Transcripts For CNBC Worldwide Exchange 20240622

Safety and innovation to recalls. And ubs trades lower despite the market. This is after it is investigating a newspaper report that prompted it to release earnings early. Welcome, everyone, to the show. This is the second hour of wx wgs. Worldwide exchange. A quick look at u. S. Futures. We have a busy week. Not just meetings or you a fed policy week. Durable goods. But social media, on whether Companies Like facebook and twitter can continue to deliver growth. The dow up 70 points. Nasdaq up 1. S p up 7. Very interesting to see a positive open on wall street despite the volatility that we saw overseas in asia. Shanghai composite down. And in the meantime take a look at european equities. They seem to be following suit from overnight. The xetra dax down 91 points. A lot has to do with better than expected ifo data out of germany. 108 is the number for month of july, versus 107. 5. Perhaps the reason were looking at the German Market down at this moment. A quick look at bonds. If youre selling equities you may be buying bonds. Were looking tenyear german yield at 0. 687. You see the tenyear yield at 1. 9 . Were going to keep an eye on the u. S. With the fed policy coming up on wednesday, are the feds going to continue to raise the rate . Thats the quig ing with question. The euro hitting that better than expected Business Sentiment out of germany. As you can see, were holding on right now 0. 8 . That could reverse once we hear from janet yellen this week. Keep an eye on japan overnight. Lets take a look the at commodities shall we . It was the worst week for bti crude. Copper trading at a 6 1 2year low. And brent crude down 0. 6 . As Oil Prices Continue to the move on the downside what does that mean for the oil picture and the feds ability to reach that target. That of course will be something that perhaps traders will be looking for answers for when the fed meets this week. Brent crude at 54. 50. And now as were saying china really the big story today heavy losses in chinas a share market with the shanghai composite posting its biggest oneday drop since february 2007. Energy stocks were among some of the worst performing stocks with china oil services ss off to 10 . I think its quite staggering. You have to understand that the volatility, despite the best everythings from beijing is not going away. Theres still a lot of leveraging to go in the system. Margin debt is still quite high and systemically it does pose a risk for the market. So the question, we have to ask, what happens for the rest of week . Is beijing going to reconfirm that commitment to the market . Are they going to send a message that theyre going to be there to backstop this market to stabilize the market and to ultimately buy the stocks in order to do that . So thats one thing. The other thing is the data continues to underwhelm. Case in point today, industrial profitability contracted in the month of june by 0. 3 . We did see an expansion in april and may. So we broke that cycle in june. So that was bad news in terms of the broader economic picture. This figure of 4,150 has been touted as an unofficial bailout target. We crossed that last week. Knack, we moved over that level in intradate trading last week. So some suspect, that the government perhaps, since weve reached that level, is going to try to back off in terms of the state eventually the statesponsored buying and profit of the market just to test the waters to see what confidence level are like at the moment. So i think investors may have got a hint of that and sold the market quite aggressively quite sharply as a result. As an element of moral hazard here, i think the market is really not prepared as of yet for beijing to be out of the game so therein lies the problem. Elsewhere, the australian benchmark often strongly correlated to china, despite the volatility, the market in australia, the only one to generate some excess returns today up by just a marginal 24 points. Thats where we stand. Back to you now. Thank you so much. Lets get the investor reaction. Matthew beasley ahead of Henderson Global investors here on Worldwide Exchange. Matthew, a pleasure to have you on the show. Just when we thought fundamentals will be driving prices this week its once again factors like china and commodities which dominate the discussion . Its a bit selfdefeating when the emphasis on china as an exporter. And that of course is impinging on other investor news. And as well weve gone through this period of rather unnormal movement in china. And frenzy and very negative frenzy on the way down. And external investors dont know quite well where to position themselves. And yeah, chinese officials have been responding to the recent stock market volatility with an assortment of measures and the question is whats left in the pbocs toolbox . We dont know that. Clearly, its unnerving with investors on the mainland. As well most investors in the market, perhaps late tented in by the very large moves we saw earlier in the year. And on top of that as well were struck now without knowing where fundamentals, ss would price markets today. So eventually markets will have to find their own level. In the meantime a void of uncertainty with fundamentals tracing a toxic concoction. Thats going with investors. Whats driving investors to sell chinese equities today on july 27th . Is it the fund mental picture, weaker than expected data manufacturing . Or is it this just panic selling ahead of the fed meeting . The Chinese Market faces pretty difficult data. And i often talk about the stock market being disconnected from fundamentals. On top of that youve had this ongoing rout in commodities. Thats exactly what were seeing copper, oil, other base metals, gold as well. For china, as a big exporter of oil, for example, as a big consumer of copper and china is weakening, with Commodity Prices. There are some out there including the equity strategists who we bring on quite often say the china concerns are overblown here. Would you agree . We just dont know. Is that certainty with the investors on the sidelines . Thats exactly right. Its that fear lack of Government Intervention, perhaps more Government Intervention a week ago, two weeks ago got people to be involved probably short term. I think longer term well see tough transitions for the chinese economy. So you wouldnt subscribe to the viewer what the pboc has implemented so far will actually feed through to the real economy in the second half of the year . Well it might. But this is the challenge. At the same time, you have Commodity Prices climbing. Indeed regarding of that china as an exporter of oil, from that perspective alone, its a weakness. The commodity rout definitely not helping china. Matthew, thank you for being here on Worldwide Exchange. A want to get you other names in the news this morning. Teva has acquired allergans business for 40. 5 billion. A mixture of equity and debt. The Israeli Group has withdrawn its offer to buy milan. Shares of teva are called to open up 11 in europe. Brent saunders will join squawk box for a first on cnbc interview at 6 30 a. M. Eastern. Fiat chrysler getting a record 90 million fine from u. S. Regulators for failing to act sufficiently following vehicle recalls. Well see the automaker pay 70 million in cash. And 20 million on outreach. An additional 50 million will be paid if they fail to comply. And ubs profit jumping 43 beating analysts expectations. Lets get the latest with carolin roth live in zurich. Hey, carolin. Good morning to you, seema. Im just looking at shares of ubs, theyre still down by roughly 1 . Were off the session lows off the 21 swiss franc handle. Those numbers were released one day early, it was that newspaper report in a big newspaper yesterday which contained accurate information. And thats what prompted ubs to release those numbers one day early. A couple bright spots, Private Banking in line just slightly better than expected. Weve got investment banking. Surprisingly strong on the equity side. And actually the ceo of unc hedge telling us this morning that they actually benefitted from chinese equity trading in the Second Quarter so hey, at least someone is benefitting from that. And leverage on that it was very solid. A cap ratio of 14. 4 . That catapults ubs to the top of the industry really. But there are drawbacks, too. That is very much visible when you take a look at the gross margin on the Private Banking side. That fell slightly to 82 basis points and that seema, really is a reflection of the pretty tight market environment, macro environment that is refining itself. Heres sergio ermottis take on that. If you look at the First Quarter or Second Quarters in the Second Quarter, i can say i saw fatigue by my investors. You had volatility you had a little less market participation, so volatility without any volume. I think by now, the greek situation is something that is absorbed by investors. But i will say compared to the past, you see less trading around events or news coming outside of greece. And sergio, as we wrap up with you, this week were going to get a fed meeting, the market is speculating as to whether we get an Interest Rate hike this year. As you look at some of the macro headwinds at the moment do you think theres any prospect that we could see a fed that starts to tighten rates not here to be quite weak Economic Trends at the moment around the world . It would be very surprising to me if the fed is not hiking. I think its fully priced into the market. I think that should the fed decide not to move i think that that would probably be a very negative news for the other economies globally and the u. S. One, particularly. And as we know the feds hike in rates battle eventually will be really good for the insurance and banking sector. Seema, finally i want to mention maybe why ubs share price is down by 1 even though prices were solid. They had a really good run, up 25 year to date. And secondly theyre just caught up in the global selloff. Little you can do about that. Exactly. Ubs down 1 . Carolin roth thank you for bringing us the latest. A brit takes home the Yellow Jersey for the third time in four years. We have all the details from the Tour De France after this break. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . And these are your headlines. Chinese stocks collapsed as the china compost turns in its worst day since february of 2009. Teva acquires allergans business for 40. 5 million. And ditching plans to buy milan. And best buy becomes the first to sell the apple watch. Lets get you a rundown of what to watch this week. Today, we get durable goods number and earnings reports from Norfolk Southern ryanair and twitter and facebook will steal a spotlight later in the week. All eyes on the fed wednesday after it releases a statement after a twoday meeting with investors, hoping for clues of a arate hike. And one that is awaited after the Second Quarter gdp rise. The data will increase annual revisions going back to 2012. Matthew beaseley of Global Investors is still with us. Is it gdp numbers . I think the market is focused on the micro, or the macro when it comes to the u. S. We know a rate hike is coming. We dont know clearly when. We know the rate rise is coming. And of course the moving markets, its been individual stocks. Its been a handful of individual stocks. I think you point to twitter and facebook is likely to live the marketing i think we focus on the micro, at the moment rather than the macro. You think twitter and facebook this week could drive action . Yeah also surprising this year is how narrow markets have become. You look at the movement the s p has had this year. And a handful of stocks thats been the key to that mover, apple, google netflix, gilead. Its a handful of stocks on how the market has performed. And facebook is clearly on that list of stocks that could have a potential to market cap. It makes a big difference for this week. Matthew, this week, four stocks in the nasdaq 100 that make up 1. 3 trillion of the cap. The question is is that a concern for the average investor . I think it is. It does link in of course, to fed policy. We could argue if we had more time that the u. S. Economy perhaps is not growing the way the fed would like it to be. The outlook isnt great. Theres concerns about u. S. Consumer discretion and health care. Of course, the dollar is another issue in the u. S. The lack of growth is whats forcing the growth to be focused on those stocks where there is growth. As Companies Look for growth weve been looking at m a deals on teva israeli drugmaker is called up 11 on the news that its buying allergans generic business for 40. 5 billion. Youre actually a shareholder, what do you do with the stock . Into within 20 within a couple years, this gives them a lot more size and scale on the market where theyre already a leading player. And this is a good deal for teva shareholders and it removes the speculation over milan. It was being called a messy fight. And the outcome of that clearly wasnt solved. Ten seconds to go would you buy, sale or hold stocks . Id be a hold to buy teva stock today. A big part of the health care story. Best performer on the s p 500 this year. Matthew, pleasure to have you on the show. Head of Global Equities at Henderson Global investors. And still to come on Worldwide Exchange digging for precious returns. The next guest says the gold selloff is overdone. Which stocks could add shine to your portfolio . Well reveal all after the break. Stick with us. T youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Welcome back. The gold miners etf is at an alltime low in a month. This as gold hovers at fiveyear low with the metal price down five straight weeks for the First Time Since october. But there are some who say now is the time for a rebound. Lets bring in the Senior Vice President of Global Metals and Mining Researching at hsbc. Youre one of the traders out there, patrick, why do you see gold prices coming back in the near term . Morning. Well, we think that gold has come to a very low point, relative to where its been. Its also trading at very close to where the average cost of production is for the top quality runners in the room. So therefore, we think thats signifying a buying opportunity here. We also note that a large reason for golds bad performance in the last few weeks, at least, has been the buildup of a very large short position and the comments. I think thats sustainable. Surely, the recent data out of china is not helping the gold bulls out there . Well its interesting how china can affect gold. Yes, there could be a negative push on gold at the moment as people use gold as a source of cash flow to cover some of the margins in the chinese stock market which, of course has been doing very badly. Over the last few months the rise in the chinese stock market may have also taken some investors away from gold. And put them into the stock market, i guess, at very high levels. And perhaps in the longer term we should see chinese investors investing more balanced way. And actually taking more gold. Gold miners have not been doing over the past couple weeks responding to the volatility in gold prices. Do you actually have a top pick in this . Which stock is set to outperform perhaps . Well, we like a number of different stocks here. We think the gold prices will rebound quite considerably from these levels and therefore, the whole sector should rebound. We do recognize there are headwinds out there including large hedge funds that are going short, obviously and pushing the price down. So we do like fresneoin london. And just a couple other stocks royal gold here in the states and a company thats doing quite well in terms of free cash flow, we do think the company is on track for Better Things to come, as we go through into next year. Yeah well see if youre right. Some analysts that i spoke say the valuation in stocks look attractive. The question is are there fundamentals will to support the stock. Well see. Patrick chidly very Vice President of gold metals and Mining Research on hsbc. And we bring you up to date in the latest twist on the latest president ial nomination race after this break. Youre watching Worldwide Exchange. Im seema mody. Here are your headlines from around the world. No escape from the china rout. Shares plunge almost 9 in the biggest oneday drop in eight years. Meanwhile the dow has placed higher after posting its worst week in january. The deal is done. Teva buys allergans business for 40. 5 billion. Fiat shares moving down after u. S. Regulators slap a record 105 million fine on the automaker over lapses in safety on recalls. And ubs trading lower despite a rise in markets in a Second Quarter profit. The bank says it is investigation a newspaper report that prompted it to release earnings early. And good morning to everyone who is joining us in the u. S. Heres a look at how markets are faring ahead of the u. S. Open. U. S. Futures pointing to a higher open at least for the dow. Up 49 points. S p up around 4. Nasdaq down about 4. That weighed on the nasdaq last week. The story will continue this week. We have a lot of social media giants including Facebook Twitter and yelp. Keep an eye on that. In the meantime got to show you what happened overnight in asia. Quite the selloff, shanghai composite losing 8. 5 . Some says its panic selling ahead of the fed rate. European markets following asia also lower, remember we got that better than equity the ifo data. Thats german Business Sentiment signaling there is improved mood across german businesses up 108 for the month of july. One of the reasons were looking at the xetra dax down 0. 8 in todays trade. Teva has announced plans to acquire allergans genericic business for 40. 5 billion. It will be financed through a mixture of cash equity and debt. Shares in teva are called to ep up over 11 in new york. Keep in mind allergan ceo Brett Saunders will join cnbc squawk box at 6 30 a. M. Eastern. You wont want to miss it. Earlier, i together to hendersons matthew beesley. Take a list ton his reaction of the teal. This is a good deal for teva. This goes to 20 in 20 years this gives them a lot more size and scale in the coming years. There are efficiency benefits for distribution. Yeah this is a good deal tour teva. And it relieves all the speculation over milan. And the teva shareholders, is this a good deal. Shifting focus to the banks, Second Quarter net profit at ubs up 53 . This after the Wealth Management posted its breast Second Quarter results since 2009. And following a swiss media report sunday shares are lower amid the broader selloff in european equities just about 1 . Cnbc spoke to the ceo to find out how its impacting market values listen in. If you compare it to maybe the First Quarter and previous quarter. In the Second Quarter, i can say i saw fatigue by my investors, while you had volatility you had a little less market participation. So volatility without any volume. I think that by now, the greek situation is something that is absorbed by investors. But i would say compared to the past, you see less trading around events of news coming out of this. And, sergio as we wrap up with you, this week were going get a fed meeting. The markets speculating as to whether we get an Interest Rate hike this year. As you look at some of the macro headwinds at the moment, do you think theres any effect that we see a fed that tightens rates if not here to quite weak Economic Trends around the world . It would be very surprising to me if the fed is not hiking. I think its fully priced into the market. I think that should the fed decide not to move i think that would probably be a very negative news for the other economies globally and the u. S. One particularly. So is it the time to buy shares of ubs . Chris wheelers u. S. Bank analyst at equities here in the studio. Chris, great to you have on the show. The stock is down 1 even though the Company Reported a 53 jump in earnings. Is this simply profit taking or Something Else going on here . Well, i think its really china having an impact. The future of the results is a very strong Wealth Management results. I always say if you want growth in Wealth Management, you have to be number one in asia. Thats where the highest number of growth of individuals with high wealth is. Around the fact its such an important market for them. Which other banks do you think have high expressier ierierexposure. You look at the investment banks who have strong foot holds, Jpmorgan Goldman sachs, Morgan Stanley, most of those players are what they see as an important market for them. You take a look at trade revenues, theyve been benefitting from the volatility around china, as well as the greek prices. Get is how long can this continue . Obviously, its not a big plan on fixed income. If you look at the u. S. Banks, youll see that starting in june there was quite a slowdown in investor activity as investors became cautious on what became the issue around greece. In terms of equity revenues, its been very strong. With the likes of Jpmorgan Goldman sachs and Morgan Stanley who are leaders in that space. I think volatility can help in markets as long as youre on the right side. I think theres a lot more to go. I think the thing that people have missed the fact when rates do start to rise the speed at which will it impact income is rather faster than people have imagined because banks have credit cards and companies and a lot of interestfree deposits that wont move at all. So we could see quite a bit of leverage once the Interest Rates move up. Financials in general have been outperformers in the past three months. Your top pick . I think at the moment its citigroup. I think theyve done a fantastic in reaching the business and shrinking the balance sheet. And what were seeing is great visibility on the costcutting prime minister. Chris wheeler, thanks so much for joining us here on Worldwide Exchange. U. S. Banking analyst at atlantic equities. Of course, one of the big news this morning has been the story of teva guybuying allergan. And in the meantime were looking at milan shares down 12 in premarket, this as teva shares are called to open higher by around 11 . There you go. A lot of big movers. And premarket action on the back of this deal announcement. Still to come on Worldwide Exchange, we explain why u. S. Regulators have hit Fiat Chrysler with a record fine. Dont go away. That story next. Nts ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Welcome back. A new nbc maris poll shows gop president ial candidate donald trump near the top of the pack in two key states. The poll also Shows Hillary clinton leading the democratic pack in New Hampshire and iowa. Though her lead over Bernie Sanders has shrunk. Lets get the full story with tracie potts live in washington. Hey, tracie. Hey there, good morning. Lets take a look at these nbc maris polls, the first two key states the first caucus state, iowa. And the first primary state, New Hampshire. In New Hampshire, donald trump has a solid lead. Seven points over jeb bush. In iowa hes number one behind wisconsin Governor Scott walker. But still well into that top ten that well see on that debate stage in cleveland in a couple weeks. The other thing that were watching is say nationwide policy. An inpoll that shows donald trump at 18 . Hes the number one republican in that poll. Whats interesting, that entire poll was taken after the comments he made questioning john mccains military service and whether he was a war hero. Hes gotten a lot of backlash from that. The other thing were watching are the democrats. Hillary clinton is leading the pack especially in iowa where hes gault a commanding lead. Her lead is shrinking a little more. Only 13 points in vermont over senator Bernie Sanders. Thats in new england, vermont is right next door to New Hampshire. By the way, shes going to be out talking about Climate Change in a few hours this morning. Specifically about Renewable Energy putting more Renewable Energy into the United States. She is promising that every home in the United States should have a clean Energy Course within a decade of her being elected. Were still waiting to see if hes going be elected because Bernie Sanders is catching up in new glance. Every week, it gets more and more interesting. Tracie potts, have a great morning. A record fine for one of the worlds biggest carmakers as u. S. Authorities clamp down on safety recall violations. Lets get the full story with Morgan Brennan who is live at cnbc headquarters. Hey, morgan. So Fiat Chrysler agreed to a recordbreaking 105 million. Thats ever u. S. Federal regulators concluded an investigation into the recall practices. The ntsb finding that the automaker failed to complete safety recalls that included 11 million vehicles. A settlement of 70 million and cash penalty on 20 million on meeting requirements also a potential for another 15 million fine if further violation, found. Fiat chrysler issued a statement acknowledging the violation saying quote, we also accept the resulting consequences with renewed resolve to improve our handling of recalls and reestablish the trust our customers place in the u. S. In addition to the recordbreaking fine also Fiat Chrysler offered to buy back more than 500,000 dodge chrysler pickup trucks that have defective steering. And also cars can be repaired after a defective gas tank. This comes after hackers were able to hack the uconnect dashboard computers. The company had already released a Software Patch to happy strengthen security. But now it says it will send a usb drive to all affected owners with a product update. Have a great day. In other news historic victory for britains chris froome who has a Tour De France victory. In the end won by just 72 seconds. How about that . The narrowest margin since 2008. He crossed the finish line in paris to beat colombias Nairo Quintana securing the Yellow Jersey. Before we go to break, chinese stocks collapsed since the shanghai composite closed in its worst day since 2008. Teva acquires allergan ditching plans to buy milan. And best buy is the first to sell the apple watch. Youre watching Worldwide Exchange. A rough night overseas in asia looking at the shanghai composite down 8. 5 . Its worst day since 2007. Whats behind the selloff. Lets bring in shariv. Hi. Hi there are a couple of factors to raise here. The first is has beijing inadvertently created a sense of bailout here. Remember the bailout, the unprecedented intervention to backstop the market. Yes, it worked for a very temporary period around the margins. And now the investor community, maybe Retail Investors seems to have got a whiff that beijing may start winding back on those support measures and the market today. So it begs the question how long is beijing effectively going to be in the market for i think is going to be quite some time . Because if they doo start winding it back youre going to see this kind of adverse reaction. Thats the first thing. The other factor is the data continues to underperform. We saw that with profitability numbers in the month of june. It was contraction. Whereas, we saw an expansion in the prior month data sets. So a big question in my mind for the rest of the week is whether beijing is going to reaffirm its commitment to statesponsored buying to try to shore up market confidence and stabilization . Despite of the fact that they seem to have created a set of secondround effects here. And once again the Investment Community nose whatknows where theyre going to be in the market. Every time it declines. How long are they going to be in the market . Thats a big question. Elsewhere, in the week that we have the fmoc and the fed, were seeing depreciation in this part of the world, especially in indonesia and malaysia. The fed ahead of any signal of a rate hike. This is interesting, considering the amount of damage weve seen in the Greater China markets, the other benchmarks are remarkably resilient. The other outperformer yes, up by 24 points but typically, we see an adverse reaction in aussie shares when we see china. I think that was interesting. The basic paradigm remains the same seema. Guests on your programming today have been saying the best way to play the china market if you want exposure is to avoid the a share market because were going to continue to see volatility, case in point. Absolutely. Down 8. 5 . Thank you for break down the trading action in asia. Wti crude falling by 5 last week. Gold also losing its shine, hovering at a 5 1 2year low. Copper, similar story at a sixyear low trading down 0. 6 . A quick look at european markets as he was pointing out, european markets down by 1. 2 . Now, shgs we are at session lows in the german the ftse with the back line. What does this mean for wall street . Well interestingly enough the dow indicating a higher open perhaps. Because the focus always as in the u. S. Is on Economic Policy and lets get you a rundown of what to watch. Today, you will get durable goods numbers. Twitter and facebook are later this week. You eyes on the fed wednesday as it releases its statement after a twoday meeting with investor hoping for more clues on the timing of the rate hike. One that could be more anticipated than that is the release of Second Quarter gdp on thursday. Economists are predicting a 2. 7 rise after a contraction in the last quarter. The data will also include annual visions going back to 2012. How should you be positioning yourself . Chief Market Strategist at tempest partners giving us the latest. Bob, listen this is a big week for fed market. And volatility in the Chinese Markets what do you think will drive action this week . Good morning, seema. I think youre right to point out that the focus is still going to be on the fed. Im definitely in the camp for september. And i think that continues. I think youre definitely going to see 2015 this is something the fed wants to do here in the u. S. They want to begin normalizing. I think youre seeing some of the reasons why with the acceleration and calming in grease. Whats going on in china. The fed doesnt want to be at zero rates. Having said that if theres ever going to be a week save for the fed that the u. S. Pulled the rest of the world up it would be this week where weve got gdp quarters coming up. And technology. And we saw last weeks tech earnings. And some of the Energy Stocks Oil Stocks Like shell mvp rising. And on friday we saw going into the future the u. S. Could actually pull the rest of the globe up. U. S. Investors suggesting that trader where is you are are not too worried about the selloff in asia. The precipitous fall that we saw at Chinese Markets are at recession lows in europe. Why do you think that is . As you mentioned, its definitely based on the fed. When you look at the dollar index and it had a significant collapse. Relative to way its been trading. Its been trading at what i call softball market. Its definitely fed related. I think youre hoping to see some softer comments if youre a bull. Lately they have not used up at all. Theyve gotten comments from janet yellen they say that liftoff is going to be 2015. The u. S. Could at least stabilize the rest of the globe. Its not going to pull china out. Given the greek negotiations that take this week china as well as earnings would you be a buyer of treasureytreasuries . Well, i wouldnt be a buyer of treasuries just yet. I think youll see rates slowly rise. I just think the treasury story is over. Its a matter of timing im certainly going to be out of buying treasuries here. I think you have european equities. Everybody has lightened up on chinese stocks. Theres no way around this argument at this point. But i dont want to buy treasuries at this point. Well leave it there. Chief Market Strategist partner at temperaturest. Teva shares up. European equities now at session lows. That does it for us here on Worldwide Exchange. Im seema mody. Next up is squawk box. Some come here to build something stronger. Others come to build something faster. Something safer. Something greener. Something the whole world can share. People come to boeing to do many different things. But its always about the very thing we do best. Good morning, a Global Market alert with chinas stocks slammed overnight. An 8 cap. Big number making this the biggest oneday loss in eight years. And we heard news about this, but its official now, breaking deal news. Teva buying allergans generic drug unit. More than 40 billion is the price tag. And a record fine Fiat Chrysler slapped with 150 million in safety issues. The monday july 27th 2015. And squawk box begins right now. Announcer live from new york where business never sleeps, this is squawk box. Good morning. Welcome to squawk box here on cnbc. Im Michelle Carusocabrera along with joe kernin and andrew ross sorkin. And preserving the space suit for Neil Armstrongs space walk. Well have more on that story later this hour. First to the Business News of this morning. Major indices in china plunging. The largest one day drop since 2007. Stocks falling on new worries amid the prospectus with the highest economy take a look the shanghai the shenzhen and hang sentence all lower. Well have a live report from our colleagues in asia in just a minute. U. S. Equities futures at this hour dont seem to be responsing