Transcripts For CNBC Squawk On The Street 20160708

Jobs . May and april payroll was revised downward. The june unemployment rises average earnings rise. 1. The biggest month on month. It is very muted considering how much bonds have rallied, considering how the expectations have been completely bled out of the market. This didnt really change the picture yet. I think it will restart the talk, but the burden of proof is really high. This looks like a pretty choppy environment now. That said earlier this morning before the number came out. You said 230 might get us back into a conversation that might be live again, right . Obviously we have two more jobs it has to be ratified by the rest of the economic markets. The fact that the treasure market is basically shrugging its shoulder might tell you the burden of proof is even hire. 147,000, i think those that were worried that may was an anomaly and janet suggested that it was. They got their proof that it was. Not only the snap back from the verizon, a lot in the services seconder, hospitality, financial activities retail was higher, manufacturing isnt doing a whole lot, so a bit lumpy and the 2. 6 wage growth is leaving those wondering whether the increased wage growth is sustainable. Its not the 34 , is it enough to move the needle on the thread . Stocks can be happy with an economy that looks okay and the feds still seem to be on hold. The dollar is stronger as well. But we spoke to vice chairman stan fisher last week he said one of the reasons they paused they were worried about brexit. Is question is is brexit going to have an impact . It is too soon. Lets bring in the david kelly, and lindsay good morning. What is it that seems to be hyper lumpy data . I think you have to look at all of it, the mosaic, on a nonseasonly adjusted employment is up about 60,000, because thats the time of year when employment rises, i dont think we should take one month too seriously. I want to emphasize, look at the decline in the u6 Unemployment Rate. We had a decline on those working part time when they didnt want to. Overall this is strengthening the payroll report. It is a strengthening labor market. Lindsay your take aways, the three month average now at 147. Certainly i agree with david that we shouldnt put too much emphasis on one or two data points but i do not see this in the step of the right direction. Were still in the 150 a significant decline to the nearly 300,000 pace. We should be seeing an Economic Growth when we are discussing whether the fed should remove a further it is still fragile unsolid footing at this point and creating no sense of immediacy for the fed. The Participation Rate did bump up but saw nearly half a million rejoin the one that left the month prior so really a wash, no positive trend there as well. David, seven years into a recovery with all the jobs that have been created are we not expecting a little bit of a slower pace . Absolutely and the key thing is this economy is a healthy tortoise not a sickly hair. If you have 1. 5 growth it is actually a little bit above your normal capacity. The number of discouraged workers fell to its lowest level in nine years. We have im not worried about the pace of job growth slowing down. This is healthy for an economy which is really only capable obvious growing about 1. 5 . Thats what the Federal Reserve should focus on. This actually represents an economy that is heating up. Lindsay you have to admit all of the slack. I was just going to say to davids point if we saw all of the slack being absorbed we would be talking about 34 ps e growth but it is still bouncing around the 2 . We would be talking about much stronger Earnings Growth at this point. Clearly we need to see that, but lindsay you cant deny that some of the Economic Data have been quite positive. We have seen manufacturing rebound a bit. Claims are lower. Taking that all together, i know its not the kind of improvement that you would like to see, but it is bert and it is resilience given the global backdrop. Certainly. We do seem to be taking a small step out of the trough that we fell into but need to see that positive trend sustain. Also into some of the key areas a significant bump upin consumer spending. The fed commented on this several times that the june foc Meeting Minutes we need to see the investment component be positive to top line growth and we havent seen that yet, so certainly youre right. Small steps in the right direction. Guys, let me cut us off there. Its a good conversation one that has to end because of all the other news. Guys, thank you so much. We want to get you the latest on the tragedy in dallas. 12 Police Officers were shot. Five killed after ambushed by snipers. The attack happened last night during a demonstration of black men by police after a man was killed by police in minnesota. Just moments ago police chief david brown urged his community to support the officers. We dont feel much support most days. Lets not make today most days. Please. We need your support. Were going to continue to stay on top of developments throughout the morning. The New York Stock Exchange will hold a moment of silence in about 12 minutes. Donald trump and Hillary Clinton have cancelled their Campaign Stops today. Joining us right from new york city is the ceos, gentlemen thank you for joining us at this important juncture for you both. White wave has long been seen as an acquisition target. How long have you been looking at it and why did you decide to scoop it up now . I think greg and i answered the organic market in the u. S. About 15 years ago, we have had a dialogue about nutrition, healthier ways of eating and drinking for so many years. Greg, as you know the list of sutors has been long, anyone from kellogg, campbells, pepsi, cocacola, what is danone the right fit . Thats a good question, i have no idea if somebody is going to come in with another offer, but it is just an exinventori extraordinary fit for us. Both of our companies i think have a very aligned vision that consumers will increasingly seek healthier more Natural Organic options more sustainable for the people and the planet and we have aligned our companies and portfolios of that against the consumer, but it goes farther than that. We both participate in the same section of the retail store in the refrigerator case. We have similar manufacturing technology, similar footprints so from an industrial perspective the logic is very much a hand and glove fit as it relates to how the businesses actually work, so very much aligned from a physical sof call perspective and how people think about the responsibilities and the consumer and highly aligned from an industrial perspective. David engle. Frankly your shareholders could care less, they want cash as much as they can get. I think it is a pretty darn good multiple but there are some who feel you can do better. Do you think you got the best price you can . What i tell you is i think we do the very best job we could in terms of creating value for our share shareholders. You report orn this every morning. Our board will have an opportunity to maximize for our share hoerholder shareholders. This is a fantastic facility. I think this is a great deal for the balance of our shareholders. You seem to be leaving the door open to the possibility and theres been speculation of course the stock price traded above the actual deal or i should say the deal price, you seem to be leaving the possibility that somebody else could come in. Do you expect is somebody else could in. I dont have any knowledge with respect to what any one else will do, but theres duties in a way to fulfill this structure . We have the same last name, why is 21 times forward a good price to pay even for what is to be fair a Growth Company . I think that gregs point about the industrial logic of this deal is spot on on this, i really believe that danone is positioned to continue the support of white wave. We have 100 years of research. We have an unparalleled presence in the United States as much as in jueurope and other countrieso push the portfolio into our own distribution and this creates a great synergetic deal way beyond the culture and similar vision of the world and greg and myself. It is truly a unique opportunity for shareholders and compelling transition for danones transition. Can you be a little bit more specific, emanuel, in terms of what you see as far as growth for products, plant based yogurt . H. 50 of our sales in emerging countries, white wave is 15 in europe. So the whole world is now open for us. Another example is that there is a barrier between plant based protein and dairy protein and we are removing this barrier and suddenly putting together the research of the two leading Global Companies in that field so that opens a new perspective a wide space for new healthier sustainable products eating and drinking options for our consumers. Greg, thats been such a problem, ever since i joined cnbc it has been one after another, all getting scooped up by these companies that cant figure out where the growth and the consumer is going, how do you figure out how to stay on top of the food trends when it is getting gobbled up by a trend that is a very different culture . I think theres a really big difference between danone and regular food. Emanuels organization just recently announced in the United States for example that their transitioning to a fully nongmo, so all their animals will be fed nongmo feed over the next few years, so thats a very important transition. White wave is the fastest growing, danone the second fastest growing, so this isnt a company that doesnt know how to grow. We have to maintain the spirit to bringing new invasion to the marketplace and stay on the cutting edge of where the consumer is going and i think we are set on this instinct chchul ability to stay on track. There would be a nationwide rule that manufactures would have to display gmo ingredients. Just wondering what you think how costly that would be the change the labels and potentially lose consumers as a result . We decide today extract ourselves from the political debate here. We truly support the just label initiative of my friend gary hershberg and others we made a decision that we would label whatever government or whatever regulations might be by the end of 2017 the presence of gmos in our products and as greg said we are now transitioning our top three brands in the United States, a 1 billion for dannon, oikos into a food supply, so we made that responsibility for ourselves working a partnership of a number of interested partners, academics and of course our farmers to transition thousands of acres into nongmo feed in the next two years so we are now in that debate, running that way and thats one of the aspects of this agreement with white wave really makes sense here in the u. S. For us. Gentlemen, thank you for j n joining us this morning. Thank you, sarah. Thank you. Getting some breaking news on capitol hill. Karl, we are told that the u. S. Capitol is in lockdown because of quote Police Activity in the u. S. Capitol building. No details on what may or may not be happening. Essentially those in that area being told to shelter in place while the Police Pursue whatever is the activity thats questionable at this hour. The buildings are locked down no one being permitted to enter or leave the u. S. Capitol as we speak. Further information as soon as we get it. Well come back to you. Those in the capitol area are basically being told to shelter in place in their offices or wherever they are. Again, very sketchy details but at this hour the u. S. Capitol is in lockdown. Hampton, well be coming back to you for more details on that. In about 40 seconds the New York Stock Exchange will hole a moment of silence in memory of the Police Officers killed in the line of duty. Four officerers killed, two shot, two civilians. The chief hoff poliof police in about an unprecedented attack. Some say it is the deadlyest attack on Law Enforcement since 911. 911. Here is that moment of great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Free market looks solid as the jobs number comes in way above expectations 287 versus a 16 estimate. The question is the bar over which it will take the o move the bond market which doesnt appear to be moving right now. The bond market anchored globally with rates below zero, i guess the fed was so emphatic by saying things have tru structurally changed that were not going to change and the fed sidelined for a moment. The oil is going higher. Remember we startsed the week under some heavy selling pressure this took down energy and financials, i guess bonds are going to be key, not on just the tenyear, but bigger in the twoyear, a flatter curve which is a signal that economic weakness or recession is coming. Some people say you cant interpret it that way that its a reflection of whats happening globally, but even better jobs report were continuing to see that. Some movers like mcdonalds and southwest and gap. More details on the u. S. Capitol which remains on lockdown when the opening bell rings in about five minutes. Youre watching cnbc squawk on the street. The opening bell in just about 90 seconds on a day where we are paying close attention to the assault on police in dallas but also the june payroll number which was a big surprise on the upside ahead of 175, biggest number since 89. We will see how long it can remain above the 18k18k. If you look at the eurostock, still trying to figure out what the brexit vote is going to mean for the Economic Growth and the by tri british pound is a little bit stronger and seems like the european stocks are taking queue from that. Helping at italys banks, thats been a problem spot, so i think that gichs you a little bit of move. Looks like a little bit of a lift at least a hope for yields to come up a bit. Meanwhile the president remains in warsaw at the beginning of this twoday nato summit. Some questions about whether or not he would come home early in light of whats happen ang in baton rouge, and minnesota and now of course dallas. Lets get a look at the opening bell on the big board it is kellogg celebrating the launch of its cereal cafe in times square and over at the nasdaq the Cancer Research foundation marking its 40th anniversary. Have you been seen the cereal cafe . No, i have not. I know they have a big bet. Theyre the Largest Consumer Company Exposed to cereal which has been in a long term decline, so trying to add some enthusiasm. I dont know if it works. I still like cereal. The stock up 30 , 14 year to date and checks off all the boxes, boring, decent dividends but then have some mna. And paying close attention to et na david as ill wait for someone were having some technical difficulties. But yeah, some reports about the department of justice and their deal in terms of et na purchase of that and further consolidation underway potentially in the hmo sector with cigna and anthems purchase of cigna. We should hear something in the not too distant future about there is an expectation that we will at least know what the investiture package, what the is posture for doj in terms of anthem and cigna and you saw the price just get crushed yesterday. These arent reports, arent always definitive and these things can be it is the particulars that are of great importance. Will be interesting to see if there is opposition and in particular to the anthemcigna deal. They will go to court but will they go to court as a unified entity because there has been infighting between anthem and cigna in terms of the executives there. Its been reported that the ceo of cigna would want to get rid of the whole thing. The analysts have been out with a lot of these things that say deal or no deal trying to make it look attractive. The industry isnt broken if these doing happen but just a tremendous over hahanoverhang. Human na showed you one of te more likely of the two though being seen in the same frame work, more likely of the two. The dow as recovered every single brexit point. Prebrexit we were 18. 011 and i wonder if thats happening on hopes of an evetch actual rise . Its pulling it back from when you might get that next hike rate. You see the Consumer Finance stocks, sync rorony financial. Gap is getting good news. Up 2 . Analysts were looking for a decline. Old navy was the bright spot, looks like a 5 increase. They have been closing stores, laying off workers, but potentially good news and you can see it is up 3. 5 . I dont think people are panicked about rates shooting higher, but you have profits and people are looking to sell some. Darker note. Smith and wesson. Stocks get higher, swhc was close to an alltime high getting back 30 or above but clearly gun makers in this country are facing increased demand. We have seen it in the results as it seems to be this massive rush to buy these guns every time things happen on fear theres going to be legislation even though there never is. It creates this headline that maybe theres going to be a momentum and therefore pulling demand over it for a while now. It has worked. Brexit levels within s p between a point or two. Nonfarm payroll up blows away the expectation. Joining us thomas perez joins us from outside the labor department. Good morning, mr. Secretary. Always good to be with you. The market is a little confused. What is it supposed to believe . I think there are two take aways from todays report. Number one, were a very resilient economy. You see it in the report. Broad based growth across so many sectors and it is really important when you have a lower than expected month as we had last month not to you know jump to conclusions. I read some of the things last month the economy is at a standstill, things of that nature. We are moving in the right direction and continue to move in the right direction. We have had 14. 8 million jobs created over the last five or six years or so and eight months since 2011 when we were urpd 100,000 and the following month we saw a bounce back a little over 100,000, this was the best bounceback we have seen. One month is not a trend. Last month the calamity hollers that said it was a trend, this is a better than expected month. Im always impressed by the resilience of the economy and what we are seeing is an economy moving in the right direction. Wage growth 2. 6 . The overall number of jobs gained in 2016 wont be as much as 2015, thats to be expected because as you get closer and closer to full employment the pace of job growth goes up, but there is a tradeoff. I wonder, mr. Secretary if you are worried at all or the impact of the brexit vote in this country Going Forward . The data that we collected last month for this report occurred before the brexit vote. At the same time, as you krae correctly pointed out a couple of minutes ago the dow has now regained all of what it lost after the brexit vote. S with a resilient economy. We have with stood global head winds. Im heading off to china with labor ministers of the g 20g20. People ask me the same question, how do we replicate what youre doing in the United States, your resilien resiliency . How do we continue to grow in the face of these head winwinds brexit has happened and the economy has with stood it and im confident we will move forward as well. It seems to follow a pattern of a soft patch of job growth in the winter months at least as the data shows it. It has been several years now where it seems to be taking hold. Is there anything to look at to make sure the seasonal factors might be smoothed out or just kind of the nature of the growth of a slow economy . Youre right, i recall the beginning of 2015 was a slow stretch and in part it was because the northeast had a horrible stretch of weather and it is hard to go out and finish the construction project when it is 20 below, hard to go out and buy something when you cant get out of your driveway. Are there broader collection issues that we need to look at . But i think youre seeing these things tend to work themselves out apnd what we saw this month was a recovery from last month and last month we lost jobs as a result of the verizon strike. You have seen that bounce back in its entirety as we expected but well continue to look at that issue and to the extent that past is prologue and not always prologue for the second half of 2016 because the second half of 2015 was better than the first half. The second half of 2014 was better than the first half, and you know, were seeing some good trend data right now although again, yoi dont want to jump t conclusions i fully expect next month were not going to be at 287,000 jobs. Why not . Well, you never get too giddy in this job. You dont start calamity hauling as so many folks did last month. You look at the trend data and it is remarkably solid this year and last year. The pace of job growth is growing, the pace of wage growth is going up in 2016 relative to 2015, thats what happens when your economy is moving toward full employment. We still have slack and work to do but as we move forward over the remainder of 2016 i fully expect we wont reach 2015 numbers but im not surprised by that because again where we are in our recovery and were going to continue to monitor the wage growth and im haerpteeartenned the wage growth has gone up. Thats the tradeoff you tend to see when we are at the point in the recovery where were at. The closer you get to the summit of a mountain the shorter the steps are to take. The rates 4. 9 and thats how ever recovery has been. Finally does the last two months put more pressure on you to either change the methodology of collection, outsource it to get a better feel of what is actually happening in this country . I have one thousand percent confidence in our bureau of labor statistics, there are certain conspiracy theorists say the books are cooked. I think our bureau labor of statistics is a remarkably professional and independent outfit an when we have 38,000 jobs, their methodology is solid when we have 287,000 jobs their methodology is as equally as strong, and that is because our Data Collection processes are so strong. We are headed into an election in a few months and thats what makes this year different than the second half of last year. Are you expecting at all for the uncertainty especially around some of the big Business Issues to weigh at all on the economy this year . I think you look at the economy and where we have been, 14. 8 million jobs. Let me put it differently. If you had said to former Speaker Boehner, Speaker Boehner in 2016 heading into an election assume for the moment that you were the head of the executive branch and you now have an economy that used to have an Unemployment Rate of 10 now at 4. 8 . You have had Something Like 69 months in a row of job growth and you you have 70 weeks in a row for first time claims under 100,000 would you take that heading into an election cycle . He and anyone elsester administ truth serum would take it. He inherited a mess and throughout the way we have gotten virtually no help from republicans in congress. Those are the facts. Mr. Secretary thank you for joining us. Joining us outside of labor in washington d. C. Lets get an update with jacob. The latest on the ground is from a press conference at the chief of police and the mayor held. They gave some insight of the motive of the shooter and shooters. The Dallas Police chief said this morning he believed there were four sheerts wiooters with and now he said before the suspect who was cornered and killed and spoke with police said he wasnt affiliated with anyone or any group but that he was upset with the recent Police Shootings and that he hated white people and wanted to kill white people especially white officers. So the chief of police suggested that this shooter had some knowledge of the protest route because he started to shoot right at the end of the protest mark at the exact location where a lot of the officers would have been there together. So the chief of police and the mayor saying they dont want to talk more about the suspects because they dont want to compromise their investigation, so were left wondering still if there were four shooters in fact because we know three people are in custody or if this person acted alone, but remember he shot 14 people, 12 officers, five of them killed and two civilians. Most of the injureda civilians are expected to survive. I want top show you the s p futures, we popped about 10 points, bond yields rose and then fell again. Germany rallied almost 1 percent. Europe was already up prior to the farm report. But right near if highs for the day. Goldman, jp morgan up, str industrial doing well. While we had a lot of volatility this week, much of it is a wash, health care has done a little bit better. Staples, energy and tell cons have reversed after recent gains here. Post brexit put in that friday here, you recollect see while the s p hasnt changed but bonds are not new lows, gold at a new year high, and european bankis s down 19 . The vics down this morning. What was when job gains are over 100,000 . Believe it or not it has only happened twice in 2009 and 2012, we asked our friends what happens, unfortunately its undeterminate. Call that a wash, no clear pattern to what happens when we get these big outside job gains. Right now the dow up 144 points. Lets get the job reaction. Good morning, rick. Reporter good morning. We went from the weakest to to strongest to october of 2015, how did that fan through the markets . Twoyear yields popped on the number an they stuck. Were at 63. Go to the other end of the curve, the 30year bond popped up to 217. More curve flattening. If we look at specifically the ten year we moved up to 144 in terms to have yield curve this has been a constant look at oneweek charts and it flattened even more. Lets go to twoday dollar indesk it was i index. Finally the pound dollar soon after the brexit we were close to 150, were still really no relief in sight but it has been orderly and im sure it will create more orders on the export site for the economy. Thank you. As we get ready to enter earning season, yes, it is almost here, how should you play the banks . The dow up to 114. 186. The dow 30 the safeties under performing like j and j, American Express leading the charge. The s p within 1 now of an alltime high. Alltime high. Back in a minute. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Dow is up 148. Gap surging almost 7 . The expectation was down primarily 3. It did see declines in namesake bra brand. The gap results were better in may and june after a bat start the year. And the fact that old navy was the out performer. Coming back, january hatzius joins us. Dow is up forei146. Good friday morning well come back to squawk on the street. Take a look at the markets dow rallying hard on this surprisingly good jobs number at 148. S p, nasdaq and dow have all wiped out the brexit votes. Ten points 4 billion deal of the producer white wave. We talk to the cnbc exclusive. And in dallas, five officers have been killed. Seven others wounded after a sniper ambush and lets get to it. Our very own sue herera joins us. Dallas is in shock after one or more gunmen shot and killed Police Officers and civilians, over shootings of black mens in other states. A fourth suspect died after police used quote a explosive to blast him out. He said he wanted to kill white people especially Police Officers. The suspect said he was upset about black lives matter. He said he was upset about the recent Police Shootings. The suspect said he was upset at white people. The suspect stated he wanted to kill white people especially white officers. Police officers in dallas honored fallen comrades and formed honor lines and saluted as each dead officer was in route to the medical Examiners Office and theres a moment of silence at the New York Stock Exchange, it is the deadly attack on Law Enforcement since 911. Well have updates throughout the day and as the situation warrants. Back to you. Sue, thank you for that. With the jobs number crushing expectations a it is economy adds 287,000 jobs. Steve leaseman joins us more to talk about what we saw. We are concentrating it. Very few economists believe the surprising strength of the june jobs report, theres agreement that job growth not as strong as the 287,000 reported. Here are the numbers everyone is talking about 287 up on nonfarm payrolls. Revises up in april for a net of minus 6,000. The huge june nfp nonfarm payroll number exaggerates the seventh of strength but under mines the may payroll view of significant deceleration of a much weaker market. Chill out, average it out. The threemonth average of job growth grow to 147,000. Above the 114 average of last month. Take a look here, leisure hospital up nearly 60,000. Information technology up 44,000. Retail up 30,000. Temporary help which had been down seen as a negative leading indicator now back up 15,000 and manufacturing surprising strength unemployment up 15,000. We talk about the impact on the fed. He says i think it Means Nothing for them as a 33 month average job gain doesnt mean an overall slowing jobs trend. Well have to wait to see whatever hit the european and u. S. Economy takes from the brexit votes and guys, that could take months before they would consider an additional hike rate. I think we can still take the summer off. I dont know what you were planning to do. Steve, thanks. For more on the jobs number. We have the chief economist over at goldman sax. Good morning to you. Good morning. Your reaction to june and what explains may if we were to believe june . I think it is one of those outlying months if you take the threemonth average just under 150,000. It might under state the trend a little bit because april and made probably had some payback for very warm winter but broadly speaking was still many the mid to high 100s and absolutely not take this 287,000 at face value. So how do we take of what we should expect from the economy at this stage, is it about as good as you would expect it to be or is there an acceleration on the way . No, i think we are above the rate at what should keep it stable. We estimate 185,000. We are seeing that in the general unemployment numbers. We are seeing broader numbers of measures of yutilizesation. We think there was probably some calendar effects in there seasonal adjustment distortions and longer term trend is toward gara gradual acceleration. Were probably very close moving toward growth and we are seeing signs of stronger wage growth. Is it confusing, because not only do jobs look better which was one of the concerns at the last meeting but the impact of brexit we dont know theres still uncertainty how it plays out but the market has recovered all of them but yet barely budge ds. Are they under pricing it . We think they probably are under pricing it. We have a 25 probability of a hike at the september meeting. We dont think it is going to happen but it is possible and then 40 for the december meeting which basically means about twothirds probability we will see a hike throughout the year. That is the main scenario that well get back to higher rates but the alternative that we find there is a bigger shock, we dont think so, we dont think brexit is a bigger shot but especially if theres more spill over into the european political system as many have worried. We ask it every time but how is an economy producing 287,000 jobs per month with Unemployment Rate below 5 still not producing the recovery type wage gains that we need to see . Well, i think the pace of wage growth depends mainly on where you are relative to full employment. We have had a long period during which there was a lot of slack in the labor market. Probably still a little bit left and so 2. 8 which is our estimate of the pace of wage growth based on a range of indicators thats not too far away from where we would expect to be just underneath for employment. I dont think its that puzzling. It was probably more puzzling a year ago. We were under shooting based on slack at the time but theres been a decent deacceleration. Do you think this is about as good we can expect nearing full employment . What is the wage Growth Market over the next 12 months . It is not quite there. A normal rate would probably be 3 or a little more just based on a 2 inflation target and productively growth for the whole economy thats probably not much above one. If you add those two numbers that probably gives you a reasonable first pass at where it should be at a fully employed economy. We still have some upside. Finally we asked secretary perez about bls methodology, he defends it. How much stock do you put in it these days . No number is perfect. No economic number is perfect. We do have the luxury in the u. S. That in general we have fairly high quality numbers especially on the labor market by international comparison. Theyre released relatively early and i think theyre generally quite good but you definitely need the average, need to look not just at a number of months but actually several different indicators to get the most reliable picture, but thats true in any kind of sophisticated life, but overall it is a pretty positive picture in terms of the amount of information we have. Its definitely the information we have got. Thank you so much for joining us from far away john dasious. Jacob ras cone with nbc news. Reporter we have learned recently our Investigative Unit has been working that a significant number of u. S. Police departments have now ordered twoman patrols since the attacks. Often times Police Officers go alone in their patrol cars but since this attack to have this new order is very significant. This is also significant in the context of the president ial election and of the conventions coming up. For example for the Cleveland Convention which we have been monitoring how the police have been responding, their plan has been to be very low profile the entire premise of how they were going to approach the protesters tens of thousands expected were going to show up in uniforms even if their biking shorts with short sleeves. It is going to be hot outside of course and we have heard a lot of that talk. It will be interesting Going Forward of course whether happened here, this ambush style attack and even an assassination will change the minds of Police Departments around the country and the protestst and especially with the Donald Trump Convention moving forward. Jacob, thank you very much. Coming up white wave agreeing to be acquired by danone. We spoke with the ceos. Much more on that ahead. Stay with us. French yogurt and danone agreeing to buy white wave. This morning we spoke with both of the companys ceos, here is white wave ceo greg enles first. I have no idea if somebody else is going to come in with another offer but danone is an extraordinary fit for us, an extraordinary partner, so i think it begins with our outlook on food and where the consumer is going and both companies have a very aligned vision that the consumers will ingreecingly seek healthier more organic options sustainable for the people and the planet and we have aligned both of our companies and portfolios against the consumer. We both participate very much in the same section of the retail store in the refrigeratored case. We have similar manufacturing technology, similar footprints so from an industrial perspective we are very much a hand and glove fit. We have the same last name. Why is 21 times forward a good price to pay even what is to be fair a Growth Company . Well, i think that gregs point about the industrial logic of this deal is spot on on this, i really believe that danone is uniquely positioned to continue the support of white wave. We have 100 years of research on the fermentation of dairy globally and we have a presence here in the United States and in ju europe and other countries to push the white wave portfolio into distribution and this generates a perspective way beyond the culture and the vision for the two companies and greg and myself, so which is what this represents a truly unique opportunity for white wave. A compelling traction, this is really an investment were making for the long term and im happy that your shareholders are aligned with this as we move forward. Can you be more specific as what you see for Growth Opportunities for white wave . Are we going to see plant based yogurt . Danone we interrupt that to take you to the house speaker. Our hearts are with the Dallas Police department, with the victims, especially with their loved ones. They wear the badge, too. I know that to be a cops wife for a cops husband is to prepare for the worst, but who could have fathomed such horror as this . Theres no cause or context in which this violence, this kind of terror is justified. None at all. There will be a temptation to let our anger harden our divisions. Lets not let that happen. Theres going to be a temptation to let our anger send us further into our corners. Lets not let that happen. That script is just too easy to write. It is too predictable. Lets defy those predictions. A few perpetrators of evil do not represent us or control us. The lives that committed these vicious affects and no one else and as the president rightfully said, justice will be done. We also have to let the healing be done as well. This has been a long week for our country. Its been a long month f america. We have seen terrible, terrible senseless things. Every member of this body, every republican an every democrat wants to see less gun violence. Every member of this body wants a world in which people feel safe regardless of the color of their skin. And thats not how people are feeling these days. Sometimes we disagree on how to get there. Sometimes we disagree passionately on how to get there. But, in having this debate, lets not lose sight of the values that unite us. Lets not lose sight in our common humanity. The values that brought those protesters to the streets in dallas. The values that brought the protesters to the streets in washington last night. Respect, decency, compassion, humanity, if we lose those fundamental things, whats left . We need to take a moment here for reflection, for thought, for prayer, for justice, for action. Right now lets let justice be done and lets also let some healing occur too. I yield. Gentleman yields. That is speaker ryan. This has been a long week for our country, he says its been a long month for america. Were back after our break. It is one year to the day when that glitch froze trading here at the New York Stock Exchange do you remember that . Bob joins us here the talk about it. It was a halt due to what the exchange called an internal technical issue. While we were in commercial break traders here at the nyc in really one moment just said whoa as a group. Scotty pull up here on the screen. Essentially the trading has been frozen. Normally there are quotes on all of these stocks. You see no quotation here, essentially we are not getting any data coming in and no trading going on. The nyc quickly said it was not a cyberattack, it was ultimately determined that the problem was caused by a Software Upgrade that forced traders to other exchanges. There were promises that changes would be made. Do we need to change our protocols . Absolutely we cant put ourselves in that position again. What those changes are, im not prepared to say. They have made changes. Earlier this year they began rolling out something called nyse pillar and provides enlanced resiliency to the system. It provides each other with closing auction redundancy, that means they can both back each other up at the close if one of them is down. The good news is this highlighted the relative resiliency of the rest of the system. They were ordered to other venues and also the trading system, while it is often criticized while having too many exchanges, too many dark polls and theres some truth to that, in this case it showed in one Major Trading venues went down one other stepped in to fill in. Still highlights the constant need for upgrades. It was one of a series of disruption from both marks and i think yieptunited airlines had problems. This market has been stress tested in realtime when the markets and the selloffs. Thanks bob. Huge payroll gains in june. That massively topping analysts expectations. We will get art cash icashins next. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Good morning everyone. Im sue herrera. Dallas is in morning after one or more gunmen shot and killed five Police Officers and wounded seven during a peaceful protest over fatal shootings of black males in two other states. President obama attending the nato summit in poland condition demi condemning the attacks. We stand united with the people and the Police Department in dallas. The lockdown at the u. S. Capitol has now been lifted. Police ordered the lockdown this morning because of Police Activity in the area. A router they were looking for a woman. It is not clear whether they found the woman. Unpredictable threats and complex challenge as, the summit is likely to be dominated by britains decision to leave the european you kn european you knowian heavy rains caused series damage to parts of highways in china. Back to you, karl. Jobs number way above estimates stocks seeing a 1 day. Lets bring in floor operations for ubs art cashins, good morning. Good morning. It is a trial separation. The oil was stronger this morning and i think it helped contribute to the rally that has just recently weakenned. They are toying with the 45 level. If it gets below 45 i think you will see negative pressure from the stocks. Fall out pressure from the stocks, what is it . Two months in a row look like a random Number Generator as our mutual friend suggests everybody is now averaging out and the twomonth average is not an awful a lot of growth. The threemonth is not a heck of a lot better. So i think you are going to have the wait for other Economic Data to see if it is going to collaborate whats going on. Art, the bond market is not really budging on this too much despite the fact that it seemed very over bought, this doesnt change the macrostory too much . It was almost a goldy locks number. I want shows that the economy is not slipping into recession and therefore you dont worry about the faults or anything along those lines and at the same time nowhere Strong Enough to get the fed back in. Everybody is talking september or december and ive said all along never as far as this year goes and i think with the anomalies to have election coming up, i dont see anywhere near september and then december you will have a new president and a new administration coming in and thats kind of a wildcard too, so i still think theyre off the board. How do you interpret the pretty overwhelmingly response from the stock market. Financials and Consumer Discretionary are in the lead, is this some beaten up sectors or a different read than the bond market . No, as i said it was a goldy locks number on one front and the one that the stock plarmark buying into is were not slipping into a recession and even though theres concern about the earnings session, well take a look at that shortly, theres a little celebratory 2016 comes to mind because the analysts argued the reach for field had gone far enough. Has it . Tell me whats going to happen in europe and i will tell you better. It has got to some stunning levels. You have had several cnbc contributors have been excellent on this, mark grant and a few others, then theres a feeling that the tenyear could actually get down to 1 and im not a full skeptic on that. Really . But you dont i dont hear conviction on that point . No, and the other thing that youre beginning to see for example is the Property Funds particularly in london where they had to stop redeeming them because people were moving ahead and then you saw kind of an associative reaction to that while theyre not anywhere near the same thing, it is oh, theyre invested in property . Well, those guys are invested in property, too. Soeasy. Snoop down more than 30 after a political trial on hold. Sno thats why they put the trial on hold an does put a lot of concern about the possibility for that drug. Some of the other names that are impacted like this. I dont know if we have a chart for kite. Pharmaceuticals does a same type of treatment approach. Kite one of the smaller by yo te bionames. It is modestly higher on the day. This does not impact things with juno. And the sector is shaking off the news. If you take a look at the index, it is up about half a percent at this our as we are seeing an overall recovery in stocks at the nasdaq. Thank you very much. Financials actually leading the charge higher here after that bigs jobs number in june. Jp morgan getting ready to kick off earnings season next week, but well speak with someone cutting the earnings on nearly 90 of the banks and we have an exclusive interview with mic microsoft ceu, the dow is up 164. Well be right back. Director of research. And what Interest Rates whats the fed going to do to help banks get that Interest Rate spread back. Do you think anything changes with this number on that regard . Were going into next week with earnings with a depressed yield curve. Thats going to be tough as they start to talk about what that means Going Forward. You talked about your estimates going out into 2017. You feel as if businesses right now have no way out of this trap. The good news is were not in japan where the yield curve is negative. Net interest margins will be under pressure. Theres a little bit of a good news though. There is some offsets. Mortgage business should be good and we raise this estimate for wells fargo and this jobs report coupled with low rates means that credit should stay good Going Forward. You talk about the mortgage bases being good. Story about how the banks are not actually lowering their Mortgage Rates tick for tick with the way the ten year yield is going down trying to preserve some kind of spread for themselves. Is that something that should work overtime or is that going to move the needle . Theyre all going to chase after these mortgages at some point but we have to expect that that spread is going to narrow. Especially with the competition and remember when we go back to the issue of credit were not seeing credit spread wide so as a result folks waiting another few weeks or a month will get very good rates on mortgages. We have seen a number of u. S. Investment bank banks voicing their support for london as we try to figure out whether london with remain a Financial Capital of the world. Clearly that passporting issue is going to be key. How much of a distraction or disruption to business is this for the big banks and their ceos that are out front on this issue. Its certainly a distraction. Theres so no unknowns. We dont know when or where or how this is going to play itself out. The near term effect is not much but the freezing up of the Property Investments in london show you that people are going to sit on the sidelines and see how things shake out and get some decisions. The big issue in europe and what i would consider one of the bigger political mistakes was the italians using this as a time to try to get a bailout of their banks. Thats creating crisis in the southern european banks. What else will we be looking for in the numbers reporting next week . Stabilizing in the quarter. What are the things were going to focus on . Certainly from the First Quarter well see improvement and however and a lot of it should be fine and the adjustments are coming in from analysts such as ourselves. Its going to be on the discussion moving forward. We have a good number in the u. S. But theres still a lot of concerns about global growth. Where does it leave you in regard to the stocks . A lot of the premium has been taken out of the stock. Its underperformed recently. Is that what the call is . Well, its valuation but also a big bank that always has been an area of safety in an uncertain world. You think wells fargo offers investors that and we think well see better than expected performance on a Net Interest Margin because of the ge deal and that Mortgage Business should create a bit of a backdrop for a positive view on wells fargo. We like wells fargo as we go forward. But jp morgan also. What you have to do today is look for the best performing banks and thats the place to stay. We got the stress test results and learned the plans. How does that distinguish it for you . The u. S. Is the place to be because were a Better Capital deployment as well as a better Interest Rate environment. Number two, i think you want to be in those banks that have the best opportunities and again we look at it. Thank you very much. Thanks. Great to be on. Lets send it over to john fort with whats coming up on squawk alley. Good morning. Well, were going to continue following the impact of the jobs number. Were up about 1 on all the major indices. Also going to talk twitter and streaming. Theyre after more sports deals. Is this really working for twitter . All that and more coming up on squawk alley. The dow is up 170. Now within half a percent of a record. Its the high of may of last year so we haven bumping up in that zone for awhile t. Vix below 14. Thats as long as it has gotten for several months. Pretty much shows brexit like the jobs reporter out of the way. Markets have a high and vix at a low. Some what expected storms. We have earnings upon us. Financials are the leading group and retail is having a nice session. Gap at the top of the list with the better june results and overall maybe a sense of relief. Yeah, Consumer Discretionary financial is a little bit more of a growth story. And that three months average of 147 jobs. Well continue digest it. All day long. Now over to you for squawk alley. Good morning, first for our top story of the morning and this mornings breaking news out of dallas, sue herrera is in the newsroom with more. One or more gunmen shot and killed five Police Officers and wounded several others during a protest over fatal Police Shootings in other states. It appears to be the deadly yesterday for us l forcement since the 2011 terrorist attacks. Th ds polic chief s dead suspect is now identified as 25yearold dallas area resident micah xavier johnson. He was upset about recent shootings and wanted to kill whites, especially white officers. The suspect