Transcripts For CNBC Squawk Box 20170615

2. 145 overnightin asia, look at whats been happening. You can see the nikkei closed down by a quarter of a percentage point the hang seng off by 1. 2 . The shanghai was flat. Lets look at whats happening in the european markets in early trading. At this point there are red arrows across the board there as well biggest decliner is the cac, which is down by 1 . The ftse and dax are off by 0. 8 when it comes to currencies. You will see right now the dollar is up across the board. Euro at 1. 1163 crude oil prices which were down 3. 7 yesterday, the lowest settlement weve seen since november 14th, you can see this morning down once again. Another 11 cents to 44. 62. We want to bring you an update on the terrible shooting that took place yesterday. Republican congressman Steve Scalise is in Critical Condition this morning after he was shot by a gunman yesterday. Squawk was on while this happened the congressman was shot in the hip, underwent surgery at Medstar Washington Hospital Center a statement says scalise will require further operations a congressional staffer a tyson foods lobbyist and two Capitol Police officers were also wounded. James hodgkinson of illinois was shot and killed by Capitol Police he expressed outrage about conservative politics and was said to be distraught by President Trumps electoral victory. He volunteered on Bernie Sanders 2016 president ial campaign here is senator sanders on the senate floor yesterday i have just been informed that the alleged shooter at the republican baseball practice this morning is someone who apparently volunteered on my president ial campaign. I am sickened by this despicable act and let me be as clear as i can be violence of any kind is unacceptable in our society. I condemn this action in the strongest possible terms after the shooting, President Trump called for unity we can all agree that we are blessed to be americans. That our children deserve to grow up in a nation of safety and peace and that we are strongest when we are unified. And when we Work Together for the common good. The president visited congressman scalise in the hospital last night. Democrats and republicans decided to play the congressional baseball game tonight in a show of unity and strength we want to talk about our top political story this morning. The Washington Post reporting that President Trump being investigated by special Counsel Robert Mueller for possible obstruction of justice eamonafter javers has more on the story in the Washington Post getting the attention of all of official washington last night when they posted it online let me bring you some of the highlights of their reporting. Theyre suggesting that the investigation into obstruction of justice by President Trump began days after the former fbi director, james comey, was fired by the president of the United States theyre suggesting that the director of national intelligence, dan coates, th nsa director, mike rogers and Richard Ledgett have agreed to be interviewed by muellers investigators. They are looking into evidence of Possibility Financial crimes among trumps associates the white house referring all questions russia related to the president s personal attorney. We have a statement here from the spokesman for the personal attorney who said this the fbi leak of information regarding the president is outrageous, inexcusable and illegal. Its not clear why the president s attorney thinks that this leak necessarily came from the fbi in this case thats not clear from the Washington Post story where the information originally came from nonetheless the president s attorney blaming the fbi for a leak in the situation. It was clear as of last week that this was likely to be the direction that the investigation was going when james comey testified up on capitol hill he suggested that mueller would have to get into the question of president ial obstruction of justice. Heres what he said in the testimony last week. Do you believe this will arise to obstruction of justice . I dont know. Thats bob muellers job to sort that out so comey suggesting that mueller would be the guy to sort it out and he is, in fact, sorting it out. Well wait and see where this goes, whether or not the president will have to testify and whether the white house will have a statement on this throughout the day today thank you for that. Joining us now, well continue this conversation what was that go back. Go back there. There you go thats you. Eamon, you still there . Im still here. So, yeah, i its unsettling when you hear, my god, hes going to do it but you think about the sound bite you played f youre going to have mueller do something, what else will he look at if hes not looking at that i wasnt surprised by this. No. Still ugh. We go back to a land deal ending with a stained blue dress. So, its just it goes like this theoretically, this is the worry. These investigations can have a lot of tentacles this is like the main part of it because you knew this would happen now the financial dealings of all of his associates . Thats kind of new it is, though if youre looking into russian interference into the u. S. Election and possible collusion, you would be looking at the financial piece of that. Did money change hands would people in essence bribed by the International Financial deals to cooperate in the investigation or rewarded for what ever they did by the russians that is one avenue you would have to go down. The special counsel in this case is different than in the 90s, hes more constrained, not as independent. They tried to rein it in a little well see how much that succeeds well talk to a gentleman now, but i was reading certain people, how stunning this supposedly is. Stunning they got it underlined the president with ledgett. The president questioned the voracity talking about while ledget it was still in office. He documented a phone call that mr. Rogers, the nsa director had with mr. Trump where the president questioned the voracity of the Intelligence Communitys judgment that russin tried to persuade mr. Rogers that there was no collusion. It all depends on if the president knew there was collusion. If he thinks or knows there wasnt any whatsoever, thats what hes hearing from the nsa, the people involved with it, to say why dont you say theres no collusion . Why dont you come out and say youre not seeing anything i dont know if thats not telling them to end the investigation or whether its just saying, look, theres no theres nothing going on here. Why dont you say it is that a smoking gun . I dont know depends on whether theres actual collusion in the first place. It does absolutely the question here, the legal jeopardy here for the president is that we have another case of an intelligence official in l ledgett who was writing down his interactions with the president. People are documenting these conversations because of some sense that this may come back up again. There may be other memos throughout the Intelligence Community that could be damaging to the president we have to wait and see what they find ultimately and whether or not theres a pattern of behavior here. Im told by people that one of the things investigator also want to do is look at what other affirmative steps the president did or did not take in terms of obstruction. Did he tell people not to talk to the special counsel, destroy documents, withhold information. All of that. Let me pose a hypothetical, and well ask john malcolm about this its been a cliche its the cover up, not the crime. Thats from watergate. There had been a crime, that was a breakin it was minor i dont know if it was minor it was a break in. But lets say theres no crime at all yet there is some type of obstruction. I dont know its weird its weird then you get to a situation you will have a judgment call by the special counsel. Ultimately by in this case the republicans who are in control on capitol hill of who thats high crimes and misdameaner miss d misdemeanors in their view what if they did that but theres no initial charime you covering up but there was obstruction. Its still illegal. Give me the man, find me the time ill find the crime plenty of people think the crime trump committed was being elected president. So there are people i interviewed jeb bush in miami earlier this week in miami. I asked him about this his take is that this was not obstruction of justice that what the president did does not amount to a crime, but he feels its inappropriate for the president to be having these conversations with all these officials. Lets go forward now. John malcolm of the Heritage Foundation is with us. Former Deputy Assistant attorney general. I see that thing in your ear so you heard sorry no, i mean i know you heard the conversation yes i was wondering whether there are salient points there that you agree with or disagree with or can add to. He made a lot of salient points obstruction of justice is a separate crime in the same way that if someone were conducting an investigation into anything, and somebody was embarrassed and wanted it to go away and you lied to an agent who was conducting the case, you could be charged with making a false statement to an agent. So i agree it is a separate crime. I was struck by your use of a quote by lavernte barea, if you give me the man, ill find you the crime. If you have a prosecutor with a broad mandate, and they keep turning over rocks, they can come up with something i worked in an independent counsels office for a while, so i know what that is like im not surprised theres an investigation going on this began very shortly after jim comey was fired. And bob mueller has been given a broad mandate to look into all things russian the bit about going to examine the financial dealings of trump associat associates thats puzzling to me. You poz ssited, maybe he was brd or maybe people were extorted. They were aware of financial impropriety, and the russians say do this with us or well out your financial deals i wish you wouldnt have outed me on where i got that quote. Now i could be under investigation. Im like thats a despicable lie. Its not true. Who did you say stalin the head of his secret police jour youre in trouble now. I am. Let me ask you this when i when i first saw it, i was like youll find democrats and republicans everywhere so mueller picks all these democrats to staff up on he is also very close to comey as far as friends. I said, well, hes an honorable man. Im sure bipartisan response, when he was selected was positive but then again i started thinking, if you really i dont know what his opinion of donald trump is. If he has the same opinion as some of these other people at this point, is it possible he could be looking for something rather than just trying to get to the bottom of the russian thing. Key be looki could he be looking for the crime to fit the man lets hope not. Hes got a great reputation. He has to be close because he dealt with comey every day when he was dock threat assessments and mueller was fbi director i heard a number of people whom he brought into the team have contributed heavily to democrats. Im not looking to impugn their integrity. But if they were investigating barack obama, and they filled an Investigative Team with people who contributed heavily to republicans, or if they were looking into donald trump and they staffed the team with people who contributed heavily to republicans, people on the other side of the political aisle may complain about this. Whatever happens at the end of this investigation, it must be fair and appear to be fair to the american public. So he needs to be careful about who he picks on his team and needs to be careful that he keeps an arms length distance from jim comey he did a good job digs himself yesterday by announcing he was aleaker does it appear to be fair to you looking at who is surrounding mueller . They have michael dreeden, andrew weissman. So youre not concerned well see how he conducts himself. I have a lot of faith in bob muell mueller. Just because an investigation has begun, were a long way from charges being leveled or sustained. John is with the Heritage Foundation the donations thing to me is less interesting, only because i look and say donald trump, jared kushner, cgary cohn all made donations to democrats its all complicated so anyone can make a mistake is what youre saying. John, thank you. We have to go. Theres more to talk about but we have three hours. Just wont be with you great to be with you. Comingup, when we return, my reaction to what joe just said and reaction to the fed rate hike and hawkish outlook. Well talk Market Strategy after the break. A look at u. S. Equity futures at this hour. The dow looks to open down off about 80 points. And later, we will talk to the ceo of a Company Making security robots being used in malls and on qualcomm and ubers corn pratt campuses. We have one there. Well talk about it and show you more are we going to launch that thing . Good morning. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. E trades powerful trading tools, give you access to indepth analysis, and a team of experienced traders ready to help if you need it. Its like having the power of a trading floor, wherever you are. Its your trade. E trade welcome back the bank of englands latest Rate Decision is due back at 7 00 a. M. Eastern time in the United States weekly jobless claims may import prices and the june philly fed survey at 8 30 eastern time at 9 15, well get may industrial production. At 10 00, the numbers keep coming, the monthly survey by the National Association of Home Builders back to the markets. Under a bit of pressure. Joining us now is kathy jones, chief fixed income strategist for Charles Schwab and company and lou breen drw Trading Group specialist lou, after the fed announced it was raising rates yesterday. The markets wobbled a bit but closed higher. This morning things are under pressure what do you think happened i think the pressure this morning is as much as there is, were not down a half percent or so 70 points on the dow, 14 on the s p. So its not nothing, but nothing significant yet. I think that had more to do with trump and mueller than the fed the one interesting thing with the fed is that they were a little less concerned with the recent decline on the core inflation measures than i would have thought they said they will keep an eye on it. Janet yellen was very willing to look past it in her press conference the tenyear note is not thats a mixed message that were getting. The fed showing themselves more hawkish, but the tenyear having none of it because inflation and Inflation Expectations is the key to the tenyear note right now were reversing that whole trump inflation trade that existed since the election and the fed just put fuel on that fire. Lets talk more about that. Its stunning to see the fed raise rates and watch the tenyear note move to 2. 10 . Thats the lowest level since november its not unusual for the yield curve to flatten when the fed raises rates theyve been pretty aggressive now. That was a fairly hawkish rate hike in terms of the rhetoric surrounding it as theyre raising rates when inflation is well below the target and has been below for five years, the market will interpret it as no room for inflation to move up here. So the market is not buying the fed story that unemployment will drive rages up and going to drive inflation up is it reason to worry i think if they continue to move fairly aggressively, it would be reason to worry in addition to the rate hikes now, and the flattening of the yield curve to the flattest its been almost the flattest its been in the cycle, well have the Balance Sheet to deal with thats a form of tightening as well as they take some of that extra stimulus out of the market its a lot to deal with. Not that its a huge surprise watching these things, hearing these things, but why is the market just now realizing that thats the case . Ive been surprised by how calm things have been heading into this the bond market has been on this for quite some time bond has. If you look at the Inflation Expectations embedded in the t. I. P. S. Market, the flattening of the yield curve, those have been rolling over for several months really since probably february or march i think the bond market has been on top of this for quite some time lou, can the bond market and the stock market both be right what do you think . To a large degree they have the tenyear note even though theyre signaling Different Things the tenyear note at 2. 14 weve been falling for generations on the yield there the stock market has gone up by four times yeah they both can be right its almost telling the same story, the low inflation and the fed hikes are not going to affect the long end of the market, which the fed has much less control over now than it used to. The stock market has gone up without Strong Economy and for several years. This last sevenyear period during which the stocks have gone up by 4 times, the gdp has been one of the most the smallest gains over that period of time in the last 60 years that has not bothered the stock market can something bother the stock market i would think so it just makes sense that it would at some point. Right now the story, as far as the bonds and stocks, were near alltime highs and low on the yield. We had investors like buffett and gates tell us that they think that the real issue is those Interest Rates as long as Interest Rates are low, they act like gravity on stock prices as long as theyre low, you will continue to see stock prices climb. You agree with that . I dont see anything that changes in the Bigger Picture the long end Interest Rate and i say that because of the inflation and because of the Inflation Expectations if thats their story, they can stick to it. Whether the politics upset the stock market at some point, well see. It hasnt up until now because were very close to the alltime high i think its true that low inflation has historically been good for the stock market. Both markets can be right unless the fed overdoes it. What would be overdoing it snfrnlt. Moving towards an inverted yield curve. And if they move aggressively as inflation is still low if that moves down to 1, and theyre still raising rates, thats a concern they signaled one more rate hike this year that is not necessarily cause for concern, right it shouldnt be lets see what the Inflation Numbers do also seeing softening in the economicdata elsewhere the u. S. Numbers this morning are soft retail Sales Numbers were soft depends on how the Economic Data develops they could overdo it i hope they dont. I think as you were just saying on the favorite inflation measure, you get a couple more down ticks in that, youre at 1. 3, Something Like that i think the fed will walk away for a while. Lou, kathy, thank you both for being here today thank you. Coming up, bank stocks trading higher a closer look at what is working in the financial sectors. And a look at yesterdays s p 500 winners and losers its all yours. Wow record time. 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Equity futures at this hour are in the red you know, not overly significant amount, but early on you see this, it could be a rough session depending on how things open at 9 30 the dow jones down 75. But its from an alltime high a pull back of 75. The nasdaq doing much worse on a relative basis, down 66 points the nasdaq indicated down 15 the tenyear is down at 213 or 214. Chinese authorities asked banks to suspend business dealings with anbang insurance group. This according to bloomberg. I dont know why the mayor is getting involved with this whatever the halting of deals would weigh on the firm. Last year alone nearly 90 nearly 90 of the firms premiums came from Bank Distribution yesterday the chairman was detained by police anbang releasing a statement saying the chairman was no longer ability to perform his duties for personal reasons. A number of complaints by passengers on u. S. Airlines rose sharply in april its probably not a surprise because it came after a series of high profile incidents including the one of the man being dragged off the united flight that was captured and played again and again and again. The department of transition says complains spike eplaints s a year ago the complaints and incidents have not hurt stocks united has risen since april to hover near an alltime high. Well talk Airline Customer Service Later this Morning American Airlines Ceo Doug Parker will be our guest host. That is starting at 8 00 a. M. Eastern. Bank stocks, they have been on the rebound after the feds rate hike and hawkish outlook. Joining us for a look at what is working in the financial sector, mark cassidy is this the time to buy into the banks . Yes, we still believe its an opportunity to own bank stocks if the economy accelerates in growth, that would be a positive you saw the rise in shortterm Interest Rates, thats expected to continue as you heard yesterday from Federal Reserve woman yellen so fundamentals are still strong and youre seeing benefits from the rate environment the continued question has been whether you should be in the small banks or big banks that is a good question i think a mix of both would work well looking at the larger banks, the asset Sensitive Banks, thats one way of playing it. Bank of america is an asset Sensitive Bank one of the largest banks in the country. Comerica is another, not as large as bank of america you can play it either way asset sensitivity is a driving factor of which banks to choose. You still seem to be indicating you would take a bank index. Where im going with this, what banks do you really like are there banks that you wouldnt touch right now the banks that we really like are the larger banks banks that have this asset sensitivity but also have Capital Market exposure. Theres reports of trade activity being lower than year ago but owning citi, jpmorgan is a good way to play the banking side of the business and the Capital Market side of the business these regional banks will benefit from the rise in rates so owning comerica or key corp has the upside already been baked in to the cake to the extent there will be some regarding the repeal or at least some kind of relegislation of doddfrank thats the real interesting point. You saw this week the treasury come out with recommendations. Theyre pretty profound. As we know, bank stocks did very well after the election. And as we saw back then, many investors were buying the banks in anticipation of news like what we heard this week from treasury so some of that is priced in but its not entirely priced in. If treasury gets through with what theyre subjecting, this is positive for the banks when you think about the last eight years, this sector has been in one of the most oppressive sectors final question for me is this, which is when you think about the upside in the sector, i know this is a sector that you like what kind of upside is there really if youre an investor thinking i could put my money into banks or f. A. N. G. Stocks, you see where im going . Yeah. I would say the upside is still pretty impressive. When you think about it, the banks are trading 1. 5 times book value. We think they can get to 2 times book value if you turn back the clock, these stocks at one point traded over three times book. We expect a big merger wave amongst our biggest banks excluding the top four amongst the biggest banks probably starting in late 18 or 2019 as they look to consolidate and build up expense savings, which will drive the profits higher so you want to oent small regionals that will get gobbled up or the big guy . No. You want to own the smaller regionals. You look at comerica, thats one again that is a leading acquisition target out there okay. Well leave it there appreciate it. Thank you when we come back, congresswoman Marsha Blackburn weighs in on the president s agenda she will join us on set at 7 30 a. M. Eastern time. At 8 00, American Airlines ceo doug marker will be here for the hour. And kroger is set to report Quarterly Results this morning the ceo will join us first on cnbc stay tuned squawk box will be right back. In case youre wondering, im a security robot so we need tablets installed. With the menu app ready to roll. In 12 weeks. Yeah. The world of fast food is being changed by faster networks. Data, applications, customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Fast connections everywhere. Thats how you outmaneuver. Were drowning in information. 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. Box. Time for the executive edge. Terrorist attacks, Security Breaches have communities everywhere on high alert joining us now with one hightech way to possibly secure your community is bill santana, ceo of knightscope he brought an oversized version of r2d2, which looks like if we light this candle it will go through the roof here. Thats a robot thats a big one thats an Autonomous Security robot. I figured out how this could work that is that it measures temperature, right so you could have this robot somewhere, and it could see a restricted area, and if a human walks into a restricted area t could alert someone. That plus much more this is intended to do advanced anomaly detection for a Security Guard to do their job more effectively. It needs to see, hear, smell, feel it can smell . It will smell me that is for Threat Detection capabilities, or weapons of mass destruction. Detect a bomb or radiation . Detect radiation, and concealed weapons capability to see a visible firearm hear a scream how would do a concealed one . Similar to what do you at an airport. I was thinking this would be a good thing for an airport. Our clients are corporate campuses, malls, hospitals, anywhere indoors or outdoors you might see a private Security Guard is fair game doesnt move fast one to three Miles Per Hour for this version we have a fourwheel one which is coming out at the end of the year this thing looks big. But i assume the guts of it, if we were to open this thing up, is it just a little computer no, its packed with stuff. Its five foot tall, three foot wide, 400 pounds its basically a selfdriving car. Has all the same technologies to roam around on its own not Remote Control these are running 4 24 7 youre charging people 7 an hourments. The machine has a service thats a different model. What is less than minimum wage i am an exford Motor Company executive. Selling hardware is probably not a good idea if you cant cover cost capital but on a machine it gets interesting for clients who spend 1 150 million a year on Security Guards at 25 an hour, having a 7 an hour machine that can give them unprecedented capabilities so youre thinking of this as a replacement to human Security Guards most people think thats it we have maybe two clients who are like i want to get rid of that guy almost everyone is adding capabilities i would assume a business that is properly capitalized would say i would prefer to buy this thing, deprecate it you dont want to do that because we drop new Software Code every two weeks, new hardware every three, four months the technology is Getting Better and better over time the you dont have any weaponized capability. Dear no and they will not ever physically sub die a persodue a does mean this one wont or eyes and ears for the security have you seen robo cop 1, 2, and 3 fiction its Science Fiction. Wait a second robo cop was Science Fiction yes so this is not robo cop no, this is very friendly in terms of building out this company, you have money . You are financing . You have Venture Capital you advertise on tv . Were allowed nowed with the new Regulatory Framework that the s. E. C. Allows companies to do a Public Offering for a private company. So we raised 14 million in prior rounds were raising 20 million mini ipo. About halfway through it. Why did you choose to do it publicly youre running ads on tv soliciting investors is it cheeper money . One is the cost of capital. Two, there is not a Venture Capital firm thats fluent in law enforcement, physical security, so why pay the premium. But will society allow us to do this this is an opportunity to build a brand, seek clients and investment at the same time efficiently. There was a great quote in robo cop that he said over and over again i cant find it. What kind of ai in this one is to detect a person versus a light pole. Machine learning in that regard. Second, be ability to have ai concierge, so be ability to if youre at a mall, something as simple as where is macys, can you take me there . Third, for the navigation. Final question, its off topic, but youre in the robot business, youll know it google, alphabet just sold boston dynamics, which is the robot company, weve shown it on the air a million times. Sold it to mass is a sasan for o money. Why do you think google wants out of the robot business . I wont speak for google, but i think over ten years, the world will change more than over the last 100 years, and massosan is taking that to heart. Its not robot also take over, but it will have a massive impact on society. No plans to merge with, like, a human, a sicyborg, put flesh n it the next one was a fourwheeled that was robo cop. The cop died, and he oh, its fiction. You say its fiction go to knightscope. Com and buy it 3 a share. Wow all right. Thanks, bill thank you. When we return, well talk government transparency. The coo of open gov will join us next first a quick check of whats happening in european markets right now. Squawk will return in a moment you are watchg quinsawk box on cnbc. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Iconic tours, its our seventh city hundreds of entrepreneurs have gathered here today. They all have the opportunity to learn from proven business leaders. At cnbc, we talk a lot about big businesses welcome back to squawk box. Silicons start up of open gov for more we want to bring in zach, the cofounder of open gov. We just signed with one of the largestcompanies in the space. What are you going to do with them theyre going to distribute our software to the 1,500 customers around the country open gov is open and more powerful government, including comprehensive Opening Movement theres a whole movement on for more effectiveness and more accountability and there needs to be a technology background. Who are your customers for the most part . Cities, counties, state we just signed the state of virginia they had a 500,000 budget short fall and i call you up and i say i run a municipality, i want you to come in and put my budget into what happens explain it 12k3w4r8 2 of governments in the country are building their budgets in microsoft excel, which itself is a 20yearold Technology Large cities might have 90 tabs with 99,000 rows and one link breaks and they lose two, three days of time open governor cant build your say you want to know how much have you spent on Police Salaries over the last five years . Right now a staffer would have to run around, answer that in five days and get you the answer and with open gov, it five clicks if i hire you, tell me what happens. Meaning how many people part of this has to be a consulting project, i imagine, part of this is a software project. We have a Services Group but the majority of this is just straight software . Yes, someone has to unlock the data from 30yearold systems and used by of fochl. A small up to town might be extremely apordable. Might be 10,000 a year what if de blasio wanted o defend, you owe. Its one source of truthin tear you can did f he has just spent an enormous amount of money, personal money on his own, he thought he would ask the kind of questions you were asking so wores did the money go i dont know if you followed his project. Of course i talked to his group. What do you make of what hes done sp. I think theres enormous interest drawn to the space. Executive chairman of cisco also joined the board last year theres something very important happening here it might be the largest industry and yet its kind of been passed oaf by the cloud and open gov is leading the charge in terms of building software. And youre doing it all mostly at the local level. Is there a federal component not yet well probably be going overseas first and then to the government after that were signing a new government about two days and we have 1,500 in total now who do you compete against in. Beside microsoft excel. Ive been building my this way but it also ibt on the imagine Software Companies that have a large government practice and who have longstanding relationships, this is classic insurgent software as a service being applied to the oldest industry we wish luck. Thank you for he yeah, great episode. You said it last time and you wpt and looked and you watched it right, bookman joe bookman, the library cop prumhave been [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Better than a manual, and my hygienist says it does. But. Theyre not all the same. Turns out, theyre really. Different. Who knew . I had no idea. So, she said look for. One thats shaped like a dental tool with a round. Brush head. Go pro with oralb. Oralbs rounded brush head surrounds each tooth to. Gently remove more plaque and. Oralb crossaction is clinically proven to. Remove more plaque than sonicare diamondclean. My mouth feels so clean. Ill only use an oralb the 1 brand used by dentists worldwide. Oralb. Brush like a pro. Breaking news overnight. President trump is possibly under investigation for obstruction of justice the fed hikes Interest Rates. This morning the bank of england announces the idea signatures. A deeper dive for what the move means for the markets. And hovering on a selfyenmonth low of supply concerns the second hour of squawk box begi begins right now i always feel like somebodys watching me live from new york city, this is squawk box. Good morning welcome back to squawk box. Im Andrew Ross Sorkin along with becky quick and joe concken check out the pound after the announcement, which has risen just slightly this morning we should mention that futalognkosaurus dukeis are down, somewhat in a big morning. The s p 3,500 looking to nsh we want to be done getting 90 minute from now, the philly med impression add also, wells fargo was embroiled in that sales practices last year. Bang officials were apparently making unauthorized hangs to home loans fechl dprrjt cnbc has learned a team within their health unit has talked about bringing Clinical Data to the ni phone. And republican congressman steve callies is in Critical Condition after being shot by gunman at a congressional babe practice in al exand from seems a little more ffrmt sclees will nrmg the student who was not. Was said to bes fchb after the shooting, President Trump called for unity. We can all agree that we are blessed to be americans, that our children deserve to grow up in a nation safety and peace and that we are strongest when we are unified. And when we Work Together for the common good. We will have more reaction on yesterdays shooting at 7 30 eastern time a special counsel investigating President Trump for possible general tech. You this go for on juks he nrnl. Now theyre interviewing white house interns. Sad. We would have all kind you do a great bill clinton well, i know. Ive had plenty of practice. Can you imagine if clinton you a through that, it might have been much better, right but more entertaining for the rest of us if youre bill clinton, ebt r entertaining might not be your goal if youre drpt, he kbp the person who the Washington Post is reporting is looking at obstruction of justice who was not involved with this through the ten sin. Now the special counsel has been on his job for aefr peeks the president not clear of what hes talking about there let me bring you up to speed on what the Washington Post reported last night. The washington reporting that into trump personally given gay dpam can zplachltd dan coates, the nsa director, mike rodgers and dalery from frfrm turning over evidence of f flchlt it doesnt matter these days the pes prbt sfrrkt, and that attorneys spokesperson put out a Statement Last night heres what he said its not necessarily clear here why the president s attorney believes that this information is coming from the fbi to the washington pos post. There presumably would be a number of people who would be aware of this investigation, including the people who are interviewed in it and those persons attorneys nonetheless, the attorney hitting back here at the fbi saying its illegal for them to leak anything about this investigation. Note that neither the president s attorney nor the president himself is denying pr pr the prz, undermining Hillary Clinton for 30 years it was the same people many also a. Sfp you know what they is, is it the president is saying somebody made up these charges, and somebody is making up the obstruction of Justice Charges but youre talking about Robert Mueller here, spun now youre getting a little bit too will the rahal who until i guess mine was that my of the first boik wing independent nom o no and he went out of his way relating to the firing of comey to point out that comey had told him self times that he wasnt under investigation at that time the Washington Post is reporting he is under investigation now because of the comey firing well see where it goes. Its a pair sfrerchlt. All right, see you later. U joining us is speaks spns sfwrfrms first of all, it may be new news coming from the prapt post nab from the home that we heard after comey was fired, after he told himming let nrmt that i thought clearly in his mind bob mueller was going o o tregt nn for those of us frn the nfrmt nuchlt and now we see him taking some pretty aggressive steps to interview witnesses isnt there an argument to be made if these moving aggressively or moving fast, that the goal was to figure out if there was a problem or even not a problem, isnt that a good thing . Im sure thats his goal. Whether youre a supposer or president in trr want them to get to clock truth wall streetbe a frvgs. Investigation is hooking at twoichl sfwlchbl thats a complicated investigation. It might take a while. There a limited number of people who would know what the president said to hem, what the president asked this many to do. Its a case where you can get all of them in an fbi or grand jury a a an and fwr be frorng prch prchlt. In some swagss, though, based on the pchs pb and that be opinion flnlt. Nfrmt nfrmt railroad the exact word the president used, i hope, will be used to show attorney general what i think theyre going to want to do is talk to everyone who spoke to the president and also the president s aide. I would expect them to say everyone close to you about the russian sprek sfrvg. That with a a frrchl frochlt. How long does it take to litigate what are we talking about . Is it going to take mmm months or are you talking year . Nixon claimed it in opinion. F ne said in the criminal case the trum pop presume buys it just to fight a fun point on opinion thin nrchlt donald trump thought this was an apou nchkt nouchblt and though there veal no underlying piece to this, if he were to say to one of his aide, we got to grork frorks woor frrmt. Its going to be easier to show or easier to could be have been sfrsh. It wouldand mike flaen has a lot of exposure, flshlt and that hooves still trying to trk frvgts if it turns out there was no crime and all it was that was try it frnk flrchl. Abandoning him and voting are two Different Things right for every one of them, as we get closer toneck years election, if this is happening, the president s at 30 , 28 , a much closer call but theyre also, the course of public nchbl sbrn when we come back, well talk with congresswoman to err is human. To anticipate is lexus. Experience the lexus rx with advanced safety standard. Experience amazing. There are some signs out there that the economy is slowing. There are a lot o livestream your favorite sport, at the airport. Binge dvrd shows, while painting your toes. On demand laughs, during long bubble baths. Tv on every screen is awesome. The allnew Xfinity Stream app. All your tv at home. The most on demand, your entire dvr, top networks, and live sports on the go. Included with xfinity tv. Xfinity the future of awesome. Welcome back fed hiking rates for the second time this year Steve Liesman joins us with more good morning. The fed took several steps yesterday down the road to getting its policy back in total. The fed, one, hiked point to a frerjts and flounce sfrurj sfrrks an Unemployment Rate thats climbed to levels weve not seen since 2001. Even in motteration, we have a lengthen market that tns to strengthen back to the approximately sheet. Some speculate pfrmt frj personal snrnlt so thats two trillion frrktsd perhaps or normal. I dont know if its ab or be abnorm abnormal frank stein thank you want this naurngt now, im lay fochlt i mean, i know a oum nifrmt. You know that part. Yes, but ive never seen it it nfrmt g yo a investment, senior portfolio and sflifrmt and one of theets days one of these new his will represent the point at which we her ysh pr fwrrchl i think weve already seen the races ups sfrrks or tend problems for the frornlt rotation in the nrmt its dpn been relatively good and likely to stay good we just did a company, looking at 5 increase in Capital Spending going up nichblers des desen grerchlt what do you think . Well, financial conditions have be sprrch even if you strip utility that. Pirchlt we have been avoiding equities the entire time i think we do take pause for caulk notice ebb pb sflshl when you see something parkbeal pfrm snirchlt and your key point of the agenda and deal with other things, its going to certainly set it back. I think any time that youre thinking about 2018, air not going to get to the mid term nermt know when it just happened, it was either a comey firing or it was something that raised the level of concern it made the mccomey firing. It was just three weeks ago when it happened so when the market does lock like something serious is going to happen to either trump or himself policies, the market sits up and takes notice you have to remember the market also tend it look through politics if theres a constitutional crisis no question, all you have to do is look if water gad and testifi testifies. I think when youre thinking about look foo nsh there flo sfwhrn sfwhrnls. Sfn. I dont get to vote kind of a god send in neff snochlt it wills we have to go but i quoted you you did in a come up. Osh, mrjer some. Who i are you bot that ins narchl we would say that cash flow is broad enough. Wow, wow. Youre just going to hang up your skiets now . Im never going to give up mileperhour dark frrp. There in what year was the first fathers day cebteelrcelebrated fathers day cebteelrcelebrated theans tw what without that cash from aflac youve it n dr nm. You might have les lesskproofrmt. Want a straightnafrmt. Able . Snrnlt n snaefrmt think again. This is the new new york. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov now the answer to todays aflac trivia question. In what year the the first fathers day del seated . 1910 was fathers day celebrated . 2010 usaa gives me the peace of mind and the security just like the marines did. The process through usaa is so effortless, that you feel like youre a part of the family. I love that i can pass the membership to my children. Were the williams family, and were usaa members for life. The future isnt silver suits anits right now. S, think about it. We can push buttons and make cars appear out of thin air. Find love anywhere. Hes cute. And buy things from, well, everywhere. How . Because our phones have evolved. So isnt it time our networks did too . Introducing americas largest, most reliable 4g lte combined with the most wifi hotspots. Its a new kind of network. Xfinity mobile. Good morning welcome back to squawk box. Were live at nasdaq england has kept key Interest Rates unchanged but came to the closest to raising Interest Rates since 2007 Airline Passenger complaints up 7 if april. Thats compared to a year ago earlier. It was fueled in large part by the highprofile incident on april 9th in which a passenger was dragged off and overnighted effort in the. Will pla sflam a lot to talk about in terms of tax policy and health care and all the other things but this game and what took place and just your own feeling of security and whats going on in this country. It is a tragic, tragic occurrence and were all very concerned about what has transpired and i think most people realize now that members of congress do not have security the leadership has a skiert deta detail. This has become political this was a bz supporter. There have been lots of questions about whether one side incite the other or the other side incites the other my hope would be that we do not see this happen given. A and i dont think it time for pl plan and a return to civility and discourse. I hour hayes been so concerned a rot prm between republican and the democrats on left and the right. We need keep toes that is correct be a nana semipersonal question do you now would he ever about your security . You a nofrm furnl nurnl you a look at my twitter feed. It is just so disconcerting the way people go to frn nrnl its disconcerting not only for our staffs and families, but also for individuals who want to visit with us at Public Events because we do not have security, we drive ourselves, we move about do you think were going to have to kmeng dmnk love in rote re kplub kprufblt. It would be very difficult doing our job. So many people contacted me and said i had no idea yall did not have security. Members of congress do not have security while we have you here, what took place yesterday is obviously terrible situation and we do hope it was a oneoff situation. I do want to talk to you about whats taking place in your world, which is to say where do you think we are on tax reform and on health care the senate is determined to do something before they leave for the july 4th break at that point, the house can can take the bill. We can go to conference. Wed like to have health care on the president s death before we league for the august recess tax reform is moving forward may not get everything that chairman brady and the speaker want, but reducing marge al rate, froosh sfrchl frfrmt with your own constituent sants snarm but thats not a bad thing, to n . I think something probably scaled back is going to get agreement. It wouldnt be a bad thing to break it into two parts thats what larry kudlow has talked about thats right. Weve proven on health care, you get to those other baskets because with the health care bill, we are focused on med malle, on increasing the utilization on how people can do those deductibles, roos Straight Lines and that is ing sing to f. How does that work out in conference when you guys come back together nuchlt well, if it extend that out and as a result it costs more, does that the medicare would probably cause a little bit of angst in the house. It one of those issues that we as whips would have to see where the youre tlk sfln flrnlt so many nm in nrnlt. Let me tell you that you could not get that is a nice place. Jimmy s that naesh it. Were sfwurnl it is a wonderful mid sfchlt but in and of themselves, theyre nice. What . Frc frchl. Thank you thank you. Thank you. Sflerngt nuchlt anyway this is where i trade anding manage my portfolio. Up, dan jergen joins us after the break. Squawk box will be right back. I have access to the oil markets and gold markets. Okay. Im plugged into equities trade confirmed and i have Global Access 24 7. Meaning i can do what i need to do, then i can focus on what i want to do. Visit learnfuturestoday. Com to see what adding futures can do for you. I think were in a rang now with these prices where you just hear now that the capital may not be so available, companies dont have the same cash flow. Maybe not for this year but well see the impact next year and whats that range that youre talking about i think as we get towards 40 a barrel, the pressure becomes great. Meanwhile with the interests in the activities, put. Ehuh a plaque they can do things with the refinery down on the gulf coast to make it look like less than look nooichlt which short cycles and moves very fast and clearly watching the inventories and watching production would we need a global slowdown to get to 35 and then below 35 all can you talk about is supply if you had a to get to 35 there is this other thing called demand. If you had a big slowdown could just supply get us below 35 i think has you get in the range we are, were going to start to see. Just the u. S. Producers, right . Right so when the speg oot spart. Thats right. If you had a real global slowdown, that would be a different game for the whole economy. We know it important for our rn these governments, if and maybe they can healed it off for a while. Thats the pressure that theyre feeling. That why they kaep together. And saint noormt, his far 234506r78 a free fall in prices and i think thats a pressure on all of them. And now you have one of the countries that was key in helping to make the deal between saudi arabia is not in a it, r concern are frrm and really no imprakt frrchlt frmtd frmtd is abo our secretary of state Rex Tillerson and went back and criticized him the same way. The other thing is venezuela its so terrible and continuing to get worse we want to thank you for your time today when we return, well talk about stocks on the move ahead of the opening bell. Future have been under pressure all morning. S p futures down by 14, the nasdaq down by 56. Squawk box will be right back. Finding time to get things done isnt easy. But weve got the Digital Tools to help. Now with xfinitys my account, you can figure things out easily, so you wont even have to call us. Change your wifi password to something you can actually remember, instantly. Add that premium channel, and watch the show everyones talking about, tonight. And the bill you need to pay . Do it in seconds. Because we should fit into your life, not the other way around. Go to xfinity. Com myaccount jabil reported estimates up. Bob evans farm earned well above the estimate the company saying its seeing benefits from its move to sell off its restaurant chain and become a pure Food Distribution company. And goodyear tires expected a flat performance compared to a year ago coming up, President Trump reportedly under investigation for pos di its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . We created the ripple the doughnut in a doughnut in a doughnut. Right away, it was a success. I mean, it really took off. What people dont know is that it all started with points from my chase ink card. I bought the ingredients, utensils, even custom donut cutters. Wow all with 80,000 points. What will you create with your points . Learn more about the ink business preferred card. Are you ok . What happened . Dad kinda walked into my swing. Huh . Dont you mean dad kind of ruined our hawaii fund . I thud go to the thothpital. There goes the airfair. I dont think Health Insurance will cover all. Of that. Buth my fathe without that cash from aflac we might have to choose between hawaii or your face. Hawaii what . Haha. Hawaii you might have less coverage than you think. Visit aflac. Com and keep your lifestyle healthy. Aflac markets now, stocks under pressure, oil prices hovering near a low plus Airline Complaints doug parker joins us on set as the final hour of squawk box takes off right now. Announcer live from the most powerful city in the world, new york, this is squawk box. Good morning and welcome back to squawk box here on cnbc live from the Nasdaq Market site here in new york 22 second real donald trump, you are witnessing good to see you. Earlier we said since the drag off of the united passenger, complaints are up 70 . So did complaints did incidents go up 70 or its the madness of crowd, right . You must be mad at united. Hes happy the attention is on somebody else somebody besides me is going to intro you i nt want o get lo it percentage basis, its not that ugly because a lot of times you see hip sfln, a lot of times you got 80 crude, just had a pretty interesting discussion on that its nice its almost like theres a supply floor of like 40 or so because people stop, it doesnt make sense shale used to be 70 and shale with the new technology, its really easy to turn it back on every time you figure you dont see 28 oil, although i like it. It means bad things. I know a bad guy who might like it ers your kprrks that im going to go one time im going to say is one way. We havent got a style correction on qatar or or cutter ive heard them say. Do you fly to qatar we do not what is the name of that . Ive always said cutter but always . And ive been told. Supermarket chain krogers ceo Mike Schlottman will join us President Trump responding to reports that a special counsel is investigating him the president tweeting they made up a phony collusion and now they made up joe tweet frmt this is a hunt and its led by some very bad and conflicted people presumably he means Robert Mueller there. Presumably hes talking about Robert Mueller, the special counsel, who is leading this investigation. Well see why it is that the president thinks that apparently thinks hes bad and conflicted later on this morning. Heres what the Washington Post reported last night that has aroused the president s ire this morning the Washington Post reporting an obstruction of justice investigation trump personally began days after he fired the were told through the Washington Post that investigators are looking into any evidence among financial crimes presumably that is related to the Russian Investigation because that is mandates personal lawyer spokesman why the president s attorney believes that the Washington Post story was leaked out put out by the fbi, there could have been a number of people who could have put that information out. Also not clear if there snrn and frrchl i dont can immediately think hes talking about muller. I saw it but it could be that other people that are conflicted and wrong have done enough of the maybe hes talking about comey and muller as the independent counsel has to look at it now because thats his job. You cant just pigeon hole it sand say now i know trump is talking about mueller. If you put the tweet back up the other one. I read it you wonder who hes talking about when he talks about being bad and conflicted we know who is leading the investigation and thats mueller. Is the president saying mueller is bad and no, but there might be some people in the intelligence communities that are mad for whatever reason. Its a whole plethora of possible bad youre saying they o could be leading it because of their actions im saying there could be some bad people around who want hp ot. I think we going ask that ets led by if someones leading it i dont know. Thats now how i read it i read that it was a they. You had the same comments earlier and there was no led so well, look, thats the trouble with the 140 characters of twitter the president likes this medium because he gets his message out unfiltered to his followers. In though the led there is people meechld if hes talking about mueller, it would have been a person. So you used lead covfefe. Lets talk about that for 20 minutes. Kellyanne conway has been tweeted out stories about how grchblt zbhrchl the i bring it up is because weve seen reports that the president has been talking behind the scenes about firing mueller i thought they pukd back and said that was the guy guy from news maximum the guy from number flrchl. Is this an indication today, is the president voicing in his tweet just moments ago frustration with Robert Mueller and what action wouldy take as a result of that firing Robert Mueller would be a dramatic step. Its not clear he could actually, cute on it based on the process of having to get the d. O. J. To do it. That would have been a grm brrm zbhnl zbhrnl and the u. S. Department of transportation reports passenger complaints surged 70 in april versus last year joining us is doug parker, chairman and ceo of American Airlines thanks for having me today. Probably not a surprise when things searched in vitiello and it really got peoples attention, particularly United Airlines where do you see the issues . Some years of earnings and huge losses and restructuring all the time thats behind us weve been entirely transformed. You can see it in the earnings of american and of the earnings of the skri. Through its still kpeand frn is the clear answer there are fewer competitors and not as many dumb ones not, no too many sfwa you the ability to take on passiers snrnl and that allows us to be a more mature, profitable bin frrchl i realize not all of it is the airlines and when youre going through tsa, theres delays youre going to be sitting on the tar mac for a while and the antiquated control issues we issues are were prrpsfwlorm nfrmt think about those poor employees, all they did was show up for work. You shouldnt put people in that situation. But look, we all have policies and procedures and rules that unfortunately can put our people in those types of situations we are working really hard to make sure we correct all of this. Well, first of all, we put in place that says we wont remove a customer thats on an air paul ryan for another customer. And the other this evening is give the latitude of your team and not be forced to follow overly restricted rules and guidelines that our frunks and in this environment we got a lot of pushback on that. I can argue why that was the right decision other airlines are fine on the 28 inch es nfrm but in this world, it didnt make sense. Is he we changed that and we nurm nurmts. The reason why customers are frustrated but often dont feel theyve charge there nrn just you all, a could be be snrnl willing will to narn so we all complain about the space nobody is actually willing to put up a dollar store how do you think about that balance if there is a balance to be nshl nrnl really our employees feedback theyre going to have to deal with those customers and fints pb flurnl nufrmt and commerce wouldnt operate with airlines like ours. We just need to do a better job of giving them the tools they need to go down what they do so well and not put themselves in circumstances. They know it doesnt seem if iy eigh eighth. Plus, a delusion of data. We have three economic reports nrnl. Fed sill. You dont care, no . I remember meeting muhammad al [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Welcome back to squawk box. Share of kroger are under pressure joining us now is mike schlotman, cfo hes a member of the cfo council. Thats what you tell people at parties and stuff . I lead with that, yes, sir. I dont blame you for doing that weve talked a lot i always bring it back to deflation. It makes it tough in the supermarket business because your margins are so narrow certainly inflation and deflation is playing a role in whats going on in our industry today. In the quarter we had about 20 points of basis point o. P you you frnl its one of the reasons we lowered guidance. The on person who has any idea what youre talking about now is doug parker i thought you said lipo i thought maybe thats an dwrchb so a in. Its n think montana. In n nrchlt it just takes a while for all of those,000s ands to tim certainly a will the bit chock nvlgts is that what it is . You it it n everybodys getting hurt and is teams like it from digital stuff, walmart snrnlt we have not a big online die signatures stwrks and it continues to be a very, very strong offering that our customers really like and anticipates. I think everybody is going to have top in. Were adding on tomorrow blif about f. Could you run coast guard are frrnlt. But, dug, im hes not smarmt ejts frchlt i did work with your dad in the mid 80s so you listened to everything what would you do right now . It tough to tell them what to do about their business it all about c. B. I think n nchn an bring customers to the stores like we do to the airport. My dad would always tell me when we walked into a store, i think you can tell if people are happy. Its about making sure you have your team engaged and taking care of your customers and we live with that today, doug i heard you save you serve 2 million customers a year, we serve 8. 5 million a day. And when you have engaged associates and you have the right product and theyre in stocking the shelves and you have great price, we have 8. 5 millionchances to have those people have a better day and our associates when they get to do that, its a better day for you as well. So we will never see a kroger in millburn, new jersey ill never say never. Because im there at a place call kings so im there three times. Its a big part its important to have a great experience when you go into one of these places. We did do a deal where murrays cheese is part of kroggers i have to go to Grand Central village . We also. Anyway, thank you appreciate your time this morning. Thank you thanks, doug. When we come book, a parade of Economic Data about to hit the tape we will bring you the numbers and much more. Stick around well be right back. Dont fly mr. Blue bird, im just walking down the road can we at least analyze customer traffic . Can we push the offer online . Legacy technology can handcuff any company. But yes is here. Youre saying the new app will go live monday . Yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. Its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . [ laughing ] oh. This guy, the mansion and the cars. This is the best . I dont like it. Gru, villainy is in your blood. [ evil laughter ] [ minions shouting ] look at us, two brothers pulling a heist. [ upbeat music ] [ gasps ] im gonna be empaled [ chuckles ] im okay. [ exhales ] despicable me 3. Rated pg. We are just seconds away from the weekly jobless claim, may import prices and the markets have been weaker this morning. The dow finished at a new high yesterday but this morning is expected to open down 85 points below fair value the nasdaq off by 62 maybe the more interesting chart to be watching thorn is the tenyear note. Check out the yield. Yesterday it closed in at abo aboabout aboabout about. About 2. 1 lets go to rick. Empire is always a roller coaster in terms of where its numbers come out its kind of the durable goods of this series if we look at import prices, that is down 0. 3, a little more than expected. And you lost 0. 3 on last look up to half a percent only up 0. 2. Year over year up 2. 1. Thats like following 3. 6 so thats a pretty big drop on claims 237,000. Thats down 18 excuse me, down 8,000 once again, thats getting into the early 70s category its a good thing to have the claims down and 3. 3 Unemployment Rate problem is we need some growth if you look at philadelphia, this is also a june read philly also can be quite volatile this is darn close to expectations and follows an unrevised 38. 8 we still have utilization. I do see the 22. 15, 2. 16 yesterdays drop was data related. From the fed perspective, it represented about a three basis points rise in rates lets keep that in perspective the dollar index, it is up by half a cent. Hold on that is a good thing it starts to put the dollar index in a mode where maybe we can Start Building a foundation to build a rally i like the relationship with what the fed gave us aplus for designing and give as you lot more detail on the reduction of the Balance Sheet hopefully the bank of england and others will take note. If we dont, we cant collude but policy with regard to all this accommodation really has to change its difficult for one developed economy to do the right thing if the other developed economies dont. Joe, back to you a lot there, steve. I thought it was all about lipo. I heard a lot of it and i agree with a lot of it i think i can find something. It was good to get a lot of the Balance Sheet. I think the fed can talk about selling what will ultimately be oaf the course of the year 300 billion of assets and what did you say . Three bips on the tenyear they said they did a quarter, theyre going to do another quarter. I was pretty interested in all that so what am i missing here . Just on the market interpretation i think its really tempting fate i know what it is were six years too late no, no, no, no, no. We all know that we dont need to rehash that thats going to be in booksfor the next 50 years. Trust me, the reputation of the feds in power at the time isnt going to be good ben bernanke has a book, the courage to act. We need somebody to design a federal where its the courage not to act to say the market was blahzay. My guess is the market knows see, this is the thing i fight about with ira now and the problem is that high ra you cant acknowledge that most Interest Rates have been manipulated to the point where we dont have a gps and then plug them into a model Federal Reserve where you draw all these fantastic conclusions. You cant have it both ways. Thats the big problem i see everything look at the news yesterday we said look what the tenyear is doing get me the Balance Sheet for a month, ill get you 3 gdp next year 3. 2, unemployment 4. 3, fed funds pretty much unchanged. Were going to tolerate a lower rate and not higher fed funds required the data yesterday says the fed has the same problem and strong employment which we got in the claims number today. I dont know if we have a minute to talk to our guest host about airline fairs . Hell join us on set. Maybe in reference to united just kidding welcome back to squawk box. We want to get back to our guest host, doug parker. One airline in particular has remained relatively silent recently so i dont know where they stand but historically theyve been against it, which is delta, which has made an argument that by privatizing it that the costs will go up rather than down. They said places have gone up 30 . Do you think that will happen here we we did what we wear about is providing official air travel it takes like 40 minutes longer today to fly from dallas to philadelphia than it did 15 years ago. Because youre oun the runways. The airlines are faster this kind of work, though, you need the ability to invest long term, something thats not going to pay for a while. You have studied the same things that delta studied. Why wont it happen here you want lower prices, i imagine. I dont know if you want lower prices but im sure you want the world to be more efficient this is le about the well burn a lot less fuel we were talking about price earlier and united and all this stuff. He says about 35 of customers choosing today when they buy a ticket they choose on price and price alone. Another 35 whoos most loin price. He said the great irony is most ceos would love to compete on product and experience, its more fun the problem is customer arent paying aaif our fares are 1 mor than other customers are you kidding me . Because we fly around the world and into in the and we need to make sure were providing that product as well if every dollar literally counts on the price tag, how will the sector not get in trouble . Because we. What does it say about all the things that airline custome customersn we have a product in place and are putting in place a product that attracts highend customers. That market can carry that kind of a product well do things like a basic economy product which will allow us for customers that really care only about price. Theyll have less of the product amenities than others have do you think who buy on price really dont care about the service . Course they care about the service. They dont necessarily pay for it and they may not travel as frequently, so they dont know the well be right back with more squawk box. Stay with us my business was built with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. With it, i earn unlimited 2 cash back on all of my purchasing. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Which adds fuel to my bottom line. Whats in your wallet . Can we at least analyze customer can we push the offer online . Legacy technology can handcuff any company. But yes is here. Youre saying the new app will go live monday . Yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. Welcome back, everybody. Weve been talking airlines this morning. But airlines arent the only ones facing trouble. Think about whats happening with uber these days and our guest, the author of leaders eat last. You and doug know each other youve gotten to know each other through leadership meetings. American airlines had a leadership conference. I had an opportunity to speak at their conference why is it that some teams get ahead and some team doesnt . Message is it all irn if ladders get the irn wrong, cynicism, pairoy it simple but it not easy for sure leap p leadership is hard work it a and if that your good at their jobs, promote them but we dont teach them how to make that transition. We simply put them into a management position and expect they know how to manage. Quite frankly, we dont get that so what would you be telling a poe sense lead aresflmtd sflomtd. And so much what resonates is because it all short term. When youre in it for the long game, once you quickly realize is the way we have been treating our team is not longterm sustainable and it not going to pid a harder struggle for us than maybe some others so thats why having simon talking to the team and the message he deliver, maybe it was hard for some to hear because hes upfront about what people are doing when people are doing things the wrong way its what we wanted the team to hear. Simon, we were talking off camera i know in airlines that have merged i can try to figure out whos on the old team, whos on the new team, who got hosed. You can tell. Yeah. When we have is bad service, wills theres always exceptions but usually when get it on a usual basis its bad leadership. Theyre feeling some pressure from above them and above them its almost always a leadership issue. Doug, you mentioned the same thing that your dad said about the stores he worked at in kroger he could tell if it was well managed by how nice the employees were. Its simple, but not easy it takes a lot of hard work and leadership in our business and i think in the grocery business its easy to focus on through put and making sure youre getting people through the store, through the airline. Therefore, build rules that are designed to do that. When you that you lose the human factor and that matters more to our customers. They want through put and want efficiency we need to give our team the tools and let them know how to do what they know how to do well. Kind of pulling back the bean counters you cant say you can only offer 400 if we need to give people more latitude we just need to give them the tool and the latitude to do it and simon is helping us figure that out. Thank you for joining us. When we come back well talk to j cmeimrar. Jim cramer from the New York Stock Exchange well get his take on todays top stories. I cant wait for her to have that College Experience that i had. The classes, the friends, the independence. And since we planned for it, that student debt is the one experience, im glad shell miss when you have the right financial advisor, life can be brilliant. Ameriprise lets get down to the New York Stock Exchange. Jim cramer joins us now. In the old days, 08 points or 75 would have been a lot. We understand on the percentage basis its not a lot, jim, but the nasdaq again looks like its leading the way. If we ever do see a pull back you expect it will be led by the high flyers . Yeah, i think its a valuation pull back and a rotation none of the companies has reported a bad number theres no big preannouncement. If anything, from jabil, we had good news that was a read through. They make a lot of apple stuff right now people are in the mode i see downgrades of tech stocks from people who want to make names and its going to work because theres a rotation into the banks an into retail of all things theres rotation into industrial and health care. Some big funds are selling the very big valuation stocks in the nasdaq and moving into the lesser valuation stocks that are triggering the s p thats whats going on its being masked by the fed it will continue from friday this is a continuation of fridays action. Take out some of the lows, look at the new picture. One of these days these new highs are well remember that new high as the high i just never know which day it will be. A lot of money being made. Right thanks, jim. See you at the top of the hour well be back with more from American Airlines Ceo Doug Parker will you be ready when the moment turns romantic . Cialis for daily use treats ed and the urinary symptoms of bph. Tell your doctor about your 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 this may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. 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Northrop grumman command and control systems always let you see the complete picture. And were looking for a few dreamers to join us. Lets get back to our guest host, american air Ceo Doug Parker explain to me why well, somebody said you have to fix costs you know what that is. If you have one guy flying on it it would be bad. It would be expensive. If you had a thousand it would be cheap its just that simple. Every seat needs to be taken somehow you have to balance that out with service and convenience. Its tough i wouldnt want to be you. Have you got the magic sauce for how to do that we do need a product that distinguishes between different customers needs and were getting there. You have to fill the plane. Absolutely. Were not having trouble doing that the challenge of course is, again, as youre noting, i mean the airlines right now, by the way, they have by far the highest margins, the ultra low cost carriers, 28 inch pitch we need to be able to have a product we can sell to those customers. And we do now with something we call basic economy but most importantly for us were trying to cater to the high end traveller thank you always great to see you. Come on back, well do it again. Join us tomorrow squawk on the street starts right now. Good thursday morning. Welcome to squawk on the street. Im Carl Quintanilla with jim cramer at the New York Stock Exchange david faber is off nasdaq futures are down about 1 on the back of a google downgrade. Market continues to digest the hawkish some say tone from yellen yesterday europe is pretty red benchmark yield around 2. 16. Empire and philly fed. The fed hiking the rates