Transcripts For CNBC Squawk On The Street 20170605

Injured many more. Well take you live to london for the latest. And President Trump sending a flurry of tweets over the weekend well get the latest on that. Plus the look at the executive order expected later this morning. And art cashin joins us where the market goes from here. The authorities are invest gaiting investigating a terror tabernacle in london. Lets get to wilfred frost with the latest. Good morning. Good morning, carl. So the latest from the investigation is that there have been more raids and no further arrests of the 12 that took place that yesterday afternoon. The three are described as having a Domestic Center of gravity as opposed to being foreigners and one of them had been flagged to Security Services in years past. Now this is the third attack in 73 days here in the uk. That has elicited a much firmer response from politicians. Theresa may said enough is enough. And saying that if reelected she could consider increasing antiterror powers. On that note she described the internet quote as a space where extremists breeds and she is increasing regulations on the cyberspace moving forward. Certainly something to watch if she gets reelected. Security is dominating the campaign trail today in a way that it didnt so much two weeks ago after the manchester attacks. Theresa may is hitting her main opponent Jeremy Corbyn for opposing increased powers while he is hitting Prime Minister may for Cutting Police numbers by 20,000 when she was home secretary from 2010 to 16. You cannot protect the public on the cheap. The police and Security Services must get the resources they need, not 20,000 police cuts. Well, what does this all mean for the poll upcoming on thursday . Well, Jeremy Corbyn has the momentum behind him. He is gaining. But theresa may still in the lead. That lead varying from 1 to 12 points depending which poll you look at. Guys . And the pound is higher, which has corresponded to when may does better in the polls. Well wait to see the next big ones into thursday. Thank you, wilfred frost, in london. The markets overall coming off of another historic week. The dow, s p and nasdaq posted a record close on friday. Oil prices are front and center this morning. Saudi arabia, egypt, the uae and bahrain are among those cutting ties with qatar, accusing it of supporting terrorism. When we mike and i woke up at 3 00 a. M. , oil prices were up 1. 5 and now wti is down 1 and youre hearing more and more qatar is an opec member. But the question is, does it now have to comply with the extension of the production cuts that opec Just Announced that could lead to more supply if it doesnt do that, if it tries to get more market share, maybe other companies will follow suit. Maybe questions about the opec deal coming into focus. I think the market is saying, well, theres nothing here that would increase supply discipline across opec. Who knows if it will have impact an all. But no supply disruptions unless it indense iftensifies from her a big experter and if cramer was here hed have a good deal to say. And the qatari stock market is down more than 7 . A lot of the companies will some of the liquefied natural gas producers. Well be watching qatar. The president is taking to twitter, making the case for his court blocked travel ban amid developments in the terror attacks in london. Eamon javers has more. Good morning. A lot on the president s plate this week, but lets start with Vladimir Putin of russia who gave an interview yesterday to nbcs megyn kelly talking about the interference, the alleged interference in the elections. He said that its actually the United States who has been meddling in elections for all these years. Heres what he said. The United States everywhere all over the world actively interferes with the electoral campaigns of other countries. Put your finger anywhere on the map of the world and everywhere you hear complaints that american officials are interfering in internal electoral processes. Meanwhile, the white house says it wants to focus on infrastructure this week. They have got an event later on today. Theyll talk about privatizing air Traffic Control. Look at what hes tweeting. He said, people, the lawyers in the courts can call it whatever they want, but i am calling it what we need and what it is a travel ban. That tweet from the president remarkable on several levels. One that he goes back on what the white house had been saying previously that this effort to protect the United States was not a travel ban. Now the president saying it is in fact a travel ban and putting out this statement on a day in which they say they want to cut cover infrastructure instead of the travel ban controversy. Another tweet from the president this morning, the Justice Department should have stayed with the original travel ban. Not the watered down politically correct version they submitted to the supreme court. So clearly, here the president frustrated with his own department of justice, criticizing his own administration here in a tweet. Thats remarkable in and of itself, particularly again on a day when the messaging of the day is supposed to be all about infrastructure. The president clearly this morning has something very much different on his mind and hes taken to twitter to express that, carl. It is interesting on a week where youd think i mean, in another world we would say the president s off message but he has the wright to tweet whatever he likes. And the media will cover that. The message is the medium, and in this case its the tweets. So fascinating to watch this white house say, you know, look, the media is obsessed with covering everything the president tweets. Is the line that you get often from the white house. But the president is putting out these statements that very personal, very emotional statements. They are heart felt. Its what is on the president s mind. Its often at odd with what the white house staff wants to be talking about that day. So theres this tension within the white house and the chief executive himself. A question on the travel ban, not one that i think youll have the answer to. But just curious. I went back and read the original executive order, i think it was from the 27th of january. The original one that was of course not allowed to go into effect. 90 day ban for certain countries. 120 days for refugees but most importantly it said, were doing this as a temporary ban to undertake an immediate review of our visa policies undertaken by the department of Homeland Security. Do we have any updates on where that review stands, given its more than 90 days and almost 120 . Thats a really good question. I dont have an answer for you on that, but you know, youre the the administration said at the outset that this travel ban was needed immediately. It was a timeliness issue, a safety issue for the United States. Obviously, we have gone well past the deadline now. And the problem legally for this administration has just been that the courts look at this and they take into account what the president said on the campaign trail about banning muslims from the United States and they see as i think willinged to that linked to that rhetoric. Of course what the president said on the record still exists on the record. Theres no way to go back and change that. So they have got a different legal situation on their hands. Ill check in with the department of Homeland Security and find out where they stand in terms of the process and the security evaluations they said theyd do. Thank you. That would be great. Sure. Eamon, thank you. As for the Market Reaction we were just having a debate earlier about its becoming a sort of teflon market. I just wonder how much, given it is infrastructure week and the president is going to cincinnati to talk about it on wednesday how much expectation there are at this point in the market. For infrastructure, which is supposed to come after tax reform which is supposed to come after health care which is not passed in the senate. I mean, its very hard to find really high hopes priced in directly. Into those sectors you would expect to be a beneficiaries of any of the policiepolicies. Any fiscal policy help that comes is a bonus, a kicker on what we have gotten already. I mean, the market has been very good at converting really slow growth, high liquidity and high rates into huge valuations for growth stocks, right, that dont depend on any policies. Thats been riding for a while now. But its interesting how much we seem to be attributing the markets valuation earlier this year, michael, to the prospect of tax reform for example. It may or may not happen, maybe it will be something of some significance, but its not a factor in valuation. I think that the attribution was overdone earlier in the year. We tell the stories about the numbers and the story that everybody was telling because it felt that way. No doubt a sudden repricing after the election and people said, something could get moving here and it was an inflation trade. Global deflation over, maybe we get to inflation. Then the data has come in a little bit, you know, kind of ambiguous on that. Well, people are talking about retracing the ten year. The difference between two and 2. 15 and 2 is one day, right . November 8th and november 9th. A lot happened in the hours following that election. Were still not there. Also go back to 1. 5. Friday we had the lowest level since november. When we return well talk more about the historic run for stocks. Art cashins perspectives on the market as we count you down to the opening bell. 22 record closes for the s p 500 so far if year. And Hilton Worldwide Chris Nassetta reports in. Pointed lower, the dow futures are down 10. Futures are down 2. Much more squawk on the street when we return. The new guy . What new guy . I hired some help. He really knows his wine. This is the new guy . Hello, my name is watson. You know wine, huh . I know that you should check vineyard block 12. Block 12 . My analysis of satellite imagery shows it would benefit from decreased irrigation. I was wondering about that. Easy boy. Nice doggy. What do you think . Not bad. What do you think . With e trade you see things your way. You have access to the right information at the right moment. And when you filter out the noise, its easy to turn your vision into action. Its your trade. E trade. Start trading today at etrade. 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But theyre citing the muslim brotherhood, that could inflame things slightly. I think all eyes are on thursday. You have the british election. You have the ecb and youve got comeys testimony. So that would be an absolute big wild card. Markets this morning are thin and ill liquid. Most of europe is closed for a religious holiday so were susceptible to air pockets and surprises so while it looks like a slow and quiet opening, well keep an eye im going to watch oil which tried to rally on the qatari thing. But rolled over. And now threatens to break 47 which i think will bring in sellers in equities. Its been hard to get across the board gains in june for the past ten years. I think we have only done it once. Characterized june as a seasonable month. It used to be the quick followup to the sell in may and go away. But the entire october thing has not been successful over the last four years or so. But youre right, the june part of it has stood out. I think some of that has to do with the position in congress and other things, getting settled down. But for now it looks like that washington remains do nothing. So i would be very careful of thursday. A lot of potential build into that day. Referring to comey specifically or ecb or and the british election. I mean, theres an outside chance that if the gamble doesnt pay off, and you wind up with coalition minority government over there, things will be strained. That will make brexit negotiations absolutely very, very difficult. You know, when we had the identifiable days when some catalyst might be there, the market has kind of built up some anxiety ahead of it. Its not starting today, at least. The vix was no, well, as i say, i think its the markets are thinly traded today. People are coming off its been a grinding out to new record highs as sara pointed out again and again. When most of us thought i personally thought the market was getting ready for consolidation sideways phase. They kept eking it out. This flies in the face of history and seasonality to some degree. But the market is what the market is. Art cashin, thank you very much of ubs. When we come back the nyse will hold a moment of silence for the victims of the london terror attacks. Oh, not so fast, carl. Oh no. Schwab, again . Index investing for that low . Thats three times less than fidelity. And four times less than vanguard. Whats next, no minimums . No minimums. Schwab has lowered the cost of investing again. Introducing the lowest cost index funds in the industry with no minimums. I bet theyre calling about the schwab news. Schwab. A modern approach to Wealth Management. Rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. If New York Stock Exchange will observe a moment of silence for the victims of the london terror attack in which seven people were killed. Dozens injured over the weekend. Of course as was know know, armed men mowed down several pedestrians late saturday. Its britains third major attack in as many months. [ bell rings ] [ bell rings ] [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Welcome to holiday inn whether for big meetings or little getaways, there are always smiles ahead at holiday inn. The opening bell is brought to you by brighthouse financial. Established by metlife. Youre watching cnbcs squawk on the street, live from the Financial Capital of the world. If opening the opening bell in six minutes. We had that moment of silence for the london terror attacks over the weekend. This rift in geopolitics in the middle east. Ecb and thursday really feels like its going to be the peak of the week when you have comey, uk elections, ecb in terms of news flow. Theres a i dont know how much you can hedge out of that, but everyone is pointing towards thursday. Well get services at 10 00 a. M. Today, the biggest swath of the u. S. Economy. I think especially after that jobs report on friday, there are some questions about whether that was a blip, whether it was the tight labor market and the fact that were at peak unemployment. Sure. Or signaling some sort of slowdown for the u. S. Economy. The question there is can the Global Economy keep up the momentum . A lot of stock inflows have gown to europe and emerging markets. A lot of attention on the economic surprise index which has fallen off the cliff. It was at elevated levels a few weeks ago and now its come back to earth. Yep. Well watch for news out of washington regarding infrastructure as well. Then some key pharma news out of asco. Our meg tirrell is in chicago with all the latest. Good morning, carl. Talk about news flow. Our fight on cancer coming out of asco cancer, and the new drugs that harness the immune system to fight cancer. Some of the biggest plays are bristolmyers, merck, astrazeneca and roche. Bristolmyers is down slightly. Some analysts saying especially in the area of lung cancer, the advantage may be looking to go to merck a little bit. Bristol is a little bit weak. Cowan estimates that the drugs that are pd1s they say that market will be 32 billion by 2022 and they see bristol having a big chunk of that market. As for other movers lots moving in the biotech space. As you check out tg therapeutics, theyre moving up a lot. Finally, well draw your attention to the other attention of i mew know therapy drugs, you can see that all in the green on data updates here at asco. When you think of the stocks moving, there are financial implications but theres positive updates in the fight against cancer. Pretty interesting weekend. Lots more to come. Well have the bristolmyers ceo joining us on your show. As well as others. Thank you very much meg tirrell in chicago. Well watch for headlines out of asco. There are usually one. Apples Developers Conference is going to happen starting today. Looking for key little visibility on iphone 8. Maybe hardware news. Will they try to put together a serious competitor to siri. And Pacific Crest downgraded apple earlier, a lot of the upside potential for the sentiment is in the stock. People tried to gain this out. A great performer. Historically the stock tends to top at the moment a new iphone is released. They say 10 is the price that apple shares could fall 10 and they say they actually like google or alphabet as a bigger tech stock alternative. Apple has been one of the top performers so far this year. Carl, you know the Developers Conferences are all about software. We may get news there. But the question is on the hardware. Well get that siri alternative and how do you sort of price that in given were still at a point that apple more than 60 of the revenues do come from the iphone and this highly anticipated new one in september. Yeah, Walter Isaacson on the air said he thinks its time for Something Big. He said it probably should come in hardware. Having made some inroads in services in software. Services is one of the things that its at scale. We could just kind of have that thrive and grow on its own. The idea of Something Big i do think its been kind of forestalled in terms of the urgency about on wall streets side because the stock has done so well. That they almost have bought themselves some time in saying never mind about a car. Something else. Its also a remind their just tech has been reminder that tech has been a star performer. Tech stocks are up, david, 20 and tech is 23 of the index. The nasdaq coming off another week it outperformed. We pointed out so many times the biggest the biggest beneficiaries whether its google or amazon, facebook or the aforemenomonietiontioned apg tens of millions in market value. Up 26 . Thats google. Everything inin the 30s that i mentioned. Alibaba a name we dont mention, but up 41 this year. So its not just here in the states. Goldman sachs had the list of hedge fund and mutual funds overweights. Amazon and alphabet are both on there, as well as facebook. Not apple interestingly enough. Two things on that front. We will get a vote on yahoo, verizon. Yes. Thats going to close this week. And will be dropped from the index. Remember that. Then theyll have that dutch auction that comes into play. As far as amazon goes, barrons estimating 60 million more prime members than have a land line phone in this country. The big board today its cars. Com. Celebrating its spinoff. Then later at the nasdaq, National Geographic encounter ocean odyssey. So well start off watching herbalife did guide down fiscal q2 revenue. 2 to 6. Scott walker breaking that news for us over weekend. Got some comments out of icahn as well, has not sold the shower. Has not sold the share. This is a bet on whether or not the Business Model can really survive a lot of the new restrictions. I dont think the news today gives you the verdict on that. But, you know, a little bit of concern certainly filtering into the stock in terms of the change. Down 5 to start. It is another monday without a lot of merger and acquisition activity which is worth noting as we head towards the halfway mark in the year that many had hoped would bring a lot of consolidation. Theres still focus as our viewers know on the possibility of communications consolidation, telecommunications or media. As well as Consumer Products and food, but you know what . A lot of talk not a lot of deals getting done at this point. When i speak to those behind the deals who typically are the people negotiating they do get a sense from management of concern about washington to a certain extent. Just sort of movement sideways. Not an inability to communicate with another company. Or even to try to get something done but a lack of sort of the and to really agree on value. And actually have the momentum you need to get something done. So it is worth noting. Yet another morning of not much news. Said if you want to find the scary chart, now theres not many out there for the markets. Its the two year chart of announced m a. It has lagged at what you would expect at this stage of the psychele. We had the talk earlier about equity valuations and the people who put the deals together there is a view on the part of buyers that things are typically more overvalued than they would like them to be. If youre a seller looking for tax reform maybe thats not something you can bank on to bring your multiple down if youre a high taxpayer. So it may result in the continued standoff between buyers and sellers until something is resolved one way or the other. Speaking of Consumer Products we have news to share from p g. We talked to david taylor, the ceo of p g. This is the first comments since we learned that trian did take a 3. 5 billion stake in the company and there are questions swirling about what trian wants for p g. Heres what taylor said, he confirmed what has been out there, there are ongoing constructive active engagement with the hedge fund between p g, david taylor himself, and nelson peltz and trian. He said were willing to engage. We want to be better. Taking ideas from the hedge fund as he says he takes ideas from many stakeholders on this company. As it relates to the strategy, he says theyre moving ihead with sharpening the ahead with sharpening the focus on ten different categories and empowering them to make decisions and operate independently. So they have president s leading the individual ten categories anything from laundry, to the gillette shaving business, and theyre innovating on which markets to go into. This is a big change for p g. Every decision used to be made at the top. At the cincinnati headquarters. So a little bit of streamlining of focus. Of course, the big goal is to try and grow top line growth, try and growth the category. That has been elusive for Procter Gamble even after it shed a number of brands. Taylor tells me they have announced another 10 billion in productivity. Thatll come out of overhead costs, costs of goods sold. Marketing costs. And of course media buying as well. All of that is whats going on right now. They continue their focus as david, as you reported have ongoing talks with trian. But the question is how much more aggressive is the hedge fund going to get at this point . Theyre taking ideas. Very constructive and friendly. Im getting the same sense that thats where things stand. When they put up targets about cost cutting, trian will hold them to it. This will take place over a good amount of time after you get a decision, perhaps that things things ratchet up to the more hostile maybe not hostile, but more aggressive stance from trian. When you throw out a 10 billion number. In ge which i would argue is first and foremost for trian a possibility of getting active, you have to wonder if they fight a two front war. Not that big of a firm they probably could if they wanted to. But there theyre trying to hold ge accountable to the cost cutting targets that its already made. If it doesnt meet them, you might expect thered be activity there. Id expect the same from p g, but it takes time to see if they follow through. But the question is theyve implemented the strategy, they need to start to see results for the shareholders. The top line growth is not where its been. They have been hurt also we should say by the foreign exchange. That strong dollar has hammered the profit and sales of p g. Thats turned in their favor. So things could look better there. And the question is can they empower the businesses to produce results . The other question i wanted to mention, should they break up, would they be more nimble and innovative in the individual businesses just split off. Theyre so big on their own and taylor said the scale helps us in all sorts of ways. Media buyin. It would be much more expensive if they had to go at it alone. Marketing costs, you name it, but what theyre trying to do is get that key Decision Making much more on the granular level so it can be much more nimble. Would they ever consider moving out of cincinnati . I dont know, dont say that, thats blasphemy. Sorry. Its come up. It is. I think its a big part of the strategy is making more local market decisions. Just keeping the headquarters in cincinnati, maybe weakening the dependence on some of that cincinnati Corporate Culture and Decision Making. I would think between a full on breakup and remaining exactly as the company is, i mean, they have been shedding brands as you said. Its not as if theres some kind of those two options so i wonder if maybe even the trian position is ultimately going to be a kind of evaluation business by business. That could be the question. Are we going to see the results from the current strategy theyre implementing . Well see in the next few quarters. Tesla is down about a percent and toyota sold all of its shares, by the end of 2016. Keep our eye on that. Time warner, wonder woman anybody . Did not. You . No. But im loving how well its doing. 100 million. Top grossing film ever by a female director in Patty Jenkins and a lot in the media circles about whether or not this opens up a new era in hollywood. Not only for female directors but the way studios think about gender overall. Absolutely. I think people were heartened by the d. C. Comics, the legs being shown by some of those brands. Those franchises. One more thing, ebay record high today. On an upgrade out of credit suisse. Lets get to bob pisani on the floor. Good to be back after a week in charleston. A new high on friday. Despite the weak jobs report. Lets look at the sectors right now. Only thing really in the green are the financials. You see the bank stocks up, of course they have been terrible performers all year. Tech also on the upside. Industrials down a little bit. The Energy Stocks no energy at all. Nothing really happening with them. Whats happened, if you take a look here, is the markets become unusually bifurcated. So the major sectors look at that. Technology stocks up 8 . This is an unusual leadership group. The technologies and Consumer Staples you dont see that very often. Banks and energy, no movement at all. Its unusual to see a 15 percentage point spread between the leadership and the bottom sector after six or seven weeks so the market is very bifurcated right now. Particularly regarding banks and energy. A lot of people over the weekend i heard arguments we need to resolve this contradiction between the stock and the bond market. We hit historic highs on friday. We closed at 2. 5 , the lowest yield since november, and something has to give here. Im not sure thats necessarily the case though. Im not sure there really is a contradiction here. That there is a gigantic liquidity trade going on i would agree. Stock prices have been elevated we know why. Theres a Global Economic recovery and an earnings recovery. Thats the reasons that reason that stocks are up. And the enormous demand for mostly u. S. Bonds that have been going on. We know about that demand so im not sure that this is necessarily incomprehensible. We had a lackluster report on jobs but the labor force is shrinking. We are near full employment on the economic front after nine years of a recovery. Im not sure theres a contradiction between stocks and bonds here. Lets move on here. President trump is speaking at 11 00 on privatizing the air Traffic Control. The big kahuna is raytheon. They supply much of the technology for air Traffic Control. They finished up yes grading upgrading a large part of the air Traffic Control this year. Its a big mover. Might see slightly slower Earnings Growth overall, but its always a leader in the aerospace area. Finally lets talk about the six arab countries cutting links to qatar. Its not a big market, only 44 stocks on the Qatari Exchange so mostly youre dealing with energy and particularly liquefied natural gas. They are the world leader in liquefied natural gas. Natural gas stocks you imagine they are down. Look at lng related stocks, the big leader, they develop liquefied natural gas terminals here in the United States. They held up very well. Put up cheniere, there it is. And the liquefied natural gas is doing well. Its been down recently as we have seen this gigantic glut of liquefied natural gas and of course oil around the world. U. S. Natural gas plays its been down right ugly for them. Down double digits. You see theyre mixed here today. But overall no particular reaction here in the United States to that qatari news. Terrible year for the liquefied natural gas. Guys, back to you. Thank you. Lets head out to the bond pits right now. Rick santelli at the cme group in chicago. We are seeing the yields tick up for a change. A basis points. Were at 2. 17, up two basis points on 30s. Dollar index is up a tenth of a cent. But overall very hard not to look at the intersection of the higher rates and low equities. You see it on the one week part of tens. We saw a falloff friday. We are coming back but we havent recouped. November 1st really since the election we havent been at these yields although right before the election we were around 1. 75. Still significantly lower than were trading. Every country is about the same, but not exactly. Look at the november 1st of gilts theyre at 106. And given whats going on in the last several months and the election coming up, its hard to look at the chart and not see that in terms of the fixed income volatility. You see more of it showing up in the italian sector. Their tens hovering just below 2. 30 yield. Indeed, if you consider all of the issues they have with regard to solvency in banks its shocking this chart isnt even higher because its getting over the consolidation we had for 2017. Finally, bunds, talk about a market half asleep. They settle at around 22 basis points. Up seven on the year and were down from a close of 2. 44. Hovering at 2. 17. Theyre virtually in middle of the range. The 20s to mid to high 40s but acting as though they dont want to go anywhere. We know that Central Banks own a boat load of sovereigns around the world. Bob can call it what he wants in terms of oh, i can reconcile how the markets are moving but when you look at the ecb the bank of japan, our central bank are doing, yes, were talking about reducing the balance sheet. It hasnt started yet. And it is really realistic and if it is, were talking a long time. But thats one of the forces keeping rates down and finally, foreign exchange. One week of the dollar index its up a little bit. But still under the 97 handle which is significant. Look at the five year chart euro versus the dollar, it certainly looks as though with can hover in the 1. 12 area for a while. It looks more bottomy than toppy when you open up that chart. Okay. Watching the oil prices as well. Unable to hold on to the gains from earlier this morning. Jackie deangel us. Hello, a bold move by bahrain, egypt to sever their ties with qatar because of supposed terrorist activities. Qatar is one of the largest natural gas exporters. We have to monitor this and see how it progresses. Second, qatar has been working over the last decade to improve its International Prestige and influence over the region. Trying to rival dubai. This is a blow to the reputation, especially as its set to host the world cup in 2022. Furthermore its a travel hub. Many of the Long International flights from the Worlds Largest cities go through doha, before connecting to the other regional destinati destinations. This is coming after trumps visit to the middle east. Look at the prices the oil did go up briefly. Any time theres strife we see that happen. But we are negative right now. Natural gas only trading a little bit higher at this point. Thats because the world is awash in natural gas. Especially with the rise of fracking here in the u. S. And the u. S. Sporting to export. Back over to you. Jackie, thank you. When we come back, what to expect from apples worldwide Developers Conference and where amazon i might fit in. Apple is the worst performing dow component at the moment. So new touch screens. And biometrics. In 574 branches. All done by. Yesterday. Banks arent just undergoing a face lift. Theyre undergoing a transformation. A data fueled, security driven shift in applications and customer experience. Which is why comcast business delivers Consistent Network Performance and speed across all your locations. Hello, mr. Deets. Every Branch Running like headquarters. Thats how you outmaneuver. Wow record time. At cognizant, were helping todays leading Life Sciences companies go beyond developing prescriptions to offering subscriptions with personalized, realtime advice for lifelong, healthy living. Honey . You almost done . Nope. Get ready, because were helping leading Companies Lead with digital. You totanobodys hurt, new car. But there will still be pain. It comes when your Insurance Company says theyll only pay threequarters of what it takes to replace it. What are you supposed to do . Drive threequarters of a car . Now if you had Liberty Mutual new car replacement™, youd get your whole car back. I guess they dont want you driving around on three wheels. Smart. With Liberty Mutual new car replacement™, well replace the full value of your car. Liberty stands with you™. Liberty mutual insurance. Apples annual worldwide Developers Conference a few hours away. Our josh liptons there in san jose with a look at what to expect. Hey, josh. Well, carl this is a developers show. So the focus going to be on software. Seems like a safe bet that apple is going to introduce a new version of ios. Apple usually unveils that new mobile operating system here today and then makes it available as a free update in the fall. In terms of Global Market share, ios controls 15 according to idc. Now that is a distant second to android, but the more than 5,000 developers today theyre less interested in market share. They want to know how much money they can make in q1 the app store did generate about 100 more revenue for developers than google play. Thats according to app annie which notes that gross Consumer Spend is more than 15 billion. Analysts looking to that ios update for any clues about that new iphone in the pipeline. Of course excitement about that iphone and the subsequent upgrade cycle is a big reason why apple stock is already up more than 30 this year. Up some 60 in just the past 12 months. In addition to software though, we are also anticipating hardware news today. With reports indicating the update to the laptop. Apple sold more than 4 million macs, with revenue up 4 and the siri enabled Smart Speaker could make a debut today. Theyre of course there apple would be taking on amazon and google. Asked about the two devices apples shiller said if you have nothing nice to say, say nothing at all. Guys, back to you. Oh, theyll be definitely saying something in a few hours. The downgrade we mentioned today is out of consensus call, would you agree . It is out of consensus. Although i think the consensus price on apple is not that much above where the stock trades right now. I think the strength of this rally and its gotten almost back to the market multiple basically trading in line with the broad market that i think analysts are reserved because for years it didnt respond to the fact that it was profitable. I think its out of consensus to down grade it. Looking at the average price target from analysts, 161. 23. Not that much higher that up the current price. You will see 10 or 15 upside in that consensus. Still a rare downgrade to mention. Still to come on the show, former vp ceo lord john browne on the saudi led backlash against qatar and the terror attacks. 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But for many businesses, its out of reach. Why promise something you cant deliver . Comcast business is different. We deliver superfast internet with speeds of 250 megabits per second across our entire network, to more companies, in more locations, than centurylink. We do business where you do business. Watching shares of snap this morning. You watched this today. Yeah, they name a number of factors why they cut the price from 20 to 18. They have a neutral rating. And they cite the companys ability to scale its advertising business. The fact that its less bullish on their ability to add new users. Concerned about the lack of profit. I dont think any of the reasons where anything new when it comes to questions about snapchat. I think it might be having an impact with shares down almost 2 . But still the stock has done relatively well, given the bearish arguments that have plagued this Company Since the ipo days. I think it articulates the caution on the stock. Whats interesting after that first Earnings Report and the stock had a rough day. It stopped going down 17 and change which i guess is right right above the issue price. Nobody liked his tone on the call. It wasnt a great growth stock conceivably. And its traded in the narrow range since then. If its a strategic asset. You cant tote he turn your back on it. Speaking of narrow ranges the dow down single digits. Four points this morning. When we come back, lord browne will talk about the oil market. Whats happening in the middle east relative to qatar. Back in a minute. When this bell rings. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. Say carl, we have a question about your brokerage fees. Fees . What did you have in mind . I dont know. 4. 95 per trade . Uhhh. And i was wondering if your brokerage offers some sort of guarantee . Guarantee . Where we can get our fees and commissions back if were not happy. So can you offer me what schwab is offering . Whats with all the questions . Ask your broker if theyre offering 4. 95 online equity trades and a satisfaction guarantee. If you dont like their answer, ask again at schwab. Welcome to holiday inn thank you wait, i have something for you making every stay a special stay. Holiday inn, smiles ahead. Whether for big meetin or little getaways, member always save more at holidayinn. Com good monday morning. Welcome back to squawk on the street. Im Carl Quintanilla with sara eisen and david faber at the nyse. The markets trying to go into the green after a mostly negative premarket. Oil still down about 1 . Were watching fallout from the london terror attacks, a rift in middle east politics, visavis qatar. Ahead of a busy week. Our road map for the hour though does begin with terror in london. Seven people are dead, dozens more injured in an attack just days before the parliamentary election. Well take you there live. Oil prices moving after saudi arabia and several other gulf states cut ties with qatar. We have the latest. And the Worlds Largest Cancer Research conference is under way. Well hear from the ceo of brist Bristolmyers Squibb. We have some data crossing right now. Over to Rick Santelli. Yes, a litany of data, carl. Start with ism nonmanufacturing. The service sector, expecting a number over 57. This may read comes in light at 56. 9, sequentially following 57. 5. Weakest since marchs number, 55. 2. Ism nonmanufacturing Employment Index that moved higher. Markedly higher from 51. 4 to 57. 8. New orders, they moved lower from 63. 2 to 57. 7. Lets now look at the april read on factory orders. That was down 0. 2 exactly as expected. If we look at durable goods, april final number, were down 0. 8. That follows a slightly revis revised well, no. 0. 7 unrevised. 0. 7 unrevised. If we look at durable goods extransportation. Its a bit less negative. The nondefense air craft, a proxy for spending is up 0. 1 following unchanged last month. We have had two months in a row now that were unchanged. So this up 0. 1 number matches january. And this is a very disappointing area in durable goods and something to Pay Attention to. Carl, back to you. A lot of information there, rick. Thank you very much. Meanwhile, seven people are dead, Dozens Injured in a terror attack in london over the weekend. Our wilfred frost is there and has all the latest. Good morning. Good morning, carl. Yes, a lot of that tragic attack took place in the street behind me further away, but i want to focus on what the government has said it might do in order to prevent a recurrence. Here is Prime Minister may talking about the role the internet played in the attacks. We cannot allow this ideology, the safe space it needs to breed. Yet, that is precisely what the internet and the Big Companies that provide Internet Based Services provide. Now, what could that mean speckly in terms of poll specifically in terms of policy . The Home Security who is in charge of antiterror said that it was completely unacceptable that the government could not read messages protected by end to end encryption. She said, further, we need to make sure that applications like whatsapp dont provide a secret place for terrorists to communicate with each other. After the march westminster attack, she urged companies to yield this information willingly. She did not rule out forcing them to do if necessary. With the increased rhetoric from the home secretary and from the Prime Minister in the last 24 hours both generally towards antiterror legislation and in the area of cyber security, it would seem that that type of legislation is more likely today than it was before. So all eyes on whether the conservatives win reelection and if they do tackle the specific areas. Yesterday, facebook, the owner of whatsapp said they wanted to be quote a hostile environment for terrorism. Guys . Wilfred frost, thank you very much. Meanwhile, the president here using the weekends terror attacks to lash out at the courts about his executive order banning citizens of six muslim majority countries from traveling to the u. S. He tweeted quote, people, the lawyers and the courts can call it whatever they want, but im calling it what it is that we need and what it is, a travel ban. The Justice Department should have stuck with the original travel ban and not the watered down one they submitted to the supreme court. Joining us is the former ceo of continental and jack rice. Thank you for joining us. Gordon, travel industrys been trying to process attacks for years now. May seems to suggest something as this changed. The frequency of the attacks is changing. Do you believe thats true . I think so, carl. Certainly the awareness of the proliferation of terrorism whether its in france or places like england has increased so its put some anxiety out there, if you will, on the travel market. How does so how does the industry adapt to that if in fact these things are going to happen more frequently even if theyre on a smaller scale . Well, you kind of pick your spots, reduce your capacity instead of doing two or four flights a day to london. You start pulling back as demand increases. After 9 11 it decreased 20 . So theres a macro change in the marketplace but you just usually tweak your frequency and seats you send into the area. So jack, is the travel ban in the United States the right policy response to push here . Well, not at this point because what we have seen in london from the manchester attack, frequently what we saw in france or belgium, even what we have seen in the United States none of these people were refugees. So we have to really contemplate the decisions that we make. My concern is that we overreact. If we overreact we xexasperate the situation. We track those who are responsible, not just in Northern Syria and iraq, but those localized in the states and europe and elsewhere rather than going for the broader ban. This is 1. 6 to 2 billion people. We cant kill that many people. The more people we go after, the more people who will come at us. We need to go after the people who are the terrorists. Not expand this beyond something that it isnt. How are we going on that front . How would you assess the u. S. s fight against isis . Something that President Trump campaigned heavily on given the number of attacks ramping up in the uk. Well, if we look at the buildup during president obama and really this is consistent, that fight with isis in northern iraq. You can look at raqqah and elsewhere. What were finding is the caliphate is dying. It is falling apart inside of that region. But what its also doing is pushing their fighters to fight in small localized ways. Thats something called a ghost caliphate where theyre working around the world. This isnt surprising that youre seeing that. I think what you need more than anything else is increased Cooperation Among the different intelligence organizations, cia, my former employee, but im thinking of mi 5 or mi 6. Im thinking of mossad, how they all come together to actually create a net to stop this as much as humanly possible. Gordon, back to the other part of this conversation really about travel itself. There are some signs that people in other parts of the world are not coming to the u. S. As much as they anticipated previously. Is that something in your former industry should be concerned about . Well, obviously anything that dissuades people from visiting the United States will have an economic effect on the airline and travel. Obviously we have our own problems in the United States and the major cities so that just creates some anxiety for people visits places like new york and times square. And it does have an effect obviously. But im also talking about the fact that the ban the talk of the ban has kept people who might otherwise think about coming to the United States from doing so perhaps if theyre muslim or even if theyre not. You know, new york is certainly a key area of tourism but theyre choosing to go other places where theres no talk of a travel ban. I think theres an emotional reaction if they support or dont support the administrations attempt to ban. They show that lack of support by not visiting the country. Theres an anxiousty side that says anxiety side that says im afraid to travel there. Finally, jack, the president continues to tweet this morning, this time turning to londons mayor, essentially accusing him of being weak. And in the wake of these attacks, how much of that is constructive . If any. Yeah, its a great question. Its not constructive at this point. I mean, this is a tragedy. Theres seven people dead, 50 in hospitals across the uk right now. The idea that the president would attack the mayor of london . A whole lot of fights need to be conducted out there. But the idea of going after the mayor of london doesnt strike me as constructive. Theres sort of a respect requirement. This is time to say, we stand beside you, we stand with you in this fight against people who are trying to kill all of us. Thats important. To simply go after him, well, maybe now is not the time. I think i learned a long time ago from bosses of mine, you need to learn to read this room. He needs to learn to read this room. Appreciate that jack rice. Gordon bethune, cnbc contributor. Thanks, guys. Thank you. And when we come back well continue to talk about the impact of terror on the travel industry. Well hear from the president and ceo of Hilton Worldwide, Chris Nassetta. Six arab countries cutting ties with qatar. The former ceo of bp will join us. The stocks at this hour, the dow has gone positive, little changed. Still hovering near the record highs. All three of them finished at records on friday. Well be right back. And i had all these points from my chase ink card. So i bought ingredients, utensils, even made custom donut cutters. Wow all with points. Thats how i created the ripple the doughnut in a doughnut in a doughnut. Suddenly its everywhere. I mean, it really took off. What will you create with your points . Learn more about the ink business preferred card. What will you create with your points . The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Containing this information. Read it carefully. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Welcome back to squawk on the street. Lets go out to susan lee, shes at the International Hospitality conference sitting down with the president and ceo of Hilton Worldwide, Chris Nassetta. Susan, take it away. Sara, so much to talk about, terror, stagnant business travel. Well start with the tragic events in london. Three attacks in three months what does that mean for tourism . Its not great for tourism and of course our thoughts and prayers go out to those who have dealt with the tragic events. The uk people are very resilient people so i think ill rise above. I think its a wakeup call, another wakeup call that we need to continue to Work Together to try to stamp out these kinds of events happening. And im confident that well be able to do that. For travel, you know, these events are obviously, you know, not wonderful in the sense that, you know, people first and foremost want safety and security when they travel. Having said that, too early to know the i want pact impacts related to what happened over the weekend. But the as the events take place around the world, they really are isolated to the microenvironments where were happening. Not causing broad based impacts. But we see more than a dozen terror attacks. Deadly terrorist attacks. What about travel to europe, have you seen a noticeable drop . We have seen from year to date and what we expect for the full date, we have actually seen it go up a lot. So i cant tell you based on what the events of this weeke weekend what the impact from that is. But if i look at the numbers in the First Quarter year to date in all of europe, frankly europe has been leading the world in terms of tourist arrivals in our business. I expect notwithstanding the terrible events for the people in the uk well have a reasonably good year. The impact will be isolated in terms of the time i think and location. Well, in reaction to the events this past weekend, the president said call it what it is, which is a travel ban and we should look for extreme vetting in the future can. Well, i think i have a less extreme view of that. Its a tricky issue, susan, lets be honest. First and foremost we want at hilton in our industry to make sure that americans are safe and secure and if we want safety and security everywhere in the world. Its the first thing about travel is people only want to go places where they feel safe and secure. So thats really important. Having said that, you know, i think that theres a balancing that has to occur which is, you know, intelligent vetting and processes, sharing of intelligence and information to allow for the ease of travel. Particularly in the area of tourism. The fact of the matter is the vast majority of the people, 99. 99 , pick a number that are coming to the United States are coming from other destinations around the world, they want to do no harm. Theyre supporting tremendous amount of Economic Growth here in the United States and around the world. Theyre supporting millions of jobs and so i think we as an industry have been trying to work with the industry here and in other parts of the world, work with governments to make sure that we balance those things out. Of course we want safety and security. I dont want there to be any misperception about that, but theres a balanced way to do it to allow for the freedom of people across borders that want to do no harm. But theres a lack of evidence from the six majority muslim countries that perpetrate the crimes. Well, i think there are ways to have vetting procedures that allow us to isolate our efforts to those places that and people that are going to potentially want to do harm. And as i said, the vast majority of the people that want to come to this country want to come for all the right reasons. They want to see the wonderful things that we have to offer. They want to spend money. Not just in our hotels but in our restaurants, in our malls. They want to move around the country and enjoy it the way we want to enjoy it and they support millions of jobs. I think its incumbent we have to focus on safety and security, obviously i understand why the administration wants to, that we have to do it in a balanced way. Recognizing that theres also a huge element of huge component of the economy that relies on tourist arrivals for those that want to do no harm. Hey, chris, its sara eisen here at the New York Stock Exchange. Last time i stopoke to you, it s january, it was inauguration way and you were one of the most optimist ceos about the entire atmosphere around the trump administration, post election. You said businesses were moving. Youre feeling upbeat. Whats happened since january, are you still seeing that level of confidence and optimism . Yeah, i was pretty optimistic then and i remain, sara, pretty optimistic. I mean, in terms of what were seeing from the samestore sales growth point of view we saw an uptick in activity following the election. Its been relatively stable since, but i think i said this when i was with you in davos. Im pretty optimistic so far this year at hilton, we have had a pretty good year. We got our spins down which is happening around the time i saw you. Were setting new records for signing new deals around the world. Were going to set a new record for Opening Hotels around the world. Were opening on average one hotel a day, two weeks ago we celebrated our 5,000th Hotel Opening which happened to be our first true new brand last year which is off to the major start. So you know the business is doing well both same store, particularly well from the unit growth point of view. Were now in a position of driving a lot of Free Cash Flow out of this enterprise of ours and aggressively giving it back to shareholders. So im very optimistic. Now, a lot of things that, you know, susan and i talked about that are going on around the world. Im not knnaive to those things my head is not in the sand, but our business is pretty good around the world and our business is doing really well. I think as much as everybody quantities to get caught up in the swirl of everything bad, you know, were having a pretty good year. Its not as bad as some would want to make it out to be. I know youre optimistic by nature. But the talk here at the nyu hospitality conference is when you talk about travel bans and not just the watered down version of the u. S. Travel ban as the president has tweeted this morning this gives the message to Global Travelers that maybe youre not welcome here. That must be a concern from a hoteliers respect . Right. I dont think thats great for the travel and tourism business. I dont think one size fits all as i said, a couple of different ways. I think we need to continue i think our Industry Needs to continue to work with the industry and do it in a very refined way. Recognizing that the vast majority of the people that want to come here, want to come here for all the right reasons. So having sort of, you know, blanket approaches to anything i have found in my experiences not always the best approach. Certainly finding ways to be able to through intelligence gathering and the use of technology refine our processes to who we want to vet and vet those people more extensively to make sure that the bad guys and gals dont get in. I think makes sense. But i think, you know, sort of a blanket approach while it might provide some level for Better Safety and security, well have unintended consequences and those unintended consequences are a lot of americans jobs. Right. Well, you had a bullish First Quarter. Youre giving back almost 1 billion to shareholders this year, but the concern is about technology and airbnb taking business away from the big hotel groups and also youre trying to claw back some of the revenue from Online Booking Companies Like priceline and expedia. I mean, there are a lot of shall we say head winds for the industry. I wouldnt describe it as head winds. I know again everybody likes to, you know, dramatize everything. The fact of the matter is it relates to airbnb i think were essentially in different businesses. What were trying to do with customers what we provide for customers is something different. You know, our whole business is focused around delivering very consistently high quality product, wrapped in authentic heart felt service. Our customers tell us every day that they want more of it, not less of it. I think its something very different than that is provided in the sharing economy and theres a huge need for it. As testament to that were at the highest levels of occupancy than we have ever seen in the recorded history of the business. I know everybody wants to say, sharing economy is disrupting us, killing us. But the truth of the matter is were all benefitting from this golden age of travel, where everybody wants to travel more and they have different needs. They share one need. And in essence we share another. As it relates to the otas, we have a reasonably Good Relationship with the otas. Like any, it ebbs and flows and, you know, my attitude on that is where we have a Good Relationship is where we found ways to deal or drive incremental business where they have customers that we cant access. Well, chris, thank you for making time for us. I know youre a busy man. So ill let you go. Thats hilton ceo Chris Nassetta. Karl, back to you. Thank you very much. Taking a look at the nasdaq a record high despite all the news coming from around the world. Sgoog google, alphabet, above 1,000 and lord john browne will weigh in on the terror in london and cutting ties with qatar. Think again. This is the new new york. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov oil prices are down this morning after saudi arabia and several other gulf states announced theyre cutting ties with qatar. Jackie deangelis has more. Thats right. Oil prices were higher briefly on the news, but the qatar story isnt necessarily about oil. Any time you have strife in the region, traders will put up their hackles. With respect to commodities this is more of a natural gas story. Qatar is the biggest exporter to places like asia and india. The market isnt getting overexcited because the countries cutting ties arent the big consuming countries but you need this to be a bigger story. But with the rise of fracking here in the United States and our efforts to start exporting, less concern about natural gas supply. But the news with severed ties with qatar because of suspected terror activities its a bold move. Probably a saudi driven move to foster stronger relationships with the trump administration. It shows how fragmented the region is and how quickly they turn on each other, posing the question, perhaps pointing the finger at qatar takes the attention off ofs. Why do this now . The saudis are master chess players, they have multiple reasons to keep u. S. Relations strong. Yes, this circles back to aramco ipo and with respect to the emirates particularly dubai, qatar has tried to establish itself as a force. So many facets to this story sara. Jackie, thank you. Crude oil prices are down 0. 75 of 1 . The ceo of Bristolmyers Squibb is with us from the Largest Cancer Research conference. Stocks at this hour, the nasdaq goes positive which means record territory doesnt take much. Only up less than three points. The dow and s p unchanged. W guy . They call him the whisperer. The whisperer . Why do they call him the whisperer . He talks to planes. He talks to planes. Watch this. Hey watson, whats avionics telling you . Maintenance records and performance data suggest replacing capacitor c4. Not bad. Whats with the coffee maker . Sorry. We are not on speaking terms. Good morning, everybody. Im sue herera. Heres your cnbc news update. Bill cosby arriving at court with actress keesha knight pulliam. His life and his legacy on the line. Andrea constand will testify that cosby drugged and assaulted here in 2004. The trial is expected to last two weeks. Police search two more locations in east london early today in connection with saturdays terror attacks in the british capital. Seven people were killed, 48 more wounded. Some of them seriously in the van and knife attacks. Secretary of state Rex Tillerson and secretary of Defense James Mattis meeting their australian counterparts in sydney. North korea was a major topic with tillerson saying that china should do more in stopping pyongyang. We call for north korea to abandon the Illegal Nuclear weapons program. China and other partners should step up their efforts to help solve this security situation which threatens not only that region but really presents a threat to the entire world. And that is the cnbc news update for this hour. Carl, back downtown to you. Sue, thank you very much. Sue herera. The American Society of clinical oncology going on in chicago right now. Our meg tirrell is there with a special guest. Hey, meg. Hey, joining us is Bristolmyers Squibbs ceo, giovanni caforio. Thank you for having me. Tell us about your updates here. We are transforming the cancer care and at the same time, we are at the beginning. Our strategy as a company from the beginning was to really invest in the development of combination therapy because we believe thats needed in order to offer hope to more patients. We deliberately build a pipeline of 20 medicines which are now in development. And at this conference we made great progress. We presented data on, and its the only two immunoolo oncology agents to treat melanoma and lung cancer. And we presented the data on the next generation of agents. Interesting data combination with a new agent called ido. A lot of discussion of that at this meeting and very interesting one of the new medicines that may have a bio marker from the beginning. In combination with opdivo it helps the patients. Tell us about the competitive landscape. Going back to last august with the trial of lung cancer, a seeing a divergence between you and merck. Well, lung cancer is difficult to treat disease and very heterogenius. We made great progress establishing opdivo as a standard of care and we are learning more every day. Today we have the broadest development i mean in the industry were investing in all of the communications, with chemotherapy. We started work in combination with ido. We are looking at opdivo and chemotherapy, so ultimately there may be different combinations that are needed for different groups of patients with lung cancer. And we are very well positioned to play an Important Role in lung cancer in the future. Looking at the political environment around the drug industry right now, it has been a focus of President Trump. The industrys pricing strategies. He has been saying in january the industry is getting away with murder when it comes to its pricing. How has that affected how you think about pricing new medicines . Its a very important topic because we invested from the innovative medicines and whats critical is that they reach patients. So we believe first of all, a that means dialogue and second for us, whats important is flexibility with pricing. In our company, we have many come pounds that compounds that we want to develop the regiments that can help patients with more flexibility. We actually would be very well positioned to apprise those regiments and ensure that the patients have access. So its a very, very important topic for us. How are you approaching the Business Development, potentially making bigger acquisitions or partnering outside, whats your strategy . So our strategy is sourcing the innovation internally and externally. The work we do internally as a company obviously we have a lot of the medicines we need in our pipeline which is a great advantage for us. But at the same time, we continue to work on Business Development. And in the last few months we have broadened our focus with a number of agreements that help us be even better at developing bio markers. So for example, we have made progress with a very, very interesting potential new bio marker called tmd which may be applicable across tumors. Thats the result of the partnership with our company. How much firepower do you have as youre looking at potential deals . Could you do Something Bigger . Well, we have done a lot of Business Development deals. We will continue to focus on it. We are well resourced to continue to execute our strategy which is to combine internal r d, external Business Development do continue to strengthen whats already a very, very exciting pipeline in oncology and in fibrosis, cardiovascular medicines and i think were very well positioned to continue to innovate. In terms of valuations in the marketplace, theyre stretched in biotech even after a little bit of a pull back. We think its important to be disciplined. We have a strategy that looks at the scientific potential break through value of science. We look at it must be strategically aligned with areas, therapeutic areas in which we have disproportionate value as a company. And looking at generating shareholder value through deals that make sense, i think it will continue going forward. Coming back to of course the conference where we are and your work on cancer the next big Catalyst Investors should be looking for . It includes the continuing to explore the use of the new and difficult tumors. We have a priority ongoing with the fda for liver cancer. Its the first time immuno oncology seems to be effective there. We have multiple data on opdivo across many different tumors and so in the next 12 months a lot of data that we are planning at looking at and obviously disclosing at the conferences. Well, well stay tuned for that. Dr. Caforio, thank you. Back over to you guys. Meg tirrell in chicago, thank you. A lot more on the terror incident in london. Plus, six countries cutting ties with qatar. Lord john browne will weigh in on a that. The dow is perfectly flat. Back in a moment. Lagging big time. This year the worst performing sectors are underperforming by the widest decade. What does it mean . Go to tradingnation. Cnbc. Com to find out. More squawk on the street coming up. At blue apron, were building a better food system. Where instead of paying for middlemen, we work directly with family farms to deliver Higher Quality ingredients for less than you pay at the store. Get 30 off at blueapron. Com cook the power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Stocks are hovering right near record highs. The nasdaq composite is up. It matches some action, like alphabet crossing that 1,000 a share mark for the First Time Ever after amazon did so itself. Dow little changed. Microsoft is the leader in the dow. Apple as it kicks off its worldwide Developers Conference is the loser right now. S p little changed guys. Some strength in financials and energy. Theyre two or three positive sectors higher. Vix below ten. That gets your attention. And despite the narrow breadth on the indices the list of alltime highs really includes the allstars. Amazon, netflix, microsoft, facebook, you mentioned alphabet. And then adobe, ulta, comcast, ebay, mastercard, visa. Familiar names on the alltime high list for sure. Whats different today is the ten year treasury yield is allowing for some breathing room for banks for instance to be positive. Oil prices while under pressure the group is higher. A lot has to do with natural gas, guys. We know that qatar is a major producer of liquefied natural gas. Helping the price and so some of the Companies Higher today. Lets go over to jon fortt to see whats coming up on squawk alley. A lot of traders may not realize it its the most important day of the year when it comes to apple. Well tell you why. Markets, if youre looking to rebalance your portfolios, what should we do . Well, well take a look at that. Finally, tech and terror. What kind of changes are Tech Companies going have to make in the wake of the latest attacks . All that and more coming up on squawk alley. We recently had a heart attack. But we are not victims. We are survivors. We are survivors. We are survivors. And now we take brilinta. For people whove been hospitalized for a heart attack. We take brilinta with a baby aspirin. No more than one hundred milligrams. As it affects how well brilinta works. Brilinta helps keep platelets from sticking together and forming a clot. In a Clinical Study brilinta worked better than plavix®. 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On the heels of the deadly attack, both countries and egypt have cut diplomatic ties with qatar, accusing the country of funding terror organizations and promoting destabilization. Joining us right now is lord john browne, former bp ceo. Welcome back. Nice to see you. First on the terror incident, unfortunately this is the third terrorist attack in three months. The you describe as a businessman and citizen what its been like and whether its going to Impact Business and consumer sentiment. Well, its a tragedy. It is appalling for the damage its created to the lives of innocent citizens. But britain is a very resilient country. It is very robust and people with an to and people want to pick up their lives and carry on for the future and not let these attacks get in the way of what theyre doing. So thats exactly what they are doing, both businesses and ordinary citizens and i can see that all around me. Were wondering if its going to have any impact on the election, on thursday. I know now the campaigning has shifted to security for a change. How do you predict this is going to play out . Im very bad at predicting elections. I have got them wrong in so many instances over the last year. But i would say its been a feature security has been a feature of all campaigns for some time. For many years, in the uk. And this is no exception. Obviously its heightened by whats happened recently. Nobody wants these tragedies to occur again. And expects governments to do the right thing. Well, let me phrase it this way. With corbyn getting recent momentum if we do see for instance a Hung Parliament kind of result, what would that mean for the markets, for business and for brexit talks . Well, i think again, its too early to tell. Lets wait and see. We have only got a few days to go. And ill go with the pundits and the polls to say that we probably will not have a Hung Parliament. If we do, it would be an open season for speculating what goes on in the future. But i think ill go with the polls for the time being. We also wanted to ask you, lord browne, of course about the energy markets. You led bp from 1995 to 2007. With the recent decision by saudi arabia and other arab nations to sever ties with qatar, do you expect this to have any impact on opecs strategy, production cuts, the market in general . Not really. The market obviously reacted with a little bump but i think the market goes up and down. I dont think that this has a Significant Impact on the oil markets that everyone is focused on. The most the biggest impact is the fact that we have too much oil in stock. And too much supply coming on to the world. The world will have to grow out of that. Either by limiting its growth rate which is unlikely. Growth rate of supply, or increasing demand over the long term. Site will take time, i think, for the markets to properly calibrate. Does opec still have control over the market . Opec always has some control. And opec finds it very difficult, i think, to control markets while theres so much oil in stock. Opec can control markets better when theres little oil in stock and supply can therefore control very carefully the price. So, while theres some control and they are trying as a cartel to get the price up or certainly not let it get down, its finding it very difficult to achieve its objectives. So we talked a bit about the terror attack in london, lord brown, talked about the oil market in qatar. I wonder if you believe that u. S. Foreign policy as it relates to the paris accord or nato or the eu is a wild card going into the back half of the year . How much does it worry you, if at all . Well, certainly its something which is unpredictable. And i think the announcement about the paris accord is a very sad one because at a stroke it takes the u. S. Out of the leadership position on this very pressing issue of what to do with Climate Change and that leadership is not just about, been part of the treaty, its been part of the general improvement in technology, the innovation that will lead the world into a very Different Energy mix and the u. S. Is very important in this area. So that, the u. S. Is positioned in this particular case of Climate Change will probably be taken up by others and thats easier to do than in some of the more, the more long standing agreements where the u. S. Is in the pull position. Youre looking at europe or a country like china for leadership on climate . Well, certainly i think europe has been trying to gain leadership position and doing very well. They will continue to do that and china appears to have taken this very seriously, indeed. I think its important for people to remember that this is a voluntary agreement and people have given commitments to reduce Carbon Dioxide levels by certain amounts. In the past days when i start this 20 years ago we had to take just on faith what people were saying. Now, of course, satellite observation allows people to verify what people are saying about their Carbon Dioxide emissions and thats a very good thing. It means that everyone is watching everybody, and the leaders will have to do, to say what they are going to do and do what they said they are doing. Finally, lord brown, were always trying to figure out the economic being impact of all of these geopolitical events and market events. You know, theres a lot of doom and gloom heading into brexit. You yourself were against it. Economy has been remarkably resilient. Europe has outgrown the United States recently and attracted a lot of money know the stock market. Whats your prognosis for europe, the uk. Do you think this growth spurt is temporary or are you taking a leadership position from the u. S. On economics . I think the key point here is an obvious point which is this is all adding to the level of uncertainty. So while some things are going well, obviously present Economic Performance is normally an indicator of past decisions. The presents decisions have yet to play out in an economic sense. So i think people are being very cautious about the level of Capital Investment they are making, the new commitments they are taking on, people are holding back a bit to make sure that they understand a bit more about how these changes and the relationship between nations and the relationships within nations are developing. So, too early to tell but uncertainty is certainly that. Well, well see what happens first on that on the thursday with the results of the election. Lord browne, thank you for joining us. Thank you very much. John browne former bp ceo. Lets check in with Rick Santelli and get the santelli exchange. Good morning. You know what does a broken market signal look like . We talk about how Central Banks made it difficult to communicate to investors whats going on. On friday after job numbers there were many conversations about why the long end was at its lowest yield levels since november and many other sovereign bond markets across the globe had similar patterns. One of the reasons was inflation. One reason was central bank ownership. Its very difficult to tell. Consider the conversation that was just on cnbc. Think about when opec or the cartels controlled a lot of oil. They were able to control a lot of the pricing that went into it. As the wildcat era of u. S. Frackers took hold that control became much more difficult for the market, to many much more true in its current pricing. Think about the same in the treasury complex or in the bond Global Market entirely. Theres been so Much Research as of late whether its jpmorgan talking about how quantitative easing is crowding out large players in the market or Goldman Sachs talking about hedge funds in particular and how they are lotion out to passive management and how it could affect markets and how the second and third, fourth derivatives could make the ultimate commodity or whatever youre trading gold, bond much more volatile. Zero heads did a piece to quantify the numbers specifically in the bond market. Their numbers resemble many others. If they look at roughly a 54, 55 trillion global bond market they believe Central Banks own 18 trillion of that. Which is onethird. What could possibly go wrong . Listen thats what a broken market signal look like. Is it inflation sit the market stirkts fed . Who knows. To tell, the real tell is volatility and weve talked about that. Theres so many big forces all converging, whether its electronic trading algorithms giving the market less volatility, more passive versus active but in the end the ownership of those securities is tough. Ill be frank i dont think they can unwind. And if they do it will take 25 years. Carl, back to you. Thank you very much, Rick Santelli. Well start again new hour with the dow up five points. Dont go away. Welcome back to squawk on street. Financials are seen as the best performing sector now lets sends it back to nyc to the squawk alley crew guys. Its monday morning. Calm to squawk alley. Record high for the nasdaq although a tight range. The uk Prime Minister theresa may vowing to