Markets and new polls and an interest editorial in the uk and jack ma takes the stage at alibabas investor meeting in china gives an upbeat view for the year ahead. Stocks trying to recover from the first three session losing streak in almost a month. A lot of cross currents. The german 10year, it finally got there. Yeah. I mean look, when i read the commentary about the eu, germany, brexit, its almost like youre starting to think like are these people really thinking its september 1, 1938, talking about munich and chamberlain going there and not being stiffed by the fascist. The commentary is outramgs you and insane and inflamed. Its about the eu, about a country that could leave the eu. Its about not knowing what will happen after. Its about safety everywhere. But its about something im not saying im an american first here and that this is 1938 and the u. S. And roosevelt sends a letter to chamberlain maybe this thing and talk to hitler listen i think maybe this is a out of control. We have to pull back here. We have to stop the scare. This is wrong. I mean if brexit if britain leaves okay, you know, this is not going to destroy kroger. Kroger is going to report this week and i dont expect a great number but i think that we uniquely can watch the tape underneath and see a diagio go down and Credit Suisse and deutsch bank. Its our job to be a little more balanced on what this means for the united states. Again, im not an american first here. Your view, its not much how could you not want to come here and send your money here. I mean if you have a german 10year, money is i used to buy go buy dutch bonds for heavens sakes and that was lunacy but you could pick up a couple hundred basis points. Indeed if you want to buy a big piece of property in germany may you wait a week. Want to buy a big piece of property in london, dont even think about it. Sell. But i mean we got to calm down. We got to calm down. I mean, you know, as i learned when i was a Hedge Fund Manager what does this have to do with the price to earn of bristolmyers. Well said. Your obliquely referring to the polls and then this front page editorial in murdochs sun tabloid urging british voters to back a brexit, our last chance to remove ourselves from the undemocratic brussels machine and its time to take it. They say brussels is incompetent, greedy, bunch of other nasty terms. Well, you know, the rhetoric is inflamed and i think that we go back to when greece was going to bring us down, we go back to when cyprus was going to bring us down, russia was going to bring us down and what happened in each one of these instances with the exception of when we were going to default on our treasures these were all situations that down 7, 8 put money in your ira. That was it. Except the treasury you had to go down 19 before you put money in the ira if we defaulted thats a suboptimal situation. The other situations, the rhetoric is very similar. Very similar to 37, 38, 39. Just in terms of the continent and the desire to avoid a conflict. But this eu was set up in part because they wanted boarders to come down and do more business. They didnt want another world war ii. And we forget that. Suddenly the wroter to rhetoric is world war ii is about it to occur. A lot of things in play in world war ii and none of it involves a british bank doing better than a deutsch bank. We could just really dwell on this. I know our market is going to go down because oil is going down and brexit. Im saying look, when i set up my thinking in the morning i do not think to myself, okay, if deage yo goes down, i have to tell everyone to get out of constellation brass. They have to get out. What . Sounds like your life is not going to change that much. It does sound like youre coming to grips with a leave vote. I am. I expect look, we could be down 5 , catch another 3, down 3 on a friday and you say wow, you know what the cannibal, the 1 00 to montauk those people are going to miss out the opportunity of a lifetime or get yelled at by their bosses, but we got to put this in a little more perspective it doesnt hurt to talk about 1914, it doesnt hurt to talk about 38, talk about 39. Just because we got to remember what it was like and why they did this. Why they felt that it was good to have a i remember when they came out with a Common Market that was a big deal. not going to have war again. Leave is not the same as, wow, you know what, the next thing you know, the bef is going to be over there and its dunkirk. Im waiting for someone to talk about dunkirk and stalingrad. It was bad. Mark andresen on twitter said if the u. S. Was in the eu, wouldnt we be trying to get out . Well were not. Right. Youre saying its not a relevant question. Were not. Why are we doing this . I mean if the u. S. , you know, if the if we had lets do like elon musk. A man on mars white be impacted or he not be we can scare people real bad. I am very good at squaring people. If you want to be afraid you can be really afraid. I can conjure 3. I got lindbergh, lindberghs great. Like i god lindbergh all set to jump out and henry ford and were going to really explore this idea that we dont have to worry about the continent. No, i got 40 in the s p that is going to go down on this. At t will go down 2 bucks 5 yield. I am going to tell you that monday, youre going to come in and say, oh, my. Eu. May be falling apart. I have to sell at t. Im going to say, have you thought about that. Have you thought about whether thats logical or not. And youre going to youll say, i dont know. Im really scared. Bristolmyers. Bristolmyers, j j is uniquely overseas like on a i dont know j j, it was on a tear yesterday. Why . Some people say j j is a pretty good company and i just dont want to be as scared. When everybody is scared i dont want to be scared. When nobody is scared im a little frightened. On the flip side if theres a remain vote how big is the chase a week from friday . Oh, man. You know, j j, 121 and youre going to say what were we thinking. I mean, lets play it out. Okay. Lets say that you were in the german 10year and not earning any money. Will you look back and think, one of the greatest decisions i ever ever made was not to earn any money and then they defeated brexit. I mean i just think being the 30day paper, i mean in 2000 in the great in the Great Recession when it was really starting to happen i chose to put my money in many banks and in 30day paper. And you could say listen, why did i do that . Because the republic was on the line. And what im saying is the republic is not on the line here. Our republic. The republic is not on the line. Its not prehamill. I havent seen it yet. You will. In 2018. Again, its so easy to scare people. I could say, nobody liked it. Nestle, im really scared about nestle, why eat crackle bars. Im worried about nestle. Mon go lease. No. The oreos theyre bad for you but going to keep eating them. How encouraged you were by retail spendin retail sales . Gas prices happening. I was at dollar tree last week asking people by brexit, they were not affected. Brexit. Everybody said i think its aisle 4. I think they thought it was like a candy. Honestly look at this stuff and the retail sales were better than expected. I dont want a recession. You dont want a recession. You dont want and you really dont want like one of the fed governors im waiting for fed governors to say no time like the present to have seven rate hikes. Do whatever is necessary. Noticeably absent. These are guys that would say listen i think von miller should get 100 million no cut contract and seven rate hikes. There is the rhetoric. We want the rhetoric to calm down. We had a few months ago on february 10th we thought most Major Oil Companies were going to go under and bank of america was going to go under. Thats what we were thinking. Okay. And remember, most major we knew that exxon was going to survive. But, you know, it turned out that oil went from 25 to 50 and natural gas went from 1. 90 to 2. 50. Amazing things that can happen that are positive. Its incredible, isnt it . Weve weathered a few storms. Isnt it amazing . You could have a guy, a major tv host do a car show. Were going to talk to jay leno in about half an hour after he rings the bell. Life goes on. Now, i mean f you go back im playing it out here. If you go back to munich and you were as calm as president roosevelt just say hey, you know what, those guys seem to have a bit of a disagreement, but chamberlain says peace in our time and roosevelt is thrilled. I dont want to be roosevelt. Roosevelt was uniquely aware of what was happening over there. Brexit is aware. People unaware to being im getting hit by brexit tax on the way out when i walk across the street and im saying when everyone knows about brexit let it come down 5, 3, and then maybe we pick at whole foods. Were going to learn whole foods i wish were in europe. Were going to learn a lot next week. Alibaba is up in the premarket foling the investor meeting. It expects 48 Revenue Growth in the current fiscal year, transactions volume doubling to more than 900 billion by 2020. At the meeting jack ma addressed the stock price down 11 in the past 12 months. Take a listen. People say, jack, are you frustrated and upset by the stock price . Yes, and no. I think i can understand because we are a company from china. We are doing something that nobody has done before in history and very, very few people has used our service in america and outside china. Its understandable if good things always takes time. We should have patience. Making some predictions on the number of customers in 2036, 2 billion from 423 million actives now. 2036. I was thinking okay, la is see how old will you be . I dont know. My dad was in the market when he was 92. You know ive used this product, this alibaba to price out some chairs, okay, they didnt i didnt see anything i really liked. Ive used the product. To me its an amazon and maybe hes got these people, but, you know, he had all the analysts sitting there and the campus in china and they all felt great and everyone leaves feeling good, 48 . Is he unhappy with the stock . I mean, thats like saying listen your team your team just went, you know you were 511, okay, are you unhappy with that . And you say, hey, you know, im fine, take a longterm view. You know, the longterm view in any other business is just a fallacy. Remember what the late great andy grove said. Andy grove said you have to judge business by a courtroom. Also said only the paranoid survive. Unbelievably good book. You sit back and say how could he not be upset. The fact is theres still accounting issues. Did he solve the accounting issues . I would prefer to let things play out before this guy comes and has a meeting and are okay. I look at china and i dont want to be levered to china. I just i dont want to be short it. I wish bydu down 15 last night. Buy yahoo . The rest looks valued at 0 and you get a nice call on alibaba. Actually minus 2. Baidu did warn on q2, almost 3. 5 . Claimed it was medical ads and if the government changed the issued the medical ad regs, then the advertising would come back. I think to myself thats what i want to be levered to. Chinese Government Medical regulations. I cant think of something that i could that i dont have a better call on. Two things on china the imf suggests policy is supportive near term and msci could decide to add them to the emerging markets. Msci is serious, rigorous outfit, maybe china will stop stop Holding Stocks and be like a regular market and that will exert discipline that would be a unique decision and, obviously, china would do better. If they can make that work god revenue them. Yeah. God love them. Your level of anxiety on china is i dont like the chinese stock market because i like the chinese auto sales those were good. Most of the chinese predictions are all so high, that i its like lets create a shortfall. I think that china will grow at the pmi 52, oh, its 49. The projections are stupid as the yes. So i care about auto sales because theyre for real. Unfortunately you cant buy gm because the auto sales here may have peaked. I see the Chinese Market and dont say they have it under control but i say its not a disaster. I dont want to own chinese stocks. They dont play by our rules. Yeah. Well find out what msci says tonight. More on that still to come. When we come back more buzz surrounding microsoft and linkedin and their 26 billion deal and the effect its having on shares of twitter yesterday and today. Also ahead as we said, jay leno Second Season of jay lenos garage premiers tomorrow night on cnbc. Hes going to join us at post nine after he rings the opening bell at the big board. Take another look at the premarket, first threeday losing streak for the s p since the middle of may. More squawk on the street from post nine in a minute. 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. Linkedin. Stocks on the move after yesterdays huge announcement that microsoft buying linkedin for 26. 2 billion. Price represents a 50 premium over linkedins friday closing price. Now twitter is up in the premarket, goldman has a list, very long list, of companies they say have a 15 chance of m a in 12 months. Twitter, t mobile, theres a bunch. Its huge. You know, ill take a hard look at them. I think i do feel that tmobile will get a bid if the stock didnt go up. The stock has gone up. Good piece in the new publication the high i saw john kelly on yesterday, talked about the dysfunction in twitter and it was quite daunting frankly. It did seem a little favor college like. I do that not because our colleague is not here, but Faber College was the epitome of Higher Learning at that period, meaning the epitome of bad. You read the piece and say, all right, someone put these guys out of their misery because this is just not really a company. So, mine they do have users. I tweeted this morning. And someone tweeted me and said wow, when do you sleep . I come back and say i sleep a lot. Then its like is that its a nonproductive dialog. But im glad. I follow times, i follow a lot of people. I get news from twitter but i feel like i dont pay them anything and dont do anything different because of twitter. I have never bought anything off of twitter. My kids off facebook said i never bought a thing off facebook all i did was click on a link and i got ten tshirts to five concerts. I pay apple but apple had a horrible meeting. I dont know what happened but it was horble. On linkedin we talked to nadella yesterday. Today sorkin write in the times about the stock based comp. Adjusted. Crushing load for linkedin and its employees. Well, look, ive been back and forth with some of the people at these companies and i think that linkedin solved the real problem for microsoft which is, were not growing with our cash. We can really accelerate our growth and linkedin did have a problem with that. But the fact is, is that linkedin had Remarkable Growth q4 to q1 and it didnt get any credit because in the ridiculous Conference Call that they hosted they used a lot of buzzwords that we know drive stocks down. That was one where they needed that was like a total nontony award. I mean it was like they really they were not up for tonys. It was extraordinary. I mean, it was one of those comp calls where every word they used was a word that said, sell linkedin. Then they spent the rest of the time trying to make up for it and didnt get a chance, hence a 196 bid off a 192 price before they decided to devastate their own. Now that the devastating thing you do with what andrew wrote, but the fact is, forget about linkedin. This was about microsoft. Linkedin is dead. Thats done. I mean like people are like wow, let me look at it. This is not the coroners inquest. What were looking at is microsoft accelerated its growth and the Conference Call will give them a cloud platform. I didnt care for how they in the Conference Call addressed linkedin as the one that will be across unite windows with skype. Yes. I mean, the great uniter. I didnt get like a National Anthem of microsoft. But no, still good. You will agree that other companies were not done with m a as companies try to show growth of any kind. I think that growth is yeah, were not done with m a. I did a section last night on mad money that said look, theres a need for m a. Because some of these companies they dont want to be growing at 3 . I mean theres this intel paradigm, i happen to love the guys at intel and i have since it was created. But the problem with intel, is you dont thats the paradigm of what you dont want to be unfortunately. Where youre levered no matter how fast, still levered to pc, growth keeps going down, a its still a Great Company but intel should have bought broadcom, n individualium, these guys are all saying i got my i had my chance. There was an article that said why didnt microsoft buy linkedin earlier, microsoft was run by Steve Ballmer and, you know, he was committed to not having social, mobile, ai, i mean, ai to him was clearly Allen Iverson or wouldnt have bought a basketball team. Thats right. Well get cramers mad dash and count down to the opening bell and jay len flo will join us. Dont go away. Sup jj, working hard . Working 24 7 on mobile trader, dont go away. It lets you trade stocks, options, futures. Even advanced orders. And it offers more charts than a lot of other competitors do on desktop. You work so late. I guess you dont see your family very much . I see them all the time. Did you finish your derivatives pricing model, honey . Td ameritrade. Its how you stay connected. With centurylink as your trusted technology partner, you get an industry leading Broadband Network and cloud and hosting services. Centurylink. Your link to whats next. Thats why i run on quickbooks. Details. I use the payments app to accept credit cards. And everything autosyncs. Those sales prove my sustainable designs are better for the environment and my bottom line. Thats how i own it. Five minutes to the bell. Lets get cramers mad dash talking about why oil is going down. Right. Continental and howard ham called the top when we were at 50 you said that day. I was mean spirited. I didnt mean to. Howell had my down to his place. Rusty brazil wrote a book called domino theory about oil. Where are the rigs being put. Two weeks in a row where you had rig count up. The mississippi and the bakken why is this important . These are marginal oil places. You would open these if you think oil is going to go up more. They are profitable above 40. What this says, carl, is that they are continent is pumping out wells that were closed, that theyre now producing oil and when you got to 50, we just literally couldnt go higher. Now venezuela has dropped out of 120,000 barrels from 2. 37. Venezuela is key. They dont get paid. I always found working and not getting paid thats kind of like russia. Under stalin. Work, dont work dont get paid. I do believe that venezuela holds the key and 50 holds the key because guys like howard are so optimistic at all times and open the wells start pumping and drilling and carl, you dont drill in the mississippi which is a not great shale, dont drill in the bakken unless you think oil is going to 60. The optimism is back in the oil patch. I dont like it. As youve been consistent on. Opening bell in 3 30. Dont go anywhere. Every year, the amount of data your enterprise uses goes up. Smart devices are up. Cloud is up. Analytics is up. Seems like everything is up except your budget. Introducing comcast Business Enterprise solutions. With a different kind of network that delivers the bandwidth you need without the high cost. Because you cant build the business of tomorrow on the network of yesterday. [ applause ] youre watching cnbc squawk on the street. Live from the Financial Capital of the world. Opening bell right about now. And a look at the s p at the bottom of your screen. At the big board, its jay leno. Celebrating the premier of the Second Season of jay lenos garage on our network, cnbc. Premiers tomorrow night. 10 00 p. M. Eastern and pacific. Over at the nasdaq, the cast of Independence Day resurgence releasing nationwide on june 24th. Were going to talk to jay in a few minutes. Got to talk to him about cars, jim. Yeah. Car ownership. When you talk about when i had meg whitman on last week from hewlettpackard, the call conversation switched from pcs to cars, now cars have always been fundamental but, you know and my kids still wanted a car the moment but a lot of kids do not want a car. They have uber. You look at a company like nxpi which sold low tech semis to a chinese conglomerate to focus on hightech semis the car, a mobile i, a Driverless Cars and doing google theres so they are the story, carl, and, you know, what a lot of them is the storied notion of the car. I cant wait to see jay. He has always been in the mix. Its a long time hobby. It does bring us to wwdc yesterday and apple, part of which was devoted to installing a lot more interactivity in the car. I think one of the things that happen with apple now, so universally considered to be boring and past its prime, that when they issue things and im looking and saying boy cant wait for that, but its boring and past its prime, there is this kind of oxymoronic to apple. Hundreds of articles dough voted to things. Usa today had three articles about what apple is up to but the market wont like that. The disconnect between the great things that tim cook is up to versus how we are like yuaning is funny. I mean i want all those apps. The idea that app store is tired. Meanwhile, im like downloading apps constantly and but its tired. Carl, i dont understand how we can decide that the app store is tired and yet go there every day and download apps. Desensitized by rapid innovation. That has to be part of it, right . I guess so. Happened so quickly that were conditioned to say what now. But how is it possible that a Great Company like apple, no matter what they seem to do, its regarded as being hohum and yet we take it in. We take it in. I mean, i dont want to switch to samsung. Im bored with apple i have to have a samsung or lg. The nokia, the microsoft phone. I dont know. Im kind of intrigued what they did but i totally get, once again, they didnt dazzle and what are people waiting for . Are they waiting for apple to introduce the car that drives on air . Is that what they want. Until tim cook reveals that the car that drives on air and takes you to mars that anything short of that tim cook is a loser . Is that what were about now . Speaking of rapid innovation, amazon, i just mentioned them in the context of retail sales because nonstore share of retail sales, 10 . Yeah. Forfor president first time. Amazon i think its a buy. Gene munster talking about accelerated growth. Im doing work over at the street. Bed bath what cant be amazon what can. Matthew boss last week, jpmorgan, what can be amazon what cant. Amazon is one of the Companies Like apple still fascinated by. Amazon package when i got home. It was a book i ordered. Why did i order the book . I dont know. It said anyone else who bought the book on bill walton and the grateful dead and business bought this book. I bought that book too. I dont know. I buy a lot of stuff because my the al gor ritholtz number their head says i have to buy it. They own me. Why the pop in the vix yesterday, got to 21, above 21 now, when stocks werent moving towardly the direction. I think this is just this kind of torture. We cant have the quick down like they do over there. Even though the vix is indicating that. Because when we do individual stock analysis we find ourselves selling stocks that may actually be doing well in a brexit environment. Were scared but when we look, the cash positions are so high that all these mutual funds that like, you know, the vix is indicating fear but the mutual funds have already digested a lot of fear and are ready. Theyre really ready to pounce. But to pounce on what . To pounce on a railroad thats domestic and really wont be affected. To pounce on walmart. They got rid of the uk guy. Theres a little brexit action. I just i mean im watching stocks go down. Im watching a home depot go down pretty much every day and thinking that could be interesting. That could be interesting on a brexit because they dont have many over there but it comes down. Sure. Big part of the s p. So i think that the fear is butting heads with the reality. And people who are selling certain stocks because they fear then have to look at what theyre selling and say wait a second, ale selling Constellation Brands because of anheuserbusch. Hold it just a second. Constellation brand is up 4. What is that about . I was just making that your point on cash is good. B of a a survey of managers today, cash levels 5. 7 the highest since 01. Their fancy new terms are the summer of shocks and quantitative failure. Things managers are afraid of and reasons they are in cash. Do you think they sat around and came up with this one and that one. Hired a guy like mon go lease. Quantitative failures. Kind of put that kind of spin. 2001. Not even 2008. You know, i mean if i get one more this bank is Lehman Brothers its become insane, really insane. Because again, there is absolutely a recognition of these banks and their problems by the governments that is so unusual versus 2007 2008 that i just think okay theyre ready, theyre ready. Theyre absolutely ready for it. On that note, dow moderate losses down 22, s p down a point. To bob pisani on the floor. Considering the concerns about brexit in europe, i want to show you once again, days and days now, european banks under considerable pressure over there. Many down 2, 3, 4 . Deutsch bank, al lee yanz, german insurance, barclays, spanish bank down fractionally now. A double whammy. The low bond yields and brexit. Doubledigit declines in the last couple weeks in some of these big banks. All down fractionally here. Here in the u. S. Modest declines in health care and consumer staples, once defensive sectors to the downside. Banks and Energy Stocks started negative and have turned positive. Here you can see some of the u. S. Banks. Please put them back which were negative the last couple days now have turned positive. Energy stocks on the Positive Side as well as you can see here. Lets talk about the vix because you mentioned this, carl. Its a very interesting situation here. Weve had an unusual situation. The vix has gone from 15 to 20 yesterday and a move of 5 points. That is a very, very fast move. Obviously much of this is on conconcerns over brexit. The question is, the severity of the move. Normally you get a 5point move in the vix with the vix at 15 the s p would move about 4 , the sort of correlation you have but that didnt happen. The s p only moved 1. 5 in that twoday period from friday into monday. So we had a very unusual situation. The stock market didnt a big reaction but, obviously, there was a sudden, huge demand for protection so there was more demand than there was supply and the price had to go up. Think about this, if youre a guy selling protection its big business, buying and selling protection on wall street right now and suddenly youre selling at 20 and the brexit does not happen, the vix drops down to say 15 so you win. You buy low sell high. But if there is a vote in favor of a brexit, and suddenly the vix goes from 20 to 40, youre in trouble. You just sold the vix at 20 and youre a guy out there on a hedge fund desk selling at 40 thats a problem. My point is that the fear of a brexit, the fear of a big loss on a brexit, selling protection, is much greater than any potential gains that you might have and thats sort of a behavioral economic question that accounts for some of the problems. Now we asked our friends what happens when you get a big outside move in the vix like a 20 move one day that happened yesterday. Well, believe it or not the next week or so stocks tend to be up. The s p up 1. 2 . A number of times in the last 20 or 25 years. Of course, this means panic and normally the panic subsides. The only reason i say be cautious here were not going to have any subsiding of the concern until we actually get what happens on that brexit vote next week. Im going to go say hello to jay leno, i am a big fan of his and get out of here, carl, and he will be talking to you. He is. Rick santelli in chicago, hey, rick. Well unbelievable times in the treasury pit. We could talk about brexit in terms of good, bad, what your thought is be longing or not be longing. But in the end its most likely going to bring a lot of volatility and in the end the u. S. Markets are probably going to be ultimately doing better after that volatility ends. He year to date of two year the short end is high compared to the rest of the curve. Just by looking at how it comps to previous low yields. Get out to the 5year, everything starts to change. Threeyear chart of the 5year. December 2012 start of 10s last time closing yields were down here. February 2013 for the longest maturity of the 30year and many investors will continue as the auction demonstrated last week to be favoring those juicier yields on the long end while they last. Fiveday chart of boons we could see that weve traded down in the negative territory for the First Time Ever and, of course, thats just one maturity. Many maturities we could pick but that is really an outstanding notion and when you think that the differential between the two is diminished by about 10 basis points rather quickly what we see is the gravitational pull of negative rates pulling us down and the fact that the differential between the two is narrowing quickly means that theres very little direction change on the horizon as long as that pull, that gravitational and subzero yields throughout the european zone and asia continue to have this effect. And, of course, the dollar index isnt doing badly as you see on the fiveday chart or the year to date chart, but whats really amazing is that this is all occurring at a time where the dollar is significantly behind the eight ball with regard to the yen. Carl and the gang, back to you. Rick, thank you very much. Rick santelli. When we come back an exclusive interview with Martha Stewart what she has to say about an upcoming project and actually i dont think were going to break at all. Jay leno joins us this morning at post nine. The Second Season of jay lenos garage premiers tomorrow night on cnbc, 10k p. M. Eastern and pacific. Thank you, gentlemen. We can change at a moments notice. I lightning like how youre able to do that. Were having a lot of fun, car crashes, danger, it goes good. Is the focus on super cars and what does that mean . No. The focus is really on the feel a people and the stories behind the cars. Im tired of these car shows everybody goes like this and have tattoos. We find a car that has an interesting story and well talk about the car, but youll also talk about the story behind it that they got married in it, their kid was born in it, their daughter got married in it. We have a lot of things like that. Its more its as much the people as the automobile. Seinfeld in it. Seinfeld is in it, seinfeld one of the premier porsche collectors but only collects original unmolested cars. I mean cars that original paint, original, you know, and hes such hes really an expert and hes thats what he looks for. If its been repainted hes not interested in it. Exactly as it was in the day. Jay, one of the things youre the expert on, the weird thing, we keep hearing about the love affair is over with cars but if you take a kid to a car dealer, they want every car. Its not over, is it . I dont think its over at all. If you live in new york city its been over for about 40 years. But once you get out in the real world, where people have to cover great distances, no, i think its im one of the people that thinks the cars we know will become like the snowmobile of recreational vehicles. In the future everybody will drive some sort of ev because electric car of some kind because of traffic and then on the weekend use your ferrari or hemi barracuda or whatever. But its kinetic artwork that moves and rolls and explodes and makes noise and thats kind of the way i look at it. You brought a clip . We did bring a clip. Is that me and hersh . Lets take a look. Jay lenos garage. This came out the term super car had not yet been coined. The first car to be called a super car. Lamborghini. I remember being 19 years old going to see the movie the italian job i forget what the movie was about but the opening scene stuck with me. The lamborghini the first super car and commanded the screen more than any movie star ever could. Is robert from shark tank. How you doing, jay . Not good. Can you give me a ride back to l. A. Absolutely. So thats a laugh out loud moment right there. For 15 of your company ill give you a ride back. Was there one that you were just that you fell in love with . The one car . Yeah. I kind of like them all, actually. Its hard, you know. I mean, thats one of my favorites. Thats my personal car right there. We did a we copied the opening scene to the italian job he goes into the tunnel and the mafia blows up his car and gets in with a shark, kind of the same thing. I have to ask you about the tesla. When you talk to kids who dont want cars they say i dont want a car but can i have a tesla. Ive got one. You do. Fantastic car. I dont understand why people attack this car. Its made in america. By americans. Its built locally. You know were becoming like the british. We like noble failures more than reward success. Somebody who who has failed with something. I dont know why that is. I think elon musk is the Thomas Edison or the henry ford. I mean against all odds, and people think he makes 2500 cars a year. He builds 60,000. He sells more cars than porsche and yet theres always this any time one has the slightest problem oh, this is terrible, its a horrible thing. I dont understand why we dont celebrate entrepreneurship and success more than inn this country. This is a great point. My father went to this is going to sound weird. Went to sleep with you every night. Right. For all long and always woke up you had an optimist bend on the news and a cynical but optimist bend. Something has happened that this has occurred because the tesla is american, apple is american. Right. And the cynicism associated with the greatness, jay, a little out of control. It does seem that way. Im one of the people who believes engineers will save the world and i think its true. Ive seen los angeles has millions more cars than it did in 1972, with a tenth of the smog. I mean its still a way to go. But i mean, you know, mallta said you can only feed ten people or 100 people on an acre of land and everybody else will die. Now you feed a thousand on an acre of land. I see elon putting rockets he put a rocket into space and landed. I watch the news and they show the one that blew up. Show the one thats successful. I mean you can show both. Yeah. I dont understand why were not celebrating success and entrepreneurship more than we do. Jim mentioned cynicism with cars and elon but it goes broader than that. This election cycle, what do you make of the environment were in . What would you do with it if you were still doing late night . Well, you know, i was fortunate enough i grew up in a different time. Clinton was horny, bush was dumb, it was simple. You know, gore was a robot. It was pretty easy. Now we have homophobic its its so ugly now im kind of glad im not on. Every time i do a joke about trump maybe im somehow promoting him. So its good to kind of stand back and watch other people handle it. One of the things that when you talk about value and cars, there was always this judgment that the moment it leaves the lot its worth less. I look at your car collection and i think that was a big mistake to ever listen to that. There are cars that are worth a lot more. I remember when harrahs car collection sold in 1986, they sold 250 cars to 50 million and they thought, and then one of those cars sold for 15 million. And you realize thats when it really thats when the general public began to notice. You see cars coming out now that dont depreciate at all. Ferrari. A mcclaren p 1. They were a Million Dollars when they came out. A year later theyre 1. 8, 1. 9 million. Theyve gone up in value. I mean weve reached the point where the technology has got son good, you know, you cant be in a business now with anything less than an a. In the old days you could have a crappy restaurant or a crappy car. You cant do that anymore. Word spreads quickly. You have to have a good product from the getgo. Anything mass produced will drop down in value. But if you hold on to it long enough it usually goes up. I mean, i have a mcclaren f 1 back in 1998 that car was 800,000. Now its 12 million. Oh, my gosh. Its just a car. I mean, so how do you know when theyre overvalued . Its not overvalue. I mean something thats if its technically interesting, fun to drive, and its no longer in production, thats something that will go up in value. I mean anything theyre still making probably doesnt go up in value. Theyre not making land anymore. That goes up in value. So any car thats limited production, and was ahead of its time, in its time, is usually going to go up in value. We cant wait for season two. We need you in the discourse, my friend. Thats me. Thats me. Im in the discourse. Thank you, jay. Thank you. Good seeing you. Jay leno. Season 2 premiers tomorrow night 10 00 p. M. Eastern and pacific on cnbc. When we come back well get stop trading with jim, dow down 25. Dont go away. What are you doing . 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. 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. Inside apples big event, record appetite for apps, will they move the needle for investors . Squawk alley today on cnbc. Dow down 48 but some of the gainers including yahoo constellation, apache, western dig. More deeper on what the markets may hold today. Stop trading with jim in a moment. Jake reese, day to feel alive jake reese, day to feel alive using 60,000 points from my chase ink card i bought all the fruit. Veggies. And herbs needed to create a popup pickyourown juice bar in the middle of the city, so now everyone knows. We have some of the freshest juice in town. See what the power of points can do for your business. Learn more at chase. Com ink see great time for af points can 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. Time for cramer and stop trading. Interesting listening to jay were too cynical, tesla, my kids want a tesla, the stock. Apple, my kids want apple but the stock these engineers will take over the world. Watch zimmer biomet. The original 6 billion man. They did a secondary, 11. 5 million shares at 115. 85. Zimmer biomet what we need as we grow older, artificial body parts, engineers solving things. If that stocks holds and 11 million we are too cynical. Urge people to think about what jay said. Not that jay is a stock market guy but he is a good call on hundred Million People in this country. He generally has a good feel for where we are as a people. Doesnt he. Tonight on mad. Theres a conference, cancer drugs, and there were companies that shined, really did amazing stuff and some that didnt. And were going to profile the ones that we really did some great work. This is a disease that theyre making progress on, carl. They are. Well see you tonight, jim. Thank you. Good hour. Mad money 6 00 p. M. Eastern time. When we come back, Martha Stewart on her newest business venture. Dow down 39 points. Dont go anywhere. Sir its the president mr. President were on mars. Switch to a video call. Sure, we can do that. Congrat. Picture from mars looks great. Its about Time Business Communications caught up. Go from an audio call to a Video Conference with the push of a button. Vonage. Business grade. People friendly. [phone buzzing] some things are simply impossible to ignore. The strikingly designed lexus nx turbo and hybrid. The suv that dares to go beyond utility. This is the pursuit of perfection. Good tuesday morning. Welcome back to squawk on the street. The new york stock exchange. Faber is off today. What a day, some moderate losses but everybodys watching the german 10year, some of these brexit polls, and by the way, a fed meeting begins today. Crude just below 49. In the midst of that more breaking Economic Data on business inventories. Rick santelli has the numbers. Good morning, rick. Good morning, simon. April inventories, of course, thats the first month of the second quarter, so implications for an gdp update. Up 0. 1. We were expecting 0. 2. Up 0. 1 isnt bad. Last month we lost 0. 3. Consider october was minus. 10, december 0, minus 0. 1, january, minus 0. 1 february. This has really been a soft series. So from 0. 3 last look 0. 1 getting back on the right track so there may be some modification based on atlanta gdp now last updated on the 11th of june. So we will 9th of june paying very close attention, stands at 2. 5 . My guess this might make it actually with the revisions close to a wash, many watching dollar yen and bund yields and differentials. Sara, back to you. Rick santelli, thank you. Now to the big mover of the morning. The brexit vote. More polls showing greater chances that britain votes out. The latest u gov poll giving the leave campaign a sevenpoint leave over remain. 11 undecided. 4 wont vote. Last week, that poll the u gov poll showed only a 1 lead for the remain campaign. A big turnaround there. Other polls are putting leave. The british pound is getting hammered again today against the u. S. Dollar. Back to april levels. The mover the british pound against the yen. Back to levels seen in 2013 as the odds makers also decrease their betting odds that the actual Stay Campaign will prevoo veil. I guess the difficulty you have and you should mention the sun Rupert Murdochs biggest daily newspaper in the uk which in the past has claimed credit for winning general elections today came out suggesting that the leave vote is where people should end up. I believe the sirctation is only about 2. 5 but in british politics the sun saying this is a big deal. Its thought to believe the populist view may change. We must set ourselves free. If we stay britain will be engulfed by the relentsly expanding german dominated federal state. It was pretty strong. Went through the immigration arguments for leaving and actually the economic arguments for leaving as well. Which usually the remain camp says the economic benefits outweigh. Within the uk the editor of the sun said ru pert mar duck was not behind the decision to make the call but what murdoch thinks what britain is about to do locally will be a huge issue and will be keenly debated is the reasons he might want the uk to exit the european union. Mounting concerns that the uk will vote to leave the eu next thursday is moving World Markets putting currencies under pressure with rattling oil markets and sending prices lower. Some comfort for the economy here with retail sales rising more than expected in may a sign that customer spending is strengthening all of these things will be in the new will be in the spotlight with the fed kicking off its twoday meeting today. Joining us, senior markets commentator and art hogan, chief Market Strategist at wonder lick securities. This retail sales data is strong. When you look at online sales. Its reashooing 3. 5 growth. Any investors really focus on it it definitely underpins the idea that there wasnt some kind of general abrupt economic slowdown last month. I mean obviously the weak jobs number is one were waiting to hear fed chair janet yellen characterize that jobs report and gives her ammunition to say that was an aberration. Its really policy land marks i think that have investors focused right now. What are you telling people . Simon, mike makes a good point here because when you look at the Economic Data stream, except for jobs creation, weve seen a lot of pieces of the data come in better whether auto sales, industrial production, capacity, retail sales today, if not for the slowdown in jobs creati creation we would be on a path to have a july lift off. Why step in front of a seismic event. Next week on the 23rd we will have the referendum vote. Too close to call although we still believe the uk remains. I think that, you know, theres very little that you need to do in front of that so the market may be in stall mode until then. The other thing were telling folks to keep an eye on dividend darlings theyve got expensive. Look at the multiples on utilities or staples or telecoms and the yields being at historic lows be careful because its a crowded trade, a rotation out of that space to things Like Technology and customer discretionary is the right move. There are very few surveys that are as big as the bank of america, Merrill Lynch fund manager survey saying cash balances for big investors around the world are at the highest level in 15 years. 5. 7 of the average portfolio for this big investor. What view do you take of that. Because bank of america itself points out, there is a contrarian view here if ever you see cash balances rise above 4. 5 , it tends to be an indicator if you look at the statistics that you should buy the market. I would agree. Bank of america came out last week and saw fund flows net positive fund flows for the first time in several months. I think thats a positive sipe as well. The other thing you want to think about in a world where the yield on the 10year is 1. 5, 1. 8. The discrepancy and the spread between that and the yield on the s p which is 2. 2 is historically high. That doesnt happen a lot and for a long time. I think thats supportive of stocks right now. We need to get through the fed meeting which comes and goes and a nonevent and the brexit vote which i think will be a nonevent. Were concerned coming into it but i think at the end of the day weve got a stay vote and then can move on and start looking constructively about this market. The 10year yield is also a high jeelds yielder next to the german 10year bund and the idea that u. S. Has a relative bet, whether the bond market or the stock market still looks okay. Absolutely. I mean its interesting, i think its the extremity of a lot of moves in these different markets around the world. 10year German Government yield negative, you talked about the yen against the Great Britain pound i dont think anybody is happy to see the yen rally. Here it is. And all these things i do think leave you with the idea on a relative basis, never say the s p 500 is a safe haven asset but starts to act at least to some degree like that when you have a 2. 1 yield, Global Companies that can sort of, you know, weather a little hiccups in the Global Economy and that 1. 5, 1. 6 yield on the 10year treasury seeming like it should be a little bit of a if thats the case what do you make of the jump weve seen in the vix to protect yourself . Its quite difficult to really kind of knit it together with whats going on in the stock market. Its been an outsized move, huge bid for downside protection. A few things are going on. The derivatives related to the vix seem like theyre being used to hedge lots of things. General, Global Market volatility prospects as opposed to just u. S. Stocks. I just want to come back finally on the brexit vote with you, and this widespread belief despite what the polls say, that the uk will not vote to leave on thursday. You know, we would say if it wasnt too diametrically opposed outcomes youre trying to price into the market we would have seen more volatility here bigger moves as things stand at the moment. There is a huge risk, this not, this thing surprises most people here and actually they do vote to leave, which is what the polls are now suggesting, there is a huge event risk there . Simon, theres certainly a huge event risk. P thats why youre seeing global yields at the levels were seeing at. The global yields are manifesting that concern that theres a possibility that happens. And the polls the momentum for the leave is certainly picked up over the last two weeks. So yeah, the markets are taking this seriously manifesting itself much more in global yields than currency markets than it is in equity markets. The u. S. Markets have been more resilient than Global Markets for sure. Why would you make a big bet stepping in front of that. The fed will not make a move in a june meeting. Not with standing a sloppy labor market in front of a brexit vote nor should investors. Once we look beyond that and say okay here we are, there is no plan b. If there is a leave vote this is going to take years, not days, to sort out and i think thats why were youre stepping back and seeing the global yields that were seeing. We move beyond the 23rd and entirely different ensflirmts okay. Quickly, simon, we can also talk about all these obscure global asset moves but also we havent tested this rally for a pullback in crude oil. Down 6 in four days. The stock market has gone down along that same track. So it might just be that at this point. At least to some degree softening up the stock market. Thank you both. Mike and art, joining us from wonder lick. When we come back, apple announcing new features. The big event impact. Martha stewart getting into the food delivery service. How she plans to compete in what is already arguably a crowded space. Youre watching squawk on the street on cnbc first in business worldwide. Network and. Its reliable uptime. And multilayered security. Its how you stay connected to each other and to your customers. With centurylink you get advanced technology solutions, including an industry leading Broadband Network, and cloud and hosting services all with dedicated, responsive support. With centurylink as your trusted technology partner, youre free to focus on growing your business. Centurylink. Your link to whats next. Apple making big system announcements at the Worldwide Development conference yesterday. Gave a rundown of enhancements to ios, tv and a lot more. Our own john fort joins us this morning from one market. John, good morning. Kind of got buried in linkedin but what should we be thinking about today . Carl, there was a ton of stuff. This is one of the most jam packed wwdcs that i can remember. I mean just starting off from the top watch os, the apple watch getting a complete software overhaul changing really fundamental things about the way the interface works, of course, well expect to see a new apple watch coming in the fall. They seem to be doing the shift that weve seen happen with the devices like the ipad before where they perhaps want to shift the release of a redesign device toward the holiday season. We also got a new look at mac os, used to be called ios, os 10, now shifting back to mac os. Sierra the new version, lots of things in that, including siri a part of it. Different ways to do messaging and voice control. Ios 10 now its not just a platform unto itself other platforms on top of it, imessage, able to download apps that work in imessage. Siri is open. Thats a platform. Now a home app for controlling some of those home kit compatible devices. Maps is now open so you will be able as an app developer to incorporate features into maps and the music which weve talked about quite a bit on squawk alley as well as squawk on the street, apple music got a design overhaul as well. They talk about the issue of Artificial Intelligence, differential privacy is apples approach making the argument that they can both keep your data secure and private, and learn from it over time. So that siri and other Artificial Intelligence initiatives will be able to compete with the likes of amazon, google and facebook. And then finally, apple tv, lots of changes there including single sign on so you wont have to log into each individual app to prove that you have a cable subscription on the back end. And new features and new services coming to apple tv including sling tv which should give some people the ability to watch something more like real live tv on the apple tv. So just a ton, carl. John, before we let you go, a lot of commentary on particularly siri and the opening up of the source code is whether or not apple is behind on Artificial Intelligence and now has room to accelerate the growth there and catch everybody else. Whats your analysis on that briefly if you would . Well, you know, its very hard to say whether apple is behind and how much. I mean anecdotically lots of people who use amazon echo, google and its services say siri is not as good. I have my own frustrations with siri. What does apple need to tweak to get siri up to snuff and better. Apple has very tightly vertically integrated product stack and what i mean when i say that, they control the chips, control the hardware design above the chip, the operating system and the Application Software plus they have a cloud on the back end. With that kind of tight integration its conreceivable they could accelerate their efforts faster than people think. We will have to see when the new devices come out and the services in action whether theyre catching up. For the moment thank you very much. Jon fortt joining us from san francisco. Up after the break well head to orlando for the latest on sundays night Club Shooting that left 49 people dead and 53 wounded in the attack. Republican senator ron johnson chairman of the Homeland Security committee will join us live on squawk on the street. The Investigation Continues into the Orlando Night Club massacre. Eamon joins us with the latest from orlando. Good morning. Yeah, good morning, sara. Our understanding of who this killer actually was, has shifted dramatically over the past 24 hours. You remember in the early hours after the shooting we heard from the killers father who said that one of the reasons for shooting up a Gay Night Club may have been the killers hatred of gays. He said he was offended when he saw two men kissing in miami. Now were seeing multiple reports from people who were themselves regulars at the Pulse Night Club, that omar mateen shot saturday night saying that he also was a regular at the night club, others who say that he was a regular user of gay dating apps as well. The Associated Press spoke with one man who was a regular at the Pulse Night Club who said in his view omar mateen was a homosexual and regularly at the club to pick up men. Heres how he described one spooky encounter of the club. I met him one time at the bar. He was talking to me about his exwife. My friends came out from the back and said, lets go take pictures in the patio. So i left and then they told me they didnt want me talking to him because they thought he was a strange person. Something about omar mateen gave the warning to people who were regulars at the club that there might have been something off about him. Well have to find out more details on what it is that people spotted from his behavior at the club. There are other reports he had been ejected from the club for bad behavior while he was there. So all of that shifts our picture of who he is, why he might have done this, and clearly when we heard from the fbi director yesterday, we heard a report about omar mateen pledged aleak ens or admiration of terrorist groups some of which are in competition with each other so its not clear what his only understanding was of the politics and relationships between all these terrorist groups he appeared to have allegiance to or affinity for. What we know is in one of the three calls to 911 during the shooting, omar mateen pledged his allegiance to isis and isis has taken credit. The orlando tragedy quickly becoming a centerpiece of the 2016 election. Hillary clinton renewing calls for gun control reforms. Donald trump reiterating his calls for muslim ban and combatting islamic terrorists. Joining us to discuss all of it is Wisconsin Republican senator ron johnson, the chair of the Homeland Security and Governmental Affairs committee. Good morning, senator. Thanks for joining us. Good morning, sara. So clearly theres still some questions that need to be answered about the motive here, but talk about what you can do from gun control to fighting isis, what you, senator, can do on capitol hill, to fight back against this . Well, i think domestically the most important thing we do is engage in positive engagement with muslim communities. Its extremely important that immigrants to this country, whether muslim or hispanic or any new immigrant to this country, assimilates, integrates into our society, accepts our form of government, our values, and, you know, not leaving their heritage behind but really coming here and assimilating as americans. Its probably the number one thing we can do so we reduce alienation and hopefully reduce the possibility of selfradicalization. Thats what we can do domestically i think thats a positive approach and something we can agree on. Internationally we have to actually accomplish the goal that president obama state 22 months ago, and that is to defeat isis. As long as isis exists that territory, that caliphate they will be perceived as winners, continue to inspire this type of activity. And again we dont know the full motivations of this terrorist, but we do know that other acts of terrorism has been inspired and directed by isis and we have to defeat them. How can you do that through new legislation . Can you authorize military force, talking about increasing funds that would go towards fighting isis . We need a commander in chief that fully commits himself to the destruction and defeat of isis. You know, the analogy im using, lets say you have a hornetses nest in your backyard. You can poke it with a stick and do damage to the hive but youre stirring them up, you need to take out the hive. What is frustrating over the last 22 months president obama states the goal but doesnt lay out the strategy. He doesnt show the level of leadership america must to assemble that committed coalition of the willing to defeat isis. Im not saying its an easy task. Its difficult if america leads too much everybody sits back and doesnt contribute, but if we dont lead enough they dont get into the fight either and thats a position were in right now. I dont think were leading enough. We dont have a strategy to actually defeat isis and we need one. Senator, we do want to take a quick listen to speaker ryan whos addressing the media right now. Really quickly. Lets listen . Dealing with the terrorist threat, dealing with homegrown jihad, dealing with homegrown terrorists were going to be moving those bills again to try to get them over the finish line. I would argue on the immigration front, we did pass into law patching the loophole of the visa waiver program. So weve already addressed one critical component of that. Weve also passed a refugee bill because we want to make sure we have a security test. So that we know who is coming into this country and that we have properly vetted that person based upon the Security Threat that they may or may not pose to this country and that is what weve passed. Also out of the house that bill is sitting over in the senate being filibustered by the democrats. So we believe that we should have a robust security test to make sure that Law Enforcement gets the tools that they need so that we actually do control who comes and goes in this country. As far as the Muslim Community you mentioned, i think theres an important distinction that every american needs to keep in mind. This is a war with radical islam, not a war with islam. Muslims are our partners. The vast, vast majority of muslims in this country and around the world are moderate, peaceful, tolerant. And so theyre among our best allies among our best resources in this fight against radical islamic terrorism. So i think its very important that we hone that distinction and honer that distinction and remember were all in this together. You know, were not lbgt americans, republican americans, muslimamericans, were americans. As americans we need to up our game to deal with and confront this real threat. We dont think the administration has done a good enough job confronting this threat. We think more needs to be done. Thats one of the reasons we put out a 67point plan last thursday to deal with the terrorist threat, to deal with our national security, to deal with homegrown sdwree had, to deal with homegrown terrorists and all of these issues including immigration, Foreign Policy and the rest. That is what we want to offer the country a better way to fix these problems and prevent this from getting out of control. Speaker ryan, talking about radical islam to the media. Senator, i would love your reaction to that and then i would love to get your take on what jeh johnson said on one of the morning shows that gun control in his words is part and parcel of Homeland Security and there have to be ways to limit a terrorists opportunities of buying a gun legally in this country. Well, first of all, what i heard of speaker ryan he was right on point. We are all americans, were in this thing together and really, you know, making sure that we have full assimilation, integration of every immigrant population in this country is extremely important. We also need to prioritize spending. Understand that the First Priority of government is defense of the nation and defense of our homeland and thats what republicans are trying to do or find those areas of agreement. Listen, im willing to take a look at any proposal that solves the problem. For example, you know, republicans in the senate voted to deny firearms to people on the terror watch list if they are given due process. The problem with terror watch lists is its a very difficult issue to deal with in terms of whos on the watch list. People dont have due process. We have to maintain our constitutional rights. Islamic terror has already eroded our freedoms. Take a look at t tasa how difficult to get on a airplane because of islamic terrorism. Lets not selfinflict further reductions in our freedom. Work with us. Republicans in the senate voted to deny access to firearms to people on the terror watch list, only with due process, thats a very reasonable approach it preserves our freedoms. Senator, changing the subject slightly, there is a huge amount of pain in the Lbgt Community which may turn into anger over the coming days. And i wondered what your advice would be to those people who would like to seek change and perhaps shift something in the wake of what happened on sunday. You know how this Society Works what the institutions are. What is their best bet in your view. Well, this is a moment much grieving, of coming together and uniting as americans, understanding what the threat is. Its islamic terrorism. Speaker ryan was very right there. Unfortunately islamic terrorism is at war with the civilized war. We didnt declare war. They declared war on us. We have to recognize the reality only way you end a war is by defeating the other side or both sides lay down their arms. Islamic terrorists are not laying down their arms and i dont like that ralty. I wish we werent dealing with this but we have to. So thats the basic facts. Lets put the blame where it really should be placed and thats on islamic terrorists. Lets not be pointing fingers. Lets come together as americans and address that threat. Senator, thank you for joining us today. To discuss your opinions on this issues. Ron johnson the chair of the Homeland Security and Governmental Affairs committee, senator from wisconsin. Coming up on the program a big name in medical devices ceo of medtronic will join us as policymakers and ceos meet to discuss the issues facing the health care industry. Good morning, everyone. Im sue herera. Your cnbc news update at this hour. A french Prosecutor Says the man who killed two Police Officers in a nighttime attack in a paris suburb recorded a 12minute video of the attack claimed allegiance to the Islamic State and posted it on facebook. He has been identified as 25yearold larosi aball la. The u. S. And China Holding Cyber Security talks in beijing to try to advance cooperation in an area that has drawn tensions in the past. Deputy Homeland Security secretary Susan Spalding and ambassador to china max baucus heading up the u. S. Delegation. Day two of the sentencing hearing for oscar pesser to jus. The father of Reeva Steenkamp gave an emotional testimony saying her Fatal Shooting devastated his family. A judge will decide his sentencing this week. The eiffel tower lit up last night to honor the victim of the mass shooting at an Orlando Night Club that left 49 people dead. French president hollande condemned the mass killings as an attack on freedom. And that is the news update this hour. Simon, back to you. Thank you very much, sue. Meantime it is, of course, day one of the twoday fed meeting. Steve liesman joins us with exclusive results from the cnbc fed survey. Good morning, steve. Good morning. We have reported that the cnbc fed survey sees a later date for the fed to hike rates from august to september and along with that what i want to show you now is that comes along with a rosier outlook for stocks. You can see here, were looking for a close of this year of 21. 49, 3. 4 . Its better than going down as we thought was happening earlier and prior surveys and then 2244. And what that is, 3. 4 for 2016 left to go and call it about 8 for 2017 between now and the close of 207. 9 to the end of 2017, 8 . You have to figure out whether or not thats worth the risk. Look whats happened to bond yields they came down with the concern about markets and the economy in january and february. And they have stayed down looking for a 2. 1 yearend 10year yield. Just want to show you here while this went down for stocks and came back up to at least where it was before the concerns, yields came down and never came back up. Lets move on and take a look at the outlook for rates as you see here. The panel of 41 economists Fund Managers and analysts look for a 0. 7 yearend rate, 1. 5 , 2. 2 on the funds rate and 2. 6 for the long run and they remain still below the fed. We will get new outlooks for tomorrow from the Federal Reserve and well see if they come back down towards the market. The market has. Whipping that. Heres some of the commentary we have here. Jim bianco, maybe we dont have the commentary here. The Biggest Issue of the year is brexit. If leave does prevail its a game changer would mark the beginning of the end of the eu, euro and a dangerous rise in protectionist policies. Sara, well have that tomorrow for you. The statement from the Federal Reserve. Steve, thank you very much for bringing us those results. Lets get over to the cme group. Rick santelli has the santelli exchange. Thank you. I would like to welcome our guest former fed governor mark olson thanks for taking the time first of a twoday fed meeting. Thank you, rick. Happy to be here. All right. Lets start out generically and get our chips on the board. What are your thoughts on negative rates in general specifically to the notion its a possibility in the u. S. . Negative rates are a real possibility and i think its a real concern. Thats an environment where weve almost never been, and i think particularly with respect to monetary policy, it would cause some real issues because were not sure how the tools would work in that sort of environment and we clearly remember in particular, the japanese experience, but were also watching in europe where this is taking place and i think thats a great concern. And the chart that steve showed us about the longterm rates going down, i think it means there will be some foes cuss on that issue. All right. Now next has the window for normalization code for a rate hike closed as we begin the first day of these twoday fed meeting . Well, rick, you made an interesting point. Normalization is a word that youre not hearing very often right now, so i think normalization, which is what you and i have been talking about for a while of reducing the Balance Sheet size, probably isnt a high concern but as the window closed, no. I think that if you look over all at the economy, 2. 5 million more jobs, thats 200,000 a month, over the past year, the natural rate of inflation, were pretty close to reaching but not seeing any inflationary pressure. I suspect there will be, we will start seeing the rates come up but i doubt it will be this time. I suspect it will be july. Do you think in the statement or the press conference that janet yellen will talk to the point of what a negative Interest Rate environment would be like in the u. S. , what their thoughts are as a group, the fomc committee or the notion that qe is a better alternative. Are we going to see discussion of any sort of plan b in your opinion and if not, should we . Taking them in some sequence, i think if the chair talks about negative Interest Rates it will be in response to a question as opposed to not being part of a statement and shes very good in question and answer environment and i suspect she will address it in that respect. I doubt very much if well see any additional quantitative easing going in or even a firm plan b. I think were still on a slow track of raising rates which was consistent with what weve seen in the minutes following the last two meetings and theres no reason why looking at the underpinnings of the overall economy, why there should be anything other than that direction. The last half minute were almost out of time, mark, do you have any thoughts on brexit, both in the micro or the macro, is it a good thing in your opinion for the uk, and is the fed paying too much or too little attention to it . Well i think it is very unsettling and so for that reason, markets respond to risk but they dont respond very well to uncertainty. Its the urn certainty of the vote that i think is the markets are reacting to now. The fed would be well advised to postpone a rate hike another six weeks. Excellent. Thank you so much for your opinions today, mark, and, of course well know a whole lot more in about 30 hours from now. We sure will. Carl, back to you . Thank you very much. When we come back our exclusive interview with Martha Stewart. Her company sequential generating 4 billion in retail sales getting into the food delivery service. Well find out why when squawk on the street comes back. Using 60,000 points from my chase ink card i bought all the framework. Wire. And plants needed to give my shop. A face. No one will forget. See what the power of points can do for your business. Learn more at chase. Com ink see what the power of points can do for your business. When a moment turns romantic why pause to take a pill . Or stop to find a bathroom . Cialis for daily use is approved to treat both erectile dysfunction and the urinary symptoms of bph, like needing to go frequently, day or night. Tell your doctor about all your medical conditions and medicines, and ask if your heart is healthy enough for sex. Do not take cialis if you take nitrates for chest pain, or adempas for pulmonary hypertension, as it may cause an unsafe drop in blood pressure. 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All ten sectors in the s p lower financial sticking out as the worst performing sector down more than half a percent, almost three quarters at this point. Lagging the most in the s p 500. Among the stocks weighing on the sector overall check out names like sin crieny and capital one and American Express and discover. Look at some of the etfs that track banks like the kbe, those tickers they are near the lows of the day pacing for their fourth consecutive negative day. Financials lost about 5 or so, so far this year, 9 over the past year. Back over to you guys. Tough times for banks. Dom, thank you. Martha stewart announcing shes teaming up with marley spoon to develop recipes and send them along with premeasured ingredients to your doorstep. Courtney regan joins us now with a special guest. Courtney, take it away. Good morning to you. I am here with Martha Stewart on the day when the new partnership has been announced and this is the First Partnership or new service under sequential bra nz for you and your company. Whats the expected payoff . Its very exciting this is a New Territory which i think is going to overtake the way we now prepare food for our family in our homes. Right now, we go to the supermarket and we shop, we shop weekly, biweekly, whatever, stock up our refrigerators with lots of ingredients and theres at the end of the week, theres a lot of waste, a lot of spoiled food, stuff you didnt use, went out to dinner instead of cooking and were here to change and help change the habits of americans who like to cook at home. So were making wonderful kits. Martha marley spoon delivers a box like this, three meals, for two people each, and you open up the box and it gives you instructions, chill upon arrival, fragile things inside. There is your three recipes right here, these beautiful recipe cards, and you can prepare for approximately 9. 50, 9. 80 a person a meal that is nutritious, colorful, seasonal, and easy to make with about 30 minutes. Theres no waste. No shopping. You can spend quality time with your family, your loved ones, whatever, and you serve them really nice food and you learn at the same time. Because these recipes are tested, they are very, very well prepared. The packaging is so simple. Here were doing a shrimp tortilla soup. Beautiful shrimp, corn, torti a tortilla, the chicken stock, one onion instead of a three pound bag of onions you buy because you think youre saving money and then they go to waste. Sure. One onion, two garlic cloves and fresh cilantro. Its all here. Such a good thing. Do you think that youre going to be capturing a new martha fan, millennial, perhaps someone that isnt familiar with your cookbooks or your martha bake show is. I think the millennials are getting familiar with our cookbooks. Weve been doing a column in our magazine called quick cook since we started the magazine. Quick cook is really and truly just like Martha Marley spoon. Because youre making something delicious, colorful, maybe ethnic, maybe a new taste that you havent tried before, and its all right here in this box. A simple package that you open, refrigerate right away and cook. This shrimp tortilla soup is a case in point, one of the many, many wonderful offerings. What you do is order last week for this week, and marley spoon and martha also have a wonderful cost saving because we know the week before what were going to send out next week. So we dont have to spend money buying a whole lot of chicken hoping that somebody orders chicken. We know exactly how many chicken dinners were going to be delivering next week. No waste for marley spoon. We are making friends with the best purveyors, the be best farmers, best suppliers all over the country developing delivering now nationwide. Is there what sets marley spoon apart from plate it or the other Meal Kit Delivery services. We tested all of them before we approached marley spoon and talked to the ceo to we tried them all to see who really was adopting this new technology in the very best way. And hands down it was marley spoon. The recipes are delicious. Thats our first, you know, Quality Control is deliciousness. And the way it was packaged, so little waste in this cardboard box. Things can be recycled, the box can be recycled. We care a lot about that. And so it was not that the others are bad, theyre all performing extremely nicely in this new and innovative and pioneering way of making food. I think sara has a question. Martha, good morning, its sara in new york. I wanted to ask you, about a topic that is on every Business Leader like yours, mine these days, and that is the election. You had crossed paths with donald trump back in the apprentice days and im curious what you think of his candidacy and hes resonating with so Many Americans . I really want to send donald Martha Marley spoon boxes. I think he would benefit nicely from eating this healthy food instead of his big tortilla salads that he says he gets in his building. You know, its hard to comment now. I just think our choice is open. We have a very good candidate running for president who has experience and the the kind of common good that we really need in that seat in the white house. So youre saying youre a hillary supporterer . I am. Thank you. If we can talk about a little bit more about marthas bigger brand, of course. Thats like a like a curveball in the middle of our new business. Well, youre a very powerful voice and so, of course, we want to hear your opinion on lots of things both your business as well as the broader economy and landscape and speaking of your business more and the landscape, and speaking of your business more broadly, and martha is in macys, and home depot, and so are you experiencing a rough patch with any of the retailers . Well, at home depot, the stockt is a new high, and they are doing extremely well, and macys has seen some problems in the retail landscape, but i think that our products are doingle well in that in the landscape and more in the fashion area to get some difficultiesk u, but i think that this is a solution, because we have to look at solutions everywhere of how we are going to actually live and be. We are going up against the Grocery Stores with this food service, because the Grocery Store is a 900 billion industry, and there is in the Fresh Department of the all of the Grocery Stores and depending upon the category 30 waste probl problem, because look at all of the the lettuces, because somebody has to come in to buy those lettuces, and here, you will order the dinner and get that lettuce, and we know how much lettuce we need to send out, so it is taking on the Grocery Store. You will have at love the staples delivered by delivery services, and ecommerce, and you dont have to oshop for the sugar and the flour in your cub boards, but for the fresh unders, this is a great solution. And try it out. I want you to try it right away, and i know that you like to cook, and this is going to be something surprising and wonderful for you. Sounds great, because i need more lessons for sure. I will try it out. Thank you, Martha Stewart joining with us your new partnership with marley spoon. And now, Health Care Ceos are meeting to discuss the gross pricing and other challenges facing the health care industry, and meg tirrell is at the conference and she is joining us. Im joined by the ceo of medtronics, and thank you for joining us. Thank you. And i want to stop and ask you about one of the biggest transitions is buying ocovidian, and there was an article talking about the companies inverted and despite the u. S. Targeting the inversions with pfizer and allergan, there are not many examples of the companies that have inverted and i wanted to ask you about that, and any kind of pushback having inverted and moving your tax base overe seas . Well, there are regulations that we are completely compliant with, and i want to draw yourt attention to the fact that the reason that we did the transaction is because of the operational benefits, and they are coming true in terms of the revenue that we have been able to preserve and the synergys that are creating value for overall company, and reaching more patients around the world, and sure, a tax inversion in the structure, because we felt that it was the most optimum structure, but the main focus at this stage is making sure that the operating business that we paid money for actually delivers the results that visits and as the regulations comes up, we are compliant with them, and the major benefit here by far is the operating synergys, and the cost and the revenue and reaching more patients. I want to ask you more about that, because the folks across health inindustry wanting to see the tax reform, and what this is the expectation with that and the outcome of the president ial election will be for the business . Well, it is still very imu pornt for us, and important for us, because we have still a lot of the e entities under the u. S. Tax regime preinversion, so it is a very important element for us, and something a that we encourage to move quickly through. In terms of the election and so on, and look, at the end of the day, what we are focused on is improving the outcomes of the lower cost, and everybody agrees with that and i think that will there is a general consensus in a move towards the valuebased health care across all of the political cycles, and so as long as we are focused on that, which i think that we are, and it is more on the details of what we do rather than who is runninging the country at this point, because nobody is going to be improving the levels os of outcome. And i want to ask you about the pipeline and the new products here, and this is a pacemaker and people are will be surprised to know that this is a pacemaker, and tell us about this product, and what you are expecting for growth from this which i understand is the smallest pacemaker ever made . Yes, ever made. And the pacemaker by way of reference is bigger than that, but this is indeed the smallest one, and the more importantly with the pacemaker is that it does have not a lead associated with it, and the complete function is incorporated win that small device to attach within the heart wall itself, and so it is a revolutionary produ product. It will enable the patient to be provided to patients who otherwise would not be able to tolerate it. We think that the long term safety profile is going be better, and so, it is something thats in the starting phase of pacemakers and from there on, you know, there is multiple innovations beyond this, and making i it more sophisticated. It is interesting because the pace make maerer was invented by the found er of medtronic back in the 1950s, and this specific technology which was in its infancy 60 years ago, and yet today, we are talking about the new berth of innovation through further versions off this product. So we are in the starting point, and we will see huge growth for this device over time, and over a long time, and maybe decades, and eventually move from not only pacing, but doing cardiac revital alization whiization wh technology. And so if somebody needs a pacemaker now, is a doctor comfortable with a pacemaker that doesnt have leads and is not so common . Well, you need fda approval, and that is going to ensure the safety and efficacy of the product, and you will get reimbursement for it and then you doctors who are aware of it and trained to deploy it. We do all of of those things. We work with the fda for approval and conduct the Clinical Trials to make sure that the product has the results that we think it should, and we work with the reimbursement agencies to make sure that the treatment is funded appropriate ly, and train the doctors and make them aware, and train the doctors as not only how the deploy, but who to deploy it on, and the certain patient selection that has to the happen, and we go through the process as well. Well, we have to leave it there. Thank you very much. Simon and the gang, back over to you. Well, thank you, meg. It looks like the losses are picking up steam, and the dow is down 108, and squawk alley is next. Experience the thrill of the lexus gs f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. Jake reese, day to feel alive jake reese, day to feel alive jake reese, day to feel alive its how you stay connected. 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