Intervention is not the solution solution. They are desperate to try to keep this market up and theyre trying every rule in the book to do that. Unfortunately as you know the more they do the more uncertainty is imposed on the market. Its official puerto rico defaults on a Debt Repayment for the first time ever. The governments debt spiral warning comes to fruition. Putting the brakes on profits. Toyota calls china a difficult environment while bmw warns of slowing sales. Coming up on the show hes a man with a plan. Obama talks tough on climate change. What would you give the president for his birthday which, by the way, is today . The numbers are in and its not looking good for Hillary Clinton. Stay tuned as we unveil the results of the latest wall street journal poll and angry gamers. Why the app ruffled some feathers, later in the show. Welcome to the show. It was an ugly start to the month of august with stocks falling across the board. The dow losing 91 points. A lot having to do with weak Economic Data plus the fall in Commodity Prices. Right now futures indicating another day of losses. The dow is down 13 points. S p 500 off two points. Were keeping an eye on european markets. Despite the sell off that we saw in the Greek Stock Market in todays trade. A mixed day of trade. Not a lot of Economic Data to react to but the xetra dax down fractionally on the day. The French Market seeing a loss of around 20 points. Some of the big corporate reporting disappointing earnings so perhaps weighing on the broader index and the Greek Stock Market down 2 . On that note lets look at the greek banks. The greek stock index losing 16 in yesterdays trade and it has been the banks that have been seeing the brunt of the sell off. That sell off continues here on tuesday. You can see all the major banks down another 30 or so. Alfa bank down. Paris bank down 30 . Another tough day for the greek banks. How much longer will this go . A huge amount of correction over the last couple of days having been closed for five weeks. Lets also look at bond markets. As the greek situation eased in july we saw risk on sentiment come back into equity markets. Particularly equity markets in europe but it has continued to be risk off in bond markets. Safe havens seeing some purchases. The u. S. And germany thus seeing yields depressed. Were looking at 0. 61 in germany. Interestingly the u. S. Which as we think is getting closer to a rate hike compressed down to 2. 15. It wasnt long ago it was 2. 4 flirting even with 2. 5 . Lets look as well an interesting couple of movers today including the aussie dollar which strengthened quite significantly. No change in rate but the central bank did ease its talking down of the currency suggesting that an easing cycle might be coming to an end. And indonesian rupee strengthening by half a per cent and kept rates on hold today. The euro and yen flat. Lets look at commodities. Oil price versus stabilize and recovered today after a sharp sell off yesterday down some 4 . Particularly during the u. S. Hours of trade. 45. 7onwti today. Brent at 50 pretty much bank on. Earlier our colleagues in asia asked the emerging markets guru where he thinks the oil price is headed. Nobody is an expert. Even the top people in the industry and i sit on boards of some of these Oil Companies and, you know their predictions are way off. If we think theres going to be more pain to come and if the prices will continue to go lower or stay at these low levels. However what we do is say, lets look at the total picture of a diversified oil company. There doing enp, theyre doing refining and theyre doing marketing. Marketing is doing very well. Refining is doing very well at these low prices. So you have to balance it. So very often people will be selling off companies on the bases of low oil prices but theyre making a mistake because these companies can still make good money. Lets talk more about Oil Companies and opportunities in the sector. Joining us is the ceo and cio at morgan greek capital management. Greet to have you on the show. You havent seen a bottom in Energy Companies yet. You want to wait a little bit longer until you start bottom fishing. How much longer . Whats the trigger for you to come in . Well as you saw earlier, someone was talking about the production decline that everybody has been anticipating that just hasnt happened and until we see some sign of that i think prices will be lower for a little while longer and you have to wait on the energy stocks. They usually lead the commodity though so youll see them turn first. We were discussing around the desk before why we have seen such a big drop in Commodity Prices but not in equity prices. Of course if you put energy aside. Why is that . Is that really just because of qe or the lack of other alternatives . Do you think its the market being complacent . What is it . Yes, yes, and yes. I talk about the four horse men of the growth pocolyps. Any time they spike down 50 plus percent youll have slowing growth. Second is copper prices. They call copper dr. Copper. Its looking sick. Its been falling. A lot of reasons about china not using it as much but thats usually another indicator. Now theres ten year yield in the u. S. Thats been rolling over again and then the last one is the korean stock exchange. A lot of Tech Companies tend to sell into countries when theyre growing. So were seeing all of those kind of rolling over and growth slowing but stocks still dont want to believe it. Theres a complacency and the no alternative. So lots of factors and qe clearly is finding its way into into liquid markets. One of the big beneficiaries are the airlines. Southwest gaining about 4 to 5 . Is it too late to buy into the Airline Stocks . No i think the airlines. I was back on the u. S. Show a couple of weeks ago saying theyre stupid cheap. Theyre still stupid cheap. Theyre crazy cheap. Single digit pe ratios. Their earnings power is really strong. Oil averaged 93 barrel last year. Its down in the 50s. I guess i always come back to the point that a lot of these fuel contracts are already in place. Oil prices are lower but if their contracts are already in place how much of an ill pact does this have on their bottom line . In the old days of the Airline Business a lot of hedging was done. Theres not as much hedging is done. American doesnt do much hedging at all. Southwest was the most active. But you have more volume. Theyre much better on Capacity Utilization and planning. When is the last time you sat next to an empty seat . Lets talk about earnings more broadly. You mentioned it for the Airline Stock but if we look across earnings season in general has it been Strong Enough to justify july all three indices in the u. S. All in positive territory . Do you think earnings is coming through Strong Enough . I dont think so. I think in the u. S. We play this game of lower, lower, lower beat. If you told me a year ago you were going to make a dollar and you told me last quarter you were going to make 25 cents and you make 30 cents im not happy because a year ago you told me you were going to make a dollar. This whole idea of low, lower, beat makes people feel better but i dont think earnings really are strong. I think revenue, top line growth is very weak. I think earnings overall being close to flat to slightly down is not a good thing. If we broaden it out and think about how earnings are coming out in other areas of the world, particularly japan and europe where theyre coming from a low base and had qe and earnings are looking stronger relative to a year ago is it as simple as that . Earnings are beating in those regions lets buy those equities or have they priced that kind of change in. In japan its definitely that simple. Japan is having record earnings. The nice thing about japan is youre buying trough margins at trough multiples. Dont quite as trough as 18 months ago but theyre still very cheap. Its gone up a lot yet the pe ratio hasnt gone up because earnings have gone up so much. We love how earnings are coming through in financials and where theres leverage to growth. They have committed to beating deflation. Theyll hit the 2 target before u. S. And europe for sure and then in europe theres some interesting pockets of growth but were starting to see some slowing in some of the big core economies there too. We like spain for example. Aside from earnings how important is is this fridays jobs report . I dont really look at the jobs report. Particularly the u. S. Jobs report because i think the numbers are a little bit squishy. If you work one hour a month youre considered employed. Where do i get that job . I dont want that job actually. Sounds quite nice. But, i know you guys like working. But i just dont think the ploilt employment numbers tend to lag the cycle. High unemployment numbers stocks are rise. Really low youre at the end of the cycle. Time to be more cautious and time to be more defensive and time to look in places where people dont want to look like emerging markets. Like greece. I was in a greece a couple of weeks ago and spent a day meeting with some Bank Executives and theres interesting opportunities. Theyre going to get punished in the short run but theres going to be some interesting opportunities in greece. You would be a buyer here of Greek Bank Stocks . Not yet. I think the current common equity is is going to be very dangerous for the next couple of weeks. Sure. But longterm people are going to put the money back in greek banks. The greek banks years from now will look good. There will probably be a restructuring and wait and buy after that but the greek Airline Stock, Asian Airlines love that company. Great company. Like your optimism. Thank you for joining us on worldwide exchange. Now switching focus to china, chinese stocks closing higher today after the shanghai and shenzhen exchanges announced measures to curb short selling by traders. This is the latest intervention to prevent a further market sell off. Our colleagues on squawk box spoke to the coceo of the Carlyle Group that gave us his take on the melt down. China is important to the private equity world. About 13 or 14 of our employees are based in china are chinese natives and we made 80 investments in china and 6 billion of equity has been invested. We have made some profits and taken those profits out and made more investments in china across a wide variety of areas. We like china because its a country with 1. 4 billion people more or less and growth rate of 6 or 7 and thats a high growth rate for an economy that size so we do see opportunities throughout the country and were going to continue to invest there. Obviously theres been some concerns about the stock market of late and we do that take into account in pricing decisions but given the size of the chinese economy and it will be the largest in our lifetime i dont think you can afford it if youre a global investor. Sri is in singapore. Did shoez short selling measures buy the Chinese Government help the shanghai comp at all . I think they did. But the general consensus view is this is going to have an impact on the margin. Were seeing that today but the question is really durational. How long is it going to have a beneficial effect on the market . It continues to create the moral hazard debate as well. Investors expect beijing to have their back. They expect them to be interventionists so when they get beijing dialing back or walking back on all of this unprecedented intervention they may very well throw a tizzy and lets not forget theres still a lot of leverage still in the system. Still a lot of deleveraging to go with that and theyll see some volatility. Here and now and the markets did like the fact that beijing managed to reign in short selling. Thats the biggest daily gain since around july 10th and it also snaps three days of three session losing streak. Thats where we stand for the chinese market. I want to highlight australia. You were talking about the data and aussie dollar very interesting move in the aussie dollar because the policy makers there are dialing back as well on that. So we saw snap back in the aud and also we have seen some fairly good data today with the retail sales. Pretty solid set of numbers. Begs the question is the rba now moving into something of a neutral cycle. If we still have these commodity head winds effecting the terms of trade very kwarly but the domestic situation is showing some signs of life. Thats where we stand. Back to you. Thank you for that. Moving on puerto rico missed a 58 million bond payment monday. The first default since it came under u. S. Jurisdiction in 1898. The government did make a payment but says it lacks the fund to pay the full amount. They both say this is likely the first in this years defaults. Many of puerto ricos bonds are in the hands of u. S. Investors that bought them through mutual funds. Still to come toyota drives to success with a quarterly net profit but will the chinese slow down catch up on it . We analyze the numbers, next. U. S. Futures point to a mixed open. No let up for apple. Shares off 2 in germany after the tech giant falls into correction territory in new york and pimco under investigation for inflating returns of a popular etf. Record profits at toyota. Beating on the bottom line in the First Quarter thanks to cost savings and a weaker yen. Were joined live from tokyo. Thanks a lot. Its been a winning formula for the last three years. Inflating profits at japans biggest employer and one of the biggest auto makers in the world. Posting a 10 jump in profits to 5. 2 billion u. S. Dollars. This was much higher than expected and also operating profits were up 9 in the april to june quarter. Also on top of the weaker yen the strength of the u. S. Markets also helping the bottom line. Heres what the cfo had to say. The u. S. Has been strong but the domestic market in asia were weak. On top of that demand in the middle east has declined due to the sharp decline in oil prices. But overall sales in the quarter are actually down. For russia theyre crumbling and because of the weakness were seeing in the markets there and the collapse of the rouble they cant give a forecast for the rest of the year. Toyota indonesia, thailand theyre not performing well in these markets and add the concerns in china. For now its not impacting sales but they are concerned about profitability going forward. In china, sales are robust but we cant be optimistic about profitability. Costs are going up and price points are coming down. Its a very difficult sales environment. The numbers for china for the january to march quarter so they dont really reflect the melt down that we see in the equity market there in recent weeks but Consumer Sentiment has been hit hard and theyre very conservative in pushing out more incentives to move profit off the shelves. Thats the latest. Back to you. Lets switch gears and talk about bmw. China weighing on the auto makers Second Quarter results. Reporting a 3 decline in profits despite a double digit jump in revenue. The company also blaming ever fiercer competition. You can see shares down about 1. 5 . Nancy is is yoining us around the desk. One of the key german auto makers benefitted from that lower currency this time around. Thats not enough to help as it seems. The benefits are not being fully realized yet. Theyre hedged until a few months out but of course just like toyota the big focus was on china with the latest report and investors were really spooked because bmw did manage to maintain guidance but warned this was really conditional on thicks not getting worse in china and other markets such as russia where they have seen a real dip off in sales here. The stock has managed to pair back some losses in the last hour because we had comments from the cfo and new ceo saying that china is not great however we expect continued growth. Just wont be in the double digits in recent years but we should mention that the income equity contribution from china in the most recent period was better than a lot of people forecasted and theyre saying we expect that equity contribution to stabilize. Not saying its going to get worse but still reluctant to give any real targets and as we have been talking about the u. S. Sales were so strong and they are benefitted from the higher margin cars so its just whether or not the strength in the u. S. Can continue to outweigh the softness in china. Great stuff. Thank you very much. All right. Coming up on the show angry birds producing some angry gamers. Well tell you why the app is ruffling the feathers of some of the users. Thats coming up. Dont go away. Today is the president of the United States birthday. Barrack obama is 54 today. A very happy birthday to you. To mark the occasion we have been asking you throughout the show what would you like to give the president as a Birthday Gift . If you want to join the conversation get in touch with us worldwide cnbc. Com or on twitter cnbcwex. A lot of comments throughout the show. Some correspondence very heated. One viewer suggested a third term. Some of the viewers were very upset about those comments. I want to clarify here. Were not proobama or against obama. Were a political on this show but we had a couple of good ones too. Derek says how about a penthouse suite in trump foutowers. Unemployment rate has come down to around 5 here in 2015 but growth has been lackluster trading at around or reporting around 2 . Im sure hed like to see a rebound in growth before he leaves. Always professional seema. The other one, he needs a little bit of a holiday. Just to refresh him for his final year to see if he can get the one other thing hed like for his birthday which is a meaningful legacy whether that comes from ttp or obamacare or whatever else it might be. He is obviously pushing ahead on climate change. Perhaps we should get him a hulk outfit and then he can be truly green. He got a run but lets see. So anyway happy birthday to the president and keep your suggestions rolling in cnbcwex is the twitter handle. Still to come on the show how are the worlds legendary investors making money . We have their trading tip afss after this break. Dont go away. 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 . More and more, data is visual. In fact, the number of mris has increased by ten percent a year. And a radiologist might view a thousand images to find one tiny abnormality in shape, contrast or movement. Because its so challenging a Research Project is teaching ibm watson to see. In the future, it could help clinicians spot key patterns quickly and precisely. Ibm watson is working to make healthcare smarter every day. Hi everyone. You are watching worldwide exchange. Im seema mody. Im wilfred frost. Crude edges off 12 month lows. Renowned investor telling cnbc oil prices will stay subdued in the shortterm. The decline in Oil Production that was anticipated has not yet occurred and im not sure it will occur. Prices will be soft for a little bit. Chinese stocks swing higher after the countrys regulator takes more action to stem volatility. But intervention is not the solution. They are desperate and will use every rule in the book to do that. Unfortunately as you know the more they do the more uncertainty there is in the market. Puerto rico defaults for the first time ever. The governments death spiral warning comes to fruition. Pimco probe. The investigation into the bond giant for pumping up returns of a popular etf once managed by bill gross. If youre just tuning in thank you for joining us on worldwide exchange. U. S. Stocks falling on the first day of august. Futures pointing to a higher open so we could be in for a rebound. In 2014 august was the strongest month for wall street with the s p 500 gaining about 4 . Nasdaq gaining about 5 . Will history repeat itself . That is a big question but in terms of yesterdays sell off, Technology One of the worst performing sectors and no love for twitter. The stock is now down about 35 since its first close on november 7th of 2013 although still above its ipo price of 26 a share. Furthermore since going public twitter underperformed every dow stock and underperformed about 23 s p 500 stocks just to put into perspective the type of price action we have seen on twitter and comparison to the Technology Sector. Earnings did not impress wall street plus were still waiting to see who will be the new ceo of twitter. The stock losing in yesterdays trade around 5. 6 . European markets with a gain yesterday despite greek stocks tumbling. Also some encouraging euro zone data helping boost sentiment. Here on tuesday were looking at the u. K. Index, the german stock market up in todays trade by around 27 points. Earnings weighing on the french index down about 12 points in todays trade and the Greek Stock Market down about 1. 6 . This after losing 16 in yesterdays trade. Of course Greek Stock Market was closed for five straight weeks. So how do you make money in these markets . Well, this is what investors have been telling us. What we do is say, lets look at the total picture of an oil company diversified oil company. Theyre doing enp, theyre doing refining and marketing. Marketing is doing very well. Refining is doing well at these low prices. You have to balance it. So very often people will be selling Oil Companies on the basis of Lower Oil Prices but theyre making a mistake. Theres no doubt that when prices stay low for a long time in any sector lets say the oil sector is the one were talking about now this will be some companies that have financial problems and there will be opportunities for people like carlyle to buy these things at lower prices than what would otherwise have been the case. I dont want to predict any wide scale decline in the value of all of these companies but there will be opportunities to buy things at lower prices than would have been the case a year or so ago. Growth is coming down and its much more that is a big reason why the com. D. Ty demand is slowing and then the production is running high so you have a supplydemand imbalance and thats how the prices are caving in and i think theyre caving into the marginal production stocks. All right. Lets get to some corporate news. Sprint shakes up the management ranks replacing its cfo with the former deputy cfo at telstra. Also creating a new coo position in charge of technology. They have been cutting costs and staff while adding stores in an aggressive turn around plan. Sprint could lose its position as number three u. S. Wireless provider to tmobile and shares fell 2 in after hours trade. Currently in germany off by half of 1 . Joining us live from new york is the Senior Analyst and great to have you on the show. What do you make of that management shake up . Many probably argue its long overdue and very much needed or is it just tinkering around the edges . Well look this is the third big Management Change that we have had from the company just in the last couple of years and, in fact if you go through the Technology Organization its probably been at least five or six. So this company has been in turmoil since 2006. It has been an extraordinarily difficult period for sprint and youre seeing that now. When they report earnings today the news now is about the management shake up but the old adage that cash burn isnt really an issue until its the only issue, the cash burn of this company is getting to be the only issue now for this company. Its how does it sustain itself given the rate at which its burning cash. But at the same time sprint has been embarking on major promotional activities. Wouldnt that be paying off at some point . Well its a balance, right . Theyre doing at least a little bit better on the subscriber front. Its expected today that theyll post Something Like 500,000 unit editions in terms of real phones which is where the value is the expectation is they lose about 100,000. Thats a little better than they were doing last year. Its still not good. And more fundamentally, the cash burn at this company is horrific and theres been a very aggressive accounting change at the company where they have started capitalizing phones. So when you dig through the accounting the Financial Results are actually much more challenging than they appear on the surface. They own about 80 or has an 80 stake in sprint. Do you think theyll put more folks on top of the Leadership Team to accelerate its turn around plan . They already have. They have been spending a lot of time on sprint. Theyre trying to figure out what to do here. The ceo who is getting on to just about a year in the position was appointed directly by his son at soft bank so they have already started to put their team in place. The challenge is nobody has quite yet hit on the solution for what do you do about the challenges at sprint . Remember, they said this is now roughly nine years into this kind of aimless walk through the woods for sprint where they have been losing subscribers. Hemorrhaging cash. Losing money. Ever since the merger with nextel way back in 2006. When you say what do they do to solve this problem, i suppose one potential solution was a little bit more consolidation in the market although that seemed to get pushed back by regulators. Do you think as things continue to worsen for sprint the possibility of some form of takeover or merger would become possible in the eyes of the regulator again . Well it certainly makes it at least more feasible. But the department of justice and fcc were clear in saying we want 4 and not three. Now if it becomes clear that sprint simply cant stay solvent on its own or if it becomes clear that sprint simply cant realistically invest much of anything in their network so its not doing consumers any good to have sprint as a fourth player you have to believe they have been willing to revisit that position. Just quickly sum it up for us. Whats your call on the stock. All Things Considered . We have been recommending a sell on the stock for over a year now and i still dont see how you can get to any compelling Valuation Methodology that gets you so any value at all for the equity in excess of the debt on the company. Thank you for joining us. Much appreciated. Lets take a look at the other top stories at this hour. Aigs Second Quarter profit rising 5 beating forecasts driven by investments in chinas big insurers. Now aig sold most of its 46 stake in that company in june. Profits from underwriting fell as aig struggles with a drop in commercial property and Casualty Insurance rates. Theyre raising the stock buy back plan to 5 billion and more than doubling its dividend. Price action and shares up about. 4 here in europe. Pimco gets a notice from the sec meaning they could face civil charges over whether it inflated returns. Theyre focussing on whether it probably valued stakes in Mortgage Backed securities it bought back in 2012. That may have lead to inaccurate disclosures about the funds performance. A wells notice doesnt mean any wrong doing occurred or charges are forth coming though. Pimco parent in germany higher than 0. 8 . Starboard value has a new target. Theyre disclosing a nearly 9 stake in Health Care Technology firm and is calling for changes to operations and to the board. Its under valued and critical of its equity saying it bought some companies at too high a price. It rose 19 in after hours trade last night. Its up 12 today in germany. Interesting comments coming from the pboc. Theyre saying they will use Monetary Policy flexible and will fine tune it. They add that they will maintain appropriate liquidity and achieve reasonable growth and credit in social financing. They will lower it to support key areas and vulnerable sectors. Finally theyll say theyll keep the Exchange Rate basically stable. A lot of people have been calling for a much more open capital account but with all the turbulence going on in the Chinese Markets right now the pboc is intent on keeping it pretty stable but they will further improve the exchange mechanism. The government has been trying to restore Investor Confidence given the volatility in the stock market. The question is when does anything actually change . When we see stability being introduced to the equity market. Weve seen stability every time they have acted but the instability came back a couple of days later so it didnt last long. The weak economy data isnt helping the picture as well. All right. There you go. Some flashes coming in from the China Central bank. Still to come on worldwide exchange, what do donald trump and Hillary Clinton have in common . Heres a clue. Its something to do with their likeability. Well explain, next. No students 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. Down about 10 or more from the recent highs. We put together some of the names. Chevron and exxon mobil and the energy and oil and gas players impacted by the drop in Commodity Prices. Tech nails as well intel now trading in correction territory although slightly higher in yesterdays trade. Ibm a similar story. Apple not only trading in correction territory but also below its 200 day moving average. Thats a bearish sign for those that watch technicals. Also keep an eye on ge down about 12 from recent highs. While broader markets suggest markets are okay you have to take a look at the internals. Thats not a very bullish picture. The dow was in negative territory yesterday where s p positive and nasdaq up 8 . The first u. S. President ial debate is this thursday. The republican candidates jock jockeying for that position. More voters will throwing support behind donald trump but not for trnshe reasons you think. Landon over to you. Theyre giving a lift to the nontraditional and antiestimate donald trump. 19 of republican primary voters have trump as their first choice. He does well among those that say Leadership Qualities matter more than issues but trumps appeal may end there. More than half of americans view him negatively. That number goes up to 75 among hispanic voters. More than 60 say trump is hurting the gops image. Jeb bush is now in third place. 57 of republicans could see themselves supporting him down from 75 in june and bush is losing ground among those conservative voters. Senator ted cruz was the only major candidate not to see support drop from the previous survey. Hillary clinton may still be the Democratic Front runner by a substantial margin but 48 of voters now view her negatively. Thats the highest level since she was elected to the senate in 2000. Its amid a series of controversies including her email practices and donations to the Clinton Family foundation. While 59 of voters still see clinton as their first choice. Thats benefitting vermont senator Bernie Sanders that supported a jump from 15 to 25 . What also may be hurting her is the prospect of joe biden jumping into the race. While 65 say the u. S. Is on the wrong track a quarter believe the economy will get worst in the next year and many want the next president to take a different course from president obama but theyre split on which party would be better for the country. Back to you. Landon thank you very much. Now puerto rico is in default today after paying only a fraction due on a bond payment on monday. Cnbcs kate kelly reports the move is now raising the prospect of further trouble for the cash strapped u. S. Territory and potential impact on investors. The week started as a nail biter here in the capital of puerto rico where a debt payment due saturday august 1st was ultimately not paid. Only a fraction of it under a million portion of it was paid using leftover funds that the government had as a good faith gesture but the government indicated because of its financial situation and responsibility to citizens here it was not able to pay that 60 million overall marking the first default in puerto rico ever and the first at a state level u. S. Territory since 1933. The impact on the market is not immediately clear. General Obligation Bonds trading off throughout monday. Another ponds which were far less heavy traded not showing too much of an impact so far but theres fears that that will spread and that the damage could spread to the high yield market as well as effecting mutual fund owners, hedge funds and individual investors here and puerto rico and the mainland of the u. S. That invested in this debt. The bond insurers were trading off today. Assured guarentee which has the largest exposure to puerto in net absolute terms, a little under 5 billion of its overall 400 billion portfolio traded okay but at the same time mbia and assured guarentee which has larger exposure to puerto rico were down multiple percentage points. As things develop well be bringing you updates. Im kate kelly in san juan. Back to you. The long running battle between birds and pigs still popular among gamers. Angry birds 2 hit 10 million downloads days after its release. But one new facet of the game is ruffling feathers. Theyre frustrated that they must wait 30 minutes after exhausting a limited number of lives or make an in app purchase to continue. Pretty frustrating. Before we go to break lets remind you of the headlines. The dow closed down for the Third Straight session. No let up for apple. Shares off 2 in germany after the tech giant falls into correction territory in new york yesterday andcord q1 but warns beijings slow down is putting the brakes on profits. Worldwide exchange back in two minutes. No students 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. I hate cleaning the gutters. Have you touched the stuff . Its evil. And ladders. Sfx [screams] they have all those warnings on em. Might as well say. youre gonna die, jeff. you hired someone to clean the gutters. Not just someone. Angies list helped me find a highly rated Service Provider to do the work at a fair price. Everyone can shop, but members get more with reviews, live customer support, and better pricing. Come see what the new angies list can do for you. Welcome back. Lets remind you to what happened to asian markets overnight. Relatively muted for japan and hong kong but a recent bounce in china after the authorities once again stepped in and tried to stem the recent volatility. This time making it harder for investors to borrow stock and harder to short things. A rebound today, 3. 7 but the last couple of months go by we can expect volatility to return soon. A quick mention of australia. Descent retail sales and the central bank did not cut rates. Lets show you what european markets are doing. Yesterday they held up well given the declines from china and the greek banks but hey athens once again in focus today. Were down by only 1 . Thats compared to the 16 decline yesterday and greek banking stocks limit down for many of them off 30 . Elsewhere were looking more settled. The dax up by 0. 1 . The ftse 100 up by 0. 2. How do you make money . Joining us live from jeffrey, chief Global Investment strategist strategist. Pleasure to have you on the show. A sell off for markets. Kicking off the month on a down note. But president obama announcing the Clean Energy Plan and also the risk off approach sending investors into defensive plays. Is this where you want to put money though as we approach september and the potential rate hike . I dont think so. They are Interest Rate sensitive equities but i dont think its the Interest Rate rate hike that is the real potential negative. Its the fact that i think were likely to see a cyclical lift in the economy and earnings in the second half of this year both in the u. S. And abroad. That should help to drive cyclical stocks particularly the Technology Sector but also financials which have been acting very cyclical lately. Shanghai composite ending higher today. Still down about 30 from the peak in june. How vulnerable is the u. S. Investor to the volatility were seeing in Chinese Markets . Very little. The reality is individual u. S. Investors are not exposed to the chinese a share market. That mainland market. They have exposure through the emerging market etfs or mutual funds. We have seen some volatility there and its very different than what has been experienced in the a share market and china appears to be making a successful though volatile transition to a more Service Oriented economy and that bodes well for the longterm. Were sort of halfway through earnings season. How are things stacking up so far in your eyes . So far they look okay. More companies than usual are beating expectations and the guidance has been fairly good but, you know some of the expectations or some of the reasons given during the quarter for some of the misses are a ll little concerning. Half of the companies that missed expectations have talked about currency and Commodity Prices falling. Those are two things that didnt move during the Second Quarter. The dollar was flat so were oil prices so you wonder what might have really been going on there that they cited these reasons as to why they missed during the quarter. Looking more closely were seeing a lot of different factors effecting these companies. Certainly growth overseas but a brighter picture as we look to the second half as we believe a bounce in Economic Activity is due. Jeffrey thank you for your time. Chief Global Investment strategist at charles schwabb. Futures looking. Slightly higher. But does this continue or a one time rebound. Mixed performance across europe today. Germany and the u. Skchlts. Just positive. Thats all we have time for today. Thank you for watching. Well see you tomorrow. Next up is squawk box. No students 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. The media giant has super hero sized numbers. More americans are hoping for change in 2016. With all this its tuesday, august 4th 2015. And squawk box begins right now. Live from new york where business never sleeps, this is squawk box. Good morning and welcome to squawk box here on cnbc. Im michelle along with joe kernen and scott. Becky and andrew are off today. No relief in sight for firefighters and residents in california. 144,000 acres destroyed by fire making it one of the biggest fires in recent history. Over 13,000 people have been he vak evacuated. Stocks in china surging on new rules to crack down on short selling. One would prevent borrowing and repaying shares on the same day. Mark made comments earlier today on cnbc. They are desperate to try to keep this market up. And theyre trying every rule in the book to do that. Unfortunately as you know the more they do the more uncertainty is imposed on the market. Something we have long