Ten oil down. Europe red across the board. No surprise. In our road map this morning, european markets not alone in terms of volatility but aggressive support measures in china seem to have stemmed some of the selloff. Aetna agrees to buy humana. Well speak with both the ceos later on in the show. Currencies caught in the cross winds of global uncertainty and thats affecting kmoimd commodities. We do want to get you the latest on greece this morning, the morning after voters rejected creditors austerity demands in the referendum. We are in athens this morning with an update. Good morning. Reporter good morning. It is now a waiting game. Were waiting for so many things. The finance minister has resigned. Were waiting to see who the replacement will be. Today we are waiting for the u ecbs decision on what they will extend to the banks. No details on that. Tonight we know that merkel will meet in paris with germany, and merkel will travel to paris to discuss the discussion in grease with germany. Germany wants to get a deal done and willing to do it under softer conditions compared to merkel. There is a Euro Group Meeting tomorrow. Thats when the finance ministers get together and then a european summit for leaders tomorrow. And weve been told alexis tip ras tsipras is going to bring forth a new proposal. He said its his priority to get the banks functioning fully again. Already now there are atms that can no longer disperse 60 euros. They are only putting out 50 euros. We spoke to an economist from the university of austin. He saw this as incredibly political, the decision. There is a lot of pressure on them and heres what he had to say. Its part of a political pressure move which the ecb shouldnt have been part of. Walking that up and getting the banks up and running as a sign of good faith would be an extremely important step. Reporter the ecb has not wanted to be seen as political in any way and the hawks within the ecb would argue theyve been lenient but in greece it seemed the opposite. Back to you. Thank you very much. Obviously, a difficult situation. The varoufakis news his relationship with creditors had become tense over time. You cant kick the can down the road anymore because of the Economic Situation in greece and because of the banks. Something has to give. Either theyre going to kick greece out of the eurozone or theyre going to have to do a deal with all the implications that that has for italy and for everybody else who might ask for a rebeat as well. And where you can get the taxpayers in the rest of the eurozone to sign off on giving more money to greece. Pretty interesting to watch the Market Reaction overnight. Obviously down across the board. Sell off from major stock markets including europe and u. S. Futures under pressures but off the lows. Look at the euro. Thats a good proxy of how the markets are doing. Dropped at the market in asia but has come off the lows in a big way. Only down after a against the u. S. Dollar which reflects this is negative to have uncertainty but its not a panic move and thats important considering all the calls that you heard for if greece has to leave the euro you might see a lehman moment. So far youre not seeing that in the stack market. Why would you have a lehman moment . There doesnt seem to be the connectivity we had during the financial crisis. People want to equate this moment with that but its different. Because of the exposure. There is no greece exposure. Germany has exposure but not investors. Its not that. Its the euro. Its what precedent does that set for a currency that was supposed to be irreversible. But thats something youre dealing with in years and years to come. Correct. And if you write down the greek debt the ecb is going to have to write that off the balance sheet. It has to take further haircuts. And all those plitolitical parties are running their hands together. Thats more the question. The left wing particularly in countries like spain. Or the right. Or the right, but these are issues that youre going to be dealing with years down the road. Its just not clear to me that there is the mechanisms by which you would see significant financial dislocations as a result of whats going on. Although others want to puerto rico with china. China to me if youre talking about impact on the market a more significant story. Talking about so much money lost and the market cap taking moves to try to stem the crisis. This has been a stunning move in the market. Shanghai posted gains after night but finished way off the highs. They only finished a few Percentage Points higher. China announces a series of support measures to stabilize stocks which has plunged 30 in the last three weeks. The a state investor promised to buy more etfs and they said they would support long term investors entering the market. Some say its a series of desperate moves by china to try to stem the decline or it shows theyre intervening and concerned about what was a tremendous runup, 130 in stocks so far this year and then a very fast and hard fall. As the peoples daily put it today, rainbows always appear after rain. Not always though. It depends on the storm. But this is fascinating in the sense of they are doing these things that perhaps may lead investors in the future to believe the government will always be there to put a safety net in some fashion there. They did things to allow the market to actually be a lot more transparent and trade much more on fundamentals. The introduction of marge inin and moving to remove things and make the market more tradeable and here they are responding to a significant downturn in the market. But still up for the year although a lot of Retail Investors piling in over the last few months and certainly the losses may be significant for them. Well see what the impact is overall. Buts the fascinating to watch as they grapple with moving your marketplace into the modern age. Its also worth pointing out that the euro and china are linked. A lot of people say for the euros rally at the moment its the chain argument. Remove a weak link and the chain is stronger. Its a dangerous argument because it may lure people into a false sense of security. The euro is a major funding currency around the world and people may be as they take risk off the table, putting that into the euro which may be why it raises. Lets get analysis on china and greece and bring in our chief u. S. Economist at deutsche bank. A very important point has been made that the markets on both sides of the atlantic are stable relatively stable on greece. Whats your takeaway . Well when you look at it obviously Currency Union without fiscal union, is if you step back and look at the macro, it helps you understand the bigger issues. The u. S. Wrote the script before europe. We devalued and defaulted on over 1 trillion on mortgages. And we used money to facility the gdp. Europe needs to do what we did and dragging them over the finish line has been the challenge. What does it mean for investors today and through the summer . Well, i think that the ecb will be the final Decision Maker on greece in about two and a half weeks they have a loan due. Its going to require more credit. If they default, it would create messy exit risks. Youll see this resolved in the next couple of weeks. Joe . I agree with barrys points. Were in pretty good shape in the u. S. Remember back in 2010 when we went through the first of what has been many itd rations of the greece saga s p fell from april through july. They were trading around only 1,000 at the lows. Peripheral years are down substantially since then. We have made some progress in ring fencing this situation. And the u. S. Has continued to do well, and my guess is were in a secular bull market. Can the fed really raise rates in an environment where the whole future of greece hangs in the balance . The feds should have raised rates a while ago. Theyll always find an excuse. If people thought they were going to raise them this month and you had this greece situation unfold. The fed is going to step back. Almost regardless of what the Economic Data show. I dont believe thats right but thats the fed reaction function. Theyre worried about everything. What was the window where they had a chance to raise rates. Sometime in the last couple of years when the economy was doing well in 13 and 14. Theyve worried about politics and the fiscal cliff and greece. Now theyre going mid year but then the dollar strengthens. It would make sense for our currency to strengthen and the fed got cold feet and backed us away from a mid year hike in march. Is it too late now . Alcoa is wednesday. Whats going to happen with earnings season . Well i would use the analogy that this is like their fiscal cliff. Europe is where we were on new years eve of 2012 after the election of the 2012 widmidterms. The greek stand off is very much like our threeyear lag in the fiscal cliff. In terms of the currency and if greece were to exit the euro could get stronger right . It could. And listening to what youre considering arguing about. Youre each right. Youre right in short term but youre also right longer term. The think about it is as long as everybody is in the union, everybody can pretend, not pretend, thats too strong but we trade at corporate hedges if its a union and the system holds together. The minute somebody leaves that sets precedent. There is a road map for somebody else and you would see people over time i think differentiate among the different sovereigns in a much more pronounced way. We have precedent on the banks as well. The reason people withdraw money, they may be asked to take a haircut on their deposits. Thats possible. I think people are worried if they dont have the support measures continuing from the ecb, theyre short of cash and then medicine food and . Is china bigger than greece. Chie is na is one of the biggest impacts in the world but greece is important in the sense that weve dealt with systemic issues. Were still in this post financial crisis syndrome mode. It will be a big summer. Thank you guys. When we come back of course consolidation in the Health Care Sector would have been our lead a couple of weeks ago. The ceos of aetna and humana on their deal still ahead. And go pro announcing something new this morning. Well here about that in their ceo. Take another look at the markets. The headlines continue to roll about all the phone calls tsipras is making this morning. Well keep you honest on that when squawk on the street continues. Holiday weekend, really kind of thursday, friday morning at like 2 00 a. M. , aetna agreed to acquire humana for 37 billion in cash and stock. It includes a 1 billion antitrust break fees. Larger break fees with aetna or humana were to get a bid from someone else. Were going to talk live to the ceos of both companies. This has been long anticipated by the market. The price actually coming in perhaps a bit higher than some operated particularly because as evidenced, the company is not going to meet previous earnings expectations but that was not a great concern to aetna. What will be a concern is antitrust. And where the review of this transaction goes and if we see another, how that is going to change in any way the way that regulators view a potential market going from five big players to three large players and, of course whether the consumer in some way is either harmed or perhaps in their case theyre arguing will benefit from this consolidation. I should note on the stock market front there is a large spread here given the implied price of the deal and where humana is trading. Stock not up. Aetna for their part down. Well be watching that but youre talking about a 30 spread to the actual value. Its going to take a long time. Theyre talking up the second half of next year. Does that mean september one or when does that come but theres quite a bit to come between now and the close of the deal. Its interesting. Its suggesting as far as antitrust was concerned being the first out of the gate might be the advantage. Rather than saying we can see whats happening across the industry overall, well go for and im not sure that thats necessarily true. I think if you get an anthem cigna deal in near term my e peerngs has been and i think this has been indicated by some reporting that there will be taken in a sense, viewed at the same time and, therefore, the market ramifications will be viewed overall given both deals potentially occurring. Fdr did downgrade aetna today saying it was reaching the price target of 130. They said we didnt think aetna needed to complete a major acquisition. The concern here on this report was that the revenue mix would be now more government weighted and, therefore, that would have to be factored in. They also sited err factors that would weigh on aetna shares. And the accretion is not what some people had hoped for. There had been a lot of time to get a sense of where this market might go. I think 230 was a pretty good price to secure given a lot of the concerns here and this is something well be following along with many other deals that have a good deal of antitrust risk. And more insurance possibly in the pipeline. Yeah. Plus a lot of deals closing deal which well talk about in a little while. And up futures are down triple digits but as we sometimes say off the lows of last night, a lot more squawk on the street from the nyse straight ahead. Bring us your aching and sleep deprived. Bring us those who want to feel well rested. Aleve pm. The only one to combine a sleep aid. Plus the 12 hour pain relieving strength of aleve. Be a morning person again, with aleve pm. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . When youre not confident you have complete visibility into your business, it can quickly become the only thing you think about. Thats where at t can help. At ts Innovative Solutions connect machines and people. To keep your internet of things insync, in realtime. Leaving you free to focus on what matters most. Premarket, of course notably weak after a weekend of the referendum in greece. Once again we go into what looks like a difficult start to the week. Dow futures down 154. A few minutes before the dell lets bring in our cash operations director. Good morning to you, art. I walked into work this morning and there is still the enormous American Flag outside the nyc, and i thought how lucky are we to live here and nowhere else . Theres no question about it. I sat here thursday morning and i said im hoping for a yes vote and we can move past greece and the people diseaseecided to vote for pride rather than pocketbook. Thats a landslide. The next thing were going to have to look to is while merkel still probably wants a deal drahi probably still has to help. The atms are quickly running out of money. People are starting to hoard currencies. Im told most businesses will not let you use a credit card when you make a purchase because theyre suppliers are demanding cash. So the place is steadily grinding to a halt and they need to loosen up the day today money. Were getting word that according to some bankers, greece will issue a new decree today to extend the bank holiday for at least a few more days. That situation is not going to get better any time soon. No and the bank holiday is one thing but you used to be able to get up to 60 euros out of an atm. Apparently you cant do that anymore. They dont have enough currency. Youre down to the smaller bills. This thing could get worse. So i think youre going to have to hear from drahi beforehand. Will reincrease the there were so many Great Research notes out over the weekend as this was unfolding and many wall street firms are upping the chances of a grexit. What do you do with that information . It sounds scary but as a u. S. Investor what do you do with that heightened probability . You have to see if they begin to move out of it themselves. If they dont get further currency to lend theyre going to have to step in and do one of two things. Stlail to theyll have to come out with an iou that the government will offer or revert to Something Like the drachma and then youre going to have to look and see at what discount does that trade to the euro and it begin to tell you exactly how difficult these things are. This crisis as it stands probably doesnt have a week to go. Theyve got to address things probably in a matter of days. Well move onto china soon. We will. Theres a lot going on there. There sure is. Thats affecting everything from our oil price on down. Wti at a low we havent seen since april 15th. People are making comparisons to what happened in 1929 with forcing the bankers to come in and intervene in the market. Well see. Well get there. Thank you, art. Opening bell after the break. Seems like weve hit a road block. That reminds me. Anyone have occasional constipation, diarrhea. Gas, bloating . Yes one Phillips Colon Health probiotic cap each day helps defend against occasional digestive issues. With three types of good bacteria. Live the regular life. Phillips. Im here at the Td Ameritrade trader offices. Ahh. 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 that 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 . For all the confidence you need. Td ameritrade. You got this. Youre watching cnbc squawk on the street live from the Financial Capital of the world. The opening bell in 20 seconds as the greece headlines are essentially voting no on the referendum. German officials saying debt relief not on the agenda. The greek finance minister is resigning and of course merkel meeting with germany today. A look at the s p at the bottom of your screen. Down at the big board, seritage celebrating. And a away we go we missed you last week yrg, carl but were adding to losses. Uncertainty rules. Thats what kind of morning it is. Its a waiting game now. Well see what the leaders say and what the ecb does and what the fallout is not only in european stocks but also in the u. S. I think its important. Were not falling out of bed in this. When you saw the headline yesterday, greek votes no. Wow, thats a big open on monday. It hasnt been hugely negative in europe or here. And thats important to note and to work out exactly to the point david is making that maybe its sort of systemic. Its a lack of panic. So far but they havent made the choice. Are they going to kick them out or make a deal. On squawk this morning, equating in size, greece is to europe as wisconsin is to the u. S. And thats why in his words, weve had a gentle reaction so far. If you thought ten states were about to disappear. In europe its different. You would worry about whos next. Which is probably what were doing. I think ive spoken to more people concerned about china. Lets tall it a roughly 2. 5 trillion loss of market cap in weeks. Its having an impact. Art mentioned it. Take a look at wti crude down to levels we havent seen since mid april. Not that long ago but oil used to be the big story in this market if you recall not that long ago, it was stable but it seems to be moving lower of late, and you can see down over 4 . Its a double whamny because the dollar is stronger. And is there economic dislocation because of the stock market decline in china. That might not be the place. Retail participation is important but people have most of their savings in banks but that seems to be playing out through this commodity. Energy stocks that are falling the worst at the open airlines are slightly higher. I was going to bring up one because the kraft heinz deal closed and starts to trade today. The first day of trading for the new combined company. Warren buffett is on the board. 3g has three seats on the board. This was the deal that closed back in march, and it just closed last week. Closed on thursday. And so this will be a chance for investors to get back into heinz which has been private. A lot of folks just like the synergy and cost cutting story that 3g has really made a story for itself and the entire skunler i talked to all these companies and they are all going on this zero based budgeting. Theyre cutting costs until the industry sees more revenue growth. Theres no top line. I do wonder over time what the impacts are perhaps negatively when you approach things the way 3g does. All we hear right now are the benefits of their cost cutting but at some point do they cut too far and give up. I want to take a look at the health insurers. Aetna is down sharply on finally the news and it was about 2 00 a. M. On thursday lets call it or friday morning that we finally got the press release. 230 a share made up of 125 in aetna and n cash and the rest in aetna shares but the value of the overall deal given the 7 decline. Many expected a lower price. A couple of anl cystsalysts weighing in with not overly positive thoughts. And the antitrust side. Humana share, therefor up bare barely at all. Youve got a huge spread actually in the overall deal given the current value and where humana shares are trading. I did want to weigh in briefly on something i talked about last year. The resumption of talks between anthem and cigna. This is the other deal that seems most likely in the hmo sector. I can tell you that sources close to the situation that indicate there is progress being made on the talks between anthem and cigna, particularly on the issues of governance. That seemed to be what divided these companies. The reason anthem decided to come with a bear hug. The ceo of cigna wants to be the ceo of the combined company as soon as possible. Im told there is progress being made on that but perhaps surprisingly there is also some difference on price. Previously it was my thought that price didnt seem to be that large an issue but when you move down the road on these things, it often will come up and it has here i am being told that there is again, progress being made. Dont expect something in the next day or two but we are watching it closely. Thats what we can offer at this point on this deal. If it comes, it will mean the potential of five going at three in this sector. I dont know what that bell was for. Thats a spinoff from seres,er is teenageseres,ars. That was seritage. Barrons primarily on chipotle they argue stock on cmg is going to take you back almost to the worst level since july and they say the stock could jump 30 on buybacks. Its already had a pretty sharp tumble for this stock. It peaked back in january. Has come off on the concerns about revenue. Barrons also noted that the problem with the pork, the fact that theyre going to have to take pork out of a lot of their stores, and its going to weigh on the stock. Short term. Longer term, they would say this is what you need to be seen doing. Thats the promise. And prop foods, the new stock started trading right now on the nasdaq. Finally, i dont know if you heard about prime day. Amazons attempt apparently to recreate its own kind of black friday retail event or a singles day kind of thing. The release is out this morning. Its in honor of the companys 20th anniversary. Its july 15th. They argue the discounts will be greater than what you would see on an ordinary black friday. I dont know if thats in terms of magnitude or number. Amazon is not responding. I wonder if they take a hit on the margins or pressure the suppliers. Its both sara and my birthdays. Were quite close on the calendar. What is the date . July 15th. Ill be thinking of you. Different ages. And alibaba having success as theyve grown into what they hope will be a global phenomenon of price discounts. Created by the current ceo of the company. Dow settling into a decline of 117. Mary thompson is on the floor. Down 117 but well off the lows of the day. The dow was down over 160 points. In the wake of the sell off in europe about concerns of growing greek drama. And asia concerns about whats happening in china. The government adding some stimulus. The Chinese Market in bare market territory. Today weve seen a pick up in the vix. Its off its highs of the day. Its a measure of fear in the market. Its come back. Up just about 8 . Were also seeing a bit in u. S. Treasuries. No surprises there because of flight to safety and also a bid in the u. S. Dollar. Gold Holding Steady at just about up one in early trade. Lets take a look at the sectors that are leading the decline. No surprise that energy is under pressure today because of the pullback were seeing. Crude oil up almost 2. 5 right now. Concerns about china, and thats reflected in the materials pullback and financials as well. We also want to look at the greek etf. Under pressure over the last several weeks because of concerns about whats happening in that country and it is extending the decline once again today as you can see, almost off 9 . Lets take a look at the oil sector. There are a number of factors there. Concerns about possible slow down in china. Also a pick up in the rig count last week. You can see its continuing to weigh on these Energy Stocks today, and then miners as well as copper got hit. Keep in mind china, again, is one of the biggest consumers of copper. You can see the mining stocks under pressure. Insurers will be a focus because of aetna buying humana. And fast food. We had reports saying yum brands and mcdrojdsonalds are looking at different payments. We have the dow off 127 points off the lows of the session. Still some weakness here. Back to you. Thank you. Lets send it up to the nasdaq for an update of whats happening up town. Good morning. So the nasdaq opening this morning down about 1 . Were down about 33 points right now. Were about. 6 . That after the worst week for the nasdaq after early may last week. The greek referendum and the growing fears of a grexit pressures stocks here as well. Were seeing that create just broad selloff here for the nasdaq stocks starting with apple. Shares of apple are down about 1 right now and thats as we get reports that the tech giant has entered production on the new iphone, the 6 s. Same situation. Go pro down as well. The price tag on the new camera 400. Cyber security stocks some of the worst performers today. Thats following a down pride grade. Shares of fort net are down about 3 . Cyber ark software and Palo Alto Networks are lower. And weaker in biotech as well today. Overall, broad sell off here at the nasdaq. Consumer discretionary, just about everything here is lower on the day. Back to you. Thanks very much morgan. Energy stocks are also sharply lower this morning. We have more. Good morning. A 2. 71 decline at the moment were under 55 a barrel. We havent seen those levels since april 15th. Several months ago. The greaseece situations aer baiting, but they were waiting for the crack to come. It comes after the holiday when summer driving starts to slow down. When we look at greece we look at the euro and the dollar. A strengthening dollar right now. Thats why were seeing a little bit more pressure but theres concern about eurozone demand. Its also the situation in china, perhaps a little overshadowed by greece today. Last week we found out that recounts were up. That was a surprise to most traders and it tells us this supply demand situation isnt changing on the supply side domestically and internationally. A lot of traders expecting to see more selling pressure throughout the week. Back to you. Well come back to you, im sure. When we come back, well take you back out to greece. A currency strategist will join us from athens. In the meantime weve found a level here off about 118. Were back in just a moment. You cant always see them. But its our job to find them. The answers. The solutions. The innovations. All waiting to help us build Something Better. Something more amazing. A safer, cleaner brighter future. At boeing, thats what building Something Better is all about. It took Serena Williams years to master the two handed backhand. But only one shot to master the chase mobile app. Technology designed for you. So you can easily master the way you bank. Dow is down 116. The euro is still under pressure this morning following the weekend over greece. We are joined live from athens where i would imagine euros are becoming harder and harder to come by. Since youre there, talk about the actual physical currency situation on the ground and what that tells us about whether greece will stay in or out of the euro. Reporter its been a tough week for greeks across the country, and the lines at atms are long but i dont think that determines the future of greece. Yesterday they voted no but for many this wasnt a question about euro membership. It was a question about whether they accepted the creditors proposal. We need to watch the political negotiations over the next 48 hours. There are some signs on the greek side and the european side that theyre willing to negotiate and talk. Were still waiting to see what comes out of this Leader Meeting in athens. The problem is for many europeans, it was about a greek rejection of europe. Even if the greeks didnt vote that way whats the probability at this point that you think greece will exit the euro. And why arent we seeing more of a reaction if the probability has grown significantly over the weekend . Reporter a lot of people have changed their call. A lot of people calling it their base case. Its not my base case. Its still not my base case. When you look at the developments over the last 24 hours, weve had two resignations that are potentially for significant. The finance minister. If thats a sign that the greeks are more willing to take a multiparty approach and willing to find some consensus that could will b what it takes to people greece in the eurozone. Thats also in line with the wishes of the greece people. Its down. Its smog severe or sharp. What is that telling you . What is the message from the currency market . Reporter you know ive heard very mixed views from investorings investors investors. Ive been speaking to people and there are some who think a grexit is a done deal. Many others doubt it will happen. They see a lot of room for compromise on the part of europeans. A lot of people have said that the ecb would be expected to contain the fallout of an exit you would expect the currency to be the biggest news. The fact that the euro is Still Holding out pretty well to me suggests that the market as a whole is talking about it but certainly not pricing a greek exit at this stage. Is 1. 10 a floor here or not . Im sorry. I didnt watch the question. Some people are arguing that 1. 10 is a floor on the euro. Do you agree . Reporter you know. There has been a lot of very good support at these levels but our forecast is for the euro to trade a little bit lower over the course of the coming quarter. If you look at the data coming out of the u. S. And compare that to the data here one of our presenters mentioned weve seen signs of decline. Theres really a cyclical story and we could see euro dollar trade back around 107. That would have nothing to do with greece but everything to do with diverging data between the u. S. And the eurozone. A lot of people saying it could be the fed pushing out a further Interest Rate hike. Thank you, elsa very much. Great to get your take on this. When we come back the unexpected ripple affects from the volatility in greece. How some americans businesses are feeling the sing. Dont go away. Are you moving forward fast enough . Everywhere you look, it strategy is now business strategy. And a partnership with hp can help you accelerate down a path created by people, technology and ideas. To move your company from what it is now. To what it needs to become. I built my business with passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Welcome back. Creditors are not the only ones getting hurt by greece. The saga is also taking its toll on small business. Thats right. Americanbased entrepreneurs are starting to feel the impact of the greece crisis. This is the company run by a greek immant. He imports 85 of the products from greece but hasnt received a shipment in two weeks. The credit has been lost, and no trans all transactions are done in cash. That affects our regular supply of goods from greece here and if we were not going to be resupplied within a certain time, then shortages will be here in our store as well as other stores that we supply. Whats worse, he only has enough product to last him into the six to eight weeks. I think longlasting dry goods go first like pasta and rice olives and then cheeses will follow and frozen goods. If were not going to be able to resupply in the next three to four weeks, our stock will vannic. Were not going to give stock to supply our customers and things are going to get a lot worse. I just hope a miracle will happen. He told us the no vote paints a scary picture for the business that we worked so hard to create. As he mentioned, he also supplies other greek restaurants that may be forced to shut down if they dont resupply soon. Thats an important angle. Tourism is the lions share of the Greek Economy. 20 . Even that is grinding on a halt. Why would you go on vacation if you knew there was a risk of getting stuck or currency issues. Or able to use your credit card, which is where we are now. They cant clear the credit through the banks. Important commentary i think that we should mention. An economist who urged the greeks vote no. He now says europe has to do anything to stop the bleeding. Whether thats greece in or out. Unless greece receives major debt relief. Leaving the euro is the only plausible rout. Hes not afraid of a exit. More likely than not, it could do it out and be saved. Let me quote you back. The greek people have been misled. Do they think this no vote obliges right now the only thing stopping greece from going over the edge is ecb. German taxpayers take a different view. When we return breaking news on ism services. More on the fallout from the greek no vote and the ceos of aetna and humana on their deal. Dow continues to be down about 108 points. Back in a moment. trader vo i search. I research. I dig. And dig some more. Because, for me, the challenge of the search. Is almost as exciting as the thrill of the find. announcer at scottrade, we share your passion for trading. Thats why we rebuilt scottrade elite from the ground up including a proprietary momentum indicator that makes researching sectors and Industries Even easier. Because at scottrade our passion is to power yours. Good monday morning. Welcome back. Im carl quintanilla. Were at the new york stock exchange. The markets continue to tread lower here in the wake of the referendum vote in greece. Dow is down almost 100 points. Oil continues to add to losses. And a deal in h health care. Aetna acquiring humana. The ceos will join us live in a first on cnbc interview in about five minutes. What does it mean for the business in the country. The head of the Greek Chamber of commerce joins us. And well tell you what to be looking for in terms of Second Quarter results. Ism services coming in. Reporter its funny. The u. S. Status trying to pull back the attention from the situation in greece. Ism nonmanufacturing number coming out at 56. Last time was 55. 7 which was also disappointing. This follows in fridays number. Remember, its easy to discount these numbers today and say there are bigger fish to fry but when the greece situation goes well away, well decide if these numbers were important. Back to you, simon. Thank you very much for that. Meanwhile the dow is down 9 1 points and cutting the losses. Voters rejecting the terms of the international bailout or at least as they were put to them in the vote our International Correspondent is live in athens with the very latest and there are now a lot of moving parts, michelle. Reporter oh for sure. And reuters reporting that later on today theres going to be a decree that the greekback banks are going to stay closed for a few more days. This flies in the face of announcements that banks will be open tomorrow possibly. Thats going to extend the issues with capital controls for sure. Theres been a lot of almost a cry of un of people from europe saying how could this happen. We wanted to juxtapose two opinions. A good friend of the former greek finance minister who thought the no vote was great. And a professor from yale whos also here for the summer. He thinks its a terrible thing that the greeks voted no. They understood it very clearly, and they chose not to continue on a path that was dictated to them from the outside, and that improved catastrophic over five years. Theyre taking a bit of a risk but maybe they will get a better deal and have a better chance within the euro. Nobody is talking about exit. The government and especially the Prime Minister tsipras told them that its good to vote against austerity. Who likes it . Theres no risk. 48 hours after the no vote they were going to get a much better deal than what they had on the table the week before and the banks would reopen. You get into a much improved situation with much less pain. They really bought that message. They drank the kool aid. Even the socalled experts divided about what is happening here. Just as divided as many of the greek people are. Back to you. Very quickly, what are you hearing about the greek government giving ious . That would be i think a further step by greece away from the euro and away from europe and i know theres a lot of talk about it. Reporter the greek finance minister or the former greek finance minister was quoted by the telegraph late last night, very directly he said i am going to print ious, i wish i had done it a week ago. That being said hes out of a job now and its our understanding any plan for ious would be on hold. Theyre not there yet but your question is on point. That is the next step toward thats the next step in an escalation of the crisis. The first was capital controls. The minute they print ious, sticking with the euro gets tougher. Even further unchartered territory. Were already there. Watching the Market Reaction in the u. S. Dow down 10 0 points. Oil sliding to the lowest level since april 15th. All of that following the no vote out of greece. Joining us a Global Advisory and founder and a global economist with wells fargo security. On the u. S. Equity market is your conviction in the bull market dented or hurt at all by whats happening with greece and whats happening in china . You know i think both were watching and both are creating volatility but does it change where markets end at the end of the year . I think its going to be limited or no effect. On the u. S. On the u. S. Stock market and economy . Thats right. Do you agree . With so many unknown unknowns at this point with greece and europe, cokan you see the u. S. Is going to be safe in the stock market and economy . You cant say that with 100 confidence. Its going to depend on a lot of political decisions right now that are going to be made in greece and europe over the next coming days and few weeks that are outside of our control, outside of our hands, and if greece leaves the eurozone and the eurozone starts to wobble a little bit, thats going to continue to have repercussions around the world and that eventually could spill over and start to effect the u. S. Economy. Utilityies are lower, but theyve a better performing sector. Do you have to own this kind of insurance . Well, i mean again, i think what were overlooking is turmoil in europe has natural buffers in the u. S. It means investors want relative safety they come to the u. S. The dollar strengthens, its good for asset flows. Fed gets on hold. These are protecting u. S. Equity crisis. I think investors who are focussed on the u. S. Have to why not cheer for events all around the globe . Bring the money home. I think people are very worried right now and theyre overlooking the good data the housing market. Remember, Energy Becomes a tail wind. It hurt the u. S. Stock market in the first half but as we think about 2016 comps, things get easier, and i think probably one of the most important things that happened the First Six Months this year and it almost never happens in expansion is the yield curve steepened. Were in unchartered territory for in so many ways. As you look at what each major block has done around the world, finally we end up in china over night where theyve all but directly intervened to support the stock market which is up 83 even now over the last year. At some point, dont you go wow, this is getting crazy. Its quite an experiment happening in china, right . But its each major zone thats engaged in this type of activity. Yes, and i think what we have to keep in mind is that this is starting to produce really really positive developments in the u. S. In terms of pent up demand, the labor markets. I think theres an organic recovery taking place in the u. S. , and it is you know in the context of unprecedented monetary damage in the u. S. When you she the chinese directly intervene in order to keep the stock market roaring high. Dont you think its something bad going on or is it so far away you dont have to worry about it . I think something certainly is going wrong in china today. That would exert a slowing effect on the u. S. Economy, and if europe were to have really stumble here and im not saying thats going to happen but if that were to happen thats also a slowing affect on the economy. Exports slow down here. The stronger dollar hals slows down and if bond yields move out. Investment grade bonds and high yield bonds, if those yields move higher thats a financial shock as well. Simon, i think you used the word unchartered territory. Theres lots of unknowns and moving pieces and i think investors need to keep an eye on whats going on. What does that all of that mean for the fed. The uncertainty around europe and what happens with the euro. And a payroll report that was tepid and disapointing factors. Higher Labor Force Participation rate among other things. Well keep in mind the fed only has to make a price if you want to call it that once every six weeks or so. I mean obviously theyre watching these numbers closely. Theyre not going to do anything for greece just for greeces sake. When they have their fomc meeting next week but more importantly in september, well see where the economy is at this point and where the Financial Markets are at that point and theyll make their decision at that point. Lower Labor Force Participation rate. Thank you to you both. Its good to have you on the equity market. When we come back buried under all of this is this huge merger in the health care world. Aetna agreeing to buy humana. The ceos of both companies will join us live for a first on cnbc interview when squawk on the street continues. Ths. Thanks to the tools and help at experian. Com, i know i have an 812 fico score, so i definitely qualify. So what else can you give me . Same day delivery. The ottoman . Thank you. Fico scores are used in 90 of credit decisions. So get your credit swagger on. Go to experian. Com become a member of experian credit tracker and take charge of your score. Shares of aetna are down this morning on the news that it agreed to buy humana for about 230 a share in cash and stock. It will face antitrust scrutiny in the coming months. Joining us now are the companys ceos. Gentleman, thanks soto you both for joining us. Mr. Bertolini, your stock is down about 4. 5 and theres a large spread. Reflecting concerns on the part of investors that this deal may not pass antitrust scrutiny. What can you tell you, that being your Investor Base to aswauj these fears . I think the market is reacting to very high level data and when we did this analysis at a very detailed market level, theres a lot of complimentary markets, and we view the divestitures as manageable. Theyre included in the value of the deal and included in the synergy assumptions and our forward projections. We see the detail at a very detail market level as do the people working on this day in and day out and we plooef its a manageable process. To this point that the regulatory authorities will look at how does this affect the consumer. Those coming into your combined kpeen company for business. What can you say in terms of supporting the idea this this is good for consumers . I think where strategy works is at the local market level. I think where health care is headed to a Retail Market its all about the consumer improving access, improving affordability and choice. And that requires a very different relationship between insurers and providers than has been in the past. Its not about hardnose negotiation. Its about partnership. How can we share data and technology to improve the quality of care, which improves affordability and maintains it over time. You have to have scale to do that. You have to have presence to do that at the local market level, and we believe this combination will provide that. Given the amount of speculation given out, theres been no shortage of reporting on the potential transaction. Im sure youre familiar with the work of a former fda official quoted not long ago so cowrote a study that said greater competition in the Health Care Market lowers race and also a paper in the economic review that examined earlier Health Insurance mergers and found premiums for employer plans rose where the combined companies had stronger market share. Why is this not going to result in higher prices. In the past the negotiation has been between providers and insurers to beat each other up over low every rates. That wont work in the future. What i think weve shown in Medicare Advantage, when you work to create partnerships to improve quality and reduce the cost of care over time you end up with a better rumt. Its in that thinking where the studies are interesting but look at a marketplace that fundamentally behaved different than the future marketplace will behave. Id like to add to that. Go ahead. That was pre, really, the aca, and regulatory enforcement around a concept called mor, or medical loss ratio which is really setting our price. So i believe today the Regulatory Environment protects the consumer and at the same time creates an innovation engine that allowstous us to compete in the local market. Do you believe, that if in fact cigna and anthem were to get together and i, i would argue based on my reporting thats more likely than not, that that will change the way your deal is viewed in terms of the regulatory window if you will looking at the market going from five to three, and therefore, make it more difficult to get your transaction approved . Theres a lot of speculation about that. I will expect they will look at the combined organizations of both and really see how that impacts impacts the consumer. But these transactions coming together really is oriented to complimentary capabilities around making it simpler and more affordl and access to local health care. This is required for us to offer what consumers are looking for. Can i just clarify. Did you suggest a couple of days ago that you feel coming forward first with your deal would give you an edge with the antitrust regulator . That in a sense, they will deal perhaps was the suggestion by you, they would deal with the mergers in sequence, if you like . It depend on how soon the deals come together. If another deal should come to doj in a relatively soon period of time, talk about 60 to 90 days then i think theyll look at them together. That also creates a barrier for the second deal coming in with the potential that they could be compromised or their opportunity could be compromised by coming together in the same time frame. Its all really up to how people view the certainty of the deal in transactions of this size coming together at this level, and the period of time it takes. As sets get compromised if they set around too long and arent managed effectively in the combined way as we see this coming together. The journal says there was quite a discussion about semitri on the breakup fee, and i wondered if you could let us know your thoughts about wanting to be protected in case furtherer down the line United Health went for aetna during this process youre going to have to go through with a regulator regulator. Im not going to comment on the legal negotiations that went on. I think its pretty selfexplanatory. Why didnt you entertain an offer from aetna, mr. Bertolini. Im sorry, an offer from unh . I cant comment on speculations and rumor in. Mr. Broussard, why did you choose to sell the company in. It really was, i think, a complimentary acquisition for aetna. How do we transform health care for the long term. Two things went through our minds. One was around the cultural semi semitri, and the complimentary capabilities. Our deep clinical capabilities combined with the strength and size of aetna we believe with transform it to a consumer based model, and from a model that today is fee for service to a value reimbursement. Mr. Bertolini, i quoted later a story from a couple of weeks ago. Some saw that as a sign that regulators wanted a way in. A shot across the bow, if you will. Im curious as to your viewpoint. Do you think regulators are already taking a stand saying be careful and have you had any conversations of any kind at this point with the regulators to get a sense of where their heads are at . Weve not had any specific conversations with the department of justice. Weve talked to a number of people who work around these kinds of reviews and we believe that given the legal advice we have, the analysis weve done, this this is a manageable transaction. I think what the regulators were reacting to was all the press leaks that were in the marketplace and the speculation. At the end of the day, its about the strategy. We only had one. It was to put this deal together. All the other noise around us was interesting. But for us it was about lets get this done because we believe it creates a fundamentally different product at the market level where it really matters and creates a sustainable cost structure structure for the future. And of course all this coming in the wake of the Affordable Care act and perhaps the sense that in terms of where pricing is but mr. Bertolini, recently a story indicating many hmos around the country seeking rate increases of 20 to 40g 40 . Does that figure into regulators thinking about your deal . I wont speculate on what theyll consider in the deal. Obviously pricing is an important thing they consider. I think for us its about how do we get to a better price point. Because in a Consumer Price point, where our rates get set for us and we have to manage within them that is where were going to win longer term. We have to think about affordability over the long run. People cant continue to afford the costs theyre paying today or could pay in the future. And to add to that i think the exchanges are one area to orient to on price changes but Medicare Advantage i think is another area. And since 2010 rates have come down about 20some percent. And i think it attributed to being able to bring these clinical capabilities and relationships with providers that transition from a fee for service to a valuebased reimburse. It impacts the cost of care. When you put that against a regulated price environment, it really brings a consumeroriented fashion that is saving Society Health care costs. Gentleman, well certain be watching closely. Thank you for your time. Thank you very much. Youre welcome. Mark bertolini and mark broussard. When we come back, Oil Prices Take a dive right now. Down 4. 5 . Where do we go from here on energy . More on that when we come back. 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We have the right people onhand to answer your questions backed by a trusted network of attorneys. So visit us today for legal help you can count on. Legalzoom. Legal help is here. We have a steep slide in oil prices. Both west texas and crude down sharply. Good morning. Since we last week were seeing another 0. 20 or so selling in crude oil. 5 on the session as well. A lot of traders were expecting this socalled crack to come before the weekend. But its happening today for several reasons. The first would be the greek crisis causing some concern that we are going to see a stronger dollar. That is bearish for crude but also now that july fourth has passed us were likely to see less demand for gasoline for the summer driving season. In terms of the supply demand balance, we know we have enough oil in the country and we are supplied well overseas. In terms of the demand equation we are concerned about the eurozone but also have from china as well. The government stepping in to hold up the marketplace at this point. I want to talk about the Iran Nuclear Talks for a moment. Secretary of state john kerri staying progress has been made but still difficult choices to be made ahead. Back to you. Okay. Thank you very much. Straight ahead on the program, supporters of the greek government celebrating that go no vote on the bailout referendum but it might be a different story today as banks remain closed and the atms remaining closed. Well talk about whether you should cancel your greek holiday if you were planning to take one. Th passion. But i keep it growing by making every dollar count. Thats why i have the spark cash card from capital one. I earn unlimited 2 cash back on everything i buy for my studio. And that unlimited 2 cash back from spark means thousands of dollars each year going back into my business. Thats huge for my bottom line. Whats in your wallet . Hello, everyone. Heres your cnbc news juch date. No two bombs exploded in a central nigerian city killing 51 people and wounding 67 more. They are blamed on the boem harm. At least a dozen people were killed and an iraqi Fighter Pilot accidentally dropped a bomb over a bag gad neighborhood. A technical failure caused the russian made jet to drop the bomb. David sweat back behind bars. He was taken to the correctional facility in new york. He is spending the first 24 hours in the prison infirmary before being moved to a cell. And rory mcilroy injured himself leaving in doubt whether he can defend his title next week. He is the number one ranked golfer in the world. We have breaking news here. Imf managing director issuing a statement reacting to the no vote on the greek referendum saying quote, the imf has taken note of yesterdays referendum held in grease and we stand ready to assist greece if requested to do so. S the important to note they cannot supply any more aid because greece is in arrears. It defaulted on its debt payment to the imf. Jeff cut moer live in brussels. I imagine not so much celebrations in brussels after the result of this vote in athens. Reporter no. Absolutely. And what weve got taking place here is now the establishment of a harder negotiating terms when it comes to the greeks arriving with a fresh set of proposals which we think will happen tomorrow. Weve already had the head of the euro group. This is the gathering of European Finance minister. The dutch finance minister coming out and saying the no vote in the referendum is not going to make it easier for the greeks to get the deal that they want, and the Germany Economy minister and we the germans have taken a tough line through here. The German Economy minister suggesting that the greeks will have to turn up with much larger reform plans than they had previously put on the table. So no one here is laughing. And they are using this as an opportunity to send the greeks a message and behind the scenes as well the commentary here in brussels is that the greeks are not going to get an easier ride as a result of the referendum so thats the music on the ground as we go into a finance ministers meeting tomorrow. There will also then be a leader sum multiandmit and well have a much better idea of where we are in this process. Another thing, Angela Merkel is set to arrive in paris in a few hours. Were expecting a joint statement later. The french have been a little softer on their approach to the greeks. It would same that Angela Merkel is arriving in paris to stiffen their resolve before the negotiations take place. I want to leave you with final pictures. These will go down in history as the former finance minister of greece, mr. Varoufakis claiming aboard his motorcycle. His wife on the back and he rides off into the sunset away from the finance ministry. Not quite a Job Well Done but a job done nonetheless but not to the liking of those here in brussels who will they think have to pick up the pieces now. Back to you. And maybe perhaps a sequel in paris. Thank you. How does this affect business in greece, specifically tourism. We are now joined from athens from the president of the Central Union of Greek Chamber of commerce. Welcome to the program. Before we get onto what it meechbmeans for tourism, how do you think the restpeople will respond to this vote . It will be interesting to see how they perceive the large vote with 62 of a no vote being registered on yets referendum. On the other hand the bill has increased since the last ten days therefore, we could have a paradox in the sense that people voted on an invalid question question saying emphatically no but on the other hand if mr. Sip ra tsipras comes back. It could be worse than what the people were called upon to vote. The question is what do we do now in were back on the market today with banks remaining closed with we cant go on with banks closed for the rest of the week. Everything is at a standstill. The market is stagnant and the major fear at the moment is since we are almost at the peak of the tourist season if we cannot supply basic goods such as food and pharmaceuticals, we run the risk not only with the population but also from the tourist wave that were having during this time of the year. Well i am one of those tourists. Im one of over the 40 million to travel to greece every year. Should we cancel our holiday . It looks like the credit cards arent going to be accepted . We wont be able to get cash out of the atms . Should i go somewhere else and the 40 million other people who go to greaseece, can you take us . As far as foreign credit cards are concerned, the system is still operating and youll be able to raise funds from the atms and also youll be able to make all the necessary charges with your plastic cards. So as far as that is concerned, were covered. What we are concerned about here in greece as a Business Community is that the central bank of greece and a corporation with the ecb is able to release funds coming from Greek Companies and heading to foreign suppliers so we can bring in specifically, food items which were afraid that if they do not allow us to make these electronic remittances abroad there might be shortages from the end of this week onwards. This is what we want to avoid. Although we have a kind ear from the central bank of greece we would like to see the ecb responding positively so that. So well wait and see what the ecb does. Obviously thats a very tense political judgment for them. Would you support the government issuing, for example, ious, a parallel currency maybe to keep i dont know air Traffic Control operating . Even if that were to lead potentially to an exit from the euro another big step with a parallel currency . That could be a decision of last resort, i would say. We need first of all, to ensure that we have the best of our bargaining done in brussels tom. Weve had the meeting of political leaders that finished just a half an hour ago whereby all political leaders accept the leader of the communist party here in greece authorized mr. Tsipras to go to brussels and try to strike the best possible deal to come back by hopefully the day after tomorrow. And if this agreement is plausible, if its agreeable with the rest of the political system if it doesnt include more austerity than the previous one did, and above all, if it enhances the possibility of growth in this economy, then i think we should sign it as soon as possible and slowly begin to return to normality with the banks reopening. On the flip side isnt there any part of you that thinks that greece going to its own currency would be good especially for the Tourism Sector . For instance if it went to the drachma sharply devalued 40 to 50 , it would be so much cheepaper to vacation there. Youre right but one needs to consider that the Greek Economy is not a productionbased economy. We depend on import as far as our food requirements are concerned. We depend almost 80 on all our Energy Requirements being imported. Basic needs cannot be taken. And we dont have the luxury to even consider a national currency. It would be a complete nightmare for 8 to 12 months and im sure as all polls show greek people are very much in favor of remaining in the eurozone and, therefore, we need to pressure the government to bring back a deal so once we have a done deal in the next 48 hours, after all the Prime Minister has promised to the elect trat two days before the referendum then we can get our states on and get back to work. He also promises 30 debt relief. Well leave it there. Thank you for joining us. President of the Central Union of the Greek Chambers of commerce live from athens. And china rolling out emergency members to prevent a crash. The shanghai down 20 in the last three weeks. And later on an exclusive interview with the former Prime Minister of greece. The dow was down 165. Now down 141. Were back in a minute. Ah aflac . Aflac i thought you said this guy was the best . Oh, hes a horrible stylist. Gah . But hes the best at paying claims fast really. Mmhmm. Paid mine in just one day. One day . Yea. Aaaflaaaac in just one day, we approve and pay. One day pay, only from aflac. With stocks at high valuations, where should investors look instead . Well discuss this. You can watch the whole interview. In the meantime this is more squawk on the street coming up right after this. The stock market initially surging 8 in china after measures were taken to stem the sell off. We are joined from hong kong. It was a big intervention. It was a big intervention. Some are calling this a china push. The officials trying to set a floor to the bare markets. Reporting on the unprecedented measures introduced this weekend. Brokerages have gotten together buying up 20 billion in the blue chip shares. But the main measure that probably had the most influence today was the fact that theres been a halting of ipos. Stock market watches have said this is the main drainage of liquidity. Basically the current investors, they have their current Stock Holdings and looking to get into these new share issue wanss. Thats been the reason weve seen such heavy selling. Thats probably why we saw an 8 pop out of the gates. But in a typical day in china, the shanghai and shenzhen moved. The biggest sell off in years. The main concern when i speak to investors are about china is the huge amount of margin lending in the stock market. 12 and 3 of the gdp, this could also filter into the broader economy. Back to you. I susan, before we let you go. The chart is an extraordinary line there coming down. Will the bounce will sustained . Does this stem the selling . What are people saying . Well basically if you look at the close, close to close, we had a 3 rally now. I think theres a lot of intervention taking place right now with even buying up etfs. Everyone gets the point that the market is being influenced by the state. Theres a lot of state money flooding. Thank you for your time. Susan lee joins us live there. When we come back the next round of earnings kicks in. A new report says a weaker dollar would prove beneficial for companies in q 2. The s p and the nasdaq have gone green. Were back after a break. It took Tim Morehouse years to master the perfect lunge. But only one attempt to master depositing checks at chase atms. Technology designed for you. So you can easily master the way you bank. Theres nothing more romantic than a spontaneous moment. So why pause to take a pill . And why stop what youre doing to find a bathroom . With cialis for daily use, you dont have to plan around either. Its the only daily tablet approved to treat erectile dysfunction so you can be Ready Anytime the moment is right. Plus cialis treats the frustrating urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. 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Front the earnings season is kicking off this week. So lets take a look at what the expectations are. We know that Earnings Growth has slowed down over the course of the past few quarters. Right now analysts are expecting earnings declines for S P Companies to the tune of about 3 . Again, 3 earnings is the expectation before we start this earnings season off later on this week. Alcoa and pepsico this week. If you take a look at where the Earnings Growth and where the earnings drivers are going to be its going to be a few different areas. Lets start here with the decliners. The biggest drags, no surprise here, again continues to be the Energy Stocks. That sector is expected to post about a 63 earnings decline over the same time last year. Again, no surprise here. We saw it last quarter alone. All of these oil prices and then falling from where they were last year really having an impact there. Consumer staples stocks also showing about a 3 decline in terms of earnings overall. So thats where the drags are going to be. The positive story here comes again from the financials the banks, all of those guys expected to produce a 15 earnings gain. Thats where the growth is coming from. Also the Consumer Discretionary sector, the retail guys. They are forecast at least for now before the season starts to post about a 7 earnings increase. So carl again to watch, Energy Consumer staples is the big drag expected on earnings this time around and then banks and Consumer Discretionary, the Retail Stocks providing at least the gains. Well see if that plays out this time around. Back to you. Well revisit that graphic the next few weeks, dom. Thank you very much. As dom suggests the u. S. Dollar index down nearly 5 . While currency head winds remain a new report suggests the downward dollar trend might prove to provide an upside specifically when it comes to tech in q2. Joining us this morning the reports author lindsay belle, intelligence analyst. Good to have you back. We should be plain. You think the earnings are going to be dismal i think is the word youre using, right . Theyre going to be dismal and the dollar is certainly going to be a headwind. Its still up 20 year over year but it should be less of a headwind to the tech sector because of the timing of what guidance was provided and the movement the dollar index has made since about midapril. Is it exclusive only to tech . No. Youll see it cross sectors. The reason we zoned in on tech is 56 of their sales come from international markets, so it has the highest exposure. Is it enough to make you rethink low expectations on earnings . Yeah, you know i really do think expectations are severely low and going into the Second Quarter, negative 4. 3 is what we at s p 500 are expecting for the Second Quarter. Remember the First Quarter beat substantially. Typically analysts will underestimate the quarter by 350 basis points. We saw the First Quarter beat because analysts came in with all the worries, the economic the weather, the west coast dollar, oil. In the First Quarter they kitchen sink first, second and Third Quarter earnings. Second quarter earnings continued to come down despite that. Despite the negativity of what youre saying its actually positive. Right. I think the bar has been set very low for the Second Quarter. Now if you exclude energy obviously thats one of the biggest weights on the s p 500, 63 decline in earnings in the Second Quarter. Excluding that earnings would see a positive almost 4 increase in the Second Quarter which still isnt that great. Do you see the stock market reacting as it should to earnings or has it become distended . Does it move in reaction to other things or not react at all . I think its reacting to a lot of other things. I think the Second Quarter you saw the s p 500 was down 0. 2 for the quarter. A lot of that had to do with greece and the international markets. Despite the earnings. Exactly. I think while earnings are going to come in strong were going to need to see Economic Data here save lives better. Were going to need to see a stabilization in the international markets, so theres a lot at play. I thought this was interesting. The most the highly exposed companies in movements hc and emc. Why those two . Well, hp, 65 of their revenues come from international markets. Emc is almost 50 . So theyre exposed to not only the international but the euro too, which weve Seen Movement after the Second Quarter has moved. To your point hp has already told us last quarter how much to expect and what to expect and where to expect the dollar to be so you can get a very good read. Yeah. Theyve provided the most recent guidance, so where they pegged the dollar is a little bit better than some of the other guys like microsoft, ibm, emc, who pegged their expectations in midapril. Is there any sense these companies are Getting Better at managing the dollar exposure which at this point is something they should expect . Is it hurting their guidance . Why are they not hedging it better . I mean i cant speak to why theyre not hedging it better but theyre frustrated with the move and the volatility theyve seen in the dollar. Youve heard that from oracle when they reported in june. But theyre trying to manage it the best they can. But they keep reiterating, hey were looking at earnings based on you know Constant Currency modes. Because thats how we manage our business. They didnt do that on the way down though did they . Good point. And then to doms point about the sectors expected to underperform, is that in line with your thinking . Yeah thats in line. Energy will be obviously the worst, Consumer Staples and then utilities will be weak too. Well see. For you, what is the bellwether . It used tore alcoa. Now debate about what is the early tell. I think, too, you have to think about the stocks that represent the bigger portion of the s p 500. You have apple in there now thats a big deal. We talked a lot about earnings. Good to see you. Lindsey bell. We want to send it over to sue herera. We have more developing news. You may recall back in july of 2009 sergei alevnikov, was arrested and accused of stealing software codes. That conviction in federal courts was overturned. Now he was retried on those same charges or similar charges. The state on the state level. That has been overturned and his lawyer has put out a very strong statement. It says in part that they would pursue the prosecution after mr. Aleynikov is appalling. Now we know in addition to being too big to fail and too amorphous to jail Goldman Sachs provokes two failed criminal prosecutions to settle a private score. The state charges have been overturned for sergei aleynikov. Sue, thank you very much. 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