Transcripts For CNBC Squawk Box 20170707

Since may. Nasdaq is down for six out of the last eight sessions. Youre talking about elevated levels for all of these indices. The nasdaq is still above 6,000. Dow is at 21,320 again, you can see things actually picking up as we sit here talking about it. Dow futures indicated up by 8 points keep talking. Here are the big stories were watching the manager of the worlds Biggest Hedge Fund sounding off on Monetary Policy ray dalio says the actions of Global Central Bankers suggests the low rate cycle is ending soon he said our responsibility now is to keep dancing but closer to the exit and with a sharp eye on the tea leaves you remember the last time somebody talked about dancing. That bugs me. Dalio said he was less concerned about a debt bubble because of Balance Sheet deleveraging. The department of Homeland Security and fbi says hackers are targeting Nuclear Power stayings and other Energy Facilities the attacks have targeted people who have direct access to Critical Systems that could cause explosions or spills of dangerous material officials said there was no indication of a threat to Public Safety as potential impact appeared to be limited to administrative and Business Networks not operating systems Berkshire Hathaway saying it will purchase oncor electric company. The deal puts oncors equity value at 11 11. 3 billion. Berkshire hathaway has agreed to buy reorganized future Energy Holdings corp for 9 billion in cash, oncors parent i dont know if this deal will go through its the dollar figure were still trying to figure out 9 billion, is it 17. 5 billion it was a bankrupt we said 11. 9. Was that we just said 9 he paid 9 but made the value 11. 9 is this energy guy taking over for buffett thats my questions greg abel is who i would cant you call and ask . They wont say. Ask warren . No. Have you asked him . Y i askes, i asked him off c on camera. Have you asked him today . Youre supposedly here because of the jobs report i dont know why im here you did the longread which didnt want to do which is torturous for myself and viewers. The same as when i do it at least you make fun of your inability. Other people are choosing the three dig stobig stories and wr it i dont want to own it a lot of times. You would rather ad lib it this morning this, i want to this im im reading this in advance. I dont understand whats going on here. Not the first story. First story is interesting stocks to watch, siemens is setting up a task force to investigate reports that some of the turbines that it had delivered to crimea for use in russianbuilt power plants could be a violation of eu sanctions against russia thats interesting the report says it is unclear whether siemens knew about the delivery if a third party bought the turbines and sold them to russia the company could be accused of indirect sanctions busting this one i dont get tesla is building the Worlds Largest lithium ion battery pla plant. Elon musk says if the plant is not completed within 100 days, its free. Free to who you wont charge australia anything maybe they got some big tax credits. Tesla has other problems. Just the volvo news has people thinking, wow, theres other Car Companies in the world because that will do electric cars. Tesla stock slipped yesterday. Mondelez, that name is still around says a recent a recent cyberattack will cut in growth there will be a 3 slice off of its Revenue Growth rate for the quarter. The attack happened in late june it hampered the companys ability to ship and invoice during the last four days of the Second Quarter multiple companies around the world reported being attacked on that same day. This is the first time i recall hearing a Company Actually lowering guidance as a result of a cyberattack. You can understand it happened in the last few days, but theyre saying theyll take onetime charges in the second and third quarters so its not like the shipments got back up and running and they got them back out this tells you how severe these cyberattacks are it does give the ceo another way out. We were hacked yeah everything i did in managing the company was right. Until we were hacked now well miss our numbers yeah. They got a lot of others, weather is always good rain. Shake shack and rain often entire First Quarter gdp every year based on some statistical noise weather, inventory, you always have an excuse. Thats like government work, you can write off anything you want President Trump active on twitter early this morning he tweeted i look forward to all meetings today with World Leaders including my meeting with Vladimir Putin. Much to discuss. The president will be sitting down with nearly a dozen leaders at the summit today. That Putin Meeting is one that weve been watching and waiting to hear so much about. Eamon javers is there in germany. He has more on all of this good morning good morning, becky so much attention and speculation about that trump Putin Meeting later on today. The president did wake up this morning in hamburg and began tweeding ill read you another tweed tt s morning. Hes been saying i wil represent our country well and fight for its interests. Fake news media will never cover me accurately but who cares, we will make America Great again. We have seen all of the World Leaders here gathered at the g20 getting together we saw Vladimir Putin and President Trump in the same room together along with all of the rest of the leaders. We saw ang pela merkel greeting the World Leaders as they walk into the venue this morning. So we are officially underway here in hamburg for the g20. The event so far has been marred by protests. We saw the socalled welcome to hell protests yesterday here in hamburg. The epicenter of that was all here where im standing near the waterfront near where the media hotels are ultimately we saw some violence last night, water cannons. This morning that has continued including the burning of some cars lets give you some of the facts. Calm where we are, elsewhere were told theres been numerous items including vehicles set on fire, signs torn down, fireworks and bottles thrown at police officers, some officers have been injured yesterday two federal Police Vehicles have been damaged this is the scary one. A Police Helicopter was attacked with a rocket flair projectile that barely missed the helicopter that could be seriously dangerous if the protesters continue with that behavior. Theres helicopters all over the city providing security and surveillance if we see that again today that could be concerning. Protesters have repeatedly blocked the streets near the n venue where theyre Holding Events today weve seen this back and forth tussle between police and protesters the protesters trying to hold intersections, make their voices heard. Police cant to clear the tur ro fair thoroughfares and allow traffic to get through well see that sen shun continue throughout the day and heat up as the afternoon goes on its just noon here in hamburg so the crowds may start to build. Eamon, i dont think youll have a monitor ill show this, keep your eye out for a particularly tall protester, maybe hell be wearing a mask im not sure this is the cover of the post. Deblasio, the mayor of new york. The day after this tragic, horrific incident where this policewoman was shot, hes jetting off to protest the g20 join the protesters. What is wrong with this man . Will you can you do you have any insight this is the mayor this city deserves i dont if youre going to take new york, home of the new york times, Mainstream Media, this is the mayor this city deserves. I think. But keep an eye out for him. He may be wearing one of those masks, im not sure. Well look. The masks are illegal here in germany. You cant wear those while protesting what is wrong with this man i have no insight into that okay. I will keep an eye out for him if we see him over here. We did see some protesters yesterday. Some of them jostled us on air yesterday a bit during our live coverage for the most part it was peaceful some bottle throwing, flares, smoke bombs, and those flash bombs can be unnerving when youre out here. The difference between covering protests here and back in the states is that we dont see guns on the street here you dont have to worry about protesters being armed particularly thats a bit reassuring when youre out here. Hell win in a landslide reelection. Deblasio. Blah, blah, blah. Do you live here i dont live in the city. Phil, i cant grill you did you vote for him the first time i dont live in the city. Did you campaign for him . No. A local starbucks a little booth . No. No all right eamon, i dont you know, you think its because he has nationals a perration s a peasp . Maybe this is try r goiis going top in the current state of the democratic party, maybe it will help then i thought trump was ant antiglobalization are they sort of trump has toned down a lot of that hes been open about trying no, no, the two ends meet the far right time and space. Theyre altogether on the antiglobalization lets check on the futures. Theyre up a bit kind of an ugly session yesterday for most of the averages rotation out of technology again today, wait and see. The dow is up 9. Nasdaq up 5. S p up a little over 2 europe, which is where all the action is taking place geopolitically today, fractionally lower the ftse up 0. 2 in asia, not a whole lot of action today third of a point loss in japan hang seng up a half. Down a half. Oil, well talk to kilduff i was fascinated by the president s speech yesterday in terms of an alternative Energy Program i can get behind offering an alternative Energy Source to poland and some countries in Central Europe other than russia. Thats a different use of the word natural gas us exporting lng its expensive but still you can get lng over there for less than what theyre paying russia. Also if they had a source to not get cut off, it would give them in 09 it was winter and they got cut off we had senator heidi heigkamp here she has gotten into discussions with senators, fellow senators from other places who said this is the equivalent of us telling you you cant export your corn the idea they cant export natural gas or oil that these are their crops essentially. As a result thats why Natural Gas Prices she thinks are so low. Is it an environmental thing they cant get the ports to do the export a lot of pipeline to get things there in boston they were doing a port up. There. I think theyre talking about one down in the gulf of mexico at this point. But it takes time to build these things you have permitting to get through. Shes a democrat kind of one of the good ones we have a lot of natural gas in the country. Exporting it could be a good deal oil prices, i think that contract flipped yesterday oil prices up, today its down. Its the august contract liesman i found a third reason why youre here because of this putin stuff. You can bring us an insight you lived in moscow during your indoctrination for how long . Can i answer the first parts of that question i was there from 92 to 98. I confirmed my adoration of capitalism there when i saw how badly communism worked in europe you would be considered a capitalist. Far right ill grant you that the reason i asked you, so putin, hes playing games already right now. Did you see the most toothless condemnation of north korea couldnt pass in the u. N did you see why russia said they vetoed that . Because were not really sure it was an icbm. Youre calling it an icbm. It seemed to go high enough, but we dont want to classify it as that since we cant classify it as that, we wont let this that was the day before trumps meeting with him he loves to doesnt he . Hes a crafty, tricky hes clever, he thinks tactically more than h strategically. He doesnt have a broad longterm vision but hes good at executing the small nearterm chess moves. How pod was he yesterday listening to trump talk about to his speech in poland i dont think hes pod in either way bfrnlgt supp about supplying them snfrn he doesnt get mad, he gets even he has a good Foreign Ministry that plays the nearterm game you know some of those guysiguys, right . I knew some of them i was joking. I was with the russian delegation, i walked up to the foreign minister in the russian hotel, i said to him, the real question is this, and i was asking him a question. He looked at me, and he said, no, no, no the real question is what the bleep are you doing here he did not get the memo. I did walk up to the foreign minister and tell him a story. When youre Walking Around with those guys in a chinese hotel. Dont you look russian like the rest of them to me you do at times. The question, joe is not how do you say no niet. The other russian that you speak. You have done it before. I have. You could pass for a rusky. Is that okay the question is not that, the question is do you drink like a russian. For more on the markets, lets bring in mark hamrick and kathy jones. I will turn to kathy, kathy i went on vacation, i had the whole thing under control. The tenyear at 2. 14 i come back, what have you guys done whats happened you can thank mario draghi. Its mario. Okay thats a big contributing factor a number of fed officials are also talking about starting to taper the bond portfolio here in the u. S. But i think a lot of it was kicked off in europe when we heard mario draghi go from whatever it takes to, well, you know, things are looking better so rates can move up is the bond market starting to buy in a bit of the inflation low inflation story is a temporary story i think the view is weve gone from this worry about deflation to now the reflation we kept veering back and forth mark, lets do the wrap up here or the curtain raiser on the jobs report. Looking for a bit weaker longterm trend but bouncing back from the prior month. Thats right. Thank you. Its worth noting so far in 2017 weve been running below the levels we saw last year. And we are remembering the fact the recovery began eight years ago. So its a mature recovery. We know the saying recoveries dont die of old age but also they dont live forever. Theres a combination of things going on, contributing to the lack of more substantial payroll growth some jobs are harder to fill we are probably getting close to the end of the recovery. We just dont know when that will be. I dont think anyone thinks theres a recession on the horizon. Were looking at a 1174 average and 4. 3. What are your numbers . I think the overall theme is you have to drink the cool akoo to think we get above 200,000 jobs a month, and i think modest but not spectacular is the new normal i wouldnt be surprised if were close to last month with an undershoot perhaps we bound back a bit. Were looking for this Second Quarter to be a little stronger than the first i think this probably will reflect that as we close the books on the jobs report kathy, if the number comes in as expected, what does this do to the outlook for fed policy . I think they can continue, depending on wage growth they can continue to move forward with talk about maybe another rate hike this year, and probably two next year and talk about working on reducing the Balance Sheet later this year. September you know, depends if they want to start with the Balance Sheet in september, then i think theyll probably announce something at the end of the summer and begin in the Fourth Quarter another rate hike either september or december is possible i have a higher number for this. What do you have . Are you drinking koolaide no, the may number was held down by the calendar effect. Well get a rebound this month. I dont employee if i want to know if i want to reveal my number, but according to mark i am drinking the koolaide. New data shows rising demand for oil, but that waefrsnt the problem, it was a ramp up in production by the u. S. And opec. John kilduff will join us next 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 Flexshares Etfs are built around the Way Investors think. With objectives like building capital for the future, managing Portfolio Risk and liquidity and generating income. Thats real etf innovation. Flexshares. Built by investors, for investors. Before investing consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. A used car, yogigspeed internet. Me . You know whats not awesome . When only certain people can get it. Lets fix that. Lets give this guy gig really . And these kids. And these guys. Him. Ah. Oh hello that lady. These houses yes, yes and yes. And dont forget about them. Uh huh. Sure. Still yes you can get it too. Welcome to the party. Introducing gigspeed internet from xfinity. Finally, gig for your neighborhood too. Dont mind us, were just doing a live tv show President Trump pitching the idea of u. S. Energy exports. Joining us now to talk energy is john kilduff Founding Partner of again capital. You said lng sending it over is 7 bucks, but still beneath what they pay so it is viable . Its viable, competitive, why youre seeing it happen. Shanier is the leader in this. They were smart, they signed longterm deals, sort of pay as you go or tolling type arrangements that has locked in their exports going forward. The u. S. Is in the process of quadrupling exports. Going from 3 billion cubic feet a day to 10 or 12. This makes sense for a lot of reasons. Arent they good jobs in the u. S. Theyre fantastic jobs. It helps us become Global Leaders in energy exports. These plants are on a massive scale. Ive been to the one in baja, california its like youre in Madison Square garden in the middle of the storage unit a lot of the ones that had been built to take in gas are being repurposed to export gas its not easy to do this. They freeze it, right freeze, you think of 32 degrees fahrenheit, this is minus 250. This is the stuff mr. Freeze used in the batman series. Really . Batman so ahead of its time. What happens if theres a problem . Is it highly flammable no, no. Its not really combustible. Its just to make it liquid so you can move it yes minus 200, it is spectacularly cold that reduces samuel l. Jackson, lucius best from the incredibles. Who did you think it was schwarzenegger when he was in he was mr. Freeze mr. Freeze. Okay. To burn it in your furnace they have to warm it back up you have the facility to contract it, make it smaller, freeze it put it on the ship, it goes over. It has to be regassified gas was 1. 60 in cleveland recently can he actually help drive the prices down . Can he do that theres an element to futures prices when it comes to oil and gasoline, thats future expectations and sentiment to the extent hes unleashing more pipeline capacity, more drilling isnt the problem the more people start to drill, the lower Oil Crude Oil becomes, and its a selfcorrecting mechanism, people wont continue to drill if it fall troos low . It is we are nearing the price, the terminal price that they will start to shutter some of these wells. Is the natural boundary upper 30s, mid 30s i dont know the permian story is a bigger and bigger miracle for the u. S if they can somehow get that down into the 15s or the 10s, that would put them in competition almost with saudi arabia so its technology. It is technology and pipeline a lot of these barrels are stranded a lot of these barrels in other parts of the country need to go by truck to get to market and refined. The Dakota Access pipeline is in the process of making a big difference a lot of crude oil it will bring to market is displacing a lot of rail shipments making that oil a lot cheaper. Which, by the way, is environmentally friendly to get them off the rails no doubt about it that was controversial thats one of those ones that was a balance. It is going to make a big difference to consumers once that pipeline is, in fact, in service. Which is when now its already started its been filled, its starting to flow as we speak. Its going to help east coast refiners in particular and the gulf looking go yo plieopoliticalp is meeting putin today oil goes under 50, they have to take over the ukraine to increase nationalism and to keep everyone happy with putin and his Approval Rating at 90 keep the ukrainians from tapping into the russian gas pipeline in europe which is which they did for many years. He uses some of his these actions to offset what is a hard time for russians because of the price of oil how mad do you think he got yesterday with trump saying well export a lot to their customers over there, im sure they would like toland. I. Im sure it is a stick in the eye, and hell offer to sign another deal in the next room. Trump saying if you have a few minutes ill cut another deal with you it was a real look, poland is a key market for russia and russias gas theyre trying to expand that dominance. John, how much gas would be needed from the United States to make a meaningful dent this 10 or 12 billion cubic feet is spoken for, right those are longterm contracts. Theres an active spot market for the balance. How much would they need to export to europe to make a Meaningful National security difference for the continent youre not going to displace russias supplies. They are meaningful and probably the core of it but in times when russia decides to shut off the gas should could it be a differencemaker and get them through . When we talkcommodities, youre pricing in that incremental bushel or barrel so this moderates the supply issues that you have its not a salve, and you still have to deal with russia the russians are also in the process of diverse fiving their economy. The privatizations that went on under putin created some formidable oil companies, rosneft in particular. That was the great things about gas prices in russia, it forced them to do economic reforms. Theyre top players fr wednesday poland is back buying patriot missiles again. Why did obama pull that deal i dont know. Now its back thats probably not making them happy either the poles are sensitive historically theyve been ticked off. Thats one word for it like when trump said something about getting invaded by stalin. It was pretty tough on these guys. Poland is the plum of europe. Isnt that a great understatement coming up, President Trump set to tackle trade, north korea and china at g20 in germany. Last as we head to break, a look at yesterdays s p 500 winners and losers excuse me, are you aware of whats happening right now . Were facing 20 billion security events every day. Ddos campaigns, ransomware, malware attacks. Actually, we just handled all the priority threats. You did that . We did that. Really. We analyzed millions of articles and reports. We can identify threats 50 faster. You can do that . We can do that. Then do that. Can we do that . We can do that. Can we do that . 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. Welcome back President Trump continues to double down on his prom police to confront north Koreas Nuclear program ahead of the g20 meeting the president tweeted about the economic ties between north korea and china. Trade between china and north korea grew almost 40 in the First Quarter. So much for china working with us but we had to give it a try joining us is doug paal from the Carnegie Endowment for international peace. Doug, when you look at this tweet, does the president have reason for being so pessimistic and having so much concern about it i think hes got reason to be pessimistic. Im not sure the reason is that 40 figure he cited. I dont know where the basis of it comes from. Expect takes around the Trump Administration is that china can deliver north korea is too high. Hin that chinas expectations on what they can help trump with is too low. And the gap needs to be brought closer what should we expect to see from china where would we see if they were really cracking down on north korea, where would it show up . It would show up first and foremost in oil. Oil has been withheld in a small measure from china thats driving up north korea thats driving up the diesel on the streets of north korea. Thats a measurable effect the chinese are primarily concerned with preventing a new nuclear test not so much interested in the longring missile tests which brings the threat to the u. S they think the Nuclear Threat is on their border. Theyre more concerned about that what would make us feel like maybe were making progress with the chinese . Maybe they are taking this as seriously as we take this . What would make everyone think, okay we can take a step down from the ratcheted concerns and elevated security concerns . One big step is china interfering with the trade going on in these duly used industries where they can combine chemicals, metals that can be put into a Weapons Program but are not themselves weapons by nature also a lot of banking activity at this point a lot of that banking activity is small scale. You have to get out a fine tooth comb to stop it. China could do more if they wanted to on that front. Are we right in thinking that china is our only way out . Wesley clark said yesterday on the show that he doesnt see another solution china has to be a part of th solution the evidence has accumulated over decades now that theyre mostly preoccupied with the threat from the u. S. If were not part of that and leading the negotiation well have a problem we have a reluctant china that wants to cap the Nuclear Program in north korea, but not at the price of losing north korea. The u. S. Has to find a way and its already started Rex Tillerson spoke on this in new york earlier this past spring, were not trying to bring down the regime and bring our own best ally on the board wer chi with china, we want to work out this north korean problem in a way that respects the equities and National Security of both the u. S. And china that will take time and trusts were not there yet. Doug, i wonder, should we be freaking out now that north korea appears to have an icbm . Weve seen this coming for some time. It shows theyre serious, theyve stepped up testing of the missiles in the last year to show theyre reentry vehicles and air frames are stable and effective. Building more than two or three of these will not be easy. We dont need to go into panic mode the problem is urgent but not that urgent. We have time to discuss with them possibilities of a freeze in their testing, a freeze in manufacturing of fissile material, and see what the price for that might be. Though, we tried diplomacy for a while, if it doesnt work, whats the end solution . Its not just china, but south korea that dont really want us to go in and take some sort of strike where you take out their nuclear capability, that leaves south korea in a dangerous position geography has dealt us a difficult hand we cant go in with preemptive strikes and think well get away with something that will solve the problem an not have horrendous human costs for ourselves and our south korean allies we have done this before we had to deter russia and aa i. Well probably have to use containment again. Because of these pressures, the north koreans might be willing to talk and take pressure off by meeting our concerns we wont get ourselves to a happy solution any time soon doug, thank you for joining us today youre welcome. When we come back, Randy Zuckerberg is the founder of zuckerberg media and sister of the facebook founder she has a new technology that combines technology with the sitdown dinner. And later kevin rudd will join us to talk about President Trumps meeting with Vladimir Putin and trade. Coming up at 8 30, its the june jobs report stay with us on cnbc 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. Were working with leading sustainability experts to develop Higher Standards for food. So you can be sure youre getting Higher Quality ingredients, that are also better for the earth. Get 30 off at blueapron. Com cook. 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. Time now for the executive edge activist investors have been targeting bigger companies, but are they having any success unlocking real value leslie picker has a look at numbers. Thats right. Clearly bigger has become more popular but it may not be better during the first half of the year activists targeted more than 100 large cap companies, or those with 10 billion market caps or more that surpasses the total from any full year since at least 2010 there have been a few drivers of large cap activism according to activist insight activists saw less danger in large cap stocks they are Value Investors at the end of the day some funds have been making concentrated bets. As was the case with p g and nestle only 23 of fight yielded a settlement compared with 41 last year. When it it came to a Company Winning the vote, 18 of the time, and activists won 16 of fights still the assets keep on climbing reaching 1 187 billion this year after a dip to 1 180 billion last year. Are their returns any better when they go after the Big Companies rather than the small ones its harder to move the needle on a big company in terms of juicing returns, getting a pop like you may see in a small cap stock. We have not seen much difference overall in terms of activists having better returns this year vers versus last year its interesting to see how the rest of the year plays out and how those specific companies contribute to the portfolios we have a nat geo segment coming up. I dont know if becky and joe are big watchers like i am, i had this idea of the lions going after the water buffalo, when they get them, its good. But a lot of times they miss and they get injured themselves doing it that was my image as you read that story thats a good analogy i came from a safari in africa in november, and i saw that live in action. Thats a perfect analogy, because when you go after the bigger companies, they have the resources to hire the top team of defense bankers, lawyers, they have the team in place. And they just kick them with their horns and everyone they injury them on the way taking them down as you mentioned, with activist investing, the success rate in terms of settlement, getting people on board that does not always equate to returns. Just because you get somebody on board doesnt mean you will get the returns you hope for thats more of a longterm play. You know whos on, right . I know. Thats what made me think of it. Who jerry the baby monkey joe dirt the badger i didnt know who they were talking about. Maggie the alligator. Theyll be here shes very sweet. Her name is maggie you go right up to her wouldnt hurt a flee i have some experience with alligators you got a pair of shoes i went on an alligator hunt another reason youre here . Another reason im here dont tell maggie when i fish, i routinely bring in alligators. Coming up, tech meets dining, thats the concept behind sues test kitchen from Randi Zuckerberg the sister of mark zuckerberg. As we go to break, heres a quick check of whats happening in european maetrks. 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. Introducing the new sleep number 360™ smart bed. The only bed smart enough to change sleep as we know it. It senses your every move and automatically adjusts on both sides to keep you comfortable. And snoring. Does your bed do that . Right now save on sleep number 360™ smart beds. Plus, its the lowest prices of the season with savings of 500 on our most popular p5 bed. Ends sunday. At crowne plaza we know Business Travel isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. Welcome back, everybody. Randi zuckerberg is creating the sitdown restaurant concept of the future its a popup right now called sues tech kitchen allows families to enjoy dinner together while taking part in activities like coding with candy and 3d printing desserts to get your kids really interested and all of the s. T. E. M. Things they should be studying joining us now is Randi Zuckerberg shes the founder and ceo of zuckerberg media thanks for being here today. Thanks. Thrilled to be here. Right now this is a popup concept and it sounds so cool i cant wait until you make it an actual sitdown restaurant that we can take our kids to. But explain what it is this is like you call it the chuck e. Cheese of the future. Yeah, maybe more like willy wonka if you envisit i think right now we have modern children who technology is such a part of their lives, parents are hungry, literally hungry, for experiences to have with their children that introduce tech and fun creative, smart ways and so im really excited to reenvision what family dinner and dining looks like for this modern child 3d printing and all kinds of wild stuff 3d printing, how does this work thats the thing. Were reenvisioning the entire dining concept you dont just sit down at a table, theres all kinds of immersive experiences that you can do its really we reenvisioning the way that you would sit at a table, who prepares the food, how its made, and were hoping to, you know, Bring Technology in a way thats fun and delightful and energizing, rather than force kids and families to come to the tech tricking kids into doing it in other words theyre doing it and they dont even realize thats right. We have a station where were going to teach kids how to code with candy in a way that they dont even know theyre learning how to code. Its something they want to do sounds neat i dont code. Candy . Yeah. But you could come to tech kitchen and learn how to code without even knowing your learning the 3d printing of desserts and the potential that they could create there we have so much fun in our office i feel like were mad scientists planning everything with sues tech kitchen. The other day we printed a hummus platter no, no, no. Thats im talking about a caramel sunday hummus and what . Yes but 3d printing on kind of the more yummy, delicious side, and children get to customize what comes out of the 3d printer watch it in action and hopefully, i mean the skys the limit. This is just a popup beta test. But you know, as we tour around the nation with sues tech kitchen i think you sold out instantaneously. Yeah. We put out one small press release, which sold out within hours. So were frantically working on ways to add new reservations and expand we want to get as many families in the door as possible. Now i asked you on the commercial break how long it would be before i could take my family and the point is its going to be awhile because youre not starting in places like new york city or Silicon Valley why is that . Thats right. One of my big passions is britaining the digital divide. I think we live in an interesting time in this country as were seeing where theres brain drain from cities, youre seeing theres a huge gap, companies cant even fill engineering jobs that are sitting open and one of the ways that we can do that is by bringing technology to cities around the country that want to become innovation hubs, and are really working hard but dont have that access to tech and s. T. E. M. Just yet. So thats why i love chattanooga as our first stop on the tour, even though i live here in manhattan and spent time in Silicon Valley its a city that is a startup in itself trying to reinvent itself as an Innovation Tech hub, and so, for once in their lives, manhattan and Silicon Valley will have to wait to get something innovative we have a rule in my house, which is no cell phones at the table. How does this great point how does this work along with that because we want people to talk to each other and only when theres a point of information do the kids get i think the teenagers now, but the kids get permission to use their phones im so glad you raised that because i think right now we have this push and pull relationship with technology, where tech right now it brings you away from your family. Right and its in between and again, at sues tech kitchen were trying to reenvision that phones arent crucial to the experience, but if you want to have your phone with you, weve actually designed an experience where your phone becomes part of the lites, and the design of the rooms. So that it kind of brings you deeper into the experience rather than putting up that barrier. But i agree, were trying to figure i mean, phones are part of our lives and tech is part of our lives. How do we introduce it in a way thats joyful and brings people together rather than have that antagonistic relationship. Randi, can we ask you just about the culture in Silicon Valley thats something weve talked about so frequently because of the situation with uber. Yes and other issues that have been happening there you spent time working there i did i spent almost a decade in Silicon Valley and its, you know, its it can be a difficult place to be a woman at times, for sure thats one of the reasons why in zuckerberg media, that chapter of my career, im so focused on bringing tech to young girls and to families because i think this is not a problem that is going to be solved inside Silicon Valley right now girls are opting out of technology by third and fourth grade. So if youre going to change what Silicon Valley looks like in a culture there in 20 years, you have to start now with the tech kitchen and with my show dot thats on air. On universal kids sprout and thats why im so focused on childrens content and bringing tech in delightful ways so this next generation of girls doesnt opt out of technology. Randi, thank you for being here sounds like really interesting stuff. And wed love to have you come back, especially let us know when youre bringing it here when im 3d printing your oyster ice cream ill let you know that was an example of not doing something because you can. That was referencing the top ramon noodle you know, if you can engineer the kids is that something you want to do i think my boys would go for it though. Oyster ice cream . No ramen noodle ice cream they like Sriracha Mayo and chipotle turkey and im still trying to figure out the first thing every 3d printer was a pringle. What the hell is a pringle what is that i mean you know its like its yummy. No, its like stuck together it is no, its not. Poet to mush, i think its potato mush. Why would you have that instead of a lays who in their right mind said they wanted to make tennis balls but they got delivered potatoes, instead, and thats how pringles came about yeah, i believe that. Exactly. The former Prime Minister of the g20 country, australia, will join us, kevin rudd will be here to talk friday north korea and President Trumps meeting with Vladimir Putin. Stay tuned for the june jobs report, too. Squawk box will be right back. The new guy . What new guy . I hired some help. He really knows his wine. This is the new guy . Hello, my name is watson. You know wine, huh . I know that you should check vineyard block 12. Block 12 . My analysis of satellite imagery shows it would benefit from decreased irrigation. I was wondering about that. Easy boy. Nice doggy. What do you think . Not bad. Good morning, everybody. Global summit. G20 leaders gathering in germany right now including donald trump and his russian counterpart Vladimir Putin it is jobs friday today. Wall street expectations for the potentially market moving event are straight ahead plus, crude crushed. Oil prices dropping another 3 this morning well tell you why as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Good morning and welcome back to squawk box here on cnbc live from the Nasdaq Marketsite in times square, im joe kernen, along with becky quick and steve liesman. Futures are rebounding ever so slightly today after a drubbing yesterday in the major averages. Thats the dow and the nasdaq. Up 8 on the dow. Up 2. 15, 2. 15 on the s p and up a little over 4 points on the nasdaq oil prices are down. Down 3 . Russian just said some stuff, too, about production. So, did the contract roll . It was july earlier this week yesterday or today were now 90 minutes away from this wall streets most significant event of the morning, the june employment report and economists think that the u. S. Economy, the average of what were looking for, 174,000 new nonfarm jobs last month the Unemployment Rate held steady at 4. 3 but the actual number, the head line number was a little bit weaker than expected. Especially after, wasnt it a great adp i dont listen to adp you dont last month it was supposed to be a great report and it wasnt. You take the longterm, joe your standard deviations are so great from the adp. Sometimes you have a couple of months where youre close. I had a good six months and a bad three months part of your model, right plus or minus 50,000 over time and where are you today, did you tell us already . I did not tell you. You want me to do that now im over 200 are you really . I am. Why because the inputs that i have, the ism manufacturing, the ism Employment Services reports were really strong and that pushed up the middle how high does the number have to be for the media to not report it at all because trumps over in europe i dont think the Mainstream Media that will be banned from cnn for sure i dont think they would do that i think theyd report it whether or not it was plus or minus. Okay. Registration i love adding to this whole thing. I know. And where do you count us, though i work here so we do everything by the book very well. Okay. Okay. Registration of tesla vehicles in california fell 24 in april from a year earlier. All the nbc units. All the nbc units every single one yeah. Thats according to figures from ihs market i love that because whenever we put it up its markit and thats really how its spelled. Tesla shares are down nearly 15 this week. You can thank volvo to some extent for that. I guess also i dont know if people really believe that new model comes as quickly as you just you just complained about something that he couldnt deliver cars because of a battery shortage just, its very did you see that story . Theres a lot of good news, some people think, but now for gm and ford again had been above the market cap the budget battle in illinois is over the states house of representatives joined the state senate in overriding the governors veto of the budget that passed last weekend illinois had been threat bee with a Credit Rating downgrade to junk, to junk status if it didnt pass a budget this doesnt mean it still wont, because there is still some problems overall. But illinois is it would be the first state to ever be junk. You see this . Yeah. Corporate news, Berkshire Hathaway energy announcing it will acquire Encore Electric Delivery Company its one of the largest u. S. Power Transmission Networks. The deal puts encores equity value at about 11. 3 billion the unit is one that Berkshire Hathaway has agreed to reorganize Energy Futures Holdings Corp for 9 billion in cash this is oncors bankrupt parent. Month lease says a cyber attack indicates a 3 slice off its growth rate. The attack happened in late june and hampered the companys ability to ship an invoes during the last four days multiple companies around the world reported being attacked on the same day and becky says this is the first time shes recalled a company blaming a cyber attack for revenues were going to check on that whether or not thats happened in the past. Campbells soup is expanding its presence in organic products buying Pacific Foods for 700 million. Campbells has reported weak sales as demand for packaged food has been hurt as consumers shift towards healthier items. Qualcomm asking u. S. Trade regulators to ban iphone imports. Let that sink in for a minute. The company arguing apple has infringed on six of its patents that improve iphone battery life i would just add that the products that are marketed as being out there, because a lot of, you know theyre not just called it healthy. I dont know like the protein bars and the 300 pay check when you go there and youre paying for things that dont have preservatives so you probably get listeria. Youre paying more for something that has less although there is something to be said for starting with whole foods and grains and going from there and buying around the periphery of the Grocery Store instead of the middle i cant do the hand signal id like to do oh, really . No. Did i just do it yeah. I dont know if it was actually on camera maybe we should roll back and see. Maybe you should read the news that means no, joe that means no go. Thats all that hand signal actually meant what did you think it never mind. I think dont matter, joe. Its what you meant. Dont misinterpret what it was. But the whole idea, you know, the nonqom stuff gmos, you know, dont take any gmo Biotech Products then. Dont take any genetically modified medicine when you have some horrific disease that we could now cure but it was genetically modified whatever. I agree with you on almost all of that. The one issue that i dont is where they genetically modify and pesticides the plant can withstand it, doesnt mean we can. Were still eating it. You just did, what was that that was some derby anyway ken langone tweeted id just like to thank us for having us on i dont think this is him. I went to the account. I think i got punked i saw one that where he had it sounded legit. But i saw i retweeted yesterday. I think it was him was it really looked like kind of a new account. Yeah. No . On the i didnt think it was no it was fine yeah, i sorry you think g20 okay the g20 is under way at hamburg, germany. World leaders gathering right now. President trump and russian president putin have shaken tand hands in their first facetoface meeting theyre scheduled to have a sitdown meeting later this morning, and you can switch to any other cable channel right now and the analysis of how that handshake went off will probably be talked about for the next 90 minutes. I would say. The expression that they have, whether all five fingers on each hand were involved whether there was any tickling of the palm by either man. Did he push somebody to get to the front exactly two scoops of ice cream or one joining us anthony gardner, former u. S. Ambassador to the European Union in the Obama Administration now college of europe visiting fellow thanks for joining us. Youve got some experience until what most of us would find to be very frustrating terrain and i think you probably understand what even the current president is up against when you go and try and accomplish anything whats the best we could hope for and what are the pitfalls . Well, chancellor merkel is walking a tightrope here on the one hand she wants to probably need to stand tough with regard to President Trump after all, its election season in germany thereve already been a number of disagreements between her and the president on many issues, including trade. But, she clearly wants and needs this event to be successful. She doesnt want the disagreements to break out in the open and she doesnt want to lay bare the disagreements by having a number of dissenting views, so to speak she needs to look like a stateman at this point so she needs a success but very difficult given the differences of opinion clearly that there are between this president and most of the people around the table hmm how did the handshake look yesterday . It was interpreted again the merkel trump handshake youve done handshakes with the eu, mr. Ambassador how was it well, im no expert on handshakes but you know, ill tell you this, i think there are two things that the europeans around the table try to do. The eu, where i was stationed for three years as ambassador, i think look, theyre not going to want to try to convince this president the error of his ways philosophically speaking what theyll try to do is on trade theyll say, look, mr. President , if you go down the road of undermining the world trade organization, then youre paving the way towards the law of the jungle. Including the United States. U. S. Exporters will lose and by the way, if you do that, we will retaliate, and we saw not surprising, the eu is already preparing its list of products on which it will intend to slap a retaliatory tariff and if theyre smart, which they are, they will choose those products with great care those will be products that are linked to particular districts, most congressional and senatorial, that are linked to Trump Supporters we already saw bourbon whiskey and probably some Agricultural Products on that list. So everyone will lose. The second point they will make is, look, you can walk away from a free trade agreement, but we, in europe, and the japanese, and the chinese, we will continue to sign free trade agreements as we just have done with japan. And thats a big deal. Thats 19 of global gdp and what is going to happen because of that agreement has been signed, the eu agricultural exporters will gain greater share of dairy, other agricultural items, cheese and wine and so forth. Whos going to be hurt its our u. S. Ranchers its our farmers and also it will be our manufactured goods exporters same thing with the deal that the eu signed with canada. And it will be the same deal, the same issue, with the deal that eu will sign with australia. Whos going to lose . The United States is going to lose you tell me the eu would look at like a list of deplorables, or what the deplorables consume, and actually consciously try to use that to hit at trumps base, seriously . No Mitch Mcconnell has been talking, too yeah, yeah. But during your what would they have done, kale or something . What would they have done for the Obama Administration tofu or veggie burgers or horrible lunches that Michelle Obama made everyone eat . Well, this is nothing new in retaliatory items, both sides will choose products where they feel that maximum pain will be imposed. Now, you know, one of the reasons we try to get our transatlantic trade deal done is to lower a lot of the obstacles that u. S. Exporters face in selling their products to europe including dairy, by the way. Theyre very, very high tariffs, around 30 or more percent tariffs that basically mean that the u. S. Sells very low volumes of cheeses and dairy items to the eu they will choose items which are particularly sensitive, and are linked to districts where which are seen as supportive of the actions the president s taken. Thats interesting. That is interesting. At this point, mr. Ambassador, the fears of how trump would handle trade have been worse than what weve got. Some people pointed out the speech yesterday, that the, you know, maybe theres a lot of bluster. Maybe it was a negotiating tactic we havent seen the antitrade, on a scale of one to ten, it hasnt been a ten in terms of antitrade so far, has it . No. Youre right but there are serious signs of things to come particularly, with regard to investigations ongoing now, with regard to whats called a section 232 under 1962 trade act, which is important because it invokes National Security at a time of peace. And its important also because the chinese are actually not going to be the biggest losers its going to be other countries, including the europeans, including the japanese and the canadians talking about the steel and aluminum sectors, particularly, that are being looked at under these investigations and the president may take action quickly the eu is very concerned about this and theyre very concerned about the very concept that the United States would invoke National Security at a time of peace, and will say that we think that importing steel and aluminum from our european allies undermines our National Security thats a very tough concept for them to assess and that is why they are actively preparing retaliatory action what are you doing in that great place . Are you going to assisi today . Or can you go i got a couple of suggestions what are you doing there and how do i get your job . Oh. Im here because its a great place to be inspired you know, im actually at the European University institute right now, which is a terrific state to study the European Union, and people dont believe it when i tell them im actually working. Youre right. At this beautiful place youre right i dont believe it yeah, well, partly because, look, florence is a city amongst others that grew rich through trade. And created enormous Cultural Heritage thanks to the richness that was created yeah, great answer. And what better place than in florence all right to think about trade. Right . All right so youre working. We got it. Trade, trade. Okay all right mr. Ambassador thanks for joining us today. And got to enjoy im going to be thinking about you. Anyway, thanks when we come back, wall streets forecasters think that the economy added 174,000 jobs last month the official answer will come at 8 30 eastern time. Well talk about whats at stake for thmaete rks next stay tuned you are watching squawk box on cnbc your joints. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Tthats why at comcast,t to be connected 24 7. Were always working to make our services more reliable. With technology that can update itself. And advanced Fiber Network infrastructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. Welcome back to squawk box. The peak of the prior bull market hit exactly ten years ago. Mike santelli joins us now to compare Current Conditions with those of a decade ago. Talking about no. All right mike, you know something i saw an article about the spread between the 10year and german bunds and when it narrows, it feel no one knows why, really, but it can spell whats the magic number yes so youre im actually not worried. Im actually basically saying that there are many more differences than similarities today, versus ten years ago. But in july of 2007 it was kind of time if you had perfect foresight to start getting concerned you had a very low volatility market. You had elevated equity valuations as we do right now i could argue that its actually okay right now to actually have them a little bit higher you had high corporate debt level. So you have these sort of backdrop factors that were in place that nobody really saw as falling apart into a Great Recession or a bear market but you had other clues that i think you want to be on the lookout for that are not really present. Everyones talking about the yield curve as if its so narrow right now. Its gotten to this point where we have to be concerned. I dont believe thats the case whatsoever theres still almost one percentage point difference between the 2 and 10 year back then you had been inverted on the yield curve for most of the prior year in 07. The fed had been tightening, and we started to see wobbles in the credit market. Thats where i would be focused. The credit market is telling you really no reason for concern the leading indicators of recession are the things that are in 07 were starting to crack and youre not seeing it right now. So basically, im using the excuse of the anniversary to say, yes, we are in late somewhat late cycle but you can stay late in the cycle for a couple of years. In 07 you were late in the cycle and it ended suddenly. In fact 07 was unusual in how quickly it came to a stretching halt because of because of the subprime crisis was basically brewing under the surface for a couple of years and then it erupted by the way, also oil went from 60 to 130 super World Economy and goldman had that super spike call for like 200 oil you started seeing things like that kind of banter about every morning. And just the Market Action itself right now is not really telling you that its all that vulnerable back then financials had rolled over six months earlier. It wasnt obvious in july of 07. You did get a 9 pullback, a rebound and then it was over mike santoli. Lets talk a little bit broader markets here and more on the economy as we continue that countdown to the key jobs data this morning joining us is gabriela santos, Global Market strategist at jpmorgan funds, and scott brown is chief economist at raymond james. And, gabriela, lets start by talking about what you see with the market yesterday there was a little bit of a selloff, but that at this point we still think 158 points of the dow is a selloff maybe thats telling us a little something, too we feel pretty confident in terms of the market. We feel that earnings are rebounding nicely after that little bit of a soft spot we had in 2015, early 2016. We feel that the u. S. Economy is still growing around that 2 phase. We think were later cycle but not at the end of the cycle. And we cant forget we have really strong Global Growth and that can be a very positive thing for Large Multinational Companies listed in the u. S. Mike just talked about how hes keeping an eye on credit markets to really know that theres a problem out there. Whats your scenario we like looking at the cyclical sectors of the economy, things like auto sales, housing starts, inventory, capital goods orders none of those are sending warnings, flashing signs that this is the end of the cycle but theyre not sending signs that were accelerating. We keep hearing peak auto, peak housing, peak all these things is that how you see the economy . How we see it is that the cyclical sectors are applying some kind of a brake for the economy. Not a screeching halt, meaning a recession, but a break meaning well keep growing around that 2 pace which has been the average for the past eight years and frankly thats been okay for the equity markets scott, lets talk a little bit about the number to expect this morning at 8 30 first of all, what number are you expecting on the jobs report im looking at around 150,000 plus or minus around 115,000 theres a huge amount of statistical noise in the monthly figures. Theres seasonal adjustment issues that can bounce numbers around and we dont want to look at a period of months so look at the three month average gives you a better sense where the job market is. We look for the Unemployment Rates to hold steady theres uncertainty in how thats reported. The idea is that the job market is getting tighter, firms are running out of people to hire. Theres still some slack in the job market maybe still some underemployment. But you look at the numbers of people that are working parttime who would rather have fulltime employment and those numbers are trending pretty close to where they were before the recession. So we may not be quite at full employment, but were nearly there. If not, and that means that the fed is, probably just going to continue normalizing Monetary Policy we keep hearing that inflation isnt here yet we dont see it. When do you expect to see it and why do you think we havent so far well, if you remember the feds forecast from earlier this year, they expected inplace to stay below the 2 target and then move gradually higher weve got a big surprise in march with this drop in Wireless Telecom prices so that really pushes the year over year numbers down but in march of next year, thats going to roll off, and we expect inflation probably still to be a little bit below the 2 target but moving towards that 2 target. What about doing Wage Inflation well, thats the Wage Inflation that were worried about. That eventually, that will heat up and if the Unemployment Rate is already below what we would consider longterm normal, you know, the curve may be relatively flat. You dont see much of an increase in wage pressure. If you keep pushing the Unemployment Rate down you dont get higher inflation, you get accelerating inflation, or accelerating wages, where the Wage Inflation numbers get progressly higher. And that could be a bigger problem, more hazardous path for the fed to get back to some sense of normal. Mike, ive been pretty amazed at the resiliency of the market to stay at the current level yeah. Bad news happens. It goes down, but it doesnt what do you look for for another leg higher were talking, gabriela was saying the economys going to really accelerate. Whats the earnings outlook . What would another leg higher in the market be based on its probably going to have to be based on earnings. I think in probably the cyclical sectors. So what the market has managed to do is when you did have the economic surprise indexes rolling over and it looked like the economy was taking a pause right you had all these kind of mega cap Growth Stocks and the bondlike stocks kind of went up you had this rotation. That was the resilience of the market you sort, okay, the cyclicals are kind of on the bench putting my other player and its been working very well yesterday you had a little more broadbased selling. But its a oneday blip probably so yes, i think Earnings Growth relative to expectations, i think was 7 for the Second Quarter, going to be eported you had the cyclical beat, 10 , i think thats enough right now. I think what youre looking for is a lot more divergence i know we have to go. But i think even a modest surprise on the economy, 2. 25, 2. 5, forget 3, the market will like that. Well see mike thank you so much for being here gabriela, thank you we really appreciate it. Guys, thank you all for being here okay, coming up, former australian Prime Minister kevin rudd joins us with a look at todays g20 agenda, and why wall street should be paying attention. The power of innovative thinking. The power of 100 of the worlds top companies. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. 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. Containing this information. Read it carefully. Thats why at comcast were continuing to make4 7. Our services more reliable than ever. Like technology that can update itself. An advanced fibernetwork infrustructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. Good morning, everybody. Welcome back to squawk box here on cnbc were live from the Nasdaq Marketsite in times square among the stories front and center this morning, a judge has rejected hawaiis attempt to alter enforcement of President Trumps travel ban that ban was allowed to go into effect temporarily after the Supreme Court agreed to hear the case in the fall the ban does not apply to anyone with a credible, bona fide relationship with someone in the United States. But that does not include grandparents hawaii wanted to specifically include that exemption france has unveiled a series of measures designed to attract new financial business from london which once the brexit goes into effect government says that it will cut payroll taxes for banks and review regulations that impose additional burdens on financially related companies. And the fed will have more to say on Monetary Policy today when it issues its july monetary report to congress that comes ahead of fed chair Janet Yellens testimony to the house and the senate, which is scheduled for next wednesday and thursday all right. Lets get back to the big story of the morning the g20 now under way in hamburg, germany did we say hamburg or hamburg . We say hamburg. They say hamburg lets bring in kevin rudd, he is the former australian Prime Minister who is now president of the society and youre watching live pictures of german chancellor Angela Merkel speaking now thanks for joining us. Good to be here so lets talk about what you might expect to come from this meeting. Theres a lot of tension now among some of the supposed allies here. How do they kind of wiggle their way out of this and come up with a communique that doesnt make it appear as if the world western structures falling apart . Well, ive gone through these meetings myself. What happens is the relaxed look on the part of government you see there is in inverse proportion from the panic looks from the sherpas, the advisers the finance ministers no, the advisers who do the negotiating and communicating. Theyre in the back room at the moment sweating it u. S. Negotiates saying we wont have this language on free trade. European saying if we dont have that, heres the alternative so the touch point will be, will they recommit to a principle of g20 major economies, to free trade of the future . And if not, whats the alternative language because that affects, then, what governments around the world think they can get away with does it really matter i mean forget whats in the communique whats really happening among relations with these allies . Well, the honest answer is no one quite knows where the north korea question is going to land on National Security so that affects, frankly, everything particularly the stability underpinning the big growth zone in the Asia Pacific Region so thats number one that will feature, and the pitt lateral between xi jinping and President Trump but also dinner last night hamburg time, with abe, the japanese Prime Minister, and the new president of korea, president moon and so thats a big piece, as it were, on the side of this agenda the big piece on the agenda is what do you do about trade and this, as it were, turning point about whether the administrations serious about whacking on tariffs for steel or not. And if they do, what exactly would be the retaliatory measures for the europeans and others and do we see the gings of a trade war thats the core how much does the climate accord matter . It does to 19 of those 20 states there and that is the paris agreement. The uk didnt put it in the four priorities. Sure. But what im saying is if you look at the continuing position even of the can we believe that north korea on the radar, i cant even believe that theyre talking about the year 2100. Let me ask you thats my answer. Okay. So we got that going for us. Which is nice. Do they ever let their hair down does anyone ever, after the meetings, have a few glasses of wine you were one of the founding members, right yeah, yeah. We kicked this off with president bush why do you start massaging Angela Merkel . Where does that come was that after a long day . Or what happened how often does that does she massage you . President bush . Anybody this is a this is a family program. Maybe things could get done there if it wasnt let me give you one insight to what really worked i think. Were coming up to the tenth anniversary of the Global Financial crisis september. What happened in 09, at the g20 in march of that year in london, gordon brown, really smart thing, run around to dinner at number 10 downing street and cut the table to 20 folks, thats all there are at the table, and become a very focused conversation of does everyone want to be in office in six months time if so, guys and girls, this is what we need to do and it was a good piece to what i describe as dinner time diplomacy. I assume chancellor merkels done something the night before here in hamburg. In office, too that underscores you care about the same sort of deal my friend together at a time where the g20 mattered for Global Financial stability. Yeah. It also mattered big time for this effort that everybody kind of agreed on which was opening up global trade. Yeah. Theyre not so sure anymore so it just strike me that g20 has kind of peaked on its purpose right now, that theres no unifying theme here in fact, the theme needs to be more that theyre kind of breaking up into smaller pieces. I think, im a huge defender of the institution for this reason we didnt have one before, and the crisis when it hits, it tends to hit without notice. Its got its own inbut machinery for handling them. And second for stuff to be important, its not necessarily in the newspapers. Theres a whole bunch of financial, shall i say oversight, regulation, and control mechanisms there, which are looking im going to cut you off. What could happen next time you have the uk splitting from europe, the u. S. And europe disagreeing about a variety of issues we dont quite know where russia fits into that puzzle. China is on a different agenda altogether and its unclear to me, rather than being part of a unifying under tpp, you know, asia and the United States seem to be going different ways i think theres the story here is more about differences than it is about commonality. Well, can i come back on that just briefly which is no one quite knows now which way the United States of america wants to go. And you are the number one superpower youve founded the rules of global free trade and you preside over the Worlds Alliance system. So the question in the back of all those folks mind is what will be the reality. Talking about the atmospherics on american protectionism. But to be fair to President Trump, apart from some bilateral stuff with the canadians i havent seen much yet. So we are at this turning point. Will america still lead, through the g20 . Or will it basically sit back and allow the groups to emerge i have to agree with you and joe a little bit on this just real quickly the lack of progress, the idea that we were sort of moving forward and donald trump has sort of brought that back, or scaled that back, thats an important influence right there, important impact. Its a big question mark. Look at Angela Merkel thats what her body language and the rest of it is saying on the mechanism, we dont have that this thing which meets each year, frankly the mechanisms for the chinese officials, the american officials, the russian officials, without the politics all the time dominating it are working on stuff together. That didnt exist before it was established. Mr. Prime minister, let me ask you very quickly, australia has now gone almost 26 years without a recession. Thats the longest record for any country to ever go i know part of that is because of chinas growth. What else do you attribute it to and how long do you think it can last well i think the two things relate a bit because we had we managed to stay positive growth during the Global Financial crisis. Everyone else went under two things worked for us one was the gings of g20 collaborated and coordinated Monetary Policy around the world. Youve had rapid easing of Monetary Policy. Interest rates coming down everywhere secondly you had a big fiscal policy intervention coordinated by everybody and thirdly we had a big domestic one ourselves, about 5 of gdp when everyone else went under and into recession we stayed positive for those critical two years. Its a combination of those factors. The g20 is part of it. Mr. Rudd, thank you so much for being here this morning. Good to be with you coming up, squawk is joined by a zoo crew. Were going to meet some pretty cool people. We get to meet some pretty cool people every morning, but today wire taking it to a whole different level. And we dont really want to make these guys nervous very camera shy. Thats maggie right there. Shes cute well be right back. Time now for todays aflac trivia question 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 now the answer to todays aflac trivia question in political news, congress is wrapping up its tenday recess and focus is squarely now on health care how do we know, kayla tausche, when theyre on vacation, or when theyre working i mean, thats very difficult to discern for most people. But you have more on how Voter Opinion could influence the senate could they do less than they normally do if theyre on vacation . How is that its hard to go below zero isnt it . I thought that was a movie, less than zero. Well, joe, it really depends on the public schedule these events that theyre holding, and the topics that they discuss at these vents and these public appearances are they at the beach . Are they in front of their constituents talking about these issues health care specifically has been the head line topic at many of these vents that lawmakers are holding. Theyre trying to drum up support, especially in swing states where senators have been met with lots of protests. But they love to organize from Bernie Sanders campaign but theyre taking place at the offices of marco rubio in florida, rob portman in ohio, and jeff flake in arizona, where two protesters were arrested for threatening a staffer. The senate has less than three weeks upon their return to vote on health care before the longer august recess. Senior gop aides say they need next week to hammer out any details and the following week for the week beginning july 17th would be the soonest the vote would take place there are two proposals being publicly floated one of them would allow insurers to sell plans off the exchanges. Senator ted cruz a sponsor says he wants more competition. The other sponsor senator mike lee said excluding this provision would be a deal breaker. And then theres a socalled plan b, repeal the law now, replace it at a later date, maybe in one to two years. Senator rand paul at an event in kentucky yesterday said that would potentially force a bipartisan effort. No democrats going to vote for repeal put repeal over here, its done, probably just republicans, but if it includes more Government Spending, and its put on a Government Spending bill that democrats traditionally vote for, i think both end up passing. Senate majority leader Mitch Mcconnell said yesterday hes still working on getting the 50 votes. He likened health care to a rubiks cube he said a bipartisan deal might be needed if this specific deal fails but joe, unlike the white house, that puts out its public schedule, all we see are the Public Events that these lawmakers hold they dont really tell you exactly what theyre up to each day. Kayla, with mcconnell yesterday, do you think that he was trying to get a response, or do you think that he was was he serious about that . Because it would have to be 60 votes. So it would have to be keep obamacare and fix the exchanges, and get democrats to come along with that. I looked at that like either either things are really dire, for him in getting to 50, or maybe hes trying to make it look dire to get some of these, to wrangle some of these guys that arent on board. I mean, was he serious was that really what i cant pretend to know exactly whats going on in his head i mean his office throughout this whole process has been very much a black box they wont discuss any of the details. They wont tell you what they expect to happen, or where the state of play is at any moment when the Senate Majority leader walks down the hallway, reporters dont even go up to him and ask him questions anymore. Unlike the other Major Players in this process. Because they know that if they approach senator mcconnell theyll just be brushed off. Its hard to know where he stands and what his catalyst is and what he believes is possible at this point. Hopefully well get some details in the next couple of weeks. To anyone, even the slightest bit to the right of senator, what he said yesterday was, you know, just scratching their heads. Its like really, after eight years, this is where you are now . Mitch . Really and for those who are watching the time line of the agenda, and want tax reform as soon as the september recess is over i mean if you get a bipartisan effort under way, thats going to take one to two years all right all right kayla, thank you coming up at the top of the hour, an allstar panel of economists and strategists will join us to get ready for todays big jobs report. But first, a squawk box roundtable of a whole different kind jerry the monkey, sky the red tailed hawk, maggie the alligator and joe dirt the badger it is a zoo crew even remo so than usual around here today straight ahead the future isnt silver suits and houses on mars, its right now. 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. Easy there big fella. A National Geographic special premiering featuring wildlife in Six Continents the hosts are here with friends. A beautiful, beautiful, what is that, a red tail yeah, this is a female red tail hawk. We are hoping to see these animals hunting outside of a bat cave in texas where the bats will emerge live on the program. These predators cant resist the magnitude of that food we hope to show a live bat hunt. Do you think they will beat Joey Chestnut . Will that hawk eat 72 bats will they gorge if theres millions a number of predators will turn up. Other species close to this and the fastest animal they will take one or two bats each evening every night they are all circling . If there was a supermarket open every night with free food, you would pop in thats whats happening. We have the mammal predators as well, things like skunk and raccoon. Some bats fall to the ground and its a free meal whats her name this is called sky. Thats right. I love her you have theme all over new york, dont we they have made a big comeback. They have made a big comeback sky, when you talk, she looks at you you see a couple times, you are talking. Shes looking at me now. You could become the hunted yeah, exactly so, are you ready for this i hope so i mean, i think the great thing about what we are attempting to do, going to Six Continents, we are going to 15 countries, 25 locations, more than 50 cameras around the world we are going live. As chris said, we have millions of bats. We are going to be under sea with with bull sharks, looking at lines in africa what we are attempting to do is quite audacious. Its all happening live. People take years sometimes to make a documentary about a particular wildlife and what we are attempting to do, we are doing in one go. There are two things that could happen, one you dont get the animal shots or something goes horribly wrong. The process of editing things out. You are right in the sense that people take so long to make these documentaries. What we are trying to do is say, okay, at any given point and time, at 8 00 sunday night, around the world, what is happening . This would never have been possible a few years ago without the technology we have available where we have cameras that can see just with the moonlight. So, we are able to and broadcast live from remote locations and broadcast live from remote locations, exactly. The technology has allowed us to do this. Come on in, chris. Im not obviously, im not an animal expert. That is a badger a north american badger, a young animal they are quite robust and strong this is heavy, very muscular long claws is he trying to bite you . He might try to nip me. Try not to get nipped. They have a powerful bite. Sharp what do they eat . They will eat fruit as well as small mammals lots of beetles, worms, those sort of things whatever they come across. Of course they get attacked by much larger animals, things like links and bear on that account, they have a powerful bite. You could lose your fingers to an adult badger. I dont want to lose my Little Finger this is a youngster. Hes not full grown what you cant appreciate, the fabulous smell of this mammal smell is important to them when communicating with other badgers. They are territorial and they mark their territory at the moment, im getting a good whiff im not sure thats doing me any favors at lunchtime. Rilgt its not going to be a mens after shave anytime soon very musky. I was thinking it would be a nice cologne get close enough to the animal oh can i ask a quick question. Im a Huge Consumer of the natgeo live animal stuff going on why has it exploded in the last several years . Is it driven by the viewership is it driven by technology the decline in cost that allows you to go out before some took five and six years its a combination of all those things i also think because of the way we are able to communicate online now and the way terrible is shared, if you remember the badger video that went out and became viral very, very quickly. A lot of young people are becoming aware of animals they had no idea about before and were just in books now we are actually seeing them and also the documentary style it used to be documentaries were so spotty. People you can see very entertaining, on air talent. I think people have helped to bring the animals we are all talking the planet earth Youtube Video that went viral and the aguana trying to escape a snake its about protecting wildlife young people are taking up the cause. Is the monkey biting . Im going to put the monkey down thats his comfort toy, right . Hes going to explore the table. Dont reach out for him. What if he decides to go for Something Else say hello to steve. Go on. Steve smells like a badger. This monkey comes from western africa oh, hes under our feet monkey on the loose this is something you have to learn. Does he throw feces steve, are you okay the animals dont behave according to time. Anyway, these are the fastest monkeys when it mes coto running on the planet. They get up to speeds of 30 Miles Per Hour if he takes off this morning, we are going to struggle to catch him. They live in west africa your Insurance Company wont replace the full value of your totaled new car. The guy says you picked the wrong insurance plan. No, i picked the wrong Insurance Company. With Liberty Mutual new car replacement™, you wont have to worry about replacing your car because youll get the full value back including depreciation. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Prone jar shatterst livthe competition. Pe . Olay regenerist hydrates skin better than creams costing over 100, 200, and even 400. Fact check this ad in good housekeeping. Olay. Ageless. 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. Breaking news this hour. The june jobs report is minutes away the numbers, the instant Market Reaction and what the payroll release means for the feds, straight ahead calling all language buffs well tell you why translaters are in high demand squawk box begins right now. 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. The other animals are gone, but we are still here, right live from the Nasdaq Market sight. You thought that monkey was cute really cute, but then he got close. I know, i like my face. I would like to keep it. Its jobs friday we are less than 30 minutes away from the big release forecast calls for an increase of 174,000 thats up from 138,000 in may. Unemployment is expected to hold steady for a second straight month at 4. 3 , a 16year low lets get a check on the markets. The dow is up under two. S p under 2 and the nasdaq up just over two points we are watching crude prices that have been weak. Down 2. 5 below 45 at 4437 stocks to watch, investigating reports that turbines have been delivered to crimea. That would be a violation of eu sanctions against russia a reuters report says its unclear if they knew about it. If they bought the turbines and sold them to russia, they could be accused of sanctions busting. Tesla is buying the biggest lithium battery in australia demands by Energy Disruption the battery will be paired with a wind farm to provide stability. Elon musk said if he cant deliver the battery in 100 days, he will provide it for free. Acquiring encore Delivery Company for 9 billion in cash encore is one of the largest u. S. Power Transmission Networks this deal puts the equity value at 11. 3 billion more leaders gathering in hamburg, germany for the g20 meeting. President trump and Vladimir Putin shook hands in their first facetoface meeting well bring live updates from germany throughout the day j. J. Is chief strategist and td amare trade Jeff Rosenberg is income strategist at black rock and michael is resident scholar. Welcome to all of you. J. J. , why dont we start with you to get a feel of how the markets are shaping up what it would mean if we get a hot number and what it means if we get a weak number if we get a weak number, it will lead to a sell off, part of it because it takes away momentum for the fed to raise rates. We dont have a high probability of it happening. In july, its 3 as we head out to september, 20 . If you get a weak number, the fed isnt going to have much to point to i dont foresee wage pressure. The two things are continued job growth and inflation will be out the window again, i think with that, it shows weakness and puts the fed in a precarious position lets talk the bond market. They have moved up sharply over the last couple weeks. Maybe not because of the fed, but what we are seen from europe and mario and what hes talking about. Where do you think the bond market is . I think the bond market is clearly reacting to changes in expectations, Global Central Bank expectations. Todays number, i think the bond market is focused on the wage figure theres a question about Wage Inflation. Wage inflation is part of that its a low bar year over year. That will get us to about seven. Anything around that level will be enough to reengage the inflation from Wage Inflation. You mentioned the average Hourly Earnings are expected to be up by 0. 3 . We have seen months where the number didnt get near expectations on the flip side, if you have a weak number around Wage Inflation, the market might get relief on that and more concern about the lack of inflation and the debate we saw in the minutes around, are we moving, is the fed moving too fast because they are too far ahead out in front of inflation that is the flip side. Lets talk about where we stand from the jobs picture at this point a lot of people think we are near full employment, that its going to be very hard to get numbers north of 200,000 in the jobs reports where do you stand on that we have seen tremendous growth in employment its finally reached down the ladder the Unemployment Rate has fallen by a half point since january. The broader measure is down a full percentage point. That measure looks at just since january, it looks at folks more marginally attached, want full time work and can only find part time if you look at what happened in the late 90s, you had unemployment below three and below eight, theres more room to run there are more workers out there. Look at the Participation Rate these numbers are room to grow michael, do you agree with that statement i do. I would point to wage growth itself its hard to argue with wage growth accelerating at the relatively slow rate it is we are in a full employment economy. You would expect to see distances raising wages to retain workers, raising wage to impact workers and wage growth accelerating beyond where we see it i agree, theres still room left to run in this economy the fed made the mistake many times over the decade of assuming a higher, full employment is a higher rate than the economy has shown. They have lowered that estimate significantly over the last several years. I think 46 or 47 is too high you are saying thefeds should not raise rates until ite sees the whites of eyes. Let it run hot until you have wage pressure. The connection between wage pressure and Consumer Price inflation is not that wonderful, either yeah, so i do subscribe to the, you know, wait till you see the whites of the eyes model of behavior i would point out that even with some increases in the federal funds rate, Monetary Policy is still accommodated if you look at the break even rate for the federal funds rate and look at a variety of averages, obviously and you look at where we are now, we are below. We have seen increases in the rate and seeing run off on the Balance Sheet, its accommodated, not as it was. Jeff, we all talk about this like an automatic real thing, the Unemployment Rate gets low, wages go up and inflation happens. That story is not as concrete as people make it out to be no, its not. As you pointed out, the pass through between Wage Inflation and broad based is long process. Its more about what the Wage Inflation says about where we are in terms of full employment and economic potential and growth and what it does to bolster the confidence of the fed that they are not trying to remove policy accommodation here very quickly they want to get on with it so that they are never in the position they are behind the curve. This inflation debate is going on in terms of that. Globally, we dont need such accommodated policy. That may be the case. We dont need such accommodated policy the market certainly not concerned at least it doesnt seem to be, even if rates go up from here. Actually, it isnt. Look at the vix as one measure of volatility and overall, the market continues to shake everything off it is amazing. Its one of the biggest conundrums the normal relationships we are used to seeing arent necessarily existing between fixed income and equity. Theres such a lack of volatility across political swirl going around so, you know, really i think one of the questions so many investors are asking themselves is what does it take for us to get a sell off we have this great anticipation before fed meetings. We have had the raises and the last one, i think, was the oddest of all because, actually, as soon as we had the rate raise, rates went down you know, with the bottom market, et cetera. We are starting to see them come back in a big way over the last couple weeks with the 25 basis move on the ten year overall, its really, really interesting how the market has been able to shake off every single thing thrown at it over the last six months. We have had a lot of events where this is finally it this is finally it when the events happen, its a 1 or 2 correction. It pays to be a buyer. Amazing. Every time people come in to buy, it has paid off for them. Well see what the crack is going to be. I dont know that today will be the major crack in the arm we have had a lot of, should we say, more volatile moves or more volatile news over the last couple weeks overall, we are still at a very low level of volatility and the market continues to hang in there. When we see one sector a week in technology and financials come in and take its place. I think the most vulnerable jeff, the yield that is 240, is it the high end of an old range or the new range a bit of both we are breaking out of that old range. Its not just about todays event. This is whats happening globally its about what we saw out of europe and changing expectations there for 50 whole basis points, right sf. Its a big move its the global move toward pricing out emergency levels of policy accommodation thats really the shift and what i think is the new range eight years later eight years later crazy liable to do anything whats next what if they are wrong . Where are you i dont know. I have not thought about it as much as we used to i have been away. Now that im back, lets go. We dont talk about it quite as much. When im gone we handle the normalizing moves the markets have handled well i dont think about it all the time its amazing. Right but im not obsessing how many they do this year and next year. Big change. It is market is not obsessed either on the cusp of Nuclear Oblivion you can handle Everything Else more calmly, as a result. If we are all going to be dead, im going cash not sure why. Any of the world happens only once we can trade you at the time very carefully. Exactly stick around, we have much more to come that number is just 17 minutes away oh, am i supposed to read i thought that was you coming up, folks, if you have seen star wars, you know how many languages c 3 pcao n speak. Skills like his are in high demand well tell you whats driving the trenld you are watching squawk box on cnbc i love you, couch. You give us comfort. And we give you bare feet. Backsweat and gordos everything. I love you, but sometimes you stink. New febreze fabric refresher with odorclear technology. Cleans away odors like never before. Because the things you love the most can stink. And plug in febreze to keep your whole room fresh for up. To 45 days. Breathe happy with new febreze. Jobs are its all about languages kate rogers joins us good morning. Companies around the country an organizations like the United Nations are seeking out highly skilled translaters and interpreters the number of people working in the industry has doubled if you are fluent in more than one language and highly trained, you could have Job Opportunities for years to come. The United States is becoming more global each day and as a result, translaters and they were interpreters are finding their services in demand according to the statistics, they are looking at a growth raid of 42 over the next ten years. Reporter opportunities for those in the industry are endless with work in finance, text, literature a lot of companies are recognizing there is a benefit to offering their products and services in another language they are responding to the demand out there as the Global Economy becomes more interconnected reporter its more than the ability to speak multiple languages. If you want a long lasting career, hone your skills and distinguish yourself as a professional its a lifelong practice. It requires keeping up your Language Skills and subject matter skills so you understand the industry and the field you are actually working in. Reporter salaries within the industry can vary, depending on the difficulty of the language you are translating to and from. If it is a highly skilled language, the Association Says a sixfigure salary is not out of range. They said all languages are in demand here in the United States spanish, by far and away is number one in recent years, they have seen an up tick in african languages. Back to you. Kate, what about the technology doesnt everybody use google translator now isnt that going to put them out of business . Reporter thats what we thought. That was a big fear. Right now, its aiding translators in doing their job if the task is complex or the language is difficult, its better to have an individual do it it helps speed up the process, which i thought was interesting. Thank you, kate could you get by in russia right now . It depends on how much vodka ive drank before and how much vodka the people with me have had. Could you order a cheeseburger i could get by fine when i was doing my job as a journalist, i needed a trancelator. When it came to using the newspaper, i needed a translator russians were very good at importing words and making them their own. They were good at that we used to talk about computer you know how to program a computer yeah. We are going to. [ speaking Foreign Language we are going fund the mutual fund they took all these words in they didnt have when the soviet union broke apart. Do you get better or worse when you drink i think better. We all think we are more attractive you know the alphabet that was key. If you learn that, spell it out. The big joke, you go to a place, its restaurant. So, if you can spell the alphabet, you can go to a restaurant or the metro as opposed to the mepo. All right amazing [ speaking Foreign Language jobs report you sound evil. Coming up, we are counting down lgepayroll release. Wel t prediction from payroll after the break. Stay tuned, you are watching squawk box on cnbc its getting close minutes away from the june jobs report j. J. , you are first. What do you have 170, joe, the private jobs number expected. Yeah. Going out on a limb there. Going out on a limb there. I live in illinois. Im jaded at the government. Minion number two 42. The threemonth average has been lower at 120 the threemonth average has been declining, so i think we are going to be in for a bit of a softer number. How about you, jeff 190 retail has been the big drag its a swing factor. Could get a bounce back, possibly also local government is a swing factor as well okay, michael i like these minions, they are all different. In fact, im less interested in your number than in what you look like as a minion. Well see that soon enough. Im at 165 i think we are essentially in a 150200 jobs per month economy thats where we have been. I dont see a lot of evidence that is changing but i am concerned about retail. Im concerned about the claims data and im less optimistic than some that the use of america are going to come rescue us with new payroll jobs this month. Imering on the low side more conservative i think our people gave you one eye to make it seem like you see i do. They give me an eye patch, too. Exactly rick you may only have one eye, too one eye, too or two eyes . Third eye blind 192 192 and i had no idea the other guess, 190 folks, we dont know each others answers, im 192 the other right winger. Joe, we only need one we only need one they can do it with one arm, they can do it with one arm tied behind their back. You have six eyes. I have 213,000. Thats my number that is the strong i have two eyes i have more hair as a minion than i do in reality, dont i . You do. You really do. The two eyes, im at 213 because the components were very strong if you were to go through the painful procedure, that is what you would look like midway through. I wonder why you wish that for me, for the pain or the hair where do they get the hair, becky . Your back, maybe . I know, im making that up could be worse. Could be more disgusting anyway, we are going to get this number steve, i hope you are right. I dont know why, i just do. The internet is back on track and see what the fed does with that i think theres some bounce back effect from the last because it was unusually low. Maybe so. You always say my work do you just guess . No, no. Here it is here is the spread sheet here. The whole spread sheet has multiple columns and things like that if a College Student looked at it, he would laugh at mikhail cuelations, plus or minus 50,000 the number is right around the corner, about three minutes away after this me yavbe we come back, the montou he en waiting for, the june jobs report. Here we go, three minutes and 19 seconds to go. Well be right back. Yeah. Like changing up the celebrity at the end to someone more handsome. And talented. Really. And british. Switch from cable to directv. Get 4 rooms with hd, dvr, and every box included for 25 a month. Wont replace the full value of your totaled new car. The guy says you picked the wrong insurance plan. No, i picked the wrong Insurance Company. With Liberty Mutual new car replacement™, you wont have to worry about replacing your car because youll get the full value back including depreciation. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™. Liberty mutual insurance. Good morning welcome back to squawk box. We are live in times square. We are a few seconds away from the june jobs report the forecast is calling for an increase of 174,000. Thats up from 138,000 back in may. The Unemployment Rate is expected to hold steady for a second straight month at 4. 3 , a 16year low. The futures have been relatively flat lets get to pearson 222,000 june increase by 222,000 jobs. The Unemployment Rate is 4. 4 . Average Hourly Earnings increased 0. 2 thats the highest since february of this year as far as the monthly job gain we have significant upward position for the last two months, a net increase in 47,000 jobs over what is previously reported june private sector growth, up 187,000. The specific sector gaining the most, health care. Professional and Business Services up 35,000 restaurants, 29,0006789 construction was up 16,000 a bit of a surprise, Government Employment rose by 35,000. That was almost entirely a job gain at the local level. That 4. 4 Unemployment Rate, both employment and unemployment increased 62. 8 is the labor force Participation Rate the threemonth average of the gains with revisions the headline number is now 194,000 per month. The average for the First Six Months of the year, 180,000 jobs back over to you all right modest. Thank you there we go thanks, hanson. I have a prediction you are going to see the lead story, is going to say boom. 220,000 and how long will it take before this reaches germany and the president tweets about this jobs number this is a good jobs number, 222. Your motto great again great again 220. Thats a firing going off. That will move over here the model is back on track back on track is the two month before that made the model look better as well. Didnt you have the feeling that given its just weird the way it works, that you can almost feel the standard deviation and needs to average out . Its been week and here we are back over yeah, i think thats right it looks like a healthy report, joe. Im looking here when i look at a report like this, i look down the line for positives and negatives. Im seeing positives goods up 25,000. Construction up 16,000 a couple negatives in there. What you see are broad based job gains, 36,000 in hospitality the government did add a lot with the 35,000 numbers. You are not getting the wave mention of the on set 222 higher. That route 222, remember that. Yeah. Higher. 02 on the wages its a 0. 215. A weak. 2 the wage number was not strong we are getting a bigger reaction actually, all week long, for about a month, we have been arguing about whether we are at full employment and people cant find people they want because they are not trained properly. And we have people saying Participation Rate shows theres a lot of people that want more work that are soyso unable tod it we have had this narrative, this argument about whether we are full employment or whether its weak you were saying it was full, but 222,000 people were able to find work no, no, no. Theres a lot more people that want work. Theres no reason to choke the economy. We have room to run on both the rate, on u6, which id be interested to see if it stays straight we have room to run in Economic Growth and from washingtons policy weve seen little over the First Six Months to move things forward. Im thrilled the economy is doing better than we previously thought. The revisions in this number made them feel like we are more in a steady range. Picked up from 84 to 86 a lot of volatility in the household report up 361 on the work force so people came back into the work force, employed went up. Broadly, you can follow the unemployment on the u6, the broader measure. People working part time because they cant find fulltime work people that are discouraged and left the work force. You were under 200 and now seems like you might have been on something last month. Three months running, i have been on the high side. I end up generating two numbers, i toss one out the number i toss out is 224 thats the way the ball bounces. I tell you what, looking at the number, you know, the dollar index is in the negative territory. Interest rates dropped a couple basis points and the dow jumped and futures jumped 40 points that pretty much says it all there is still this mentality that when things are kind of, you know, middle of the road to good, we actually see the markets doing better thats not the way it used to be dont look at the fixed income markets and try to gauge whether its the good number or bad number yes, we did see disappointing wages, all of that in the end, almost 60 basis points is what our ten year is looking at the boom is looking at what they are looking at we hope they all take a vacation a nice, long vacation. Michael, from where you are sitting, what does this indicate about the underlying economy well, i think it indicates the economy is doing what it has been doing for years and years we are a 150200,000 jobs per month economy. If you look at the threemonth average and sixmonth average taking into account todays number and the revision, we are right in that 150200 range. So, i see an economy that is solidly performing month after month in a very stable way i agree, theres still room to run. I think the Unemployment Rate, the u3 can go lower than it currently is im disappointed with wage growth, but that suggests that we havent hit full employment yet and theres slack in the labor market and still opportunity to pull workers in you know whats happening here you have a conservative economist and a liberal guy both saying, let it run i know that we care about the people, steve. Will it run to 3 gdp . Like the drudge says great again, up 227. Great again. Got anything to do with regulation, animal spirits, getting this this is the same economy that trump inherited. 2 growth. Now they are separating let them go let them go. What do you think of the possibility trump is fudging the numbers here zero. Come on under obama you said the same thing. Serious professionals here joe wouldnt right but you are going to are to change your tune if it goes to 3 you get a year we had 14 in the First Quarter. Then backtoback threes okay. I guarantee and i will bring you back on. Michael, what is the top number we can do in this cycle on gdp for a year, annually well, you know, its a hard question wii eel see. Im more optimistic that we can get 25, 26 i think a lot depends on policy. A lot depends on the ability to do a big tax reform. A lot depends on the ability to accomplish policy goals, to do serious deregulation and, you know, its anybodys guess what is going to happen on capitol hill right now yep we can get it forten years if we did a major, serious tax reform try and do it. Tax reform or tax cut because they are two very, very Different Things very open to a reform. We had scott on, he said just having the water boarding stop from the last eight years should be good enough to get us above 2. 5 its the same Economic Growth, water boarding trump figured out the key to success, inherit well, inherit a goode conmy. Oh, give me a break isnt that beautiful . Its awesome. Jeff, lets talk about here is what we do know. We know one thing. If we dont have more consistency in policy, there could be long term planning. If we dont do some of the things joe brought up, we will never get to 3 . So, you can debate as to whether we have the possibility to get there, but if we dont do the right things, we absolutely will never get there. Thats the way it should be viewed i agree with you, rick. I dont think the president is a very consistent person well, the president doesnt need to be a consistent person theres 535 other guys i dont know when the president became live all, end all what we need is a president that gives us consistency for the most part, tries to hold things together here is the key, knows how to bring together compromise. You are all underestimating this guy. Yes, he does wild things hes going to be like a salesman if he cant get it to pass, take this out mark my words, both sides are going to be unhappy. All these things will ass, i just dont know what the final look of them will be seeing evidence of that starting to happen all things must pass. Its like meditating. Can i ask here you have to check with the robots back at the office. Right what explains the Market Reaction you have a blip in yields and change you dont care its getting back to the data and the story, its the difference in the headline number and revisions and wage picture. The wage picture is the bigger story for bond markets, a bad inflation. This puts that back in the box in terms of expectations, at least for the near term. Are we go ahead now Balance Sheet reduction by the fed . This isnt going to change it it keeps it on track . No reason to keep it up. You have two messages here you talk the 222 with the Unemployment Rate going up you have participation going up a little bit of noise in that data this is really about a longer term trajectory for the economy reaching full potential. We are debating fiscal policy. Things might happen. What the fed is looking at is where is the Economy Today they obtained their goals on full em diplomat they are worried about getting too far behind this is going to keep them on track for Balance Sheet normalization. Another rate hike in september, that will look for the evolution of inflation i dont think this changes okay. Awesome all right. Thanks to our jobs panel i could mention each one of them, but there they are figure it out. Okay, Jeff Rosenberg, j. J. , aaron klein, michael, whats your last name strain. Got it. I knew that. It should be in your notes. Just testing you. Rick santorum, no, rick santel thanks when we return, we are going to the New York Stock Exchange jim cramer, we are going to get his take on the jobs report. A look at the futures when we got the jobs report. We are up 53 we went up a couple. Stay tuned, squawk box coming back this is a story about mail and packages. And its also a story about people and while we make more ecommerce deliveries to homes than anyone else in the country, we never forget. That your business is our business the United States postal service. Priority you 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. Welcome back to squawk box. Lets recap the june jobs report in case you missed it. U. S. Economy added 222,000 nonfarm jobs last month, well above the consensus. The estimate was 128,000 average Hourly Earnings were up by 2 . We have been flat most of the day. Dow is up 55 points, s p up by seven and nasdaq up by 26. Among the other headlines, department of Homeland Security and the fbi say hackers are targeting Nuclear Power stations and other Energy Facilities. In most cases, they have attacked people with direct access the Critical Systems that could cause explosions or spill of dangerous material theres no indication of a threat of Public Safety. The impact appears to be limited to administrative and Business Networks, not operations systems. You hope they are systems that are not accessible to the internet you hope Homer Simpson is not the guy they are hacking hes a loose cannon. Officials in the eu have started making a list of u. S. Goods, including orange juice, Dairy Products and bourbon for a plan to impose new tariffs or quotas on steel imports. The finance times reports the eu plans set off by President Trumps threat analysts say it could spark a trade war. U. S. Experts little stool to europe, so the eu is focusing on agriculture and other sensitive products bourbon is the main export of kentucky it is the home of Senate Majority leader, Mitch Mcconnell. Illinois is ending their budget crisis and enacting the first spending plan in two years. Lawmakers overroad the governors veto. Illinois could become the first ever state with a junk Credit Rating moody says the budget plan may fall short in addressing the huge liable. The 36 billion plan would raise the state income tax rate bay third to nearly 5 it was delayed when placed on lockdown yesterday a woman threw a powdery substance in the office. They found the substance was not hazardous and the lockdown was lifted after two hours Police Say One person was taken into custody if you go in and throw some johnsons baby powder on the floor, can you go to jail . Probably. It creates a lockdown like that. I know, but if you were doing it as a way to prove whats behind it. You are obviously even though there was no threat right like robbing a bank with a gun thats not loaded. If you can prove intent, its not as severe as doing it. Theres a crime that was committed there. Right the worlds Biggest Hedge Fund sounding off. In a linked in post, the founder, ray, says the actions of Global Central Bankers suggest the low rate cycle is ending soon. He said, quote, our responsibility now is to keep dancing. Close tore the exit and with a sharp eye on the tea leaves. He said he was less concerned about a debt bubble because of the leveraging over the past few years. All sound sort of like something could have said a year and a half ago yeah. The dancing. But we realize the feds, the Inflection Point was hit a long time ago the low rate cycle was ending he is late to the party with that saying something that is obvious. Lets get to the New York Stock Exchange jim cramer joins us now. Jim, as americans we like that number, i think, right lets go i think thats the most important loss in the guessing game wow, this is great a lot of people got employment i wish people were paid a little more, but i understand that. This is part and parcel why a lot of people say you are way too optimistic, jim. What are you talking about employment is the undercurrent and credit is the riptide. If you dont have it i think we are employment is going to make those other things better. A lot of people, a lot about similarities to previous market peaks and things were seeing here theres usually something you find out later that underline fundamentals were not what you thought were or not good im worried there could be something with north korea i dont know if theres something in the economy itself that could end this or not. Well, look, were on the verge of earnings. I know that a lot of people feel that were in a peak i keep going back to 2000 and the only company that even had remo remotely the low multiple that we had was comcast that was reasonably valued back then the others were all valued insanely i look at oracle the stock jumped to 52 its back to 48. Tell me where the peak is in that we had a big pull back on a lot of the names but people dont know what the companies do they piopine on larger macro concerns they would say its a company that wow, i dont know chips. Chips, because they dont do the homework because the homework is boring and you have to study it and they dont have time for that theyre too busy opining on the g20 im stuck with the fundamentals of the companies and theyre doing well and well find out that in another week. That chart is unbelievable. People are so falsely i mean, the optimism that people talk about thats raining everywhere, i think its like raining among five people. It really is incredible. People are so negative im worried about north korea. 35 3 3yearold guy with a icbm not my cup of tea. Otherwise what are we going to do what happens if amazon doesnt buy every Single Company and destroy every single business . After prime, the infamy for retail in july 11, its prime. I havent bought anything in months because prime day is coming up. Im going to buy everything that day. Theyll come in and down fwrad the retailers and then we can at least deal with it lets wait until july 12th when after the apocalypse of retail cour course. You talk about australias 26 Year Economic expansion and thats what got me thinking about what it is that, suppose they dont die of old age. Thats a prime example that you have to screw something up usually to end an expansion. People think its time. Listen you have to look at these periods where its not that good. I look at the employment number and i say are things as horrible as people are telling me it should be . I guess have to get more depressed. Are there prodepression drugs i can take so i can get in the move im going to a pharmacologist. Make me more depressed so i can get more on board. Theres some that are like alcohol and you feel great initially and you might feel bad later but usually you feel good. Ive been told i dont know. Gin gives you a horrible hang over talk to me tomorrow ill be negative. Thank you jim well see you in a couple of minutes. Make sure that you watch squawk box on monday. The new york time columnist Thomas Friedman will join us to talk g20, trump, putin, syria and a lot more on that monday at 8 00 a. M. Eastern. [woman] we did it. [man] were campers. Look at us. Look at us. Its so nice to get out of the city. Its so. Quiet. Is it, too quiet . Its awful. Yeah. Feel at home, pretty much wherever you are. Tmobile is americas best unlimited network. Your insurance on time. Tap one little bumper, and up go your rates. What good is having insurance if you get punished for using it . News flash nobodys perfect. For drivers with accident forgiveness, Liberty Mutual wont raise your rates due to your first accident. Switch and you could save 782 on home and auto insurance. Call for a free quote today. Liberty stands with you™ Liberty Mutual insurance. Apple is being sued for patent infringement. The chip maker claims apple breached six patents that increase battery life. Qualcomm is asking for an import ban on certain phones as well. And Second Quarter Revenue Growth will be cut by 3 from the recent global sign area tack the snack maker does say all the effected systems are now up and running. Lets recap the june jobs report that came out a few minutes ago. U. S. Economy add 222,000 nonfarm jobs last month. Well above the census. The estimate was 174,000 average Hourly Earnings rose. . That was a bit below the forecast. A final check on the markets today. You can see whats been happening with ours. Up by almost 50 points for dow now. In europe things are weaker for most of the important there. The ftse was flat when we started this morning now up by a quarter of a percentage point though. Markets weaker in italy and spain. If you check out whats been happening with oil prices. Yesterday oil prices were higher but today you see its an august contract the wti is down by 1. 7 . Thats declined to 4475. Thats actually off the weakest levels of the morning when we were down by over 2 the 10 year note is the other interesting one to watch the dollar is up and gold prices also ringing home. Down by about 2. 90 to 1,220 steve how does the fed take this jobs report . I think in stride it keeps the path for what he they plan to do this year. This year swois working out wel for them relative to the forecast this keeps them on track for this reducing the Balance Sheet Program Beginning in september and then another rate hike which the odds right now for december, they were 51 . They actually did not check after the number came out but right around there and third rate like of the year in december i dont think it changes anything if they see an up tick in inflation it may cause them to accelerate but right now i think theyre cool with the way things are going. I mentioned the idea that aaron and michael are conservative and liberal economists are both thinking that the fed is getting ahead of itself here this number makes it seem like its not as tight. Were out of time thank you for being here today have a great weekend everybody right now its time for squawk on the street. Jobs number shiest since february meanwhile in europe a slight sell off the president meets with putin