And town but not out walmarts ceo admitting his company fell behind amazon but now the pressure is on to play that catch up game. And finally peter thiel doubling down on his attacks against google why he says the search giants dealings with china should be a huge red flag for the feds its tuesday, july 16th. Worldwide exchange begins right now. Good morning welcome to Worldwide Exchange from wherever you are in the world you may be watching. Im dominic chu in for Brian Sullivan live pictures here, a screen shot of capitol hill where today congress will be Holding Hearings on Big Technology well take you there live in a moment first heres how you and your money are setting up right now the Global Markets are setting up their day stock futures indicating the dow will open just about flat, off by 4 points. Not much movement. There the s p up by 1 point. The nasdaq up by 6 to 7 points this after the major averages capped off another day of, yes, record highs the dow hitting its fourth record close of the year the s p hit its 11th the bond market in focus now the tenyear note yield trading at 2. 09 so, higher than it was a couple weeks ago. The twoyear note yield 1. 84 . Lets go worldwide in asia, a bit of a mixed session. The nikkei in japan off twothirds of a percent the hang seng up a quarter of a percent as for whats happening in europe, generally positive but maybe just marginally so the dax is up 0. 1 the cac is up about 0. 20 . The same thing for the ftse 100 yes the uk with futures searching for direction and a number o earnings on tap this week, well hear from today jpmorgan and goldman, netflix, microsoft, United Health later on in the week can this rally continue given all of those earnings . Lets get more insight from art hogan from national ecurities. Art, is earnings season this time around going to help propel this next leg of the rally or be a cause for concern for traders and investors . Such a great question its always difficult to come in on earnings season at alltime highs. That reaction to negative news or a miss will be much more exaggerated than we typically see if we look back over the last three quarters. So my guess is well probably see punishment for the companies that missed be a bit more extreme than weve seen in the past i think as we work our way through this week, which is largely the large cap financials, well start to feel better about the entirety of the s p 500. Well get about 120 Companies Reporting next week. Well get a much better view on sectors other than the large cap financials expectations have been tem period ov tempered we are not expecting market Earnings Growth. In fact for the second half of the year even were expecting earnings declines. Take us through the expectations game is this a market that can rally if expectations albeit lowered are exceeded three things to think about first and foremost, we have difficult comps every quarter this year. North of 20 earnings in 2018 is the quarter theyve comping against. Thats difficult to be well probably be in low single digit Earnings Growth for the first half if we usually have 68 of companies beat, they beat by 3 and 5 , well be in the low single digit Earnings Growth which is okay for where we are now. In terms of what makes this b ss better is getting the u. S. china trade tensions behind us lets go into that. Just yesterday we got data showing that the chinese economy is growing at the slowest pace in 27 years. But some of the more High Frequency data showing that industrial output is decent. We have decent numbers coming out about retail spending and the consumer all in all, is the china trade war going to be an issue as much as it was knowing that chinas economies are perhaps not as bad as some had feared that doesnt make it better in terms of shortening the timeframe of getting this accompli accomplished we dont like to have either side start to feel emboldened. What makes that happen alltime highs in the market, a fed cutting rates in july. Better economic growth, and because of the fact that the massive amount of government stimulus going into that economy is driving that. We would like to get this over with sooner rather than later. Before we let you go, its a big fed meeting. Do they cut . Do they not . Is it 25 basis points or 50 . Theyll cut its impossible to walk back the expectations theyve given the market commentary throughout and pretty good consensus that its 25. The big question now is is this the beginning of a pattern of cuts or is this a one and done art hogan, always great to see you. Mixed numbers from one transportation name playing out in a big way ahead of the bell Frank Holland has more details on that. Thats right. Mixed numbers, still shares of jp hunt surging this morning even as they reported a big miss in Second Quarter earnings and revenues just in line. Analysts at citi and stevens putting out a note saying if it wasnt for a onetime pretax charge profits would have topped forecasts. The street may also be breathing a sigh of relief given the freers offree fears of a looming recession and tariffs from the trade war still the numbers were not great. Jb hunts most profit sector, shipping freight in a container was 4 lower than estimates. Thats where it gets 51 of its volumes. There was weakness in the eastern network. On the Earnings Call the company said they expect to improve in the second half of the year. Jb hunt shares up 7 , but it and other trucking stocks are still underperforming the Broader Market back over to you Frank Holland, thank you very much for that update. When we come back, facebook facing it from all fronts as it heads to capitol hill for a double grilling today. What investors should be watching for and then short cuts, price cuts, and harsh conditions new details on teslas push to boost deliveries at any cost later on, early paypal investor and trump supporter peter thiel doubles down on his tax against google wi ehaeilrernl tu after this it naturally begins to change, causing a lack of sharpness, or even trouble with recall. Thankfully, the breakthrough in prevagen helps your brain and actually improves memory. The secret is an ingredient originally discovered. In jellyfish. In clinical trials, prevagen has been shown to improve shortterm memory. Prevagen. Healthier brain. Better life. Sun is coming up over new york shortly big tech is back under fire today as executives from facebook, apple, google, amazon and more head to capitol hill. Elizabeth schulze joins us from london with more what can we expect from the grilling these Tech Companies will get on capitol hill thats right. Big tech back in washington. The house judiciary subcommittee on antitrust is holding its second hearing on Online Platforms and market power this is focused on innovation and entrepreneurship this is part of a bipartisan investigation into digital monopolies unlike the first hearing, today we will hear from the Tech Companies themselves with executives from apple, facebook, google and amazon. The hearing will include a panel of antitrust experts including some who are in favor of breaking up these companies. Yesterday i spoke with one of those witnesses, stacy mitchell, she researched amazons effect on competition in local markets. She said lawmakers are look at how to change the structure of these companies so that smaller firms can better compete for facebook or google that could mean spinoffs of wathatsa and youtube. We heard about fees charged to developers in the app store. Another topic will likely be the expected 5 billion fine agains facebook for privacy violations. The chairman of the submiti iti subcommittee said the fine will do nothing to stop the behavior and better protect users data. So, while we have you here, elizabeth, the other major hearing on the until with regard to big tech is about facebook and its planned libra Digital Currency we heard from Steven Mnuchin yesterday sharing his concerns over the cryptocurrency in the space in general heres what he to say. The Treasury Department has expressed very serious concerns that libra could be misused by money launderers and terrorists and financiers we will not allow Digital AssetService Providers to operate in the shadows and will not tolerate the use of the cryptocurrencies in support of illicit activities six letters that every banker no the world knows very well aml, antiMoney Laundering, and kyc, know your customer. Cryptocurrency is a big part of all of those watchful eyes that treasury has what should we be watching from the libra hearing . Weve heard global scrutiny from central bankers, from finance ministers, we heard it from Jerome Powell last week as well, serious concerns about Money Laundering, along with the Money Laundering theres the Financial Stability concerns, concerns about volatility of the crypto products. Yesterday in the prepared remarks, david marcus emphasized that they dont want to launch this project until its received the required approval. They are taking a more cautious approach to this facebook has taken that stance since they launched last months. They said we know we need to have regulators on board in order for this product to work so far were not hearing a lot of flexibility on the front of regulate others. The bank of england said he this has to be such a rock Solid Product on every front, every concern we have before we can think about launching this think about launching this one key thing take prilosec otc and take control of heartburn. So you dont have to stash antacids here. Here. Or, here. Kick your antacid habit with prilosec otc. One pill a day, 24 hours, zero heartburn. Its 5 18 p. M. In hong kong lets check the stocks on the move bayer is higher in germany this after a u. S. Judge cut the damages awarded to a california man who planned roundup the weed killer for his cancer the judge reduced the amount of damages to 20 billion. Prologis is guy ibuying warehouse owner ipt. Still to come on the show, another shutdown showdown. House Speaker Nancy Pelosi throwing a wrench into the treasurys request to raise the debt ceiling before the country runs out of money. Well take you live to washington coming up and later on, more on this record stock rally, where can you still find opportunity with stocks sitting at record highs stick with us. Worldwide exchange will be right back after this. Across my business. Starting here, in procurement, helping us find the right suppliers. Then here in logistic, to avoid disruptions here in sales. Even here im talking about ai we can build to work. Here, predicting trends. And here, wherever our data lives and here, working with all our other ai i think were done here. Expect more from ai. Ibm watson. Thats a live shot of capitol hill treasury secretary Steven Mnuchin is throwing cold water on the idea of a looming Government Shutdown. I dont see the Government Shutdown looming again, thats not an issue until the end of september and i have no expectation that there will be a Government Shutdown all right this as house Speaker Nancy Pelosi rejected the treasurys latest proposal to raise the debt ceiling before congresss summer recess. Pelosi said raising the debt ceiling on its own without a budget agreement is not acceptable to democrats. Elsewhere President Trump continues to clash with some members of congress as well. Tracie potts joins us from washington with the latest the front page of the Washington Post is about the comments against those four Democratic Congress members. Take us through the details of this latest attack weve heard from theresa may on this, condemning the president. A couple things to look out for today are will Republican Leaders speak out . We heard from some members, but not from the leadership. One way or the other condemning or supporting the president on this plus where are democrats going next whats their next move condemning the president theres a vote set for that today or might they try Something Else the house of representatives will consider a resolution to condemn President Trump for telling these four freshman democrats to go back where they came from. But they want more hes committed high crimes and misdemeanors its about time we start the process and impeach this president. President trump not backing down calling the women unamerican and antisemitic if you hate our country, if youre not happy here, you can leave. Reporter the law americas, all americans, all women of color, three of them born here, called this a blatantly racist attack a deliberate distraction from how his administration is handling migrants at the border. A disruption and a distraction from the callous, chaotic and corrupt culture of this administration. He does not know how to defend his policies. So what he does ask attais attas personally impeach this lawless president today. More than a dozen republicans have joined democrats condemning the president. It was very wrong reporter Republican Leaders have not said a word where are you reporter some defend the president. Come on, of course the president is not racist. Reporter others like Lindsey Graham agree but urge him to aim higher the other concern here is who is listening to the president who is attracted to the type of speech that we heard on twitter and now in person. He was asked are you concerned that white nationalists are using this and signing on to your comments . President trump said no because lots of people agree with him. Lets of drama there. Tracie potts, thank you very much for that. Lets check the other top stories. Phillip mena is live in new york with the latest there. Good morning good morning. Mexican drug lord Joaquin Guzman will learn his sentence today. Is he expected to get life in prison he was convicted in february of criming e ins including Drug Trafficking and murder six people are lucky to be alive this morning after going over a waterfall the group missed several warning signs not knowing they were in danger until it was too late to turn back. All six rafters were wearing life jackets and pulled to safety. And on the california coast, that is a pod of dolphins that surrounded a boat near laguna beach. The man who filmed this said about 100 dolphins followed in the boats wake as they raced up the coast and he said they seemed super happy back to you. Nature video always gets me thank you very much for bringing us that. Coming up on the show, we are on record watch as wall street looks for another day of gains. Could earnings be the driver that fuels the next leg higher and peter thiel doubling down on his attacks against search jugiant google and walmart playing a long game of catch up against amazon. Com, what its ceo says the retailer is ready to do when Worldwide Exchange returns after this take prilosec otc and take control of heartburn. So you dont have to stash antacids here. Here. Or, here. Kick your antacid habit with prilosec otc. One pill a day, 24 hours, zero heartburn. The dow, the nasdaq and the s p 500 all sitting at record highs. So what should you be doing with your money well get some answers coming up facebook under fire. Congress demanding answers on the social media giants big bet on dig tall curreital currencie. And peter thiel doubles down on his attacks against google. What he said overnight that is sure to get attention again today. It is tuesday, july 16th and youre watching cnbc welcome back to Worldwide Exchange. Im dominic chu. Brian sullivan is off today. Lets get you up to speed on Market Action. Futures pointing to a calm open after record highs yesterday for the three stock indices. If these losses and gains hold into the opening bell, the dow will open down by 21 points. The s p down by 1 point. The nasdaq composite up by a point as well. On the treasury side of things, watching closely to the tenyear yield. Right now 2. 09 . Twoyear Government Note yields, 1. 84 . In the asian session, the nikkei off by twothirds of a percent the hang seng up a quarter of a percent. The shanghai off by 0. 2 in european trading we are seeing fractional gains in the major bourses for the time being. The cac in france up by 0. 1 , as is the ftse 100 in the uk. The dax is now slipping just negatively but not by much as for the Broader Markets overall, wti crude up by a third of a percent the last trade there, 59. 78 the dollar index, 97. 11. And gold futures, 1,417. 60, up a third of a percent were keeping a close eye on facebook the company on the hot seat today on capitol hill. Ylan mui is live there for us. This is a lot of congressional testimony and hearing for big tech what should we be watching for today . Its going to be a doubleheader today first up its facebook under fire as a Senate Banking committee holds a hearing on libra. The company is leading the development of the cryptocurrency and its facing a tough crowd in washington. Treasury secretary Steven Mnuchin setting the tone yesterday when he called leb bra libra a potential threat to national security. The Treasury Department has expressed serious concerns that libra could be misused by money launderers and terrorists and financiers we will not allow Digital AssetService Providers to operate in the shadows and will not tolerate the use of the cryptocurrencies in support of illicit activities the facebook executive heading up the project, david marcus, will be testifying today. In his remarks he said the company will work with regulators and that we know we need to take the time to get this right facebook will face round two this afternoon for an antitrust hearing in the house thats part of the judiciary committees investigation into the power of big tech. Officials from google, apple and amazon will also be testifying the focus there will be on whether the companies are stifling innovation and entrepreneurship these are two different hearings on two distinct issues but the Common Thread is that both sides of the aisle fear big he tech has gotten too powerful and washington is hunting for ways to rein them in ylan, it seems this has gone way beyond senator Elizabeth Warren talking about some of her ideas and how to regulate big tech this is much more of a thematic issue forlawmakers on both sides of the aisle how much of this is washington wants to regulate big tech more . Theres a lot of angst on capitol hill now about this issue. Theres not been a lot of action the reason is theres disagreement amongst republicans and democrats over how to move forward. I think the most likely area where you will see legislation is on the issue of privacy even there theres debate over preemption and whether federal law should take the place of state laws theres questions about what the role of the ftc should be. Whether a new agency needs to be created, the power of consumers to actually sue companies that they believe are violating their privacy. So theres a lot of very thorny, detailed questions that still need to be answered. But i think if you see legislation anywhere and any kind of coalescing on capitol hill, it will be on the issue of data privacy ylan mui, thanks for that update lets talk more about facebooks big push into Digital Currencies joining me now is lou kerner you heard the update about what will happen and what will potentially happen on capitol hill today what chlttoday. What do lawmakers know about the cryptocurrency industry and what do they not . What will they be grilling david marcus over . This is a complicated topic very few people in the world understand it. Starting with what is money. I think few people in congress understand what money is, let alone value, now were talking cryptocurrency and facebook, their longterm plan is to have libra be decentralized congress has no idea what decentralization is. You know, i think a few things that theyre most concerned about, one is, you know, making sure the u. S. Dollar continues to be the world currency, the worlds reserve. And thats at risk both from libra and from bitcoin that will be the major topic of conversation with marcus bitcoin, ether, lite coin are not necessarily tied to the u. S. Dollar bubbbblt libra and other stables are tied to the u. S. Dollar. How much of this will be education for lawmakers and how much of this will be lawmakers trying to figure out what big tech is doing to circumvent these safeguards again, this comes back to this is complicated. This is not kind of thing congress will learn in a one hour or twohour session with david marcus theyll need to spend a lot of time, weeks, months understanding this i dont think any of them or a few of them will understand this what is most likely going to happen, when regulators and government doesnt understand whats going on, they stop it. And i think that what well see today is that libra is d. O. A. In terms of the federal government and congress which part of the government should the big tech cryptocurrency industry be more fearful of . Is it going to be the lawmakers on capitol hill or is it going to be folks like treasury secretary mnuchin and those folks at the treasury whose job it is to regulate the u. S. Currency sure. What we saw from mnuchin yesterday he went on and on about all the different government bodies that have potential Regulatory Oversight over libra so what youll see is just death by a thousand cuts whether its the cftc, the federal reserve, the s. E. C. Who are all going to have Different Things theyll want libra to be. Libra cant be all of those things so the government will stop it until they understand it and they wont understand it for years. Is this generally bullish or bearish for cryptocurrencies in general and bitcoin in particular because weve been watching bitcoin fluctuate wildly over the past couple of weeks, let alone the massive move higher in the last couple months the general perception in the industry is any time we have people talking about cryptocurrency, thats positive for cryptocurrency the more people know about it, the more they understand it, the better it is with the president talking about it, with the treasury secretary talking about t were incredibly excited about that where is there the opportunity right now . It may not be in just the currencies themselves. We spoke a lot about the Blockchain Technology that underlies it what should investors be focused on now if they feel like they want to be more involved within cryptocurrency were still very, very early. Theres a lot of comparisons to the internet i believe that i was there for the internet i think its 93, 94 for the internet and when it was difficult to pick who the winners and losers would be. We know bitcoin is about twothirds of all value in cryptocurrency today thats one thing that i think a lot of people can understand its just a replacement for gold i think thats a great place for investors to start lou kerner, thank you very much well, peter thiel is doubling down on his attacks against google heres what he said last night on fox news. I think the chinese are competent enough, the ministry of state security is likely to have infiltrated google. And i think the google management has a decision of either letting this software go out the front door or figuring it will get stolen any way and go out the back door the weird fact that isgoogle is working with communist china why is that they figure they have to. If they dont give it to them through the front door, it will get stolen through the back door first answer is they have to and theres a broad base of google employees who are idealically super left wing, woke, and think china is better than the u. S google denies thiels claims saying we do not work with the chinese military, so the latest in that drama, at least unfolding for right now. Its day two of amazons prime day, other retail giants are looking for a piece of the action walmarts ceo speaking yesterday at the Fortune Brainstorm tech conference about keeping up with amazon yeah, we fell behind and we have been playing catch up and have been doing a number of things to accelerate that process, learning along the way, Getting Better as it relates to the customer experience. Joining me now is lauren thomas, retail reporter for cnbc. Com this is your entire coverage universe converging together it is amazon is massive for prime day. Walmart the biggest brickandmortar retailer out there in the u. S take us through how the dynamic is playing out now we have one day left of this amazon prime day how are the numbers shaking out . Here we are day two, of this 48hour shopping extravaganza. As it relates to walmart, i would say good for Doug Mcmillon for acknowledging theres work to do. This is the biggest battle in retail, the online delivery war between amazon and walmart in many ways you are seeing walmart play catch up. Earlier this year amazon came out and said well make oneday shipping the default now for all paying Prime Minister members across the country walmart a few weeks later had its own announcement of well reach 75 of the u. S. Population by the end of the year with a oneday shipping option. In many ways theres been an ongoing back and forth between the two of them to get goods to consumers as quickly as possible amazon is winning because walmart just admitted as much. Can we say that prime day is doing what amazon wants it to do yeah. I think in certain ways amazon is winning i think one area where it really does have leverage and what shineses through on prime day is its massive membership base. Thats this loyalty aspect of the prime membership, these people that pay 119 a year to get things like Free Shipping and whatnot. Walmart cant compete with that. Theres pros and cons to being paying prime member. We see those shoppers on average, a prime customer, they spend more, so thats very valuable to amazon i think those are the people that are really turning up over this 48hour event, those paying prime customers. Those are paying prime customers. What about people new to prime will this get more people to join up . Amazon for the five years they have done this is the fifth year of them doing the prime event. Each year they said we added more and more paying prime members. They use today as a tool to add more and last year was the first time the company disclosed how many of those members they have, which they said is more than 100 million now. Can we broaden this out a bit more is there a specific part of the Retail Industry right now where we are seeing a real bifurcation or a separation of winners and losers i know Consumer Electronics is there. But it seems apparel is getting to that point as well. Absolutely. There was a report out from npd group this morning that said apparel spending is expected to continue to tick down this year. One area where they still see growth is athleisure wear. Athletic wear. That is one area within apparel that theres been a lot of players like lululemon, nike, under armour, adidas continuing to do well youre seeing dress barn, chicos, Charming Charlie filed for bankruptcy last week the Department Store chain, a lot of apparelbased retailers are struggling thats one area if consumers are cutting back on spending, thats where theyre cutting back whats the big focus for you . Which part of the Retail Business sure. I think it is and continues to be apparel thats where store closures that were seeing across the entire retail landscape thats where those are shaking out. So just then, you know, looking at what is moving in to those spaces whats next . What will fill that gap if anything as these Companies Continue to struggle and go out of business. All right lauren thomas, thank you very much thank you for having me coming up on the show, much more than a tweak. Twitter rolling out a major facelift the features youll need to know about. And an internet meme about aliens gone too far. Are people serious about breaking in to area 51 what the u. S. Military is saying this morning orwi ehaeths. Wlddexcng will be right back your Credit Card Debt into one monthly payment. And get your Interest Rate right. So you can save big. Get a nofee personal loan up to 100k. Its how we care for our patients like job. His team at ctca treated his cancer and side effects. So job can stay strong for his family. Cancer Treatment Centers of america. Appointments available now. How do you like it, how do you like it more, more, more how do you like it, how do you like it all you can eat is back. How do you like that . Applebees. Now thats eatin good in the neighborhood. Chicago, illinois. Its where Frank Holland spent a good amount of time of his life. Time for this mornings top trending stories, and we mentioned frank because hes back with those. Frank, chicago, 4 47, 5 47 here. Its a big day for twitter absolutely. Twitter is buzzing twitter got a makeover the Company Rolling out a new desktop layout with a completely rearranged navigation. This design allows users more Customization Options but still no edit function jack dorsey the ceo had some interesting ceo he said they have not added it because people could tweet one thing, because when people comment, they could change it to Something Else. I feel like they have developers that can find a workaround around that. Lets go back to the redesign, it makes it look like the phone, right thats on purpose, right that is on purpose. I think social media redesigns, they feel overdone for me, it was fine before sites like this, they always want to improve and upgrade. I would still like to see an edit button. So many times i want to tweet something, i make a mistake and i have to start all over again more than 1 Million People signed up for a Facebook Event calling for users to storm area 51 to see whats inside. Now the feds are getting involved the u. S. Air force warning people from entering the area telling the Washington Post area 51 is an open Training Range for the u. S. Air force the u. S. Air force always stands ready to protected america and its assets so if youre trying to do you believe area 51 is what they think it is . If youre trying t toing to people there are not aliens there, this is not happening what do you think anything is possible. What do you think . Youre looking at me like im scared to think about the possibility of if there was. I watched way too many Indiana Jones movies, way too many Science Fiction things where maybe ive become more coming around to that particular school of thought that there are aliens and they did land at area 51 i think it would be cool. New numbers on how much last weekends new york city blackout cost businesses. Restaurants are reporting thousands of dollars of losses on broad kway 26 shows had to cancel stub hub is refunding customers for shows and events canceled with no make updates i was in oregon at the time i knew about it because of social media and the news, was it as bad as people said it was . I was out of town myself. I had friends who had tickets for the Dave Chappelle show. I know they were upset i also had friends who went to the j. Lo show, they were upset. Peoples feelings and the actual impact, two separated things those are two big artists. Huge artists. A mhuge Economic Impact on deck for the show, financials are in focus. Were about to get a big round of results from the banks. Well break down the key names to watch. Plus the rally triple play what you should be doing with your money with the dow, the nasdaq and the s p 500 all sitting at record highs. Stick with us. Worldwide exchange will be back after this. Within the last hour, you can see the sun is up in new york now but the days are getting shorter. 5 53 a. M. Eastern time time for your executive recap. The headlines you need in just 60 seconds facebook in the hot seat the head of the companys cryptocurrency project is set to testify before the Senate Banking committee today. Separately the house will hold an antitrust hearing on Big Technology well have full coverage of both of those hearings on capitol hill throughout the course of the day here on cnbc bayer shares are moving higher in german trading a u. S. Judge slashing danlsmage awarded to a california man who claimed roundup weed killer for his cancer earnings season rolls on a trio of big banks reporting this morning including Goldman Sachs, Jpmorgan Chase and wells fargo as well. A big analyst call just crossing the headlines Goldman Sachs initiating coverage on Fiat Chrysler automotive with a sell rating. Goldman sees limited opportunity for Earnings Growth in north america. The firm predicting 7 down side for the stock over the course of the next 12 months the stock now in extended trading down 4 . Lets turn back to the Broader Markets with the dow, the nasdaq and the s p 500 all sitting at record highs. Joining me right now is ed campbell, senior Portfolio Manager of Global Multi Asset Solutions at qma is this a market at record highs where investors should be adding to positions or thinking about trimming them . Well, weve been trimming i think the market will probably go through a bit of a tough phase here over the summer months its been exhilarating were up 20 year to date but we think the market has gotten ahead of itself here our Market Sentiment indicator is signaling some level of exuberance here. We think we could have a pull back economic and Earnings Growth has slowed to a crawl. Were not bearish. I dont think we reached the cycle highs in risk assets, just more of a digestion phase here there was a great chart from spoke Investment Group that looked at other times when the market was up 20 in the first half of the year and then what happens in the second half. This chart is what happened in 1998 with the s p. The reason why were showing this is because they say this is similar to the Market Action playing out now. The markets then went through a pullback in 1998, but then rallied to bigger highs by the time the year is over. Do you think that were due for that kind of volatility in the second half of this year i think that chart that you just pulled up is pretty consistent with the scenario and our scenario and the way that were thinking about things. A lot of strategists talked about the late 1990s as a template for what were going through today. I think its a reasonable analogy. If the fed is successful in engineering this soft landing, and we do see growth accelerate again in the coming quarters, and markets can get rid of this fear of recession, and inflation still stays low, you could see a scenario where you see a melt up in stocks. I think thats a scenario worth keeping in mind. The gains in the s p have been driven by he Mega Cap Technology and retail and everything else. The f. A. N. G. Stocks. Is that the leadership you assume will take place in the second half of the year . Either to the up or down side . I think so in the nearterm if you look at you guys mentioned earlier in the show that the russell 2000is still in correction territory so large caps are definitely leading the way here i think thats indicative of u. S. Economy where growth expectations still get marked down once we are past the valley, the fed engineers this, i think small caps will lead are there certain stocks or sectors you want to focus on for the second half of the year . Well, in this derisking phase, you know, that were expecting, were basically adding to things like gold and mining stocks. Mid stream energy. You know, gold really for its diversification properties here. And, you know, the fact that with a growing share of the global bond market in negative Interest Rate territory, the opportunity cost of holding gold has never been lower its also broken out of its range in recent years. So we think thats a good play for the coming consolidation that we think over the next few months after that risk up again ed campbell, thank you very much for that. That does it for the show on Worldwide Exchange. Futures now pointing to a flat open squawk box begins right now. Good morning it is full steam ahead for earnings well get reports from jpmorgan, wells fargo, Goldman Sachs, johnson johnson, all this before the opening bell. In the hot seat today, big tech heads heading to capitol hill for hearings. And billionaire investor peter thiel doubling down on his attacks against google he said the search giants dealings with china should be a huge red flag for the feds its tuesday, july 16, 2019. Squawk box begins right now. Live from new york where business never sleeps, this is squawk box. Good morning welcome to squawk box on cnbc. Were live from the Nasdaq Market site this times square. U. S. Equity futures this morning are a little muted after reporting some big gains yesterday. The dow, the s p 500 and the nasdaq all eking out another round of record closes in the final minutes of trading this morning a bit of a pullback for dow futures. S p futures off by a half point. The nasdaq up by 1. 5 points. You did see technology, consumer discretionary, Consumer Staples closing at record highs yesterday. We wil