Were closed for holidays. In the early trading in europe this morning, ahead of that final debate between the last two candidates in the french election, you can see the cac is off by a third of a percentage point. Ftse is also down. Crude Oil Yesterday down, and down once again as pumping in libya and the United States more than made up some of the cutbacks. We closed below 48 yesterday. Right now 48. 04. On todays agenda the fed concluding its twoday meeting with a statement at 2 00 p. M. Eastern time. The central bank expected to hold rates steady. Investors looking for hints that the economy is on track for a rate increase in june. Another big earnings day ahead. We will hear from time warner and yum brandtbrands, after the close, facebook, tesla, aig and fitbit will report. Adp private payrolls at 8 15 this morning. Later services pmi and ism nonmanufacturing. We are just four days away from the final round of the french election. Candidates emanuel macron and Marine Le Pen face off in the final televised debate today. Ahead of the event, le pen making comments about the euro after days of mixed messages about ditching the currency, which is an unpopular move with the majority of voters, le pen made it clear she wanted to take france out of the single currency. Havent been following it that closely, but shes cut into his lead but its still 20 points, 30 points. So the polls would have to be really wrong. But i heard theres a lot of energy and crowds at her rallies. Not only that. Some of the con state wencies that you might expect voting for macron are saying hes too much of a free capitalist and free market guy for them to support him. Its a weird theyre both they are like a mixture of all the political things. Part Bernie Sanders, part capitalist. You dont even if i were there i would have trouble figuring out who to vote for . Certain things about le pen that i like, but i think she wants high tax rates. Not a free market person. I can see the best in people. Then macron, he worked for hollande, right . He was a hollande yes. When is it again . Sunday. Just in time for the markets. That and the derby on sunday. The derby already . It is you got a hat . No, i dont wear one for that. You have had a mint julep . I have. Im not a big bourbon guy. Dave evans, one of our producers. From kentucky. From kentucky having a derby party. Did you get invited . Im not going. Did you get invited . Maybe. Maybe i didnt check my mail. Check your mail. Did you get invited . I was not invited either. But im comfortable about it. Youre okay with it. Youre not going to new jersey on a weekend. Were in omaha this weekend. Thats right. Im thinking mint juleps with warren. Apple reporting earnings of 2. 10 a share, 8 cents ahead of estimates. Revenue missed the mark ahead of weaker iphone sales. Tim cook saying we are seeing a kind of delay in purchasing behavior that we think is a consequence of a number of rumors and reports about future products that is happening. If you look at the iphone outside of greater china, they moved up nicely. We had more switchers than ever before. Bricking it down is a Senior Analyst from maxim group. Good morning to you. So a lot of people freaked out when they saw the earnings. In any other context of the world, these would be the greatest earnings. You would say what . I would not say theyre the greatest earnings, but decent earnings, but i think the headline here is that the iphone growth on a sellout basis, thats what consumers are buying, was only up 1 year over year, that includes china, which is down year over year. In the mature markets it looks like units were up 5 year over year, which is healthy growth but not fantastic. The key is that he said were seen the greatest number of upgraders ever. You know iphone users continue to be iphone users. Two, the greatest number of new i phone users as well. Within china, he excluded that in the number of new iphone users. That means the upgrade rate, or the new to iphone users rate in china is weak. Thats a bit of a problem. Heres my real question. It feels like now all the eng e are in one basket. Thats on this next phone. This next phone has to be like magic. If it isnt, if the phone is anything like last years phone, do you think people will upgrade the way the market needs them to . Yeah. Yeah. Our data point suggests three main incremental features for iphone 8. Using the word incremental already is a bad idea. One of them could be big. But based on our analysis of what it could be, we dont think it will be that great. That would be augmented reality. That is the next paradigm of computing. The processor of the iphone will be weak to handle real time processing to provide what is a terminator like augmented reality. Which is really the next generation of computing. The other key things are an infinity screen like i have on my galaxy s 8. The third is wireless charging, which the galaxy already has. The processor included on the iphone 8 probably wont be Strong Enough to have a fully immersive augue ivive augmented experience. This resonated with me, when he talked about people who have not upgraded because theyre waiting for this next phone. Frankly the 6 to 7 didnt seem way the way, three years old now. 6 to 7 did not seem like a big leap. I could still download the latest operating system. I felt like i havent missed much. And its a pain to upgrade. Whether or not youre upgrading now or later, you always will have, i think, a bit of extension of your upgrade rate. Thats a drag on the overall year over year growth. Im going to harg heargue he. I think there was a time when the Technology Upgrade felt like such a step change each time that either every year or two years people bought a new phone. The last three year period it did not feel like the technology moved the needle. So people did not upgrade in the same way. I could be wrong. Tim cook could have better numbers, you could have better numbers than that. You are absolutely right. What youve seen over the past three years is constant evidence of iphone life cycles extending. Not just iphone, smartphones. Were getting to a mature state. So, i do agree with your assessment that you are going to have extending upgrade life cycles. For the key for apple, it is whether or not they will continue to grain market share like they have for the past 12 years in the mac franchise. Thats the power of the apple brand. Bottom line what is the stock worth . We have a 170 price target eps of 9. 50, so that gets us to 130. 15x is a discount to what we are trading at. We think thats valid given the limited Growth Prospects they have. If tax policy changes and they can bring money back, does that get more interesting to you . Not really. Im assuming that net profit return to share is for shareholders. What else can they do . I dont know what else i want on my phone. Thats what apple is so good at. Better camera. If the battery lasted, that would be a meaningful the battery is not marginal for me. The battery is a significant if i could get even three or four hours extra. I dont want one hour, i want three or four hours more. What about after that . What feature that you dont already have i would like the phone to physically be smaller and the screen the same size. But not lose the screen. Which you can do. These are not qualitatively different things. For me, its meaningful. You need to shave with it maybe . Thats a good question, youre right, samsung and others do have a full its like would controlling your heating and i guess you can already do that. You can control your environment. You can watch your heart rate. If siri was meaningfully better. I would like to be able to say to it all these things are improvements, its like making it water proof or headphones wireless. Its all on the margin. Im with i. We dont need a patent office, theres no more inventions. No. What else can a smartphone do for you . It could be a pipe. Heres what i want to know. I want to know when series can do twostep stuff. I would say ask joe and becky to lunch and schedule it. And just make it happen. I dont want to go back and forth. I want them to figure out if i need to get a subway or taxi there. Have the uber there. I want it to do five dimensions. I want it to figure out when my plane leaves. Thats not a new i phone hardwa hardware no, thats software. How long away from that are we . If cars can drive down the street by themselves. My phone is pretty good right now. But i dont like the battery. The battery story how is the Samsung Battery . Awesome, actually. Even you saying that doesnt make me want to switch. As phones age, the battery life does deteriorate. This is a new phone. Thats part of the reason why. How many hours do you get on that thing . I dont know, its that awesome. Wow. Hmm. Thank you for coming in today. Great to see you. Thank you. A couple other stocks to watch. Twilio shares are plunging. I was listening. You took a shot at me. Yes, shes talking about twilio. Twilio out with fullyear revenue lower than expected. The ceo is blaming uber saying the Ridesharing Company will be reducing Communication Services over the next year and doing more stuff in house it makes up like 12 of twilios use taj. That stock got slashed by 30 . Weight watchers beating the stretc street adding subscriber force the fifth straight session in a row. Yesterday thiey had ra 14 gain and mondelez was helped by cost cutting, strong sales of the chocolate brands and better product pricing in latin american markets. Stock price up 2. 6 . Odd chart. Something goes from 40 to 46, it looks like an earthquake. Its done nothing for the year. We have Steve N Whiting and chris rupkey from mufg. Do you always say mufg . Mufg, yes. No one thought about whether ill get you a hat. No one thought do these ledsers go together in a meaningful way . Mitsubishi. Mufg. You a your branding people, d anyone ask this is above my pay grade. M stands for mitsubishi. I know what it stands for, it just doesnt look good. All right. Im not going to argue with you. I think you both say the 0. 7 gdp and the weak job number last time, it may not be reflective of whats actually happening. Next to nearly useless. We got nearly a 13 eps growth in the First Quarter. Thats the more important number. Thats more important for equity. In your view it justifies current stock prices and justifies staying fully invested. A lot of folks come on and say this will be a 6 , 7 eps year. If you have a 13 First Quarter, its going to be a lot better than 6 , 7 . We had a nithird of that gain fm the energy sector, oil. This will be a big eps year. A big gain this year in the United States before any tax cuts. Then the rest of the world is also accelerating. Gdp will do better later, but we always had these quarters that have been weak. I dont think youll see the fed reflect on that and say this is ab important s an important statistic for them. If underlying things are better in terms of earnings per hair s reflecshgs share, it reflects, but puts the fed on hold. The fed are not champing at the bit to go again. They were only going to go two more times this year. Still . Thats what they said. Maybe they wont now. When i heard your prior guest, iphone sales are down a bit. Boeing jet orders are down. Car and light truck sales, 16 million annual rate two months in a row now, sounds like a recession. I dont know if thats true. Im exaggerating, but it is odd. Car sales came off last year, same way. Picked up. We had turbulence in world fim markets. We had credit spreads blowing out. This time it came off why . Auto finance is giving us travel. Look at net tightening of lending standards. Weakening used car prices making it difficult to get a great deal and sales were powerful as a driver of domestic growth. Housing can pick up slack. We have a lot of other statistics. Ism readings in the 60s were way ahead of Everything Else. If we come down, it wont be a miraculous growth recovery, but industrial activity in the second half will probably be stronger than the first half. Mike jackson from autonation was with us, he talked about how the incentives got to such levels that he thinks theyre stretched thin. Maybe weve seen the peak. Hes not suggesting they fall off a cliff, but its sweetened the group. Its consistent with past growth solid growth periods for the u. S. All right. We have to go. The europe notion now, one guy said stay out of europe. Other people are saying its undervalued and theyd go there. Is it a frefrnl problem or a broader cloe eer global risk pr. The u. S. Is still going to get lower Interest Rates from the influence of europe. That will be something thats important for the relative value of equities. All right, guys. Thank you, steven, chris, mufg. You flown southwest . Yeah. You . Yes. Is this your first time flying southwest . No. Did you pay extra to get into the a group . No i didnt know about that. Wheres my seat . I was assigned a number. It is like peoples express. Were all going on. People are rushing to get a seat. Theres only middle seats yes. Thats what happens. Whose idea was this . I wish we had cameras with you. Coming back was united. With all the flack united takes, i was like let me hug you. Frnlgt if you do southwest, you have to pony up. Pay up to you can pick your seat. Not to mention how i felt about myself and how my daughter felt about me. I was 43, 44 in the c group, shes like what did we do, dad . I dont know. Were not good people. Not good people. I would have paid to see that. Were glad youre back. Really, when she said okay, have at it, theres the seats. Thats what they do. Terrible. I have to have gary kelly on saying what are you thinking . I dont care if your fuel prices are hitched. I want a seat. You can pay for it. Get on early. You never played Musical Chairs well, did you . No. When we come back, President Trump tweeting a Good Government shutdown in september could help fix the mess in washington. Kevin, meet your father. Kevin Kevin Kevin KevinKevin Kevin KevinKevin Kevin Kevin trusted advice for life. Kevin, hows your mom . Life well planned. See what a Raymond JamesFinancial Advisor can do for you. The power of 100 of the worlds top companies. The power of a proven 15year track record. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Cobut weve got the gettion. Tdigital tools to help. Now with xfinitys my account, you can figure things out easily, so you wont even have to call us. Change your wifi password to something you can actually remember, instantly. Add that premium channel, and watch the show everyones talking about, tonight. And the bill you need to pay . Do it in seconds. Because we should fit into your life, not the other way around. Go to xfinity. Com myaccount welcome back to squawk box. In political news, a tweet by President Trump and a Government Shutdown is getting some pick up this morning. Eamon javers has more. We averted the most recent Government Shutdown, but what does this tell you about whats to come. We are pretty sure we averted this latest Government Shutdown. The white house on the defensive here over the past 24 hours. The president arguing in a couple of tweets that he had to give away a number of concessions. Hes apparently responding to conservative angst, the democrats got a lot of wins in the bill. The president tweeting the reason for the plan negotiated between the republicans and democrats is because we need 60 votes in the senate. He said we either elect more republican senators in 2018 or change the rules now to 51 . There hes referring to the legislative filibuster which requires you have 60 votes in the senate. He said our country needs a good shutdown in december to fix this mess. Not clear what means by a good shutdown. Mick mulvaney came to the White House Briefing room yesterday to answer that question. He said a good shutdown is the one that fixes the process in washington, which he says is simply broken. But what is on Mick Mulvaneys mind and the president s mind is a perception out there that the democrats had won this negotiation and that President Trump had lost it. That, he said, was simply untenable. Heres what Mick Mulvaney said just yesterday. I think the president is frustrated with the fact that he negotiated in good faith with the democrats, they went out to try to spike the football and make him look bad. I get that frustration. Its a terrible posture for democrats to take. The white house responding to democrats claims that they did very well in these negotiations. He said he was concerned that made the president to look back. So Mick Mulvaney went out to give details three times. We will have more on this bill this afternoon in washington, well see if there is conservative angst, whether cthy stay on board and vote for this deal and keep it going until september and then do it all over again. Mmhmm. All right. Eamon, thank you very much. We will see what happens later this afternoon. Theres a lot of pressure back and forth, but compromise is how you get something done. Absolutely. Thats whats frustrating. If the democrats did get some wins some things they wanted, it would be nice just to say, you know, i dont know its politics. Its a winwin. Thats what you want. In a better world, take your gains and say im glad we were able to negotiate. Maybe it was thank you for negotiations with us and letting us get a few things, instead of saying, mr. Art of the deal, mr. Negotiator. But its not just the democrats. Its the republicans also. It wasnt a perception that the democrats did better, they were crowing th