a week ago when we started trading on the news from thursday night and it is the first day of the second half of 2016 and with a lot of stuff planned for this next half of this year. You got the furry parade still going on. Youre obsessed with that. Im not the one obsessed. Furry people themselves are apparently obsessed with this. Some pretty sick ways. But, hey, you know . Whatever. Whatever floats your boat. Then we got an election supposedly. Well see whether we do that in november. Checking out markets in europe, you think we still need to . It is like playing the ncaa final. Georgetown villanova. You had to play that. You dont really have to. Eric cantor is here. Well talk to him about that in a minute. Europes positive now. Is it is the counter factual or theyre not going to do it . I love all the people who said it was never going to happen. Now theyre not going to do gove wants to do it. Have to listen to the vote of the people. Why do it if youre not going to how much of an exit there actually is and how much globalists and statists just cant believe it. Right, eric . Its like what . The people said this . What . They just cant believe it. And theyre whining and crying and gnashing their teeth. I was just in europe last week. It is stunning to see the denial thats there. At the end of the day it is going to happen. We havent talked about have you seen the italian banks . Now it is the central bank in italy. You wonder why it is imploding. This thing was not working. If you were the uk and you got to eat all the stuff happening in greece and italy and all the would you want to do that if you were a successful country . No. Weve talked about this. If youre just the uk and you want to get out, thats one thing. The question is what the true political ramifications are like greece. They bring back the drachma, cut it in half and devalue it. All of a sudden theyre competitive again. If you think all of that really works. It worked in russia. Statism does not work. Thats what we know. Meantime, lets talk about the u. S. Race for president. John harwood has the latest from washington. Good morning, john. Reporter morning, andrew. On the point that eric cantor and joe were just discussing, the denial, the people who say that brexits not going to happen sound a lot to me like the people who say well maybe donald trump wont be the republican nominee after all. Were just a couple of weeks away from that convention. He is on track to become the nominee. Lets look at the state of the race as we head into this big fourth of july weekend. All the polling averages tend to converge around the same thing. You take the outliers like the washington post, abc, plus 12 for clinton, rasmussen yesterday had donald trump up a few points. The averages are all pretty clear. Hillary clintons around 45 . Donald trumps around 40 . And donald trump has a bit of momentum going in to the weekend because of that illadvised meeting a few days ago between loretta lunch, the attorney general, and bill clinton on an airport tarmac. This comes at a time when the Justice Departments considering the email issue with Hillary Clinton deciding whether or not to bring charges. The white house was not very happy with that meeting, although they didnt directly criticize it. Donald trump on hannity last night went off. Take a listen. When i first heard that yesterday afternoon, i actually thought they were joking. I thought the people that told me were i said no way. Its just no way thats going to happen. And it happened. And i am just im flabbergasted by it. I think it is amazing. Ive never seen anything like that before. Now as an indication of how uncomfortable that moment was and how bad those appearances were for Loretta Lynch and for the clintons, Loretta Lynch is expected to come out today and say that she is not going to overrule recommendations from career prosecutors. Justice Department Says that was always their plan but shes going to make that clear today. This was not a good couple of days for Hillary Clinton on that front, guys. Does that mean the way i read it, she wasnt going to overrule comey. Is that what you mean by longtime prosecutors or no. I think that refers to career prosecutors in the Justice Department who will receive their recommendation from james comey. They get the recommendation from comey. So they could still they could still reject comeys recommendation if the career prosecutors did it then. Right . Career prosecutors, they are the ones that usually recommend a prosecution. It is usually the higherups that are the ones saying did their career begin in the Obama Administration . No. I think the idea of career is that these are Civil Servants who were not obama appointees. By the way, joe, another subject . You should have stayed on the mound for cincinnati last night. You know what . You should have kept throwing. I have realized that pitching is the problem. You know they got swept by chicago. The game i was at, they scored eight runs and still lost by three. Last night it was 134. There is a pitching problem there, youre right. Mine was a brushback. Mine was to a righthanded hitter. The guy was crowding the plate. Was it right around 95 . Im trying to think whether there is a metric system that would get it that slow in terms of miles per hour. We dont need to show that. You know he caught it, john. Thats all im going to say. It is a little nefb wracking, isnt it, eric . Did you ice your elbow afterwards . I need tommy john surgery. Or tommy john underwear or something. This is really interesting whats happening. Im surprised. The way it happened on the tarmac, its like whos going to say no to bubba. Look whos here . Thats the problem. If youre a former president of the United States, you simply have to have more discretion than that and more awareness of what youre doing. Which is what bill clintons known for, discretion and i mean this is so out of character. Anyway, thank you. Thank you, john, for bearing with me. You okay with that . Youre used to it. I dont know if everybody else is used to it but i am used to it. I love you. Youre great. He doesnt need an introduction, former u. S. Congressman eric cantor here, republican from virginia. He served as House Majority leader and is currently the vice chairman and managing director of an investment bank. Heres the question for you. I went back and looked. You were over the years, said very nice things about hank paulson. Hank paulson recently called donald trump a phony and said he was going to vote for Hillary Clinton. You still like donald trump, i think. Uh, well, remember in the history of this, i was one of the cochairs with jeb bush. So i was always and felt he would have been the most qualified. Thats clearly not happening now. Donald trump will be the republican nominee. I agree thats happening. Those who are denying that are in another universe. Donald trump will be the nominee. And im going to support the republican nominee which is going to be donald trump. Because at this point, it is binary. There is only two choices here. I know what Hillary Clinton stands for and i know the kinds of policies that she would implement and i dont think those policies are going to affect the kind of Economic Growth i like paulson, therefore paulson says this. Then you could use gingrich or christie or you could use Jeff Sessions or you could use you could go on all sides of this. Hank paulson is traveling the world worrying about Global Warming right now. Hes got the Bird Sanctuary down in south carolina. And his whole life is now devoted to Global Warming. I mean figure it out. The thing thats going on in my opinion in this election is mike bloomberg. Yeah. With mike bloomberg. We got a terrorist attack every three days and theyre worried about 2,100 to be an inch higher in the sea level. Go ahead. Listen. This is about people. We saw it in brexit last week. This is about people wanting change. This is about people standing up against the status quo. I know what people want. Or what we think some people want. Im asking you what you want. Im saying given what you do for a living, given what you see in the world, given your experience, what you think should be happening. Do you think that donald trump given all hillary loves wall street. Shes bought and paid for. She loves you guys. The bottom line is we need Economic Growth. In this country we into ed to return to some sense of American Security and leadership. We need more people in this country to see that their futures going to be better. You think Donald Trumps that guy for you . I think we got a better shot with donald trump than we do with Hillary Clinton. Would you say why would somebody like hank paulson be for hillary . I think business right now is looking for certainty. Ive always been somebody who says bad certainty is not something im after. I think just like the people in the uk were willing to say, hey, well take some shortterm interim uncertainty to see if we can get back on a path of longterm Economic Growth. I think the challenge for the two candidates because it is going to be hillary and donald. Where do you personally stand on immigration . You know where i stand on immigration. A part of why i was defeated in my primary is i said, look, weve got to do something about it. Weve got to reinstill confidence on the part of the American People that the federal government is doing its job. I went to the dreamers. I said look, these kids were brought here by their parents. It wasnt that they broke the law. We dont have the tradition in this country of holding kids liable for misdeeds or illegal acts of their parents. How do you square that with Donald Trumps view . Listen, Donald Trumps view ive been outspoken on it before. Hes talked about immigrants in a way that i think is extremely offensive. Ive called him on that. I said i dont agree with that. I think that kind of language is inappropriate in this forum. Do you agree with his policy on Foreign Trade . No, i dont agree with that. What part do you agree with . I agree that i dont believe that Hillary Clinton believes in a limited government. She sits here and maligns those who have been successful. Youve not heard the words Corporate Tax reform out of her mouth in the last four or five months. Reason because elizabeth warrwar rl ren and the rest. Youre not going to get that from Hillary Clinton. I think every other candidate before it was whittled down were talking about securing the border. Whether you do it with a wall, whether you just enforce existing law on immigration. Theres not a country in the world that has open borders without youve been over to europe. Im afraid to go through half the things they ask me whos quarterbacking for the bengals. If i dont know, they start looking. Borders need to be secure. I dont know what we do with dreamers. But the first thing we got to do reinstill confidence that says the governments doing its job at the border. But theyre not. These arent terrible people that hate immigrants. Theres a different between immigration and illegal immigration. I was just trying to understand some language has been highly offensive. Absolutely. Right at the very start with the rapists. The guy hes talking about has been deported five times no question there are bad people you can point to anywhere. You are effectively voting against lshg. Is that a better way to think about what youre doing, voting against Hillary Clinton . When i asked you which pieces of Donald Trumps campaign that you really support, it sounds to me that theres much more about something else. You know why . Because no one really knows what donald trump is about. Thats what were all waiting for. Were waiting to see what is a policy agenda. I think to your point, andrew, ive seen indications in polls where more than half the people on both sides are voting for their candidate because theyre voting against the other partys candidate. Ov ov eric cantor, thanks for being here. Hes an establishment republican. At least youre not like some of these guys, theyre taking their ball and going and crying. Its denial. Its denial. Weve got a choice here. There are two choices. Youre going to come down on one side or the other. If you dont how about your buddy, jeb . I think if you look at the way that donald trump has talked about the bush family, listen. Look at ben carson. I think he called him something. Ben said alls fair in love and war. You look at what donald trump said about bush 43, about george w. Bush, about jeb. But you signed a pledge at the very beginning. You put your signature on it. It is like well, i signed it but i never thought trump watts really going to be it so i didnt really mean it if it was going to be trump. It can get very personal in politics. All right. Eric, thank you. When we come back, a tough quarter for apple. Shares of the tech giant down 13 just in the last three months. Now reports that the company is in talks to acquire jayzs streaming service, tidal. The company has some different thoughts about that but well talk to an analyst next. Right now as we head to a break, check out the s p 500 sectors that rose the most in the first half of the year. Telecom leading the way up nearly 22 . Apple was severely bruised in the second quarter. Shares dropping 12 making it the performing stock in the dow since it was added to the dow, i dont think its had a single up day. New this morning be with the wall street journal since its added to the dow. You were never making money in apple i dont think since it was added to the dow. Its all blitzers fault . No. Hes just a person that was able to recognize consensus tops. What was the date . Do we know . I know that at ts doing a lot better than apple. The june reports apples in talks to acquire jayz atis ti music service. Will power join u. S. Ns us now. What was your highest price target on apple . Had. I think ive gotten this question from you before. It wasnt as high as some of the others but its obviously been a tough performer. I was on with you a little over a year ago when they made that switch and you made the comment at that point thats normally a sign of the top. Indeed it has been over the course of the past year. Who would have known at t what do you and your buddies miss . Your analysts i guess it is hard to see the forest through the trees. When it was at 700 billion in market cap and people were saying it is going to double, that would be 1. 4 trillion. Wouldnt that be enough for some people to say maybe we ought to at least consider that everybody who loves the stock already owns it and there is no one left to buy it . I dont understand why guys get paid to be analysts. Well, thats look. Thats a good question. As weve discussed, it could be a humbling business. Hopefully we get more right than wrong. With apple, the pace of innovation has slowed. Youre seeing longer upgrade cycles for consumers. We noted earlier this week with respect to u. S. Carriers, theyll probably have another record low with customers hanging on to their phones longer. Thats a challenge. As you look forward here theres still significant opportunity for apple long term. You should think about the ecosystem, benefits, this annuity of sorts thats still built in. When i look at apple, i covered nokia and blackberry and some of the others that have gone by the wayside. When they got hit by the iphone, you knew there was a better product out there. When i look at apple, you dont go thats a product. But the cycle has slowed. Theres not a product from apple that makes you go wow either. Is there something out there that you think thats coming thats going to be or from somebody else . We havent seen it from anybody else, right . Thats the ongoing opportunity for apple is to continue to innovate them. Fortunately the iphone 7 while i think it will be a nice upgrade doesnt look like it is going to be a game changer. One of my concerns near term is that the street estimates are still high. It is tough for stocks to work until you go et them sufficiently reset where you can meet if not beat estimates. As weve called out in a couple of recent notes, we think not only the fiscal q4 estimates are still too high but particularly the 2017 estimates. Until those get sufficiently reset it is going to be tough for the stock to work well. The stock was at 132. 54 back on may 22nd, two months after. So when it was added it was what . When it was added it was down when it was added what was the price. When it was added it was 123. At one point it was actually up 9 from where it was at . Yeah. I never remember that. You knew that was the kiss of death. Combined with just being the Largest Market Cap Company in the world. Thanks for coming on. Coming up, a group of fishermen reel in a 12foot shark all caught on tape. Later today, dont miss this. Fed vice chair Stanley Fischer willing on squawk on the street. His first postbrexit interview at 10 00 a. M. Eastern. A warning to florida swimmers this weekend. Governor rick scott has declared an emergency as blue green algae covers the states treasure coast. A 33square mile bloom was discovered there last month. Thats like supposedly guacamole. Now the spreading algae has forced officials to close some beaches in martin county. Its been spotted in waterways and canals in much of south florida. You have a recipe for kale or something. Is it kale or its different. Do you know what to do with this . Could you whip this up . You could definitely get this into a juicer. Id probably put it into a blender. Good source of protein. Yuck. Thats gross. 33 miles . A 12foot tiger shark being reeled in on the beach of a coastal North Carolina town. It was caught by a fishing team that finds sharks, tags them and releases them back in the ocean all for research purposes. Coming up when we return, east coast drivers can possibly rejoice because new Jersey Gasoline prices remain among the cheapest in the u. S. Thats at least for now but should states raise gas prices to help rebuild the infrastructure . Well have that debate in just a moment. Used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Welcome back to squawk box, everybody. Heres what making the headlines on this friday morning. Several economic reports are ahead this morning ahead of that long Holiday Weekend. Both the ism Manufacturing Index for june and may Construction Spending figures are due out at 10 00 a. M. Eastern time. Well also be getting june Sales Numbers from the u. S. Automakers throughout the morning. Starbucks is being accused of slashing Employee Work hours in an online petition signed by over 9,000 people. The company says that there is no nationwide cutback in hours or in jobs. Still, starbucks Ceo Howard Schultz reached out to the barista who created that petition. Though no details of the conversation have been made public. We are continuing to watch shares of hershey today after the chocolatemaker rejected a 23 billion takeover offer. Shares of hershey were up 15 or something yesterday well above that offering price of 107 at 113. 49. This is an indication that some investors expect a higher bid. But remember the Hershey Trust controls 81 of the vote here. Theyve voted against takeover bids in the past. Its anybodys guess as to what will happen here. Police in wisconsin on the lookout for a cheese thief. Made off with a whole truck of cheddar. Was it really in wisconsin, too . More than 20,000 pounds of cheese were onboard a white unmarked trailer when it vanished from a parking lot. Where else . In wisconsin, milwaukee county. The cheese was made by u. S. Foods. Its valued at its value to some people says 46,000 here but its priceless to some people. Police hope to use security cameras nearby to help identify the cheese bandits. Wife as alibi is always used in every law and order. Theres always something you dont need to testify against him either. No. He was with the kids and my dad. They all saw him. He was there. He still love Cheddar Cheese . Y he. And beer . Not as much. Thats a scary combo. If youre hitting the road over the fourth of july weekend, get ready for some traffic. Kate rogers veins us from the Vince Lombardi rest stop on the new jersey turnpike. What a location. Hey there. Reporter what a location. Thats right, andrew. Still, as you said, be prepared to sit in traffic because a record breaking 43 million americans are going to be traveling this fourth of july Holiday Weekend and 36 million of them are going to be driving. Thats up 5 million from those who traveled by car on memorial day weekend but the good news for those drivers is that the National Average for gasoline is at 2. 28 per gallon this morning according to aaa and that number has the drivers that we spoke to excited to hit the road. July 4th weekend, i plan on taking a long ride up. Really didnt have a destination. Just looking for a really long ride somewhere. Gas prices definitely help out. It is definitely a big incentive into taking like long rides. Unless they get over the 4 range, thats the only way i would reconsider driving. Thank god it is not like it was two years ago or three years ago. Thank god prices are lower. Reporter now, unfortunately for drivers on the west coast, thats where theyre going to be paying the highest amount for gasoline. Highest prices are in california, then hawaii, alaska, washington and nevada. Now the lowest prices, the least expensive market south carolina, mississippi, arkansas and alabama. Good news for drivers here in new jersey, that gas tax vote that would add an extra 23 cents per gallon tax bringing the total up to 37. 5 cents a gallon, a vote on that by the new Jersey Senate has been pushed to after the holidays. Good news for drivers here in new jersey. Their gas will still be a little cheap. Back to you. Kate rogers, thank you very much. Drivers in new jersey will face more pain at the pump this weekend at least for now. Lawmakers stalling a vote on legislation that proposed a gas tax hike. Heres how the plan would work. The gas tax would increase by 23 cents a gron in allon in exchan 15 sales cut that would be phased in over the next two years. The Bridge Maintenance Fund is set to expire today and were hearing maintenance crews will be shut down potentially over the weekend. Jared bernstein is senior fellow at the center on budget and policy priorities. Hes also a cnbc contributor. Grove norquist is the president and founder of the americans for tax reforms. Gentlemen, im glad to have you both here. Probably something each of you likes and each of you hates in a proposal like this. Jared, start with you. My guess is you are okay with the gas tax but not so thrilled with the 1 decline in sales tax. Im certainly not thrilled with the impact that that has on state revenue. It is actually a big net loser for the state when you factor them both in together. But there is no question that the state problem in terms of funding their Transportation Trust fund is perfectly analogous to the federal one. We havent raised our federal gas tax in well over 20 years. Guess what . Roads and bridges dont fix themselves. Heres something ill bet many viewers dont know. I follow infrastructure and i didnt know this until i read something pretty recently. 90 of our nondefense Public Infrastructure is owned by states and localities, and they fund 75 of its maintenance. Its critically important to keep that trust fund healthy. However, what this tax cut does is on net really seriously drains the coffers of new jersey. It also ends up being pretty regressive at the end of the y day. Grover, i have to admit i like the gas tax hike simply because it is a use tax that puts from people out of state, too, instead of just relying for people who live in the state for funding all of these roads. I am guessing you like the decline in the sales tax. The overall plan is not a tax increase and that frustrates people who dont care about roads who just want to raise taxes. At the National Level and in all 50 states it is a game thats played. Politicians take your tax dollars that you send in for gasoline taxes and spend it on things other than roads. Wisconsin over an eightyear period before scott walker was there took 1. 4 billion out of the road fund and put it on other things. Then they turn around and go, the roads need to be fixed, lets raise the gas tax. They play this game in virginia every few years, kaine and warner both got massive tax increases for roads. Everybody in virginia notice all the roads they built with the tax increases . It largely went other places. You are seeing this game. What they are doing in new jersey is theyll have a vote in november that will require all taxes for gas gasoline taxes to go to roads and not be diverted. They did that in wisconsin. There was an effort in maryland. Its very important that we stop this game where the politicians dont do spending on infrastructure, take the money, spend it elsewhere, then point to you and say the infrastructure hasnt been fixed in x number of years. Because they didnt do it. Grover, let me ask you this. If you could ensure that this was a black box that all of the funds that were being raised on gas taxes were going simply into repairing roads, it was just a use tax and nobody could raid it, would you be okay with just a straight gas tax hike . No. It is not necessary. Taxes are too high in new jersey. This is a state that didnt have a steaales tax until 65 or inc tax until 77 because they were going to reduce property taxes with those two tax increases. Anybody notice their property taxes down in new jersey . Politicians are like teenage boys on a prom date. Theyll give you 100 reasons for the same thing. They want more money. They wont build roads. What happened to the 800 billion that obama was going to redo all our roads . Theyve spent the 800 billion. Anybody notice the roads improved . Jared, top that analogy. Well, look. I mean the problem with this tax plan as it stands is it is sort of like you exercise for about 15 minutes and then you eat three bacon cheeseburgers and a couple of sundaes in terms of its net revenue loss. And so new jersey cant afford to lose 17 billion over ten years. Thats what this plan would do. Although grover and i are on precisely the same page in terms of increasing and funding these Transportation Trust funds through dedicated transportation taxes. The property tax thing in new jersey is really a problem. We may agree with that as well. The reason they keep raising their property taxes is because it is this back door revenue secret. Grover causes this problem in lots of different places. If you cut somewhere else, typically these states are going to have to raise someplace else or theyre going to have the kinds of revenue problems that new jersey faces. New jerseys problem is much bigger. Part of it is that there are too many municipalities and too many Municipal Workers i totally agree with that. But lets keep this very simple. The trust fund is out of money. Replenish the trust fund, then we can have all other kinds of arguments about who you to raise the tax raids first and talk later . No. Grover, were somehow going to pay for roads with a tax increase with a tax that hasnt been raised for 20 years . How could that possibly make sense . Certainly at the National Level, one of the reasons why we have fewer roads and less good roads than we would is because something that the labor unions pushed through to stop black americans from getting jobs in the industry would you just agree with me that no that law is still there. We should get rid of that law. Its a 25 increase on the cost of everything you construct. And when states get rid of their prevailing wage laws it costs less. Guys, i knew you wouldnt disappoint. Were running out of time. Grover, i do have one more question for you. Last time you were on you mentioned that donald trump had not signed your pledge yet but everything he was saying led you to believe he would. Has he signed it since . We dont physically have it. It is my understanding that hes made that commitment. I think it would be very helpful if he made it public for the American People to see. Grover, jared, thank you both. You both bring a lot of insight to this argument. Appreciate it. Coming up when we return, the countdown to Independence Day is on. Americans are spending more this year than last year. Mary thompson joins us with the details. Beer and barbecue are popular choices for the 4th. Coming up ill tell you how americans are spending billions on their celebrations. Today, were seeing new technologies make healthcare more personal with patientcentric, digital innovations; from selfmonitoring devices that can interpret personal data and enable targeted care, to Cloud Platforms that invite providers to collaborate with the patients they serve. Thats why over 90 of the top 25 Global Pharmaceutical Companies are turning to cognizant. Our domain experts, technologists, digital and data specialists, clinicians and scientists are transforming the way Clinical Research sites collaborate with pharmaceutical companies, and enhancing Patient Engagement with innovative platforms and solutions. Our populations growing healthcare needs present growing opportunities for our clients to advance the future of medicine with digital, and improve the quality of lives. Mary thompson trying to figure out which one is my camera. This is a spread, right . This is what americans spend on food. This is gross. Those are steamers. But it is crawling out. No, it isnt. Thats what happens when you cook them. Those are the necks. Those are the necks. So, listen. Weve got a long weekend this year. Lower gas prices. So spending for fourth of july is on the rise. Most of it is spent on food. About 6. 8 billion. Reason for that is twothirds of americans are going to have either a barbecue or cookout. Thats how theyre celebrating. Weve got some amazing statistics coming up. The average American Household is going to spend over 370 each on the fourth of july. Thats a 7 increase from last year. The top holiday for beer nielsen says almost 1. 7 billion worth of beer, malt beverages and cider are sold on the fourth. Soda in high demand, too. The reason, we need all those drinks to wash down the 150 million hot dogs. That seems low. The nathans are going to do that alone. We also eat 190 Million Pounds of beef and 700 Million Pounds of chicken. Firing all that up on the grill. If your stomach doesnt hurt yet, americans also buy 133 million worth of hot dog and hamburger buns. 52 million worth of ketchup and mustard. And 318 million worth of chips. This is joe over here. I also want to point out people have clam bakes. We are in to day two of the lobster season. Those are the antenna. Lobster prices are on the rise. Theyre up 7 this year. That might be one reason people are spending more money on this fourth of july. Mary, i just want to say before we let you go, mary has been here for 16 years at cnbc. She is a wonderful reporter, a great friend. Shes about to embark on a new adventure but of course we couldnt let you go without a look back. How did the questioning go today . Should shareholder have the right to vote on what a ceo earned . Estimates of the damage done by katrina runs into the billions of dollars. Just like butterball. Its the first one ever to go through this new lane at the panama canal. If you do see big bird, run because he could potentially he could be it could be a mating call, right . We did ours in a minute. Mary and street signs, you got to come in on time if you want to play and win the game. Thats because you have nothing to say, brian. You have nothing to say. From daytona beach. Im Mary Thompson from the New York Stock Exchange. Mary thompson. Were going to miss you. Were going to gorge on this cake here. I think theyre spending 22 million on pies, too. We are going to miss you so much. Thank you, everyone. Thank you to our viewers for everything. You dont need to do this, do you . Well, i need to work. Its time for something new. So im excited. Youll only be hanging out in the finest places. I know. Got to get away from you. We know what this is about. This is about you. You are just angling for an invitation. My favorite place. I know. You tell me that all the time. Nantucket. You are welcome all the time. Just like three or four places . Im going to go down to see my nephew in colombia who is teaching english down there. Thank you. Thank you, everyone. Its been great. Ill be watching. When we come back, another guy we love jim cramer joins us from the New York Stock Exchange. Well get his take on the markets big stories. Back in a moment. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. The first stock index musicwas createdughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Nike has named apple ceo tim cook as the lead independent director on its board. Cook has been on the board since 05 and the move comes as phil knight, the founder of nike set to retire and named chairman emeritus as part of the planned succession. Ceo mark parker will take on the added title of chairman. Lets get down to the New York Stock Exchange. Jim cramer joins us now. Wow. After we talked yesterday, tacked on another 230 or so . Reverse a huge number of shorts. Joe, you know its supposed to be the end of the world. A week ago it was the end of the world and then turned out to be it wasnt. Anyone who had the puts they had to reverse, and then you got the hershey mondelez, timely for a lot of people, and its just turned out to be that there was no end in the world and now people are thinking wait a second, maybe theres a lot of companies that will do well in britain. I do think the banks got hurt due to buybacks but in the end people got too negative. A lot of money out again this week. Hershey, jim, is like what is an american brand like hershey worth . I cant you know, youve been on that kick for a while, if you think about that. I love hershey. I remember when they first decided to be more than chocolate and started buying other brands and then moved their factories to less expensive places so that the Gross Margins went up. Its been a winner and its worth more than its selling for substantially. The deal we heard about is too low. Hershey want sell, it has to be much higher. Tesla, the terrible accident happened in may, but, of course, just releasing some of the details. Do you think it has an impact . Short term maybe. I was in the looking at the ford driveless car. 2 million pulses per second by laser to figure out whats ahead of it and i still think you have to have a degree of responsibility when youre doing a driverless car. We dont know the circumstances but no, i think not longer term because a person whos drunk is going to do the same thing and theres a lot more people who drive drunk. Sad. All right. Yeah. Can we say we definitely looked at the counter factual, jim, and once able to see it and really, you know, we never we always hear whats going to happen and never really test that. We finally tested it and i mean i guess anything can happen from here on out, but so far, the counter factual didnt come true. No. And it was really incredible. Think about the commentary last friday at this time and monday. And before and prior to that. Really just there were just a lot of people who came on and really decided to make this into the worst thing in the world. I was on the today show last monday saying guys, look, might be an opportunity to buy some if things get hit. People are like doesnt he know brexit. You know. But matt lauer, we talked about it and did a lot did two segments on it. We didnt want to scare people. We thought it was inappropriate. Good call by matt. Beautiful. All right have a great fourth, guys. You too. Happy fourth. When we come back disney takes the mound. The Company Reportedly taking a stake in mlbs video unit. Programming note, dont miss vice chair Stanley Fisher on squawk on the street first on cnbc at 10 00 eastern time. Welcome back to squawk box. Disney reportedly in talks to buy a stake in Major League Baseballs advanced media unit that would value that company at 3. 5 billion. The business develops and manages mlbs Digital Products including its Popular Streaming Service mlb. Tv. It lets users watch live broadcasts out of market games, but heres the bigger piece of this. Mlb advanced media is working with hbo and espn to create their streaming apps so when you get hbo to go, for example, its actually running over this companys service. Same thing with espn. Thats what makes this business as valuable as it is. Its an extraordinary thing that they were able to build this out of the mlb. Lets take a look at a few stocks to watch this morning. My kron Technology Reporting a smaller than expected loss for the latest quarter but revenue below forecast so the chipmaker said it would cut jobs as part of an effort to lower costs as a result the stock is down by 8. 8 . Oracle ordered to pay hewlettpackard enterprise 3 billion in a case involving Software Support for old hewlettpackard servers. Oracle stopped developing software for the servers in 2011 and hp said that violated an agreement between the two. Oracle does plan to appeal. Six directors at pipeland operator Williams Company resigned follows an unsus sesful attempt to ouster the ceo. Equity abandoned its 20 billion deal to buy williams. Any fireworks for you guys . I will be on a plane on july 4th. Im swearing off fireworks because of my dogs. Oh. Yeah, yeah yeah. Too much. Its like too much for babies and animals. You watch dogs, its they dont know. They think its the end of the world. Were thinking about getting a benadryl for our one shepherd that gets so for the evening. For zara. I mean its like on top of us in bed like sitting on top of us. We cant do anything. Happy independence, sir. Happy holiday. Happy july 4th. If you have fireworks you should be careful. Join us on tuesday. Let the professionals do it at the local high school. Squawk on the street is next. Good morning and welcome to squawk on the street. Im david faber with jim cramer. We are live from the New York Stock Exchange on this friday before the july 4th long weekend. Carl quintanilla got a start on that weekend, in fact a start all week long, lucky man he is. Futures this morning, of course it has been a tumultuous week for the markets and actually thats an appropriate word here. Im not e