Transcripts For CNBC Squawk Box 20170817 : vimarsana.com

And in europe, some of the early trading, you see some modest declines there ftse is the biggest decliner, down by a quarter percentage point. Look at whats going on with the dollar the dollar which has been under pressure broadly for many months, you can see its up against the euro today at 117. 06 down against the yen at 110. This morning wti down another 7 cents to 46. 71 President Trump disbanding those two Advisory Councils, the announcement coming as one council was dissolving already the president in bedminster, new jersey eamon javers is nearby in bridgewaters eamon . The president will wake up here in bedminster, new jersey to a changed landscape in the relationship between Corporate America and the president of the United States. We saw this dramatic moment yesterday as you just described as the elite ceo Advisory Council was deciding to disband. The president issuing a tweet saying he had instead folded both of his ceo Advisory Councils heres what the president put out. Rather than putting pressure on the Business People of the Manufacturing Council and strategic and policy forum im ending both. Thank you all. The president very much framing it as his idea to end these two ceo advisory groups. After that we saw this cavalcade of statements from ceos rebuking the president of the United States aetnas ceo saying im ashamed of the president s behavior and comments apples ceo saying i disagree with the president and those who believe there is a moral equivalence between White Supremacists and nazis Johnson Johnsons ceo saying the president s most recent statements are unacceptable. President must recognize the broad criticism that is he receiving. Weve never seen anything like this, a breach between Corporate America and the president of the United States. Earlier the president called those who were leaving his councils grandstanders, and said he had plenty of people to replace them obviously no replacements have been named to either of those councils so far. Back over to you the outrage is real i cant tell you about the number of phone calls i got from members of the council as this was going on yesterday and throughout the afternoon in particular outraged about the tweet that went out where he tried to take credit for it. I cant te tell you the word lyg was used multiple times. One of the bizarre and fascinating details that i learned last night was that when Steve Schwarzman had called jarrett curb noer saykushner toe dissolving the group, jarrett asked him if they would be nice enough to write this in the press release that they were doing this in agreement with the president. They agreed to do that to be polite about it, and couldnt fathom the fact after having done that that then he tried to frontrun the entire thing. What is your what is the state of play now in your from what you know about whats going on with gary cohn . That was a Big Conversation late in the afternoon and into the evening about where he stood on all of this. We dont know whats going on with gary cohn theres been total radio silence from the white house on that no indication that anybody is preparing to resign from the administration i was standing about 20 feet from gary cohn during the remarks on tuesday, where the president got angry with the press, angry about this white supremacist rally. Gary cohn was looking down, looking to the side, wincing, looking physically uncomfortable standing there, but the question is whether hes morally or politically uncomfortable staying there inside the white house. Well have to wait for a decision or nondecision from gary cohn. I think its too early to say where that ends up you talked about the reaction from the ceos on this council. I was texting with one ceo involved in this yesterday i asked him what is going on with this council . He texted me back one word saying resolved. You get a sense of relief there, and finality from that that some of these ceos were anxious to put this to bed and put this behind them. Its a tricky moment for American Companies they dont like to be seen as taking sides in any partisan issue, but this was a bridge too far for them they couldnt they couldnt continue to be aligned with this president. I was going save this for son fel sonnenfeld, these highminded ceos, i get it thats fine. Theres another side they do they are risk adverse. They have handlers around them youre talking about torches, people walking with torches, with nazi slogans. Heres what holeman jenkens take was Companies Get in bed with politics when it service their interests and quick to run away when it doesnt. Thus nobody is obliged to interpret the flutter of ceos away from the president as occasions of courage b still there are some these are some of americas most delicate pr canaries surrounded by riskadverse advisers but that in itself from torches and White Supremacists it took a while thats probably the point that you should make. It took until tuesday. Tells how big of breach this is coming from the president that these people would actually get up and say were leaving were disbanding this. This is Holeman Jenkins you can write him. When you use the phrase pr canaries talk to holeman you brought him up. I thought at least theres another side jeffersonen fsod will take these guys and canonize half of them for leaving. Hold on you know what, lets get sonnenfeld on the line let him do you think he heard it or he can read it again we can read it again if he hasnt heard it. But the rest of the holeman je jenkins. I think hes a thoughtful guy. To the degree we talk about courage and leadership, theres a degree of leadership that it required to leave this thing ken frazier, maybe. Ken frazier but it ththen the guys theres no question theres safety in numbers. Exactly having said that, theres a much larger issue at hand here the idea that the Business Community has effectively walked away from a president who has scribed himself as the business president. And who has made some efforts to make their lives easier, as many of them have said, despite the programs that they agree with, they cant im not saying theres a giddiness or a glow thee that ti happening among certain parts of the business word, but its weird that since it means a lot of the pro growth policies will probably have trouble now, to be so gleeful about it happening is strange for Business Reporters but for ceos this was a conflicted time to try to get through. I understand. Let me say one one executive said to me last night, i will say it to you, joseph, because hes important theres 20 of them. I know some of the ones that you know that are likeminded with you. But they were likeminded with you up until yesterday. Thats the difference. They said last night at some point, you cant tolerate it anymore. I understand that that we the Business Community have tolerated lying, racism, all of it in the name of tax growth, taxes, pro growth policy, whatever. And that at some point you have to have some moral courage at all, whether you think its too late, sure to me, thats the issue at hand. When you say they tolerated racism what are you referring to they tolerated a president who has not been willing to truly condemn racism in a meaningful way they didnt tolerate that this is where they got it. I thought you were saying prior to this latest thing they tolerated racism thats what you said, right . To the extent that you believe he has been slow to condemn look, the david duke comments are a perfect example he has a pattern and practice, this president , for reasons that i dont know i dont know whats in his heart. I dont know if hes a ratist. I want to think hes not maybe its a political calculus, but its his calculus, whatever that is, people have decide thats intolerable period i will talk to jeff. Probably true to some extent that prior to any of this happening, the there are probably 55 of the country that wanted this guy gone in any case any way. It was pure revulsion. Hes not my president. This is illegitimate hes an impostor you add this on top of it, some of that was already there. Sure. Okay. By the way, many of these ceos, when they say tolerated, not only tolerated, they came to get get on these committees, in same way they were used as props by the president , they were using the president as a prop. Even republicans are throwing darts at trump they bring jeff flake, Lindsey Graham, john mccain, they bring up the same ones at this point, i dont think you can get any republicans to other networks that are friendly to republicans, couldnts on tho say nice things. I understand but theres no way that when you see torches and slogans in this country and in 2017 shoe run tyou should run ther direction. Tfrn it shouldnt be qualified even tom brokaw said this is the moral leader of the free world you cant be dogmatic enough about your statements. Thats what were dealing with here Jeffrey Sonnenfeld has been waiting patiently, sitting, listening to this conversation have at it, jeff what do you think of what Holeman Jenkins had to say about this, in terms of the issue i think there are two distinct issues, but the issue of courage or leadership in this instance thank you i appreciate the treat of joe spending his ammunition in advance so i know where joe is coming from. I did see the piece in advance andrew, congratulations on your incredible research. Joe, i somewhat agree with you this round in fact, i have right here that i was about to run until the dam broke yesterday afternoon, a piece called brother where a art thou not coming to ken fraziers defense. Im not canonizing these guys a half dozen of them, paul pullman did serves credit, meg whitman, others came around later. It took them twice as long as the boy scouts to rebuke the president. They have an 80person board Business Roundtable has 22 people but i just learned that jaem mi dimon didnt respond had some minor surgery, had pulled a hamstring over the weekend. I couldnt understand why this brilliant, most revered outspoken leader wasnt engaged right away he was detained at a critical time and couldnt jump into action i think if he had broken the dam with ken frazier, we could have seen this happen an awful lot faster people were hanging back and waiting to see what jamie would say. He is very courageous. But the Business Community, what i had written in this piece, which i pulled, i will tell you what i was going to say, is that the founding generation of the Business Roundtable would have recoiled no, in American History we have never seen this. No one watching this show, nobodys parents or grandparents ever heard of a Business Community that ever said no to the call to Public Service by the commander in chief of this nation theyve never turned their back. Never. You can find in every generation, the bernard beroffs, whoever has been there, they always stood to bring the Business Community with them right now this is something different. But they were late i dont canonize them, i celebrate ken frazier. Ken frazier was a clariairian cl ben franklin warned if we dont hang together, we will hang separately the Business Leaders were hanging separately this is what trumps mow tdus operandi is. China versus russia. Canada versus mexico what was the moment you decided that this was too far . Because in the past you have been supportive of his policies and some things you have seen. When was the moment you said no more i liked a lot of the economic agenda i think theres a taxation issue, deregulation issue. Trade issues to adjust i was supportive of those. When you can see many of these ceos were sitting there as potted plants, wallpaper for photoopes, several of them telling me that they felt that things were overscripted, they didnt get to meaningfully engage then we see this large loss of faith in the back drop, especially over the weekend from the general public, that was a real problem to get this economic agenda through without the will of the people, it doesnt take a big endor endorse. Of skinheads to get it through, it has to be the support of the general american population. That is what was hurting here. The fact they were not rallying around ken frazier that was disturbing surely as more and more signed e breaking open. It was frustrating watching you poor guys trying to keep up yesterday afternoon in two hours having this tidal wave of sudden declarations of conscious . Where were they before they talk about so surprised how could they be so surprised about the lying this morning its like Claude Raines saying in casablanca, gambling, here . I cant believe it they knew that these were not the facts. So i think it was not credible for them to act like theyre so outraged but historically we have a conundrum now. They cant go forward without a liaison, link to the Business Community. I expect the Business Roundtable will do a great job stepping up to the plate all 22 people on that board are politically savvy, strong performing ceos. I think theyll forge a link through the Business Roundtable now that the councils have collapsed. They wont be able to get legislation through without some wisdom the argument was you want a seat at the table to have that influen influence. This is a president whos smarter than most think. Theres been a lot of email traffic last night about the future of gary cohn. I want to read a headline. This is the article sent around a number of people on wall street a piece in breitbart that some have suggested steve bannon was behind the headline, donald trump disbans ceo council. It goes on to say the council dissolving is a significant blow to cohn in the white house they go on to say he was rumored to be potential candidate for federal reserve, his chances at that are waning, too, given the disgusted remark thats been in the press. What do you think he should do i think if he steps away, it would crash the markets. I dont want to be an alarmist, but theres faith he will carry through the tax reform people are looking for. If not some of the deregulatory agenda wilbur ross, hes been quiet lately hes not a kweiquay crazy perso. Hes a smart guy elaine chao, you add it up, ten members of this cabinet are disaffected right now from Jeff Sessions to tillerson. It only takes 12 to throw this into a trump off the job for two weeks until the senate and house vote and that seems so farfetched so farfetched even two weeks ago. His adversary, cohns adversary in the white house, bannon had some interesting comments in those interviews to me it was a little odd saying finally we put basically paraphrasing, put a dagger in the heart of the globalists that had influence in the administration these multinational ceos that were not allowing the true economic nationalism that weve wanted to sort of put forward. How do you do 3 and how do you improve the economy without the Big Companies . Can you do it with a grassroots effort finally you came out and stood up for our people, and you laid to rest the globalist influence of Jared Kushner and gary cohn thats not normal conservative Economic Policy to say we got rid of these globalist ceos. This hits to trumps vulnerables. He has a hairtrigger sensitivity, he doesnt like to be cornered. He has tantrums, and hes unsophisticated on these fronts because hes not a fortune 500 ceo, he has never been one he admires them, reveres them, loves the association, but also loved learning from them he did want to listen to them. As he gets isolated this way or insulated, it becomes a selfdestructive pathology this is awful. He cant apologize he cant say no. I sent a message to some places to try to get a message to him, im not in direct contact with him anymore, im sorry to say, whether or not youre Jimmy Swaggart or jim and tammie faye baker, when you come out with these apologies, the american loves contrition we love that its not his mow tus op ra modus operandi if he could show something, build a bridge, people are willing to work. Hes denuted well have ken novak on later. Trump will not lose an argument. Maybe eventually, jeff, youre right, maybe he will see some i dont know, i doubt it at 71 jeffersonen feld jeffersonen Jeff Sonnenfeld i shouldnt do that. You knew what i was going for. Andrew did all the heavy lifting. Holeman jenkins, i introduce it, then its not my problem after that the dow logging its fourth straight session as crude prices fell to a threeweek low well talk strategy after the break. At the temperature of the hour, retailer and dow component walmart set to report. 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So why hasnt the way we pay for them . Introducing Xfinity Mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit or go to xfinitymobile. Com. Welcome back to squawk box. Stocks to watch today, shares of l brand down 5 after the retailer lowered its guidance for the year the owner of victorias secret and Bath Body Works reported a bigger than expected drop in sale store sales netapp beating the street. Product revenues grew 10 on the year Cisco Systems latest earnings matched estimates, but the stock is under pressure after revenue from the security business missed estimates. Well hear more from ceo Chuck Robbins. He joins squawk on the street at 9 10 eastern. We have been watching the markets this morning, the futures are relatively flat at this point lets talk a bit more about whats happening kevin gittis is the head of fixed income from raymond james, and Peter Boockvar is from the lindsay group. Welcome to both of you peter, lets Start Talking about stocks first we know that stocks yesterday still closed higher even though they gave back some gains. You can see what happened with the ceo councils and extrapolate what that might mean for trumps policies why is the market not more concerned . The market and the economy dont care about trumps personality, they only care if it influences the policies that are still to come. Its hard to believe that wont happen at this point until they know whether tax reform is going to get kicked to next year because of his political issues now, they wont care every day people youre saying if the market suddenly thinks tax reform is not coming this year thats when theyll care. Right now theyre trying to separate his personality and Current Issues with policy and everyday activity of the economy. We talked about tax reform. Its very difficult. Hasnt happened in 31 years because its so hard everyone we talked to said you need leadership from the white house. Thats the only way to get this done its troubled, no question about it the market is reactive these days they want to see it right in their face, whether this will happen or not. You could see these guys, number one, its self preservation all the guys in the house need to do this i dont know about the senate, you could see them almost saying all right, ill put trump in a separate compartment here. I could see that in the house. Hell sign whatever they send him. Whether they cut off the nose to spite the face and say i wont work hard for tax reform because i no longer am Backing Trump that doesnt make sense. What weve heard in the senate is much different tax reform than what trump himself has talked about 15 to 20 for corporations it might just be a cut, not reform i think theres hope that there will be something. Like joe said there is self preservati preservation a lot of these guys have to run next year, theyre all bandied about getting some tax cuts done whether or not it happens, the odds are shrinking what do you think happens to stocks if there is some realization that it wont happen this year . Right now earnings estimates are not including it so, from that perspective, maybe it wont have much of an impact. But were in the ninth year of this expansion in order to continue this expansion you need some tax relief and some stimulus kick. And it just were at a late stage to the economy do you put into extra innings because of tax reform . Yes, if we dont, people will be worried. Were tightening in this moderate economy we need an offset. We are also right in the middle of this, whats happening now. We know about news cycles. You heard jeffersonen feld ta jd talking. I dont know, is trump going somewhere in the next three years . I dont know i dont know how this works itself out how theres some healing with this i wouldnt write him off completely here just because of this no, kevin, when you look at fixed income, the treasury market, whats driving it now . Is it the back drop with tensions for north korea escalating, receding is it what the fed is doing next the economy . Whats the overwhelming issue now . Becky, the treasury market in particular has some good things going for it a few things against it. Some things causing investors to step back no the market is the lack of inflation for starters two is the fed if you notice from the minutes yesterday, the members are torn on when inflation actually will pick up and the much expected conversation about reducing the Balance Sheet in september looks more like a september announcement of a plan or that theyll set a dated for a plan that they may fatake on the Balance Sheet. Then geo risk looms large out in the marketplace. Every time we have some well see this spike yesterday it was mostly about comments from the fed and hangover about geopolitical risk on the flip side, treasuries, higher yields can happen if something does happen in washington the vol is so low now, the high low range is about 8 basis points from the tenyear lastly the economy is mostly acting like it supports higher rates, its just that enough rates happen to keep it from coming true. Kevin, peter, thank you both for your time. Couple of tweets. Its interesting, i just said maybe he walks some of this back in walking it back, he has Lindsey Graham he always has a guy guy to slam publicity seeking Lindsey Graham he wants to make the point he didnt say there was a moral equivalency between the kkk, neonazis and people like ms. Heyer. Such a disgusting lie, he cant forget his election trouncing. Its almost a combination of making the point that i didnt i wasnt saying it was a moral equivalency but he didnt say hes mad at lend indsey grah. So much for general kemly k controlling the situation. Coming up, ceos parting ways with President Trump we will talk with mike rosenbaum. Another tweet whats the tweet . The public is learning even more so how dishonest the fake news is. They totally misrepresent what i say about hate, bigotry, et cetera shame, exclamation point so, as we head to break, we look at yesterdays s p winners and losers thank you so much. Thank you so were a go . Yes we got a yes what does that mean for purchasing . Purchase. Lets do this. Got it. Book the flights hai si si ya ya ya what does that mean for us . We can get stuff. Whats it mean for shipping . Ship the goods. Youre a go you got the green light. That means go oh, yeah. Start saying yes to your companys best ideas. Were gonna hit our launch date scream thank you goodbye let us help with money and knowhow, so you can get business done. American express open. Youre watching squawk box live from the Nasdaq Market site in times square. Welcome back our top story, President Trump shutting down two business Advisory Councils after a backlash over his remarks following the events in charlottesville. Our next guest has created two companies to help diversify the workplace. Lets bring in mike rosenbaum, former white house economist turned tech entrepreneur founder and ceo of arena thanks for joining us. Off camera we were making the point this is a different world were living in now. Not a ceo values diversity and doesnt live in the world that were living in now. This almost seems like a retrothing retr retro thing to be talking about these issues again Public Opinion has moved far from where we were 10, 1520 yeayea years ago. When you think of the job of a ceo, you need to be out there representing your brand and the values of the Organization Diversity is a key value of so Many Organizations today even more significantly today, i think about more myself as a ceo, for the organizations that we work with, authenticity, being honest about who you are as a leader, who you are as a human being is kricritically important. Thats core to, you know, to everything you are as a ceo. But the a lot of times its about the bottom line when can you distinguish between actual moral courage with a ceo and just doing something that he knows prwise is necessary or for customers, because they run the gamut from the right all the way over to the left, or for shareholders, a lot of these guys are interested in survival and the bottom line as well, too. You cant separate the two, can you . When you think about the culture of an organization, its that culture that ends up driving the Financial Results of the organization when you thinked about the role of the ceo, its to drive the culture. When i think about being honest and authentic and getting the trust of the organization, being able to communicate to the organization that authenticity is important, and to drive those values inside the organization, that ultimately drives financial performance. Can it ever be detrimental if youre too worried about the way things look . Too worried befoy ied about howe perceived . Too politically correct to do the right things for a company or is it always the longterm success and shareholder value will always be correlated with doing the right thing . You know, its interesting. A few minutes ago you were talking about the idea of leaders having lots of advisers they are they do they are pr canaries thinking about risk aversion, thinking about being afraid of what might happen. Im in the business of collecting data on people and predicting how someone will do in a job when do you that, we usedictive do that. You find organizations become more diverse when we think about how do we talk to a client about that, the organizations were working with are concerned about diversity longterm, but the immediate need is a financial return the immediate need is moving an organizational outcome so for us when were talking to a client, some of the first stuff we talk about is by doing a better job, putting someone in the right place, dont even think about diversity for now, doing a better job of putting someone in the bright place, you will generate a better result. When do you that, you will get a financial return and the bu p biproduct is the organization will become more diverse over time when you think about how people hire, they look at a resume, conduct an interview when that happens, you do end up having bias in hiring. Meaning we want People Like Us we want people who look like us or who are like us. They went through the same sort of schools, the same sort of internships. Thats right. Exactly right. The first time i ever worked in the government, you know, i got a job because the person who was hiring me had gone to the same graduate school i did. Its exactly what youre talking about. For us, you know, our client base processes about a million unique job applicants a year its a relatively significant data set when you look at the percentage of each group in an applicant pool, before you use techniques to remove that bias, and you look at the percentage of people who get job offers, those numbers look different when you use techniques, orchestras have been doing this for a while, when you suck that bias out, quu you can do a bettb of that matching i wonder if theres times that pr is at a certain point, Public Opinion is at a certain point, its a fad, error or not the right strategy sometimes it might be the ceo that ignores the i was thinking about exxon there were times in the past when oil prices were 200, where there was shareholder pressure for exxon to move out of hydrocarbons and move to renewables, to wind. Whyitioning th entire company to this some of those guys, lee raymond, they existed they continued developing hydrocarbons, natural gas, fracking, horizontal drilling, which was not fashionable and not what you would want. Its not always that you just do what is the easiest thing to do pr wise. Sometimes you have to have the courage to do what you need to do for the company absolutely. Frankly, as a human being. Just well were talking about that today. Youre not just a biz ps leusin leader, youre a human being there was a time that we were absolutely sure red meat would kill you, cause cholesterol, heart as it turns out, the cascade of consensus is not always you have to do whats right. Mike, thanks thank you very much for having me. When we come back, earnings alert. Dow component walmart expected to report at the top of the hour we will bring you the results and the reaction from wall street plus President Trump disbanding two business Advisory Councils former yum brands ceo david novak will tell us what challenges lie ahead for executives in america. And later the council on Foreign Relations president Richard Haass will talk north korea and the political environment at home. Welcome back to squawk box. Time for the executive edge. Google parent alphabet bought a start up that makes an app that can change the hair color in your selfies what . Yeah. If yyou want to be blond, pik hair the company is called aimatter it was founded last year, based in belarus its fabby apps let users make and transform selfies. Terms of the deal were not disclosed. What abo what about adding hair or filling in areas of head we might do that. Im game. So they were bought too bad they cant go public for 10 billion. That is that might be better than putting dog ears and a dog nose on people what was that worth . The dog ears and dog nose . That was like 5 billion, right for a second yeah. For a millisecond were our Parent Company is a proud owner i didnt know that was instagram or snap. I have plausible deniability a former bank of America Technology consultant used his access to the companys Computer System to share more than 50 trading tips with friends. Thats according to federal prosecutors who unsealed an indictment against five people who profited from the tips prosecutors say the consultant, daniel rivas, accessed the banks internal deal tracking system to generate more than 5 million in illegal trading profits. Bank of america said it fired rivas in april and cooperated fully with the investigation rivas went on to work at rbc but has been suspended from that institution. Results just coming in from chinas ecommerce giant, alibaba. Earnings per share came in below forecast, but the revenue did Beat Estimates revenue was up by 56 in terms of an increase of a year earlier. You can see that stock is reacting its up by up by a declining amount up by 4 when we first saw it. Nowup by 2. 8 . The adjusted earnings per share were 1. 17. Revenues, 4 4. 7 billion theyre talking about their Digital Media and entertainment increasing 30 year over year. By the way, the Cloud Computing business has grown 96 year over year, has reached a smimilestonf 1 million paying customers they are the amazon of china. When we return, well talk more about that and the effect of trade on employment in america. Well take a closer look at what happens when trade kills yr ou job. We have that story when squawk returns. 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. Going somewhere . Whoooo. Heres some advice. Tripadvisor now searches more. Than 200 booking sites to find the hotel you want and save you up to 30 . Trust this birds words. Tripadvisor. Welcome back, everybody. Talks to renegotiate nafta are under way and we are taking a closer look at the effect of trade on jobs in america good morning. President trump talked a lot about trade and bringing jobs back to america while on the campaign trail as a candidate, but what actually happens to jobs that are displaced. For some the traded Adjustment Program can be a lifeline helping to retrain workers taa is a federal Entitlement Program administered by states he lost his job at American Airlines back in 2011 after 22 years when his position was shipped off to china as the company restructured in bankruptcy you get comfortable in a career that youve been doing for many years and youre at a good place in life, youre making money, youre saving. Everything is comfortable. You get taken out of that environment and its a whole new world. At 45, he went back to school and retrained to become a surgical technologist at Cook Childrens Medical Center in ft. Worth, texas, taking prerequisite courses in science and going up against younger candidates for his new position. The main motivation is my daughter ive been a single father. Ive raised my daughter from birth and its just been me and her. I have to provide a good home for her, so i knew i had to find a career that was beneficial for both her and i, one that i could survive on and make a decent living. He is hopeful others wont have to rely on taa under the new administration the way he did. However, given all of the America First rhetoric trump has touted, they did request an increase for funding for taa at 790 thats up from 673 million. But i think it says a lot about a person whos been in a career for 22 years in manufacturing and working on engines and painting planes to go back to school, totally rejigger their brain and work on something new like this. I also heard, i read somewhere yesterday that the number of americans who are quitting jobs in manufacturing is much higher than the number of americans who are losing their jobs in manufacturing. That this is a sign of a healthy job market, of people having choices and opportunities and being able to do Different Things. I read the same article in the watering post. The guy at the carrier plant said a robot bumped into him at work so its definitely interesting but good to see that he was able to find a new job. Thats a great story. Coming up dow component walmart set to report. Well bring you the numbers and reaction from an analyst next. Plus former yum brand ceo david owknovak talks about President Trump disbanding his councils and the challenges they face in 2017 but you cant. At cognizant, were helping todays leading Media Companies create more immersive ways to experience entertainment with new Digital Systems and technologies. Get ready, because were helping leading companies see it and see it throughwith digital. Good morning, everyone President Trumps corporate councils collapse as big business rebukes his response to charlottesville. A look at how the dramatic turn of events at the intersection of wall street and washington is impacting your investments. Plus, how does this latest washington fallout affect the president s global agenda . Well speak to Richard Haass. And walmart reports. The latest Quarterly Results hitting the wires. We will run you through the numbers right away live from the beating heart of business, new york city, this is squawk box. Dont say it, dont say it good morning, welcome to squawk box right here on cnbc. Were live at the Nasdaq Market site in times square theyre saying stuff that cannot be said on television. Im Andrew Ross Sorkin along with becky quick and joe kiernan. The dow looks about 12 points off, the nasdaq off about 15 points down and s p 500 looking off about 3 points we do have a number of earnings reports this morning, including alibaba and one thats crossing the wires as we speak. Walmart Quarterly Results just out Courtney Reagan has the numbers. Good morning to you, becky, and to everyone. Walmart Second Quarter earnings beating the street by a penny. Thats adjusted on stronger than expected revenues of 123. 55 billion. Also raising the lower end of its previous Guidance Range now at 430 to 440. That brackets analysts consensus of 4. 37. U. S. Comp sales growing 1. 8 in line in estimates and the 12th straight quarter of u. S. Comp sales growth traffic also higher for the 11th straight quarter nine of the 11 of walmart countries where it operates saw their comp sales grow. Now, the discounters u. S. Online net sales grew 60 . The sku count, the items available, grew from 50 million last quarter to 67 million now walmarts cfo brett biggs, i spoke to him on the phone just a moment ago and he tells me it was another solid quarter, were pleased with the first half of the year one of the things im most excited about is that we continue to bring together what we are doing in the stores with what were doing online. He calls out the strength saying it was broad based over categories, segments, format and time but does point to the grocery business, which remember makes up more than half of all walmart sales saying were happy about what were doing in the food business. Online grocery continues to grow rapidly. Order online, pick up in stores, that those numbers do get reported in the ecommerce numbers. I did ask about walmarts position on the president s councils disbanding and they pointed me back to the Group Statement and said they didnt have anything further to offer at this point. Lets take a look at those shares it looks like they are trading, the bid and the ask surrounds where it closed yesterday. Stick around, were going to bring in chuck into this conversation, Senior Research analyst. Whats your take its pretty much an inline report i think the over under for the comp, we polled a bunch and it was around oneeighth to 2 . The eps being 1. 08, well look at the quality over the next few minutes. I think the raise and guidance from 440 to 430 to 440 is pretty much expected so i expect a muted reaction to this this isnt a blowaway report weve seen a lot of bad numbers out of retailers the past week and i think this is a pretty solid report. Doesnt that i mean since we have seen such crummy numbers from a number of folks, walmart has a really solid trend positive comps for 12 straight quarters, thats impressive when a retailer is pulling in 123 billion a quarter. But the setup for walmart was a little tricky here you had a number of upgrades over the past week the stock is up 17 year to date the xrt is down 12 . This has been a big outperformer as we saw with home depot, even if the print is perfect, the stock can get sold off temporarily. Does that take anything away from what walmart is doing in the near term, absolutely not. Theyre outperforming, theyre taking share but i think this number needed to be a little bit better today to drive the stock higher, well see. Thats the shortterm story play out the longterm story in terms of what were looking at in terms of the bricks and mortar piece of the business and the electronics, ecommerce piece of the business. Well, retailers is a case of the have and have nots right now. What walmart has done under douges leadership is revolutionary. Shes completely flipped walmart. Ive never liked walmart in the 12, 13 years ive covered it i like it now. The fact that theyre merging their brick and mortar operations with their digital operations is exactly where they need to be this is a twohorse race right now between walmart and amazon i dont know what the sales online was, i dont know what the gmb was. Up 60 . So what they did in the Second Quarter again, continuing market share what theyre doing on the ecommerce side. Longer term this is a winner today im not sure its enough to us we think its going into the high 80s, low 90s. The fact they raised guidance is indicative i saw they raised Third Quarter comp guidance up 1. 5 to 2 . Theyre acquisitions, things like bonobos, shoebuy. Com. How should investors think about this part of the strategy . I think its one of the most attractive things theyre doing, frankly. Digital native acquisitions is exactly what they need to do they get customer data, intellectual capital, younger with the customer. I think these make a ton of sense for them are they all going to be home runs absolutely not. Before we let you go, one final question, which is this. Were about to have a conversation about yesterdays news with the ceos and trump giving up this council is there any kind of economic implication for walmart because dodd mcmillan was as outspoken as he was monday night and then getting off of this council . Is that going to have any impact are you a believer that there are customers on one side who are going to run to walmart to say thank you, doug, i think youre showing moral leadership and other people who are going to say im boycotting this store because i dont like the political decision. I dont think its going to have any impact at all i just dont i could be wrong, but i think its news for a few days well see what happens i think on the margin, i dont think it will have much of an impact to the average walmart shopper. Theres a few of those. 123 really . 123 with a b. With a b in one quarter the number of you need scientific notation to talk about the revenue. Thats a third of the country. Its incredible. Its great. The guy just died. Sam walton. Yeah, yeah, yeah. Anyone watch Michael Keaton yet . Yes, as the founder, ray kroc yes. That was an amazing story. Did you see it . No, not yet it was sort of an undertheradar film. It was underappreciated it was very well done. Its a good movie for you. I bet our next guest saw it because he was an icon in fast food for more on the story of the morning, the relationship between President Trump and the leaders of American Business, our next guest cofounded and led a company of 1. 5 million employees with over 13 million in revenue lets bring in david novak, former yum brands cofounder chairman and ceo of golead. Com you look great i like that full head of hair, looking good thanks for joining us this morning. Its great to be with you, joe. Im glad to have the hair back too. Looking good. You made an interesting point in the notes that President Trump does not like to lose arguments. He just tweeted again. Just let me get this in before we talk about all this great to see that dr. Kelly ward is running against flake, senator flake. He calls him flake. Against flake, jeff flake that must be the name, who is weak, capital, on borders, crime and a nonfactor in the senate. Hes toxic and this is this just goes to your point, david. With Everything Else thats going on, he fights back no matter what. And with all the other things that all the cable channel, including ours, is talking about, hes still got it out for jeff flake youve got to admire the tenacity either admire it or maybe not admire it, but at least see that its still there you know, many times, joe, one of your greatest strengths can be your biggest weakness i think one of the big challenges that President Trump has is managing his desire to win any argument thats not possible no matter how much power you have. I think its very important as a leader in any situation, whether youre running the country or youre running a company is that youve got to take the moral high ground, youve got to establish a great culture. I think every ceo that i know thats good makes establishing a great culture their number one work priority because when you get that right work environment, then you get the very best results. And when you have a great culture, theres a set of core values that people know are basically the rules of the game. And when you follow those rules of the game, you do well, you can continue to keep your job. But if you break the Cultural Values of a company, you have a real challenge in almost any Great Company of staying on board. So i think the leader has really got to establish what youre all about, what really matters, be unequivocal on that, and make a stand for what really matters, whether youre the president of the United States or whether youre the ceo of General Electric david, you could have easily been on any of these councils, obviously, and we did see one of the president s advisers, steve bannon, actually seem to celebrate a break with the big corporations because it allows economic nationalism to be pursued. In the future, just give me a guess, do you think that this is the end of trump and Corporate America or do you still think hell call certain people will take his call and theyll talk about things. Do you think we can just say the next three years theres going to be no cooperation whatsoever with Corporate Leaders how does this play out because hes not leaving office as far as i know any time soon who knows, but i think you know, i think the ceos in america are great patriots i think they want to serve our country. So, you know, i cant imagine ceos not returning a president s phone call to get some individual advice. Well still have the Business Roundtable it will be there as a vehicle to talk to the president and the administration and give them their views. So i think there will continue to be a dialogue from what i understand, the two committees that are being disbanded really have not met that much and a lot of the members were frustrated because they werent getting heard that much anyway. So sometimes you can have too many committees. I think if we can really make the Business Roundtable work on behalf of the Business Community, we can get after the agenda that we really need to get after, which is more and more jobs, Higher Quality jobs, attacking the infrastructure, improving the tax code you know, all the things that need to be done. The unfortunate thing right now is because of where were at, were taking our eye off the ball and focusing on something that obviously is a big challenge and issue in our country, but at the same time, weve got a lot more to do that we need to get done to really improve the lives of americans. And, david, thats the question how much has the agenda, the pro growth agenda, the tax cutting agenda, how much has that been threatened by these events do you think this is a temporary setback or something that completely disrails it for the foreseeable future i just think it makes it harder to do i think its a temporary setback. I think people will get back on the issues we have people who need to get the job done if you dont get the job done, you dont get to keep the job. If the president has any desire to run in a couple years, hes going to have to start making a lot more things happen, and that means hes going to have to start taking people with him there is no leader that gets things done by themselves. I cant really be at the top of the mountain and just provide all these edicts ultimately you have to take accountability for the results that are being generated and in my mind, whether youre the ceo of a company or youre running our country, youre accountable for whats going on in this country and how much progress were making. And i really hope and pray that President Trump will get back on the agenda that he got elected on and will get people to help him get done what needs to get done in our country. That brings us back to some of the stuff that may have been what he was elected on visavis china. How many times do you think you went to china, david did you ever total it up i went a lot of times it was a big part of our business you know, we actually spun off our yum brands spun off china. Not only did we are we starting to ramp up on some of the, i guess, intellectual property and other things that we have a problem with, we needt kind of language that kind of language basically puts people in corners and gets peoples hair on their back to rise and keeps them from getting at the solutions we need to get at when you look at china and the United States and the rest of the world, were all intertwined. We need to Work Together to create a great Global Economy. I think going in with that attitude gets people to Work Together in a much more positive spirit now, im not naive on this, there are lots of challenges that need to be done, but ive always believed that positive energy lifts people up, negative energy brings people down. When you go into a conversation with a lot of vitriolic comments and divisive comments, i think its hard to get everybody on the same page so that you can at least get a common understanding of reality and then start to make progress. So i think these big, big comments like that dont do a lot to move the ball forward. Back to this whole economic nationalism, though, what we are seeing is the president and the administration making moves to really go after china for what they have been doing in terms of intellectual property theft. And while that may not be a huge issue for yum brands in terms of intellectual property, it has been a big issue for a lot of other ceos how do you see our relationship with china after these moves becky, youre right about yum brands the only intellectual property we had was the colonels secret recipe and thats those 11 herbs and spices but i think whats going to happen is weve got to get more of a level Playing Field with china and i think we have to negotiate our way there and find the winwins that will move both sides forward. I dont have the answer to that, but i do know that you have to you have to take an approach that its possible and that we can get there by working together not at just basically attacking each other and i think the right approach with chinese leaders will get us to the right place and vice versa. You got hair growing on your back what did you say, your back hair was standing up . Its everywhere, huh on the back of your neck. In the back of your neck. Thats a missouri phrase, you probably dont understand that. If it starts growing there, wouldnt you have it is that painful . Just have it ripped off the way 40yearold virgin. I dont have that problem are you hows your are you out on the are you doing that now or you got some time now, right are you swinging what are you down to you must be a 2. No, im playing a little bit. But, you know, im really having a fun time building this Digital Leadership platform called ogo lead. Youre not at yum anymore you dont have to say, no, golf, whats that . Ive never done all right, anyway, great to see you thanks for coming on today, i appreciate it. Its my pleasure. The trump backlash weighing a bit on the markets well talk about where stocks are headed after the break. And then former office depot ceo steve oden will join us with his thoughts later Richard Haass will join us to talk cha,in north korea and a lot more youre watching squawk box right here on cnbc oh, not so fast, carl. Oh no. Schwab, again . Index investing for that low . Thats three times less than fidelity. And four times less than vanguard. Whats next, no minimums . No minimums. Schwab has lowered the cost of investing again. Introducing the lowest cost index funds in the industry with no minimums. I bet theyre calling about the schwab news. Schwab. A modern approach to Wealth Management. Thats why at comcast were continuing to make4 7. Our services more reliable than ever. Like technology that can update itself. An advanced fibernetwork infrustructure. New, more Reliable Equipment for your home. And a new culture built around customer service. It all adds up to our most Reliable Network ever. One that keeps you connected to what matters most. Welcome back to squawk box, everybody. Lets tell you about some headlines from this morning. Cisco systems, the shares are likely to weigh on the dow today. Ciscos quarterly profit of 61 cents a share was in line with estimates but its sales in its closely watched security business missed forecast and that stock is down by 2. 75 . We have a number of key economic reports that are out this morning before the bell at the open were going to be getting initial jobless claims and the philly fed index coming up at 8 30 eastern time followed by Industrial Production 45 minutes later. Alibaba shares are higher in premarket trading this morning just a note that some of the numbers you may be seeing on the screen when we report those, those are in rem and d the chinese ecommerce giant did beat on the top and bottom lines. That stock is up 4. 6 . When we return, is washington gridlock coming or continuing . Well talk about the fallout of ceos quitting the president s councils up next, though, more problems for hbo. A number of social media feeds were hacked, including the game of thrones twitter account. We have the details straight ahead. Estors emore value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4. 95, you can trade with a clear advantage. Looking for a hotel that fits. Whoooo. Your budget . Tripadvisor now searches over. 200 sites to find you the. Hotel you want at the lowest price. Grazi, gino find a price that fits. Tripadvisor. Welcome back, everybody. Lets get you caught up on the markets at this hour weve been watching the futures and theyre under a little bit of pressure. Dow futures indicated down by 25 points s p 500 futures down by about 3. 5. The nasdaq off by 14 joining us is jeremy zaren, head of Investment Strategy for ubs Wealth Management americas also hans olson, global head of Investment Strategy at stifel. Gentlemen, what do you think we can talk about how the futures are under pressure, but its really just down 25 how much of this is because of concern about trumps agenda how much of this is because weve been up so many days in a row . Hans, what do you think . Yeah, i think its more about the weve had a really good run. August and september are typically seasonally weak times of the year. Thats been the case for the most part in august. Id expect it will be the same for september. And then well get back into earnings season and it will be much more about economics and earnings. Jeremy, thats certainly been the case that weve been watching the economy, been watching earnings come in very sharply. What are your expectations about what to expect the rest of august, because we have written off geopolitical concerns, weve written off all this headline risk out of washington, weve written off the ceos kind of abandoning the Trump Administration at this point what do you think . I think theres lots of evidence so far this year that the market is putting the political backdrop as a sideshow and the market is focusing on the economy and economic fundamentals have been good and improving. Weve seen payrolls over 200,000. Its certainly been the earnings story. So Second Quarter earnings up 10 , Second Quarter doubledigit gains and importantly its not just the earnings story domestically weve seen a broadening out of Global Growth in 90 of countries that have pmis above 50 . Thats the highest figure since the great financial crisis. You both sound pretty laid back about things. Is there anything that concerns you when you look out there . Well, i guess its the pace of the earnings. Weve had an earnings recession in the United States that just came to an end at the end of last year. Thats fairly rare over our history to have an earnings recession outside of an economic recession. And as jeremy said, if you look around the globe, earnings are on the rise so i think that gives us some measure of protection the question is how fast the earnings can continue at i think the easy money has been made at this point flies on set. Another one bites the dust. And we go from there. Jeremy, if you were telling people how or where to invest, where would you tell them to focus . I think were still in a bull market you want to be innic quits relative to bonds. Thats more of an indictment on the low yields from the fixed income market rather than equity values are attractive. Theyre not stretched to any extent like weve seen in other periods. What would you start to think that were out over our skis, to use a phrase i think that we use too often . Theres no evidence that the market enters a bear market unless you have a recession. So unless you start to see signs that Economic Growth is weakening, if you start to see the fed become overly hawkish and you think that will stunt Economic Growth or as you start to see some of the traditional leading indicators suggest that growth is slowing then you start tightening lending standards. Youve been out over your skis since august of last year youve tumbled so many how long youre one of those long jumpers on skis . Youre still like this im waiting. Waiting to land its a long jump. Thank you. Thank you. I killed that fly. Did you get him yes im worried about peta. Where did it go i caught the fly and leedreas it outside where it can return to its family and make more flies. 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, welcome back to squawk box right here on cnbc were live at the Nasdaq Market site in times square fed vice chairman Stanley Fisher warning against the dangers of loosening regulations on banks he just told the Financial Times such moves are dangerous and extremely shortsighted and he thinks current political thinking could move the u. S. Back to where it was prior to the 2008 financial crisis. Also the white house has approved obamacare costsharing payments to Insurance Companies for the month of august. President trump has threatened several times now to stop those payments, those subsidies estimated to be a total of 7 billion for 2017 we want to check in once again on walmart shares. The stock now lower despite a beat on the top and bottom lines for the retail giant Comparable Store sales rose for the 12th straight quarter but we had an analyst on a little earlier who said in part because there had been a number of analysts who had raised their guidance just even in the past week that perhaps just that alone maybe expectations were too high. Theyre talking about their full year earnings expectations 430 to 440 the street was at 437. A number of hbo social media accounts were hacked late yesterday adding to the pile of Security Issues that the company has following leaks of scripts around key shows like game of thrones. The hbo twitter account was taken over by a group. They compromised the hbo and game of thrones accounts the hackers posted about trying to get hbohacked trending they have been responsible for highprofile hacks of social media accounts, including several belonging to Facebook Ceo Mark Zuckerberg and googles ceo. In its post they asked hbo to contact them it was deleted after hbo regained control of the accounts. The ceo exodus from President Trumps Advisory Council, joining us is the president and ceo of the committee for economic development. Hes also the former chairman and ceo of both office depot and autozone steve, i dont know how much the commentary youve heard or whether you so jenkins piece, but i think its somewhat telling that he used the term ceos a lot of times are pr canaries they cant stay long if something threatens either their Customer Base or their Shareholder Base should we look at this as a courageous move or just sort of just bailing when the going gets a little bit tough yeah, i think its very unfortunate that they have folded these two groups. You know, all the reasons that existed for the establishment of both the Manufacturing Council and the strategy and policy forum still exist. They were put together in order to advise the administration on nafta and trade, taxes, health care, regulation we havent gotten any of that done yet, so all those reasons still exist. So to get rid of these councils at this point is cathartic but at the same time we still have these needs. So it comes back to what should be the role of ceos as it relates to advising administrations and whether youre talking about a Democratic Administration or a republican administration, i think companies and ceos should be nonpolitical and focus on policy and weve also talked if the president calls any of these guys individually, i cant imagine they wouldnt return his call and then the other thing thats kind of interesting, steve, its certain parts of the maybe the left or the mainstream media, i kept hearing about how these guys never met, they never accomplished anything, that when they were there meeting with the president that, you know, he didnt really listen to what they had to say so it was really useless, none of these things were doing any good, but the minute theyre disbanded, its like the biggest news in the world for the same people. Any truth to that . Well, they just got started i was on two president ial commissions a few years back in each case we set out what are the objectives of the commission, we set out that we were not political we werent there to serve the politics of any administration, we were there to serve the objectives that were set out on the commission its too bad that these commissions were not set out the same way you have to start with saying why do we exist . And the time with the president is not the important thing, its the time before that and the debate and what advice are you going to provide to the administration and so they had not they hadnt gotten to that yet. So you come back around and say, all right, we got rid of these two. You still need to put together advisory groups or advice in some way we dont have the positions filled in this administration and weve got some really serious issues and some important things that we need to deal with right now. Steve, but heres the issue is it possible, as joe just mentioned, for these executives in these Companies Either directly or through lobbying organizations and whatnot to still get their message across, to still contribute on the policy issue, but that the larger issue was that these councils and being attached to them to some degree may have very well been some theater for both sides, by the way, in this instance in terms of being props for each other, but that the just being attached to this sort of council or committee unto itself at some level, even if you put the policy stuff aside, that that was becoming a brandibran brand issue and there was a leadership element to all of this. Joe was right, any of these ceos can pick up the phone and talk to the president. The benefit of this was to provide a Discussion Group where they can come to some sort of consensus on heres the policy path that the administration should follow, so now thats gone youre right also, that the lobbying group still exists. But the lobbying groups all have narrow Political Goals to either defend their point of view or industries. Think about this, think about public polls recently about tax reform and cutting corporate taxes. Theres a lot of people out there for whatever reason, i think its misguided, but they think corporations dont pay enough in taxes. Here you have the average american watch the president meet with all these ceos, what used to be known as fat cats lo and behold, these fat cats think they should have lower corporate taxes. How does that help sell the message to the average american anyway it probably doesnt. Its the president meeting with all these highly compensated ceos talking about cutting taxes for their corporation. Im not even sure thats that beneficial in selling the whole program. Well, and so then it comes around whats the role of Business Leaders in society . They have got to educate their employees and they have got to educate the public look, this is our gdp. We are a marketbased economy, businesses provide the gdp and the growth of the economy. If theyre not listening to the Business Leaders, were in a world of hurt. So, you know, the Economic Issues still need to be worked out here. Steve, call them Economic Issues or not. I was going to say what do you do as a ceo, steve, if youre on one of these councils putting even the morality issues of what the president said or not when you dont feel that you are being listened to . So the paris climate accord, obviously many of those ceos advocated for a position that was not the president s. On the immigration issue, they advocated for a position that was not the president s. And then to see the president effectively attack or at least verbally attack ken frazier, for example, or Doug Mcmillan for the comments that they made, that makes it very complicated very quickly. Welcome to the real world, though this is the point of being a ceo. Youre a public figure everything that you do is scrutinized. Maybe not as much as the president of the United States, but youre out there and thats part of the role. Your role is to lead and to take positions on issues and to advise the president on the right thing to do regardless of whether youre going to be listened to in every little detail that you provide. You still have an obligation to lead so these guys need to get together and they still need to provide policy advice to the administration, otherwise youre just delegating it to a bunch of politicians who will politicize everything that we do. But i do wonder how useful it is in terms of pr. You would never see president obama meet with jamie dimon and Lloyd Blankfein to figure out what to do with doddfrank obviously. So i dont know does it look good to meet with corporate ceos about cutting corporate taxes . That doesnt help with the average person. No, but you can talk about ways to do it correctly, ways to do it without spoiling the job creation. Demagogue. But to walk in blindly into some of this stuff seems a little ridiculous. Certainly with the border adjustment tax, the ceos had some things to say about that part of tax reform. Hes actually right well talk more about this. Steve, thank you very much. For more on this story, lets bring in another voice mary ulbein is from texas universitys school of business. Mary, steve just set this up saying that the ceos need to have a voice, they should be consulted. But so far we havent seen a president who tends to go back to people who have burned him in the past do you think that this is a splitting of the Ceo Community with the Trump Administration . I think were in a very Interesting Times and the old rules dont apply. This isnt a situation that we used to have where politics was very separate from business. And with the rise of social media, theres a lot of pressure on ceos now to have to think about what their moral stand is, so this is really a moral and ethical issue, i believe its not simply a matter of having a voice at the table, its a matter of the association with the administration sending messages and the values that are being that are being conveyed in those messages. Its a more politicized america, its a more split and divided america. My guess is ceos cant afford to have 50 or 40 or 30 of their customers turned off by something that they are doing outside the ordinary bounds of running their own businesses, correct . Yeah, what we see is a fundamental power shift. In the past it was harder for consumers and social advocates to have a voice. But with social media, they can band together and they have a tremendous amount of power they pressure organizations. I agree with the previous caller that its really unfortunate that its turned out this way. I think that there was a lot of excitement when trump came in, that business was going to have a voice at the table and these councils were a key part of that but we saw when the administration started there were going to be some significant policy shifts. And what that did is it forced companies to have to really reflect on what their position is and their stand on issues like trade and pollution control and immigration and climate. So thats just playing out, continues to play out and we saw it escalate this week and the ceos deciding that they cant be part of in association with this administration. Hey, mary, though, heres the complicated part about this. In fact i was having a conversation with someone last night about gary cohns future in the administration and whether its better to leave out of protest or for brand reasons or whatever but the Practical Implications of it as well, which is this executive was saying part of this persons feeling was that gary should resign in protest, but the other thing he said was, you know what, hes the adult in the room i want people like that around the president. And so there is a little bit of a mixed picture here you want the experts, people who are in the trenches and know stuff to be there and yet if people abandon the president , you know, who comes to fill that void its a very, very difficult situation. And i think that thats been the mindset during the year is that were not going to abandon the president. But when the actions continue as they do and they get basically pushed into a corner, they dont have a whole lot of choice so i think that the public and the sentiment not only in the american sentiment but the Global Sentiment is that Business Leaders have to take a moral stand. In many ways theyre taking a stand that politicians traditionally have taken, theyre kind of playing that role so we see a very different situation for Business Leaders they have to be much moorage ill and adaptive they have to read the context and situation and in many times improvise. In this case it was a radical move for them. They were excited about the opportunity to have the voice at the table. They wanted to represent their constituents they believed that by having a voice they were going to influence policy to benefit productivity and jobs. This is a seriously lost opportunity. I dont know, unless something changes in the administration, im not quite sure where we go from here. Mary, thank you for your time. Thank you. Coming up, the president s global message, council on Foreign Relations, Richard Haass joins us after the break shares of walmart this morning, the company reporting results earlier. Wall streets reaction and what analysts are saying about the stock which is now down 2 squawk box will be right back. Or your digestion. So why wouldnt you take something for the most important part of you. Your brain. With an ingredient originally found in jellyfish, prevagen is now the number one selling brain Health Supplement in drug stores nationwide. Prevagen. The name to remember. Welcome back to squawk box, everybody. Take a look at the futures this morning. They have been under a little bit of pressure. The last we looked, the dow was down 25 points below fair value. Weve also seen the s p 500 and the nasdaq under some pressure right now it looks like the dow futures are down by close to 32 points walmart shares after earnings reports its time for the biggest sale of the year with the new sleep number 360 smart bed. It senses your every move and automatically adjusts on both sides to keep you effortlessly comfortable. And snoring. Does your bed do that . The new 360 smart bed is part of our biggest sale of the year where all beds are on sale. And right now save 50 on the labor Day Limited Edition bed. Or a little internet machine . It makes you wonder shouldnt we get our phones and internet from the same company . Thats why Xfinity Mobile comes with your internet. You get up to 5 lines of talk and text at no extra cost, so all you pay for is data. See how much you can save. Choose by the gig or unlimited. Xfinity mobile. A new kind of network designed to save you money. Call, visit, or go to xfinitymobile. Com. Welcome back, everybody. President trump receiving more backlash following his controversial reaction to the violence in charlottesville. How is this going to impact the president s global message we are joined by the council on Foreign Relations president Richard Haass. He is the author of a world in disarr disarray which has been turned into an hbo documentary. Richard, thanks for being here. Thanks, becky. Ive spoken with ceos who have said, yeah, when we met with the president we felt like he was actually listening to us. We felt like it changed his opinions at times and they felt like what they were doing was valuable service by showing up not just to these councils but some of the meetings he had called as well if this is the way we are painting it, kind of a break between the ceos and the white house, what does that mean well, look, what it is, its probably an inevitable switch. I would argue that a lot of what donald trump is doing is not particularly good for American Business the trade policy is bad for American Business, much of the immigration policy is bad for American Business. And it also shows you the difference between the political world ceos work in and with donald trump, they cant isolate themselves. Although, what youre talking about, some of those things like the trade war and some of those other things you dont think are good, some of the ceos have told me that they have had a moderating impact on some of those views and as a result things like the b. A. T. Went away, the trade talk with china tamped down a bit. It wasnt quite as venomous they thought after they had the an impact are you going to continue to see ceos consulting with donald trump . Is this for show at this point or is this a true break theres a difference between consulting, if you will, as a day and being on councils as a relationship relationships have now become unsustainable for ceos because they have to be they have to answer to shareholders and employees. They cant sustain that. I think going in for individual meetings is something qualitatively different and theyll continue to do that. Do you think trump will actually reach out to them only because he is not somebody who tends to take rejection well. His view of constructive criticism is that its clearly overrated. So he may cherry pick which ceos he speaks to or the subjects on which he speaks to them. He still needs to know, theyre a powerful constituency. For example, of all the ceos were to take a certain position on nafta and they got their employees and others to push, it would really shape an environment in which he operates so he cant afford to ignore them. I think a lot of times im gratified because i think youre an equal opportunity basher of both parties you werent well, im unemployed. You werent necessarily impressed with the Foreign Policy of the last eight years visavis korea or north korea or iran necessarily. But i saw you also said about the fire and fury comment that that was unproductive and self that it was going to come back and actually hurt us, those comments now, that was before we saw kim jongun blink or back down or at least temporarily sort of say, okay, he was bluffed and then he didnt follow through with doing anything with guam was that definitely the wrong move now that you look back in hindsight . Didnt trump do some things right in terms of the way he handled north korea . The one thing hes done right in handling north korea is basically saying it cant continue to drift. For more than 20 years, republican and Democratic Administrations allowed it to drift. Part of not letting it drift is saying things like fire and fury and having mattis say game on if you take this next step, setting a red line that actually we saw in syria, setting a red line that wont that you cant ignore. But you dont want to make the issue the United States, you want to continue to keep the focus on north korea also, its one thing to say were going to respond with everything weve got, game on, if you use Nuclear Weapons or Something Like that first. Thats obvious the more interesting question, and i defy you or anyone to i think he just said sending missiles anywhere close to guam. He didnt say nuclear. He said if you point them at guam and launch them. But unto itself, then the flip side of that, right, is if you set a red line and you dont do something about it and you put yourself in a box. Thats what he wrote about. That will be a big part of the previous president s legacy. Thats why he made all the money on the book. And the previous president really was a reluctant sheriff and really will be seen as what he didnt do as more consequential than what he did do. Is it my understanding that you think that the president is in a box on this red line because if in fact north korea were to either point missiles at guam, whatever, that we cant necessarily go full on fire and fury, or can we . We should never be the first to use Nuclear Weapons against north korea or anybody else. If north korea is threatening to use if we had hard intelligence that north korea has Nuclear Weapons on missiles ready to launch, we should do whats called a preemptive strike and Something Like that we would be negligent if we didnt do that the real question is what if north korea doesnt give us that kind of a situation. Do we just attack out of the blue we have a big strategic challenge here. Richard, thank you for your time today. Thanks, becky. Come on back. When we returning, we have more on the fallout of ceos quitting the president s councils plus a new deal for Helicopter Service provider blade the cewio ll join us in just a bit. Well be right back. Ase. Im here to fix the elevator. Nothings wrong with the elevator. Right. But you want to fix it. Right. So who sent you . New guy. What new guy . Watson. My analysis of sensor and Maintenance Data indicates elevator 3 will malfunction in 2 days. There you go. You still need a pass. Ceos break up with trump the president s Advisory Councils collapse and this morning more backlash from chief executives. Walmart beats the street well tell you how the big box retailer is defending its online turf, straight ahead. Plus akman versus adp. It reminds me of a spoiled brat in school asking teacher for an extension for their homework. He makes his case in the heated proxy fight well tell you what to expect as the final hour of squawk box begins right now live from the most powerful city in the world, new york, this is squawk box. Good morning. Welcome back to squawk box here on cnbc live from the Nasdaq Market site in times square im joe kernan along with becky quick and Andrew Ross Sorkin nobody else, no other people, no other flies, no nothing, its just the three of us at this point. I havent seen hide nor hair of that thing, have you i havent but i havent seen the body either. Wait a second no. Futures right now are indicated slightly lower on the session less than now actually worse i dont think walmart is helping at this point. Even though the numbers looked okay down 39 points or so, down 5. 6 on the s p 500 we had an analyst on that said if deplorables never shop at walmart again it wont make any difference im not i dont know, well see. But there are a few deplorables that probably didnt like that the analyst said there wont be any effect from that letter. There may be a few trump loyalists that still shop at walmart. I just that would be my guess, you know, in middle america. Well see. Heres whats happening this hour walmart out with its earnings. The retail giant reported just a quarterly profit of 1. 08 per share. That was a penny above estimates. Revenue was slightly ahead of street forecasts the cfo telling Courtney Reagan the company is continuing to bring together what we are doing in stores with what we are doing online that stock, though, down marginally in the premarket in large part paubecause analysts e the past week had brought up their estimates. So once you get the new estimate, it gets harder to beat the newist estimate. Also alibaba ticking higher. The china ecommerce giant did beat on both the top and bottom lines. The numbers youre seeing on your screen are in renb rather than dollars revenues from the core ecommerce business was up 58 from a year earlier. Their Cloud Business up 96 . By the way, on a market cap basis, this company is going to get close soon to amazon. Reallytrue . Really true amazon is about 450 billion and at this rate alibaba is probably about 50 billion away. Wow. And an update in the renegotiation of nafta u. S. Trade the u. S. Trade representative says that President Trump isnt interested in just tweaking the pact with canada and mexico, theyre now blaming nafta for a direct loss of 700,000 u. S. Manufacturing jobs since it took effect in 1994 warning that the u. S. Could use its clout as canada and mexicos biggest export partner to wring more concessions. You can just do the math, though if you do a per capita amazon market cap per capita and then do it at alibaba. A lot more capita its like five times. Youre right, its over 400 and amazon 470. So were getting close. Closer the United States is in an economic war with china, thats according to steve bannon, chief political strategist to President Trump. In a new interview with prospect. Org, bannon says the u. S. Is five to ten years away from hitting an Inflection Point with china from which we will never be able to recover bannon also said focusing on race would help the republicans politically. He said, quote, the democrats, the longer they talk about identity politics, i got em i want them to talk about racism every day. If the left is focused on race and identity and we go with economic nationalism, we can crush the democrats. Our top story this morning, Corporate America taking a stand against President Trump. Two key Business Councils are disbanded. The leaders decided to disband these councils themselves after backlash to the president s response to violence in charlottesville. Joining us right now on the squawk news line is andy puzder, the former ceo of cke restaurants. Andrew, what do you think about this is this a true break with Corporate America or is this a temporary setback . I dont think its a break with Corporate America i think that it was the right move for both the president and for these ceos with all of the controversy that was generated around the president s comments, i think it became very difficult for people to represent the best interests of their shareholders and remain on these councils in prominent positions. I think dissolving the councils was a good idea. But they were really they were symbolic in any event i think they met twice and only about half the members showed up for each meeting i think they will the lines of communication im sure will still be open with the white house when theres a policy at issue that these ceos are concerned about. Im sure theyll either call with support or call with opposition and i think the president will listen to them so i dont think there is a break. I do think that the councils needed to go given the current controversies. Is this just a Public Relations head fake then is this just a situation where they are symbolically saying, okay, were putting up our were taking our stand at this point but the lines of communication will continue behind the scenes . This is just a way of tamping down shareholder and customer backlash well, i think theres probably a lot of things going on im sure that a number of these ceos very sincerely feel they couldnt support what the president said at that News Conference and decided that they needed to move on. Others im sure are concerned. Look, when youve got 30 or 40 of the country on one side of the issue and 30 or 40 on another side of the issue, if youre in business, particularly retail business, you dont want to offend people on either side of the issue because you to damage to your business and your shareholders interest so there is some economic motive not to offend people i think some people probably withdrew because of that but i think the president decided to dissolve them just because it was no longer in the interest of these people to remain on these boards he wanted this to be a positive and it wasnt a positive but i do think people will still comment when they have i think people comment to the president if they have a line open to him whenever they have a concern. Andy, just as a fact check of sorts, because weve described it this way, some of the headlines have described it this way and you just described it this way the president didnt dissolve these voluntarily. I would say to you that he didnt dissolve it at all. To the extent people talk about fake news, its fake news that he tried to dissolve these things the committee was dissolving itself, told him that they were dissolving it and then he effectively asked to actually have the press release changed to suggest that he was going to be part of it and then before the press release was released, he front ran the press release yeah, i dont know what happened internally. No, no, im telling you thats what happened internally. Once you know that i mean i believe you. Im just telling you before i comment that i wasnt involved in that so i dont have some insight on this. Andy, this may be qualitatively different because were talking about torches and horrific slogans and the most repugnant group of people that you can possibly find. And i dont know whether trump necessarily equated those people with the left and said theyre exactly equal. I think he just said there were some bad people that were on the side of it, but saying there were some good people on the other side, i have a problem with that obviously. But if you go back to access hollywood, you go back to what some people thought with second amendment, people will take care of hillary, i can give you 10 or 20 Different Things that have happened in the last year that a ceo if he was a social Justice Warrior and if that was his role in life, there would have never been a ceo council that could have been put together in the first place. So is that now going to be the status quo, that ceos, anything that either could offend any of their shareholders or customers, any time where theres anything theres any heat in the kitchen where they have got to protest and resign in protest or do you keep a seat at the table no matter how repugnant you might find some of the comments, but youve got to be there to influence policy, unless the guy is not going to be there next week i dont im just wondering whether is that what weve decided, that now ceos are the arbiters of social justice. I agree with you totally, this was a tragedy in charlottesville. The actions of these altright groups, the ku klux klan, neonazis and as the president said racism is evil and these groups are repugrepugnant. To get to your question, i think ceos are always in the crosshairs on these social issues theyre always in the crosshairs on any issue whether it comes from the right or the left because you have a real obligation to protect the interests of your shareholders when these councils became so controversial because of either what the president said or the coverage of what the president said, because while the president certainly could have better articulated his position, and i think his position is probably not even what he stated probably wasnt as good an articulation of his position as hed liked to have given it, but there are people who oppose his agenda who are trying to make perhaps more out of it than it is based on what he said. So for the ceos to stay in in that environment was very, very difficult. Ceos are always, as i said, in the crosshairs and you have to be careful their job is to represent the interest of their shareholders, not to make political statements so i think its a problem. Its difficult to get input from the Business Community when every time one of them opens their mouth, theyre attacked as monsters if youre attacked as a monster every time you open your mouth, you tend not to open your mouth. So i think theres a problem from getting input from Business Leaders on those issues because theyre so controversial but thats the nature of the american entrepreneurial system. You dont want to offend consumers and you want to represent your shareholders. All right i almost recused myself from talking to you because of the western Bacon Cheeseburger, which if youve ever had one of those, i cant really its difficult for me to be tough on you. They have an onion ring on the cke western Bacon Cheeseburger and a sauce. And now this next guy that is coming on, i dont think i can i should really recuse myself here too. Andy, thank you. Thank you, andy. Lets get to a ceo whos backed President Trump since he took office. Joining us now, i cant believe this, i cant, i cant mike lendell, ceo and stwesinver of mypillow. I spend my night every night with this guy i mean with this guys pillow. So do i mike, this was not planned, thats not why youre on, but its a fact. We have mypillows both of us. Thats awesome. Anyway, mike, you were at the white house earlier this summer for a made in america event. You know, youre still a young guy. How many employees from mypillow. Com now, all in the United States, like how many, like 2500 or something no, weve got about 1600 now, yes. 1600. So its awesome. You designed it from scratch whats in there . Actually dont tell me its like the colonels its a patented secret. Is it obviously it is because it comes right back up. I got a patent on it, yes. Becky no, i havent, but i told you i need new pillows were in the market. It has a certain kind of feel for me it works. I havent convinced my wife yet. So, mike, getting back to the nittygritty, i keep making the point that since world war ii there is zero tolerance for this we learned our lesson. The greatest generation had to save the world because of and thats still fresh in our mind you see torches on u. S. Soil, you cant really qualify that in any way. You cant say, well, but its just what it is and theres just no way around that so are you do you understand what happened here with the ceos leaving or disbanding or whatever else it is . Yeah, theyre making their own decisions on that. I have you know, our president condemns all hate and especially those groups. You know, the public, the way the public theres been so many attacks on our president and we havent been able to get to the agenda that i know he has and that hes trying to do and i think the influence with social media, were in a different age where you say the wrong thing or do the wrong thing and then your business gets hurt. And i think they you know, they just made their own choices. But i believe thats a few that are i think were all still unified that are with the president. I think hell find a way to communicate with us. Ive never seen a president reach out for more help in making decisions than any president ever. Well, that i have taken what youre saying and i agree with you, i dont think that he said that the two sides were morally equivalent i think that thats a narrative that fits certain peoples idea of how to approach this. But then again, i understand i look at the genuine feelings of a lot of people that watched that and maybe im not in a position you know, im not africanamerican, i dont have i cant judge how horrific that is, and i think that these feelings are genuine that were seeing. So you cant just deny that that happened and its the media or the portrayal of it. I mean it deeply affected and it was i dont think people are faking there so how does he how does he bring that back . How does he heal the country now at this point . Well, you know, i can only say for myself, you know, i met him last summer and he reached out to me in a meeting i thought that was amazing having everything that i stood for that he wanted for this country. Hes not a racist, hes an amazing person and he will hell persevere and get through it and get to his agenda and all the Amazing Things hes done already with the jobs at an alltime high over a million jobs since the beginning of the year. The stock market at an alltime high my company is flourishing. The Consumer Confidence is at a 16year high i mean these are great things that are happening and i just wish the attacks would stop on the president and we could get down to helping the country and get down to all the things hes doing with infrastructure, the inner cities and the stuff that is really going to matter to help unify this country youre a familiar face, mike. Congrats on your success, household name almost in like two or three years, amazing. Anyway, thanks for your opinions today. We appreciate it thank you for having me its an honor. Youre welcome. Coming up next, walmart out with earnings. Were going to dig tou thrghhe quarter with an analyst right after the break. The babys room wont build itself. 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. Welcome back to squawk box. Take a look at walmart beating the street but shares are under some pressure this morning, down a little over 2. 5 right now dan bender is here, managing director of jeffreys good morning to you. Were looking at these numbers they look like theyre beating but in large part i think, you tell me, a lot of analysts raised their expectations to the high end and now maybe theyre not going to be at the high end . Well, i think thats right. Youve seen walmart plan pretty conservatively and beat and analysts have adjusted to that and they have been raising numbers so they did come up at the upper end of their guidance and beat by a penny. If you include some impairment charges at sams it maybe it was even two pennies i think the important takeaways are that Comp Store Sales are accelerating both on a one and twoyear basis in the u. S. And the operating margin declines are decreasing at walmart u. S. So were working our way towards profit margin growth again i think in a world where amazon seems to be taking over, if you can have a player like walmart not only accelerate Comp Store Sales but also increase margins, this will be a pretty good story. To your point earlier, certainly expectations moved up. I think after the target preannouncement. But i would draw a comparison, walmarts twoyear comps were 3. 2 stacked and target was flat i think target is still in the earlier innings. Whats a fair price for the stock . We have an 88 price target and that does reflect a premium multiple based on the idea that we were in a depressed earnings cycle, if you will, for the last few years as they made those investments. We see good signs of improvement. So i still think thats a fair price target. Weve got to run, but among the big boxes, which one do you want to buy right now . My favorite big cap names are walmart and home depot. Fair enough dan, appreciate your time this morning. Sure. Thanks. When we returning, ackman versus adp the proxy might is just heating up today the activist investor making his case to investors well te y wt eecllouhatoxpt. Tk 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. Finding the best hotel price is whoooo. Now a safe bet. Because tripadvisor searches. Over 200 booking sites so you save up to 30 on the. Hotelock it in. Tripadvisor. Welcome back, everybody. Bill ackman will be taking questions from adp investors today as his proxy fight with the company heats up leslie picker joins us right now. Hey, becky. In less than one hour bill ackman will begin his presentation on adp, a proxy fight thats already shaping up to be one of the most contentious this year. Adp disclosed the two had been in talks ackman wanted to nominate five directors and oust carlos rodriguez. Adp denied ackmans request for an extension to nominate his directors. Rodriguez explained that decision on squawk on the street last week. The real question is why does he need an extension not how long is the extension and what did he really ask for or what did he really not ask for, because it reminds me a little bit of a spoiled brat in school asking the teacher for an extension for their homework. Ackmans story was a little different. He said he only wanted three directors, not five, and filed a preliminary proxy statement on monday that included, among other things, backgrounds showing that rodriguez sent an email in error to ackman. In it rodriguez said he didnt find ackmans willingness to Work Together as, quote, credible hopefully well get a better sense in a half hour, guys. Hopefully youre right, leslie, thank you. Coming up, weekly jobless claims about to hit the tape we will bring you the numbers. Quick check on the futures before we go to another break. They have been down but not actually now worse walmart weighing on the dow, down 55, s p down 7, nasdaq down 30 here at Td Ameritrade trader offices. Steve, other than making me move stuff, what are you working on . Let me show you. Okay. Our thinkorswim Trading Platform aggregates all the options data you need in one place and lets you visualize that information for any options series. Okay, cool. Hang on a second. You can even see the anticipated range of a stock expecting earnings. Impressive. Whats up, tim. See options data like never before. With thinkorswim only at Td Ameritrade. And the wolf huffed like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. She said. Symbicort could help you breathe better, starting within 5 minutes. Symbicort doesnt replace a rescue inhaler for sudden symptoms. Symbicort helps provide significant improvement of your lung function. Symbicort is for copd, including chronic bronchitis and emphysema. It should not be taken more than twice a day. Symbicort contains formoterol. Medicines like formoterol increase the risk of death from asthma problems. Symbicort may increase your risk of lung infections, osteoporosis, and some eye problems. You should tell your doctor if you have a heart condition or high Blood Pressure before taking it. Symbicort could mean a day with better breathing. Watch out, piggies child giggles symbicort. Breathe better starting within 5 minutes. Get symbicort free for up to one year. Visit saveonsymbicort. Com today to learn more. Good morning, welcome back to squawk box right here on cnbc were live at the Nasdaq Market site in times square some stocks to watch this morning, a lot going on. Shares of l brand slipping after retailer lowered its guidance for the year also reporting a bigger than expected drop in samestore sales. Check out sales of cisco well show you whats going on there. Youre looking right now at that stock. It is off about 2. 5 the quarterly profit of 61 Cents Per Share was in line with estimates but sales in its closely watched security business missed forecasts Chuck Robbins will hang out at 9 10 a. M. This morning so you dont want to miss that. Also, we are just seconds away, literally seconds away from jobless claims. Rick santelli standing by at the cme in chicago rin rick, the numbers, please. Originally 244 last week, this week you drop it 12,000 to 232,000. Pretty good subtraction, dont you think . 1. 953 million on continuing claims august read on philly fed index, dont see it yet now, if we continue to monitor everything coming out for the rest of the day, were still going to have industrial, best utilization, all these things may be important still down 64 in preopening. If i look at the dollar index, its up 37 of course equities are a little soft, as i described so you want to pay particularly close attention to the low 2. 20s with regard to tens. I dont know why were not getting all the data thats supposed to be out dont see philly fed when i do see it, ill dial you up and give you the updates. From chicago at this point, its jobless claims not having a big effect on the market as we get ready to see what the softer equity open may mean for the markets. Back to you. Thanks, rick. Let us bring in chris hisey, chief Investment Officer for Global Wealth and Investment Management at bank of america and Steve Liesman is here. Steve, i want chris to respond, did you see the atlanta fed, gentlemen, yesterday 3. 7. Is that where gdp is thats where his thing is. How are they on the high side theyre on the high side, yeah were on 2. 8 which is the average of all the tracking forecasts on the street. There are different error rates at different times of the cycle. They have their own model. The reason we do the rapid update is because we dont think anybody has a lock look, 2. 8 is a good number what are you looking at, becky philly fed is there i want to tell you the numbers 18. 9 versus 19. 5 for july. I think 16 was expected rick had no reason to apologize because the number wasnt there. Its still not on my screen here love means never having to say youre sorry anyway. He does such a good job, he does math on the fly which i will not do on television. Chris, are we in a 3 world temporarily . Temporarily i think is the key here there isnt one big trend that is completely sustainable like we all wanting we all want to see 3 , 3. 5 , we want to see inflation close to the feds target, we want to see equities in the slow grindup trend forever but were going to be in a world of confusion, complexity, changes all around, whether its geopolitical risk, whatever is going on in washington but heres the key the one trend that everybody dismisses, that everybody wants to talk about, that everybody wants to change their view on every other month is profits the bear camp will tell you theyre not real the bear camp will tell you its quantitative easing, its the excessive liquidity thats out there in the system creating these corporate profits. They will tell you that stock b buybacks let the first stage of this but the tailwind is nonu. S. Economies right now nonu. S. Economies are participating in the Global Growth curve for the first time in years, especially the emerging mark, which are a lions share of the Global Economy. And thats translating into s p earnings, which is translating into a marketplace that continues to frustrate the bears. So europe is not kicking the can down the road anymore, are they im sure they are. They are . Im sure theyre kicking it down. I thought you said things are better. Things are better. They may be able to grow their way out of all those problems we talked about every day for five years ago for now theyre extending the Business Cycle for now. And the Business Cycle is probably healthy for the next couple of years. Emerging markets too, and china. So were hitting on all cylinders, that explains everything thats happening . Were hitting on all cylinders at a lower growth rate than normal but better than what people believe. And Interest Rates arent likely to be a factor in tamping that down for how long, for years theoretically . I think thats a good way to put it. So its Pretty Simple i have not going to call you stupid but this is Pretty Simple. Theres a lot of why do we think theres a wall of worry . People still dont love this environment for some reason. Because the greatest experiment ever in Monetary Policy has been with us for quite some time. Theres structural changes in the Global Economy that were not sure of yet. Theres an innovation cycle that continues to confuse people and surprise people to the upside. So you get inflation stay dormant and theres excuses for it andrew, it sounds like youre not like this on your skis, its like youre trying to catch up with your skis. Ive got to catch up with my skis. Theyre out in front of you, which is not a good way to ski either over or behind. Thats one of the things the fed was talking about yesterday was this inflation outlook the crisis of confidence around the feds ability to create inflation is a big issue if you look at a longterm chart of inflation and unemployment, theres supposed to be this thing called the phillips curve. And its not working too well. When those things come together or fall apart, thats the phillips curve working when they move in the same direction, its the phillips curve not working. The idea is if you have low unemployment, wages should go up and inflation should go up when you zoom in on the last five years, take a look, kind of flat youre not seeing much of a relationship just so you know, i looked up this guy, a. W. H. Phillips from new zealand. Escaped from russia and he did this big study on unemployment and inflation in england its been kind of like the thing that everybody has used and now its falling apart and the fed doesnt know if its technology, if its globalization, arbitraging, even local wages here or if theres just something going on i think what this sets up for is this idea, this december rate hike may not happen now because of this uncertainty about inflation, even though dudley yesterday does that change your outlook at all . What it does is it creates a lot of questions the question that i constantly have, and i dont know if anyone has an answer to it, theres a lot of work that needs to be done around it if youre going to a Global Economy that is every more contingent upon the Service Economy, how could you get higher productivity. You never do. Thats so interesting. If china is more service oriented, theyre over the 50 level. If the u. S. Continues to move that way shall whats on the phone. Software driven economy, not just robotics, but how do you get higher productivity if you have a higher magnitude of a Service Economy . You cant. You cant measure how fast the waiter comes back and forth from your table so how do you get higher productivity i think a robot on wheels could get back to my table even faster and that would be it would be more productive but none of us will have jobs. So you think its a fake number just because we cant measure productivity in Todays Society but we could be getting more productive along the way . Well, thats an interesting thing thats out there, this measurement issue. The argument has been, well, weve always mismeasured service. But the idea is that if more and more of this stuff is either, a, free, b, available online, that we cannot were making a bigger measurement issue now our friend Marty Feldstein has this issue, he thinks were mismeasuring this, that theres more productivity out there. People feel like theyre more product iive and its not showg up in the anybod numbers ultimately this gets to how much we can grow and whether we should be satisfied with the Growth Numbers we have because theres more efficiency in the economy, but whats interesting is the profits are there and if the profits are there, thats one barometer of how well the economy is doing its not the only barometer. And the question becomes whether or not the workers and the wages end up sharing in that wealth. It seems increasingly incrementally they are the trouble is the way that in your job today, maybe a robot or Foreign Worker is the one depressing your wages. This is why corporate profits for investors mean more today than ever before, because not necessarily mismeasurement, but the efficiency ratio of a corporation today is so much higher right. Than it ever has been if its not a foreign robot. Right, steve . Just hope its not a foreign robot. Its a complicated situation. Theres a lot of foreign robots, joe. We hope theyre made here. There was a great article in Discover Magazine that says were not robotized enough japan is way ahead of us given the aging of american society, there are going to be more robots. Weve also said that japan has this deflation that has gotten them in trouble for so long. They also have this aging society. People like jeff bezos would argue if we could get robots to do all of the things that we dont want to do that that ultimately is better for society. But how do you distribute income i know. Youre going to go to guaranteed income. The hair on joes head redistributing it, he knows exactly how to do that. Thank you very much weve got to go. Were coming back in just a moment because theres a new deal for Helicopter Service provider blade the ceo is going to land on our set and hes going to do it right after the break. Welcome back to squawk box this morning i was going to say that rob wiesenthal has landed on our set. Helicopter providers that work with the oil industry are teaming up with blade. Pilots and choppers from bristow have been flying through the hamptons this summer instead of their usual routes to and from oil rigs joining us with more on that and where this whole helicopter industry is going, rob wiesenthal, the founder and ceo of blade we were going to have you last week you had a little pink eye. Its all solved. Thank you for telling the whole world that, but yes. Im sure my doctor is thrilled. That was smooth. Good to see you i apologize about that. I got to come back again, by the way. Thats all right, go ahead. How did you get that, rob okay, were okay. Come on back. Everybody is good. Andrew. Thats about the grossest thing you can get. Because of whats happening hold on because of whats happening in the oil industry, these helicopters are now being used to chopper back and forth to the hamptons why is it only the hamptons to you its boston, its philly i know, you revolve around the hamptons its his social circle, right . Blade started out by taking excess capacity and consumer helicopters and getting it to the point where people could buy it by the seat and make it economic now were taking helicopters that are down in the Oil Field Service industries that are moth balled because the infrastructure of these companies were meant for 100 oil and they want to keep servicing the oil industry, they want to diversify and they have a dedication to that business. The right answer is not moth ball them so how many are no longer in service because of this right now . There are a lot of them. Are we talking hundreds probably into the hundreds now globally i think were talking about extremely large, sakorskis, what they call lorenzos, these are 10 to 15 million helicopters. How many people can fit on them the helicopters we have are up to eight people theyll go up to 12, 18 which changes the economics for you. Changes the economics and i think that there are jobs that are now preserved were bringing people up here. Its an important it is the most valuable short distance aviation corridor in the world for the Consumer Market is the northeast. So theyre thrilled, were thrilled we want to keep this going. Im trying to understand what you think this i just want to go back to the oil industry. What does it say about that world right now . And do the folks who own these helicopters think, you know what, im going to do this blade thing for a while and hope that this comes back . Whats the i think its twofold. Number one, i think theres a dedication by the Bristow Group in terms of that this is an important part of the Global Energy infrastructure that cant go away in terms of servicing these rigs they want to be around to, you know, to continue helping them, but at the same time they want to use the excess capacity i think down the line its really about diversification era has done a good job in terms of tourism, other businesses bristow sees the ability to use our crowd sourcing technology in terms of getting more Oil Field Service employees onto rigs, really important. What happens, though, if Oil Goes Back up to 100 what happens to your business . Theyll be continuing to diversify. I think people learned a lot of lessons here it is, obviously, cyclical and i think youre going to see investors really want to see some diversification. But what does that do to your business, which is to say youre making a bet now on these helicopters. Could they leave you they could, but you have to bet that theres diversification. Also, remember as we talked about last night, were really transitioning to what we Call Electric vertical takeoff and landing helicopters. At some point the oil industry and the Consumer Market, we increase our market by having more places to land. Thats about quiet aircraft, safe aircraft, less expensive aircraft. Whats the price do you think you can get it down to using these bigger helicopters right now were down to 195, to the airport these larger helicopters are what we call cabin class where a lot of your executives who are on your show use twin engine 2 pilot large sakorskis. These are really the high ends of the high end but they also have moderately priced helicopters as well. Will we be landing on the tops of roofs in new york city ever again yes, 1977. And those flights were cheap. They were 5 back then. No single engine single pilot flights, are there yes, absolutely. There are still some of those . Absolutely. He does those every day. I think nothing to be fearful about, joe auto rotation. They dont drop in the sky they have fans, they glide like planes. Im more fearful of pink eye than the single engines. Anyway, when we returning rob will come back another time. We hope, after this after weve burned all the brushes and makeup and sponges that were used on rob, its very contagious but when we return hes fine he doesnt have it thats why hes here hes fe. In youre going to be on the bus from now on, joe. Thanks. The final two weeks of august tend to be a tough one for stocks welcome back production was up by. 2 last according to figures by the federal reserve. Which was scheduled for 9 15 eastern time but came out 30 minutes early. Still unclear why that happened. Rob walked off. Let me just say, i only meant president of the show we have known him for a long time he wasnt on and i felt like i was trying to explain why he wasnt on. Lets keep digging. That std is all taken care of. He is the author of tears we cant stop. Im very serious now. No, this is a very serious conversation. Yeah. And first of all lets just get your retox whaction to what has on over the past couple of days. Not how to look backward but is there a way to look forward . Yeah if the president uttered the words i resign it would help us a great deal short of that he he have to take seriously the criticism coming at him lets discard what he considers the alt left lets look at the conscience voice within his own party if he we take john mccain and senator blake. Those thats conscience moved him to say youre wrong. They failed to name him by name it does strike me as interesting that republicans that are always touting the virtue of either selfhelp or be responsible for what you do and dont make excuses in this instance its failed them all together so what we do from now is use this as a teachable moment even if the president refuses to come to class, he can still be an object lesson for us to say you dont make moral he kwif len sis between big gots on the alt right and neonazis and people who no matter what their flaws may be are not amply identifying the worst things we know. We had a number of ceos come on today or yesterday and say they want to support the president. They want to work with the president and then theres a larger issue which is you do want good people to be around the president. Yeah, you want good people to be around the president if they have the possibility of make an impact hes proved to be impervious to solid advice if general kelly can hang his head and say manion what i can do with this of course thats not his position but the reality is that very good people surrounded this president and he has not taken their advice number two you have to draw the line in the sand at some point people are saying we still have to do business hes still the president , thats true but if you dont have any moral authority to exercise. If you dont say enough is enough and our leadership is man chest we we are able to say even as business men concerned about the bottom line were also concerned about the mosral line we draw in the sand. Theres an interesting article this morning suggesting that the ceos took too long. They did but the fact is theyre doing it now they did take a long time. They put their finger in the wind to say which way the wind was blowing but at least now theyre acknowledging this we need people ahead of the curve and understand this is fundamentally wrong and we have to do something is about it. Thank you for coming in this morning. Lets get down to the new york stock exchange. Jim cramer joins us. Can you figure out walmart for me jim it is good. I think that what happened is this has been stand out and moved ahead. I like the fact that they are offering so many different products on their ecommerce and the stock has given up a lot of what it made in the last couple of days. I think it is a buy. So everything we talked about for three hours, jim, number one is it really important that you get the input from the Big Company Ceos do they, will they individually still talk to President Trump at this point six months from now are we not talking about this every day again . How do you see this playing out . If the president were to call any one of these people and say toipt talk about tax reform and they say, they may say listen i cant because of what happened but i think that time does not necessarily heal all wounds but i think if you get back on a business track, joe, i think that people will say okay listen i do want to help but theyre way off the track right now. All right, jim, thank you well see you in a few. Jim and the whole crew on squawk on the street in a few minutes. Well see you back here tomorrow, take care. We have a question about your brokerage fees. Fees . What did you have in mind . I dont know. 4. 95 per trade . Uhhh and i was wondering if your brokerage offers some sort of guarantee . Guarantee . Where we can get our fees and commissions back if were not happy. So can you offer me what schwab is offering . Whats with all the questions . Ask your broker if theyre offering 4. 95 online equity trades and a satisfaction guarantee. If you dont like their answer, ask again at schwab. Better than a manual, and my hygienist says it does. But. Theyre not all the same. Turns out, theyre really. Different. Who knew . I had no idea. So, she said look for. One thats shaped like a dental tool with a round. Brush head. Go pro with oralb. Oralbs rounded brush head surrounds each tooth to. Gently remove more plaque and. Oralb crossaction is clinically proven to. Remove more plaque than sonicare diamondclean. My mouth feels so clean. Ill only use an oralb the 1 brand used by dentists worldwide. Oralb. Brush like a pro. Good thursday morning, welcome to squawk on the street. Im with jim cramer at the new york stock exchange. Chuck robbins is going to join us on the Companies Earnings market slightly red. Ten year yield just 224 despite jobless claims near a six month low. Our road map begins with a gap between the president and ceo