Transcripts For CNBC Squawk Box 20160721

Green either. Looking to open down. Overnight in asia youre looking at a bit of a green picture there. The nikkei and shanghai all in the green and up. Lets try over to europe and tell you whats been going on over there while youve been sleeping. Lufthansa. Could use the business apparently. Flying over there. Yes. Theyre warning and terror related warning. It is the lets say the some very smart writer says the Airline Stocks are losing out. They dont seem to lose out. Pretty consistent. And finally, they all rely on this thing. Its called crude. Wti crowd at 45. 79 this morning. Lot of earnings to talk about. Intel shares are under pressure. Company reports better than expected earnings and revenue that was roughly in line with expectations. Weaker than expected revenue from the company data center. Chief Financial Officer stacey smith giving a positive outlook for the second half of the year. We have insight into what we think some of the big cloud customers are going to buy. We have new products coming to the data center we think will give them cape capabilities. Momentum in the data center and particularly in the cloud as we go into the back half of the year we think give us more than seasonal growth in q 3 and q4. More on intel from a analyst later this hour. Computer prom left southwest passengers stuck in place. 17 flights were cancelled. 600 were delayed. Tweeted a video update saying there could be additional disruptions this morning. Work to bring it back online. Company expected to report quarter lly results. Thats going to happen at 6 30 a. M. Also on a days calendar. General motors travelers and Union Pacific are among the Companies Reporting results before the opening bell. Well talk to gm cfo Chuck Stevens. Hell join us at 7 50. At t and starbucks, visa, lets think about and chipotle. On todays economic agenda. Ecb comes at 7 45 eastern. Well get some comments from draghi. In the u. S. , weekly jobless claims. The july fed survey are out at 7 30 a. M. Sales released at 10 00 a. M. Expected to slip half a percent. Following a 2 increase in may. And theres a powerful coalition of business and investment leaders back accident a set of Government Principles including dual class shares and replacing ineffective directors. Among the backers of the statement. Ryan rogers and viseson, mcadam and bryan rogers will skroin us at 7 00 a. M. Eastern. And at 8 00 a. M. Well be joined by Warren Buffett. They have been working on this for quite some time to put this together. They would all. Will you talk a little louder. You cant hear me. Theres knnobody here. Im not moving because ive been here long and im used to this. Ive got a pillow built in. You could move. You dont think we can play got from here. This doesnt bother me although i did try to bring, i like to have a lady on the set. I booked someone to come on today. In the 8 00 hour. Ann, and i understand rachel was not available. I love ann culter. Im going to enjoy and were going to have fun with it. I love rafael maddock. Becky will be back to be the wall. She will. Indiana governor mike pence taking center stage last night. It was senator ted cruz who stole the spotlight. Eamon xaviers joins us now from cleveland. It was supposed to be mike pences night. Accepting the lets start with mike pence who told the crowd here he didnt realize he would ever be selectsed as the Vice President particularly with that wild Selection Process we saw him go through last week. He didnt expect to be here, but he was proud to be serving as the republicans Vice President ial pick. Heres what he said. Yet, there i was a few days ago in new york city with the man who won 37 states, who faced 16 talented opponents and outlasted every one of them and along the way brought millions of new voters into the Republican Party. Hes a man known for a large personality. A colorful tile and lots of camera riz ma and so i guess he was just looking for some balance on the ticket. Humor there from mike pence. Clearly the moment that everything is going to be talking about. If you scripted this as a Republican Convention organizer. You would have had that moment and mike pences acceptance be the highlight the news that everyone was talking about today, but of course ted cruz was given a prime time speaking spot last night. There were questions whether he would endorse trump or not. Were told he tolds trump team he would not endorse, but over the course of the speech it became clear he was not going to endorse donald trump for president of the United States. That made them angry. They started to jeer. They started to boo. They started to call for donald trump. Heres how it all went down. If you love our country and love your children as much as i know that you do, stand and speak and vote your conscious. Vote for candidates up and down the ticket who you trust to defend our freedom and to be faithful to the constitution. And that phrase vote your conscious is what had some of the delegates here upset. Thats been the language that the never Trump Delegates are using in the Convention Hall arguing they shouldnt be forced to vet for a candidate they dont agree with. When he said vote your conscious, that set off the trump supporters, we saw this moment towards the end where donald trump entered the hall, taking some of the tv time. Taking the attention of the crowd away from ted cruz so some real man no y mano political stuff. May have been the first night of ted cruzs president ial campaign in 2020. Ive heard we go back a lot of years now, eamon, we always here about 1968. Weve been hearing a lot about 1976 and gerald ford and Ronald Reagan. Comparison to jimmy carter and kennedy where he wanted the endorsement and didnt get it. Im not sure its comparable. Reagan didnt do it like this. Im not sure anyone can be compared. History never repeats, just rime. Steve as a reporter who has been covering these things for a while. Everything is passeng this has not been an infomerc l infomercial. Its not be sterile. Its been real. Theres been roudsdyness both inside and outside. Theres real news. Real history being made here. Well, we always complain on this show we dont get to watch the nba finals because things start at 9 00. I havent able to see things live at night either, but ive wanted to. Thats different than most conventions here to fore. Yes. Im not going to want to watch next week. It doesnt seem like it could be this. I watched this week and i will watch next week. Its not going to be i was talking to michael. Let me introduce him thanks eamon for more on the Republican Convention, we have rnc strategist chip sales man. He worked for both Mike Huckabees president ial campaigns. Bill fris, there he is, the aforementioned democratic strategist mike. I was kid can go around in makeup. We were a couple of guys getting makeup. I was saying that see now i think that theyve talked about Hillary Clinton so much and in such a negative way, i now this next week theyre going to be mean to donald trump at the convention. Do you think i mean, i think it was going to be a highminded Politics Convention next week just talking about how to bridge the fwap and do all that. Now i think theyre probably going to talk bankruptcy. Theyre going to say mean things about donald trump. Dont you think theyre going to be induced to do that now . I think theyve got a plan for that convention. I think theyre probably going to stick to it. And traditionally there are four nights in a convention and you program them. He answered me seriously. You dont think its going to be a trump bash. I think there will be time spent at the convention drawing contrast to donald trump and talking about donald trump without a doubt. And thats not unusual at a convention, but there will also be a period of time to plush out the buyi the buy yg if i of the nominee. I agree that the Republican Convention has been really good television. Im not convinced its been good politics. In the modern area its good for the base. Yes and no. Part of the what the republicans needed to do, donald trump needed to do is bring together and unite the part. Get them energized. That happened last night. The cruz thing was a distraction. Mike pence gave a great speech. Its not what were talking about this morning. Chip, we just went over a a lot of things there. I never know with trump. Theres a method to a lot of the madness and when you see anybody that harbored any sort of sent mental feelings about ted cruz. Grudge doesnt shape all the opinion, but if you do look at what drudge said, he said this guy is in republican now. He went in there with a plan to wreck it. I think it may be in the shortterm. He things its going to be look, i already have a email solicitation. I think longterm thrks is a loser for ted cruz. He came across as absolutely sell fish. He came this is all about me. This is a person that lost. In our world, were taught be a good loser. Sometimes if you want to know the character of somebody is how they act when they lose. In a pav leave yan sense, i. Thought he would have been penalized. People said it was all about him, but then he almost won the nomination. I think he thought it worked for him. The dog, you know, you skpresz get whatever. You get some food. I think i backfired last night. I think he went back one too many times with the selfish ted cruz centric speech. Absolutely. I couldnt agree more. Even his afternoon speech to his supporters like a mini ted cruz convention not at all about the nominee or donald trump or the party. It was about ted cruz. That was good tv. You dont think he won the game . Meaning this is the piece im unclear about. You can be frustrated with him depending on which side of the aisle youre on, but ultimately didnt he win by doing what he did, the fact were talking about it and how ultimately people are going to start thinking or questioning whats going on . So look, shortterm im sure he thinks hes going to win. Ive talked to several people last night. Obviously it hasnt been that far in between. People who leaned towards ted cruz that supported him in the primary that are furious with him right now. Donald trump may not have been my first or second choice, but hes the only option we have to stop Hillary Clinton. This might as well been a Campaign Speech that ted cruz gave next week at the democratic convention. This did more to help Hillary Clinton. But that was his goal. That was his goal. People that were probably could lean to support ted cruz or get behind ted cruz, theyre not going to do that. Hes not running. Im saying if it goes for 2020, like i said he set the precedent now. Lets Say Something happens and hes not the president of the United States. Ted cruz is the nomination in 202 20. I think he miscalculated. Absolutely. I dont think he was expecting boos at the end, back to who is meaner to whom. Locker h eer her up. I understood that. The words associated so far with trump, fascist, racist, ma sole judge nis, i get stuff that says orange hitler is what i see. People write it and even on a supposed journalistic website, every single time the huffing on the post mentioned trump, they call him a serial liar, rampant general phone. Is it possible the republicans have gone over the top of Hillary Clinton when this has been the last six months on donald trump. I go back to what makes good political strategy. Those people are talking to themselves. When theyre chanting to lock her up, those people are talking to themselves. In the end, there may be a group of people. What do you think, 10, 15 . Theyre going to be decisive in this election. Ultimately thats who these conventions are supposed to appeal to and talk to. I dont think this has been successful for them in terms of reaches outside of the hall. Just right now were on day four of the convention. We spent is the first two days talking about plagiarism. This morning were talking about warfare in the party. In the modern day, conventions are the only real estate you have. The kerry convention, oh, my god he came and said im ready for service. Didnt work well for kerry. Didnt work for romney. A lot of them went well for the winner and usually they were there filling out their bio. So it should be boring. Like i said. Good television. Ive been tuning in. Its face nating to me. Im not sure its intending what they want. He wanted a very divided Republican Party on that strategy. I dont know if he can win the general election. Nobody does. Then we have m crazy stuff. Crazy underpinning. Im not saying it has to do with brexit. Im saying the same thing thats hamg, the populous nationalistic to move away from globalism. I agree. This has been a very unsettle time. This is a change environment. Im not sure this trump team has taken advantage of that. All those people that were screaming heidi out of there. I dont think they have connected those dots yet. You think wall street guys are good treasury secretaries dont you. I have no problem with the wall street guy being a treasury secretary. Some of them do know about money. They might know something. Yes. Right. Last word chip, or no . Look, as we go into the Convention Like you said it best, donald trump does everything unconventional i think tonight with ivan ka and. Except for pence. Yes, pence did a great job last night. And i think you saw last night he gave a great speech and there was a lot of good points and he hit on them. This morning were talking about ted cruz. What youre going to see over the next couple of months is mike pence doing a great job at a lot of different fronts. Yes. Pence is 57. That hair is white. Its been that way for a long time. Its been like that ever since ive known him. Its like credibility something i may get rid of the collar roll. You know, and just let it go. Makes me think that maybe all this effort i go through every, you know, because i dont like when i have white roots. I dont like that. When they put the system back on. Yes. I can send it out to have it died dyed or not dyed. Thanks, always great to see you. We are talking to elon musk this morning. Laying out his master plan. Plenty of chatter about the master plan part two from elon musk and tesla. Four main points. Some of these weve known about. I went gr integrate similar city. This is the plan. Why it makes sense for similar city to be part of tesla. Expand the vehicle lineup. Talk about that in a bit. Autonomous drive cars. All of them will be autonomous in the future from tesla and some of those will be part of a car share fleet program. Care sharing from tesla. You as a owner and the Company Running the car sharing program. Developing Autonomous Vehicles was a big part he outlined last night and with regard to autonomous drive vehicles. He plani plans on tesla vehiclee fail safe. The vehicle will be able to continue to drive itself. Dont expect to see auto pilot turned off any time soon despite the investigation of a crash of a model s that was in auto pilot in florida. Writing last night it would no more make sense to detest the auto pilot as some have called for to disable auto pilot in aircraft after which our system is made. One of the comments last night. Take a look at the shares of similar city. He outlines why he believes it makes sense for tesla to be a energy generation, but also a Storage Company with the power wall and Energy Storage division working with the factory interesting comments all around guys. Most of the comments in terms of reaction have focused on a, pretty cool visionary ideas there, and b, never mentions how its going be paid for or what the financial plans are for the future. That should not be surprising. Certainly some people are harping on that today. Thanks so much. Were going to talk tesla later in the show. In the meantime, when we come back, the dow on a nineday winning streak talk strategy with the top strategist. Later Southwest Airlines set to report. Plus the Ceo Gary Kelly joining us in a moment. [rock music playing] [music stops] [whistle] [rock music playing] [record scratch] announcer dont let e. Coli mosh with your food. An estimated 3,000 americans die from a foodborne illness each year. You cant see these microbes, but they might be there. So, always separate raw meat from vegetables. Keep your family safe at foodsafety. Gov. Welcome back to squawk box. The dough hitting the ninth straight up session. The longest winning streak since march of 2013. To tell us if the stretch is going to continue. Chief Equity Analyst at ubs Wealth Management research. Usually after a stretch like this, youre supposed to start selling a little bit because it doesnt always continue. Should we start selling. We dont think so. We think the rally we have seen as good underlying fundamentals. Postbrexit, whats happened. Weve seen labor market improve. Weve seen manufacturing and nonmanufacturing improve. Weve seen Consumer Spending perk up. And broadly the earning season shows this quarter were likely to see flattish growth, but thats better than 6 decline. What happens when the economic analysts start putting out new reports that chasm atcho this. Overall reasonably good. 17 times earning when Interest Rate is under 2 . The valuations are well spo supported. Its not multiple expansion store at this point. I think its mostly an earnings recovery story. Earnings have been flat for the past four quarters. Thats masks really the underlying strength because its been down simply because energy has been a big drag. One we get past those big hurdles and anniversary the different comparisons. Earnings are going to turn positive in the second half of the year. Look, weve been in an earning stagnation, not an earning recession. The fundamentals look healthy. Not to talk us down, are we going to get into a conversation about raising Interest Rates all over again. Yes. Much more concerned if we dont raise Interest Rates for the next five years than if we do. We want to see some economic poll normal sags. Were in a sweet spot because the u. S. Economy is doing reasonably well and were importing the low Interest Rates from the rest of the borld because of fears of brexit and what they may do. Just purely given the economic fundamentals in the u. S. , we shouldnt have a 10year treasury at 1. 5 . It should be higher. The uncertainty of the brexit Decision Holding things back. Yes. And then theres the unpredictability premium of donald trump. Yes right. Now theres depending on how the rally, the trump rally sometimes fades a little when theres negative things. The brexit uncertainty has been removed. Theyre leaving. Its no longer uncertainty. Youve got to give credit to the diabolical way the market operates. That was the catalyst. Its been straight up since then. It has. Postbrexit. So the worstcase scenario occurred and the markets response. How do you leave behind the most people . How do you leave behind the dumb money and census guys . Now theyre like, wow, im at 2180 on s p. Thats what happens. Thats the way the market moves and leaves people behind. Its beautiful. Whats your target . Whats your 12 month target on the s p. End of the year target. Its above 2150. Agreed. We have a accomplished upside of 2400 on what. Six month basis. Really. Thats a downside scenario. 1850. You cant have a 40 of the entire market cap range. The baseline is going to continue to drive the market. A lot of wiggle room. You cant do that. Thats 40 of the whole market capitalization. You cant nar crow it down at all. We do in our baseline scenario. Were talking about if things break right and earnings grow next year and valuations expand a bit, we get to 2400. Is there a school to be a big Investment Bank strategist . Do you learn these things . Probably 2450, but near term there could be downside. We try to assess the current fundamentals. I think theres a school for this. Its not about just the specific target on the s p. Its about what the broad arranges of what could happen. Its called a nuance. Thank you for coming. We appreciate it. The markets heading higher unless something were to push it lower or there might just be a trading range and stay where it is. Thats what i usually say. If valuations are reasonable and the data is getting better, the market is going to go higher. The data getting worse. Factors, political uncertainty. Shortterm. Anyway, thank you. Southwest airlinings reporting quartersly profit of 1. 19 a share. The airline says it was helped by low fuel prices and record low fak source, but the fare environment remain s challengin. We know its a monopoly. Southwest Ceo Gary Kelly will join us soon. Coming up. As we head to break, i want to its a big guest, i want to emphasize it. Also take a look at s p 500 winners and losers. 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 the approval coming with a stipulation to protect craft brewers. Required to secure dissolution of your marriage r doj approval before acquiring any distributors or craft beer brands. Still waiting for china regulators to clear the deal. Expected to close by the end of the year. P pokemon go craze is yet to hit japan. Interesting. Reports of robbies and traffic accidents already have the japanese government worried. The countrys chief cabinet saying players should follow guidelines for the National Center for incident readiness and cyber security. Releasing tips to be cautious of scams and their personal safety as well as to carry extra batteries and be ware of heat stroke. Waiting for it to launch in japan. Im trying to figure out why getting Something Like a little thing, a little image on your computer and finding it and then having it and its worth absolutely nothing, why is that see it in my own house. Why is if its a rarer one you have to hurry to get to where it is. Why . Its fun. Pokemon has been out of fashion for ten years. Its virtual. Its the next real. You havent done it. No, i kind of want to though. If you do, show me. Well do it. Its proprietary at home. We can do it together. Lets do that. After the show well go around the city. We dont do enough together. Looking for points. All right. So you get points and you get rare ones. Yes gl you cyou could actual your own children. Youre looking for wracking up points. Yes, thats the game. Here you can see whats going on there. You cant trade the points in for anything. No, you cant trade it in for anything. Chucky cheese you get things 6789 then you can go turn it in for stuff worth less than the paper the actual tickets are printed on. Losing the pulp from the wood is worst less than the crap. Skr you seen that. I know all about it. Doesnt matter. Youre building them up and you go and get your trade. Digital status. I would even take a piece of deductible bubble gum. Any, intel shares are under pressure this morning. Dig through the company with an analyst as we head to break. Hoo heres a quick check of whats happening in the european markets. Down a third of the point on the ftse and cac a little less. Well be right back. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. My m. About my toothpasteice. She eveand mouthwash. Ice. But shes a dentist so. I kind of have to listen. She said jen, go pro with crest prohealth advanced. Advance to healthier gums. And stronger teeth from day one. Using crest toothpaste and mouthwash makes my. Whole mouth feel awesome. And my teeth are stronger too. Crestpro health advanced. Is superior to colgate total. In these 5 areas dentists check. This check up . So good. Go pro with crest prohealth advanced. Moms right. Again welcome back to squawk box this morning. Intel coming in a shade lite. Telling cnbc he is bullish on the rest of the year. We have insight to what the big cloud customers are going to buy. We have new products coming into the data center we think will give them dap bltss theyll buy a richer mix of products for us. The momentum in the data center and particularly in the cloud as we go boo the back half of the year give us more than seasonal growth in q 3 and q4. Lets break it down. Good morning. D disappointed . For the year they didnt change their guidance at all. The stock is down because it has risen in print. The pc is a little bit better in the Second Quarter and i think the street was extrapolating in the second half. The shortterm concern in the stock whats this. Its about where it is now. About 35 or so. You would not be buying more of this. No. The issue is, you know, still half of intels revenue comes from pc obviously. That is still an area thats an area of secular weakness. If you look on the second half of this year, as stacey pointed out in the clip. They do expect data center to get better in the second half. Now you need that business to improve in the second half. Do you have any disappointment when you woke up monday morning and saw bank buying arm. I think that would have been difficult from an antitrust situation. Intel would have a lock on almost everything. For the soft bank, i look at that as a financial transaction. Soft bank doesnt do anything thats synergistic with what arm does today. Theyre not going to change the way arm is managed. If you look at it perhaps theyre going to allow arm to deploy a little more resource. But when it comes to mobile and you think about intel, do you say were just giving up. Whats interesting about that is intel is widely expected theyre going to have a piece of the new eew iphone and were expected 30 of the modem thats in iphone. Till a tiny piece. Whats interesting the same time theyre at the cusp of announcing that, theyve also cut back on the rest of the global road map. Apple is a little unique and they separate the possessor and the modem. In most phones you see that together. Last night you had qualcomm report as well. Qualcomm has good results and the chip set results with r better than expected despite the fact theyre going to lose a piece of the iphone. Is there any sense on the horizontal that pc world is going to move the needle. I dont see it. You know, the pc itself, it just has failed to evolve. I think thats the issue. I guess the good news from intel and the pc market in general is tablets are no longer as much of a competitor. Tablet growth has stalled. Its been taken up by smartphones. Thank you. Couple other stocks to watch. America express reported the earnings exceeded estimates, but the revenue that the Company Posted was slightly below expectations, and was actually down 1 from a year ago. We know the issues facing american express. Weve talked about quite a bit here and i dont know, kind of i think theres an uncertain future there for amex. There is. Who knows. Depending on how management tackle some of these things. You never know. If you get the right guys to run it. Ebay hiking its outlook for the year. Reporting increases in profit for the quarter. The firm also launching a share purchase program. Qualcomm beating on top and bottom lines as demand for mobile chip rose. The company is offering an upbeat forecast siting strong demand. Southwest airlines under a bit of pressure. The company just released earnings and revenue came in below expectations. Look through those numbers and talk to the ceo, gary kelly, he will join us next, first on cnbc. Trolling for a gig with braindrone . Cant blame you. Its a drone you control with your brain, which controls your thumbs, which control this joystick. No, im actually over at the ge booth. Were creating the operating system for industry. Its called predix. Its gonna change the way the world works. Ok, im telling my brain to tell the drone to get you a copy of my resume. Umm, maybe keep your hands on the controller. Look out ohhhhhhhhhh. You know what, im just gonna email it to you. Yeah thats probably safer. Ok, cool. Southwest airlines out with results this morning reporting quarterly profit of 1. 19 a share. That was 2 cents below estimates. Revenue also below street forecasts. But these are, i think, numbers that have never been posted this high in this quarter, i believe. Gary kelly southwest chairman president and ceo. Thats at least the lead for your press release, gary. Are they disappointing . Or are they record results for southwest . Good morning. And, oh, no. Theyre very impressive results. And very much in line with our expectations. Just a couple of othe estimates were a little too high. We didnt beat expectations, thats for sure. It was an alltime record quarter. We had solid Revenue Growth during the quart enin a competitive, fair environment. And costs were under control. Fuel prices were low. So alltime record. So but it is if you had to point to one thing, you would say that theres fair competition that thats what didnt allow you to beat analyst expectations . I think thats very fair and perhaps, you know, to the point over the last several weeks weve seen further softening of the fair environment. Its very competitive out there. Were expecting revenue declines in the Third Quarter year over year in the 3 to 4 range. So its very competitive. Weve got low fuel prices that allow for this lower fair environment and still produce very, very strong earnings. But people can continue to compete vigorously against Companies Like yours. We know about lufthansa and some of the international carriers. And we remember some of the horrific incidents. Need to get passed the psa or whatever it is over there. You can do it in the terminal before you go through security. Is there any will southwest feel any pressure due just to terrorist concerns around the world but not as much here, obviously . Well, its just something that all of us have to live with. We have that risk. And we do everything that we can as an industry in the United States in particular to mitigate that risk. So we always have to be vigilant. Weve got to be aware. We work very closely with the tsa. As you know, they were suffering from very long lines to get customers processed through security last spring. And i think theyve done a remarkable job in addressing that crisis. And its pretty much abated for the meantime. We just need to continue to work with the tsa to make sure that is sustainable. If someone cancels a flight to paris or wherever in europe, dont they they might come to southwest and fly somewhere in the United States . Couldnt it actually be a positive or not . Absolutely. And i think that this you know, this shift, if you will, between desire to fly internationally for whatever reason and then in lieu of that maybe have a domestic flight, clearly that would accrue to our benefit. We dont have as much international service. Its all here in north america. So we dont have immediate visibility of that. But it appears a lot of our competitors and especially with brexit are moving capacity out of International Flying into domestic for those very reasons. But, yeah, that tends to help us in a period like this. Hey, gary, i dont know if you saw this news at the Newark Airport the tsa are going to install automated lanes. And a similar test down in atlanta. Are you guys going to be spending money on trying to work through some of the lines and the issues yourself . Or should that be on the government . How should we feel about that piece . I think it should be on the government because we all pay a lot of tax to pay for these kinds of things. But in any event in the meantime to address the immediate problem, yes, we have been spending money in a low tech way to help manage lines to get through the security checkpoint. And then in the future in terms of investing in further automation, it remains to be seen how much well want to invest as a company. But we are definitely working with the tsa for the next generation of screening processes and equipment and im hopeful well see something productive along those lines. So yesterday, what happens . So where were you . Are you, like, sitting around, you know, relaxing and then you hear, uhoh. Some glitch and its 500, 700 flights do they call you . Do you have to call and yell at a computer person . What happened yesterday . All fixed now . Its all hands on deck in a situation like that. Ultimately im accountable. And this of course this morning is 90 of whats on my mind. Im glad you brought it up. First of all, i want to apologize to all of our customers. This is not the kind of service that were famous for at Southwest Airlines. Yeah. We had a you know, we depend on phone companies and power companies, et cetera. But this was all on us. This was computer equipment that supports our network. It went down. The backup failed. And then the restoration process also failed. And it took about 12 hours to finally get all the systems restored and it pretty much impacted all of our customer facing systems. Very unusual. And obviously very disappointed. Or disappointing. But the technology is restored as of about 1 00 or 2 00 a. M. This morning. Right. Thats a good thing. And now the operation just needs some time today to catch up. So itll be another tough day today, but not nearly as bad as yesterday. Your stock was down a couple dollars. Its back to basically unchanged at this point. Its tough on travelers and on the agents there listening to the travelers. We take for granted. Wait a second. Im supposed to get where im going right then. Try driving and see its not that simple. Thank you. We appreciate it. Thank you. Coming up when we return, earnings alert. Weve got reports from travelers, blackstone, and gm. Well bring you the numbers as they hit the tape. Just a moment. [announcer] is it a force of nature . Or a sales event . The summer of audi sales event is here. Get up to a 5,000 bonus on select audi models. Boos for cruz. Jeers rain down on the Convention Floor as the gop faithful express their anger. And vp pick mike pences big night is overshadowed. Reaction to last nights drama from Florida Governor rick scott straight ahead. A secret mission to shake up the board room. A group of investment icons releasing a Ground Breaking new plan for how Corporate America should be run. The leaders of this common sense drive with us this morning. This hour tiro prices ceo and Warren Buffett. And elons master plan. Move over highend sedans and suvs. Is the future of tesla in trucks and buses . Well tell you what musk has to say as the second hour of squawk box begins right now. Live from e the beating heart of business, new york city, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. This autoban . From the big lebowski. No. Is this craft works . What is this . Anyway, its german tech music. I dont know why. I guess because of the ecb . Im joe kernen along with andrew ross sorkin. The futures at this hour are down eight. Okay. You hear the music, it could only mean one thing. An ecb decision on Interest Rates. Look at that. Its much nicer than that last ugly euro sculpture they had in frankfurt. Were just about 45 minutes a y away. Fractionally lower. It just turned positive. Not a lot going on. We got to hear Mario Draghis statements. Thats straight ahead. And now were going to talk about things here so the tech music is now gone. And what kind of u. S. Music should we have . As far as u. S. Earnings . For u. S. Earnings . I like patriotic stuff. Truly are. Some people still think this is an exceptional place. Im voting my conscience. Heres what else were watching this morning. Dow component travelers just out with earnings. 2. 20 per share for the Second Quarter beating estimates of 2. 07. Revenue also beat forecasts despite higher losses compared to a year ago. You dont think a vote for bernie is wasted at this point . Have you thought this through . I did not say that i was you dont have to. An independent journalist. Youre also watching shares of Southwest Airlines this morning. Missed estimates by 2 cents with profits of 1. 21 per share in what the Company Called a challenging fair environment. As we noted were 45 minutes away from the latest Rate Decision from the European Central bank. Most think the ecb will hold rates steady. Draghi holding his postmeeting conference at 8 30 eastern time. On a night where mike pence was to be the highlight, Donald Trumps former rival ted cruz stole the show telling voters to vote their conscience like andrews going to do. And he got ripped for that performance. For me ted cruz showed what he is. Hes a fraud, hes a liar. Hes selfcentered. Wow. Eamon javers joins us from cleveland with more. Im talking to andrew about this. And true used to watch wwf and youve seen on wwf stuff. Im going to take it mean gene oakerman. Im going to take it more highbrow. What would a fellow be without yago . What would hamlet be without the king that married his mother . Ted cruz is there. Andre the giant be without hulk hogan. Right. Reporter im trying to remember my English Literature classes for this one. He gets booed then comes in trump walking in. This is really shakespearean. Its awesome. Reporter the way im thinking of this is this was a master class in political showmanship last night here at the q in cleveland. Lets dissect it a little bit. You started out with mike pence who was the Vice President ial pick. Supposed to be the highlight of the evening. He did what you are supposed to do at the convention when you are a Vice President ial pick. He went out and delivered a speech that was very much about his family, his roots, and his upbringing. Heres what he said. Although we werent really a political family, the heroes of my youth were president john f. Kennedy and the reverent Martin Luther king jr. When i was young, i watched my mom and dad build everything that matters. A family, a business, and a good name. I was raised to believe in hard work, in faith, and family. Reporter but then you had ted cruz, the moment everyone is talking about today. He comes out on the stage. Theres this high drama about whether or not hes going to deliver an explicit endorsement of donald trump or not. He decides not to. The crowd begins to realize that and as they realize it, they start to boo cruz. Heres how that one went down. I appreciate the enthusiasm of the new york delegation. Ted cruz there kind of dismissing the boos as just coming from the trump partisans in the new york delegation. Obviously it was a wider held sentiment in the room than just that. So that was cruz stepping on pence. He came out to step on cruz and continuing this master class in political showmanship, heres donald trump entering the hall as cruz is still speaking attracting everybodys attention away from ted cruz to himself. Firing up waving thumbs up signs getting his supporters riled up. That was a message to cruz saying, hey, i dont appreciate what you just did trying to launch your 2020 president ial campaign while im having a convention here in cleveland. It was hard for me to tape this stuff. I had to look at the shows that were normally on. I cant wait to see that part. Did you see that . I watched it this morning before. Just clips of it. I didnt. So someone got word to him wherever he was and said get out there now and he did. Thats pretty reporter thats how you do it, right . You step on the guy. Somebodys giving a message you dont like, step on it. Now watch what Hillary Clinton does. One of the things she has in her tool kit this week is the Vice President ial selection. Do you wait and let the other Convention Get the Media Attention and do after that . See what she does tomorrow. How fast we might see Hillary Clinton try to turn the attention back to her. Everyones stepping on everyone else here trying to demand all the Media Attention to themselves. Theres a lot of global attention. I think kaines the last guy standing, isnt he . Two or three of the other ones are like maybe you want a ticket where both are ethically challenged. But she probably should pick someone whos pretty clean at this point. Reporter well, Newt Gingrich is available. Didnt something happen with vilsack too . Whats the story with him . Do you know . Reporter i dont. The conventional wisdom is tim kaine might be the guy. Who knows. Its a wacky year. Ive given up predicting everything. I dont know whats going on. Wacky in a good way. Reporter fascinating and important and historic. All those things. Good for ratings. All right. Thanks, eamon. Reporter that too. See ya. Millions of americans employed by publicly traded companies, 90 million americans own stock in these organizations. Over the past year a Blue Ribbon Commission of leaders from the world of business and Money Management have been secretly meeting and working together to come up with a new set of principles for Corporate Governance. Were joined by one of the key contributors to whats called the common sense effort. Brian rogers, the chairman and chief Investment Officer of tiro price. More famously known for having a great lineage. Part of the hbs class of 82 with jamie dimon and other luminaries. Great to have you on the program. Great to be here. I should show everybody. This is a fullpage ad. Its in basically every newspaper this morning called common sense Corporate Governance principles signed by yourself along with mary barra, Warren Buffett, and a host of other people. Warren buffet is going to be with us also in the 8 00 hour. How did this come about . What was this all about for you . Andrew, this all started maybe a little over a year ago. And a group of us convened to talk about some basic governance. I tried to down play the use of the word top secret and shakeup. This is just a bunch of Business Leaders getting together to talk about in a Perfect World how things would work. Common sense is the operative word. There are other things like independence, rigor, validation, longterm focus. These are the principles that we agree to and which populate the newspapers this morning as you reference. A couple of surprises. Clearly the group looks scant at guidance but doesnt think the company should be obligated and seems to suggest i think underneath it that maybe youd prefer that there wasnt guidance. Well, there was a lot of discussion about that and it revolved around longterm focus and how companies ought to be for the longterm. Conversations between investors and companies focus on business strategy. Longterm goals. Longterm strategy decisions. As opposed to the quarterly guidance game and my observation as an investor over the last 35 years is a lot of Times Companies get in a pickle because they set the bar too high. They want to please investors and sometimes setting aggressive guidance goals can lead to counterproductive behavior on the part of ceos to meet those objectives. You talk about diversity on the board. What do you mean by that . Well, we talked about how boards make good decisions. Our view was diverse boards make better decisions than nondiverse boards. Its a focus on diversity on all levels in terms of different experience, different backgrounds, different focus. And we felt that strong diverse boards were important. Should there be, though, a quota system . I was talking to a couple people who apparently were in the room with you when some of the folks were thinking about this. They said right now most boards are about a dozen people. Sometimes up to 18, 20 people. They said theyd much prefer them to be a handful of people if they could and probably wouldnt have as many academics and consultants an the hoop. Theyd really jus have experts in the field. But because of governance experts that the boards have morphed into something beyond what they should be. I think all things being equal, a smaller board is better than a bigger board in terms of ease of dialogue and discourse. I wouldnt pin this on the proxy for why theyve got more diverse or larger. A more diverse board is a more productive board. Back to the issue of size, i think a smaller board is viewed better than a large board. The issue of quotas came up in one statement. But the group really didnt feel as though quotas on a board made any sense at all. I dont know if you saw this in the uk. Theresa may was saying that workers should be considered directors. There should be workers, employees on boards. What do you make of that idea . I think obviously employees of a company are critical stake holders in that company. You know, i think our model in this country is that we did not have employees workers of the company on aside from the ceo and one or two others. We didnt address that in terms of workforce directly. My personal view is that it would raise a lot of issues. Were probably better staying clear of that. While we have you here, brian, help us with the markets. Weve been on a bit of a tear over the past week and a half. Somewhat unexpected at least to the socalled expirts. I did not expect the market to move this way after brexit. How are you thinking about things right now . Well, i think what is brexit anyway . I cant remember. It seems so long ago. I think the markets have been very resilient. I think news out of the u. S. Has been generally good. You saw the feds reference the other day. Maybe they might move to raise rates by the end of the year. I think theyre keying off economic data. I think brexit will take a long time to work through. We didnt expect the brexit vote to occur the way it did. None of us really expected markets to respond the way they did. Markets always confound all of us. Thats no real surprise. And it just feels as though the equity market is going to be hanging in there for a bit. Markets go up over time. You remember 800 or the dow, i know. Now at 18,000 or whatever. So they seem to go up over time. If they dont go anywhere for two years and all they do is back and fill and consolidate gains, why are we surprised when two years later two years ago we were expecting the market to go higher. Now it takes a break. The pause it refreshes, rolling corrections. And now were surprised when its going up after two years of flat trading. It doesnt seem that confounding to me. Well, again, if you look at the longterm markets go up basically twothirds of the time. And when markets so the odds are in your favor. Two years they dont do anything. But you said two out of three. Isnt this the one . It shouldnt be that surprising. Year to date the s p up 6 or 7 which is not bad. Right. And i think the challenge for the market and the reason maybe weve been treading water for a bit is that growth has been scarce. And Earnings Growth has been under pressure. At the same time valuations are extended but not too extended. Were in this period of really building a base, i suppose. Waiting for the economy to pick up at some point. So how do you handicap the next six months and does the election factor into that for you . I really enjoy your conversation about the goingson in cleveland last night. I think the key is going to be what happens economically speaking over the next six months. I think investors will shake off the election, whatever happens. And i think all eyes will be focused on the fed and on earnings performance in the second a of the year. I think the u. S. Economy is stronger than any president ial candidate. And i think the economy will do what it does irrespective of who the president will be. You didnt say which candidate it would have to shake the election off. Maybe you mean both. I think the market is going to have to shake off either candidate. Okay. Fair enough. Brian, we appreciate your time this morning. Congratulations on putting this together. Its important work. And its pretty good stuff. You can find it, by the way i was going to say we can find it online. There is a website. But i dont have the web address. When i get the web address people are rushing to get a pen and pencil to get that address to read the Corporate Governance changes. But you can get it on cnbc. Com. Can you . You can. Rush there. I should also mention i said that brians part of the hbs class. You know who else is in that . Steve burke. Yeah. That was smart leaving him out. Who else . I didnt know those other guys. Burke was in it . Burke, jamie dimon i know. Im kidding. The most important one and probably the biggest success out of that. Very much so. Coming up in the 8 00 hour, another success. Warren buffett. Hes going to be weighing in on the initiative as well. Were going to have that mustsee interview at 8 00 a. M. Its not even close. Right . Im with you. Geez. Coming up, elon musk revealing another part of his plan. Looking to pivot into the truck market. We have details after the break. And governor rick scott will join us with his reaction to ted cruzs speech and much more. Squawk box will be right back. Zblvrnlts were back. Elon musk revealing the master plan. And phil lebeau joining us from chicago. Weve been talking about the master plan and how it justifies the integration of solar city into tesla. One of the interesting parts of the plan is what musk sees in terms of future vehicles being built by tesla. If you think this is a company that only makes high end electric cars, think again. In the future tesla plans to build some of these models. Others are a possibility. Pickup truck, a new kind of pickup truck, he says. Thats in the works as well as a compact suv. Then he also outlined the possibility of a heavy duty commercial truck. A semi. And urban buses as well. All of these vehicles, autonomy is a part of it. Musk says he will not disable the Autopilot Technology already in so many of its vehicles. He said it is significantly safer than if you have people driving. Therefore it makes sense to have this technology and continue to improve it. There is a care share fleet plan in the future. Tesla plans to operate one and to allow owners of tesla vehicles to have their vehicle be part of the Car Share Program as well. With regards to that he says you will also be able to add your car to the tesla shared fleet just by tapping a button on the tesla phone app and have it generate income for you while youre at work or voi kags. Significantly offsetting and at times potentially exceeding the monthly loan or lease cost. Take a look at shares of tesla versus General Motors over the last year. The reason were throwing this up, were going to hear from General Motors and their 2 q earnings in just a bit. Remember how tesla sold off . Theyve made that all back and then some since june 22nd. Guys, back to you. Okay. Phil, thanks. Coming up, well have earnings from a different automaker. Ive heard of this one. General motors expected any minute. Plus Florida Governor rick scott will join us. His reaction to ted cruz, to the vp candidate mike pence, and much more. Straight ahead. Were also expecting a decision on rates from the ecb. Check out the euro markets. Whats happening in socialism land this morning. Down. Well have that decision. Squawk box will be right back. Welcome back to squawk box. Couple stocks to watch right about now. Strong demand for barbie dolls. Mattel posting a smaller than expected loss. Also Networks Beating estimates. And the goldliner cutting the gold cost forecast. Coming up when we return the barbie news was good, you said . Good news for barbie. Because the news had been bad. Then they introduced new barbies. We didnt look into it. E with dont have any barbies in our house. Not yet. Not yet. General motors ready to report. Were going to have the numbers shortly. Plus vote your conscience. Vote for candidates up and down the ticket who you trust to defend our freedom and to be faithful to the constitution. Governor rick scott with his reaction to last nights speech from ted cruz and much more. As we head to a break, take a look at u. S. Equity futures. Squawk returns in a moment. Thats why i use e trade mobile. Its on all my mobile devices, so it suits my mobile lifestyle. And it keeps my investments fully mobile. Even when im on the move. Sign up at etrade. Com and get up to six hundred dollars. Announcer when they test you, stand firm and move only when you hear the seatbelt click that says theyre buckled in for the drive. Never give up till they buckle up. Among the stories that are front and center at this hour, now just about 15 minutes away from the ecbs latest Interest Rate statement. Well have it for you as soon as it hits. And well monitor the draghi News Conference in about an hour. More from Steve Leisman on that as well. Also a number of key economic numbers coming out. Jobless claims out in about an hour. Also existing home sales. And a big takeover in the Mining Industry this morning. Japans koma a japanese company. Thats not fair. A japanese company. Komatsu is buying u. S. Based Mining Equipment maker i bought you time. For 2. 9 billion in cash. That deal worth 28. 30 per share. More than a 20 premium over yesterdays closing price. Thank you, joseph. All you need is a little time. Just a little extra. Three syllables. Sound it out. General motors releasing quarterly results. Lets get the numbers from phil lebeau. Hey, phil. This is a huge beat. Eps of 1. 86 a share. Well above the consensus of 1. 52 a share. Net profit more than doubles. Up 157 to 2. 9 billion. And this is a number that usually the analysts are not this far off. Revenue they were estimating 38. 9 billion in the Second Quarter. Came in at 42. 4 billion. Largely because of the richer sales mix in china and the retail sales here in the United States. One other note, the profit margin in the Second Quarter, 9. 3 compared to 7. 5 in the Second Quarter of last year. General motors because of the Strong Quarter and because of its outlook for the rest of this year is raising its Earnings Guidance for the full year by 25 cents a share to between 5. 50 and 6 a share. The consensus on the street now is at 5. 65. Im sure analysts will be raising their numbers. One other thing we want to point out, europe. A profit for europe. 100 million but theyll take it. First profitable quarter in europe since 2011. Well be talking with Chuck Stevens, the cfo of General Motors coming up in about 20 minutes. A big beat. 1. 86 a share. A lot of this speaks to the strategy of emphasizing retail sales and a richer mix of those sales here in the United States. Back to you. Yeah. Big cars, no doubt. Stocks up a lot. Were you able to look at the monitor . Im not sure. Im not surprised. This is way above what people were expecting. And when youre selling those suvs and pickup trucks at a higher average transaction price because youre emphasizing those retail sales, thats where the strategy is paying off. Youre seeing that in the 2q numbers. Looked pretty good too. Its a denali, right . Even the smaller denali looks good. Acadia denali . They look good. The suv market, joe, is red hot right now. And General Motors has been targeting that and the midsize pickup market. Thats where theyre making hay right now. Ford isnt in that market. Fords in the full size market. When it comes to the midsize, huge success for General Motors there. Will you buy an suv when you finally buy . Yes, sir. Absolutely. Electric. Hybrid if i could. All right. Because a Carbon Footprint is like a size 16. Trying to be helpful. You are. Conscientious. You vote your conscience too. Just like ted. Ted and i together. Speaking of ted, another night of fireworks at the rnc. Ted cruz getting booed after failing to endorse donald trump. Then indiana governor mike pence accepted his nomination as Vice President. Lets bring in governor rick scott. Addressed the Convention Last night with a great speech. Governor, good morning. Good to see you. Good morning. Id never given a convention speech. Im a business guy like trump. It was a ball last night to give this speech. It was fun. It was a lot of excitement. There was a lot of chanting going on last night. So did you have any inkling as what to expect when senator cruz took to the podium . Joe, its time to unique. Theres only two people on the ballot. Donald trump and Hillary Clinton. If youre not supporting donald trump, youre supporting Hillary Clinton. So its time to unite the party. Im here to do everything i can to help donald trump win. We need a change in direction in this country. Theres only two people on the ballot this time, governor. In 2016 there might be different people on the ballot in 2020. The question is whether unbridled personal ambition always pays off. It paid off for Ronald Reagan in 1976. I dont know if history repeats itself the same way this time around. What do you think . I think right now weve got to win in november. This is about the very survival of the american dream. Weve got to get this country going again. We cant have continued overregulation, higher taxes than the rest of the world. Weve got to get this economy moving faster. Why doesnt senator cruz see your points that youre making right now. You know, i never understand what everybodys going to do. I know from my standpoint i want donald trump to win. Hes a friend. Ive known him for quite a while. I know hes going to focus on jobbings. I need a partner in d. C. I need somebody who says how can i help you get jobs going . Weve added over a million jobs since i was elected but we should have had more if i had a good partner in d. C. Being the floor it must be exciting but do you think its too hard core . Before alienating those people in the middle that arent already decided . Is that possible to do that . I guarantee the democrats arent going to worry about being too harsh next week. Youre going to hear every word under the sun thrown at trump. People care about jobs. The biggest issue. With the isis inspired terrorist shooting people in orlando, its isis. Whos going to destroy isis . Donald trump wants to do it. Hillary clinton had a chance and she failed at doing it. This election i think is going to be about jobs and destroying isis. How often do you talk to the candidate . Every week or two. I talked to him last friday. He was excited. I talked to him after he picked mike pence. I think mike is a good choice. Hes a governor which i liked. He had success in congress. He gave a good speech last night. The trump kids have given great speeches. You have to really admire donald trump, how he raised his kids. Hes done a wonderful job. Where i was going with that is do you know whether hes going to is he going to be the trump that riffs and Free Associates and gets off track . Or is he going to do a teleprompter . Or is he going to do a bit of both . Teleprompter and then riff once in awhile . What do you think . I have no idea. I was at a rally with him. I introduced him at a rally in florida the other day. Hes a great speaker. He energizes people. He has big rallies. I know hes going to have a big win in florida. Its going to be about jobs, jobs, jobs. Im staying up tonight, governor. Me too. Itll be late for me. Tomorrows going to be tonights the night to stay up with peter thiel. I watch squawk box early so i dont stay up at night. Good answer, governor. Right. He does sometimes. And we need to be here so we normally dont stay up late. Thats important. We found out just with the geneticist yesterday, sleep. If you want to your immune system and, you know, seeing mutations when they occur. You need sleep and you need exercise and you need to eat well. And you need to vote your conscience. Thats the key for andrew today. Vote your conscience. Vote your conscience. Thats a reference to ted cruzs kind of threw a wrench in the works. That was the question i was going to ask the governor. How much do you think it did ruin the fact were talking about that to the extent do you think its divided the party or created questions or has it . Theres a lot of support here for donald trump. I mean, hes clearly our nominee. As i travel around i travel mostly in florida. You go to a barbershop, theyre all talking about trump. People want a change. I said this is our chance. We get to fire the politicians and who better to do it than the person who knows how to fire people and thats donald trump. Thats exactly what people think about in this country right now. Theyre tired of the career politicians. Thats what weve got on the democrat side. How about are you friends with kasich . I know john. Hes a competitor for jobs. I like being here. This is exciting. I loved getting to talk last night. Im not talking about you. Is that in contrast to him . Hes starting to remind me of captain quig. He does strange stuff. This is weird. This is weird. Is he pacing back and forth alone in his Governors Office just like i dont know. Its very strange, isnt it . Look. I think people ought to be here. I think they need to unify. Its great for ohio. Cleveland looks unbelievable. What a Beautiful Day yesterday. Oh and people are so nice in cleveland. And the way police and the security and everything else, i dont know. Id stop by. Is there any chance of that that he stops by and surprises people . Or hes just mad . I dont know. Its the last day. But clevelands beautiful. The people are really nice. You walk the streets, they all say hi to you. Theyve done a wonderful job in cleveland. But you dont like cleveland compared to florida. Dont act like i want everybody from cleveland to come to florida, spend all your money, and then move there. You are so on message. I would want you giving a speech for me too. You are so on message. Governor, thank you again. Call kasich. You got his number . Ive got his number. Call him. Will you . And just say, just walk in there. People will go crazy. You know . That would be fun. Well see what happens today. Maybe tonight. You know him, andrew . Can you call him . I can make the im going to make the phone call during the commercial break. Thank you, governor. See ya. Have a good day. Coming up when we return, ecbs decision on Interest Rates. Well have that and market reaction. Take a look at european markets. Techno music to go along with that for you. At 8 30 mario draghi will hold that News Conference and well be monitoring his remarks and bring you any of that news. Stay tuned. Squawk returns in a moment. Then at 8 00 with Warren Buffett. Back in a moment. Welcome back to squawk box. The futures right now, take a quick look. Now flat, basically. Well take a quick look at the european markets at this hour. Notable that the nasdaq is actually up now. Had a big day yesterday. Up the same number of points as the dow yesterday. Which is not the way it normally works. We got to bring in mr. Leisman, the professor. Hes not in europe but hes got breaking news from the ecb. Yeah. The ecb leaving Interest Rates unchanged at minus 0. 4 . At 0. 25 . So unchanged. Guys, this is exactly as expected by the market. But i do want to talk about this emerging split between central bankers and economists on one hand and markets on the other. It seems like the markets have decided that the brexit vote was a nonevent, and is going to be a nonevent. You have central bankers and a lot of economists that are in the first order of marking down their outlook for uk gdp and even european gdp with a bunch of economists saying they expect a recession to come from the brexit vote. And certainly what we expect from mario draghi who hasnt spoken a lot. These will be extensive remarks. As we expect to wait and see. Its not really until september when the ecb is going to change some of what the ecb might do in the imf forecast earlier this week which was to downgrade britain and the eu a little bit. But the market it seems to me and joe, youve been on this story a lot. That it seems to be a nonevent. I just want to tell you that the economist for what its worth and the central bankers are a little more suspect about the impact of brexit on both the eu and the uk economies here. Big deal yesterday and day before was the downward revision in the imf. Right. Which still had the uk growing faster than the other countries. I will tell you. For 2017 you see a lot of 0. X for the uk. 0. 2, 0. 3. I was reading barclays outhook for the uk in 2017 and a bunch of other major wall street banks that really see a cratering of growth in 2017. Really the story we hear about is the one on uncertainty. We do not know the terms by which the eu and the uk are going to be doing business. What those trade deals are going to look like in a postbrexit world. And those can have a big impact on the economic outcome. So the big story right now is the uncertainty of the outlook. Worse and worser are the two the imf came out with. And i never know where i see things anymore. Which is bad. You cant necessarily trust twitter all the time. Really . The uk was supposedly going to be relegated. That hasnt happened. That people are tripping over themselves trying to do deals. Look. You have these two different interests on the part of the eu here. On the one hand everybody has an interest of making this go smoothly and creating the best economic trade agreements they can for both sides. On the other hand, the eu certainly has an interest in making it disadvantageous for other countries to go. So you treat the uk too well and other countries say i want that deal too. Yeah. And then i still, you know, think if the rest of the countries that are perceived as weak in the eu could devalue their currency thats certainly true. Itd be a better world and the uk has been able to do that. I dont know why everyone doesnt think the weaker pound is not going to offset some of these other things. The weaker pound is not costless. Especially in a country like the uk that has a larger share. Stuff is more expensive. So there is a downside to that. Theres an upside and a downside that comes essentially in a lower standard of living when you rely on imports. I do want to say one thing though. One thing that is true is the market is girded for different or worse outcomes from the uk and the eu by lower Interest Rates. In the u. S. Theyre much lower compared on the 10year from a year ago. Thats something that will be an offset to whatever the outcomes are. They got the queen in the royal family. Thats something. And harry and kate and the kids. I mean, they got. Thats something. I hadnt factored that into my models. Maybe i can factor that in. I think maybe you should. Its pretty cool. Its worth thinking about. All right. That queen, shes amazing. Appreciate that advice, joe. Thank you. Draghi coming up at 8 30. Right. Thanks, steve. Chuck stevens joins us next. Then at the top of the hour, shoring up trust in the health of americas Financial Markets. Billionaire investor and ceo of Berkshire Hathaway Warren Buffett will join us to discuss governance guidelines. Squawk box will be right back. For decades, investors have 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. Gm reporting quarterly reports just moments ago. Phil lebeau joins us now with a first on cnbc interview. Phil . Joe, lets bring in Chuck Stevens, cfo of General Motors joining us from the companys headquarters in detroit. Chuck, you guys blew away the estimates. 1. 86 over the expected 1. 52. What did you do that analysts were not expecting or underappreciated in the last quarter many. Well, i think it starts out with the continued Strong Performance in north america. Theyve had an outstanding quarter and were proud of the entire team. 3. 6 billion of profit and 12. 1 margins. And profitability in europe. We made money in europe for the First Time Since 2011. Those were the two biggest drivers of the beat. But broadly speaking we had Strong Performance around the world. Chuck, you guys have been emphasizing retail sales for some time. Clearly that paid off in the Second Quarter especially here in the United States. How much greater is the profits that youre making in those vehicles right now relative to where you were a year or two years ago . Well, i think the Overall Results reflect that improvement. I mean, clearly retail sales are more profitable than fleet sales. And as we continue to launch great new products, were seeing the benefit in pricing. Were seeing the benefit in mix. Were seeing the benefit in improved residuals. And were seeing the benefit in Overall Results. Were pleased with the execution of our strategy thus far. Are you worried about incentives especially with your competitors starting to increase their percentage of average transaction price. The amount of incentives going into that. How much is that pressure starting to filter through to you guys . Well, when we look at our incentives spent in the first half of the year, clearly both the industry and our overall incentives are up slightly. As we continue to drive efficiencies and drive cost performance and launch great new products, we believe that were going to be able to overcome and continue to generate strong margins. And we believe overall fundamentally the markets pretty rational and disciplined at this point in time. Any concerns about where were seeing auto sales through the rest of july and as we head into summer . Things were a little soft in june. Whats your outlook as you look at the Third Quarter . Yeah. We still expect to see strong industry performance in the u. S. For the foreseeable future. Clearly the results in june were a little less than we expected. But the fundamentals are there for continued Strong Performance. And thats our baseline assumption for the rest of the year. Chuck stevens, the cfo of General Motors joining us here on cnbc first. Where they raised their full years earning guidance by 25 cents a share to 6 a share for the full year. Back to you. Thanks for bringing us that interview. When we return, another interview. Warren buffett of Berkshire Hathaway is going to join us. Hell talk the push to change perhaps the board room. Were going to talk about it with him. Take a look at the futures at this hour. Dow looks it would open down about five points. We are back in a moment. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. A secret meeting of corporate titans. Jamie dimon and Warren Buffett among the Business Leaders on a mission to shake up the state of public companies. The oracle of omaha is here with details. The ecb holds its first meeting since brexit. Mario draghis News Conference news straight ahead. The jeers heard around the world. Ted cruz booed off the stage in cleveland. The former president ial candidate refusing to endorse donald trump. Ann coulter is going to join us with what this means for the future of the gop. Squawk box begins right now. Live from the most powerful city in the world, new york city, this is squawk box. Huge hit from my youth. The turtles. Welcome back to squawk box here on cnbc, first in business worldwide. Happy together. I dont know about the republicans. But we are. Im joe kernen. Were voting our conscience together. You continue to love that. Along with andrew ross sorkin. You always need to vote your conscience. I dont know why thats an earth shattering statement. Becky is off today. The futures right now after the decision from the ecb are flat. I dont think we have any idea what the market could potentially do over the next trading day. Until 4 00. That doesnt really indicate that much. Theres earnings that we have, results after the bell from some key companies. Weve almost got some intel casting a bit on the dow stocks and maybe the nasdaq. Among the days top stories, the ecb holding Interest Rates steady. That was as expected. In fact, leisman said almost everything that transpired was pretty much in line with expectations. You can see the euro is at 1. 10. And the yen down to 106 since it has the weird relationship on the screen with the dollar. Then the pound below 1. 32 again. Mario draghi will hold a meeting 30 minutes from now. General motors posted much better than expected earnings and revenues. Also raised their full year outlook and reported its first profit in europe in five years. Cfc Chuck Stevens joined us moments ago. They just had an outstanding quarter and were proud of the entire team. 3. 6 billion of profit and 12. 1 margins. And profitability in europe. We made money in europe for the First Time Since the Second Quarter of 2011. Those were the two biggest drivers of at least my assessment of the beat versus consensus. But broadly speaking, we had Strong Performance around the world. You see even the cars behind him, did you see them there . All suvs i think except for one. Intel shares, the big drag was slower Revenue Growth at its data center business. Stacy smith on closing bell yesterday. We have insight into what consumer wills buy. We have new products coming in we think will give them capabilities that theyll buy a richer mix of products for us. So that momentum in the data center and particularly in the cloud as we go into the back half of the year, we think give us more than seasonal growth in q3 and q4. Youre looking at that stock down close to 3 . In the meantime, we now have Warren Buffett with us. A Blue Ribbon Commission from the leaders of business and Money Management. Theyve been meeting a little bit secretly to Work Together to develop what theyre calling a road map for fixing whats broken in the bedrooms of Corporate America. Its a group of whats being called the common sense principles. Its a full page ad in about every newspaper today. All about it you can read it online. Governance principles. Org is the website. Were joined now by one of those coes that helped develop. Good morning to you, Warren Buffett. Hi, andrew. Great to see you. Help us understand how this happened. You know, you look at the signatures on the bottom of this ad. It is everybody from you, mary barra, jamie dimon, larry fink. How did this come together . Well, jamie initiated it. He gave me a call and gave those other people a call probably a little more than a year ago. And suggested that we get together and see if we could come together on some earlier principles for Corporate Governance that might help show a pathway to the future. Corporate governance has evolved over the years. Weve got new constituencies that have become stronger. So it was an attempt to get general agreement, not total agreement on every point. But general agreement on some principles that would be useful in Corporate Governance. One of the figures that jamie dimon often cites when talking about sort of the i dont know if you want to call it a broken public market. The fact in 1996 there were publicly listed companies in the United States by 2012 this according to the National Bureau of economic research, it was in half. 4,101. So Many Companies either taken private, people delaying, going public. Of course mergers an the like that may have led to that. But what do you think is happening . Why are we at this point in time . This state of affairs . Well, theres two Ways Companies disappear. They either get bought or they go broke. And i dont think that many have gone broke. So its been a period of amalgamation, mergers. But markets go where money and peoples desires lead them. So i think thats been a its been sort of a natural evolution, i would say. A couple of the suggestions, recommendations. And i know these are not absolute. But perhaps the biggest one, you dont think that a company necessarily needs to provide guidance. Yeah. U like that one. I think that i think that guidance can lead to a lot of malpractice. It doesnt have to, but i think if the ceo goes out and says were going to earn 1. 06 next quarter, i think if theyre going to come in at 1. 04 theres a lot of attempts to find extra pennies some places. It doesnt necessarily have to be the ceo. Sometimes subordinates. They want their chief to look good. And there are ways that you can move earnings toward the end of a quarter. Sometimes even after the end of a quarter. And i think the guidance ive seen guidance produce some bad results. How hard was it to persuade others in the resume that thats the right answer . And the reason i ask is you have the heads of everything from vanguard in the room to t. Rowe price. We didnt we didnt necessarily come to it on every point. I believe we point that out the beginning of our statement. That there are a variety of companies that may have different constituencies. That may operate under different pressures, may have different beliefs about it. So this is not saying that if you dont do this, youre dead wrong or anything of the sort. But it was it was to give encouragement to companies that really felt uneasy about giving guidance to perhaps have a little more back bobone about i. I personally think thats a good recommendation. I dont think it should be mandatory. I know the goal is to stir conversation in the business community. Is any of this like the giving pledge as in you hope others sign up to it . Or is this more about creating a dialogue. Its creating a dialogue. This is not something were going to be passing along and hoping we get hundreds of signatures or anything. Its a dialogue and its certainly we welcome other views on it. Its these are not these did not come down on a tablet, you know . From the mountain or anything. One of the more interesting recommendations in my mind was the win around dual glass voting shares. And the idea that youre not necessarily against it. But to the extent that companies do have dual class, do you think at some point it should sunset . How should that work . And do you think that will be adopted . Have you heard from anybody yet on that . Theres a number of big ones and i know you have some friends who have them. Not only friends. We have a dual class at berkshire. When i bought into the Washington Post 40 years ago, they had a class structure. The initial letter i wrote to graham, i happened to welcome it. There was some value to society of having the Washington Post clearly controlled by the graham family. For decades to come. And our own case, as id give away my own shares. And ive given away 40 so far. Ill give away every share i have. I always convert the voting stock into the a stock into the b stock. The a stock will have less proportionately as it goes along. And we also have a provision that in the event of any event of a corporate transaction, the a stock cannot get treated differently than the b to stock. I think thats important and we put that in our paper. Additionally, weve got it for 20 years and the a and b stock have always sold right at parity. I generally think that on balance i think its better to have one class of stock. How much of this conversation is being driven by all of this Corporate Governance and the like and rise of activism . Well, i i dont think it was exactly driven by that. But it has to be addressed. The question of whether major Institutional Investors should sort of quitclaim their behavior as owners to the advice of some outside organization, we spent a lot of time talking on that. At berkshire, we think we ought to vote the stock as we believe and we do not use consultants or organizations to direct our vote. So i lean away from people having someone else tell them how to vote. Can you take us inside the room for a second . What was the biggest point of contention . Well, we certainly disagreed on a number of things. It was very it was a very pleasant discussion. They lasted i think we had three of them that lasted somewhere between three and four hours each. And i you know, i think almost everything youll see in that we had some discussion with people, part of it originally written. But i cant think of anything we got in any fistfights over. Would you prefer to be a private company today . I mean, one of the big issues is that when you talk to ceos today they all say they much prefer to be outside of the glare, if you will, of the public spotlight . Ive had an interesting transformation on that. I originally would have preferred Berkshire Hathaway to be a private company. And over the years my view on thats changed 180 degrees. I enjoy having berkshire be a Public Company. I enjoy having i dont know whether we have a million shareholders or even more. But i like the fact that people put their trust in us and that we treat them like partners and they feel like partners. So i enjoy being a Public Company now. If you asked me that question 40 years ago, i would have said id rather be prefer. Theresa may, part of her platform in the uk is encouraging what she called worker directors that arent cut from the same Social Circle to be on boards. When people talk about diversity on boards, usually its other ceos. What do you think about really changing that up . Does that make sense . Well, in certain countries they have various ways of workers participating. I think maybe even one time in the past in the auto industry, they agreed to put a uaw member on. Maybe it was the chrysler board. Thats a long time ago. But i believe that the board of directors is there to represent shareholders, the owners. And i think that you should have people that their primary allegiance is to the company. Thats a great interview with andrew. On a personal note, i just want to thank you for not sending me that dairy queen card. Because i dont need that. I dont. You were going to send me that to get i dont need it and i think you thought about that. The last thing i need is dairy queen stuff so thank you for not sending it. Joe, i will take that as a request. Ill send it immediately. No, i mean it. I think you were going to but who needs a dairy queen card at our age or well, you can work it off. But its too much work, warren. Okay. I feel like i got to dont do it. Maybe another brick. Another brick is on the way. Another brick in the wall. Someone said that once. Okay. We want to thank joseph for the dairy queen questions. It wasnt really a question. I will take you to dairy queen. No. I was serious. I dont want any i will personally do it. Go ahead. Joe, i would hate to test joe with a net card. You said youd send me one, it just wouldnt be good for anything. I know. Its good for tarmac hours. I could use it at like if i ever go out to a nightclub again. I could go, what is that . Thats my net jet card. Im sorry. Thatll work. Youll get further with that than a dairy queen card in a nightclub. Thank you for joining us this morning. For the viewers who want to check out what these guys are working on its governance principles. Org. Coming up, ted cruz stealing the show at last nights rnc convention. Tonight peter thiel, tom barrack, ivanka trump, and donald trump. More when squawk box comes right back. eeeeohmumohweh hush my darling. dont fear my darling. the lion sleeps tonight. hush my darling. man snoring dont fear my darling. the lion sleeps tonight. woman snoring take the roar out of snore. Yet another innovation only at a sleep number store. Our mission at clover is to highest Quality Dairy products. Clover has relationships with 27 different family farms. The environment is who clover is. Without it, were nothing. Pg es been a great partner. Theyre the energy experts, were the milk guys. Pg e worked with clover on a number of Energy Efficiency projects to save energy every month. If youre part of the fabric of the community, youve got to ensure that you do things right, environment included. Learn how you can save at pge. Com save together, were building a better california. Welcome back to squawk box this morning. Among the stories and stocks and that were watching, Southwest Airlines, earnings and revenue coming in below. It was helped bid low fuel prices and record low. Southwest is also working on a computer problem that left passengers stuck in place yesterday. Flights were grounded across the country after the malfunction. And as of this morning, 221 flights have been canceled. Ceo gary kelly joined us this morning. The problem is restored as of 1 00 or 2 00 a. M. This morning. Thats a good thing. Now the operation needs time today to catch up. So itll be another tough day today but not nearly as bad as yesterday. We should tell you just in the last 20 minute this company tweeted most systems are back online but there could be some more delays and cancellations. If you head to the airport, check the app or website before you go there. Were already in day four of the Republican Convention. Eamon javers joins us again from cleveland. Youre going to talk about tonight, not last night. Or maybe both . Reporter lets do a little bit of both. We in the media had given up on big political conventions as actually news. Theyve been infomercials packaged for so many years. But this has been an unconventional convention. No more so than last night when taking to the stage about whether or not he was going to endorse donald trump. Did not endorse donald trump and as the crowd began to realize thats where he was headed, they started to boo ted cruz. Heres how it went down last night. I appreciate the enthusiasm of the new york delegation. Those were the chants of we want trump. Cruz playing it off saying thats just his home state delegation. Thats just new york state, dont worry about it. But that was a tre dramatic moment. Donald trump then trying to upstage ted cruz who was trying to upstage donald trump. Now we turn to tonight where well see mr. Trump speaking. Ivanka trump was on the today show talking about her stepmother melania and the speech controversy. Its interesting to see the women talk about each other and showcase. I love melania so much and i am so proud of the job that she did. Shes a very private person. And for her to come out on that stage and speak from the heart and share her story about coming to this country, this is such a personal experience for her. And she shared it in such a graceful and articulate way. So i am enormously impressed with her ability to do that. And have Great Respect for it. Reporter so ivanka trump saying shes not worried about her speech tonight at all in front of the Convention Hall here. She said even if she bombs, she knows her father will support her. One more moment thats getting a lot of attention here, this air kiss moment between trump and pence as they were both on the stage. Watch this video and tell me what you think about this. This is trump and pence on the stage. There it is. Not quite a kiss, sort of a kiss. Thats how they do it in new york, right . In indiana they dont do it that way. Had a misconnection there. Ive done that before. We do its an air kiss. Reporter a near miss. Kind of put the lips out but not on the guy. We do it in the euro way and thats on both cheeks. We do an air kiss on both cheeks. Reporter you dont want to mess up the makeup, right . Exactly right. Thats exactly right. Reporter these men know and we do hug. But both of us have yeah. We could you know, both makeups could get smeared. Thats not always the case. Reporter they do it in new york. Im a d. C. Guy, its a bit more southern. I go up to new york, on the floor of the New York Stock Exchange kisses me every time. Lets do this in private. Come on. Come on. For there it is. Come on, come on. There you go. Thank you. Reporter i didnt know we were going to do that. But im glad we did. So many things that i could say right now and are inappropriate. Theyre old. Roll of quarters, roll of dimes. Any of that stuff, im not going to go. I saw that earlier before you referenced it and i didnt think i said oh thats kind of cute. Youre not going to actually plant one on your Vice President most likely. Reporter maybe umd. Oh, my god. Love from sandy. This is his penultimate day. Thats our producer and tomorrow hes going on to bigger and better things. You should give him a kiss back to thank him. He had a roll of certs in his pocket. You go ahead and see you later, eamon. Thank you. Reporter later on. Well see you in just a little bit. Coming up when we return, maybe some more kisses, i dont know. A video gone viral. First Lady Michelle taking a ride on the passenger side all in the name of karaoke. Well show it to you next. Squawk returns in just a moment. Got to check this out. There is a video going viral. First Lady Michelle obama rocking out. Flotus joined james corden for a carpool karaoke. Singing and dancing along to beyonces single ladies. And were joined by missy elliot to sing get your freak on. If you like it then you should have put a ring on it dont be mad when you see that he want it if you like it then you should have put it a ring on it do you know the dance . You like the way i switch my style holla now go get your freak on go get your freak on when are we going to begin doing this . We need the autodriving feature for that. His hands were off the wheel. We can get a tesla. Do the autopilot thing. Can we do some i dont know those songs. I can sit in the back. Becky can sit in the front. Some milli vanilli. Were like people that there was the old guy was dating the younger woman and they were going to sing on the road, you know . And the only song they both knew was star spangled banner. I dont think we know the same. How about some Michael Jackson . Do you have that glove still . I will bring the glove. Bring the glove. Can you go he he . Ill sit in the back and do that part. Okay. Coming up, we are just minutes away did you notice the convention is bringing people together. It is. Yes. Bring over. Were minutes away from initial jobless claims. Well bring you those numbers in a moment. 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. Announcer dont let salmonella get funky with your chicken. On average, one in 6 americans will get a foodborne illness this year. So, learn the right temperature to cook each type of meat. Keep your family safe at foodsafety. Gov. Welcome back to squawk box. Rick santelli here live on the floor of the cme group. Breaking news. Initial jobless claims move down 1,000 from an unrevised 254,000 to what it remains at at this moment, 253,000. Continuing claims dip from 2. 15 to 2. 128 . Heres the number were all waiting for. Philly fed index. Let me see. Philly fed, still dont see it. Still dont see it. It should be out momentarily. Well keep looking at the screens. But at this point, 250,000 obviously goes back to the early 70s in terms of times weve seen down 2. 9 seems to be the read. Thanks for picking it off. Down 2. 9 on the july read of philly fed. How does that fit in . We had minus 3. 5 coming in. So not type of number we would like to see. A little lower than expectations and sequentially follows 4. 7 . So the july read, a disappointment. We still have existing home sales. Joe and the gang, back to you. Okay, rick. Thank you. Now back to politics. Indiana governor mike pence accepting the Vice President ial nomination. But it was Donald Trumps former rival or current rival ted cruz who stole the show telling the audience to vote their conscience. Joining us now, columnist ann colt coulter. She the author of adios america. Beckys out today, ann. I was trying to get another lady anchor. And i thought of you. Youre in cleveland so we cant have you for the whole three hours. But its me and you against andrew now. So im not even going to talk. But thanks for joining us. Absolutely. Good to be here. Is that all right . He was going to get rachel maddow. Shes not here. That would have been something, huh . She cant get up this early. Were you there last night, ann, for that . No. Im in cleveland. And you were hoping for reports from the scene but i have not been i have not watched a single moment of the convention. I was at a dinner party when someone came in and said you have to see this. Ted cruz just committed suicide on stage. And we all pulled out our iphones and first read about it and then watched it. And oh, my gosh, thats the only thing i wish i had been in the hall for. Its like professional wrestling. Its amazing that he does not have people around him to tell him, ted, maybe you shouldnt be committing suicide live on national tv. But i mean, i guess youve shown your viewers the great thing among the great things about it was when donald trump came out and the whole crowd turned their back to cruz and applauded trump as he glared down ted cruz. Are you showing it now . Were showing it now. Personal delusions can be pretty strong. And i thought, you know, he did this stuff on the senate floor and the shutdown and he got confuse accused of being out for himself. But youre a first term senator and havent really done anything. Youre not you have delusions. But i thought itd been cured a little bit by the primary process. But he really thought it was reagan in 76 and the perfect prelude to 2020. I dont think its going to turn out the same way. Do you . No, i do not. Im beginning to understand why ted cruz has been hated by everyone every place hes been from kindergarten to the United States senate. I must tell you the only way im making money this year is on bar bets trying to get donald trump in the white house. I won all of them. I would have lost if we had made a bet on who would endorse donald trump first. Marco rubio or ted cruz. Because marco rubio is standard establishment. Theyre very much against having borders in our country. So theyre against donald trump. But cruz started to imitate during the primary. He was imitating picking up trumps positions. You would think it would occur to him every place ive been everyone hated me. My only shot is to tie my wagon to donald trump. Maybe i can be attorney general or solicitor general. No. Rubio comes out and as tepid as it may be endorses donald trump. Its cruz who cant get over it. So theres a lot of talk back and forth about whether appealing with red meat to the gops base, whether that expands into the i guess this center of people that are undecided at this point. And whether theres too much. I mean, the idea that Hillary Clinton and her people are saying this youre just too nasty. With what were in for next week, you know what were in for next week. Orange hitler and fascist and all that. Ive seen unbelievable things already. So i know its not going to be a love fest next week either. But is this helping get some of the people that arent decided yet, do you think . I think it is. I mean, thats part of the reason im not watching any of the convention. Very few people speaking who endorsed donald trump before South Carolina are speaking. Its the family. Im guessing this convention isnt designed to appeal to those of us who are with him from the mexican rapist speech. But i think as for the alleged harsh rhetoric, what id say is, look. This is the new trumpian party. It isnt as youll see in my next book out august 23rd, the old Republican Party which im so glad is boycotting. Thats the greatest thing about this convention. Bushfree convention, no john mccain. Its great. But theyre going to the cliches of the past. And often their image of Ronald Reagan that wasnt even Ronald Reagan at the time. Take for example, last night ted cruz going on and on about how we our party stands for freedom, for freedom. Thats the main thing. Freedom. Well, what does that even mean anymore . I could understand it back when americas greatest enemy and the greatest threat was the soviet union. The soviet war machine. But now its just words. What trump has done is broken through that, focused on the real issues facing the country which is having borders again, building a wall, bringing jobs back, renegotiating trade deals. He doesnt speak to identity politics groups as identity politics groups. He speaks to all of working class america and middle class america and boy, has it been a hit. So the other night i was watching one of the competing cable show. A very popular competing cable show. Anyway, oreilly looked at the demos that we have. And i think since the last election with romney theres actually more nonwhite voters going to be voting this time. So the number of white voters needs to be a stratospheric number if the numbers for trump dont improve with africanamericans or hispanics or in other areas. Can the turnout of white voters be enough to put trump over the top in your view . Two things. One of the bar bets im definitely going to win and im so collecting on this is i believe and ill take one with you right now. Donald trump will win more of the africanamerican vote than any republican since richard nixon. I also think he will do quite well with the hispanic vote. As we saw in the primaries, he kept getting more of the hispanic vote than any other republican. Again, he does not speak to hispanics, asians, women, gays as identity groups. He says im going to put americas interest first. Im going to bring back jobs. And he will. And point two on that, dont be fooled by those who ran mitt romneys campaign. There is not a mammal on north america who knows less about how to win an election. This whole thing about even if he didnt need even if even assuming trump does not get one additional, you know, nonwhite vote, we have something called an electoral college. So the National White vote is utterly completely irrelevant. Romney won a huge percent of the white vote than reagan. When reagan ran, half of the south was still democratic. Anderson was running that year. 10 of the vote. No one but white people were voting for john anderson. Romney was getting above 80 of the white vote in states like mississippi and alabama. So lets say trump although hes doing very well with with evangelicals, lets say he only gets 60 . Swing states that trump needs to win, romney either lost the white vote to obama or got way below his national percentage. So in fact, in only about five states he only needs if nothing else just get about 3 or 4 more of the white vote and i think he can do that. Hey, ann, on a somewhat related topic but a little bit different, its a business one. Weve been spending a lot of time if the past 72 hours talking about the future of fox news. Ive seen some of your comments recently. You said every woman whos ever been employed by fox has some roger ailes stories. What did you mean about that . I think i was misquoted. I was riding on a shuttle bus. Contrary to popular belief, i have never worked for fox news. Ive only worked for msnbc, in fact. But stories. I was just saying somebody asked me, you know, if i had had any experiences like this with fox news. I said no. There are stories, but ive never even i met him at geraldos wedding and rush limbaughs house. I never had a meeting with him because i never worked for fox news. But i always told people, look, these are just stories and i dont believe it. That was the main point of what i was saying. The punch line of which was i was the holdout at dinner parties always saying i dont believe it, i dont believe it, i dont believe it. Even to some of the people claiming it. If it were true, why doesnt someone sue . Right. So thats the ends of that argument. It seemed like you might have been taking a shot at megyn kelly sat one point saying it was, quote, very brave of her to wait until the last moment to Say Something . I i must tell you i dont remember. Okay. Im suspicious of that quote. Youre suspicious of that quote. What is your when you look at the future of fox news without roger assuming thats what the outcome is going to be, what do you think it looks like . And its impact on politics . I dont have any particular inside information, but i guess i know what you know which is theres apparently just from reading the news theres apparently a rivalry with the murdoch son who is are supposed to be very liberal and want to move roger ailes out. So the thought is instead of having this one cable station that would appeal to a small niche of 50 of the american people, there would be no Cable Networks doing that and well have three msnbcs which is possible. But i dont think it will be that harmful. Because very few people under the age of 60 watch tv and no one under the age of 50 does. A tv wouldnt have to go that way. They could attract viewers. As long as its a propaganda arm of the Democratic Party, people will get more of their news from the internet. So i dont think i dont think it will have that much of an influence. But it is kind of an amazing thing. You must admit that it is really disproving this nonsense that drives me crazy. Just whatever will sell papers. Were just doing it for ratings. No, no, no, no, no. The media is a propaganda arm of the Democratic Party and they are perfectly willing to sacrifice ratings to not sell newspapers as long as they are pushing an agenda. And the fact that we know that no cable station will say, hey, we can move in and scoop up fox news viewers. No, no, no. Were not going to get down in the mud and fight for ratings with fox news. All right. Before i dont stay up late enough so im going to watch it at home. Laura ingraham, she pointed to the very top row of Media Outlets and said why dont you do your job and investigate the other side once in awhile and do your job. And the place went nuts. So at least in that crowd, theres something to what youre saying. Ann, thank you. Thank you. Hope to see you again soon. Well see you around. Thanks. Thank you. Ecb president mario draghi answering questions from reporters right now. Steve leisman is going to join us with the key statements. Just starting the q a session. In his opening remarks he called brexit a headwind to the european economy. He said the ec sbrks watching the Brexit Economy very closely. But he says hell be better able to assess brexit in coming months. However, he said if warranted, the ecb will use all available instruments to me this mandates to the downside he said. And one more thing i thought was interesting. He said european Financial Markets to this point have weathered the spike and uncertainty with encouraging resilience was the term used by mario draghi. You do have the euro was at a high. It looked like 1. 041. A bit of a strength in euro because of his comments this morning. Okay. Mr. Leisman, love you. See you in a little bit. Coming up when we return, stocks to watch. Weve got earnings reports. Stay tuned. Youre watching squawk box here on cnbc, first in business worldwide. Earnings season kicking in high gear this morning. Travelers earned 2. 20 a share for the Second Quarter. 13 cents above estimates. Revenue also above forecasts. The companys results upbeat despite an increase in catastrophe losses. And blackstone shares rising. 5 cents above estimates. The Asset Managers results helped buy improved credit in real estate markets. And biogen earned 5. 21 a share for its latest quarter. Well above estimates of 4. 67. Biotech firm also announced a Buyback Program also announced the impending departure of the ceo once they can find a successor. Okay. Coming up when we return, were going to talk to our good friend jim cramer. Hes going to join us at the New York Stock Exchange live. Take a look at the futures right now. A bit of a mixed picture, but nothing moving that big. Dow off by about 20 points right now. Were back in a moment. Its a golden opportunity to experience breathtaking lexus performance in streetlegal form. For a limited time get great offers on our complete line of f sport performance vehicles. At the lexus golden opportunity sales event. Lets get down to the New York Stock Exchange. Jim cramer joins us now. Weve got upcoming results, jim, but also, intel and others that are already out. Whats setting the tone today . Intel and southwest air. Southwest is totally reliable and they really had some very bad passenger revenue, seat mile numbers and also a lot more capacity coming on. That was surprising. Because, you know, i think gary is great. You think gary is great too but that was a bad number. Intel just really kind of shocking that the rest of the exciting business, which is the data center business, was disappointing. Against that qualcomm we expected so little and that was great. It really is a very mixed bag in the last 24 hours. This was not like the previous 24 hours where i could point to stuff and say its great. I do think the joy bid may carry the day. A Biotech Company people didnt think much of gets a big bid. A guy replaced at biogen, a nice move. Biotech looks good, a big change. Qualcomm looks good but intel and southwest were two that i was expecting to be very good. What about later, whats the highlights after the close . Well, you know, im not quite sure which one im focused on. I know for me for the show ive got dominos the absolute standout of the whole quarter so far in the restaurant and i have campbells soup which will be incredible because i think thats a major turn of the company. Im focused on those two. I think they will matter. Gm coming back down is not something i wanted to see. Yeah. And actually southwest was initially down and then traded back up. I dont know where it is now. Why would gm, is there something that looked really good but was not really positive . This is really a pattern for gm. Its people get excited about when they hear the number and go through the Conference Call you hear about different areas that arent that good. I will tell you and i think that phil was right, i think gm is too cheap and i dont think its caught up. If they sell this back down people will want to get in it. Its a remarkable market. What was great yesterday is bad today. Its kind of intel ran so much into the quarter, in part because we just kept hearing good things about pcs and wasnt enough. Southwest air had been the only one that held up this year in the airlines and thats the biggest disappointment. So what people thought was going to be great wasnt. And thats very mystifying to people. Youre just talking food, chipotle after the bell, what do you do going into the earnings . Chipotle if you look at taco bell, it took about 18 months to turn around after terrible, terrible illness. If you look at jack in the box, which actually killed people, it took two years to turn around. We are in about month nine for chipotle. And you can anticipate that these guys, therefore, this is probably the last quarter were going to have minus 20 comps. Put half on now and wait for the quarter. Buying back a lot of stock at 400. Those running away are making a big mistake. Jim, thank you. Well see you in about five minutes. Okay. Jeff bezos picks up a new job on the side. They didnt put makeup on. I thought he was fine. Dont miss cnbcs coverage of the Republican National convention at 10 00 eastern. Jeff bezos giving twitter users a look at his alien character in star trek beyond, which will be released tomorrow. The amazon ceo tweeting a video of himself in full alien makeup while eating with a plastic utensil and while drinking from a water bottle. Amazing. Pretty cool. Pretty cool. Wonder how long that took, five, six hours . Easy. I would think. We do three minutes. Three minutes. People think were lying. Even less. You dont need any. Tell you unilever announcing yesterday that its buying Monthly Subscription razor startup dollar shave club. Unilevers ceo paul pullman spoke to Nancy Hungerford this morning about it. Its a very good business. They have abe chieved about 5 of the shaving market in the u. S. Very attractive market. Booming. Its about 30 billion and growing. Were the number one by far globally in that segment if you exclude shaving. So we think were well placed. On top of that a great subscription market. Really taking off in the u. S. , subscription models being very attractive. In the industry with good quality product so the were happy to Work Together. When asked if the 1 billion price tag was justified he said it interpreted the difference of the deal and unilevers stock price went up. I still believe gillette is suing them over the 5 or 7 blade whatever number blade theyre up to at this point. We got no time. Look at the markets and then just talk about this, what to expect. Heres the futures. Unilever. The futures which are down 21. In europe, markets are off a little bit, but kind of mixed. Get the rest. Tonight peter thiel, going to be interested to hear what he has to say. Had him on before. Hes going to get hammered by all the guys. In Silicon Valley think its crazy. Supposedly love Free Enterprise but love big government. I dont see any its a new breed of democrat. What he has to say. And everybody else. Ivanka. Watch it tonight but join us tomorrow, squawk on the street begins right now. Is. Good morning. Welcome to squawk on the street. Im david faber along with jim cramer. We are live from the New York Stock Exchange. Carl quintanilla is live from the Republican National convention in cleveland. Where we saw some fireworks again last night and hes going to bring us the latest in just a moment. Lets give you a look at futures this morning as we get started here on shows. As you can see were looking for