Transcripts For CNBC Squawk Box 20170822

Washington worries the manager of the Biggest Hedge Fund wrote a post saying im watching how conflict is being handled as a guide, im not encouraged the bridgewater founder was initially confident that President Trump could stimulate growth tru throuhrough tax refo dered deregulation well hear more from ray dalio next month when he joins the delivering alpha conference. A los angeles jury ordering Johnson Johnson to pay 417 million to a woman who claimed that the talc in the baby powder caused ovarian cancer. J j says it will appeal the ruling its the largest yet in lawsuits saying the company failed toed a quickly warn consumers about the cancer risk of its talcbased products Johnson Johnson faces 5,000 cases nationwide long long ago, the ceo of i think it was after ralph larsen i had read about this probably ten years ago. 5, 10 years ago. Sometimes the shape of a carcinogen im not slaying talc is a carcinogen there was scuttlebutt about this, at least ten years ago i have not touched it since. Most baby powder, they changed it its cornstarch. Just as a ive always been kind of thinking, you know i read some stuff yesterday that says this is junk science this jury this is one of these things, they have no idea about the science. Im sure Johnson Johnson think about how much baby powder they sell im sure they will dispute the science. I will tell you ten years ago, i have not touched that. I have not used any you can use cornstarch cornstarch is not talc if i see it in a locker room, theres other products that contain talc i never thought about it. Its the way i think of klee next versus tissue its just talc powder. Baby powder most of the time now is not talc. Its cornstarch. Good to know. 400 million thats a lot. You wonder whether that gets reduced. Its not like this is something that was postulated in the last week or so. I can remember ten years ago, wow, the shape of a molecule can ef fefk effect jim mattis making an unannounced visit to iraq. Mattis arrived at baghdad a few hours ago. His visit comes as the iraqi army tries to take tal afar from isis control. Shares of bht billiton swinging to a sixmonth high the company is raising its dividend bhp announced plans to exit the u. S. Shale business following months of pressure by Elliott Management. And then tronc i look forward to stories about this company, which i guess is like the stub of tribune. Sorkin, you know which company the news papaper business also a video game called tron i think also a movie called tron tronc. Whatever shaking up the newsroom at the los angeles times. The company has named ross levinson, remember that guy, as the papers new publisher. Previously ran fox sper actiint media. In the running to be Marissa Mayer at the time. Not exactly be here to have that role before she got that role. No relationship no. Ross is a family name for him. I know. Its actually a last name. My mothers maiden name, if i say it, then you can steal my credit cards i always thought you were David Schwimmer on friends. Wasnt he born before frien frien friends . No, its my generation. Are ytronc you remember t great seinfeld episode with the bar mitt zvamitzvah . Im a man i dont remember that. I dont either. Tronc replaced the times editor and other newsroom managers thats when you become a man, right . Bar mitzvahd. Yes he figured its time. Elaine is there, chasing the bar mitzvah kid. Taking it literally yeah. I dont remember this did you see any you saw them, you just have no institutional memory in one year, out the other. Like our conversations just nod, everything happened on seinfeld that could happen in life you could benefit from listening i should go back. No just in general. Macys naming a you knew this was happening today. I did. Hal lawton will report directly to jeff gennett, macys is forming a single unit, eliminating about 100 jobs here we go that gentleman there will be on courtney is bringing him on. Shes the retail reporter an exclusive interview at 8 00 a. M. On squawk box. As wilfred would say squawk box. Wanted to check out shares of ukbased Provident Financial the stock slammed after the company cut its dividend, issued a profit warning and disclosed it is being investigated by the Financial Conduct Authority over credit card replay plans Debt Collection rates plummeted from 90 to 50 after it switched from contracted collectors to fulltime employees. President trump committing to an openended conflict in afghanistan during last nights prime time address eamon javers joins us now with more eamon, good morning. Good morning. The president spoke at ft. Myer virginia last night in order to at the nation on the monthslong developed plan for the war in afghanistan. The president ing ing5 presiden s is a change of stance from him he said things look different when youre in the oval office as opposed to running as a candidate. He dismissed the bush era idea of nation building and said the United States is moving away from that. Heres what he said. We are a partner and a friend, but we will not dictate to the Afghan People how to live or govern their own complex society. We are not nation building again. We are killing terrorists. Reporter the president putting that simply. He also was opposed, he said, to the obama era or implicitly opposed to the obama era efforts to withdraw from afghanistan and from iraq. Saying that the time had come to simply double down on the objective there. Heres what he said about withdrawing. The vacuum we created by leaving too soon gave safe haven for isis to spread, to grow, recruit and launch attacks we cannot repeat in afghanistan the mistake our leaders made in iraq one of the other mistakes that the president singled out last night was the idea of trusting the pakistani government too much. He said the pakistanis have worked at the site of the United States he honored that sacrifice,but also said too often theyve been a safe hiven for terrorists. That will change the president changing himself from a candidate who opposed the afghan war and said he would bring the troops home to a candidate who is now signing up for an open ended xlitment mco troops in afghanistan. No number on troops or strategy the United States would adopt. The president saying he doesnt want to telegraph his moves to the enemy. Thank you, eamon. Tough, tough i dont know the answer but this would not be the first time weve been somewhere for decades, i guess, its going to be this is americas longest war. 16 year years, three president s. Its intractable. Its unsolvable almost the whole region needs to come into 2the 21st century the president mentioned india last night he talked about the corruption in afghanistan the idea that the Afghan Government needs to step up. These are things that american president s have said for years he also said that he wants to take some of the limits off of american troops and allow decisionmaking to be down at the local level. Those are relatively minor changes, though, to what the Obama Administration and the Push Administration before that had been doing in after. The question is will this bring different results than what has been done before youre right. Intractable as the president said last night, the alternative is to allow a power vacuum you could see the spread of Something Like isis like we saw in iraq. The president decided that was untenable and the status quo was a better choice. Eamon, two other notes on the business side of the world maybe social media side of the world. Curious about the reaction that folks in the white house had f they had one at all yesterday, to lloyd lankfeins tweet abou the eclipse. Yeah. Perhaps other things eclipsing the eclipse. Yeah. Lloyd blank fifein tweeting this eclipse was not the only thing casting a shadow across the nation we survived the eclipse, we will survive Everything Else. The white house had no comment for lloyd blankfein. No word on whether that was intend for the president or gary cohn theres the tweet. Was he sending a shot across the bow . I dont know er gary cohn signaled he will stay following last week ben white making the point this morning in Morning Money that perhaps janet yellen stays. Do you think thats what chance thats possible the president is very wary of any aides who take on outside significance we saw gary cohn last week be couched as the person who if he left, the markets would crash. Does the president recent sa gary cohn has that influence or perceived influence in the markets is an open question. The president also good at determining what his aides want most in the world. Sometimes if that aid is not in favor, he will deny certain things in thiscatio case gary cohn seeo want to be fed chair that was not unanimous. We had mark grant on yesterday who rolled his eyes. That was a yale management professor. So, you know about the market crashing ludicrous there was a lot of speculation about that last week you guys are the market experts. Drudge ran with it. For some reason they put on clickbait or something they put on the most incendiary headline they find, add up the clicks, and valuations are you think drudge does that . Imagine the drudge report eamon, while we have you. One other commotion going on on social media this revolving around an Instagram Post dont know if you saw this from Steve Mnuchins wife a picture of her getting off one of the planes, clearly owned by the government, someone had a sub tweet, relatively nasty to her. She looked she was wearing tom ford clothes, looked glamorous. She wrote back, have you given more to the economy than me and my husband either as an individual earner in taxes or selfsacrifice to your country im sure we paid more taxes towards our day trip than you do im sure the amount we sacrifice is more than the amount you would sacrifice if the choice is yours. A lot of back and forth about that. Rich people talking about how much they pay in taxes, hashtaging their expensive clothing in Instagram Posts is it not go over well with a large section of the country we have not seen a response from treasury or the white house on that this highlights the idea of how big of a leap this is into public life. When you do that as an individual, its one thing its another thing when do you that as a representative of United States government thanks for bringing us back to the sensitive stuff thanks, eamon. For more on the president s commitments to afghanistan, less bring in james garfano, Heritage Foundation National Security and Foreign Policy vice president. My first question is generals know probably better than anyone else what the strategy should be in an area like afghanistan. Dont generals maybe by definition take a more aggressive stance . If the people that are there as generals say this does it mean its the right thing is it possible its not the right thing . You need to extricate yourself yeah. Ive only been in the military 25 years, and tracking this war for 15 years generals know a lot about military strategy. So we should just focus on the military strategy for a second where they know what the last administration did was stupid. First obama wanted to walk away, i cant do that. I did that in iraq, it was horrible so the idea is well build up the afghan army, let them fight and then walk away so we built up this afghan army, sent them out into the field because obama canwanted to see levels go down, kept putting down lower and lower troop levels the armies are out there fighting, taking casualties and theyre not capable of sustaining themselves. Were not giving them the assistance that allows them to do that. The military strategy, this didnt come across in the speech, the president made that decision weeks ago he basically decentralized the Military Point of that so they already started to expand whats called the advise and assist mission its not the number of troops but what theyre doing where theyre helping the afghans is in fire support, logistical support, and in medical support and evacuation what that allows the afghans to do then, theyre the ones fighting this war. Theyll be able to better hold terrain awayfrom the taliban and we can do that in a sustained way over time with joust burning through the Afghan Military thats a huge change its a big, big change thats just the military piece of it. Trump had to go back and know that all of his comments about afghanistan and in the past were going to be dredged up because this was 180 degrees from what he used to think should he get credit for listening to generals . I think other president s may get more generals if they have to add more troops, add more troops that hasnt been the tact the last eight years i give trump credit ive only been following him since hez first day on the campaign trail the fundamental principle of his Foreign Policy is america first. We donen dont want afghanistan a platform for terrorism is there a strategy that will do that this administration looked at everything, from everything including pulling the plug, walking away to doing this then president said what is the best thing for the American People andici iic and picked tht course you wont be the last word we have today on this we appreciate your insight on it thank you. You bet. When we come back, markets in focus well talk strategy, earnings, data and the fed look at u. S. Equity futures. Looking to open up and pop on the open dow up by 55 points higher. Later, macys stock has been under pressure down 50 year to date. The Company Announcing its hired a new president from ebay. That ceo will join us at 8 00 a. M. Eastern time. Hey, ive got the trend analysis. Hey. Hi. Hi. You guys going to the Company Picnic this weekend . Picnics are delightful. Oh, wish we could. But were stuck here catching up on claims. But we just compared historical claims to coverages. But we have those new audits. My natural language api can help us score those by noon. Great. See you guys there. We would not miss it. Watson, you gotta learn how to take a hint. I love to learn. Welcome back to squawk box. Lets talk about the broader markets. Here for that is lindsay belle and michael tyler. Good to have you here. Thanks for having us. Ray dalio, linked in post, hes worried about the markets to me you see a rally in commodities, you think thats portending good things for the economy. Hes nervous where do you fall on the issue i think theres good reason to be optimistic now on the economy and on the markets i think the rally in commodities is telling you something its telling you that asia in particular is doing reasonably well thats drawing demand. Global growth is on the upswing. I think that plus a slightly weaker dollar is enough to continue drawing u. S. Economies to do well lindsay i would say we are longterm optimistic on the market but were august going into september, the two most volatile and worst performing months for the s p 500. I can see where some concerns come from we have some big issues coming to the forefront we have budget talks, tax reform that will be on the table. Could create a lot of volatility his linkedin post is about geopolitics, which thus far has not derailed the market at all you sound like its the classic its been a long time since we had correction, reversion would mean at some point it will happen exactly geopolitics is always something hard to anticipate the fundamentals are there some of the major things when we enter bear markets you usually see inversion of the yield curve. We have a lot of positive Economic Data points you know the copper roof thing, right yeah. Every bull market has a copper roof. Thats what you were eluding to right . Which is not doesnt make sense, because if things are percolating, you know, as far as Global Growth goes, should be good for the market. It seems to indicate youre getting to the end of a cycle if every bull market has a copper roof it doesnt seem like theres inflation that will result from commodity rises. You dont have it in the wage sector the wage sector is interesting. Though the reported wage numbers are 2. 5 , that doesnt include a lot of things like bonuses, commissions, so on it only includes salary and wages. If you look at tax data from payroll taxes, you find actually more like 6 wage growth, 6 total composition growth at the highend of the job market, there is a shortage, but at the lower end were not seeing it. I dont think the fed is noticing that. I do think an inverted yield curve is a concern the spread between the 5 and 30year treasuries is tight that gives them very little room to raise rates, other than the one time theyre promising so we could get an inverted yield curve . Its closer than people think. I think were two hikes away from that. The fed is and ought to be concerned about that thats why they want longer rates to rise well the only way to do that is get strong Economic Growth what about selling the stuff you own . Theyre not selling. Theyre letting maturities roll off. What is the duration of a 30year bond maturing . Zero unless they sell longterm instruments, which theyre not doing, you wont have a benefit to the longterm Interest Rate you said longterm optimistic, but shortterm you thought the market might struggle a bit in terms of a strategist, you tell your clients to do what it makes sense to get more defensive in the nearterm utilities are rallying we like that sector. Even though its really expensive. Its really expensive, that and Consumer Staples earnings have been good coming out of that group even though you have Competitive Pressures and lack of inflation. All right were more cautious. Considered a defensive sector. If you read into this ray dalio piece, hes the opposite of where you are you may be shortterm bearish, longterm bullish. He says while i see no important Economic Risks on the horizon. Hes not worried about now he says im concerned about growing internal and external conflict and inefficiencies. Then he goes on to say it could be 1937 in the future. Hes been making this argument we are now economically and socially divided and burdened in ways that are broadly analogous i think its analogous to 2008 just to put a fine point on it dont you ineffecti ineffective government, gridlock doek the did okay then. This is not somehow i would not say this is his fresh take hes been making a version of this argument, maybe hes getting more pessimistic longterm. Was a construct so he could have a different version of the market discussion. No, no. No theres nothing new about ineffective government and gridlock just making the point that he may be closer to where you are the waterboarding stopped i think tax reform will be a great test for congress and for the gridlock that we are seeing. It is impairing, it will eventually impair Economic Growth what do you think is built into the market on that . Very little. Zero. So it does not go down if nothing happens this year. Right you probably get a strong rally if they do anything. Even a 5 cut yeah. Thank you dalio was bearish five years ago. Like i said it was a construct for our market discussion i just wants wanted to make everybody he has been on this tact for a while. I remember thinking he has a gazillion dollars under management and hes bearish. At this point were waiting all right coming up, well talk about the role of Business Leaders in politics wes moore is the ceo of the Robinhood Foundation he wrote an oped about standing up to hate groups. As we go to break, heres a look at yesterdays s p 500 winners and losers good morning u. S. Equity futures at this hour are indicated higher were up 50 points or so after the market the market ended higher yesterday. Up 41 this morning nasdaq indicated up 22 s p indicated up 3. 25. Treasury yields back above 2. 2 copper hitting the highest level since november of 2014 still though, that doesnt look like a copper roof yet so the premise of my previous segment was okay your premise was right. A copper roof i was asking with commodities rising, isnt that a good sign for the markets. I know. But it can be seen as a negative okay. Ceo activism reached new and public heights following the Charlottesville Protests here to talk about that is wes moore, ceo of the Robinhood Foundation, bestselling author and retired u. S. Army captain. Well call him Great American hero you wrote a piece after the events in charlottesville, a moving piece called the kkk chased my grandfather from the u. S. But he returned hes what he would say now what inspired you do it . How difficult as the ceo of an organization was it to do it was challenging because i think in this moment he was the first thought i had you know, when he was six years old, he was born in South Carolina the ku klux klan chased his family not only out of the town, but out of the country they were jamaican imgrants. When they saw the level of fear and intimidation placed in their lives, their reaction was to go home my great grandparents never wanted they wanted nothing to do with america after that my grandfather had a core focus to come back he came back he became the first black minister in the Dutch Reform Church he was here in the south bronx went to brooklyn he this passion for this country that i thought was just so unbelievably admirable so much of the love that i have for this country came from him i felt not only did he he was the first thought that harkened in my mind when i saw what was going on in charlottesville and beyond i think it fit perfectly appropriately in terms of the fact that we as leaders of organizations must have that sense of not just courage but frankly that sense of patri patriotism everybody is grappling when i say everybody, ceos have been grappling with how to expression emotions about particularly sensitive topics. You are the new leader, recently named new leader of robinhood. How difficult was it to decide you were going to do this, be outspoken about it, and how far do you go. One thing at robinhood, we realize this is intertwined. Robinhood has been around for 30 years, it has been involved in the fight to reduce and remove poverty not just from new york city but beyond. You realize this idea of making sure you are always going to fight for the underserved, also the lacing of poverty and race and discrimination, these are things that have been intertwined throughout society for so long. It feels like we got into a moment thats political. You have all sorts of Business Leaders and others part of your board and organization i imagine with different political leadings how do you contend with that one thing we have to do is say this has nothing to do with politics with a capital p. This has not do with an administration or a specific party. This has to do with whats right. If we have people, in the case of new york city, 1. 78 million, 40 million around the Country Living in povcy, millions more on the cusp, it becomes our responsibility to push in and making sure these issues are being debated and discussed and that we can create alliances around making sure we can make Real Progress on the issues. You were in afghanistan, right . Yes what did you make of President Trumps speech last night about what should be done there . Yeah. This war is also personal. For the past 6 years, either i or Close Friends of mine have been in close combat i hahave friends now fighting as we speak while i applaud the decision to get away from a timebased freight work, theres two things im waiting to hear. One, what is the exit strategy two, how was the strategy changed at all last night . There was one word that was introduced this is the biggest piece of news introduced from it. One word was introduced throughout the past administration, thats the word win. Is that the intention now, we will win this war. The president is saying hes owning this war. Hes owning our victory. So i think if youre going to own a victory, you have to be very clear about what that victory looks a like and how we got there. Theres a difference between tactics and strategy we saw a collection of new tactics last night im not sure if we saw a different strategy different attitude. Different attitude. When you say win, one criticism of president obama he laid out the timetable President Trump rearticulated that saw paul ryan yafr afterwards saying theyre watching the clock, and once we leave theyre ba back talking about the ptaliban. When i deployed, there were 17,000 troops in afghanistan i remember thinking we have the land mass relatively the size of texas, 17,000 droops to pa tr t. We will get to around 13,000 in afghanistan now. The attitude has changed and the truth is that there are going to be probably thousands of families who will get deployment orders. There will be thousands of families who will now be separated. Yeah. I think when were talking about a war going on for 16 years, a criticism ive had of multiple administrations, we have to be honest with the American People what this will cost, what 5 f sacrifice where is asked to make and for the sacrifices for those families being dedeployed, we he to know what it looks like thank you of course, thank you. The company ceo of classpass will join us to announce the expansion. And later, macys cutting jobs and bringing in a new ceo from ebay. And President Trump making a new commitment to the war in afghanistan. Thank you clients . Well jd power did just rank them highest in Investor Satisfaction with full Service Brokerage firms. Again. And online equity trades are only 4. 95. I mean you cant have low cost and be full service. Its impossible. Its like having your cake and eating it too. Ask your broker if they offer awardwinning full service and low costs. How am i going to explain this . If you dont like their answer, ask again at schwab. Schwab, a modern approach to wealth management. Welcome back youre watching squawk box live from the Nasdaq Market site in times square. Time for the executive edge. In a speech last night President Trump signaled he would dispatch more troops to the war in afghanistan. Joining us now to talk about what that means for the militarys suppliers, morgan brennan. What did you find out . President trump will become the third president to send more troops to afghanistan. Heres the key about that. What are the roles theyre going to fill . The center for strategic and International Studies published a 160page report on this he says this will likely involve specialized officers who will train and assist the afghanis. Also expects to see increased air support. To analysts say Services Contractors will be early beneficiaries of increased activity other names to watch, makers of remotely piloted air crafted, which are inaccurately referred to as drones sometimes manufacturers of light tack cal and Armored Vehicles bae systems. And if we boost air support, youre talk about Lockheed Martin and boeing. Were still light on details here in the meantime theres another development to watch today when the markets open this occurred last night the air force awarded two new Development Contracts for t Northrop Grumman will compete for that lockheed will not. Its the modernization of the ground based leg of the nuclear triad. Why its not tied to afghanistan, theres a lot of speculation before the president took office on whether he would modernize this part of the nuclear triad. Joe . Morgan brennan, thank you appreciate that report coming up, when we return, new york fitness startup classpass could be coming to a city near you. The Company Announcing a major expansion. The ceo will join us after the break. Right now a quick look at whats happening in European Green arrows across the board. Squawk returns in a moment 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. So they called the fire, yodepartment for us. Clearly, my first truck was on the scene within five minutes. I am grateful we all made it out safely. To protect what you love, call 1800adtcares the dollar getting weaker by the day again today. The dollar may not continue to go down theres a lot of short positioning right now, and now were looking at a fed that might still hike Interest Rates. The previous failures and distractions could actually add fuel to the notion this must get done, otherwise theyll have a big goose egg on the legislative front. Wont congress bet get something done let me get these going so i can be ready for anything coming at me. A company calling class pass announcedi extending to ten more cities , its the way enthusiasts sweat. Joining us is the ceo of class pass i want everyone to understand the Business Model you dont run a fitness studio, you run a subscription modding where, for example, if i join i pay a certain amount per month and i get access to classes, all different classes throughout the city thats exactly right. You pay one fee to us, no ongoi ongoing. You can do anything in the network, depending on the plan the reason were expanding is because the model is really working. We havent launched a bunch of new cities because weve been making changes, but just raised 70 million financing, and using some of that capital to not only invest in technology, but to expand to more cities. People pay the subscription fees, but i assume you give a cut to the participating studios. The vast majority of the revenue goes to our studio partners, but like other marketplace, we take youre a market maker. How much does this cost it depends on what city youre in. Lets just do new york. So 135 for a ten plan. Ten classes a month. Yeah. The idea because you were giving access to all these boutique studios, that people were at least the initial idea was they would go to the places and the gyms would love it, because they would sign up for more classes. These were people signing up a class. Thats the hypothesis in the beginning. My partner thought she would be a leadgen operation we thought people would find a studio they loved and convert over what we saw is people were signing up using a different email address and wanted to keep coming through class pass some customers who are loyalists, who gets really excited about one workout our within brand, they go direct we tell our studio partners sell as much as you we have a different customer, now were getting millennial, men, lowertier plans. Our customer isnt a hardcore brand loyalist, they want variety. What you went from a leadgeneration on a yield optimization business. To the consumer were a subscription service, to the partner, the studios or gyms, we look a look like what priceline does, youre only filling 35 of your excess capacity, let es try to fill the rest on classes that are popular, may be harder to get into those classes. Do you think there will be a movement where youll strike a deal where those classes are made available, the as well as to the others, or is that never going to happen . You have the right question, which is if were filling excess capacity, if there is no excess capacity, well not have that class available. Fortunate for us, the whole space is priced at the top of the demand curve, so its only about 35, which mean 98 of their schedules. That being said, we are exploring ways to let People Potential pay more. Weve got to go. So sorry. Thank you so much good luck. Cheers. Well talk more about President Trumps commitment to the conflict in afghanistan, with p. J. Crowley, a former state department official, next. These days families want to be connected 24 7. Thats why at comcast were continuing to make 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 President Trump with his first major policy address, announcing hell step up the u. S. Engagement in afghanistan. Reaction from washington, and former assistant secretary of state p. J. Crowley, thats straight ahead global stocks are rising, and well have a closer look at whats driving this mornings move and where you might want to be putting money to work. Plus a new travel website thats taking on the big boys, what sets Wanderlust Travel apart . Well fund out from the companys cofounder, a name you might be familiar with the next hour of squawk box starts right now. From the beating heart of business, new york city, this is squawk box. Good morning, welcome back to squawk box, life from the Nasdaq Marketsite in it times square im here with Andrew Ross Sorkin and joe kernen, did you see how smooth that was . I was supposed to say Andrew Ross Sorkin. I caught it. Its important to think about what youre saying, because sometimes they put stuff in the teleprompter that you dont want to say. Right. Futures this hour are suggesting a positive open. President trump didnt go offscript. Generally the big speeches he tends to stick to the teleprompter boeing and northrop t. The pentagon had asked the Defense Industry to come up with proposals to replace the current minuteman 3 system, which has been in place for 45 years. Toll brothers is well above the consensus. The bottom line, and a 6. 5 increase in the average price of the delivered home apple has reduced the wait time for customers to get its airpod wireless headphones. Originally the wait was about we six weeks, now its cut to two to three weeks others say it cant reflect reduced demand. Ray dalles i dont is reducing risk because of washington worries the manager of the worlds Biggest Hedge Fund writing in a linked link din post, he was initially confidence that President Trump could stimulate growth through tax reform, but recently has expressed concern over trade policy and much more well here much more next month from ray dalio when he joins cnbcs deliveringal for a. For more head to deliveringalpha. Com. Eamon javers joins us with more. The president spoke to the nation last night from ft. Myer, virginia, he be gan his remarks by going to some of the divisive rhetoric, calling for a moment of National Unity here, saying that the United States simply c stage unless its bound together as one here is what the president said last night when one part of america hurts, we all hurt, and when one citizen suffers an injustice, we all suffer together. Loyalty. Love for america requires love for all of its people. The president there emphasizing love for all of americas people he also had a message for the government of afghanistan last night. American leaders for a decade or more have been so frustrated with the level of corruption and the lack of cooperation they have seen. Heres what the president said to those leaders last night. America will work with the Afghan Government, as long as we see determination and progress however, our commitment is not unlimited, and our support is not a blank check. The government of afghanistan must carry their share of the burden the American People expect to see real reforms, Real Progress, and real results the president expressed changes in terms of three specific areas pakistan, deadlines and the issue of nation building. On pakistan, the president said that government has been too willing to serve as a safe haven for terrorists the last several years. On deadlines he said the United States is no longer going to give a date certain on which its going to do anything militarily instead that will depend on conditions on the ground on nation building, the president said the time for nation billing is over and the United States will focus on killing terrorists back to you. Thank you for more, we want to bring in p. J. Crowley, the author of red line. Good more to yning to you, p. J. Good morning. Your first thoughts were what i think the president came to the right decision to extend the american commitment. I think he tried hard to tie this to the current state of american National Security he was right to put the focus on pakistan as being one mall lined actor playing both sides of the struggle, making it harder for afghanistan to succeed he didnt mention two other countries that are not helpful either, that being iran and russia i think the most stunning aspect of the president s speech was the acknowledgement that 16 years into this war, the longest in american history, you know, the prospect of a political negotiation is still a longterm challenge. He didnt mention iran and russia, maybe because theyre not our allies in theory pakistan are our allies, yet they harbor terrorists on the border this is an issue we have instrument well it, almost like china. How do we get china to change . How do we get pakistan to change visavis afghanistan . Are there any levering we can pull china may well be helpful in terms of helping clair day what pakistan needs to do the president talked about the tension between pakistan and india last night, and that is at the heart of the unwillingness of pakistan to recognize that its most for that foremost challenges is not a prospective conflict with india. Can we explain something basic. Why does pakistan support the taliban . Its supported the taliban, because they do not want to see indian influence in afghanistan grow behind their back and its pakistans inability to come to some accommodation with india that really drives its perceptions and its actions and its unhelpful actions with respect to afghanistan p. J. , one of the other questions is we had wes moore on the show the last hour, he thought the most powerful word mentioned during the speech was win. Hes effectively described a plan to win this war, a distinction from previous president s from previous administrations. Do you see it that way and what does it mean . Thats a very good question i thought the president put too much emphasis on the military aspect of this struggle. No question that we need to help afghanistan retake and hold territory in its own country, but weve been at this for 16 years, weve been killing terrorists for 16 years, yet were no closer to a political negotiation. That really ends up being the ultimate challenge here. You know, were trying to buy time here for afghanistan to be able to sustain the struggle on its own, and were also buying time for afghanistan to grow a legal economy so that it can deal with the vacuum that does exist in at least some of its territory, but ultimately we do have to get the taliban to the negotiating table, but the real question i was in meetings, and the Obama Administration where we were challenging pakistan on this, but its really unclear at this point where the taliban is interested in and able to goevt that remains one of those elusive elements. Is there any reason to ever believe that afghanistan can have a viable government on its own . I think, michelle, what we have done over 16 years is underestimated how complex this is, and weve underestimated how long this is going to take so we have President Trump has leadership the same lesson from president obama, the same lesson from president bush. Do you think that will be political palatable with the american public, his base . Theres tension for sure, but i think president obama put the challenge on a more sustainable longterm footing. I think the president has more or less reampffirmed that as log as afghanistan is taking most of the fighting, our challenge is to help them to sustain that effort for as long as it takes. P. J. , while i have you here, since the book is called the red line im curious how you think what the president said about two weeks ago about north korea and how you think about north korea versus these other risks. Yeah, i think about, you where he has drawn the red line with respect to north korea. I think thats still moving. You know, general mattis has helped hem in recent daze say, look, the red line is if north korea fires something at us, were going to shoot it down and we reserve the right to shoot it back i think what President Trump was toying with is that if north korea threatens the United States in some fashion, thats a red line thats a recipe that gets abu a shooting war, and as steve bannon said, he want wrong with his interview of the american prospects. The challenge for any military operation is tell me how you can do this without putting hundreds of thousands of south koreans and japanese citizens at immediate risk. A lot of investors, of course, watch us here in the morning. Theyre always trying to make sense of all of this both as citizens, but also as investors, trying to put some kind of cal inclusion around the percentages of what may or may not happen. If an investor or ceo were to call you and say, you know, how big a risk is this, whats at the top of your list and what kind of chances do you put it at i think the president was right to bring north korea back up near the top of the list of challenges that we face. The dilemma is partly his rhetoric he has hes lapsed into this in terms of north korea, he lapse booed it again last night in terms of afghanistan. These are enormously complex challenges they are going to take a combination of military force and diplomatic skill i think hes putting too much emphasis on the military component of this. Were going to have to find a way to getnoic into the negotiation, and find a way to get the taliban in negotiation niece of those is going to be easy. P. J. , thank you for spending time with us this morning. Always a pleasure, guys. The buy the red line. Miami is at the heart of the battle over minimum wage kate rogers is talking to Business Owner shell join us next. And well talk markets and investing ideas, with equity strategists. At 8 00 a. M. Eastern time, jeff gennette. Stay tuned these days families want to be connected 24 7. Thats why at comcast were continuing to make 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. We are in the green pretty much across the board. Well calm dow 57 points higher, nasdaq up about 28 points. A couple stocks on the move. Macys naming a senior ebay executive at its new president howe lawton will report directly to the ceo its also consolidating into a single unit. The move will eliminate about is 00 jobs. Macys ceo will join us live at 8 00 eastern shares of bhp bill the ton raised its dividend. And it announced plans following months of pressure from Elliott Management tronc a nice name to it has named Ross Levinsohn hes also replaced other newsroom managers. Hes a cnbc contributor and will be on Halftime Report today. On at noon Halftime Report is from noon to 1 00, but you knew that. I wanted everybody else to know that. The minimum wage still stands, but cities and municipalities are taking matters into their own hands kate rogers is in miami looking at how a local wage battle stands to impact Small Businesses there kate hey there, michelle good morning in miami beach theres an ongoing battle to hike the local minimum wage to more than 13 by the year 2021, 5 more than the current minimum wage, but for some Small Businesses like panther coffee, where we are live today, they do have locations, paying more than the minimum wage is a nobrainer joel and latisha actually start their lowest paid workers at 10, and thats before tips kick in they say its simply the right thing to do. We cant have the business without a team if people come to work and dont feel appreciated or respected, i find minimum wage disrespectful. Reporter the Florida Retail Association says it will simply be devastating to local Small Businesses we talked to james miller, the groups communications director, he told cnbc that the Wage Ordinance would see jobs maybe going away all together, and higher prices for consumers. One thing is for sure, wage battle or no, miami is a growing hub for Small Business activity. The Kauffman Foundation found it the number one metro in the country for Small Business growth theres tax credits for jobs being created, and of course florida itself has zero personal income fax for all those Small Businesses that file at the individual level back to you. When we return theres a new prince and princess of bel air with jayz and beyonce what they spent on their new home take a look on futures we are in the green, squawk returns in a moment. Whats going on here . Um. Im babysitting. Thatll be 50 bucks. You said 30 dollars. Yeah, well it was 30 before my fees, like the dogsitting fee. And the rummage through your closet fee. Who is she, verizon . Are those my heels . Yeah yeah, were the same size. In shoes. With tmobile taxes and fees are already included, so you get four lines of unlimited for just 40 bucks each. And now get zero down on the hottest smart phone brands like samsung galaxy. More reasons why tmobile is americas best unlimited network. Your bbut as you get older,ing. It naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. I love these kind of stories. The power couple securing a massive mortgage to buy their new 88 million home you heard that right the home cost 88 million. Public records show they got a home loan totalling nearly 53 million. The mansion sits on two acres, only two acres, by the way, of land with six structures the gated property has four outdoor swimming pools, a spa, Wellness Center and a ill say it again, a is a 15car garage so there you have it 88 million is a lot in last. 88 million in l. A. Is a lot of mon money. Wouldnt know because you did deploy the cash elsewhere why tie it all up . If you cant write it off you definitely already paying the Monthly Interest you may be able to beet somewhere else. Does it prove the point, though, that maybe we shouldnt have interest deductions on mortgages . We dont on that. Do we have an image here . This is in times square. This is a big box or boxes, we should say, of sugar, part of a campaign against sugar this is what they say being consumed here its a pretty remarkable thing they have put together. Part of the ongoing war on sugar. Its a marketing for the sugarfree product. Children in the u. S. Consume 4. 7 billion pounds of added sugar every year. Its free of added sugars. Every five minutes . Every five minutes. Wow think how big the country is you know, were not smoking, we dont feel quite as its the white powder, but keep it in perspective. If we could get people off the amount of issue gather were consuming, 28d be better for everybody. Case closed, because andrew said it. Okay didnt you do okay dont you feel okay . I had issue far. Did you each count chocula . Is it an epidemic you dont you told me it causes diabetes they dont know a lot about actual causeandeffect. Red meat used to be horrible, too. Is everything at whole foods good, too . How about how about gmos how about gluting free. Are we going to debate whether sugar or good sore bad everybody in moderation. The problem is its not being done in moderation its done in soda we need were going to get back to the markets after this. I cant even believe were having this conversation. I mean, Carbon Dioxide announcer welcome back youre watching squawk box, live in the Nasdaq Marketsite in times square good morning were live at the nasdaq among the stories front and center, another day, another clarification in the takeover speculation involves Fiat Chrysler. Great wall said its indeed evaluating a bid, but says it has not formally contacted the company. Thats in line with what Fiat Chrysler said. Michelle is going to stop us for a second. I think it story is extraordinary, if you go back and real some of the original reporting. Automotive news set they received an email from the ceo of great ball. Who does m a this way . Instead you tell a reporter via email were definitely going to buy it its bizarroland to me. You covered m a. Now theyre playing the technicalities, did they get in touch clearly there must have been some backchannel how often does somebody on the record confirm to you via email theyre making a bid for a Company Without anything official im saying its unusual. Exactly call it what it is its weird could we reach peak facebook according to Research Company emarketer facebook will see a decline in teen users, the first time emarketer has ever predicted a drop also the National Transportation safetyboard has now scheduled september 11th for a hearing to determine the cause of a fatal may 2016 crash of a tesla model. That car was us semiautonomous driving system ntsb had said earlier this year that the driver taos his hands off the wheel for an extended period of time there are reports that he might have been watching a movie at the time during the drive. All right. Back to the markets now. Here with us is mike ryan, and david leibovitz. Good to have you here, earnings season almost over, so that catalyst or derailment is behind us turned out to be a catalyst. And jackson hole on friday, with the fed still cheap money even though theyre talking about raising Interest Rates what are the chances theres some kind of marketmoving event as a result the jackson hole i think that expectations are pretty well set. You make a good point. We are entering the black hole of august, low trading volume, low liquidity, so we need to be on our toes, bur our expectation is the Balance Sheet reduction will formally begin following the september meeting. I think what will be particularly interesting, is the comments around inflation, Financial Stability and the possibility of a third rate hike form the fed is clearly concerned about assets bubbles were seeing much more asset inflation, so i think weighing her comments and getting a sense of how much inflation will give a good glimpse into what to expect for september. I think david is right here i think the real issue for the fed will be the focus on inflation. Lets face it. Inflation has serially disappointed also we see progress towards the feds 2 target, i think it makes it more and more different to raise the rates market has about a 40 chance of a go in september. On you view is well seed some improvement, but a lot will depending on what we ein terms of Inflation Numbers and longterm or shortterm utilities were positive last month, one of the few sectors that were, because people fell far more relaxed going into what was a high yielder at this point . I think the real question is how much of an effect the reduction in the Balance Sheet has and the potential for that to put not i think is a real possibili possibility. That will be bad for the banks. I think the concern had always been they do it in a manner thats disruptive certainly from the banking system, you want to see higher rates. But i think the market wants to make sure they dont come in a sporadic or episodic manner. What the fed will go, then, is a directed approach. So, david, you managed assets how are you managing them right now . I think the earnings story gives us confidence that the fundamentals are fairly sound at the current juncture im with mike. I think it will be a well telegraphed next 12 months of Federal Reserve action, which i think will keep equity markets from getting terribly volume tiff were embracing opportunities. I think this puts an enormous burden on earnings right now lets face it. They were punished so within the u. S. , we would financial technologies. Were warming up to energy you know, activity data outside of the u. S. , with Earnings Growth out, we do think theres some bolstered that. We reduced a bit. That had been or largest overweight weve balanced it out and increased our waiting relative to the u. S. Both in terms of nonu. S. Developed markets the. Why because we think the Earnings Growth store is birr weve had this chronic set of weakness conditions. First in emerging markets, then clearly in europe. Youre starting to see the global and the earnings back drop is much better that people fully appreciate so far. Thank you, gentlemen. Good to have you on. Coming up a new travel website with a twist we introduce you to Wanderlust Travel. Com the ceo is a junior, not a senior, the break tells us what sets them apart tro an already d 8ded feel anat 00 a. M. , the ceo of macys will join us. Squawk box will be right back. Welcome back to squawk box, the futures are suggesting well have a positive open at this hour. The dow would open higher by 53 points, the nasdaq higher by 28. Okay. Adps ceo sounding out of on bill ackman last might on mad money, telling jim cramer, quote, he takes offense to some of the claims made about his company. Just yesterday adp unanimously rejecting the attempts he told cramer about a phone call he had. I had a conversation with bill right before, you know, we, i guess, agreed to disagree he was going to launch a proxy contest. I asked, bill, i know you have a vacation and why you need an extension of this deadline, but when you get back from vacation, why cant we meet then he said im afraid thats not going to work. I have to have the leverage over the threat of launching a proxy contest in order to get you guys to agree to the things i want to do with the company. Ackmans Pershing Square saying the characterization of that conversation is, quote, totally false. Adp shares have taken a tumble, down more than 7 , you know, if its not working with my vacation schedule, thats usually what i say, i need an extension. The founders of gear the founder of gear and spin magazine is on to his next venture. Gianting us is the founder of the new website. Wanderlu wanderlu wanderlusttravel. Com. Congratulations your dad was the publisher of the original penthouse. Can say it. A hero to some people. Some people on this panel, at this table dont look at me. Im looking right over there. I know. I know i was 14 years old, okay, and i didnt understand objectification and everything, so i happened to [ laughter ] i was 14, okay . He tells me now, which is im a bit disturbed, he says my mother knew i had a couple of these. No doubt. No doubt why didnt she sever saying anything anyway, tell me about wanderlust you started it a very straight, legitimate travel site. You know, i feel that travel media has be able a bit generic, sort of a patina that everybody is fabulous, though thats true, i think travel is mower about the soul, more about our innate desire to move, as infants we start crawling away from wherever we were sitting its the way we express ourselves. I say the first story ever told was a travel story it had to be to get us out of the caves. From there we keep exploring perhaps most importantly it should be fun. And theres nuance. You have to talk about to sorkin he niece knee wants no, bhutan, vietnam faro faro in africa he needs nuance and exotic stuff. How to pack for mars is one of your stories. I love that the reason is i wanted to say a little statement to the industry, you know, that all of this ubiquity on how to pack articles, i dont know, im an adult. I know how to pack badly, but i pack. So i thought well, lets have fun. Actually its a real thing theres a entire chunk of nasa dedicated to the one proposition, because you cant just pack everything you want. It really is limited space. 0. 1 of the weight of a mission is not the rocket and the fuel its Everything Else so you cant pack a lot. What is the Business Model given how crowded the space is its not crowded with good ones, and, you know, all through my career at spinning, gear i bought and sold discover. As long as its interesting, people support it, i think we can grow probably into ecommerce at some point. So its rif for lead generation kind of product i think so, but i think it has to be done in a way with integrity. With all due respect to a jetsetter, which is more a travel Company Rather than a publication, i think you have to first establish an identity and a personality and honesty with your audience, then i think they want you to guide them to things. When i say ten best shatto in france, are you getting a cut of that no the at all, i wish i was is that the goal, though, eventually it will be part of our business, but very transparent that was just a list, not even a ranked list. Also fashion business for a lodge time, too, is whether the journalist or writers about these locations effectively all of it is a big freebie, and whether they need to disclose that in fact some celebrities have not disclosed certain things like that on social media and the ftc is looking at that how do you address that . Very transparently. Well be honest if we do, but ive said to publicists we want to send your writers this place or that place. I said, great, we september the invitation, but were going to write or piece if our writer goes to bhutan, theyll write about bhutan, if theyre happy with it, then fine i dont have a i didnt have a problem with that with spin. We always did our things, and raers knew we did our thing. What missing in travel media, and im already on making enemies, but theres no humor. And why not . The world is funny you know, its full of funny things and funny people and funny situations, more so than at home. So i want to bring that humor, and i mean wit, not comedy its not a comedy thing. The name is wonderlust, homage to your dad no, no, most of my life is a homage to my dad, but no, its a lust for wonder. A spinoff of the word wanderlu wanderlust that word is 100 years old, for people who went to the Empty Quarter in the sahara and discovered great swathing of thor today wandering is not a big deal, nots an accomplishment to Wander Around the world, but to worlder is an accomplishment i think if someone loses their sense of wonder, they kind of have given up. Our tagline is its a big world after all. Its massive full of so much well never get a chance to see. I wanted to bring the largeness of that of what we dont know. I could go on all day theres a idea about fantasy islands, what to know. Important consideration travel sites often head to be highend sites, they tend to be geared toward the rich. We call ourselves a Luxury Travel sites, and im going to cheat. Well be about interesting places im not looking to do backpacking across nepal, because its done better elsewhere. I think the luxury end is done flatly and uninterestingly, so i want to make it interesting. Why for example . I think too many talk about the threat counseled of seats on you how fabulous coffee is on the patio in the morning i think a travel site should be about the environment. Can i ask one thing one thing thats changed the travel business is tripadviser, the idea that people are generating their own comments. Before i go on a trip to any hotel, frankly before i would reed travel leisure or wond wonderlust perhaps, i often go to trip adviser to figure out what everyone is saying, what those people actually like are they four seasons aficionado or holiday inn . But all of that has changed the whole idea of reviewing properties in the same way amazon has changed the idea of reviewing books, do you think thats changed how you approach it no doubt. Its changed the entirety of travel media, but i dont think its necessarily replaced good reporting, interesting reporting. Again, not just about a hotel, but about where that hotel is, what the culture is, who the people are, what funny interactions happen when coaches mingle and sometimes collide. I think great journalism will always trump i read trip adviser, too, and theres so much of it, and so many different opinions. When you have that many different opinion, imagine applying it to the financial world. Would you buy a stock based on the fact that 400 people had 400 different opinions you actually want one smart opinion or one of two or three smart opinions i have Great Respect for the travel leaders is travel leisure still owned by American Express . No. They sold a few years ago. So fun having you on. Thank you very much i saw a couple articles that i want to see. Whats the best hotel in rome . Yeah, thats i want to see that. Thats an example of the mainstream reporting we are doing at the core. There are a lot of hotels in rome and i like that i think the j. K. Place is not as beautiful, and the michael anglowouldnt even make my list. Best new hotel maw the lauren . Where is that thats in the bahamas thats just a beautiful place. The copinsky in havana looks amazing. Well chat during the break okay. When we come back, stocks to watch, and then the ceo of macys is going to join us and her paw wont heal on its own. Were all working forward to something. Synchrony financial can help your customers make it happen sooner. So she can plug into her dreams. And theyll have a new addition for their new addition. Whatever youre working forward to, even if its chasing squirrels, Synchrony Financial can help you get there. Cameras. Even if its chasing squirrels, introducing the newly redesigned gla suv. At a price thatll make you feel like youve gotten away with something. The 2018 gla. Lease the gla250 for 359 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. What should i watch . Show me sports. Its so fluffy look at that fluffy unicorn hes so fluffy im gonna die your voice is awesome. The x1 voice remote. Xfinity. The future of awesome. Dsw ahead of expectations. A 14 gwinnett it also posted an unexpected rise in samestore sales and announced a share buyback. Medtronic, revenue fell below, and the supply issues involving its diabetes sensors and Restaurant Brands international a top pick at ubs, says the parent of Tim Hortons Burger King and popeyes should continue to outperform as it opens more locations and drives comp sales higher. Cosmetics maker coty broke even for its last quarter revenue did beat forecast, but the Company Significantly increased its marketing coming up, corti reagan will join us, a very special interview, macys ceo will join us next. Volvo rolling out the latest versions, including a hybrid version of the xc60. Squawk box returns in a moment y. 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. 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. I will not say when we are going to attack, but attack we will a cnbc exclusive, macys poaches a new president from ebay well talk to the retail giants ceo about the shakeup straight ahead. Facebook could be losing its grip, and snaps dancing hot dog could be to blame. The final hour of squawk box begins right now you make me feel like im livin a teenage dream the way you tur me on announcer live from the most powerful city in the world, this is squawk box. Im joe kernen, along with Andrew Ross Sorkin, he has very sterile hands. Just pure. We have many things in common one of them is. Germ ophobe well, you know, yeah. I fist bump. There you go. Fist bump better than the than the handshake. A quick look, up most of the morning after gains were posted yesterday after two down weeks and the s p under 6, treasury yields hovering around 2. 2 . Just below that. Afghan strategy in a primetime address as the nation as candidate he insisted america pull out of wartorn country, though in the speech he reversed his stance america will work with the Afghan Government as long as we see determination. However, our commitment is not unlimited and support is not a blank check. The government of afghanistan must carry their share of the military, political and economic burden the American People expect to see real reforms, Real Progress, and real results hes living decisions about the number of u. S. Troops to defense secretary jim mattis in Corporate News today chinas great wall motor put up a controversy that it indeed is evaluating a bid for fee at chrysler, but its not formally contacted the company. Notice the word on formal. Levinsohn also replacing the times top editors and manager levinsohn is a cnbc contributor and will be on Halftime Report today. Toll brothers earned 87 cents. That was well above estimates. However, revenue was slightly below forecast deliveries were up 26 , the average price up 6. 5 . Stock right now lower by 0. 7 of a . Apple has reduced wait time to get it is a little weird. Totally weird. The crown jewel of fee at, and worldwide symbol of American Military and manufacturing might is an interested chinese suitor. Yes. You know me with the bacon. Now youre such an iconic brand . Didnt we sell the humvees at some point tal be strange Italian Company i used to have a jeep. We have an actual jeep in the family now, a whatever a sahara phil lebeau syphius would be a hurdle thats the committee that looks into Foreign Investments and whether or not. Im thinking of the other guy sysifus. Sore about that private label functions, lets get to Courtney Reagan she joins us with a special guest. Hi, courtney good morning, joe we have some exciting things to talk about here. Im with macys Ceo Jeff Gennette were in your woodbridge store how long hes coming from ebay, taking over one of your titles and youre realigning merchandise how will all of this help macys lift sales thank you for having me i think yesterdays announcement was all about how macys is going to grow sales faster the first was hal lawton, and hes a great choice for macys what he learned in terms of his retail experience, and now coming about, and then we made this other announcement about massively restructuring our organization we took three organization, collapsed it into one, and put an internal great leader jeff cantor to run that our Consumer Insights teams, we moved into that, so we believe by the pricing decisions that will fortify into a simplified merchant structure, we can grow sales faster at better margins. Because youll be able to turn inventory faster . And we obviously take lots of markdowns, and having science inform those decisions at a pitch more robust level will help us grow faster, get better margins, drive more sales. Youve only been ceo for five months, but you changed the way you sell shoes its not open sell, you have some digital pricing, so it can help update prices and sizes available, making some changes in fine jewelry, beauty, back stage youre doing a lot is it possible youre pulling the right levers and you wont get the customers to come back were approaching business by business, story by store you mentioned womens shoes, fine jewelry. We are our big ticket business our fragrance business, were winning in certains businesses n. Certain stores. We have to put more of them on the board. We had a saul Second Quarter we have a big half fimplgts fast fashion players, t. J. Maxx, now looking at prime wardrobe macys cant afford to do a program like that. The profitability, there is none so how does macys compete with that how do you keep your shopper from turning to prime wardrobe for all of her needs we talked about the last time we were together some of the initiatives we are working on. One is a new Loyalty Program right at the hard of what our consumer has been telling us were excited to launch that in october, we have that built into our plans and where we believe we will have success off price is lifting the entire building by mid Single Digits in those stores we talked about the next generation of stores when we were together, woodbridge is one of those what im excited about, this is a typical shore. This isnt a flagship or super regional center. This is a typical store. The changes we have made in the shopping experts as well as assortment is lifting the built. With yesterdays announcements, with the simplified structure and this new leadership with hal, we believe well have the team to take us forward faster michelle has a question thank you so much for joining us in terms of investors who might be watching. Is the different safe . How do you think of cash flows. So youve done a lot with real estate. I know brookfield is looking at 50plus properties do you have any updates to possibly redevelopments . I know investors are getting a little anxious about what else they can extract from macys, as the share price falls. We have a good strategy in real estate. Brookfield is one of those expect us to make progress on that we expect of the 50 properties there will be a good share we will develop, and more will come on that announcement in the future we also will at any time in we still have another and we have doors, we are continuing to monetize, and then the big one, which is herald square, that is a big opportunity. Its a very complicated process, expect us to take care there, but were taking that one very seriously. So you mentioned the loyal program. The amazon has the best Loyalty Program in the world they make it so, so easy do you look at any models, youre offering convenience, youre offering them choice, but do you look at a prime model we do actually when we have a thanks for sharing program that a customer pays to get a discount, so expect what were launching in the beginning of october will basically give our best customers better rewards than shes ever had before thats on our list, is the opportunity to have a pay for play program were not announcing it as a yearround program, but were selling it today in our stores with a very dedicated Customer Base that takes advantage of that. Joe has a question. Just a quick one, courtney. Another way down from 74 to close to a multiyear low at 19 1 2 or so, if there was just a one mitigating one or two mitigating factors that the company has faced that it had to deal with in the last couple years, would you say its amazon is it malls . What exactly are the challenges that youre facing right now to right this ship in terms of the stock surprise i think the best answer is where our consumer has gone. Our consumer has more choices than ever. Some of the brands we sell have more distribution than ever. When you think about a stores experience, the expectation of a stores experience has changed faster than ever so were focused on that we obviously invested early in digital, and they remain as robust as ever, but were focused on how we take them all and bring them through the entire system. Including what we do while were here today in woodbridge is how do you scale that that are the side of woodbridge, nots just in your flagships. Frictionless, we still have the advantage of great stores in the best malls in america. We have an amazing website, making the connections between the way she shops and all of the touch points is our journey. We believe we have the competitive tools with our strategy and with the talent and the structure change that we made yesterday to accomplish all of that. Can we finish can one final and if thats going to be the case, is it inevitably going to be based on a much, much Smaller Company . Im very excited about the green shoots expect us to. If we can finish with one big brought question about stores, at the same time when one of your competitor issues a support thats pretty dire, all your stocks fall. Do you need to be in this together and do you think the Department Store model is viable. I think it is viable. We now have new economic models through lease or hybrid to make this an exciting destination im actually encouraged by a number of my competitors positive results i think its there to be won i think we have a consumer that wants macys to win again. With the right tal ton drive it, simplifying the process so we didk go as fast ago the speed of our customer macys can win again. We want convenience, and if you can bring that home, i think macys a a good chance of being here for a long time. Appreciate it. I like the macys day parade. This stock has an nearly 8 years old. Thats extraordinary if you believe him, and what he has to say, hes committed to the dividend its a big payer, huge you have to wonder if its at risk. When it was 70, it wasnt an 8 yield it puts a floor on the stock to some degree. Still ahead, President Trump unveiling a none afghanistan strategy, vowing to defeat terrorism in a primetime speech. Up next from retired on army general kimmitt. The vacuum we created by leaving too soon allowed them to grow and launch attacks. We cannot repeat the mistake our leaders made in iraq. That was President Trump last night in his primetime address joining us is mark kimmitt who served the george w. Bush administration, and assistant secretary of state for Political Military Affairs thank you for being here. Thank you, good morning. Your assessment of last nights speech i think it was a good speech. He made it his war, his strategy theres been a lot of question for quite some time not only among the general public, but among the troops about which way were going in afghanistan i think to a great extent hi put that to rest least night some would say if you listen to generals, they will always tell you more troops are needed. President trump campaigned on leaving afghanistan. So im wonter dim im predicting the answer im going to get, but year thoughts on that divide which drove the election s there is a Mission Remains for 17 years weve been there. We kept isis contained in iraq is and inside so that core Mission Still remains. Because of that, it needs to be resources against that, so i think that provides the justification for the troops being there. You agree with that, or what kind of pressure, how do we exert it i think the initial pressure will you economic and in terms of aid we provide billions and hundreds of billions to pakistan every year to improve their military as well as their Economic Situation what President Trump said last night is that aid is going to be conditioned. If they act in responsible ways, holding up the Haqqani Network and those other elements that come into afghanistan from pakistan, that aid will continue if not it will be reduced or eliminated is the gold the eradication of we also discuss what is winning . Thats a fairly low bar, but when you add on the other requirements, which is generally a selfsustaining stable government and a military that can do its own defensive requirements rather than requiring outsiders to come in, i think those are the minimums were seeking before we can say we succeeded over there. I never light to use the word victory. We are seeking success. It sounds an awful lot like nation building. I dont think so, as was said last night, its more state building we can help with the structures of the state and the institutions h. R. Mcmaster for many, many years worked on the anticorruption efforts there, so there are elements, rule of law, legislation, those types of statebuilding functions that the United States can help with. When you start getting entwined into all the of the elements of afghan society, thats the type of nation building that i think the president is trying to avoid. General, thank you so much for joining us this morning. Sure. General kimmitt. Why facebook executives could be saying oh, snap they might be losing ground to the sadippearing app squawk box will be right back. I think that shes a very nice girl. You never got the brakes looked at . Oh yeah. No. At cognizant, were helping todays leading manufacturers make things that think and do automatically. Imagine that, a world of new Digital Products and services all working together for you. Can i borrow the car when its back . Get ready, because were helping leading companies see it and see it throughwith digital. Google is working on a possible direct shot at amazon echo spot. Unclear if it will have any additional features. Td ameritrade is teaming up with facebook for a chatbot it uses Artificial Intelligence and Machine Learning to respond to messages about customers investments. It will be backed by a human Customer Support team. Im not sure i understood anything i just read there i dont know what that means a lot of people are just having conversations with the bot. Thats how its going to go. About your financial health. Thats different than talking to alexa no, it will be on alexa. But not to alexa. But using the underlying software. Got it. Coming up, when we return, stocks on pace for the biggest monthly decline since october last year, the futures pointing to a higher opener right after the break, and later, i love volvos taking the first steps to roll out the allelectric well hear from the ceo right after the break. It will be okay dance dance dance just dance still a lot of cabs around good morning welcome back to squawk box here on cnbc live. Front and center h r block is getting a net chief executive offer. Jeffrey jones, a different jeffrey jones, most recently president of ridesharing at uber will take over on october 9th. He also served as chief marketing officer at retailer target and is a principal at the school proferris buehler went to high school. How does he do it all yeah, all over the place. Replaces tom geriky necessarily, unilever and tyson foods are announced in a volcano venture with ibm, used Blockchain Technology to track Food Supply Chains Blockchain First came to prominence as the Technology Behind bitcoin. Thats interesting. Youll use the Technology Behind bitcoin to manage supply chains . The argument has always been the greatest thing about bitcoin was the underlying technology. So this is another story i dont actually quite understand, but sounds very intriguing. I dont understand, either, but that never stopped me from moving on. Mining giant bhp bill iton after the at thesh called on to shed underperforms assets. Facebook losing ground to one of the its own platforms, at least when it comes to teenagers, according to a forecast from emarketer facebook using among 10 to 17 years olds will decline for the first time this year snapchas would take over by the end of 2017. Thats good news to snapchat we do need to remember, of course, that they do own instagram. I didnt think about that earlier. I was thinking it was significant, but they own instagram anyway and its not the end of social media. Just a difference. The real question is whether snapchat is taken over for teens. The teens will be in that are 20s at some point. Do they stay with snap is that how this happens its kind of like radio stations, right . They can either stay with their pop genre forever and theyre always catering to 20yearolds, or do you grow older with your audience, and always play hard rock like they do in new england. Well so. The electric car generation will create a lot of loser, estimating the populate of these vehicles will they say it could create big issues for maintenance businesses, lenders and also Oil Companies volvo is pressing the gas on under the circumstances allelectric lineup. Phil lebeau has caught up with the north america ceo. Well, remember volvo just a couple months ago said we are planning to go all electric over the next seven years were not going to completely go ahead rid of internal combustion engines, but converting more and more to an electric platform along those lines, the vehicle they are rolling out here in the u. S. Is the xc60 t8 basically a compact version of were theirs most pop you ullr suvs and crossovers. You will get that electric benefit for the first 20 or 30 miles you drive the vehicle. Its all part of pushing the lineup to be more electric and selling 1 million electric vehicles worldwide total by 2025 heres the ceo of volvo north america talking about the greater interest theyre seeing from consumers to buy electric every time, like when we announced two weeks ago we are going for electrified cars by 2019, you instantly see that it sparks an interest the demand is increasing, with the result, by example, that the t8 sold out until early next year thats definitely not something that we expected. It is the kind of buzz that volvo has been looking for go back to 2010. Thats when chinese automaker bought volvo from ford remember volvo was struggling under ford ford was not giving it the money it needed. For jillguiel geely its worked well guess what ford shares have done since they sold volvo . Down 18 . What do you think about this talk about great wall buying jeep there, phil im not surprised look, great wall needs to expand the Chinese Government has told its automakers you need to do more than simply grow sales in country. If you are great wall, and you are making almost exclusively suvs, whats the best brand out there for you to grow globally jeep it has great worldwide brand recognition, barely scratched the surface in terms of expanding those sales beyond north america. You look at europe, the potential there, the middle east, and certainly you look at china. Boy, they really havent done much yet theyre just starting to get going. If youre great wall, you would love to have jeep. If youre sergio marhe said hei the market for a deal for the entire company or potentially jeep or ram or some of the assets from the company. Sergio is always in the mood to talk, but you better make it a formal offer jeep is the crown jewel, the most valuable asset that fee ate chrysler is holding. Theyre not going to sell it for a song they are going to want full value, or if its part of the whole package. Is there an argument. You think the government would step in for any reason remember they did help, by the way, with the rescue of chrysler the first time around. And very focused on chinese acquisitions. You dont make America Great again selling jeep to a chinese company, phil. If youre great wall, its going to take a lot to swallow all of fee at chrysler market cape its larger than great wall, so maybe they take a partial investment they can say we own a part of jeep or fee at chrysler, and if youre the trump administration, what do you say to that . No, cant have part of the company . I would be curious to see a reaction for the trump at mrgz. You know what made me roll my eyes in your report, the Chinese Government wants them to expand overseas that is the essence of china, the topdown is telling all these corporations what theyre going to do and how theyre going to invest overseas or not, depending on the political motives at the moment. Its ridiculous. If you look at the suv market in china, its booming great wall sales were up 44 a lot of that is theyre moving down market into crossover utility vehicles, but its going to hit a saturation point, and for automakers, theyre really killing each other they need to weed that out and to expand. All right phil, thank you. Excellent. If you get a jeep look around i hadnt noticed theyre everywhere not cherokees, jeeps, saharas the i didnt realize until my daughter has one she waves to anyone else who has one. Its like keep your hands on the wheels theyre everywhere everybody has a jeep anyway, to the broader markets joining us is sarah coater. Sarah, ill start with you weve been saying august will be one of the worst months in the recent past for the stock market unless it recovering its going to be up a bit today. Its been up a lot youre focused on a value thats still in certainly areas with individual names lets go over a couple of those that you talked about. Gladly. There are id say the sector thatsing woefully left behind is energy. U. S. Shale companies that are producing, and theyll be producing at 30 to 35 over the next couple years. The share prices assume wti 30 not close to 50. So investors hate them, and so Value Investors love them, because were not leaving fossil fuels anytime see despite what volvo is doing. And cord cutters arent the demise of viacom and other companies. You figure its been overdone . Thats not going to happen either yes cord cutting will continue the pace may slow, but theres some very valuable properties in that company, and mtvs ratings are improving. Comedy central tracks a lot of viewers. That kind of valuable content can be moved to digit at platforms and attract the millennial, and then the paramount studios out of an 11 billion total market cap that means the rest of the business is trading at Something Like four times earnings compared that to the stock market at over 20 times, and theres a bargain there. Its not going out of business, either it generates lots of cash. Investors have become very selective. They like certain stocks and hate the rest. So as Value Investors, its our job to find value and get those stocks with some of them, for example, with high different yields like china mobile thats a fantastic stock over 200 billion market cap you got to like that virage, we had an analyst yesterday that shes not convinced were on a trend up from here. You appear fundamentally whether its the diminishing odds of any progrowth policies, you dont think 118 or thereabouts is the end of the run in the euro well, in keeping with the main event in las vegas this week, we actually think its showing the thats refusing to go down despite a verbal hit from the ucb last week we would probably cant in resistance to fade, but in reality, euro is actually pretty strong we expect it to move lower before it moves much higher again. As you mentioned, it really is a weak dollar story, thats underpinning it. You do expect, after the recent weakness, you expect it to get in another sustained up trend over 120 and beyond . Well, were not expecting 120 until next year. We expectly expect a bit of a correction to 115, but we cant stress how weak the dollar is. The dollars weakness is threefold. We have explained that its pretty much to do with shortterm u. S. Data and what it means for fed policy, maybe this might ease up, but the other two factors, which is what is shown to be a reply wall risk weighing on u. S. Assets, as well as signs of the u. S. Economy topping out in the absence of any progrowth or significant progrowth measures from the white house, both are likely to be headwinds for the dollar in the near term. Thank you viraj, and sarah, thank you. Well be watching. Im not cutting my cord anytime soon. Thank goodness. No, im not i dont we work for a cable company. What are the other screens . Second screen im a Second Screen called New York Post right now. Im glad to see youre reading thats correct but reading page 6 isnt it great. First place to turn. Up next President Trump will make his way to phoenix tonight for a campaignstyle rlleay. Stay tuned youre watching squawk box right here on cnbc hey, ive got the trend analysis. Hey. Hi. Hi. You guys going to the Company Picnic this weekend . Picnics are delightful. Oh, wish we could. But were stuck here catching up on claims. But we just compared historical claims to coverages. But we have those new audits. My natural language api can help us score those by noon. Great. See you guys there. We would not miss it. Watson, you gotta learn how to take a hint. I love to learn. Your bbut as you get older,ing. It naturally begins to change, watson, you gotta learn how to take a hint. Causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. The name to remember. Welcome back to squawk box. This morning President Trump holding a make America Great rally tonight. Joins us is j. C. Watts, a democratic strategist and Purple Strategies cofounder steve mcmahon. Good morning to both of you. What do you expect to hear tonight, as opposed to what we heard last night j. C. Well, i didnt hear much of last night i kind of read some of the reports and some of the assessments that people were given. I dont know i think the president probably goes in and talks about what he wants to do, or whats happened over the last seven months, and, you know, thats not a very good lineup, not a very good menu to give to the American People based on what we have seen when you look at health care, infrastructure, the things that we have talked about getting done, they just hadnt gotten done, and in large part, its due to a lot of unforced errors that the president has made. So i hope that, you know, tonight will be a start of getting him on a path, getting him in a rhythm of working with speaker ryan and majority leader mcconnell to get where we all would like to see us go. Steve, you look at last nights speech, got some good reviews, he stuck to the script, he stayed on the prompter. You have to imagine his team at the white house was happy with that when he does the rallies, oftentimes he doesnt stick to the teleprompter he often adlibs what kind of approach do you think hell take this evening . And what do you think it means so what i think hes probably going to do is go out and have a campaignstyle rally, which is exactly what he should not do. I think j. C. Is right. He doesnt have much to brag about. If i was advising the president , i would tell hem to stay at the white house and bask a bit in the afterglow. I dont say this very often and i probably will regret it, but he sounded a little president ial, partly because he was given the same speech that president obama and george w. Bush have given before him, but he also but the responsible president that every previous president has made theres no winning strategy, but you dont want to be the guy who loses it, and i think trump finally saw that last night. J. C. , you heard that. Youve been critical of the president for him to go out and do a really speech, hes not going to address whats happened in the last seven months hell address what he wants to have happen over the next seven. Even that, you have to have a good understanding of how the process works. You know, america, we elect president s, we dont elect kings. Theres a legislative process thats very ugly, very nasty, its been ugly and nasty for republican president s and democrat president s, so i think until the processings how you get from a to z, i think the president has an interesting understanding of how that all works. When you talk about infrastructure, you talk about taxes, some of the good things that the president wants to do i think if you would work with mitch mcconnell, work with paul ryan, kevin brady and just, you know, kind of understand that its going to be ugly i dont think the tax bill is going to be easy you know, washington dont do washington doesnt do comprehensive well on anything to get a comprehensive tax bill, thats going to be quite a challenge. But nevertheless i look to the old pros if you will in ryan, mcconnell, brady let them navigate it and see if we can get something good. Steve, whats realistic whats possible . Tax bill. I think it will be difficult, given the fact that the democrats yesterday came out with their three principles, one of which is that you cant give a penny to the top 1 , one of which that it has to be deficit neutral and it has to go through regular order. Mitch mcconnell and the republicans that jncht c. Are list there have decided to do the opposite of that its going to be big tax cuts at the top, not paid for. Theyre going to put it through reconciliation so they can jam it with 51 votes if the president is smart he will try, dare i say, a purple strategy, with an infrastructure or something attached to this tax bill that democrats could support. Who is moveable on your team who is moveable right now . I think youve got any blue state or any democratic senator in a republican state is probably susceptible that would be manchin, highcamp, donnelly and others. Mark warner, tim kaine and others would like to do something constructive and positive a lot of people, democrats who believe that the Corporate Tax rate is too high and he has some wiggle room there with democrats and there are also democrats who think we need to invest in infrastructu infrastructure if hes smart and the deal maker he said he was, he could actually get a deal. J. C. , steve, appreciate it. Thank you. Jim cramer live from the New York Stock Exchange. Well get his take on the top stories. New york stock exchange, jim cramer joins us now. We had a long conversation about macys i didnt even want to say the p word, jcpenney, but i got worried. I looked at it at 75 and then down at 19 and i started thinking, man, its just all retailers are tough. But its not going to be another jcpenn jcpenney, is it, jim look, i think he just point blank said look, the dividend not an issue he had Better Things to say about real estate and what hes going to do on the Conference Call he seemed more control of the future in this interview, which i like i felt, as we did last night on mad money, that theres real value here now, obviously, if the Fourth Quarter does become more promotional, thats something that will change the story but i do think that he acquitted himself in a much more positive vain than the Conference Call. It destroyed a lot of value. Macys has this great sort of brand with me. If i need to go to a Department Store i would go to macys jcpenney lost that somehow i wonder if theyre all headed there. No. I dont know the real estate you could argue the real estate and merchandise there is worth almost the whole company the company is valued about 500 million as an ongoing retailer penney does not have that. I agree with you with the existential crisis at penneys. I dont get it. Ross linhnevso interview at 12 30 pm well be right back. Nk to keep their global campus connected. And why a Pro Football Team chose us to deliver fiberenabled broadband to more than 65,000 fans. And why a leading car brand counts on us to keep their Dealer Network streamlined and nimble. Businesses count on communication, and communication counts on centurylink. Taylor swift is back on social media and sent the internet into a frenzy, the pop star posting a cryptic tensecond clip of what appears to be a snake moving back and forth after she completely wiped all her websites, fueling speculation she may be getting ready to release an album. I thought the thing was broken when i was on twitter. You saw this . Yeah. I follow her on twitter. I saw a periscope thing. How many people do you follow i follow a lot of people. You follow none. I follow 100 and try to pair that down when i get above t make sure you see us tomorrow. Squawk on the street is next good Tuesday Morning welcome to squawk on the street. Im Carl Quintanilla with jim cramer at the New York Stock Exchange david faber is off today coming off three straight losses benchmark el