Transcripts For CNBC Squawk Box 20160629

We are seeing the euro at 110. Things have appeared to calm down a bit. What about the oil markets. Crude oil rising yesterday and looks like it will rise again today. We are seeing crude oil up 57 cents a barrel to 48. Yield on the ten year treasury note unchanged at 1. 45 percent. Get ready for Mortgage Rates to fall again. If youre a metals investor, youre up slightly this horng. Those explosions rocking turkeys largest airport last night. It appeared to be a coordinated attack with gunmen opening fire at Turkey International airport in istanbul and detonating decides bombs. Much of it kaugtd on video that has been seen since that point. Turkey is blaming isis for the attack. Joining us now, its great to see you this morning. Good morning. It feels like we are talking to you more and more often about attacks that are taking place around the globe. What do you think is happening in turkey. In is the fourth or fifth attack in turkey just this year. There were others earlier. The earlier attacks were kurdish, but the latest string of attacks all of them have the hallmarks of isis. There are a couple of reasons for this. Turkey, which has been kind of aloof from nato for a long period of time. Pretty much a pop list and controlled airspace. Didnt want to fly out to conduct attacks on iraq and syria now has started to let us do that so were now flying attacks out of turkey into iraq and syria. Second, it looks like he is trying to straighten out the relationships with others in the region and a lot of it has to do with terrorism. Apologized to russia for downing a war plane and perhaps most important mending fences with israel. All of us have security inter t interests revolving around siefs. Theyre going to continue to do this stuff. Theyre in the region. Theyre part of nato. They figure they can lever attacks on turkey to get the United States to quit bombing them in syria. Turkey as you mentioned as seen its share of attacks from the kurdish, the pkk. That had seemed to be more of the focus. Thats what the critics said. Do you this the attacks like this will sharpen the focus when it comes to the problems with isis. I think it will. Test interesting we complain to turkey about it. Its refusal to engage and prevent syrians from crossing the border. One thing to keep in mind here is that turkey has got mandatory compulsory military service. I think turkey not is going to start deploying some of these people along the border to do what we have asked them to do and that is to stop the ingress of people from syria into turkey or at least to check them out when they get there. This is a very, very complicated issue and i think the leadership in turkey now is going to be much more focused on its responsibilities in the region. Its interesting to know that next week theres a very big nato summit now. Turkey milltarially has been a very close ally. Except for some bumps weve had with them, weve been on the military channels alone with respect to trading intelligence information, weve been very close to them. I think there could be some very interesting outcomes of this summit thats next week. If there are public pronouncements, it will be interesting to see. If there arent, there will be protocols that will be established to reimmigrate turkey to what appears to be a worldwide attempt to keep isis from morphing, from spreading and focusing its attention. If we have a minute or two more. Theres one interesting thing that came up overnight and that is isis apparently a number of sources have said there are Something Like 30 or 40 operatives that have been inside turkey for a month. This attack yesterday was obviously wellplanned. Two or perhaps three bombers. It was wellcoordinated and there could be more of this unless turkey makes an effort to the stop the ingress of people from syria. Theres one other thing to keep in mind. This actually had a lot of similarities to what we saw in brussels too. Not just in turkey. Yes, it does. Keep in mind also that the toll would have been much higher had turkey not had very good security at the airport. Their Airport Security is out away from the terminal. In the United States you walk right into the terminal. Not so in turkey. The toll would have been higher had these guys been able to get through the terminal area. Thank you for joining us this morning. Thank you again. Bring you the story as well. Senate democrats blocking the gop 1. 1 billion to fight the zika virus. A hand full of provisions that had been added to win support. They added a number of things that had nothing though do with zika. These were grants, restrictions on federal grants. Would provide Birth Control to women in puerto rico that were threatened by the virus as well as temporary lift of clean water that had been thrown in there as well. It falls short. Neither side looking forward to leaving washington next month for a sevenweek recess without addressing zika, but lawmakers will have two weeks now to negotiate between the july 48 holiday. Its much more than that. Part of it is theyre taking the republican bill takes funding from ebola to move back through. Neither side is bending. We have had the cdc telling us you can expect it here this summer. Both sides are going to have to give on this. Its ridiculous to hear the stands back and forth and each side blaming the other side entirely for it. What you need is a clean bill that gets passed. Both sides to instant up and say okay. What was the piece the democrats threw in that wasnt straight zika. There was stuff that goes into potentially for Climate Control issues. Have been on the rise so theres funding. Fair enough. Need more bats. There was a problem with bats. Im not kidding. Bats have been returning. Bats eats thousands of mosques each per night. We need to be realistic about this and spray pesticides. We have not been doing a good job. How about bats that separate pesticide. I take this issue very serious as a pregnant woman. I train bats. In the meantime, we have some more zika news. The top golfer wont be competing because of the threat. He wont travel to the game because of the possible risk and danger it could pose to his wife. This announcements coming just after a rory mcilroy. Leaders of canada and mexico today to discuss importance of trade. Formerly known as the three amigos will hold a komps in canada this afternoon, but a very different tone on trade than the campaign trail. Donald trump has some harsh words for the tpp. A rally in ohio last night. Blamed a wave of globalization for wiping out the middle class. Promised to store lost factory jobs by backing away from trade deals and withdrawal the United States from the tpp once it is ratified. The Transpacific Partnership is another disaster done and pushed by special interests just to rape our country. Its a harsh word. Its a rape of our country. This is down by wealthy people that want to take advantage of us and that want to assign another partnership. In the meantime democratic candidate Hillary Clinton advocated for tpp, but came out against it last fall because she said that once it was negotiated, it did not meet her standards. Trade is an issue that both sides have run from, but Donald Trumps comments on this were quite a bit stronger. Politicians dont have the power to impact where things are made. You know who does, consumers. If we choose to purchase u. S. Made goods, spend a little more and see the demand i know it sounds simplistic. Everything coming down to price. The reason that moves offshore is cost of production. Why does cost of production matter because people dont want to spend money or they dont have the money to spend. Because the jobs have moved offshore. Its a downward spiral. Do you think we have the choice. Theoretically we do. Theoretically, but most people cant really look at the label and are not always going to decide they can buy american and the numbers dont add. Because the jobs have mooufds overseas because price matters so where does that chain end . I think theres a completely missing piece of this argument which is ultimately the technology has robbed this country of jobs, but the larger march here is technology. Would argue even over the outsourcing of everything. Even if you look at a town like pittsburgh, so many of those jobs became medical jobs. Its a much more complicated than whats being addressed. Are you suggesting politicians are. News at 11. We have to get to wilfred. European gathering the uk. Frost joins us in brussels right now. Hes got the latest. Andrew, thank you very much. Yes, indeed. Late last night we had Prime Minister David Camerons final ever press conference. Hes been kicked out today. The other 27 members are still meeting behind me. The Prime Minister was in a somber down beat mood, but the content of what he had to say was fairly constructive. Here are his comments in terms of what he thought other leaders made of the uks decision to pull out of the eu. There was universal respect for this decision and this decision will be carried through in britain and is understood it will be carried through here in the European Union. The tone of the meeting was one of sadness and regret. Reporter now the president of the Eu Commission mr. Juncker struck a more critical note. I thought that if you want to leave, you have a plan. You have a project. You have a global picture. They dont have it. Reporter now, as i said, the other 27 members are continuing their meeting. They did however say a formal brexit meeting will take place in september once the new Prime Minister is in place. Its a sign of the extraordinary divisions and turmoil in uk politics in the moment that as David Cameron went home early this morning, another uk politician arrived in brussels. Taking meetings in the building just across the road of the European Parliament to see what sort of special deal she could get out while scotland overwellingly voted to remain. She will also take a meeting with mr. Yunger today. All right. Well see you again, im sure. Thank you. Lets get back now to your markets. Stocks could look to add to yesterdays gains. Now yesterday we jumped 270 pounts in the dow. We had buying into the close. Thats usually a good sign for the next day. Thats what weve got now. Indicating a gain of 100 points at the hope. Her is a Global Market strategist. Along with david joy, chief Market Strategist at aher prize financial. For two days it was all doom. Today appears everything is fine. Please note a little bit of sarcasm at my point. What do you attribute yesterdays fwans and just the general rise of volatility. Sure. Friday and monday were characterized by a risk offset element. Peopling selling across the equity. Now you have a little bit of people coming in looking for opportunity. Realizing the rally of last week before friday was pretty significant. So to get back to some of those fair value levels that were seeing today and yesterday as well. Do you think theres a recognition that yes the brexit may have a monstrous impact, but if it does, it will likely be down the road. We dont know when it will be implemented or what will happen. Everyone is just guessing. Do you think stock prices are going to be unaffected by brexit for at least the next couple of quarters. Its a tough one to call. You make the right points. The uncertainty is not going to go away. We have a few months before the government gets itself figured out. We have more months to see what an eu exit means for the uk. So the actual implications for the Global Economy are going to be muted and uncertain and drawn out. Now a bit of that shock is being swallowed. Lets look at where the fundamental is at. Youre seeing that occur in the europe industries. For example, the ftse 100 which is comprised of multinationals that will benefit on a lower pound is doing better than the mid caps which have taken more of a beating. Investors are starting to understand that differentiation and playing that the in the current market mood and looking forward for the uncertainty that will come for many months. You and i have been talking for a long time. Sadly i think ive been doing this for a long time through multiple crises and i remember the dow at 7,000 when i started my career. Its now at 17,000. We lurch from crisis to crisis. Stocks do tend to go up. Is a good piece of advice to keep calm and invest on. Yes, for the longterm investor. This event is going to start to appear in the Economic Data over the next month and next couple of quarters and as a result, i think that we may have seen the near term highs for the Global Marketplace for a little bit of time here. So in the interim, i think you need to be a little bit cautious. Longer term, i think were going to be okay once this gets sorted out, but theres a good chance the uk goes into a recession and i do think that a big issue for the United States is going to be what is going to be the relative strength of the dollar here. Youve seen the dollar move higher over the last couple of days. If that persists its going to be awfully tough for the u. S. To start producing positive Earnings Growth in the second half which was the. Do you think well see an earnings contraction . Not producing growth is different than a contraction. Do you think corporate earnings will begin to contract . Because thats means prices that means stock prices have to come down. Certainly a chance the Energy Sector is going to be washing out negativity, but if the dollar persists then the Energy Sector and materials more broadly are going to struggle. Not only that we know the export part of our economy has been weak going into this. This strength in the dollar is not going to help. The eu is an important trading partner of ours. I dont think weve seen the full story. Its going to unfold over time. All right, david joy, thank you for your time this morning. We do appreciate it. Coming up when we return, nike falling at premarket trade. Were going to talk about it. Company reporting revenue and future orders that fell short of the estimate. Were going to get through it when we return. We got another one. I have an orcogram for an owen. Thats me. You should hire stacy drew. She wants to change the world with you. She can program jet engines to talk and such. Her biggest weakness is she cares too much. Thank you. My friend really wants a job at ge. Mine too. Im a wise elf from a far off shire. And sanjay patel is who you should hire. Thank you. Seriously though, stacy went to a great school and shes really loyal. You should give her a shot. Sanjays a team player and uh. Amazing sleep stays with you all day and all night. Sleep number beds with Sleepiq Technology give you the knowledge to adjust for the best sleep ever. Dont miss the lowest prices of the season going on now, with our bestbuy rated c2 Queen Mattress now only 699. 99. Know better sleep. Only at a sleep number store. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Nike taking a big tumble. Thats lower than the 8. 28 billion they had expected. Rising 11 . That was short of estimates as well. This number is closely watched by investors not just for nike, but a signal for everything. Joining us right now is Equity Research analyst. Are these nike specific issues, do you think. I think what you have is a choppy backdrop. Not just here domestically, but globally. What nike needs to do is continue to show invasion. The report last night was mixed. The revenues were soft like you talked about. Gross margins are weaker. They need to show the invasion. Particularly in north america. Its whats going to be separates. Is this a story about the sell of apparel, slow down across the board. Is this a story of competition. Whats driving to the extent you think theres challenges . Whats driving it . I think its less commission. I think its more broad based consumer being more picky in terms of what theyre buying. Holding back i think tourism, nike is not immune to it. I do think competition is something worth noting you do have under armor now, r, you ha adisagree das, you have nike. To me thats more than enough growth. Weve actually seen shares of under armor under pressure just like nike. Is this a situation where you like one company over the other. I think the space is verys to be negative. You have the low gas prices. All of a sudden same store sells whether or not coming through. Too many Dollar Stores in the u. S. Dollar general now its 20 times because things have normalized. Inventory has been heavy in athletic. Lieu lieu l lululemon was the first to say it was clean. You think this is a buying opportunity for all of these stocks. I think athletic, once the dust settles is a place to be. Its the invasion bucket thats really going to separate the companies. What are we about to see. What about the basketball schools, down. Air jordans are the only thing up. Why is that. Basketball as a hole is not the issue. I think its signaturele basketball at nike thats been the issue. So if you see under armor put out the curry shoe. Absolutely on fire. Right price point, consumer flocked to it. If you look at nike, completely sold out this week with invasion bind it. Lebrons shoe was off. More made for jeans than shorts. This to me is up to nike. If they put the invasion out there. They have the brand name and the quality. 12 months out what do you think the stock is worth. 12 months out we see 06s to 70s. I think thats fair value for nike. Any brexit risk. Weve been evaluating the brexit exposure to all of these names. How can you do that . How does anybody analyze the brexit. We have no idea whats going to happen. All you can do is look at the europe exposure. Take a look at how they hedge and for nike thats a tough bet to make. Sometimes its gains sometimes its losses, but teacher i think its what happened to consumer conferred over there and how does that spread potentially from a Tourism Impact over here. To me thats along the lines of luxury retailers that are going to be impacted. I think nike will be okay. Thanks. When we come back if you are a visitor to the United States Border Agents may be asking for your twitter handle. Take a look at winners and losers. Loose loosers and a parade rained on the sales teams parade. And they still made the meeting, without actually going to the meeting. Before any of this, cdw orchestrated a mobility solution, using the hp elite x2 1012 with intel core m vpro processors. Mobility by hp. Orchestration by cdw. Can an established bank move like a startup . Its a question we get from some of our largest banking clients. The face of their business was tellers. Then atms. Today its their mobile app running on the ibm cloud. Across every transaction, the hybrid cloud helps their data move quickly and securely. Our clients are building out features and pushing updates faster, on five continents. With the ibm cloud, they can move at the speed of any startup. Good morning and welcome back to squawk box. After ending session highs and basically wiping out mondays gains. It looks like the dow futures are up. Things have been picking up in the morning. The nasdaq down by 42. Still not back to where we were before the brexit vote. Still hangs in there, but, again, you are looking at a positive trend this morning. Also take a look at the price of crude oil. As crude oil goes, so goes the equity markets and that is the case this morning. Wti up. 63. Time now for the executive edge. Board control agents could start asking to see your facebook page. Part of the screening process for entry into america. The proposed change would add a line for that information for visitors planning to stay here up to 90 days without a visa. Filling in the information would be optional. Not sure what information you would be writing on a line, but. There have been incidents where they look at statements online and say there are issues where these things. Given our prior conversation about technology, one would assume a massive computer doing billions of word scans a second could probably do better than somebody filling in a form. Probably. More than probably. Weve got another story for you this morning. Amazon debuting a new sight. Launch pad. Exclusively made by startups. Eligible for amazon prime free twoday shipping and also available through the main site. Listen to this, would you put up with a five hour wait for a five minute ride . Thats what you need to do if you plan on riding the frozen themmed ride in orlando. It opened tuesday and still drawing fans willing to wait in the massive lines. This is a real disney file. Was the troll ride next to its a small world. No, different park. Would seem so. Its a small world, trolls. No. No, no. Its all over my head. Im sorry, but mark your calendar. If you havent already. Look back at this date in history. The first generation iphone went on sale today. Steve jobs showed the phone at the show. It would go onto sell 6 million iphones alone in the first year. Mark mobius will join us after the break. As we head to the break, a quick check in on whats happening with the european markets right now. Ftse regaining a bit of what it lost in the last session, you might have heard about it, brexit. Were back after this. Mary buys a little lamb. One of millions of orders on this companys servers. Accessible by thousands of suppliers and employees globally. But with Cyber Threats on the rise, marys data could be under attack. With the help of at t, and security that senses and mitigates Cyber Threats, their Critical Data is safer than ever. Giving them the agility to be open secure. Because no one knows like at t. Farage holland. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back to squawk box, everybody. Speaking in chicago on tuesday says the referendum has shifted is global risk to the downside. We issued a Statement Last friday saying that the Federal Reserve is carefully monitoring. And that were prepared to provide dollar liquidity with Central Banks as necessary to address pressures in Global Funding markets. Powell says a brexit induced rise in the dollar would add to a steady tightening in u. S. Financial conditions. Joining us right now to talk more about Brexit Impact on emerging markets. Mark, you are somebody who is no stranger to black swans, who is no stranger to potential decline in the market, but you say the brexit vote caught you offguard. Where is that . I think the brexit will be beneficial for Eastern Europe because of the manufacturing thats taking place in the uk will move to Eastern Europe. That depends if the countries step up to the plate and encourage investment in a more favorable way than they are now. I think the whole center of gravity for the Financial Markets is going to be moving into asia. The speed at which the chinese free up will be the determining factor as to whether more and more trading moves to asia and particularly china and ipos move to that part of the world. You think this is happening, the speed of the move of trade to asia is being prompted in part by this brexit vote . Yes, i believe that were beginning to see people thinking in that direction. Of course, nothing really has happened yet because people are sort of frozen. Its like a deer in the headlights. They dont know whats next and they dont want to make any decision. I believe that as we simmer down and begin to think about this future, that certainly will be in peoples minds. But you were shocked yourself at the brexit vote. You thought that the way things lined up it would have made much more sense for the britains to stay in europe, right . Absolutely. I was one of the people that was very wrong on what we had expected. It was an amazing event, and, i believe, now in england there are second thoughts. Some of the implications as you know, Boris Johnson has gone back on his saying that they would move forward with the separation and with trade, et cetera, et cetera, and now theyre beginning to think twice. In terms of the emerging markets that you like as a result, where can you be more specific . Where do you through the biggest beneficiaries are and how do you play that as a investor . Biggest will be china because more and more trade will go in that direction. I believe that with the softening of the u. S. Market and with whats happening in europe, people will begin to think more about diversification. Theyre very underweight in general. Some of the Frontier Markets in africa, in the middle east and so forth will benefit with more floisover funds. Have you moved any of your money yet or do you think its too early to play some of this stuff at this point . We havent moved much. Earlier this year we were moving more into brazil. I think latin america looks good in this scenario, but we havent really done anything yet because were still evaluating what are the impact. If we look at the list of stocks in our portfolio, there are not many that are going to have a big impact from uk holdings so that is the important factor. At least at this stage. Mark, when you look at brazil and think its a positive story, that is counter to what most people are thinking at this point. What do you see there that you like. Consumer. Any of the consumer plays in brazil look very, very cheep and look very interesting. Brazil is a Huge Consumer market. They will recover. There will be a certain spirit of growth. Next year where he believe and the consumer names will do very well. What about the huge challenges weve seen in the currency markets over the last four trading sessions or so. How do you try and figure out how to play some of these International Markets when currencies have been so volatile. I think one of the things thats clear is theres been a recovery of market currencies from the beginning of this year. They lost a lot oef the last few years, but now weve seen some recovery. With some recovery of commodity prices. So the rush out of emerging market currencies has slowed down and we are certainly looking at this very carefully. Some of them are overvalued, but some or under valued. If you look at the tie baht is under valued. Korean yuan. Although doing anything around the is no dependent on what china does from daytoday. That can be a risky play anticipating what the government is going to do. Yes, i think we have to look at that in the basket of currency. They moved away from looking at the u. S. Dollar. Right. Explicitly and now the basket is what we have to concentrate on. That means their main trading partners. Trading parter ins are going to be more and more the Asian Countries. We have to look at the yen, the baht. Korean yuan, et cetera, et cetera. I believe the move will be very, very slight. Very cautious. They will not allow big big changes in the value. You just said something very interesting how chooip is going to be trading more with his asian partners. What do you think of tpp and is it a trade pact the United States should sign to prevent china from being the only player in the arena. Theres no question that the u. S. Has to wake up to what china is doing, and, i believe, the best path would be to cooperate and join with china. Here you have two great nations. If they cooperate it could be beneficial to both. To the Pacific Partnership doesnt include kooin. Thats a mistake. I think theyve got to include china. China is the biggest entity in that part of the world and their biggest trade partners are the Asian Countries so really doesnt make sense to exclude them. Mark, thank you for your time today. Its great to see you, sir. Thank you. Coming up when we return, potential benefits and maybe no so many benefits. Why the brexit vote could lead to better Cyber Security protections on the upside. Theres another view as well. Were back in a moment. With strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Welcome back to squawk box everybody. A pair of economic reports top todays agenda here in the United States. You get the made personal income and spending number. A little bit later on look for the may pending 10 00 a. M. , watch for the pending home sales. Thats after surging to more than decade high in april. As for earnings, monsanto and General Mills report before the opening bell. Heres how your futures look this morning. It could be another decent day for the stock market. Were up 270 yesterday. Some buying into the close. Now the dow jones indicating a jump of about 90 points, andrew, at the open. Okay. Lets talk tech right now. Britains decision to leave the eu has been met with mixed reviews of those in the uk. Some think it means may need better tech security. Why some think britain could benefit from the brexit. You think this is a good thing. When you came on the set i said to you, google, facebook, a number of American Companies think brexit is going to be terrible for them. Theres going to be different rules and make things much more complicated. So its interesting. I think that theres that perspective, for sure. The way were looking at it is the things weve been doing in terms of protecting our borders, immigration control, literally every passenger that comes into the United States being processed on our systems, the demand for that has been growing in europe as well. Youve heard about the migration issues and all of those. Those are the trends we saw happening over the last six months. So we started talking to the eu about securing eu borders. Now if you think about more borders being created within the European Union with brexit, for example better for business. Better for business. Okay. So maybe better for business but let me ask you a separate question which is is it better for the world . With multiple border controls will we be safer or less safe because then theres sharing information . Clearly. I think the European Union and the u. S. Were in talks of the Privacy Shield as you know which allows for data sharing across the atlantic. With brexit, something similar has to be put in place between the uk and the European Union. In the near term at least the Privacy Shield types of things will still apply to the uk. That wont break down. You think well be safer or less safe because of this . Well, as we look at securing our National Borders here in the u. S. , its all about understanding and you had a Border Security type of a story just earlier this morning. Right. Those types of Technology Solutions are the ones that were depending on more and more. So we believe that securing physical boundaries by using analytics, biometrics, vascular recognition, those are the types of solutions that were offering. So is that in some way profiling though . Theres a huge pushback against profiling. I think when you say biometrics. I mean, those are fancy sounding words, but in reality are we just talking about profiling . I think youre trying to identify those that are higher risk from those that are lower risk. I dont consider it profiling, per se. 18 to 25yearold muslim men, statistically. Clearly thats not the way were looking at it. We look at it from a behavioral standpoint. What is your behavior and what are the things you might do. What are metrics that you look at a little bit different . Were integrating some of the different ill call it data base of information around the world of what travelers are doing. We also look at new areas around integrating that into biometrics and facial recognition and so on. Its more about identifying the individuals, land border crossings and vehicles going across the border. And then on the cyber side, securing Financial Institution transactions, for example. We have a product called stealth that actually cloaks networks in effect. What does that mean . Cloaking networks . So it shrinks the attack surface. Very new approach of security. Enabling basically less and less and less to be accessed. Right, sure. And then providing a shield around that our technology called stealth for a reason where its hard to attack. Were the only on web services, microsoft and we think the next cloud builder will put it on there as well. One of the bigger issues is where all these cloud based operations are going to have to live. Which is to say that in a fractured eu, right now nobody knows where these places are going to physically be. Where will you be . So, you know, we have 30 of our business in europe today. Right. Around 11 in the uk. So were sort of on both sides of the channel. In a way, if you think about the eu wanting to have a National Identity and the uk wanting a National Identity, there might be this domicile thing that comes up and says data centers has to reside on both sides of the atlantic. Were positioned for that. Will there be a lift and shift of data centers as a result of this . I think thatll play out over time. Do you think the eu is going to become more about attacking or less friendly to American Companies with the uk out . That is a prevailing view in the valley right now. That the uk in an odd way was a protector of the american relationship. On the margin. I think the relationship that the bilateral uk u. S. Relationship is strong if not stronger. I dont think this necessarily breaks down that model. Its in nobodys interest to take an open market place and put economic and commercial boundaries around that this was about National Identity. Inder, thank you. Thank you. When we return, well talk more about the attacks in turkey killing 41 people at this point. We will talk to security expert Michael Leiter. Amazing sleep stays with you all day and all night. Sleep number beds with Sleepiq Technology give you the knowledge to adjust for the best sleep ever. Dont miss the lowest prices of the season going on now, with our bestbuy rated c2 Queen Mattress now only 699. 99. Know better sleep. Only at a sleep number store. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Terror in turkey. Dozens killed, hundreds injured after suicide bombers strike an airport in istanbul. Well talk to the former head of the Terrorism Center about Global Security, the isis threat, and the war on terror. The calm after the storm. The global stocks bouncing back after the brexit shock. U. S. Futures in the green. Europe in rally mode. And the currency steadying. Are the brexit fears fading or is there more fallout to come . Donald Trump Doubles down on trade. Just a continuing rape of our country. Thats what it is too. Its a harsh word. Its a rape of our country. The gop nominee blasting the trade deal. The latest from the campaign trail straight ahead as the second hour of squawk box begins right now. Live from the beating heart of business, new york city, this is squawk box. Welcome back to squawk box rugt here on cnbc first in Business Worldwide. Im Andrew Ross Sorkin with becky quick and brian in for joe kernen. Top story, terror in turkey. Explosions rocking turkeys airport leaving 41 people dead and around 150 people wounded. Thats according to the Prime Minister. Blaming isis for the attack. Were going to talk counterterrorism with Michael Leiter in about 30 minutes. Lets get to becky with the markets action. Lets get a check on the markets. Youre going to see the futures are higher. Yesterday the markets closed gaining 269 points. Picked up all the ground it lost on monday. But not the ground it lost on sunday after the brexit vote on friday after the brexit vote. The dow futures up now about 92 points. S p up by 12. 5. In europe those green arrows continue there as well. The dax is up by 1. 75 . The cac up by 2. 5 . And stocks ended higher in asia as well. The nikkei was up by 1. 6 . The hang seng up by 1. 3 . A lot of this has been happening as Oil Continues to rise. Wti up to 48. 39. You see brent up at 49. 08. Check out the 10year. Yields still at the low level of 1. 46 . We will continue to monitor treasuries not only here but around the globe where youve seen all kinds of crazy moves. Right now if you look at currency, youll see the pound is still stable at 1. 3437. And check out gold prices which had risen so sharply on friday and monday. This morning theyre relatively flat. Also in your headlines this morning, a major Energy Industry emergencier is off at least for now. Pipeline Operator Energy transfer equity has terminated its deal with williams. This follows a ruling by a judge last week that ete could pull out due to unexpected tax consequences. Williams obviously not happy. Says it plans to appeal that decision. The deal was worth 33 billion when it was announced last year. Meantime, honeywell is getting a new ceo although not until next year. The president and chief operating officer will take over from current ceo next march. Cody will continue as executive chairman for an additional year after the transition. And you also have several economic reports ahead this morning. Out at 8 30 a. M. Eastern. Then at 10 00 a. M. , the National Association of realtors out with its may pending home sales number. Japanese Prime Minister shinzo abe is urging the boj to provide enough funds to the market to ensure liquidity in the wake of the brexit vote. Abe met with bankers for a second straight day. There are worries that fallout from the brexit could trigger an unwelcome spike in the yen. Weve already seen it. Of course theres always going to be that separation between Central Banks and politicians but abe says the government is ready to use all policy tools to support the economy and small business. Lets get another check on the futures this morning. As we showed you dows been up by triple digits earlier. Right now sitting just below 100. S p up by 13. Nasdaq by 29. Broader markets seeing their best day in about four months yesterday. So is the rally real or is there more fallout ahead . Joining us now is david bianco from Deutsche Bank, paul hickey of spoken investment group, and guy adami. Guy, you think this could be real. I think its obviously for real. Had a great bounce off lows. But i think there are headwinds. And the headwinds, some of the things you mentioned. Global bond yields. A yield between 2 and 10, less than 90 basis points. The last time we saw lels like that december 2007. And i think we all remember what happened from there. Not to suggest were on the precipice of something. With that said, heres a market being led by utilities and being led by telecom. You want to see whats going on . Look no further than at t and verizon last year and a half. And theyre both broken out to the upside. To me thats not really a sign of a broader healthy market. Its not, but you think the rallys for real . I think this rally can last into this weekend. I think people are going to challenge and they are going to protect the s p which is a critical level for a number of reasons. Technicians will be looking at. Do i think its for real . I think this entire market, respectfully, is absolutely built on sand. You need Strong Revenue, Strong Revenue growth. In my opinion you have neither. Lets look at the global yields weve seen in treasuries. That has been kind of stunning. Nornlly if you see the 10year, youd flip out and think the economy is going to hell. What were seeing is what guy was saying. Gold and yields havent really moved upward or down. Thats one thing just to watch here. But, you know the market was clearly positioned for the opposite outcome last thursday. So well see. Are there any, you know, bodies to be uncovered in the market selloff . Taking a step back, these types of selloffs, whenever we see an event like this. People start saying this is going to happen. This is going to happen. The reality is nobody knows whats going to happen. And these what if scenarios usually do not pan out. So you look historically at these types of selloffs and what weve seen is over a short period of time, the market stabilizes. And you know, short to intermediate term, the market comes back to these preselloff levels. I think youve got to put it in perspective. Keep putting it in perspective, david. Were talking about a market selloff of about 650 points right now. Which is not massive. Were still above where we were in february on some of these trading positions. Weve had a hard time getting stocks going. Its been a tough bed to make. But were not looking at a massive selloff at least not at this point. Well, so far from the top to the bottom of the market, its been about a 5 decline. These things happen a couple times a year. But i am very concerned about the market for the summer. I think theres still significant Downside Risk for the s p this summer. I think the s p likely falls to Something Like 1950, perhaps lower. It is true that these low Interest Rates in the United States and around the world are supportive for p. E. Multiples, id like to see higher p. E. S on health care and technology. But these are a massive challenge to the financial sector. We are back in the thick of things when it comes to currency, uncertainty. Thats the risk, isnt it . Where its pound. Sterling has more downside, euros got more downside. If weve got european currency downside. Right this moment you see the stock market leading oil rather than oil leading the stock market. But i think the point is that if weve got too strong of a dollar again, its going to be difficult for climbing to higher levels. I think that oil hasnt been i mean, oils been pulled back but we havent seen oil get crushed and i think thats a positive to look at here because the dollar has strengthened and we havent seen oil get crushed. The fed is certainly going to be dovish going out forward. The u. S. Has the potential to become a safe haven asset. Seeing the currency drop like emerging market. People are going to shift capital out of those areas. It even makes relative attractiveness of markets because youre seeing this in developed economies. So you see a safe haven asset and maybe benefit in emerging markets, i think. If you could put money in one country, what would you do right now . Im still waiting for there to be more downside on europe assets. Right now i think cash is a great place to be to keep your options open. Its amazing how cordial this group is. Whats missing . Oh, i know whats missing. Whos coming back tomorrow . J. K. With that said, you mentioned listen. I think you have tremendous risk in terms of what the chinese can do. Theyve tried to play nice in the sandbox now for a long time. Sterling goes from 150 to 133 overnight and they have to say our currency is way too strong given this backdrop. You could walk in one day and they could have done something dramatic. Id fight with you if i didnt agree with you. Two days ago i wrote the biggest risk to the market was china. It was the brexit but because pounds, sterling up, china whoa. The offshore yuan getting devalued. Maybe they have to set off a when the market did have a massive hit, it was because of china. Were still above february levels. So is there a risk the brexit could sort of shape that china currency dragon which brought us down in february. Those were to me more nerveracking market days than we have right now. Sterling could be the domino which causes currencies to fall. China is a big concern of mine for the near term and longer term. Im very disappointed with this brexit situation. Im very disappointed with the policy response so far. I feel like the bank of englands just willing to let sterling fall. I think thats bad. Their overnight rates 50 basis points. I think if anything they should be defending sterling to prevent uk assets like real estate from falling further which would destabilize much of europe. And i dont like the response out of the eu so far. Really feel like the eu should be saying, okay, we get it. This is a big message. They should be signaling willingness to negotiate. But that is exactly what the politicians dont want. They feel like we want to punish britain for voting to leave. I understand why they said that before the vote. At this stage they should say we get it. This is a loud and strong rebuke and they should be negotiating better terms. Theyre talking about dropping english as one of the englishs of europe. If you want a nice thats a guy adami type response right there. We aint speaking english no more in here. I dont know if i should take that as a compliment or insult. It was like youre saying is hey, this show isnt as good because joes not here. I love joe. I got to throw joe kernen come on. Why dont you just wear a bengals jersey next time. If you invite me back, i will wear it on the show for joe kernen. If you would like me to, i would. And nothing else. You know joes watching right now. Its all good. I want to know how the u. S. Election is going to play into all of this. So do we. Did that have an effect on your thinking . I think what this turnout and the reaction from it were seeing, i think its a much better outcome of outlook for clinton than trump. I think people are saying you have to think about what youre voting here and you have youre not just voting in emotion rather than vote for policy. Whatever your opinions are, but you think the u. S. Looks at brexit, thinks its a mistake and goes what really . I think the quote, unquote chaos youre seeing right now is causing people to rethink their opinions on things. And things can change i was going to say well see the level of chaos and whether it rises or drops over the next few months. Politics changes from week to week. But in the meantime, the u. S. Stock market hasnt made anybody any money in two years. Up 2 over two years time. All the other stuff, all the other noise, and if you just bought an index fund youve made even with Interest Rates almost at zero. People say stocks look like a Good Alternative and look at bond yields. Yeah but why are bond yields so low . In my opinion dont look at it that way. You talk about the yields and s p 500 companies largely being higher of that in the bond market. But youre comparing apples to oranges. Youre not taking into consideration that the underlying asset could get obliterated in the global world we live in right now. Thats what im saying. People are saying buy stocks just because of that. Thats a false read, right, guy . Because you have to look at why buying yields are so slow. People say buy an index fund and let it ride. If youve done that in two years, youve made nothing. If youve done it over five years, youve done well. If youve done it over six years done even better. The question is why are yields where they are. I think janet yellen spoke to this. She danced around it. Because i think the enemy has been the deflationary environment were in and will remain in for a long period of time. Okay. Gentlemen, it is great to see all of you. Its been fun. Ill be back. With the bengals jersey. When we return, donald trump declaring a trade war. Vowing to rip up a number of trade deals. Were going to head to the campaign trail. Thats next right here on squawk box. Back in a moment. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back to squawk. This morning right here on cnbc first in Business Worldwide. Donald trump laying out his economic plan at a rally in ohio trashing trade deals and taking a few swipes at Hillary Clinton. John harwood joins us with more on all of that. John, good morning. Good morning, andrew. It was pretty remarkable turnaround yesterday in a contrast where Hillary Clinton was talking about Computer Science and looking toward the future of the economy, donald trump was looking back at the Steel Industry thats gone away saying he could bring it back. And denouncing trade deals in the most provocative terms. Heres donald trump. The Transpacific Partnership is another disaster. Done and pushed by special interests who want to rape our country, just a continuing rape of our country. Thats what it is too. Its a harsh word. Its a rape of our country. This is done by wealthy people that want to take advantage of us and want to assign another partnership. I want america to get back in the future business. You know, saying that you want to make America Great again is code for saying we want to go back to the way it used to be. Forget about technology. Forget about inclusivity, forget about everybody having an opportunity to have a best shot at the best possible future. You cant understate what a turnaround that is. 75 of republicans in the house and senate voted for the trade deals that donald trump was denouncing yesterday. And just as he was speaking, the u. S. Chamber, the business round table, the National Association of manufacturers all set out tweets criticizing the message distancing themselves from it. The question is going to be could donald trump pick up enough White Working Class voters . He did well with that in the primary but enough of them who would otherwise vote democratic to offset erosion among republicans. Free trade has been a staple of republican orthodoxy for decades. Donald trump needs to unite his party. Well see whether this tactic is successful for him, guys. John, when you think about, though, that issue and specifically also i mean, Hillary Clinton doesnt she didnt vote for this thing either. It becomes very complicated. Well, yes. But Hillary Clinton has identified with the bush administration. In fact, that was the contrast that donald trump wanted to make was that the bill Clinton Administration pushed through nafta, chinas acceptance to the world trade organization. If he is going to run to the left of Hillary Clinton on trade, that leaves a lot of room in the center and in the Business Community for Hillary Clinton to appeal. Dont know whether she will be able to do that, but it is a quite unusual alignment of forces. But do you think the support of the Business Community is now considered a good thing . Thats become the ultimate question given brexit and the whole idea about elites, right . Well, there are multiple dimensions to what the Business Community support means. Theres Financial Support and donald trump is the doing very poorly in fund raising. Shes doing a lot of fund raising in Battle Ground states. Hes not. Whats he up . Hes doing a 10 million campaign. I think by thursday hes now hoping to raise 10 million just in a couple of days. Hoping. Hes got 48 hours left or whatever it is. Yeah. Thats fine. But look, his campaign is dem minimis compared to hers. The signals that are sent by people like hank paulson who came out with an oped the other day and said hes endorsing Hillary Clinton to voters who dont look at business as toxic, who are suburban women, for example around major cities. He was appealing in steel country. But what about the suburbs where people think they dont think that the entire economy needs to be turned upside down. Now, look. Were going to have proof as this campaign plays out as to whether he can pull that off. But most of what weve seen in the history of recent elections is that mainstream economic and business support is not a bad thing. Its a good thing. Okay. Were going to leave the conversation there. John, always great to see you, sir. Thank you. When we return, are you heartbroken after the brexit vote . Well, there is a dating app for that. We have the details next. And as we head to a break, David Cameron is back in london this morning making his weekly appearance in front of parliament. Squawk box will be back with details in just a bit. Welcome back to squawk box, everybody. If you live in the united kingdom, voting to remain, and you are now looking for love, guess what. Theres a new app for you. Remainder is a dating and social platform for the 48 ers that voted to stay in the eu. Its developing technology to match up those who are broken by their brokenhearted by their countrys brexit decision. That app is expected to launch very soon. They got to launch something very soon. Like yesterday. To capitalize on this. Theyre developing technology to do this . I think theyre probably just rewiring. The other side is not as good. The just leave app doesnt necessarily bring people together the same way. I dont understand. Ive got no hits. Now to sports, lebron james opting out of his contract with the cleveland cavaliers. His agent telling espn that james will not exercise a player option that would have paid him 24 million next season. That makes the mvp technically a free agent for the Third Straight summer. Relax, though. Although he has opted out, the 31yearold can resign with the cavs. Lebron saying last week he has no intention of leaving cleveland again. He could sign a deal to get him a max salary of 30 million. Not so much as an opt out as an opt in to more money. Coming up, were going to try to make some sense of this senseless situation. Terror in turkey. Coordinated suicide bombings at the airport in istanbul. Were going to talk to a counterterrorism expert about Global Security and the war or terror. Take a look at equity futures at this hour. Were back in a moment. Welcome back, everybody. Toyota is recalling nearly 3. 4 million cars worldwide involving two different issues. Some vehicles may have small cracks is air bag inflaters and others may have a problem elsewhere. Meeting today to talk about International Trade and the possible impact of the brexit vote. The three will be holding a joint News Conference. Thats coming at 3 00 p. M. Eastern time. And Atlantic City could see strikes at casinos as one of the busiest gambling he ining holid approaches. And check this out. The Colorado Rockies game was delayed after heavy rain and hail brought floods to part of denver including inside the rockies dugout. A powerful storm pushed back the first pitch almost three hours. The home team ended up losing to the blue jays 149. More data this morning on housing market. Mortgage applications dropping 2. 6 . Diana olick joining us. The application volumes are from last week so prebrexit and the drop in Mortgage Rates. That said, total volume decreased 2. 6 for the week ending june 24th versus the previous week. Theyre up nearly 38 from one year ago when Interest Rates were higher. That annual gain is mostly by application to refinance home loans. They fell for the week seasonally adjusted but are 63 higher than the same week one year ago. Mortgage applications to buy a home, they are 13 higher than one year ago. One more set of numbers. Thats it. The average contract Interest Rate for 30year fixed rate mortgages fell to its lowest level since may of 2013. 3. 75 from 3. 76 . Of course theyre a lot lower now. So a lot of folks are asking, should i lock in . Or could rates go even lower . Yesterdays rates were lower in the last three years. Sop yes its kind of a dicey play. You could wait a few more days to see how things shake out. Its not like rates are going to spike up any time soon. And rates might actually come down. Theres a lot of brexit stuff, its more of a question to our viewers and listeners and maybe youve talked to people out there. I do wonder there may be a credit market impact. But is anybody in america really going to say, honey, i dont think we should buy a home because of the brexit . No. Its not that theyre going to say we shouldnt buy a home because of the brexit. The question is going to be do they feel good about their financial situation . Are they invested in the stock market and theyve seen losses and that hits their Consumer Confidence in some level . Its not that theyre not going to be able to get a loan because rates are so low. So its a great time to buy. The bigger issue has nothing to do with brexit. There are so many fewer homes for sale on the market. I mean that with all sincerity. We are still above where we were in february. So the market is still up from those levels. And you just wonder if somebody in dallas or cleveland or boise or whatever it is says, you know, we shouldnt buy a house because im worried about the brexit. I dont see that happening. I dont see that happening either. Especially with low Mortgage Rates that youre going to get from the low Mortgage Rates. If you want brexit upside, its going to be rates are going to go down again. Rates could go down a small bit again. They could go lower. The question again is and we have to remember most americans are not as heavily invested in the stock market as we think they are on cnbc. The vast majority of people buying entry level homes are not that invested in the stock market. Its just a question of can they save for the down payment, do they see the economy as improving and their jobs improving and does that give them the confidence to buy a home right now. Could you find me a mortgage in german bunds . I dont work there. Not my area. Well get on it. Some people were faking mortgage out in yen a few years ago. You wonder if you could take it out in bunds, now, that would be great. The new count in turkey, 41 people dead. Turkey is blaming isis for the attack. Joining us is Michael Leiter who was director of the national counterTerrorism Center. Its what do you say . This is becoming sadly a monthly or bimonthly occurrence. They seem to be growing in scope. Literally they dont make all headlines. Weve got hundreds around the world. This is the fifth major attack in turkey alone this year. Why does it seem to be getting worse, not better despite billions of dollars being spent on this problem . Well, it is getting worse right now fundamentally from turkey to western europe. Thats because we have a message for isis which is resonating. An ability to use social media. And truthfully, playing counterterrorism on defense is a really tough way to do it. Especially if youre in turkey with the porousness of the borders and weapons, it makes these attacks very, very difficult to stop. Regardless of how many rings of security you have in an airport which the turks had. For all these reasons the resonance of the message, the fact were still on defense more than offense. And the availability of weapons in relatively free societies, its very hard. So youre not painting an optimistic picture for the future. Despite politicians talks, hundreds of billions being spent. Youre saying social media and the way we are structured is not going to make this go away any time soon . Well, i think there are real steps we can take. First of all, i say we have to be more aggressive in iraq and syria than weve been. And i think we are still slow in accelerating what the president has intended to do. So i think we have to be more aggressive there. Second, we do have to make sure even as the eu makes challenges, that nato remains strong. We have to use nato to protect the rigidity. Our Aviation Security is good. It can be strengthened. We can push these security perimeters out from airports. And fourth, contrary to what some have been argued for, we have to be deeply engaged with this part of the world and our own muslim populations. Without security in places like turkey and brussels and paris and the United States, as you all know well, its a lot harder to have anything else go well. Economically, politically. So security is that precursor. Its the oxygen we breathe to allow the rest to be effective. Heres the terrible selfish question. When you look at what happened in turkey and so many of these situations, we still havent had well, some people might say we did have it here on our own shores here. But we havent had a major attack yet in a meaningful way, in that way. Do you expect one . Well, we have been because of the billion dollars spent and talent of a lot of people, weve been very, very good at stopping large scale attacks like we saw on 9 11. We stopped things like that in 2006 and 2009 and beyond. But we have had real tragedies whether its ft. Hood, orlando, san bernardino. And the threat has really changed. Should we stop saying its not here then . We shouldnt say its not here. Its different than in other parts of the world. We dont have the same threat as in turkey but we do have the threat. Because a tiny percentage of muslims in the United States are susceptible to isis. We have to change our activities here. But do i think were going to see daily, monthly attacks like in turkey . No. Do i think we have to be deeply engaged and have a partnership between Law Enforcement in those communities as we have built up since 9 11 . Absolutely. But i will tell you one thing. There is no Silver Bullet on this front. There are no walls to be built. There is no instant change that we will do on any front. This is a multifaceted problem. And like most hard problems, it requires a lot of focused effort on a lot of different fronts. All right, michael. Were going to leave it there. Thank you very much. Do appreciate it. Thank you. When we return, those who dont learn from history, they are said to be doomed to repeat it. So what do european leaders take away from the brexit . Holman jenkins has some advice coming up. But first heres what the ecbs Vice President said about the plan to leave the eu. In terms of market developments, i think the comparison does not apply. Because the reaction as you may recall was that several markets froze. Ceased to work. No price formation, no buyers and sellers. And the big impact all over the world, that was not the case this time. Welcome back to squawk box, everybody. Take a look at whats been happening with the stock market. Were going to start with the european markets because thats where so much of the damage was done over the last several trading sessions. Yesterday was a different story and so was today. You can see the dax is higher. Still up by 1. 13 . And the ftse up by 2 . Here in the United States weve been following that. Weve been following crude and the dow futures up by 76 points. The nasdaq up by 22. Eu leadership divided over how to respond to the brexit. Holman jenkins is here. He hopes theyre going to see the recent vote as a wakeup call. Jenkins writes the twiceweekly column Business World and a member of the wsj editorial board. Thanks for coming in. So help us here with this. First of all, are you surprised that markets are actually where they are today . That this is almost appears to be like a blip in the world . I think its an overreaction at the time. For the reasons everybody knows. You know, the markets were wrong footed. They thought remain was going to win. The entire british ruling class and political establishment was wrong footed. There was immediate chaos. I dont think it was meant to last. And the fear mongering was just that . I think theres a lot in europe right now because they wanted this idea that they have to frighten other countries into not leaving. Most countries cant do what they did because theyre stuck with the euro. A vote to leave would be destroying your savings and having your government default. If you could leave, greece and spain and portugal would have done it already. The idea other countries are ready to go, is not. Did you see the nigel farage video yesterday . It was hilarious. Very entertaining. And so how do you think the eu should handle this now . What is the right answer . Sit and wait. Were going to have a British Election in few months. Its quite possible that both major parties will have a leader whos committed to staying. You think thats possible . Do you think thats legitimately on the table . An exit from brexit i think is completely on the table. Angela merkel said herself yesterday that she thinks any british politician will be in the position of having to follow what their voters have told them. Shes taken a hard line stance on it. She cant do anything about it. The brits have to file to leave. Whats she going to do . Kick them out . She cant. And when you think about the rest of the uk or whether you think the uk remains united scotland, et cetera, do you think were in far complete breakup . Were going to vo more terrorist attacks, more elections in europe, more chaos in the eurozone. I think well forget about all of that. While we have you here, i wanted your thoughts on Donald Trumps comments on ttp. Yeah. That was one of the great protectionist speeches in american history. Obviously hes playing for ohio and pennsylvania and the midwest. Thats his scheme to compete two major swing states, by the way. Ohio and pennsylvania are key to the election. He goes up and says im going to put the miners back to work and the Steel Workers back to work. And if youre a scared unemployed or underemployed person, that message can resonate. Thats his scheme to compete with hillary. I think its going to lose to many republicans and republican donors over that stance. I still dont really know what donald trump would do in office. I have no idea. I think hes just playing an election game here. I dont think he has a vision. He just wants to win, win, win. There are times you have these weird things happen, right . And i think yesterday we saw one of these weird things happen. Because the u. S. Chamber of commerce two organizations both tweeting out literally backtoback just ironically that Donald Trumps trade policies will effectively and im going to summarize here destroy the United States. Have we seen a time when the aflcio labor union and chamber of commerce agrees on something. And what does that tell you about the state of politics right now. You can also see the coal miners and Steel Workers going to trump. You know, for these protectionist people to be in the Republican Party for a lot of liberal economic republicans to be in the same party with social conservatives maybe just doesnt make that much sense. Maybe we need a realignment of both parties. And trump, hes setting off this explosion. Do you think its a wakeup call to our politicians here and to the way the mood of this country . Well, i think our politicians here already know that there is that great amount of dissatisfaction among working american who is havent seen their wages go up and who feel a little bit under threat from new groups of americans. I dont think thats news to anybody here. I thought it was remarkable to see hank paulson come out with the oped in the Washington Post saying he was going to be supportive of Hillary Clinton. But then the flip side being that i imagine donald trump will take that and theres certain people in the public who will look at that and say hes another member of the elite. 55 Million People to get elected and donald trump only has 14 million. I dont think he can fight this election without money. His point is he doesnt need it. Its unconventional candidate whereas other candidates run from being in the media. And speeches like yesterdays will start a prairie fire that will through free media rally the country. There are people with a lot to lose in the economy and they are not lining up behind trump. This is about the people who have something to lose and people who dont. And there are just more. I think thats a lot of it. Trump really doesnt want to spend money so he needs a strategy like this. I want to go back to one issue. We talked about this a couple times since youve been here. Ive asked you are you supportive of trump and youve said that you havent thought that he really wants the job but that if he did, you might you could be youre open to it. Hes not me hero. Hes not my role model. I have written the convention would replace him. But suggest donald trump was willing to serve as the messenger of the republican set of ideas. He would be an interesting president to have because of his mouth and his ability to slap people around. I dont know what you guys talk about at parties and whatever, but what does it mean to be republican or democrat . Is Political Party affiliation just mean almost nothing this year . Because we can point to the paulson who have access to the media saying were voting for clinton. The union will say we support clinton and this guy will be at a bar saying the hell i am. Its always each party is a coalition of incompatibles. Youve got to get in bed with people you dont agree with in order to get anything done in this country. Those coalitions have to rearrange themselves. I think it can still mean something and be a republican and democrat. Holman jenkins, thank you. When we come back, an iconic breakfast sandwich turns 45 years old. It may be small, but the mighty mcmuffin plays a big role in mcdonalds turnaround thats been fueled by the alldaybreak fast. Squawk box will be right back. Used a 60 40 stock and bond model, with little in alternatives. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre called alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people should look past conventional models and make alternatives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. A little Birthday Party today. Mcdonalds egg mcmuffin turning 45 this year. Susan lee joins us now with that story. Good morning to you. Call it the lebron james of the alldaybreak fast menu. Definitely the mvp right now for the golden arches. Its interesting how something thats been around for half a decade is still having such a big impact on the Worlds Largest fast food company. So the idea behind the egg mcmuffin came in 1971 in california. Invented by herb peterson. He was inspired by the idea of a hand held eggs benedict. Today the egg mcmuffin and other breakfast items account for a quarter of all sales. Back in october they saw their sales jump globally and while the egg mcmuffin recipe hasnt changed much, its ingredients are getting upgrades. Were talking about real butter instead of margarine. And a move towards cage free eggs by 2025. Analysts say mcdonalds can afford to make these and still keep profits up because protein prices are relatively cheap and a move towards fresh items will pay dividends. The most important thing is that they look progressive. Theres a whole other generation going to these fast food restaurants. They need to have the right ingredients. Quality of ingredients is the key driver, is the number one thing driving consumers to restaurants. And looking progressive appears to be working. Mcdonalds same store sales in the First Quarter of this year saw the biggest increase in four years. Susan, thank you. Got all of us hungry this morning. Sausage muffins. I like those too. We have earnings out just for cereal and food maker General Mills. The bottom line coming in 6 cents above estimates. Revenue also topped forecasts and projected annual savings of various Cost Reduction moves. When we return, we will have this mornings top stories. Plus we will welcome special guest host glenn hutchins. Well get his take on the brexit breakup. The winners, losers, and implication for the u. S. Economy. Take a look at the u. S. Futures this morning. Markets rallied as we headed into the close. Up once again. Dow futures up by 95 points. S p futures up by 13. The nasdaq up by 28. Squawk box will be right back. Youve wished upon it all year, and now its finally here. The mercedesbenz summer event is back, with incredible offers on the mercedesbenz youve always longed for. But hurry, these shooting stars fly by fast. Lease the gle350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. Global market alert. Green arrows around the world as bulls get their mojo back. But is this brexit bounceback a real rally . Well let you know what janet yellen will be watching today. Glenn hutchins is here with his take on the brexit breakup. The winners, the losers, and the implications for the u. S. Economy. Plus the road to rio. Michael phelps begins his quest for a fifth olympic team. One stroke at a time. As the final hour of squawk box begins right now. Live from the most powerful city in the world, new york, this is squawk box. Welcome back to squawk box here on cnbc. Joe is off today. Our guest host this hour is north island chairman glenn hutchins. Its great to see you. Nice to be here. Thank you for coming in. We have a lot to talk about in the markets. We are less than 90 minutes away from the opening bell on wall street. Check out the futures. They have been higher this morning. Dow up now triple digits. Gain up by 14. The nasdaq up by 31. That is following the trend in europe. European markets have been higher all morning long. The dax up by 1. 6 . The cac in france up 2. 4 . And ftse up 2 . Terror in turkey. Explosions rocking istanbuls airport last night leaving 41 people dead and 140 wounded. U. S. Flights have resumed from the u. S. To istanbul. Also european officials are gathering in brussels for the second straight day. This follows the vote to leave the eu. Today they talked without David Cameron. Heres the European Commission president. I thought that if you want to leave you have a plan. You have a project. You have a global picture. Meantime in America President obama and the leaders of canada and mexico discussing International Trade and the impact of the brexit vote. The three will hold a joint News Conference at 3 00 p. M. Eastern time today. Lets look at other stocks you need to watch this morning. Nike under pressure. Now, earnings did beat expectations, but it is guidance that matters. And nike warned that future orders may, indeed, slow. General mills earnings and revenues topped estimates. Company also increased its projected annual savings. If you have shopped or eaten at noodles and company lately, pay attention. Theyre saying their credit card information, you guessed it, may have been compromised by malicious software. The software was found at payment terminals with possible data theft occurring over a fourmonth period. Noodles co. Sony cutting output of sensors for smartphones. Are we at peak smartphone . It just depends on how quickly youre going to get a new one. Which is ironic because today back in 2007 the first iphone was released. We had a tech guy what did you get me . We have peak phones . In the United States the distribution of smartphones is pretty much completed especially at apple. There are still some lower priced Android Devices that have penetration opportunity. But now that growth will slow down a bit. And it will be driven more by the pace of innovation. Glenn hutchins as we mentioned is our guest host today. Weve been trying to get our hands around whats been happening with the brexit market reaction. Today the reactions a little more muted. A lot of these things are going to play out over weeks, months, and even years. Who do you think wins and loses in this scenario . In this situation its helpful to have architecture with the way to think about it. The way i think about it, its extra bad for london. Its very bad for the uk. Its bad for europe and interestingly enough for japan. Its a mild negative for the United States. Its a big strategic win for russia. Potentially a big strategic win for china. And there are some vulnerables around some countries. And around potential, i think, a low potential for con today gin. And the weakness right now. Lets go through that wun by one. Bad for london because of the financials that are based there. It reduces the global reach of london meaningfully. As well as the its a city thats benefitted from immigration. But if i was by the way, if i was mayor of london id make a trip to singapore and hong kong try to get other trading part inners . No. Look at models for other big cities. Thats one of the why is the sky not falling in europe in particular in the uk the way people thought last week . These are longer term implications. This is not shortterm dislocations. You think theyll get priced in . Yeah. But it should be being priced in. And it will be over time as we understand its implications. But the longer term question for the uk is you know, without whats really bad for london is bad for uk because london is the economic engine of the uk. And then the Economic Uncertainty and Political Uncertainty is going to be reflected in hiring and investment for sure. And then europe, imagine, you know, if you had kept greece and lost britain, thats kind of the economic adverse selection kind of problem. And then youve got sort of the knock on effects. Potential knock on effects politically of other countries who are thinking about this and dealing politically with the contaigent. They are very worried about other countries deciding that they want to pull out too. Thats probably why were seeg this sort of punitive reactions. I think cooler heads will prevail. But theres no incentive for europe to make this easy for the reasons youve talked about. And ironically for Great Britain if they want to stay in, theyre going to have to conform to all the rules about trading with europe that they thought they were getting themselves out of. Like norway does. Exactly. Its not a win there. And for the United States, really only major impact is so far absent contagion is come to transmission. Which has been largely around Interest Rates in the dollar and might eventually if these lower stock prices sustain, might have a small wealth effect. But i think that will be transitory. We look at our financials that have been under pressure. Ours have been forced to recapitalize heavily. Right. Youre looking where Interest Rates may not rise for a long time to come. Thats right. One of the longer term implications by the way, one of the real measures of kind of what the vulnerability in bank stocks, i think. The miners here and the london banks have been the ones most significantly hit. I think that cascade tell yous how people are starting to think about this. The london banks have an immediate problem. The u. S. Banks, much more just about the financial transmissions. If youre a company on corporate boards and youve been on many corporate boards. Were always trying to figure out on cnbc what does it mean for stock prices and companies and sales and earnings. Is brexit is material event for most companies . Do you call an emergency Board Meeting saying what are we going to do about the brexit . Depends on how youre exposed to the items i laid out. If youre a company that does business primarily in the United States or if youre primarily in a growth industry Like Technology youre watching it. But youre not that concerned about it. If youre really exposed to london, youre tfocused. And if youre your second biggest market is in china, you might feel good about it. If youre a company that im going to make one up. Becky quick corps. Im an investor. Im in. Ive got options going on, the whole thing. If youre becky quick corp. And get 70 of your revenue from england and uk, do you bring down your guidance now . Depends on what youre selling. Right . So if youre selling you know, when you talk about the iphone being introduced. Youre selling smiles. When apple introduced the ipad at the depth of the global crisis, it was the best selling product of all time. If youre selling that, you can burn your way through this. If youre dependent on lets say youre an Office Services company focused on the Financial Services community in the city of london. You better think hard of migration of your customer base. Under armour marched through the last recession too. Sure. Youve always been a tech guy. What do you think about the Big Tech Companies and their relationship with europe . If youre a google or facebook that has big business in the uk but also has a very complicated relationship with brussels. Really interesting question. Id say twofold. One is the Big Tech Companies typically have 20 to 30 of their revenue in europe. To the extent that europe is you know, the likely outcome here for most economists think for Great Britain is a recession. Youre planning a mild recession for your british business. And probably stasis for your european business. Youve got to plan on that. If you are if you have a regulatory matter in front of the European Union this is where it gets interesting. My guess would be you have to expect greater protectivism. Uk is no longer at the table. Uk no longer at the table. That means thats one of the bad parts for europe, becky. Really good point. Both politically and economically uk has always been a rational voice at that table. And now theyre gone. Theyre not gone though. Theyre going to be. They werent even there today. But we believe its going, however. Scotland act and some talk that maybe scotland can veto the whole process. But if eu leaders are already mad at the british leaders, anything they say isnt going to carry. If youre in a longterm relationship and you go to that person saying im going to break up with you. Im still here. But im going to break up yes. But i dont want you speaking on my behalf to the person youre breaking up with. Do we need Relationship Management here, guys . I just shorted becky quick corp. I think the divorce is a good analogy for whats going on here. Its its going to be nasty. Lots of unintended and unfortunate consequences for innocent bystanders. Glenns going to be with us for the rest of the show. We have a lot more with him on. Fortunately we get to keep him. Coming up, border wars, neighboring states like kansas and missouri are duking it out for business. Well tell you about the economic tug of war when we return. Welcome back to squawk box. 8 13 here in the east. Good morning. Toyota recalling nearly 3. 5 million cars and trucks worldwide. At issue, possible defects involving the air bag inflater, cracks and emissions control units. Prius hybrid models may contain both problems. If you own a prius, contact your local toyota dealer. We are just weeks away from the top states for biss rankings where we rate all 50 states for business competitiveness. As we get set to unveil, scott cohen is in kansas city, missouri. Good morning. I am in kansas city, missouri. Right over there kansas city, kansas. Now in top states we give points to the states for their insentive programs. Both of these states have them. In missouri its called the missouri works program. You create as few as two jobs and you can keep the withholding tax youd otherwise pay to the state for up to six years. In kansas they have p. E. A. K. Promoting employment across kansas. You have to create ten jobs but you might be able to keep the withholding tax for as long as ten years. So what does a company do . Im in missouri, lease some office space in kansas, move employees over there. Then i switch it back up. I lease some office space here in missouri, move the employees back here. Collect the incentives again. A lot of money spent, no jobs create. Even some local Companies Think this is kind of stupid. Nobodys saying we should dismantle the programs, but theres a growing need that we should try to agree to a strategy, a regional strategy that would use these tools to attract businesses to this region to be more effective. Now, there is talk repeatedly about changing this. And a little bit of progress this year, kansas which is facing a budget crisis has offered to cut back some of its incentives. They did that at the end of the legislative session. Had put an offer on the table for kansas which kansas hasnt picked up yet. So at least theyre talking about it. Still it continues. It may continue for awhile. Weve got more about this and all things about competitiveness at our special site topstates. Cnbc. Com. Okay. Scott cohn and i like to play the game i dont know where hes going to be. So we will follow all that. Thanks, scott. Trade obviously taking center stage on the campaign trail. Gop candidate donald trump had some harsh words at a rally last night in ohio. The Transpacific Partnership is another disaster. Done and pushed by special interests who want to rape our country, just a continuing rape of our country. Thats what it is too. Its a harsh word. Its a rape of our country. This is done by wealthy people that want to take advantage of us and that want to assign another partnership. Our guest host this morning is glenn hutchins. Glenn, this is the type of populist argument that concerns the establishment in a big way. Its what we saw play out in brexit. How do you think this is going to play out this fall . Well, it shouldnt just concern the establishment. But i think what we need to do across leadership in the United States is to avoid the chaos and uncertainty that accompany brexit in the United States. United states has been indispensable nation to the world for over a hundred years. Everything Something Like this occurred weve stepped in and been the bull work of stability. I think his election would be the equivalent of brexit in the United States. But Donald Trumps language was very harsh. But Hillary Clinton has not come out in favor of free trade. Very good question. Heres how i think about it. This has been the most informationrich election in i think since Ronald Reagans election. How so . Weve learned that the deal on offer to the american electorate from globalization is no longer acceptable. From the electorate from the electorate itself. So we have to respond to that in a very profound way. When i say we, i mean the Business Community in particular. What i would argue is that we need to sort of send a very clear message that we listen, understand, care. I call that kind of a fairness agenda. The reason this has come up is middle class jobs have been chipped away at. We lost manufacturing jobs that used to pay well, pay strong benefits that would come along with good pay. You didnt necessarily have to have a College Degree and those jobs have gotten harder to come by. Thats why people are pointing their fingers. We cant reverse time. The Business Community needs to move beyond ideology. Needs to move beyond party. Needs to move beyond narrowly corporate selfinterests and understand that weve got to create a foundation of social stability in which to build our businesses. Why do you think thats going to happen . I think it has to happen. It can happen. You talked earlier about hank paulson endorsing Hillary Clinton. Things like that have to happen. The Business Leaders need to reach across lines to the liberal part of the american political process and embrace an agenda that addresses the interest of the poor, minimum wage, expanded eitc, all those sorts of things. The middle class, securing and guaranteeing things like Social Security and medicare for the future. And longer term issue like investing and infrastructure and education. These are things we cant squabble about anymore. The only way were going to get to future trade agreements and tax reform is if the Business Community enables these things to happen first. You send a message to people, we care, we hear you, were having equality. Zblit comes down to jobs, education and training. We have seen companies that have stepped in and tried to increase their programs. Companies like at t to make sure they get engineers and help get people these degrees that will then create jobs for them down the road. Do you expect to see more of that though . I expect to see a lot more of that. And im intending in the coming weeks and months to call on the american Business Community to do much more of that. How so . By coming here today and talking about it. I think its a really were really important thing for us to do. Because we cant allow the disintegration and polarization and uncertainty and resulting negative implications for our country. There is a trade message that does resonate. Trump has never said hes antitrade. He says the deals we have are bad. Hes saying i want to redo some of the trade deals. So thats theres a difference. Is there anything hes got where he says, listen, china they dont play fair with currencies. Their labor laws arent as strict so they can pay people almost nothing. Theres not a lot of Worker Protections in china. The average income is 5,000 u. S. A year. Yet we have to compete with this for manufacturing and thats not possible because theyre playing on a different level the way they treat their people. Any part of that message that does resonate. Just like demagogues of past, hes struck a nerve. It doesnt mean hes got the right answers. And so the right answer the way to think about is i think im not talking about answers. Im talking about the nerve part. Thats what people are going to vote on. We wont know the answer for years, decades. Im hoping americans can do what weve done in the past which is be a stabilizing force in the world. And there are pads to that. Why have both democrats and republican who is have been supportive of free trade done such a horrible job of articulating the benefits to the public . And if you were going to articulate the benefits to the public, how would you do it . First, its interesting. Every four years we learn something from this complicated highly dynamic country called america. Every 15 to 20 years we learn something really important in our elections. So what weve learned is that we havent communicated this very well. Well have to change the way we think about it. How do you do that . I think you need to say we hear you and we care. And heres what were prepared to do. I tried to outline some of this a second ago. Put that on the table, get leaders at a round table to say were for that. Lets go change the way can i answer your question . Because im the only one here from a rural area. Although youre born in oklahoma, i think. Ill give you a real life example. Indiana. So my parents, their neighbor ran a light bulb factory in virginia. And they decided they were going to move them. They were going to close the incandescent light bulb factory and move it to china to make green l. E. D. Bulbs. So everybody at the factory lost his job. Thats globalization. Right . So to make green light bulbs, they moved the manufacturing 11,000 miles to the center of china while almost 300 people in my hometown of winchester, virginia, with not a lot of Job Opportunities lost their jobs. Explain free trade to those people. And im not saying trumps right or trumps wrong or this is not a political statement. Its thats why free trade is hard to explain, andrew. Because dont worry, were going to make Something Else elsewhere but dont worry because its cheaper for you to buy. Hold your answer because weve got to go to a break. Were going to a break after that . I quit. Thats all i have. Youre out. All right. Coming up, breaking Economic Data. Minutes away from personal income and spending numbers from may. Squawk box, light bulb. Well be right back. Its here, but its going by fast. The opportunity of the year is back the mercedesbenz summer event. Get to your dealer today for incredible onceaseason offers, and start firing up those grilles. Lease the cla250 for 299 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. But they demand the best shopping experiences. They may want the latest products and services, theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. With new cabinets this wfrom this shop,house, with handles designed here, made here, shipped from here, on this plane flown by this pilot, who owns stock in this company, that builds big things and provides benefits to this woman, with new cabinets. They all have insurance crafted personally for them. Not just coverage, craftsmanship. Not just insured. Chubb insured. Welcome back to squawk box, everybody. Lets take a look at oil prices. They have been higher once again this morning. You can see this morning wti up by about 42 cents. Back above 48 at 48. 27 a barrel. Brent sitting just under 49 at 48. 94. When we come back, well look at breaking economic news. We are a few minutes away from personal income spending. And later postbrexit technology plays. Glenn hutchins will weigh in on the best opportunities in that sector. As we head to break, look at the u. S. Equity futures. Dow up by triple digits. S p up by 13. The nasdaq up by 26. Well be back. Before the band separated over unknown creative differences. [ crash ] and reunited three decades later for a tour that sold out in three minutes. And your cisco hybrid cloud handled millions of ticket orders without breaking a sweat. Before all of this, [ crash ] the experts at cdw orchestrated a cisco hybrid cloud solution. Scalability by cisco. Orchestration by cdw. Welcome back, squawk box. Live breaking news. May read on income and spending. Income up. 2. Spending up. 4. Both of those are darn close to expectations. A little light on income. You could argue maybe a little heavy on spending. But its never too heavy on spending. We have a consumption economy, right . If we look at spending, real personal spending is up. 3 month over month up. 2. No revisions to our last look. And boy, these are solid numbers especially on the income side. Up. 2 is pretty good. And we did gather an extra tenth up to half of 1 on our last look. Which make this upper half 1 one of the better numbers since april. Of course whats the response in the market place . You are getting, you know, just a mild sell in the treasuries. Nothing huge. Maybe a half a basis point or so. The real issue is still under 1 . Two days in a row of stable if not higher equities and fairly global. And of course the notion of whats going to happen with brexit. Ill tell you what, it was interesting reading all the different meetings that occurred yesterday between the nations and the parliament and the leaders and farage. Ill tell you what. This is going to be one heck of an interesting soap opera. How it turns out in the details, nobody knows. But one thing i think is for sure, many in the camp oversold some of the rambunctiousness was to follow in the market place. Not that its over, but thus far its been volatile but orderly. Ive lived and traded through many crashes. This doesnt resemble one, in my opinion. Back to you. Okay. And your opinion is worth a lot, rick, because you have been doing it a long time. Noted. Rick santelli, thank you very much. Lets bring back our guest host for the hour glenn hutchins. The previous point i was trying to make was im not agreeing or disagreeing on trade, im just saying for many people globalization is a hard sell. Right. And we have to sell it. Because the uk leaders who didnt get out a sufficiently strong and clear and empathetic matter are now regretting that in a significant way. The problem with globalization is its spread like a thin layer of Peanut Butter a little bit over a lot of people. But thats not sufficiently offset narrowly defined devastation to industries, communities, certain demographic groups. We have to do a much better job of addressing those peoples concerns without creating the impression we could go back to the past. But with creating the impression we care and could do something with their futures. I think thats an important thing. If we dont do that, were going to end up with Something Like brexit in this country which we cant afford and cant avoid. The problem youre talking about is it will take years to lay the ground work for Something Like that, to get people into jobs programs, to get them into training programs. To make sure that they see that their children have a future. There are things you can do today, things that take a medium amount of time and long period of time. Today you can go right after things like expanding the eitc, increasing the minimum wage. You can move pretty quickly, i think, to send a message to Social Security and medicare is going to be there. So you dont need to worry about your retirement. Then you have longer term issues that you need to deal with like redoing the unemployment programs to get more training. Things like wage assistance. Trying to get companies to adopt profit sharing. So workers can share in the benefits of the company. Then longer term things like, all right, lets invest in infrastructure. Lets really go after the Education System and get it right. Not just for kids but for adults. It seems like a quick fix, seems like something you can do rapidly. Its wrong to think about infrastructure as a quick fix. This shovel Ready Concept in 2009, proved to be i think you and i dont mean to speak for you, becky, but i think you mean its something we should agree on. Lets have crappy roads or good roads. Why is that a discussion . But i know what glenn is talking about. Having the projects rea to go. A 10 to 15 Year Investment in jobs program. So theres this longterm thing you can be employed by and it will improve your community. Its going to be ongoing that you can observe for a long period. But when weve talked about it, youre a technologist. Thank you. Ill take that as a compliment. Yes. But weve also talked about how over the next 20 years, if you really start look out 10, 15, 20, 30 years how many jobs ultimately get taken by technology. And what that conversation really means. And what all of this outsourcing is really about. Because people talk about bringing manufacturing back to the United States. I could argue to you bring back manufacturing, its almost irrelevant. The idea of manufacturing is almost an irrelevant issue when it comes to straight up jobs because so much of manufacturing is now going to ultimately be done by robots and technology. But in addition to being a technologist im a tech technooptimist which is i think the we dont have people using typewriters anymore. We dont have operates sitting at a desk pulling plugs and p putting them in again. But we have women in workplace, those were typically womens job, and with a lot of opportunity. You would say the typewriter is going to the word process is going to make it obsolete. Weve actually seen progress. So i think we can do that. But we do need a new kind of safety net to deal with the work. You want to head in the direction with a higher minimum wage. One of the things we miss with a higher minimum wage is that the low minimum wage is the taxpayer subsidies to businesses. We all pay our taxes to do things like have the eitc. Have, you know, housing subsidies for people who cant afford. So why not put that cost on the actual businesses and create compel them to create a living wage for people and on and on. I think you move in those directions. Now bearing the cost of the business. Not the taxpayers. Then you can shift those resources. Take Social Security. Reconceptualize it as the Insurance Program that pays out to people who need it. Paid in by people who have the resources. Thats another part of the social complex. You say, we get it. If you make above a certain amount, youre not going to get Social Security because you wont need it. Or if you have a wealth level so its a means test on steroids. Reconceptualizing things. Saying we care, were going to do something about it. Okay. Glenn is our guest host and we will have more with him in a moment. In the meantime, the eu summit just wrapping up in brussels. Were getting comments from european leaders and wilfred frost is there. He joins us from brussels with more on this. Yes. We have the closing statements. President of the European Commission, mr. Donald tusk saying the eu leaders are going to be on september 16th without the uk to continue these talks. Of course by then we expect the uk Prime Minister to be in place. He said all eu leaders agree access to the Single Market requires accepting freedom of movement. Thats one of those areas who wants the free trade. But maybe put curves on continuation. Saying thats not possible. The president of the European Commission added eu leaders will accept no nuances on freedom of movement. So making that view very clear, indeed. We also heard from Angela Merkel of germany saying the uncertainty about britains future the better. Also saying that no one wanted treaty change which would be a bigger, more formal change of reform amongst the rest of the eu. So clearly some hard words coming from european leaders here towards whoever is going to be the next uk Prime Minister about how tough this negotiation is going to be for the uk. The only other point i would just add which may be a Silver Lining for the uk is its been confirmed that the european council, the individual country leaders will have the political power of this renegotiation. Not institutions like the European Commission. So it would be individual nation state heads of government like merkel, renzi, hollande that will decide things. Guys . All right, wilfred frost in brussels. Thank you. Coming up, brexit and beyond. Former congresswoman jane harmon will join us. She recently sat down with the imf managing director Christine Lagarde. Well ask about anything we want because its an unscripted show. Squawk box will be right back. Welcome back to squawk box. British politics in turmoil after the brexit vote and the fallout could have big consequences for the political race here at home. Joining us now is jane harmon, current president and ceo of the Woodrow Wilson center in washington. She recently sat down with Christine Lagarde. Good morning. Good morning from glorious aspen. When you think about the implications of brexit and whats going on there, weve had lots of conversations this morning about the feelings around the world about the elites. How do you think it will impact the conversation in the Election Year . Well, itll impact the conversation. How it impacts the election will require some time. In political time, a day is a week and a week is a year. So theres a long time to go before november. Shortterm im very worried about a tax on airports. Lets think istanbul and devastation there. As john kerry said at aspen yesterday, that could be the new normal. And i would fear and i think its possible that airport attacks come to europe now while europe is distracted. Certainly therell be an effort in the United States. And that will throw, it seems to me, a big wrench around all this. So the goal has to be steady hand, longterm vision. Thats what Christine Lagarde said on sunday in aspen. And Angela Merkel from the reports i was just hearing sounds like shes the leader whos stepping up along with a couple others in europe and boy, is that welcome. Before i forget, on the issue of Christine Lagarde, there were a couple of mentions, critiques of her performance in aspen suggesting why is she in aspen given what seemed like a crisis. Given the stock market had not fallen the way some people suspected. What did you think of that criticism . Well, her appearance was set a year ago. And it was supposed to be for today. What she did was come over the weekend, speak on sunday, and go back to washington where she is now. I think shes headed to europe later today. So i think speaking to this audience made a lot of sense and i think what she said made a lot of sense. And i john kerry stopped here yesterday after seeing after being in three countries on his way to canada. This is a form that a lot of people want to take advantage of and i thought she did it brilliantly. Fair enough. Help us with this. When it comes to the election, theres been a lot of comparisons made between Boris Johnson and donald trump. Are those fair . And do you think that his success in the uk portends Donald Trumps success here . Well, i think both of them seem similar in terms of personality. I dont know if the if the connection goes farther than that. Theyre different from each other. Johnson has a record in government which trump does not have. I dont know yet. Johnson, it seems to me, is going to be blamed by the remorse campaign. The remorse campaign is e spshlly millennials who are upset with what just happened. And i think if David Cameron plays this carefully, johnsons going to have a big rock to push up a big hill. And i dont know how that works. In terms of trump, his arrival in this is just my observation in my nonpartisan role of the Woodrow Wilson center. His arrival in scotland did not go so well. So ges well have to hear more from him. But again, this election season is a long, long time and a lot could happen. Right. On the topic of the election, when you think about Hillary Clinton teaming up recently we were actually just looking at a picture with Elizabeth Warren. Does that help or hurt her in all of this . Well, i think its a piece of a puzzle shes trying to put together. Warren is a very important factor to the sanders voters. And to have warren side by side speaks to them and says get in this. Its going to be important for many of them. Im assuming not all of them will do it. But hopefully for many of them to move over to support her. Then it will be important, too, it seems to me, for moderate republicans disenchanted with trump to support her as well. Thats a straddle act shes going to have to do. I had to do it as a member of congress as a democrat who was very progressive on social issues but much more moderate on defense and economic issue. And i think thats basically who she is. Shes also going to have to show more empathy. That was just used in your prior segment about this wakeup call on globalization. And there are people hurting in the democratic and republican parties. And it took us too long to figure this out. And thats going to be her biggest challenge. Congresswoman, it seems she is kind of walking a fine line trying to straddle things by teaming up with Elizabeth Warren like that. Many think shes looking at her as a Vice President ial candidate. If she doesnt, is she alienating the Bernie Sanders voters . If she does, does it sway moderate voters . I dont presume to know who she will choose. Im reading the same tea leaves youre reading and there are other people in contention like julio castro and others all of whom are impressive. I think she will probably pick someone shes very comfortable with. I dont know if thats warren or not. But i do think she has to think about both pieces. The moderates who dont want to vote for trump. And the more left people in the Democratic Party who are having a hard time warming up to her. And shes trying to build a bigger tent. I think its great that warren has embraced her. Lets Say Something nice about Warren Moving out quickly after it was clear sanders couldnt win and embracing Hillary Clinton. And really going after trump and making clear that hillarys her candidate. So thats good news. I mean, the Democratic Party has to pull together. Trump is obviously trying to get the Republican Party to pull together. Both candidates are going to have a hard time with this. But the candidate who can get a big portion of the other party is the one thats on a better glide path. Glenn, real quick. If Elizabeth Warren became the Vice President ial candidate for Hillary Clinton, would that change your views of Hillary Clinton . Im not licensed to practice politics. What did joe say . I dont know if viewers saw joes twitter account. Joe kernen yes. I dont know if we have it ready. She was staying in the same hotel in cincinnati as senator warren and they took this lovey dovy picture together. One for the ages. Congresswoman harman, thank you. Can i put in one plug . Thats for potholes. You were just talking about infrastructure. I dont think its just a longterm problem. There are potholes and road paving that kids, unemployed kids could do this summer. The Infrastructure Bank idea has been around a long time. It could include private investment, even foreign investment. And i think if we roll out Something Like the civilian conservation corps updated for the 21st century right now, well send a message to all these alienated spectrum we car in fact, well actually improve our sagging pathetic thirdworld infrastructure in this country. Are you stating on the record you are against potholes . Yes. I am. Against potholes. We will try to fill those. Appreciate your time this morning. Thank you. Jim cramer from the New York Stock Exchange will join us and get his take on the markets ahead of the open. Back in a moment. Getting faster. Huh . Detecting threats faster, responding faster, recovering faster. When your securitys built in not just bolted on, and you protect the data and not just the perimeter, you get faster. Wow, speed kills. Systems open to all, but closed to intruders. Trusted by 8 of 10 of the Worlds Largest banks. Amazing sleep stays with you all day and all night. Sleep number beds with Sleepiq Technology give you the knowledge to adjust for the best sleep ever. Dont miss the lowest prices of the season going on now, with our bestbuy rated c2 Queen Mattress now only 699. 99. Know better sleep. Only at a sleep number store. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. All right. Lets get prepped for your trading day down at the nyse with jim cramer. What is on your radar this morning. The clowns that sold nike at 49 and realizing the business was good and lebron is doing well the soldier ten and the kyrie and china has been strong and i always marvel that people are as dumb as they are and they dont bother to listen to what mark parker and his team has to say. Had they, they would have been buying nike at 49 instead of selling it. First amendment allows you to be as stupid as you want. Interesting listening to you because youve been the voice of reason saying we were lower in february, not the end of the world, we had a nice rally yesterday. Today were indicated up open about 100. Do you think the world is coming to xwrips political fallout aside the brexit may not be doom . Well, i have right now. That could be. The main thing i look at is the credit side. While there was a panic in Deutsche Bank and Credit Suisse stock, barclays and lloyds, geez, the paper, the real senior debt and some of the junior debt traded fantastically. It was if the common stocks were an aberration. The government does own some rbs, sold to you, and they own some lloyds not much left, but there was a panic in the common stocks but not in the credit sf stocks where theres smarter money. Chinese market is good, Copper Market has been good, oil market has been good. A lot of stuff away from europe thats not as bad. You have to stop just totally focusing on whats happened in, you know, where shakespeare the globe theater. Time to end the globe theater analysis. Hutchins is here and has a question for you. How have you been . How are you . All right. What do you think about honeywell . I love dave cody so much. You cant be a ceo forever. What a remarkable job hes done. Hes been a great neighbor. Hes quiet and the kids like him. Shout out to cave thdave tha announced hes stepping down. Hes staying on as chairman until 2018. Hes been the best and, you know, maybe i hope he sticks around. Too young to be able it to do any he has to go down to washington and make things better. That would be good. Wouldnt that be great. Yeah. Nice way toenz it there. All right way to end it there. See you in a bit. Our final hang with our guest host glen hutchins. Stick around. Later today microsoft Ceo Satya Nadella will join closing bell, lot to talk about there, the linkedin deal. Were back with more on squawk box after this. Lets get final thoughts from our guest host glen hutchins. The question for you, youre a tech guy. Weve watched the tech world sort of live in a bit of a bubble and get a little bit deflatsds. How much more do you think it has to go . You know, if you had bought the best internet 1. 0 stocks, google, amazon, ebay, before the tech crash and held them to today you would have made a lot of money. I would get less concerned about daytoday valuations of stocks like that and think more about longterm opportunities for them to create real value. Right now, the theres a huge opportunity in building out the mobile internet which were just the early days of. The biggest investment trend in my lifetime. The combination of Voice Recognition with Artificial Intelligence is going to create a whole new way and maybe Virtual Reality on top of that, going to create a way we interact with our technology. These are massive waves. The other is the creation of a new internet capability around payments which is in the Digital Currency world, the most wellknown Technology New guys it will be both. And thats find people who can win in those trends buy the stocks hold them and forget about daytoday ups and downs. Always fun. Thank you. Thank you. That does it for us today. Make sure you join us tomorrow. Time for squawk on the stree. Welcome to squawk on the street. Im david faber along with jim cramer, carl is off today. Weve got breaking news to get you started so lets get right to Mary Thompson who has got that for us. Mary . Thank you very much, david. This concerns general electric. The Financial Stability Oversight Council voting to remove ge capitals nonbank designation or as a systemically important Financial Institution. Ge applied to have it ge capital dedesignated in the First Quarter of this year. In a