Transcripts For CNBC Squawk On The Street 20160711

Near the all time high as the start of earnings season i can cans off. Alcoa tonight. Twitter will live stream the republican and Democratic National conventions. This on the day that the stock gets a downgrade from sun trust. You will look here at a live shot of the microsoft worldwide partner conference where they Just Announced a partnership with general electric. Well talk to Satya Nadella and jeff immelt later on. After fridays job report rally the s p beginning the week within a point of the alltime closing high five points from the intraday high. We head into the unofficial start of earnings season. Alcoa set to report. What a day to come back. Tgs rejuvenating. Take a week off. Im thrilled for the opportunity. Thank you, cnbc. Italy, amazing. You have a full week off. Okay. It was hard. You know. Without you. It was hard. Dont do it again. It was frustrating not to check in. Didnt check in. I will say this. Fridays rally, felt like what the market used to be like when we made new highs. It was led by j j, 3m. The laggards came up. Biotech. Even the banks for heavens sake with Interest Rates down after momentarily spiking. The banks set up so low ahead of earnings this week. You may have something going here. When i see a Union Pacific breakout they arent doing that well. When i see the overall tenor of a lot of big cap stocks going up, kimberly goes up, clorox, a new high. The utilities didnt even synch. It has a better one. Everybody else, the noises drown out. My big worry is boeing may not have a lot of orders. They said it was pretty much in line. Thats the only area im concerned about. That doesnt matter. Alcoa will talk and aero space is key for them. Are you looking for what jim paulson calls a breakout in optimism after the brexit loss is reversed and the jobs. The earnings recession could end this quarter. I dont know where that comes from other than perhaps the dollar not being as strong. I think what happened is if you go back we had redemption monday. It was right after brexit. It was the final exhaust. Everybody wanted to get out and has gotten out. It was one of the ten worst days for redemptions ever. That was the signal that, okay, who else could throw in the towel . Yet there are Interest Rates, the tenyear is going by procter. Thats one of the keys thus far. Brexit is low Interest Rates for everyone forever. Yeah. According to the latest statistics we have 14 trillion at negative Interest Rates. Thats bonds. Obviously you have the entire swiss complex. Most of germany, japan in negative rate territory. Also corporates. I noted disney sold the tenyear bond at 148. My point is on the stock market how in the world, 1. 48. Alexander hamilton working . Thats crazy. Disney borrowed money at 3 for 30 years. The mouse. Founding father of disney. Donald duck was the third signer of the declaration. Clearly that was the case. I dont know where disney will be in 30 years but people are happy to get 3 a year that they will be here. I guess espn wont cause a revolution. It wont be like the south succeeding. Apparently not. I dont know if there is a link in the future. What does that make a Utility Company . Whats duke . Dominion. These are sovereign states, too. This is nuts. The yield will continue. I guess my point is how much of this is a function of where am i going to put money when so much is negative yielding or disney can borrow 148 over ten years. I have to put it in the stock market. What was i doing losing money for clients. Is anybody paid to run money over there and lose money . Im down less than everybody. If youre a bond fund, what am i supposed to do when you want to reinvest. You hedge the currency. Or buy white way for a huge price. Well talk about that. We mentioned you that day. We said somebody would like the deal. Really . Sp. Yes. I have to tell my daughter. David asks a lot of questions about price. Today the post argues pepsi was interested but balked at price. Yeah. We did have it that day. The cfo indicated pepsi isnt interested in pursuing large deals. They got a good price but others believed General Mills would have been interested or might be. I cannot say they are. General mills didnt have a good yogurt quarter. That was the only spot in the whole Conference Call i read at midnight when my daughter was asleep. The only spot disappointing. For General Mills which is also at a high multiple. David the entire group. Wow. Its the only company with double digit growth in the area. Exactly. When i look at the number for clorox, at the p. E. , it reminds me of microsoft in 2000. You have incredible p. E. S but, look, they have aaa Balance Sheets for the most part, a lot of them do. Look at clorox. Its a 1 growth at 38. Things are upside down. I know it shouldnt be as it is. But at the same time if you listen to programming at 10 30 on friday after brexit, that friday. You shorted clorox. You thought it was the end of the world. You shorted a bond at a wbad price. Are we exiting the market for an alcoa market . Thats tough. Starting to deal with real earnings. You have the Commodity Prices are up all last week. Howss it looking these days . Put down a hundred thousand euros. They dont make mortgages. The rest is done on a cash basis. You go to the oldest bank in the world. Im just shopping for a bank. Bank shopping over there. We have mentioned it more in the past week than in a long time. Could be a bail out, bad bank, good bank. That bank in sienna is gorgeous. Yes. Somehow italy is able to borrow 1. 221 over ten years. I remember there was 7 rnt and you talked about a possible failed auction. By the way, do you remember corzine, what he did there . He was right. That was the right time to buy those. He didnt realize the leverage part on the balance sheet. The actual bet at that point, what was a play. Didnt work out. Might be playing poke mon go now. We dont know. Meanwhile, microsoft and ge announced a Cloud Partnership today. John ford is live from toronto. Hes got a busy morning. Hey. Hey carl. Its a big deal for microsoft in particular. What ge is announcing here at microsofts Conference Today is that predix, their software for the industrial internet will run on microsofts cloud. Thats not exclusive. It was already available on amazons cloud and or ra on ora cloud. Now microsoft has the opportunity to use that to build up their overall enterprise adoption of the cloud. From ges perspective, predix is the center piece of the strategy which yields 5 billion in revenue last year. The digital strategy. They are expecting by 2020 it could yield 15 billion in revenue from ge digital. This is important to them. Microsoft wants to work with ge not just to bring predix but to build in hooks to office 365, dynamics, cortana, microsofts other cloud offerings so the Industrial Partners ge works with on this digital project go over to spend more money on microsofts cloud. I will sit down with satya and jeff in an hour. Dig into those and other important issues. From whats happening overseas. The macro environment, ge capital no longer designated as systemically important financial institution. Lots of changes. They have opinions on globalization. The challenges businesses face throughout the year. It should be an interesting conversation. For sure. See you in a bit. It comes a few days after ge set multi year highs. Its important to note even though boeing may not have a big book to build you have to recognize the air show that orders may not be skyrocketing. The backlog is big. Thats important for ge with a huge backlog number. Predix is basically a system that says you are about to break down before you break down. This is the industrialization digital which is not just words. No. Its connecting industrial machines to the internet through the cloud. Thats basically what we are talking about here. What did you do . Looked at the quote in the press release. By the way, you can read the first three paragraphs if you are a layman without any understanding as to what they are talking about. Thank you for a clear quote in there for people like myself who have only a keen sense of the obvious. It begs the question who may have been in a position to get this business from ge creating industrial machines and the ability for them to connect to the cloud. You would think ibm or others would be interested in being in the position microsoft cleary is now in. This imperva is for sale. Ibm has to say, listen, well stake out cyber security. There has to be something ibm does that says, listen, we are back. They want to say they are back but their stock says they are not back. People were unsure about linked in, including bob peck who talks about twitter going out at 2021 if you use linked in valuations and takes it from a buy to a hold. A shrewd move. Highly unlikely. Seeing a deal this year. Well talk this morning. Hes a downer. You also downgraded yahoo i saw that. He wants to make made me unhappy. Did he . They were two things i want to talk about. We can. He had interesting points. He took the mind share. He has it. Now that jim is back well get his take on the white wave deal. Take a look at the premarket. All time intraday high. We are not far away. More squawk on the street in a minute. And can you explain to me why you recommend synthetic over cedar . Super food . Is that a real thing . Its a great school, but is it the right the one for her . Is this really any better than the one you got last year . If we consolidate suppliers whats the savings there . So should we go with the 467 hoepower . Or is a 423 enough . So should we go with thegood question. You ask a lot of good questions. I think we should move you to our new fund. Ok. Sure. But aryou asking enough about how your wealth managed . Wealth management, at charles schwab. Denon erkdanone is an extr partner for us. Both of our companies have an aligned vision that the consumers will increasingly seek healthier, more Natural Organic options that are more sustainable for people, for the planet. We both have aligned our companies and portfolios against the vision of the consumer. Whitewaves greg ingalls along with Emmanuel Faber after danone agreed to acquire whitewave for about 10 billion in cash. We have talked about the name. Its one of your favorites. We have known it might be a takeover candidate. A year passed since it could get out of spinoff jail in terms of the tax ramifications of a deal after it was spun. Here is the deal and the stock. Still slightly. In fact, its one penny above where the bid is. There continues to be at least some belief. Although relatively small that you could get an overbid. A 300 million break fee. A buck 75 a share. Do you think there could be a potential buyer . Lets x off pepsi, give them what we heard on thursday. In this sector, mondolese isnt done with hershey. If they are, they should look at this. Now, candidly as i said when we talked about why we have over many months, its expensive. Its got debt. It is expensive. A lot of firms had sells on it at one point. To find double digit growth in an area where many people from my era do not understand the power of soy milk, almond milk. Plantbased foods will be the biggest thing in china because they cant afford if you hired a banker and hershey says no. Hershey said no already. You may be right. We may hear something. Dont expect to hear anything this week. I dont know what theyre doing. Its been a couple of weeks. What about General Mills . General miller should do it. Really . Also you run the risk of getting in a fight with danone. That doesnt mean theyll back down. Look, this is the area where i think General Mills, if you look, did it tip this quarter in to be more natural and organic when they lose green giant and do more with some of the bars. They have a couple of nutritious bars and they have obviously got annies. This tips it so General Mills is the first natural and organic, major old line food company. Do you think the choices are getting limited, running out of ideas . They dont want to sell but everything at a price. He has to be a seller at some price. The stock was up 10 on the day of the white wave deal. Stocks were trading down with whole foods. The kroger of the world went natural and organic. Not to get sidetracked but the sector is good. When you see walmart, you go in. I remember going to walmart six years ago. I said i would like to buy rice cakes and they sent me to trice krispy cake aisle. Fresh as the day it was canned. Walmart, costco. They are all natural and organic. Cereal had its first growth quarter in years. But thats because even cereal got a little bit more natural and organic. General mills took out the artificial coloring out of trix. And the High Fructose Corn Syrup out of things, too. Kelloggs has a cereal restaurant in new york city. Changing times. There is only one kind of granola worth eating. What kind . You tell me. The kind your wife makes come on, man. Dont screw it up. My wife doesnt watch. Im fine. When we come back, well count down to the opening bell. Also, Satya Nadella of microsoft and jeff immelt on the partnership in the cloud. Another look at the premarket. On twitter today. Lowering to our 18 dollar target. M a not likely in 2016. Why . He thinks its inevitable. Jacks first year, not good enough. But estimates are reasonable. Not overly conservative. They cant do it. He says Second Quarter growth is challenged. New products. Yet to reignite user growth. Engagement from the new users appears lower kreelting a slight drag. Says it will be taken out wu not this year. Ever since linked in. 32 times. 56 cent estimate for the year. The rally is based on linked in thinking that the last property out there is twitter. It probably is. At the same time and microsoft stock isnt down since they bought linkedin. I am more positive than peck. I think this idea that because it is jacks first year and they wont sell. That resonates with me. The stock is up really on takeover chatter. Right. It does feel like we got more to come in technology. O david, a lot of the Companies Involved with apple parts could see consolidation. Watch nvidia, this is graphics. If i dont mention nintendo go im an idiot. Apparently. Have you kids found it . No. They are both away without devices, thankfully. They are in device prison. No, they are not. Theyre very happy. Doing kid things. Did you ever hear of that . No. Not walking in traffic with the phone in front of you. We were in the colosseum looking for things. People are hurting themselves with the pokemon thing. To heck with this. We have the opening bell coming up after this. Welcome to opportunitys knocking, where selfproclaimed financial superstars pitcyou investment opportunities. Ve got a fanstic deal for you gold with the right pool of investors, theres a lot of money to be made. But first, investors must ask the right questions and use the smartcheck challenge to make the right decisions. Yore not even restered; im done with you i can. I can. Savvy investors chk their financial pros background by visiting smartcheck. Gov in new york state, we believe tomorrow starts today. All across the state, the economy is growing, with creative new business incentives, the lowest taxes in decades, and new infrastructure for a new generation attracting the talent and companies of tomorrow. Like in rochester, with worldclass botox. And in buffalo, where medicine meets the fure. Let us help grow your companys tomorrow today at businesny. Gov the opening bell brought to you by powershares. Leading the revolution. You are watching cnbc. Live from the Financial Capital of the world. The opening bell in 60 seconds as we kick off a busy week. We look to open above the s ps all time closing high. We have earnings season beginning tonight. There will be fed speak all over the place and more data. Cpi and ppi later in the week. The more we hear that the more you hear the chatter after the great employment number. Will the chatter be overwhelming . I think what will happen is if we wow, i have to tell you. If we hear more stabilization there, well pick them up. Especially if london cuts, we could take it up. Its above the highest level its been post brexit. The u. S. Markets made up for the losses late last week. Lets get the opening bell. S p at the bottom of the screen. At the big board it is spo logistics being named the Fastest Growing company in the fortune 500. Over the nasdaq consumer products. Helen of troy doing the honors. Brad jacobs has been on mad money. It is a rollup of trucking and logistics. Its taking down a lot of debt. It didnt work for a long time. People are fired up now about it. S p, 213431 is half a point away from the all time intraday high. You want to get the. 72. We are essentially right there. Well see if we make it official in a few minutes. Its been a long time. May 20 of last summer. Go back toen ja. Go back to the first week of february. Lets forget about sell in may. January, election year. All of that stuff was soporific pablum. Pablum apparently. There are a number of months left in the year. Bring me up short my first day back. Well see how we conclude. We have an election coming. Donald trump is soliciting ideas over the weekend. Twitter this morning as we talked about. Got a live stream. I have a secret plan to take over the world. You are referring to a tweet the other day saying working on top secret tesla master plan part two. Hoping to public later this week. What does that mean . Take the stock to 220. Hes got a master secret plan you dont tell anybody. Thats the whole idea. Its got to be secret. That was pretwitter which, by the way, is done. Stick a fork in it. You dont tweet about the secret plan. Do you think they will find out who trumps running mate is from the real donald trump . How is that not worth more . Well, because twitter isnt run well. I dont know. These things are being done on twitter. It is a Communications Tool unparalleled in a lot of ways. Doesnt seem to add a lot of new users. Like oxygen. Just because you breathe it doesnt mean its a good stock. Right . 2137, jim. If i told you the night of brexit wed be here in essentially two weeks would you have believed me . No. I got off the plane at 3 00 a. M. The market was looking down 500 points. A lot of people came on air not just on tv but in print and said, look, this is kind of the western world, the beginning of the unraveling. We found out, dont forget. The uk has done better than the e. U. Over the past few years. Its important for people to recognize that we are now seeing the blowback resonating positively in the united states. You cant keep your money there. Thats the thing. You have to get your money out. This is not necessarily a reflection of expectations that earnings will improve or the market multiple will have a decline. There is nowhere else to put your money. You have to put it in equities. You cant find a debt instrument to do anything in terms of a return. You have to put it here. Over there its too uncertain. Until the world starts growing you have to be here. There is no choice, if you are a fiduciary. You cant put it in the dutch tenyear. How many years since apparently 499 years. Or its never been negative. Its been around for almost 500 years. Tulips . Never had a negative until today. When tulips went negative. The dutch ten year. They switched. Correct. That was the guilder. Those were the days. They were in business back then. Im sure they may have been the first to issue a tenyear brond. They were killer traders. Great. Also helping matters overnight, asia, japan, abes party, landslide victory. Raises the prospect of additional stimulus there. They finally got a win on the yen after several days of losing the battle. Also, china had lower inflation. Maybe china can do something. The stars are aligned for shorts to cover. I didnt say the stars are aligned for earnings. Starts are aligned for shorts to cover. They are so afraid of what happens later this week when jpmorgan reports and jamie diamond says this is the greatest time ever. He fills the letter with why it is a great time to be an american. You are short jpmorgan. Do you want to be short when jamie diamond says how fabulous things are or do you think they will say things arent that great . I dont think they will say things are fabulous. I havent when was the last time he said that . Thats not a word he uses. I dont think hell throw cold water on the rally. No, no. The stock is all the way down. Remember the last time we thought oil was 35 going to 26. We were worried about the criticized loons. Oil at 45. If oil goes to 50 you will only be thinking, wow, they have reserves. Maybe they dont need them. None of the banks had a good year. Ones that are focused on the Capital Markets. Fixed income is an issue to a certain extent. They are doing terribly. Ipos are relatively sparse. The stocks are set up for them doing terribly. I wonder whether not unlike the Pacific Crest piece about apple which says apple will be every bit as bad as you think. Thats good. Right. You know . Yeah. But jpmorgan is down so much less than the other big names. Little less than 5 . Bac is down 20 . And wasnt able to buy back as much stock. Goldman sachs down. Discount to book is extraordinary. As predicted the return on equity wouldnt come back. One thing i would say is wells kept a lot of power. They didnt announce a new buy back and they have a problem. If they do well, Warren Buffett needs an exception from the government to go over the 10 rule. Meanwhile they will watch the window of new issues. Later in the week line will be the biggest tech debut of the year. Cbs radio we havent mentioned yet. They have a lot of revenues cbs revenue. A lot of revenues. Yeah. Well see. They could still sell it if somebody showed up and wanted to buy it. They will pursue is spend route. Im sorry. I heart radio. These are challenging times. Struggling. Whats not challenging is twilio, my favorite ipo of the year and its not done. Because it did so well . No. They have a piece of air bnb and they are involved with whats app. Uber. Uber uber. Can you elaborate . He laughs. They have a model that actually if the companies grow, they grow. What a great model. It is a good model. First time he agreed with me. You noticed everything i said. Tomato, tomahto. The eye rolls begin. We will not call the whole thing off. How about this . A little cole porter in the morning. Yes, jim. 2137 is what we are watching closely. Comcast, a new alltime high. The secret life of pets does well. Bob pisani . 41 advancing to declining stocks. Who cares about utilities in tell. Co telecom. Energy, tech. Well see. This has been going on for a couple of days. Utilities and telecom lagging. The new high list is expanding in the right places. I dont mean clorox. Ge has been there for a couple of days. Lock heed, honeywell. There is the big three. All at new highs. Important thing here. We are expecting industrials to do better. Everybody is trying a trade off about the q2 numbers which are sort of in the books here. If you look at Global Markets we have a triple whammy going on. We have a jobs report. A new high momentum going on. New leadership that happened quicker than expected in the uk. The pound is up. Thats helping. Remember what happened. Abe had an important election victory over the weekend. They are expecting additional stimulus there. The bank of japan will meet july 29. Everybody says abenomics is done but apparently not. The markets are acting like its not dead here. Look at the Global Markets. Hong kong was up. The ftse up, the Dallas Cowboys in germany also strong today. Well go into earnings season. Essentially at an intraday high here. It is important to note the sector leaders the last time we were here which was may which has been a small one. Utilities and telecom. Nobody cares about them in terms of how they moved the markets around. Consumer staples. The dow is down 400. Thats what mattered. Discretionary retailers had a tough time. Home builders doing well. The guys that matter are sector laggards. Look at, for example, tech doing nothing for a while. The biggest sectors are tech, health care and financials. Health care has been down. Energy, down. Financials are down 7 . There is the big issue. Can you move any of the stuff that matters . Can you move health care a little bit . Energy, oil . That will change things around. Can you get Interest Rates up . That will change financials around. This is the parameters of the debate now. Where are you on either side of the Interest Rate discussion . If you believe rates will be low for longer, the dollar will be low. Your portfolio will be set a certain way. If you believe it will change, maybe inflation will come up a little bit. Then you have a different way of looking at things. Thats the issue. The important thing is we keep talking about the s p. Everything else is still shy of the historic highs. Transports, almost 20 below the historic high and that was a long time ago back in 2014. Thats the small cap and the mid cap, almost 2 below new highs. This is whats important for q3 here. Q2 is going to be a loss. Only four of ten sectors are expected to be positive. Energy will be a mess again. Everything starts turning on in q3. They are modeling improved global numbers. 8 of 10 sectors are expected to be up. Only energy and telecom are expected to be down in the quarter. Everybody, again, is expecting certain changes. Slight improvement in the global economy. Weaker Dollar Generally. Bonds up slightly but not too much. To help financials. A lot of things have to go right for q3 to do well and be in positive territory now. Thats the debate well talk about all week here. Finally the guys mentioned line. This is the big japanese messaging app. It priced overnight but wont trade in new york until the 14th. You have a market risk here in this peculiar way. The japanese ipos wait three days before they trade. The good news is they price at the high end. Its about a hundred yen to a dollar. You can do the math. 33. It priced right at the high end. A lot of concern. Thats certainly good news. Well have a big food ipo. Advanced Pierre Food Holdings on friday as well. A little bit of an opening. I dont think well see torin but decent companies coming. Thats got the ipo market excited. The dow is up a hundred. We are essentially at new highs intraday on the s p. Back to you. Thank you very much, bob pisani. Oil almost exactly flat. Jack any deangelis for us at the anyway mention. Oil prices are tent tef. We started the session overnight in negative territory. Now we are bouncing around slightly positive, trying to make a comeback off the twomonth low, not convinced it can do it today. Recent losses based on the fact there is increased concern asht economic growth. Comments out of the middle east from the new Saudi Oil Minister about the market rebalance may be helping things stabilize here if we have a nice solid green session as well. Meantime gas prices have dropped according to to the survey. Down seven cents. The average is 2. 29. Post fourth of july we start to see the decline. Thats the peak of the driving season. Gold prices are hanging in there. We made another push to break through the 1376 resistance. Some analysts say the next time we make the push well probably take it out. Now stabilizing the safe haven trade has not come off the table and we are holding over 1350. Back to you. Jackie, thanks. When we come back, microsoft and ge striking a cloud rp pa. Stay tuned for a live interview. Meanwhile the s p has taken more than a year but at 2138 the s p is the highest its ever been. Back after the break. E shows pretty much over. friend wish we could start it from the beginning. jon bon jovi with directv, you can. You see, wve got the power to turn back time lets start over, lets rewind and lets go back and not quit the gym and ve a chance toayoodbye to grampy tim oh, thats the power to turn back time. vo et t ultimate allincluded bdl call 1800directv. Im in charge of it all. Business expenses, so ive been snapping photos of my receipts and keeping track of them in quickbooks. Now im on top of my expenses, and my bees. Be 68,000 emplees ever. Thats how we owit. Alltime high for the s p. With things pretty good. A point above the prior high set a year ago in may. David . A number of retailers taking aim at amazon ahead of the prime day shopping event. That begins tomorrow. Walmart is offering Free Shipping with no minimum purchase on all online orders for five days beginning today. Gap, the limited, big online discounts. Am skon is likely to get a big lift from the Second Annual prime day as hundreds of thousands of members signed up last year. Cowan represents amazon prime subscribers range from 45 to 46 million. Thats up 23 from a year ago. We dont know if the numbers are correct. Amazon doesnt tell us. Except they say tens of millions but we dont know the number. Its a lot. It is an incredibly powerful engine of commerce in this country thats changed so much. Probably it will continue to. The credit expansion in may was north of 6 . That says can bigger than just amazon. Even with 17 billion in additional. The rest of the retailers came alive. Looking at macys, nordstrom starting to go up. Target. My Charitable Trust owns that. Its been not a great stock at all. I see broader retail rally. I think Consumer Credit is doing better than people thought. People are feeling more comfortable. People would be spending more though sharewise more may be going online and to amazon. Why couldnt i have said that . I come back fresh. The article in the journal had something we have known which is the Big Department stores replaced by smaller retailers. Department stores paying less on rent. Morgan stanley has a note on amazon today, maintaining the 800 target. Arguing its basically groceries and clothes driving 26 of amazons forward growth will be groceries and clothes. They rule the world. They really do. Not to mention the cloud business. You saw the announcement we highlighted between ge and microsoft. Amazon is still on web services. Its a monster. Thats why thing sto. Everyone says it is over valued. I get the criticism on twitter. No. Amazon web search had a lot. Walmart, we dont talk enough about the stock. Its again going up. With the recognition that Doug Macmillan has done something right. Its near a 52week high. Gave people a raise. Spent more money on doing buy it online. Something is working. The prices are working, the scale. That stock is a horse. Its a good horse. It is. Its up 10 in the last three months alone. Could they coexist together in peace . I dont know. The age of both. Its like brutus and caesar. Didnt end well. The market value is 120 billion more than walmarts. Holy cow. Virtual. 74 on walmart looks better than 56. Oh, remember that . In november. The walmart bomb. They dropped the bomb. Right up stairs in the meeting. Yeah. That was a weird day. It was weird. Learning. Now they are back. Looking at the app. The app is no longer featuring vel veet at the top. Not just that. Well get stop trading with jim in a moment. Welcome town in minutes16,yocans or across the globe in under an hour. Whole commities are living on mars and solar satellites provide earth with unlimited clean power. In less than a century, boeing took the world from seaplanes to space pnes, across the universe and beyond. And if you thought that was amazing, you just wait. And if you thought that was amazing, keeping the power lines clear,my job to protect public safety, while also protecting the environment. The Natural World is a beautiful thing, the work that we do helps us protect it. Public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. We want to keep the power on for our customers. We want to keep our community safe. This is our community, this is where we live. We need to make sure that we have a beautiful place for our children to live. Together, were building a better california. Once again time for cramer and stop trading. Boeing, though they admit they dont have a huge surge in orders. If the stock is breaking out. Thats important. Dont forget why you have to buy planes in dollars. They are talking about that. Anyway, there you go. Intel. Two firms both say this is about the break out bank of america and merrilllynch and cowan, field work suggests the iphone 7 narrative better than expected. Maybe 50 of the innards of the iphone. That would be big. I think brian is doing a great job. People under estimate him at their own peril. Hes a gamer. Hes an actual gamer. I wonder if hes doing pokemon go. I dont know. Who isnt . I dont know. More devices now than twitter and tinder. I thought i was a simulation. Now im a pokemon. You could be both. Really . Sure. Thats my secret master plan. I cant wait. Whats on mad tonight . Alcoa. They have construction, turbines. Aerospace and a break up. David lately shrinking isnt growing. No grow to shrink. Its great to be back. Its fun. Yeah. You seem surprised. Especially this week. Good to be back. Rome is fabulous. Post nine is better. Youre like a tesla charged to capacity. I have to tell you. Zero to 80. No emissions. A master plan. Higher without earnings. Im ready to roll. Youre the top, the colosseum. Mad money at can have p. M. When we come back Satya Nadella. Jeff immelt of ge on the Cloud Partnership. Back after the break. 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 what the power of points can do for your business. Hi daddy gain the freedom to fumb with the new water and atterresistant Samsung Galaxy s7 active. Buy one now and get the samsung gear s2 for free. Exclusively at at t. Take a look at the markets. S p sets a new intraday high. Without the help of oil which is up just a touch above 45. Well keep an eye on that ahead of a busy week. Our road map for the hour begins with the markets soaring at the open. The s p 500 breaking its previous record set in may. Information technology and financials leading the way. The dow closing in on a record. How long will the rally last . Well discuss. Get ready to report. Well tell you what to keep an eye on. Plus an exclusive interview with Satya Nadella and ge ceo jeff immelt. Announcing a Cloud Partnership this morning. Well discuss that and more. That interview is coming up at 10 30 a. M. Eastern time. Lets start with the market rally on our hands. Dow up 83 points. S p 500 hitting a new record high. Is stocks continuing to rise after the stunning jobs report. Perhaps helping boost Investor Confidence in the u. S. Economy and beyond. Lets bring in paul christopher, head of Global Market strategists at wells fargo. Whatever wall of worry the market managed to climb. Is it too late to get in . Its not too late. The yearend target with a mid point of 2240 for the s p. There is decent upside here and pull back, we expect. Additional referendum in europe and in the u. S. There will be pullbacks for buying opportunities. This rally this morning was kicked off in japan where the nikkei rose 4 . The japanese yen weakening. The victory for Prime Minister abes government coalition. Why was there such an applause of a policy that doesnt seem to be working in japan. Its more of the same. Its a large stimulus markets are expecting. Perhaps a few percent of gdp. It keeps the game going. The. Conation of Central Bank Activity and fiscal stimulus will keep japan treading water above stall speed like the world. Thats enough. It is Growth Without inflation. Is that why the u. S. Equity market here has rallied in the face of bond yields barely budging after what was a strong jobs report. We should expect more. That should help the markets higher. Can we expect more bond buying . Can we expect new record low levels for yields . 1 perhaps for the tenyear treasury. Global Bond Investors recognize policy rates are likely to stay low for the rest of the decade. Just looking at forward rates. One can see in europe they expect negative rates to persist. Similar for japan and for the fed markets are expecting Something Like 1 plus. With that backdrop, as long as the continued economic growth. That keeps it together. Continued cash flow. Thats what a bond or Equity Investor needs. There is a lot of cash out there still. What we are changing, of course, is the acceleration in economic growth. That requires pick up in productivity in nations. We havent seen action to encourage businesses to invest which would, of course, raise it and left growth rates. As janet yellen said, raise the neutral funds rate. Thats not on the horizon. They will be moving in as long as they have the glue keeping it together. Continued cash flow through economic growth. Hey, paul. On earnings season, a lot of discussion about whether or not the earnings recession continues. S p is looking for a 5 drop in eps. We know the quarter usually ends up four or five points higher than the estimate. Do they have a chance at breaking even or not . They have a chance. Some of this is due to the problems in the energy sector. They have been a large drag on earnings for several quarters. If you look ahead and we think the market is looking ahead. We see faster growth in the second half of the year headed into 2017. Earnings should follow that. So we think it is a matter of time, if not this quarter. Tony, if im a bond fund manager or running a pension fund and we have stuff rolling off that had a yield. And now im looking around and cant find anything where i usually focus that has a yield at all. Everything is negative. What do i do . Do i keep going out on the risk curve and where does that take us if youre right and this keeps going from 2020 . First, investors should remember you cant market time the diversification benefits of bonds. What you said is analogous to an automobile driver saying i havent had an accident in a while so i dont need car insurance, dropping it for a week, a month or a few months. In treasury there is still yield. Its better to move out and away from treasury into other products. We suggest an overall strategy of bend but not break in terms of an investment theme. First, put capital preservation first. That means looking at Core Strategies and enhanced cash management. Investors too much these days running in cash deposits. 11 trillion worth and in money market funds. Secondly extracting complexity premium in bonds means looking at income strategies, Credit Strategies and liquid alternatives. Finally think about how things could go well to bring you into commodities, multi asset and real return strategies. There is a lot to do. Dont drop your insurance yet. Back to the stocks, paul. Carl asked about profit recovery. How about revenues recovery . How much harder is that to achieve in a slow growth environment . At this point, youre looking all the them being the same. We have seen companies go back into cost cutting modes but they aring looing for revenues to recover. As is tekd half progresses and the consumer which is the strength of the recovery continues to Gain Momentum we think you will see the top line improve. With it, the bottom line. Can you give us a sector for where you are expecting to see it the most . Yeah. Look. The sector thats been performing for a while is consumer discretionary. Well have on the list with information technology, health care. We like industrials, too, here. Thank you. Good to see you. Paul christopher from wells fargo and tony creczenzi from pimco. A major Cloud Partnership. The worldwide conference in toronto. With the two ceos. Wont be long now. This is about the platform becoming available on microsofts cloud. Thats going to happen in q2 or by q2. They will do some testing. Ges predix is about helping industrial material. Hay work better. That means using analytics to boost revenue and lower costs at the same time. Be able to tell when something will break down or when you should run the air conditioning. Might be another scenario for that. Ge not only uses predix. They want other companies. Even competitors to begin on top of that. Its kbrks e Digital Business in revenue. 15 billion they are targeting by 2020. This is an important center piece. Sounds like they want to use this to tie the industrial customers into office 365. To dynamics which is their answer to some of the stuff that sales force, sap and others do. This is a key strategic deal. Going to get to jeff immelt and Satya Nadella how they are going to work through blocking and tackling making it work for longterm strategies. We havent yet spoken to them. What do you expect some of the take aways to be, specifically around Capital Spending and investment . Even in the cloud. I want to get to that specifically as it relates to globalization. Jeff immelt gave an interesting speech a couple of months ago. A commencement address talking about how important globalization is and some of the adjustments he and other ceos are having to make as we get more protectionist policies coming not just out of the u. S. But around the world. We have seen the brexit vote and implications of that. With microsoft, want to hear how much they will spend on cloud and some of the other efforts. We see them snapping up linkedin for more than 20 billion. That has to play out still. What else are they prepared to spend money on to make the Cloud Strategy play out. We cant wait for it. The interview in 20 minutes. Stick around for that. First when we come back, the earnings season spotlight hitting the big banks as Credit Suisse, barclays and Morgan Stanley are cutting the forecast. Bank stocks are up. Wall street is bracing for bottom line declines. Well tell you what to watch for. Plus our exclusive interview with Satya Nadella and jeffrey immelt. Dont miss it. Much more ahead. Stay with us. Fridays job numbers and the win for abe helping s p hit an all time high. The Banking Group is down nearly 13 versus the s p this year. Analysts at barclays, Credit Suisse cutting forecasts on the group. Good to see you, jeff. Good morning. Nice to be here. Is the story going to be Investment Banking fees . Slowest first half since 2012. Well, the reason for that is a tough First Quarter which we know its in the books. Second quarter got better and the outlook is good for Investment Banking. Especially relative to how the stocks have traded. It seems like they are trading as though the investment cycle turned and well flat line on Investment Banking and trading revenues. There is upside chg turn into good news for the group. Specifically in this quarter we should watch fixed income trading. The credit markets are more favorable. We are probably ahead of consensus. If there is a potential here for upside surprises. You bring in numbers for a few but not all of them. Walk us through the differences. Our preview wasba for bank o america and citigroup. It was more for the guidance on consumer revenues. As we look forward we took the 2017 numbers down between 1 to 2 . There are more revenue head winds. There is more cost to come out next year than people are giving credit for and Capital Markets. As long as gdp growth is north of 3 which is the consensus estimate for the world we should see pretty good trading in Investment Banking numbers. The pessimism on the universal banks specifically for 2016 is over done. Do you see it waying on earnings . The uncertainty about hiring and Investment Decisions in the uk, europe and potentially m a . Thats the question. Not how much it is to relocate london to dublin to stay in the eu. What kind of effect does the uncertainty have an Investor Confidence with ipos, m a. Im encouraged at the markets bounce back after brexit. Its not good news for the Capital Markets but we are doing well. The uk is the market to be most concerned about. They were down 70 already year to date coming into the vote. A lot of the potential slow down isnt priced in. You mentioned expense controls. You thought the buy back announcements were pretty impressive. Yeah. I thought we were maybe being aggressive. They came in better than we were expecting, especially for jpmorgan. They were strong. Morgan stanley was strong. That creates a meaningful tail wind for next year for eps. We didnt take the numbers down for 2017. That buy back provided enough off set that the revenue we built in didnt hurt the bottom line. Good news from an earning perspective and outlook. It suggests the regulatory focus on the guys is easing a little bit. And maybe things will be easier for them going forward. Finally a question echoing fridays news. Did the jobs number do anything to meaningfully adjust the rate discussion . I dont think so. You look at how the market reacts month to month on the jobs report. Its like credit data. Its volatile. You have to look at the threemonth average. The market over reacted to 38,000. Probably caught some of that back up. The employment market is going in the right direction. That should be good news for at least rates potentially being able to go up. Thats the catch with Interest Rates. If they are not going up it hurts spread income and applies to the economy is in trouble. If the economy is trouble thats a much better opportunity for the banks. We are buckling up here getting ready for the week. Thanks, jeff. When we come back, an interview you cannot miss. An exclusive sit down with microsofts ceo Satya Nadella and ges jeff immelt. Well discuss the new Cloud Partnership and more coming up at 10 30 a. M. Eastern time. First, cnbcs tenth annual americas top states for business is ready to kick off. Scott joins us from a mystery location. Here we go, scott. Reporter we are in americas top state for business. But we are not going to tell you what it is yet. We are going to tell you about how we do the countdown, the study. This is now our tenth year. Well take you inside the numbers next. In new york stat we believe tomorrow starts toy. All across the state, the economy is growing, with creative new business incentives, and the lowest taxes in decades, attracting the talent and companies of tomorrow. Like in buffalo, where the largt solar and gifactory in theorrow. Western hemisphere will soon energize the wor. And in syracuse, where imagination is in production. Let us help grow your companys tomorrow today at business. Ny. Gov this just got inresting. Why pause to take a pill . Or stop to find a bathroom . Ciis for daily use is approved to treat both erectile dysfction and the urinary sympto of bph, like needing to go frequently, day or night. And medicines, and ask if your heart is healthy enough for sex do not takcialis if you take nitrates for chest pain, or adempas for pmonary hypertension, as it may cause an unsafe drop in blood pressure. Do not drink alcohol in excess. Side effects may include headache, upset stomach, delayed backache or muscle ache. To avoid longterm injury, get medical help rightway for an erection lasting more than four hours. If you have any sudden decrease or loss in hearing or vision, or any symptoms of an allergic reaction, stop taking cialis and get medical help right away. Ask your doctor about cialis and a 200 savings card in a few minutes an interview you dont want to miss. An interview with Satya Nadella and jeff immelt. Well discuss the Cloud Partnership and more. First, cnbcs tenth annual rankings of americas top states for business. Our own scott cohn now with what to expect from this years top states and any clues, scott . Well, you can look around me and see if it tells you anything at all. It is a nice part of the country. We have done this now for ten years. The formula has always remained the same. I want to take you through how we come up with this. The first step is we go through every States Economic Development Marketing materials and see what they are talking about. The more the states are talking about something, the more points it carries in the study. There are ten categories. So the point totals changed over the years but the categories have remained the same. What they are talking about most, work force worth 400 points. We look at the education level, union membership, productivity. We look at migration. Are states attracting workers . The cost of doing business. Taxes, wages, utility cost and incentives. Infrastructure, roads, bridges, ports, airports, anything to get your people and products on the missouri. The economy. We look at job growth, economic growth, state finances. That type of thing. The quality of life. We look at the crime rate, air quality, things to do. We also look at inclusiveness in state laws and whether people of all stripes can be welcome in that state. Technology and innovation. We look at research grants, patents, things that basically support innovation. Important in a state in this age. Business friendliness, regulations. The cost of living and access to capital. Both Venture Capital and Small Business lending. We have to be americas top for business. The countdown will go on all day tomorrow. Top states. Cnbc. Com. Always fun to. With a. Our scott cohn here. Exclusive with Satya Nadella and jeff immelt of ge. Well go to the worldwide conference where they will join us in a moment. Hello prhant bhuya cofounder of the Fintech Services staup. Hello watson. Your analysis of social media and conversations on various trading floors, helps us uncover insights. Insights that help investors predict market closes, well before marks ose. You know, your analysis has helpeds improve our predicti auracy by over 500 . 552, to be precise, but we can always do better. I like your attitude watson. Microsoft and ge announcing a partnership signalling a big vote of confidence in the cloud business. John ford is in toronto with the leaders of both companies. Hi, john. Hey, carl, thanks. Im here with Satya Nadella and jeff immelt. Thanks for sitting down with us. Big announcements today around the cloud for both of you. Satya, i want to start with you to put it in context. Its clear whats in this for ge. I think they had a 5 billion Digital Business last year planning for 15 billion by 2020. How do you make this work for microsoft and boost the other cloud businesses as well. We are right here at a partner conference at microsoft. We are a Platform Company. When we think about what a Platform Company does, it creates an opportunity for other software and other platform companies. They are building out their own platform. It creates a huge opportunity for the partners at this conference to be able to build the internet of things and industrial internet solutions. As part of the solutions, they would wire in microsoft dynamics, office 365 and all of the other partner solutions. To me, its that combination of platform capabilities that i think will shape the industrial internet. Can we think of it being a potential industrial and enterprise on ramp to microsofts full cloud in a similar way that linkedin would be an individual consumer on ramp to things like 365. The professional network to 365. Thats the linked ds in dynamics. But the way we thought about partnerships is what are the companies that are innovating in softwares. Building solutions that we can partner as a provider. In the past it was about tech companies. Now every company is a tech company. Ge is a Digital Company building with predix. In the past, sap was a big partner of ours. Going forward, of course. Sap would be a partner but ge would be in the same class. Talk to me. Ge has traditionally been a Huge Technology customer. You are becoming more and more of a Technology Player in your own right. What are the cloud providers going to do to distinguish themselves working with you so they dont end up offering commoditized services. Doesnt matter if you are on azur, amazon or oracle. You have been covering it a long time. There will be multiple allian alliances. For us, having a relationship with microsoft does two things really. One, allows us to go faster. In the industrial world it will be customer by customer, country by country. Having azurs presence around the world, being able to build the platform on top of the platform allows us to go faster. There is a bridge between intersurprise and industrial. Every chief Information Officer will have to walk. They will have to be more comfortable with operations technology. I think microsoft good example of what kind of use. Sure. Take a railroad. They have been buying systems. They have Microsoft Office in their offices. Now they want to do a Movement Planner to then them schedule loek motives. Thats operations technology. Its easier if they have a cloud provider. Easier if they are able to put predix on top or some other network they are more comfortable with. Every airline, utility. Everybody else. There will be lots of aliepss as time goes on. This will help the trains run on time. We are pulling data off the equipment. What we can do is add that with use data. We are coming at this from the asset of. Microsoft is coming at it from enterprise across. We intersect. The industrial world is done in units of one. They are in different countries. Having the arms and legs that solve the problems globally is something that takes scale. I want to ask about globalization. You gave an interesting commencement address. You said we will produce for the u. S. In the u. S. But our exports may decline. I think you were talking about some of the protectionist policies springing up everywhere. At the same time well localize protection in big markets like saudi arabia and countries where export banks like canada will be attractive for investment. That sounds like a warning that if u. S. Policies continue toward protectionism both hiring and Capital Spending. Everybody looks at the trade deals and things to be from microsoft, ge or big companies. We have globalized already. We have 400 factories around the world. Microsoft is in every country around the world. The trade deals help small not big companies. We are for the export, import bank. If there is no importexport bank well move production around the world and take advantage of banks in europe and other places. I think smart Global Companies have smart local strategies that allow them to continue to grow while politics ebb and flow in every corner of the world allows us to serve our customers globally. We were going to have the democratic, republican convention, a lot of policy discussed. What are a couple of issues. Not going to ask you to pick a candidate. What are a couple of issues that as the ceo of one of americas best known brands, the biggest businesses. You are going to be looking for. It will be important for moving not just microsoft but also your employees livelihoods forward. Great question. There are many issues. I talked to the politicians every day. Whether its immigration, patent reform or trade. Quite frankly right now what im looking for is the politics in our country to get to a place where they can win elections by making a case for both globalization and addressing the inequities that exist in the society. Thats where we need to get to. It cant be one versus the other. It has to be how do we balance the two such that we can truly have the right dialogue for the progress of the country. America has to be the beacon of progress, where both the inequities in society are addressed and at the same time, we can shut the world out. Do you see that the same way and what kind of message do you feel we need to hear to get at that . I would say three things. Really three things. Security. There are other people smarter than the two of us. To work on geo politics. 2 wont get it done. We have to have more pro growth policies. 5 of the World Population in the u. S. Without globalization, that doesnt end well for a country like the united states. Pro growth policies and unity. I think all of us want to see more constructed dialogue that takes place between business, government, some of the tragedies that have taken place recently. I would say i look for which candidates will provide security. That helps most people. Everybody. When you look at the more protectionist moves as some see them. As you look at brexit, does that make it more expensive to do business globally . If so, who will end up bearing the cost . Do you have to raise prices for your services and software in various markets . How does that play out . Look. In fact, thats the real world to me. They are legitimate digital sovereignty needs, Digital Security needs that companies have to address across the globe. In our case, for example, we operate in china under chinese law we have the cloud operating under german law. Have we have not gotten to a point of equilibrium where its friction free. We are building azure and the infrastructure. Office 365 for that. The costs of that for sure will be higher than just having one data center in one part of the world to serve everybody. Are you having to tweak plans based on the headlines. More so than we already anticipated it. Im not tweaking it because of brexit. Even take the united kingdom. We have data centers in the united kingdom. We have data centers in the netherlands. We have already anticipated our legitimate security needs. Sometime sometimes its more prediction laden. The world will be simple. An automatic assumption. Good global ceo. Knows the mayors complexity. We have 400 factories around the world. We know how to make and sell things in every corner of the world. Look, we are a 20 billion exporter from the united states. We are a net exporter in almost every country in the world. We can compete. This year that everybody wants to put forth. I understand it hasnt been that theres been people that havent done as well as others as we have globalized. This country is competitive. We have great people and products. Help us compete versus closing the door on globalization. There is more to be gained than lost. Ge capital is no longer too big to fail. Systemically important financial institution. That makes people very happy or pushing for ge to focus on roots as an industrial company. That will free up resources that are dont have to spend with regulation. Whats top of the laundry list as far as where you will invest now that its freed up . We love where the company is today. We continue to have a great dividend and, you know, well execute plans on buyback and things like that. We love reinvesting back in core fran iz choos. We love the competitive advantage we have. Making investments in predix and the digital transformation. We think these are great for our customers, great for our people and for investors. What i say is well get the best company in the world and you get predix for free. Thats a pretty good message for investors. Im not sure they are getting it for free. A little. Maybe not what jim cramer would say free. I want to go a little bit lighter. In a way, pokemon go. Over the past few days its exploded on mobile devices as a popular game. You know, you throw balls at them or something. I never played. Im too old. It uses augmented reality which is an area you at microsoft pioneered with the hollow lens. Are you missing an opportunity . Is there room to apply the Technology Just in this more than you have already . Its fantastic to see this augmented reality getting built. The best thing that can happen when creating a new category is for the killer apps. Whether its the industrial scenario for investing it. To the pokemon interest hopefully will translate into interest. If you think about it the game physics are built for it. The phone is a great way for the installed base of the phone. It makes it possible. Think about the game on hollow lens. You can actually just use your eyes to look through and have the augmented reality experience. We showed not just gaming though. To me, the industrial scenarios whether it is education, training, manufacturing, design will be changed by augmented reality. It is the paradigm. Im happy for pokemon and industrials. Are you buying hollow lens. We are all over this technology. What microsoft is working on, we are quite keen on. They are quite advanced. If you can take the cycle time on a utility or l g plant or refinery down by 10 . Say you could fix everything right the first time. You had a chance to visualize, manage the human data interface down by 10 . Thats worth 50 billion or something. Im not a great gamer. I really cant say how much its worth. The industrial applications will be billions of productivity. Thats where the industrial how far off do you think we are from Widespread Adoption of technologies like this . Within 24 months. Does that mean you are putting in orders . Within 24 months. We are trying to build the right human interface. We have 20,000 field engineers repairs mr scanners, jet engines. We are marrying that with service data right now. This is really right there. Visavis how to unfold it in the technology. The scenario we just showed was the japan air lines using it for the training module. Absolutely. Hollow lens is available today. You have to go out, order the devices. Its pricy. That will save you 15 billion. The price will be a little bit better. Okay. You will be ready to supply this within 24 months. You are seen to use it within 24 months. Sounds like augmented reality and the promise of that on predix is something well track as a real contributor before long. I think, again, i look at our say to replace the base today would be almost 2 trillion. The assets, the industrial assets. The difference between the consumer internet, if you have an iphone you throw it away and get another one. With a gas turbine, 1 more fuel is like gold for you. Our ability to deliver in this distributed global network, more productivity tools is like gold for the customers. Make no mistake. Augmented reality will happen. It will happen in the industrial space. It will be very productive. You know, we want to make sure as a practitioner, first and foremost, we want to be the best practitioner of the technology. I noticed just to close you joined your first nonprofit board. Tell us why thats important. You picked this one. To me, i was looking at whats a World Class Organization doing World Class Work and was local to seattle. You know, unanimously, people recommended fred hutch. When i think about curing cancer and the way things like immunotherapy are really bending the curve on finding the cure for cancer. I felt that i can learn a lot. Maybe contribute a thing or two to a World Class Organization. Im really privileged to have a chance to join the board. Im looking forward to it. Hutch is one of the best in the world. Great to have satya there. All right. Well, i guess one last question for you. You are 60 years old, im told. You dont look a day close to that. Edging toward the area where people start wondering, okay, succession plans, how long are you planning to serve in this job . Are you in it for the long haul . Joe kern and i are both from cincinnati. We were both born the same year. Im going as long as joe goes. Wherever that takes me. You tell him i said it. Put your Running Shoes on. That could be a long time. I dont know how long a day you work. Okay. More than joe. I can tell you. You said it. I didnt. Thank you for joining us. Covering industrial internet. The cloud, augmented reality. So much. Really appreciate it. Exclusive to cnbc. Satya nadella and jeff immelt. Back to you. Okay, john. Thanks so much. In toronto. Happening as ge hit about 32 and a half. Going to take you back to the highest level since 2008. The evolution as an industrial. Now a tech Company Continues the conversation immelt made repeatedly. It was interesting to hear nadella start with ge as a Digital Company giving props to them and immelt excited about talking about pokemon saying, i dont know about gaming but when it comes to augmented reality you will see this when it comes to our industrial clients he made a link between that, jet engines and how it could save billions in productivity. Interesting for him to talk about the technology. Also about the election and the issues. Both companies, multinational. They do business abroad. They are making the case that while they recognize they said this. Globalization certainly leaves people behind. It is important to make the case that netnet it is positive for the country. Competitiveness and the economy. 2 growth. Not going to get it done. Especially Small Companies that havent globalized. Meanwhile, as we go to break, take a look at the markets. Dow up 90. S p stopped essentially where we made the last alltime intraday high. 2137. More after a break. We were rn 100 years ago into a n american century. Born with a hunger tfly and a passion to build something better. And what an amazing time its been, decade after decade of innovation, inspiration and wonder. So, we say thank you america f a century of trust, for e privilege of flying higher and higher, together. Is there a troubling sign for stocks . One strategist makes his case on trading nation. Cnbc. Com. More squawk on the street next. Stocks are building up half a percent. And boeing. S p 500 up. Were in record territory and need to close about 2130. 82 for a new record close. Some of the groups are the cyclical groups. Technology, energy, industrials even though energy and Oil Prices Flip back into negative territory. Adjusting that better u. S. Jobs report. A 4 rally in japans stock market overnight and looking ahead attorneyings. Alcoa after the bell. Kicking off and bringing in multibillion dollar orders. Well take you live next. In alt. Yet alternatives can tap opportunities that traditional assets cant. And even though theyre lled alternatives, theyre actually designed to help meet very traditional goals. Thats why invesco believes people shou look past conventional models and make altertives a core part of their portfolios. Translation . Goodbye 60 40, hello 50 30 20. In new york state, goodbye 60 40, hello 50 30 20. We believe tomorrow starts today. All across the state, e economy is growing, with creative new business incentives, the lowest taxes in decades, and new infrastructure for a new generation attracting the talent and companies of tomorrow. Like in rochester, with worldclass botox. And in buffalo where medicine meets the future. Let us help grow your companys tomorrow today at business. Ny. Gov the farnborough air show is kicking off. Massive new orders worth billions of dollars are already being announced and phil is at the air show and joins us now with the highlights so far. Phil. What we have noticed is just when theyre starting to get momentum. Just when were starting to see the first planes taking off for the fun part of the air show a huge storm came through. Were still waiting for the f35 joint Strike Fighter to fly in just a little bit. Heres a couple of things and we can give you a taste of the air show. The c series is one of the stories garnering a lot of attention. We had a chance to go up for a flight in this plane. It features a wider aisle so its 21. 5 inches and its easier to walk down the aisle and a configuration of three seats on one side. Two on the other and airbus and boeing and delivers more planes and eating into that backlog. Theyre both sitting at record backlog. If you ordered the new one youll have to wait many years to get that. Heres the ceo of boeing talking about cutting into that backlog. We get about 5700 commercial air unplanes in our backlog today. Were still expected to build about one today. Not as great as previous years. Stronger and narrow bodies and wide bodies and this is just execution and successfully delivering on that backlog. As you take a look at boeing versus the Dow Jones Industrial average over the last year boeing is hoping as they can improve they can cut into the backlog. Remember guys, they garner their profits based on deliveries. The rain is gone. Lets see if we get the f35 flying soon. Guys, back to you. Phil, thank you. Reporting live from the air show. Well see you later. Lets get a quick check on the markets here. The dow is up 91 points. Boeing, that stock is helping 58 new s p 52 week highs including some new records for amazon, auto zone, comcast, Dollar General and more. The s p 500 inches higher into record territory. 2130. 8 would be a record low. Squawk alley is next. Stay with us here on cnbc. Approaching medicare eligibility . Dont put off checking out your Medicare Options until 65. Now is a good time to get the ball rolling. Medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement insurance plans insured by Unitedhealthcare Insurance Company come in. Like all standardized Medicare Supplement insurance plans, they could help save you in outofpocket medical costs. Taking informed steps really makes a difference later. Thats what it means to go long™. Call now and request this free decision guide and explore the range of aarp Medicare Supplement plans. All plans like these let you choose any doctor or hospital that accepts medicare patients. These are the only Medicare Supplement insurance plans endorsed by aarp. Call now and request your free decision guide. And start gathering the information you need to help you go long™. It is 11 00 a. M. On wall street and squawk alley is live. Welcome to squawk alley for monday. Kayla here at post 9 and john fort on assignment. First up theyre our big stories. This all time high in the s p. First time since may of last