Transcripts For CNBC Squawk On The Street 20170703

Plus what to exfrequent the market over the next six months. Hes making some unexpected calls from foreign leaders lots of news happening on the auto sectors today plus the new tesla model set to hit the streets at the end of the month. First up its the first trading day at the second half of the year. Futures pointing on whats likely to be a low volume day. Market slows today due to the 4th of july holiday. Well get a few notable pieces auto makers will be out with june sales throughout the hour and the president tweeting about the state of the markets and the economy. Wages will start going up. It has never been stronger actually pointing to a narrative that some believe will be written in the second half if we finally start to see another kind of reinflation trade. Or if they dont. Theres actually movement. Its incredibly dangerous im superstitious to tweet about how high the market is the same to me is just tempting fate. Why over saying its like peace for our time and i think its dangerous. The journal, the top of the journal today is about the dollar about six years down 5. 5 they say investors are confident that other economic recoveries are surpassing growth in the u. S. When you saw whats happening last week, especially in the wake of what mario draghi said or didnt say et cetera. It drew 20 basis points in a matter days. Its a huge, huge move central bank is able to be less acome day tif and that speaks to exactly where your asking. I also wonder 6 and you have to wonder is the flip side of that part of the increase in the stock market the stock market rises theres really some change coming out of the Trump Administration so i dont mean to start circling back to that a lot is predicated on the story this morning even talking about changes with tax cut hikes on the wealthy also talking about they still want to go big on tax reform and make that happen i dont know if the trump tweets are helping health care happen or helping tax happen. Its going to be a sense of doubling down today. And a tax rate for the wealthy that begin with the 4 to pay for more aggressive lower and middle income tax cuts, pushing for 15 corporate and then this line that some say resigning if he concluded the tax reform. What has mike santoli said. Hes worth 2,000 points on the dow. He is kind of seen as the kind of stabilizing force that represents what its wishes are for lack of a better way to put it if you feel like that weight shifts more toward the seat i dont know if theyre quite as excited about that prospect. It was part of the administration committed to revenue neutrality which removed the shackingels of what they could do speaking of putting downward pressure on the dollar those headlines arent going to help. Finally well watch as we said oil today hasnt had 8 days up since the end of 09. Back to the end of 09 they had ten days up its coming off the best week of the year but the worst half since 2015. We saw rig counts drop last week for the First Time Since january. I know we spend so much time obsessing about opec im not sure we should anymore because clearly lets remind everybody opec is talked to. The government says a and they do exactly what it says but here in the United States they do what theyre going to do based on what the price of oil is doing. We see rig counts go up and being determined by us im impressed were up 8 Straight Days because of that. Every time it starts to get a little traction the capital goes back into the market and that continues again. Happy 4th guys jeff do you believe the second half is going to ring different than the first. I think your dollar point is a strong point and weaker dollar should pick up Industrial Production in the second half of this year. Come in well above what people think. I think in the stocks were going to continue. Youre not worried. Im not worried about that. The underlying economy is stronger than the governments figure suggested i traveled all over the country is strong. Strong business will tell you things are strong so im still bullish. I have a feeling thats going to happen a lot this hour. But what about you same question about Interest Rates. How do you interrupt their moves here so, you know, theyre still so low, not whats going on from a central bank standpoint. At least in our data one of the things that were watching sin inflation data is starting to turn inflation data. Nothing that should be alarming but to see that two and a quarter range. Tweeted the 232 is a critical level. Its the worst month since november we had a flip flop do you think thats going to be more permanent. We do expect more volatility. Theyre talking much less about supporting growth and financial conditions much more about asset prices and it wont show up in the markets probably until we get meaningfully into the second half were probably a little bit more cautious because of that reason exactly. What about you in terms of the rotation we probably saw outperform growth for the first time in ages is that a play book for the second half or no . I would favor value over growth a strong recommendation on the financials and so far its played out well. How far would you ride that, jeff not to bring this all just as a trade. The fundamentals changed quite a bit there. The pay outs are up big. Theyre relative to the market multiple. Trading below market multiple. Could trade to 2. 5 times trading 18 times forward earnings actually they think it falls to 17 what do you think for the whole s p . I think 20 multiple on the s p makes a lot of sense to me. Why because if you start if 1990 at the beginning of the year and were still okay then whanchts do you think. There would be probably a slow leak. If you see Interest Rates as a sub city tutor in equities both on the shortterm rate and ten year we expect a grind higher. More and more people are able to meet their financial goals and they may pay a lower price we should fit in moderately to slightly lower. It really hinges around what they see in a ten year yield how much do you pay for earnings depending on what youre going to get in the bond market. Which was in absolute certainty. The s p can earn over 150 per share. And to this point that fixed income is an alternative i sit on the board of two endowment funds and theres no way to get to our mandated 7. 5 target return using fixed income. The only way is stocks. So 150 with tax reform and without it are you in the 130s where are you . Its probably around 140, 142. Wow thats a number considering 100 wasnt at a long ago. I know. I remember when we were kpieexc about the s p hitting 100 in earnings. Have a great fourth of july thanks for joining us on the session here. Youll be shocked to hear the president took to twitter this morning. Hes announcing he will be making call with foreign leaders and top trump adviser steve ban nonis is floating a tax hike, a big one on the wealthy. Good morning, the president is at his golf course in new jersey today but he is carving some timeout as you can say he is going to be talking to some of those folks. Angela merkel of germany and we will be going along with the president to see how thaun folds after a weekend where he spent largely on twitter criticizing the media this morning he teed up another tweet blasting the media he said at some point the fake news will be forced to discuss our great job numbers, strong she kmis, success with isis and the border and so much else that after this tweet over the weekend in which he retweeted an image of himself as a professional wrestler body slamming and punching a person whose face is replaced with the cnn logo the president critical of the cnn network. That tweet got a lot of reaction some of the president s critics said it was an insightment to violence against journalists some say it was the president ial equivalent of a prank phone call the president continuing to be fixated on his cable News Coverage also steve ban nnon has the idea of raising taxes on the wealthy. That would pay for midding and working class tax cuts a populous move by the white house if they go in that direction. Not clear how republicans would react to the idea for tax increases for anybody. So a interesting mix here this morning going into this shortened july 3rd. Well talk to you later this morning. What a weekend for political news june auto sales figures for ford toyota is out just now plus the weight is over. Tesla announcing its rolling out the model 3 earlier than expected we have details on that. Take another look at the premarket. Nasdaq coming off the worst week of the year but the best first rba ia nu 09 wee ckn mite it was declined to 5. 5 . Retail sales in line with expectation. As for toyota an increase in sales last month of 2. 1 expecting an increase of 0. 1 so ford and toyota reporting a little bit better than expected. Well get the gm numbers in about 15 minutes and dont forget later on today well find out what the sales pace is most believe it will be about 60. 8 million vehicles with these first two coming in better than expected we could get back to that 17 million mark though. Most believe 16. 8. Elon musk tweeted out the first model will be produced on friday when they ramp up producti production the first 30 molds will be at the end of the month on the 28th and then gradually increase production through the end of the year with the production rate hitting 20,000 for the month of december. Thats production rate doesnt mean theyre going to crank out 20,000 vehicles in december but remember they initially targeted production rate of 5,000 per week by the end ofdecember so theyre roughly in line with what they have been guiding the street to. Where are we on their efforts to get to half a million by next year in total . Theyre sticking with that. Theyre sticking with that as the Production Target for next year a lot of this continues on if they can continue increasing production. Tesla shares up another couple of percent. 72 year to date extraordinary i also want to ask you about this report that the Homeland Security Department Might partly resend the band. Whats going on there. They announced yesterday that flights out of abu dahbi have been cleared by the United States that their enhanced security procedures and they dont go into details about what they are but that those enhanced security procedures mean people flying to the United States and were talking about the airlines that those people, those passengers will be able to bring on their electronics including the laptops so i think were going to see this over the next several week where is youll hear from a particular airport primarily your larger hub and we have been clear. We have been approved by the department of Homeland Security. They have signed off on our increased or enhanced security and therefore people will be able to continue bringing their laptop and other electronics. Will we see a big up tick in the companies that make these things we went and spent time just outside of boston and they have one already being tested by the tsa. Different hubs around the United States one also being tested in europe. Theyre planning to ramp up their production and youll see that from the other 3d bag screeners as well. I think everybody realizes this is being pushed by the tsa and the department of Homeland Security therefore theyre going to be ready to increase that production well see you in a little bit for gm when we come back the second half play book on transports can they remain in rally mode after a good june . Today marks the first day of the second half of the year. Lets get a check on where the major averages stand for 2017 t. Both up over 8 nasdaq 14. Nasdaq 100, 15. 3 more squawk on the street in a minute baby crying slow jazz music fly me to the moon and let me play bell ring [woman] we did it. [man] were campers. Look at us. Look at us. Its so nice to get out of the city. Its so. Quiet. Is it, too quiet . Its awful. Yeah. Feel at home, pretty much wherever you are. Tmobile is americas best unlimited network. We created the ripple the doughnut in a doughnut in a doughnut. Right away, it was a success. I mean, it really took off. What people dont know is that it all started with points from my chase ink card. I bought the ingredients, utensils, even custom donut cutters. Wow all with 80,000 points. What will you create with your points . Learn more about the ink business preferred card. Transports underperform the s p in the first half of the year but coming off a strong june is that the sign of things on come for the back half morgan has a closer look. Thats right. This could be the case the dow transports reversed course from the best performing index and now the average is neerg its all time high of 9639 a new high would be another buy signal for stocks so improve dag at a the possibility of Stronger Economic growth. A new traex charge during some weeks. Fed ex is exapproximate pekting to do something similar. And june truck tonage bounced back can it finally recover from a down cycle they have a big rule taking effect thats going to force them to electronically log driver hours that could help take capacity trucks off the road and raise rates. Also keep a close eye on rail stoc stocks they all rallied this year theyll face it in the second half and key growth areas like autos have started to wain and csx is expected to keep soaring. Thank you for that. Opening bell in just a moment. Thank you is what we say. But we mean so much more. We mean how can we help . We mean what can we do . We mean its our turn. To do our part. To serve you, for all youve done to serve us. Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at Td Ameritrade. One of only two shortened sessions for the year. Bob is here at post 9. What can we expect today i think the important thing is what were going to expect for the next few weeks i looked at the earnings over the weekend. We only got 5 of the s p reporting. 23 or 24 companies but the numbers have been excellent. Oracle had great numbers nike had great numbers fed ex had great numbers so we have seen these companies. These early reporters not only do better on the bottom line and the top line numbers the revenue numbers have been spectacular. We have a revenue drought for 2. 5 years. Nothing zero on the top line suddenly 8, 9, 10 Revenue Growth for these companies now you cant say we have Financial Engineering going on now you have real top line growth 90 beat on the revenue side that almost never happens. Typically its 50 or 60 . Relatively speaking the huge move in yields, the big jump goes almost 20 basis points. Im not ready to call it the reinflation trade back a little but oil, copper, ten year yield all moving at the same time. I think theres something to that we could talk about using bonds as a hedge against stocks after the bell here but i think its a little bit of that going on as well its the opening bell and the s p at the bottom of your screen undergraduate Investment Conference and at the nasdaq its the United States air force. Its 70th anniversary. More auto sales coming on and lets get back to phil. Maybe everybody had better than expected sales. Gm down 4. 7 the expectation was for a decline of 1. 8 so gm a little weaker than expected and when we get that later on gm believes it will be 60. 6 billion that will be the fourth straight month. Thats a pretty big miss relationship ti to the others. Any special factors that might be in play there. Usually when you look at these. When you see an auto maker come in a couple of Percentage Points lower than expected. Usually its because of that and Sales Program when they cut back on complete sales thats terrible. Theyre taken with a bit of a grain of salt month to month from the low 17 million, right . Now theyre in the low 17 million. Theyre in the mid 17 million. They brought that down for the entire industry. Their estimate for the entire Industry Sales for this range they brought down to 17. 1 where Everything Else was already. Thats not a surprise that gm brought it down. With all the talk about tesla today how is the chevy volt doing . Its okay but its limited sales. Youre primarily looking at sales on the west coast, california, oregon, washington, some states out of the east coast. You will see nationwide sales ramp up later this, its actually next month. Thats when well be able to say how much appetite is out there and then be able to perhaps compare that with the model three. And the model 3 are comparable customers and if those are two good cars. In terms of customer i think youre looking at different customers there. I think the person that is shopping for a chevy volt tends to be positive toward chevrolet. Tends to be a gm favorable toward general motors. The person that put down a deposit on the model 3, i think these are people that from the beginning looked at what elon musk and tesla are building and they say i like it i want it. They put a 1,000 deposit down a year and a half or 2 years ago before they had a chance to see what this is all about youre looking at two different types of buyers. Phil, thanks for that covering auto sales today. Dow is up 92 being lead by microsoft but otherwise, financials, goldman sachs, jp morgan, the ten year right at 230 as we speak. Thats the group to watch energy and telecoms are down double digits. With everything going on theres a lot of repositioning that might be happening thnchts. This is the big debate. We did see money coming out of tech they were down about 5 in the month of june. We saw that. The problem is its not quite clear who the rotation is going to everyone is cheer leading the banks. The banks were up about 6 in june thats an obvious one. We have ten year yields up we have banks allowed to raise dividends and buy back more stocks so they seem like the obvious ones but not much else oils not doing anything none of the Energy Stocks are. Retail isnt doing anything. Theres two obvious groups you would think might get a little money just as a contrarian play there might be investors that look at the banks and say if you look at the one year performance, its extraordinary. Some of them are 80 , 70 , 90 those are very, very big moves and then to add on to that, i know your performance isnt as strong but theres some question as to how much was priced in already in terms of coming off the bottom. Yeah. Remember a lot of these, people talk about the steepness of the yield curve but a shortterm yields are the most important things for these banks because you get a lot of things. A lot of them are of course Interest Rate sensitive and theyll change overtime. Theyre not necessarily fixed rate theyre floating rate. So that shortterm rise in the yield that we have seen recently, even with the longer term yields flattening thats big. That helps the banks a lot. The bottom line goes up very directly. I want to go back to your point earlier about bonds versus stocks because we have been debating this for weeks now. Why are bonds going up and stocks going up and gold going up theres a group of people that believe that the stock market is going to be strong but are using bonds as a hedging strategy. In other words the idea of going out and buying put options or betting on volatility was a bad idea its been a loser for years so you can see the volatility dropping off in a lot of the Options Market where people are saying who cares were not making money on that lets just as a hedge own bonds at this point. So this call, risk parody, whatever word you want to call it but owning stocks and bonds as a hedge has been a popular strategy. Many people are doing that because they think its a hedge. Its defined the bull market for 30 years they have been rising together no reason to think its going to stop now its not add odds if you continue to see inflation falling and the Economic Data is okay you have guys saying man if the ten year goes up another 50 basis points i would be buying that by the fist full. Theres value there. It doesnt seem like that needs to be driven higher. Theres no inflation data out there that shows it would be. The other part is technology and how its keeping the cost down. Its deflationary and thats good news. Also said Something Like at t is playing chess and verizon is playing checkers which is a little bit of a dig. Theyre under tremendous pressure theyre losing subscribers to tmobile, to sprint, now we could see a tie up there that bolsters them even further or capital coming in there. They need spectrum they need compass toy to help with these unlimit dade at a plan offers as well and if you look into a future where theyre the provider and not comcast then they say we need to have the content too. Theres all that cash sitting in Silicon Valley. Some day theyre going to do something with it. No. The marginal buyer of content. No, my money is about them buying all of this content way above average prices because everybody likes to invest in hollywood when they have too much money but more about what do you do with all of that cash sitting there in Silicon Valley. Whole foods and amazon woke up everybody. Apple is being rumored in buying disney or you name a company with its cash. So right off the bat here, first trading day of the 2nd half t leaders are oil refiners, banks, and retail. Those are the three losers on the year so its too early to say that these are just any kind of longterm place as a rebound but theres your leaders right off the bat. When you think about retail the sentiment had gotten so ugly and then along comes amazon and whole foods and it gets catastrophic maybe over the longterm theyre going to beat amazon but it doesnt happen tomorrow. Look at it. So strong. Conference call last week talking about why he maintains that sears should be a 90 stock or its going to navigate the environment because theyre going to kick out sears and bring in the tenants of the future i think theres a trader joes going up near me and then look at what else is happening. Michigan shopping malls are now employing ford as the anchor tenant because theres a food court convenient for our employees. Theyre putting up experience usa where you can play basketball or volleyball. Kids can learn how to be doctors. Version trends data centers. Yes. Put a bunch of servers in. Yeah. I bet the wifi is really great at these places. Out care patient centers. I saw one the other day. Walk in in the mall the other day. Just walk in. Because the real estate itself is valuable theyre convenient to the highways theyre well placed for people to get there theres parking. People want to go to do. That will take some time but anybody that rolled their eyes and said theyre never going to reinvent these malls and they still probably have to close hundreds of them that transformation is already under way. We used to have kiddie centers. Giant amusement parks built into the mall on the backside of it huge slides. I did it on the weekend too thank you very much. I dont want to see you on a slide. I love to ask what his first car was. 1969 chevrolet camero a 69 Dodge Charger i had a 74 barracuda. We need photographic evidence. I was an intellectual greaser. Bob has a colorful past. I will stay away from that for the moment butly provide you with photographic evidence. Lets get over to bertha at the nasdaq. I do not remember amusement parks in the mall when i was a kid and im around your age bob. You must have been at interesting malls back then. Interesting moves here at the nasdaq composite and the nasdaq 100 snapping a 7 month winning streak and it was really the small caps that were the stars in june but they have been the laggers here today up 4. 5 here today after a strong june but its really been the big cap tech and also the large cap chips in particular that have been driving the moves here at the nasdaq today were seeing all of them bounce back after a bit of a swoon but health care helped the small cap russell 2,000. Taking a look today, microsoft is moving higher microsoft is one of the best performers of the big momentum names. Its only been down twice in the last 12 months most of the others have had three losing months during that time facebook, apple, and some of the others microsoft has been up now for four straight quarters its best performance over the year since 2014. Recordedly its under pressure to discount licenses in india. Cyber Security Officials there are pressuring microsoft to offer discounts to upgrade to windows 10 over Cyber Security issues meantime tesla, one of the outperformers here today tesla has also been a big winner here as well its been up nearly 72 this year one of the best performers in the nasdaq 100 get a little bit of a move up and start reporting auto sales also moving into the electric truck area and finally we have an acquisition here ahead of the holiday. Bank rate being bought out for 1. Had billion. Guys, its kind of a digital consul tan sy that connects brands and consumers although i have to say its so new tech when you read their site that its really hard to tell exactly what they do and what they dont do they seem to do everything this is about data. What is bank rate. About70 of their revenue come from providing credit card information. The other 20 or 30 is other things like banking. Bank quotes and rate quotes. This is the perfect fit for the data company its about generating massive amounts of data. Thats the story its the way to look at it youre buying data. Rick had a front row seat to all the surprising action in the bond market last week. He joins us from the group in chicago. Whats going on today . Well, you know, rates are actually much higher depending on what maturity maybe a basis point or so but where theyre hovering and how they got there seems to make the world scratch their head look at a june 1st start of 2009 to 2 year note yields. Thats the last time were closing up at the 139 level but lets isolate that time frame and look at the two year shots the european two year. Between june 08 and june 09 we covered a lot of ground and it fell quite a bit which really accounts for the pattern why to i point it out . Theres something going on outside of the u. S. That has a dramatic effect within the u. S you can argue why rate versus gotten back up without i would point to this move and say inflation data weakened. A couple of things should jump out at you its been fast to the upside everybody likes to do data dependent because it makes everything easier to script but it doesnt seem to be. It seems to be bund dependent. They settle at 22. Theyre double where they settle we settle at 244 and were still down over a dozen basis points if we look t at the last chart, a one year chart of the dollar index we can debate all day long but the answer once again is look across the pond whats going on in europe and Mario Draghis easy money is giving a big wave to the european markets putting the euro in the spotlight but the wave is dependent on the ecb how long that wind will keep that wave going. Thats the question. Carl, kelly, mike, back to all three of you. Ill take it. Thank you. Speak of one of the inflationary inputs oil has been on a run here lately. Jackie has more at the commodity desk. A little bit of an up tick because of the 4th of july holiday. Thats possible. But gas prices have not caught up theyre actually down 15 cents on the month 2. 23 is the National Average for a gallon of regular according to aaa i shared the results of our oil survey asking about the outlook for the second half. Heres what i feel is important. The majority said crude can go lower from here. High 30s is likely they were not comfortable calling the low 40s the bottom for the year and opec could try to jawbone this market shortterm but the cartel lost control according to our survey respondents. Back to you. Sounds like what michelle was saying earlier. Jackie. Thank you for more on the oil markets lets bring in rbcs head of Global Global commodity strategy do you make much of this 8 day run we had in crude here or do you think the prevailing bearishness that we have seen play out this year is going to reassert itself. We thought this market was a bit oversold we think the fundamentals are better than where the price was earlier this month but we think that rallies are technical driven so the key thing we need to watch is look at the reg count. We saw it come down for the first time last week we see that as the start of the trend. Also inventory data. Are we going to have the big draws . If we dont we think thats particularly bearish those are the two things were watching and the upside is a geopolitical story that pushes us higher. All right what about you do you see the risks to the upside here or to the down side. At this point the risk is to the upside we had a nice run lower. About 9 per barrel. We all know that all have been priced into the market in between 41 barrel. I think there is a potential to go down there but were already very low so given that all of these bearish headline versus been priced into the market if you dont have any sort of risk of a large outside move i think it would be to the upside at this point. Before you ask your question, dow transports just hit a new high as we were speaking about that he was talking about the idea that below 50 production cuts are going to have to come in along the way. Its going to be a buy and talk about what happened during the second half of this year do you see that possibility of oil over 50 and how would you rate oil stocks at that point . No, oil stocks are certainly a venue that you want to start paying attention to. What the Global Economy is doing. We do know that over the last two years the producer has been heavily hedging Spot Oil Prices between 47 and 54 barrel so once we get into that range we know the producer is making money because this is where theyre willing to hedge conversely with oil prices this low your margins on the downstream, your refiners are making tremendous margins and theyre making 30 or 35 margin with the amount of oil theyre pulling out of the refinery the current price regime that is the oil stocks given the current price level and given the current upside potential risk of i think this is where you want to start looking into oil stocks would you buy oil stocks here or no . What we juan to watch for is what happens were focused on what happens during gog to the end of summer. What is the inventory draw do we get a draw of 30 Million Barrels . That could be bearish but we expect it in the back half of the year and do we get something coming out of the middle east. Thanks. The second half play book after a shot month for that sector transports at a record high for the First Time Since march that would include all time highs for likes of fed ex and delta. Back after a break at crowne plaza we know Business Travel isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. We can expect volatility to be higher. A lot of participation. They havent set a record high since marchand if you get those they always like to talk about the industrials and transports and the utilities leading the way in the dow today we also talked about disney. Jp morgan is up there, exxon, dupont, nike is down. 5 its the only way to take a bullish position if you were a believer in that philosophy. Yeah. Also interesting because going back to what youre saying earlier about whether the market is overvald or people are starting to get concerned about it writing in the journal today in the oped section he is starting to say this is what a bubble looks like its a lot easier to call it cryptocurrency are we talking about dow theory. It does come at a consequential time we have three huge questions speaking of bubbles well talk in a few moments. Inngmay be familiar with his thki dow is up 135. Dont go away. D active duty 11. And two in the reserves. Our 18 year old was in an accident. When i call usaa it was that voice asking me, is your daughter ok . Thats where i felt relief. It actually helped to know that somebody else cared and wanted make sure that i was okay. That was really great. Were the rivera family, and we will be with usaa for life. Usaa. We know what it means to serve. Call today to talk about your insurance needs. A used car, lets take a look at the markets. Pretty good for the early hours of the 2nd half. Dow is up 150 lead by oil, retail, even a little bit of tech here. Lets get the road map. It starts with as carl mentioned were halfway there. We take a look at how stocks ended up in the first half and where you should be put yourg money to work. Elon musk announcing his tesla model 3 shutting the market sooner than expected plus a mixed bag for june auto sales. A report that top trump adviser steve bannon is quoting a big tax hike on the wealthy. A live report from the white house straight ahead. First up Economic Data on a big day from macro all around the world. Rick has numbers. Were expecting an ism june read of somewhere around 55 and change but boy do we get an extra helping. 57. 8 57. 8 i cant stress how surprisingly strong this number is. So consider if you look at 57. 8, right now the high for the year was 57. 7 so that usurps it obviously and now we have to go all the way back to a 57. 9 read in august of 2014 and that was the highest since 2011 so only a hand full of readings at this level. Lets break it down. 63. 5 much better than the 59. 5 and finally on a week where were going to have a day off but then were coming back to adp and the jobs report, 57. 2 on the employment headline and this is very fascinating as well because the high for the year outside of this was 58. 9. That was the best since april of 2011 so very strong data the last number a little older its a macon instruction number. Spending month over month. That actually is a disappointment were looking for up. 3. Its followed by a positive revision in a negative way last was minus 1. 4 now half that minus. 7 putting all of that together rates ticked up a basis point before the data. Ticking up another basis point 232. Welcome back to the early 2017, 230 to 260 range carl and the gang, back to you. Yeah, you have highlighted that before. Were looking at the dollar doing an up tick as well Retail Sector having a rough first half as vacancies continue to increase amid store closures. Whats in store for retail in the second half. Joining us with his outlook is the worldwide ceo Retail Consultant that is also a cnbc contributor. Good to have you here. Great to be here. Could it get worse in the second half or was it so bad that at least in the shortterm if youre a trader theres value in these stocks. No, its going to get worse i said the 4th quarter will be the toughest quarter for retailing. It was the toughest quarter. It was the Tipping Point for online versus brick and mortar its not going to get better well see the same problem in the 4th quarter this year that we saw last year its going to be the worst traffic. Its going to be the worst Sales Comparison its not going to be good and all be driven mostly by things online. Does black friday survive black friday hasnt survived already. Last year black friday was stretched out for about four weeks and that continues to be the case so will there be a big shopping event in the 4th quarter, sure. Will we do lots of business and have big discounts will they start before black friday and run all the way to business, yes but that happened last year. You also called for, i wont name the names but high profile bankruptcies i think you said august at one point. I did say i thought in august that varies could go and i think well see, we have already seen more bankruptcies this year than all of last year well see more as time goes on and it will be hard to predict too but the other thing is strategic mergers. Its not like whole foods was a great business and it still got bought by amazon its not like jet was going to make money on its own and it still got bought by walmart so youll see some of these people that may not be performing great still get acquired because you need to be brick and mortar if youre online and better online if youre brick and mortar. In terms of whether or not youre able to buy stocks, some of these companies are going to get smart enough instead of waiting for bankruptcy and doing massive structuring that preserved value before they drive the stock to zero . Yes but we have to guess which ones you could say were going to short them all but some are going to get bought out and youre going to get your face ripped off if youre betting against them so you dont know how thats going to workout because its not necessarily the great companies. Its the one that will add a strategic need for one of these big players. So is it an example i was stunned that sycamore took staples it seems hard to play. Thats why i think mostly strategic mergers because theres no exit anymore on most of these deals they think they figured out one on staples and theyre smarter than i am on that so im going to go with them but its going to be hard to make a bet on the retailers. The guessing game on amazon and whole foods, continues we saw mapping over the weekend. If you put amazons Distribution Centers for their food and whole foods on top of each other they get to one hour within 70 of the population of the United States for delivery. Does that start to maybe play into what that is eventually going to be . Thats the game they have to be able to compete with walmart and walmart has a store next door to you no matter where you are. Now very they have 460 more locations than they had and its easy to build more if they need to if they need to fill it out to 500 or 600 or 700 its not that hard once you have the base and you know where to put them so its going to be a huge battle walmart versus amazon. Who can get you stuff in an hour food, fresh, all of it. Right. As you start to, some analysts start to do the really big thing, one guy on the street talking about amazon, apple, tesla and google all merging to be the same kind of company do you begin to think about how theyre changing distribution of all kinds of things. My other thought. Yes i believe thats where theyre going. We are going to see online brick and mortar emerge into one big entity so they can get to you fast when you want it. What would be another category for that disruption. Is it drugs, or Building Supplies or furniture. Thats already happening and now were seeing grocery theres no reason it could be done online. Theres no greater deflator in the world than amazon however, now you see a front page story about the journal is google monopoly is amazon monopoly theres growing pressure in certain parts of the country to say amazon has too much power. Do you think thats going to get any traction the goal of the antitrust laws is to save the consumer from predatory pricing not let you get charged too much everything we see from walmart they never got charged with it was lower prices would we have to go break them up sure but for the next ten years do they just drive prices down shouldnt the government stay out of the way. Thats maybe what you think they should do but that isnt a guarantee of what they will do you shouldnt disadvantage the consumer because of some view that somebody is getting too big. There will be a day if they are too big when theyre costing the consumer money and then youll have to do something about it. The economic theory around antitrust is getting fascinating. So interesting. Thank you always good to see you. My pleasure. Its the first trading day of the second half of the year. Take a look at the dow, nasdaq, svp all pushing higher today mark farber joins us this morning. Its always good to talk to you. Thank you. You have been consistent on your thinking. You said the other day there is a bubble in everything nothing in asset bubbles is very low. How long can that continue. It can continue as long as they print money but as you know some assets have already started not to perform particularly well and High End Properties in london, new york, hamptons havent performed very well. They were quite vulnerable and some of them have broken down. We will now have to see what the rebound brings about if the rebound cannot push these stocks to new highs i would regard that as negative and then well probably have a change in leadership in the markets. How dangerous or sit dangerous that it appears for the first time in nearly a decade nearly every central bank in the world has not decided theyre not going to be ultra acome dcomodae a warning, what . Well thats a good point. I think the bubble in european bonds and japanese bonds is far larger than in the u. S. Market i think if bond yields really go up, the u. S. Ten years treasury note goes about 30 which will be quite the big move and i think that stocks would probably start to reup and europe up to this year equally they massively underperform and over 22 and in europe all the major market with the exception of the u. K. Are up between 17 and 22 and youll make a bullish case for stocks i would look at the International Markets and not the u. S. I dont know if we had your chance to get your reaction about what yellen said last week talking about financial crisis i hope it would not be in your lifetimes and i dont believe it will be. What did you think when you heard that well, what i thought when i heard that is that the predictions by fed members have been horrible, really horrible they never saw the 2008 recession coming and they never thought that the nasdaq could drop by 70 in year 2000 and 2001 fed forecasts are horrible and the other Central Banks are no better. Was there something about this particular forecast that you find extreme a lifetime say long time. I dont know what mrs. Yellens Life Expectancy are. My life until i have an accident tomorrow ill see another financial crisis. Imagine if we get the sing you lairty she could live forever where do you think that financial do you think theres one brewing right now considering how much debt there is in the world . The people that are worried about the markets and the International Markets point explicitly to that the very, very high level of debt that just went up dramatically because of all the ultra accommodative policies from Central Banks around the world and as we reverse is that going to be a dangerous thing . Well, lets put it this way you have two Companies One has no debt and one is highly leveraged and there is a slow down in business. The company with no debts will survive the company with lots of debts may not survive. Similarly you have two households one household has paid for their homes. The other one is highly leveraged. Home prices go down. Which one suffers . So all i want to say is we have a colossal bubble. Now can it expect . Yes but it cannot expand forever. One day there will be a limit and one day there will be another huge crisis because the debt level today is higher than it was in 2007 finally mark, you light up the phone lines every time youre on. Im hearing from viewers as we speak right now and i think people wonder even though you may be right one day for the moment youre directionally wrong and i wonder if that gets frustrating overtime. Well, i have always explained in both my news letters and publicly, we dont know how the world will look like in five years time therefore, you need to be diverse identified some money in real estate. Some money in stocks some money in bonds and some money in Precious Metals and with that i think you will survive reasonably well. You may not perform superbly but this has served me well over the last 20 years. So although i am very pessimistic about the world and especially about the rest of the world and 75 exposure and bearish than i used to be. Im not short. Im not short. So that worries me that is a worrying sign for the market mark its always a treat. Well see you soon thank you very much. Thank you very much. Good night. Good Old Fashioned advice stocks bonds, golds. I mean, its back to basics, right . Toyota ford and gm all have auto sales for june out this morning and big announcement for tesla the model 3 hitting the market sooner than expected. Phil has his hands full today. We do have our hands full and the news from the auto makers better than expected for three of the four largest auto makers in the country take a look at these numbers and remember this is a comparison to june of last year. Keep that in mind although you had better than expected numbers from toyota ford and Fiat Chrysler the Industry Sales rate that well get later on today will come in at 16. 6 or 16. 7 million vehicles as we take a look at this chart it showed the annual sales pace compare that with where we were last year and the year before at 17. 5 million june on pace to be the 4th straight month with sales. Elon musk tweeting that model 3 production begins on friday of this week with first delivery scheduled for later this month and then they ramp up production ultimately hitting a pace of 20,000 vehicles by the end of december and because of that, take a look at shares of tesla and a little bit of a bounce today. Guys this is a very busy second half for tesla i love this chart because it shows no comparison between tesla and the s p 500 this year. So a busy day in the auto sector guys well get the full auto sales rate number later on today we take a look at the top sectors. Tech and health care leading the charge in the first half worst performing Sectors Energy and telecom. The second half play book on bio tech specifically after a fiery w p h for that sector. Dois u155. Dont go away. Huffed and puffed. Like you do sometimes, grandpa . Well, when you have copd, it can be hard to breathe. It can be hard to get air out, which can make it hard to get air in. So i talked to my doctor. 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Red ventures here Digital Marketing and analytics provider its held private equity shops like silver lake and General Atlantic among investors it provides content and information to consumers geared toward personal finance. You go there if youre looking for the latest Home Mortgage rates or which credit cards have the best current offers. Its looking to pay over a billion dollars for bankrate because it has to do with user base and the reach it has. Red ventures could use it to match up with businesses looking to match their services. It will help expand their footprint in Financial Services and that sort of thing its about how to best get more customers in the virtual door and matching products with potential buyers if youre a Credit Card Company and looking to get your cards in the hands of other customers this might be a way to do it and theyre looking to capitalize on that. Well take all the news we can get. Thank you. Back in hq bio tech as you know out approximate performed in the first half of the year will we see more of the same in the rest of 2017 bio tech sectors sentiment picking up in the first half of the year and celebrating through june most of that positivity driven by the expectation that legislation around drug pricing might not be as investors feared you can see the big up tick in june people talking positively about the new commissioner and moves he has announced and taken around increasing competition to bring down priegs as well as moving drugs through the process more quickly as for the second half a lot of catalysts on tap mostly around clinical data. Its to better fight cancer. And could have implications for Bristol Meyers and merk as well. That could come in the second half also thats a Personalized Therapy could be extremely volatile and of course theyll be watching whether it picks up all could have implications guys certainly second half of good data on drugs. I saw a story about the best way to describe it could cover a lot of drug pricing. Those drugs are very, very expensive but as a result its drawn tons and tons of investment to the sector to the point where people worry theres too many trials going on at this point. Thats a really great point michelle and just at the conference in early june where we were, that was a big topic of conversation is are we planning these immunotherapy trials intelligently and rationally based on what will hurt the best or are we throwing spaghetti at the wall and every company trying different combinations to see what works thats something that people are thinking about and as youre combining these drugs that cost 100,000 a year for each one is that going to drive up costs so a lot of issues weighing on the industry now. Super important investor money and not taxpayer money when things go well they go really, really well. You throw the spaghetti at the wall because it only sticks a very small percentage of the time. Meg, thanks see you soon when we come back the president tweeting he is talking to a number of Global Leaders ahead of the g20. The late fres the white house. Take a look at stocks from this hour dow obviously elevated up 146 on lf fstayf e cond ha we, the people, are tired of being surprised with extra monthly fees. We want hd. And every box and dvr. All included. Because we dont like surprises. Yes. Like changing up the celebrity at the end to someone more handsome. And talented. Really . And british. Switch from cable to directv. Get 4 rooms with hd, dvr and every box included for 25 a month. Only from directv. Illinois lawmakers may have cut a deal to keep the bond rating from being downgraded to junk they passed a 5 billion plan that raises personal and Corporate Income tax rates the plan moves to senate for final approval china accusing the United States of serious military provocation after an american warship sailed close to disputed land in the south china sea. The one mile long island is claimed by china, taiwan and vietnam. The u. S. Missile destroyer was conducting a right of passage exercise officials are using air tankers in the hopes of stopping a fast moving wildfire in california. The spring fire closed a major highway and forced several families to evacuate and home depot recalling 64,000 light fixtures after more than 100 reports and causing burns and cuts december of 2014 to march of this year. Thats the news update michelle, back downtown to you. Thank you, sue. Congress on recess the agenda, the trump stall. President trump turning again to his favorite social media platform this weekend and it has created quite a stir aman from washington with the latest. Good morning, michelle. The president turning again to media criticism this morning over twitter thats a theme that we have seen from him again and again in recent days going after the networks msnbc and cnn heres what he tweeted this morning in terms of criticism of the media. He said at some point the fake news will be forced to discuss our great jobs numbers, strong economy, success with isis and the border and so much else. The tweet over the weekend that dominated the conversation in media circles was this one a tweet that the president reposted of himself beating up a person whose face has been replaced with the cnn logo with the fraud news cnn, fnn for Fraud News Network that is the president s message to the Cnn Television network over the weekend and calling World Leaders and called Angela Merkel and the leader of italy this morning in germany hes going to hamburg where he will meet Vladimir Putin of russia. White house officials did not say whether or not the president is going to bring up the russian attempts to influence the 2016 president ial election here in the United States. They said simply they hadnt released the itinerary of the meeting just yet that will be a much anticipated meeting along with the president s other meetings with World Leaders at the g20 later this week. Got it. Thanks for the run down. You bet. President trump heads to europe on wednesday for the second trip of his Administration First to poland and then the g20 meetings with the worlds most powerful leaders including putin and merkel now Senior Policy Adviser and former undersecretary of state now chairman and ceo lets focus on china first guys because we have seen now, sue just told us about the u. S. War ships and right of passage exercise in the south china sea. Secretary of the treasury coming out last week and saying all the sanctions on china because of north korea, that shouldnt be a message to china but everybody seeing it that way and then the arm sales to taiwan. Put aside this trip for now right now, it seems like the administration is now taking a much stronger stance against china. Are we reading that correctly . Well i think the administration is getting very frustrated that china isnt helping with north korea i think the administration thought this would be an easy one and its not so theyre trying to rachet up the pressure but this is really a longterm struggle yeah. It has been but you dont think this change in position will work when he meets next week its unlikely that its going to work and i also think that what is really needed from this administration at this point is a much broader, clearer strategy its unclear whether the administration wants to engage more with the world or to pull back from the world and i dont think that has been resolved with the administration itself thats an interesting thought. I wonder what your take is on that on the one hand the argument for retreat is obvious but on the other hand hes constantly hosting not just executives from our country but executives and leaders from around the world. I think he likes to host for sure but a agree i mean, i dont see a master plan here or some sort of plan that reflects his intention with respect to china or other countries as well but i think theyre trying to develop a relationship that could be mutually beneficial for both countries. But i think the expectation that president xi is going to solve the problem is more Wishful Thinking i wish he could. I hope he would but i dont think thats going to be the case. I know we bill this as a Foreign Policy discussion but im going to throw you for a loop and bring something closer to home. I dont know if you have seen these reports coming out about steve bannon encouraging a top tax rate on the wealthy in an effort to pay for middle class tax cuts senator, would that finally get the other side of the aisle to come on board . For lets say a 15 corporate rate well, youre talking about generally the tax reform effort that is going to come after health care but look i think tax reform is going to be more complicated than health care and im not sure that health care can get it done but if everybody would like a lower tax rate. Individuals would like a lower tax rate corporations wanted lower tax rate but you cant lower the rate and way lit get paid for through increased Economic Activity there would be some but all the studies suggest that, in fact. It wouldnt be without some other changes would increase it. I think part of the idea is that it would come from the wealthy. Mr. Ambassador, having worked for a Republican Administration this kind of idea continues to either defy or redefine what it is to be a republican. What do you think of this . This is a nutty idea in many, many different ways. For one thing, you would in if you knocked the corporate rate down to 15 and you increased, you increased the personal rate above 40 , i mean, everyone would end up being a corporation. That gap is too wide as it is and needs to go in a different direction. Youre not going to have a tax increase on anybody under a Republican Administration. I dont know what bannon is doing and i dont think we should waste our time talking about it bankly. It speaks to the larger issue that we talked about though, right which is what is this administration right mr. Ambassador i think thats true and theres a couple of things that are coming up where were going to get a better picture. One is nafta so hes going to come up with his plan for nafa and the administration is getting enormous pressure from american agriculture not to make major changes in nafta thats going to be interesting the second thing is whats going to happen with sanctions on russia which passed 982 in the senate but i think theres a lot of problems in the house among them the fact that it really hurts u. S. Corporations but i think theres going to be a rewrite of that. Those are the things that the president is facing in the shortterm that hes going to need so make important decision on besides his meeting with putin of course thats coming up. No doubt about go ahead. Let me just say i think if they have this sidebar meeting or some type of meeting with putin at the g20, my hope will be that the president will raise the question with putin about interference with the American Election the fact is this interference didnt just happen now its going to happen again and we ought to call russia to account for that and we ought to call putin to account for that personally my hope is thats going to be on the agenda at the g20 when President Trump meets with mr. Putin. Well, senator, dont hold your breath on that. I dont think thats going to happen at this point. I stopped holding my breath a long while ago my head is exploding in recent months. Is your hair still on fire. Thank you, good to have you. Thank you. Home prices making a move higher across in the past six months as low inventory weighs on the market but whats in store for the rest of 2017 diana is in washington watching that good morning. Good morning, look a lack of listings has been the lead story in the first half of this year keeping sales at a lower space than expected. Especially on the lower end of the market take a look. Homes priced below 100,000 are way down and those below 250 k are barely ahead the higher end of the market is seeing a big jump in sales but only because theres more listings there and buyers are less cash strapped this is unlikely to change in the second half even as seasonal demand falls off but a great opportunity for the nations Home Builders if they start putting up cheaper homes that they claim they will do. Theyre also hoping for deregulation under the Trump Administration tough regulation now accounts for one quarter of the cost of putting up each home according to the builders. The possibility of deregulation this year coupled with the tight supply of existing homes for sale and lower Mortgage Rates had the Home Builders stock on a tear in the first half and could continue into the second half as well dont forget the remodelling market which is also getting a huge boost from the lack of homes for sale home depot, all benefitting from that when people cant move they remodel and upgrade older systems. As for the elephant in the room and you know what im talking about, Mortgage Rates we keep predicting they will go up and they havent yet but with the Federal Reserve continuing to pull money out of the bond market there will be more competition for cash so rates will have to move higher back to you. All right thank you very much for that when we come back the latest on the new travel ruls aes and the airline laptop band. Transports hit a record high fed ex leads the way dow up 177 ten year just hits 233 that level that over the weekend was crucial. Back in a moment baby crying slow jazz music fly me to the moon and let me play bell ring rallying today the companies now completed the merger of ges oil and gas business its tech and services for oil and gas and trying to smooth out that oil cycle where they can make money. Yeah. Massive, Massive Company and youre right the entire supply chain is where theyre at to your point so no matter what is happening upstream versus downstream, smoother well keep an eye on those shares on a day where the dow is up 182 lets get to Rick Santelli and get the santelli exchange. Id like to welcome my special guest. All i can say is i look at the dollar its finally having an up day. Rates are moving in higher and coming back to the 09, 08 period the change wasnt a data point wasnt an inflation. And all the good will in the market and you saw something, you and i talk about the ecb also these people start to talk about terks cb, what we didnt understand last week not only did draghi speak but it was an anomoley they always publish the starting rotation itsics t the statist. How much did they use up . 56. 7 going into last week so in english, what this means is is that the markets sensed that there was no more good will coming and the marks made a rapid adjustment. 20 basis points. My contention is a new month and theyre locked and reloaded with bullets. I say manipulation is manipulation and Market Participants may not go into letting rates go down before it was over. Thats right. The ecb and doj is still buying 142. Do you think theres going to be a tape in december. No chance. So this goes back to faber. No matter what you believe about fundamentals in the marketplace, no matter how weak you think the dollar s its not a dollar story its a euro story. The real underlying motion is theyll buckle in december. The goal is to build the ecb balance sheet. Thats how theyre going to back door it. Is there any other end game here that makes any economic sense . No, this is right out of the play book. Theyre following the play book. So he they get into a heap of trouble where theres only one escape hatch and they know what it is. Exactly. Like chicago and illinois isnt it possibly the next ecb president that would placate the germans theyd like nothing more than to have atz the head of the ecb which means the markets might still be built on sand but the castle can still go higher. Of course. Thank you. You dont find it. Squawk on the street. Back to you. Lets send it over to whats coming up on squawk alley. That tesla model 3 role out the stock has been sky high but will this roll out meet expectations also continuing controversy over Sexual Harassment in the valley when it comes to venture capitalist and drop box getting ready for an ipo all that and more coming up on squawk alley you know that thinkorswim seamlessly syncs across all your devices, right . Oh, so my custom studies will go with me . Anywhere you want to go the markets hot sync your platform on any device with thinkorswim. Only at Td Ameritrade i put everything into my business. 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. Dow all time high of 194 today. We begin the second half of the year s p 500 is back to 2438. We saw signs of this really from the opening bell when the transports posted their first intraday high since march 1st. Now here comes some industrials. We got some data, 10 00 a. M. That was positive for the economy. Stronger than expected Rick Santelli talked about it. That seemed to add immediately to the intraday chart that we were just showing to you another 40, 50 points. That has some peoples attention. Yep. Were going to see some of the components there i thought we were going to look at the components. Well be doing that later on. I wonder to what degree is the move amplified about it lack of volume . Its a shortened trading session. You tend to get bigger moves on lower volume days. Still, when you look at your portfolio at the end of the day, its higher. The dollar is the same color. Thats right. Meanwhile, the administration focusing on National Security with the implementation of a wider laptop ban and the supreme courts reinstatement of the controversial travel ban joining us this morning, the director of research at the national iranianamerican council. On the phone, Patrick Surry is the chief Data Scientist for Hopper Hopper uses data to predict and analyze air fairs. What kind of laptop ban due to either fares or traffic . Its a big potential impact on demand. I think particularly for people traveling to the u. S. On a discretionary basis. You know, it will make people consider other options you know, there is Something Like 100,000 seats that fly every day from europe into the u. S. And not being able to have any electronic o electronics on the flight is going to cause people to maybe consider somewhere else for a vacation or maybe try to do their meeting via video. What is the thinking from where you are regarding the reasons which obviously were not privy to as to why these things might be necessary . Well, on the one hand, you know, there are legitimate National Security concerns oftentimes predicated on intelligence that only a small number of people in government have access to but on the other hand, we have to consider what the tremendous cost rfz taking steps whether its the travel ban or laptop ban. And aftermath of 9 11, 600 billion hit the Tourism Industry took in our kun analysts are predicting 18 billion in the next year or two we really have to take a step back and find a better way to balance our security interests with mume with humanitarian interests. Where is the balance . Balance address cure security interests. Like i said if, there is intelligence that were not privy to, the government needs to do a better job of trying to explain these kinds of things. And, b, explain why previous administrations hadnt taken these kinds of steps and then, c, and perhaps most importantly, work to make sure that the economic hit that not only our country but other countries take are minimized as much as possible. Patrick, there is also talk about the need for a lot of airports to have within 21 days more scanners for detection and explosives you have looked at that issue at all and what impact it might have well, not scanners specifically but we certainly look at, you know, what peoples preferences are in terms of travel we have already seen a pretty significant shift interms of where americans are looking to fly and shift ago way frint national destinations and more towards domestic ones. You know, that, i think, is driven by these kinds of concerns about security risks, you know, bad publicity that youre hearing from places all around the world with these kinds of terrorism incidents and so forth. Thats just the opposite of what we were just hearing from rezo which is if you increase security too much then people dont fly. But youre saying conversely, security is not high enough. People dont want to fly because they have fears. Yeah. I think theres, you know, people dont necessarily make these kind of decision onz a purely rational basis. I think if youre hearing all these kinds of bad things going on around the world that, may cause you to make different decisions about where you travel finally, i mean, you raise the question of why prior administrations may not have gone this far. I mean the general answer to that is that the technologies and capabilities of terrorists are bad actors also evolve over time right . They make advancements, too. Thats a fair point we also have to go one step further in the analogy and challenge the administration to explain why a handful of countries, saudi arabia and uae not being on the list, for example, why arent the threats emminating from those areas which are clear as 9 11 demonstrates why isnt it being applied to those airlines, for example . So its a haphazard application of a particular rule and until the details are flushed out, it might be a bridge too far to take the steps when a variety of other measures have been in place since 9 11 topic will be with us definitely as we get into those arguments in october well see what happens thank you so much fof your time. Appreciate it very much. When we return, another vc executive is under fire amid a Sexual Harassment scandal. Well get the latest on the Silicon Valley culture drawing criticism once again dow up is 184. Thank you is what we say. But we mean so much more. We mean how can we help . We mean what can we do . We mean its our turn. To do our part. To serve you, for all youve done to serve us. Welcome back to squawk on the street. The rally in stocks being led by the energy sector. Both wti and brent crude futures gaining more than a percent so far. You have stocks like hess, marathon, conocophillips and transocean among the best performers energy trying to climb back from being the worst performing sector in the first half of the year that does it for squasquawk oe street. Lets go to the start of squawk alley. Back to you. Thank you very much good morning it is 8 00 a. M at tesla headquarters. Its 11 00 a. M. On wall street and squawk alley is live