Attempt to quell protests, she said the controversial extradition bill that sparked the demonstrations is, quote, dead lam said there is no plan to restart the legislation and earlier work to amend the bill has been a failure lam suspended the bill but protests continued with calls for it to be withdrawn completely lam did not say that she is officially withdrawing the bill. She said the bill is in the coffin, the bill is dead and no one needs to worry that there will be any tactics to resume the bill in the lenggislative council term Richard BransonsSpace Tourism company now planning to go public. That is according to a wall street journal report it will list shares as part of the deal with social capital company, spac. Weve talked about it in the past it was created by a friend of squawk box, spac will invest 800 million in Virgin Galactic, it will get a 49 stake. The stock market listing is expected to take place later this year. Virgin galactic so far sold 600 tickets to space at a quarter of a Million Dollars a piece. They took its first flight with a test passenger in february chamath and richard will be joining us live at 7 00 a. M. Have you ever done a crowd funding type thing no, im a crowd funding virgin do you know allow to how to t nope. Andrew has stated many times that he would like do this to do what . To go to space you want to crowd fund your own journey to space sxwli wa i want to crowd fund andrews journey. Does he want to go to space he said he would. He is nervous on flights, but face hes fine my idea, and ill talk to them about it, for me, cant we do like a realistic imax type of experience you know how they have the seats that move around and you are surrounded by do that for me and im fine and i can leave, still be home in my bed. Like space mountain except better exactly seriously, that the point, would you be more inclined to real or virtual experience . Virtual experience yeah. What would you do, are you going to be i would wait for a couple missions to go forth without me. So how much of this is these guys well talk to richard today. And you got the other guy, elon and bezos, and they all want to why cant they just do cars, why futurist space stuff you know, a couple years ago prior to the killing of khashoggi, Richard Branson was in talks with the Saudi Public Investment Fund for a billion dollars. That fell apart because of khashoggi. And so then the need for capital arose. So it will be interesting to see how exactly the deal came about after that unwinding of the saudi deal this is more commercial Space Tourism as opposed to for the good of mankind were going to mars tourism, a lot to how is the food you can come back and say you did it have you ever had that astronaut ice cream . Exactly and other stuff that floats around accidentally. I dont know i remember john glenn, watching his face and the g forces and will he come back. And this guy is the bravest guy in the world and i guess it has changed a little looks like that we have pepsi earnings crossing the tape a buck 54. Versus consensus of 1. 50 pepsi up 20 , double the gains of its rival cocacola 50 of pepsis revenue is a fritolay snack portfolio, so more diversified stream of revenues here. Immediately were seeing just can a tiny flaks higher in shares of pepsi. But on the eps side, it looks like a beat. Higher in shares of pepsi. But on the eps side, it looks like a beat. R higher in shares of pepsi but on the eps side, it looks like a beat. A higher in shares of pepsi but on the eps side, it looks like a beat. Laks higher in shares of pepsi. But on the eps side, it looks like a beat. Raction higher in shares of pepsi. But on the eps side, it looks like a beat. Gar nrett nelson is joining. Youve had 10 seconds to look at this what is your feelings about the numbers . Thanks for having me. Looks like about three cents ahead of consensus pretty solid quarter i think pepsi has a pretty strong track record of beating earnings they have beat now eight of the last nine quarters so maybe agtsz disap pointment that they didnt do better than 1. 54 because they have been so conservative with their guidance also it looks like they have maintained their 2019 eps guidance of 5. 50. That is about a 3 drop in earnings from last year. The stock has done very well year to date pepsi is pepsico is up about 20 which is more than double what coke shares are up. And it is really 2020, 2021, 2022 story at this point obviously investors arent buying the stocks with the 3 drop in earnings this year but looking out two or three years, we think this is a company that could earn north of 7 a share and there has really been a lot of fun inflows into names with higher yield pepsi is yielding close to 3. And so we like the stock here. But the quarter, you know, a little bit better than expected. Looks like the top line was about in line with expectations. Im being told 26 milli26 mn ahead. But revenue came in 26 million ahead of consensus but organic Revenue Growth was 4. 5 which that is pretty good i guess, isnt it, if you factor out everything it is pretty good last quarter they did 5 organic Revenue Growth so it is down a little bit from the growth rate of last quarter. Fritolay has been a very solid contributor to both top and bottom line growth pepsi derives about 50 of total revenue from snacks and foods at this point and so it looks like fritolay had another solid quarter. And then the beverages business is still very solid, particularly in emerging markets like latin america and asia, middle east, africa. How do you interpret pepsi not raising full year guide even though it beats for this quarter by three or four cents depending on what consensus estimate that you use . Are they just being conservative or leaving leeway for the back half we think they are you could get an upward revision next quarter but for now, it looks like they are just being tariff wiconserve so if you were running pepsi, five year plan, do you want to innovate and just as far as efficiencies go, do you make new snacks for people like me that need a low carb something that ends in tos like cheetos, free free toe fritos would you go into cannabis, cbd, what should it looks like in five years so we think that is why the shares are up so much here to date there is a lot of excitement, they have a new chairman and ceo who took the reins last fall from someone who had been there 12 years b pled hes pledged to make the company faster, stronger and better. He is shifting their portfolio towards healthier food and beverages, snacks, and there is an expectation that growth will be more robust under his leadership and also that they will be more generous in returning cash to shareholders one of the first things they did after he took the reins was they announced a plan to reprurchase 50 more stock this year so i think that you are looking at more generous cash returns to shareholders under his leadership buybacks about 3 billion in 2019 all right. Garrett, thank you thank you stock trades 23 times forward earnings i was looking at that so taken up with all the yield stocks, all the high quality steady names and the fact that it is kind of holding these levels on these numbers shows that it wasnt just a quick sell the news even though yields are a little bit higher so you have to watch that dynamic. Coming up, it is a big week for the fed. Jay powell set to testify in Congress Tomorrow and thursday well get you ready. And we have a big interview coming your way from the Nations Capital later this morning, kelly evans is sitting down with larry kudlow well take you there live at 8 00 and take a look at the biggest premarket winners and losers in the dow. Moving is hard. No kidding. But moving your internet and tv . Thats easy. Easy . easy . Easy. Because now xfinity lets you transfer your Service Online in just about a minute with a few simple steps. Really . Really. That was easy. Yup. Plus, with twohour appointment windows, its all on your schedule. Awesome. Now all you have to do is move. That thing. [ sigh ] introducing an easier way to move with xfinity. Its just another way were working to make your life simple, easy, awesome. Go to xfinity. Com moving to get started. Fed chair jay powell begins two days of congressional testimony tomorrow morning joining us to to discuss, phil orlando from federated investors. Good morning julian, 3,000 is your call for the s p 500 and two rate cuts. So what are you looking for out of jay powells testimony . Jay powell will likely disappoint the market. It is quite frankly amazing to us how three months ago he our call for two rate cuts was looked at with extreme skepticism and now the market is look for almost three by the end of the year and four by the middle of next year. That is too far in our opinion this is not about an economy that is going to go into recession. This is about taking insurance to make sure that the growth path is maintained phil, you have two concerns for the markets. China trade deal, that that didnt happen, and the fed screws up Monetary Policy. So what does that mean screwing up Monetary Policy, not cutting or cutting too much . What is the risk i think julian hit the nail on the proverbial head the core pc number a week or so ago was better than expected results of the g20 better than expected nonfa nonfarm payroll numbers better than expected. If im jay powell, id let the market down easy and let them know that it is not a slam dunk that im going to cut 50 basis points on july 1 i may not cut at all there are other things that they need to look at over the course of the next few weeks. If the data is strong, the fed may push it out to mid september and the market may be disappointed is two days of softness after we got an alltime high kind of accounting for this a bit . Were seeing yields drift up a bit. Maybe were taking a little bit of the certainty as you say for very aggressive rate cuts, but wou in the moment when they get the message from powell, is the market mispriced not radically mispriced the markets pulled in from the high about a percent very, very small amount. But that is walking back the probabilities of a cut in july and we think again as phil said you could walk back the probabilities more so to us, what it really comes down to is the market is in a holding pattern. There is an expectation that the fed is there, the fed is going to be there. But again, the other issues are still to be resolved china, brexit, et cetera and for us, the next data point but as traders, you dont know whether you want to result in good Economic Growth or bad Economic Growth. Which is so annoying given that the previous jobs number was so weak and suddenly you get this great number on friday which should have allied fears that recession is imminent or even likely in 2019 and instead i mean i always these crack addicts that love free money that trade stocks but this is three straight days, not two reflectionary reaction. I would have thought that removing some of the recession fears with the jobs number would have been a positive and it is not. How do we know that we want a resolution of the china deal that shows us down and were back to the races. The real issue for the market here in making further up side progress is that long term Interest Rates in our you view are too low. They are reflecting something this fear of recession that we dont think is actually going to materialize. And so what we would like to see in fact is the fed eventually creating some expectation of inflation, sending longer term yields i mean minus 40 basis points in germany . That doesnt rational sense to us those rates start moving up. You get a more sort of progrowth mentality and a shift away from defenses into cyclicals like financials and energy that is what we like to see. Some might criticize the recent alltime highs because we havent had the transport or small caps to confirm the move at the same time you like small caps you think that there should be a swing higher here. We did like small caps. Small caps have underperformed large caps by 12 Percentage Points here officer the last nib months or so we think that there will be catchup. The domestic u. S. Economy is doing better than the rest of the world. So joes point, our inhouse model is suggesting that there is no risk of recession before the first half of 2021 at the earliest so the naysayers are saying that we started a recession last year, were definitely in one this year. We just dont know it yet so we think that once the market realizes that the economy is in better shape and well get data to that effect in the second half of the year, small caps should participate but in that environment given the fact that were at all time record highs and the fact that we think that the fed probably ought to do less than the market is pricing in, we took some chips offer tchi chips off the tame we took from 5 to 3 in anticipation that the fed could disappoint, data is not that badly and as a result we could see weak neness the next couple months and we have the draghi transition, japanese vap tax, the brexit decision coming up. We could have a sloppy couple months here. Phil, julian, great to see you. Thank you. Any chance we do 3 gdp . Theres not, is there . We think that the Fourth Quarter is likely to be 2. 6. What about this quarter this quarter were at 2. 3 i think consensus around 1 pp. 7 so were 2. 2 for the full year but again, the most critical issue is resolving the trade dispute. All right coming up, a new read on the health of Small Business the latest confidence numbers from the nfib. And later, Virgin Galactic announcing plans to go public with the space venture crowd funding andrews ticket if youre interested. Well bring you a first on cnbc interview with Richard Branson and at 7 00 a. M. The nfib is out with its latest confidence report kate rogers is joining us with the details. I saw something go by on the wires about giving back some of the positive gains we saw in recent reports thats right. Good morning so the index taking a slight dip this month of 1. 7 points to 103. 3 as uncertainty weighs on Small Businesses the group says about 30 of Business Owners reported that recent changes in china trade policy in particular have negatively impacted their businesses the nfib noted there could be some tariff inflation pressures on main street as the number of firms raising prices also ticked higher even with the drop, were still well above the historical average. This is a look at how optimism has been tracking. Were about 3. 5 below the high and Small Business owners seem to express concerns over the economy and future Business Conditions nearly he have component fell. Biggest drops were those who believe in those who believes it time to expand slight gains were in inventory satisfaction and inventory plant. Skilled labor is also a major issue. 21 say it is actually their single most important problem followed by government red tape and regulations. And taxes. Now, this has been the case for more than half of the year so far while trade and Economic Policy and uncertainty are on the minds of Small Businesses so too of course is this labor problem weve been talking about for months and months. Weighing on them for sure. Back to you. Kate, thank you coming up, a big win for the phrma companies after a judge blocked new drug price rule. All the details next and take a look at yesterdays s p 500 winners. And losers. Through the at t network, edgetoedge intelligence gives you the power to see every corner of your growing business. From managing inventory. To detecting and preventing threats. To scaling up your production. Giving you a nice big edge over your competition. Thats the power of edgetoedge intelligence. Welcome back youre watching squawk box, live from the Nasdaq Market site in times square. Lets check out equity futures. Down about 112 on the dow. Down 48 or so on the nasdaq be and the s p indicated down about 12 a federal judge are has blocked the Trump Administration from implementing a new rule requiring pharmaceutical companies to show the list price of drugs in tv ads the rule was set to go into effect today under the proposed rule, the list price would have been shown if the drug sold for 35 or more are for a month owe supply the government says ten of the most commonly advertised drugs have a list price of roughly 500 to 17,000 a month. Merck, eli lilly and amgen sued claiming the rule could confuse consumers. Drug makers have argued that list prices dont reflect the actual costs the junlgts sadge says that th responsibility to act lies in congress hhs says they are disappointed and will work with the Justice Department on the next legal steps. Those ads drive me crazy anyway any buy a song you dont want to hear anymore and they they do the oh, oh, oh and i dont need it whatever the hell it is. It is for some minor thing but the list of side effects sounds like you may not survive the side effects for this mine or thing that they are trying to selling to you that your doctor prescribes it. So why are you selling me ten times every break on something im trying to watch didnt that tell you how profitable it must be if a very small percentage of people out there might ask their doctor for it it is amazing. And the actors that they have got in the ridiculous things that no one would ever say or do like two different bathrooms i like that at least they went there not out in the open, you know. They are in the open. Look at that but then they leave and the bathtubs are empty, but they go into the nobody is there except the camera crew. They get a room finally pretty nice place to have a couple bathtubs. Thousand i know what you like to do in your spare time and this and a pina colada. Like walking in the rain japans nintendo,this is about minute ten d nintendo from china to vietnam in an effort to dd diverse if i manufacturing. Nearly all is outsourced to manufacturers in china and a spokesperson says the shift was not related to the potential tariff fights by the United States<