Transcripts For CNBC Worldwide Exchange 20160718

Good morning on a monday and welcome to Worldwide Exchange on cnbc. Im sara eisen along with dominic chu. Thaps for sitting in for wilfred frost. Great to be here. Investigators searching forrancfo forranfor answers on the gunman who killed three Police Officers and injured three others. And then a deadly military coup attempt in turkey has failed over the weekend. Thousands have been rounded up and arrested. A report from istanbul coming up as well. First, a lot of geopolitical uncertainty. Global investors shake it off. Were green across the board mod erately speaking. The Dow Jones Industrial average up 37 points and nasdaq, 9. Yes, green, again, but not crazy to the outside. Tenyear treasury notes currently yielding 1. 5, 11. 8 . Lets take a look at whats happening in europe because were seeing equity market strength now. We did see a little bit flatness but the german dax, flat again. Theyre all ratcheting back a little bit. Of course, powered by that arm holding deal. The ibex 35 in spain fractionally to the downside, sara. Thats what happened in aovernight. The japanese nikkei finished higher. Home prices there moderated potentially weighing into the trade. Now lets go across and show you the broader market. Currencies, the british pound is higher. If you got a 32 billion deal, thats a whopper of a currency trade because they have to buy it in british pounds. So the pound continues its strength. Its post brexit recovery, were a lock way off unlike the stockmarket. As for the dollar yen, thats a focal point. Clearly the weakening japanese yen continues. This after the worst week for the japanese yen in decades. Thats been helpful to the japanese stockmarket. It continues above 105. Oil prices were down. Theyre pretty flat to modestly higher. Wti pushing. There we go. 46 a barrel. Brent, 46 a barrel. And as for gold, sold off a bit in the wake of the recordhigh stockmarket. A little bit higher. Up a buck. Its going to get heavy on earnings this week. Its interesting. It didnt happen as much as we thought it would. Then as it became clear that erdogan was still in control and regaining control potentially a lot less uncertainty. You could see there on the boards, dollar turn eric lira, 2. 95. Of course, that means weve gotten just around half of the losses that we saw turkish lira. That was the concern early on friday. In deal news, japan softbank, more than 32 million. Thats about a 43 premium. This is an all cash deal and its been approved by both k companies directors. The combination comes less than a month after the uks decision to leave the European Union, the socalled brexit, which has push. It shows that britain remains attractive for investments even after the brexit vote. Were showing a pound dollar chart right now. If you look at pound yen, of course, this is a pound yen play, right, because you have the safety bid coming back for yen over the course of the past few months. You have the pound weakening. So those yen crosses you love so much to talk about, sterling yen, theyve got a great discount. It used to cost you 195 yen to buy a pound a year ago. Now it costs you 140 even after this deal. I got to a low. After the brexit it lost 120 of its value. That was clearly the impetus for the deal. Strategically if you look at what oshies son has done, hes continuing work through dealing. They control sprint in this country. And that was a 20 billion three years ago. This is a huge deal and they also say its a play in the press release on the internet of things. This is a chip company that powers all sorts of thing. And a samsung 1u7 plier. That goes into so many devices. The question potentially is are the regulators going to approve. Theresa may is the new Prime Minister of the uk. I wonder how cautious shell be. As a result of brexit because politically speaking that could be a problem as we continue to see this. Of course, i it would also be a signal that their trade doors are open. They dont have an yoep lapping business. Well see if it goes through. Switching gears, an investigation under way after three louisiana Law Enforcement officers were kill and three more injured during what officials have been calling an ambush. Jay gray is live in baton rouge for us with the latest. Jay. Hey, there, sara. This is where it all unfolded. A rolling gun bat frl this car wash across to that Convenience Store. Police and federal agents still learning for evidence and answers. Were learning more about the victims and the suspect whos responsible for the deadly attack. As the shots exploded sunday morning in baton rouge. Shots fired, officer down. Shots fired. Reporter three officers were killed. Montrell jackson, matthew gerald, and brad garafola, all three husbands and fathers. Three more wounded. One of those still in Critical Condition. Officials in louisiana have called it an ambush, carried out by a lone gunman, gavin eugene long on his 29th birthday its unjustified, unjustifiable. The violence, the hatred just has to stop. Overa long time long had a long name. Describing himself as a freedom strategist and spiritual adviser. Five polices were assassinated by a sniper. After that he spoke about, victims fighting their protesters. Protests and tensions have been building in baton rouge after the controversial death of ail on the sterling. Sterlings family made an emotional plea for peace. At the end of the day when these people call these families and they tell them that their daddies and mothers are not coming home no more, i know how they feel, because i got the same phone call. Reporter the call echoed for the second time in two weeks across a city and nation mourning the loss of those that wear a badge. Now, just hours before there was a cryptic message. Just because you wake up every morning does not mean youre living and just because you shed your physical body doesnt mean your dead. Part of the digital footprint at the center of the investigation going on here. Dominic and sara . Thank you very much. We oar going to move to cleveland where the Gop Convention begins today. John harwood is there. And in cleveland, it rocks. It does, so says the show back then from drew carey, but whats the feel from day one as we kick off the Republican National convention. Reporter its uneasy here. Republicans are concerned. Why . Because donald trump whos going to be nominated this week is trailing Hillary Clinton in the polls. He has huge advantages among white voters, young men in particular. Hes down 4641. Fivepoint spread down in all regions of the country except for the hoult but donald trump is hoping unease abroad but hoping turkey, the unsuccessful coup and that other cities around the country is going to buy him a boost as casting himself as a law and order candidate. Heres donald trump in a an interview with cbs yesterday. It doesnt necessarily given us a right to commit suicide as a country, okay . Ill tell you this. Call it whatever you want. Change territories, but there are territories and terror states and terror stations ta were not going to allow people to come into our country and were going to have what they call extreme vetting. Were going have extreme vetting. Theyre going to come in and were going to know where they came from and where they came from. This man is awed by the American People and not intimidated by tl world and donald trump, i believe, a good man, will be a great president of the United Statesing. Mike pence, social conservative, religious conservative, republicans are hoping he can unite party whos uneasy with donald trump. Theyve got a lot to do in four days to try to lift Donald Trumps image which is very mixed with the electorate right now, guys. John, very quickly, if you had to pin it to one or two points, what are the talking points trump and pence need to get across to the American People in the next couple of days . Reporter as mijsed casting themselves as the law around order ticket, w. H. O. Will stand up for the United States abros. And at home. In terms of the broader message about donald trump, hes going to have to convey in four days, especially in his sep stance speech on thursday night that he can be an applaudable president. Rehn, Hillary Clintons campaign against him is hes too erratic, unstable, lacks the judgment to be president of the United States. He has to show why he is suitable. Do they have unity on the ticket. I watch thad yesterday and i know there were a lot of questions about whether governor pence agreed with trump on a lot of issues including trade. Whats the reviews on that interview . It didnt look very comforten and cohesive, i have to say . Nothing, sara, about the weekend roll of the trump pence ticket was anything but awkward including rollout on saturday morning where donald trump didnt seem to want to be in the frame picture frame with mike pence where he gave a speech, where he was talking mostly about himself. Pence was a bit of an afterthought in that speech. Everybody knows voters go for the top of the takata, not t thats because a lot of the party is uncomfortable with the challenge. First he has to reassure his party, second that he can run a campaign, run a convention, and run the country as president. We eelg see how that goes this week, john. Thank you very much. Live from cleveland. Now to the week ahead on wall street. The Housing Market is on focus while earning season gets into high gear. Today look for the monthly survey from the National Association of homebuilders and tomorrow well get june housing starts. The philly fed survey. Well get a steady stream of earnings as mentioned with ten dow components and 85 S P Companies reporting. Bank of america, ibm, netflix, yahoo . Those are just out today. Goldman sachs reporting tomorrow. General motors, at t, and starbucks on thursday, dw e and American Airlines out on friday. Were going to be looking for a lot of symbols. First what are the multinationals saying about brexit and the European Business and the consumers in this country, how healthy its going to be and whether the legup can continue. They have sort of rotated into a better position along with this market. Well see if that continues. Of course an earnings parade. And coming up on the show, with ee were going to see. Well tell wu what Boris Johnson is saying to his counter parts next. Worldwide exchange is going to be back next right after the break. Hey, honey . Yes, dear . Youre washing that bakedon alfredo by hand, right . loudly yes, dear. Dish issues . Cascade platinum powers through. Your toughest stuckon food. So let your dishwasher be the dishwasher. This turned out great. Cascade. You gein your car. Odors you think it smells fine, but your passengers smell this. {ding} eliminate odors youve gone nose blind too, for up to 30 days with the febreze car vent clip. Wow, it smells good in here. So you and your passengers can breathe happy. Welcome back to Worldwide Exchange. A key u. S. Ally in the fight against isis. Thousands have been rounded up and arrested as alleged cocon spoir tors. Nc chief correspondent Richard Engel has the latest for us inside turkey. Reporter this is how turkey wants the failed military coup to be remembered. Unarmed civilians cowing down to tanks. The people defending their elected president , erdogan. He helped carry a coffin, his campaign manager. More than 6,000 alleged conspirators have been detained. The traitors will be rooted out like a conditionser, said erdogan. Cnn turk a local channel kept broadcasting even as rebel gunmen stormed their studios. There was a single shot that fired inside the building and thats the casing from the shot. Reporter erdogans jet was harassed by rebels flying f16s. While he was flying into istanbul, we know there were two, at least three f16 fighter jets they were automobile to control in the air. Reporter in a cockpit, controls warning. They locked on but never opened fire. Richard engel, nbc news, istanbul. Thats the latest coming out of turkey. Joining us to go over whats next, director of global strategy project which is a geopolitical risk advisory. Marco, weve seen all kinds of details come out. Thousands arrested, rounded up in this postcoup attempt. What expectly now is going to happen in turkey as they try to recover from this situation . Politically speaking theres going be reprisals. Hes going to be going after his enemies. Even though beyond those who may be directly responsible for this coup, anyone whos on his list of opposition, whether its the politicians, academia, it can be dissidents, anyone who basically he considers a threat to his power will be on that list and hes going to use that opportunity as a pretext to accelerate one of his chief priorities which is getting the constitutional changes necessary to create an allpowerful presidency. One News Organization is calling it a gift for him as he tries to consolidate the power even further. What does it mean for the United States . He called it a gift of god. With respect to the United States. The United States is playing it very carefully right now because the person who president erdogan directly accused of being responsible for the coup behind it is a gentleman by the name of man whos in the United States, whos been based in the United States for years who was once an ally of erdogan. That i had a falling out over the years whereby the president accuses him of using his network of people to try to topple him and there was fallout because both of them basically had the autocratic tendencietendencies. Now, for the United States, erdogan is eventually going to be calling for his extradition and its going to be difficult because the secretary of state already called for specifically for the proof to be given and the fact os to be given. Also for the United States, theres something else. Erdogan may want to use this as leverage for the use it, trying to get him into durky, use it as leverage for the u. S. The u. S. s key priority in the u. S. Is the war against isis. It serves as an important nerve center for that and theres a possibility that erdogan may use that as leverage. And in terms also for the United States is that turkey is and remains an indispensable ally not just for the u. S. But all of nato and the western alliance. Our thanks very much for for helping to break that down. Sara. Turn eric stocks down a little more than 4 . Meantime britains new sforn secretary Boris Johnson speaking to reporters ahead of we have to. It means were leashing europe. Were not going to be abandoning the leading role over all kinds. Well see how his european counter parts respond to him. Lets stick around for the whole britain instruction. Including 32 billion deal. Expectations for the rnc in cleveland and what appears to be a very resilient stockmarket. Stay tuned. Youre watching Worldwide Exchange on cnbc first in business worldwide. You wont see these folks at the post office. They have businesses to run. They have passions to pursue. How do they avoid trips to the post office . Mail letters, ship packages, all the services of the post office right on your computer. Gea 4 week trial,plus 100 in es including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Josh, dont you have fryeah, so . Ng over . It stinks in here. Youve got to wash this whole room are you kidding . Wash it . Lets wash it with febreze. For all the things you cant wash, use febreze. Fabric refresher whoa hey mrs. Walker inhales hey, it smells nice in here and try pluggable febreze, with up to 4 times the freshness. In one refill. Pluggable febreze and fabric refresher. [inhale exhale mnemonic]. Two more ways to breathe happy welcome back. Good morning. It looks like the bullish mood is continuing at least in the early session on dow street. Dow up, s p up. Nasdaq futures up seven following the early action in europe. Lets show you the boards across the continent in europe. Weve got a big deal to tell you about. 32 billion of Arms Holdings taking advantage of that weaker british pound especially against the japanese yen. The pound losing. Thats helping the footsie at 100. Thats the british index up a quarter of a percent. Pretty flat for the german dax and france. Also watching gains in italy and in spain, don. All right. So green across the board for many markets in europe. Although well see stability as well. And coming up, this mornings top stories plus the big issues youll need to watch at this weeks Gop Convention in cleveland. Insider tony fratto is our guest. Thats coming up next on Worldwide Exchange. Keep it right here. Breaking deal news. Japan softbank buying chip design maker a. R. M. Holding for 31 billion jo a new nbc news poll finds Hillary Clinton keeping a fivepoint lead over donald trump. And the resilient rally, despite the world of worry, stocks remain strong. Well tell you why. Its monday, july 18, 2016. And youre watching Worldwide Exchange on cnbc. Good morning and welcome back to Worldwide Exchange on cnbc. Im sara eisen along with dominic chu for wilfred frost. Its good to be here. Were following developing stories including this. Theyre searchier i a gunman killed three Law Enforcement officers and injured others. First lets check on the Global Market this morning on what is heightened risk of geopolitical uncertainty. Absolutely. Lets tack look at whats happening with the stockmarket. Youre shaking it off for the most part. The s p 500 showing what could be modest gains. The Dow Jones Industrial average showing a gain and the nasdaq showing what could be a fivepoint gain. Lets take a look at those boards as well. Were seeing at least some green across whats happening in europe. The german dax now just down fractionally 0. 2 . The ftse up 1. 25 . The ftse mib down fractionally. Both showing modest modest losses to start here. As for what happened in asia, we did see a bit of a mixed perfect in there. Up by twothirds of 1 . The shanghai composite, off by one third of a percent and the ftse up by 0. 1 , sara. I think the lesson here, dom. Tell me if you agree. Were keeping up on the major actions. Geopolitical risk is difficult for them to assess. Brexit i would put in that basket as well. Yes, we saw a plunge on the dow. And then all of these doom and gloom forecasts about who was coming next, was the euro breaking up, was the euro breaking up. Same thing with the turkish coup and the political moving events. Thats because u. S. Earnings and Economic Data have been good or maybe better that no. I would agree with you there. I would also say the central Bank Environmental that were in probably plays large part in that as well. Those are the three factors, right, that ultimately have been moving stocks. Whats been happening, sure. Lets show you the broader picture market. Wti crud just going back and forth above and below that 46. Brent, a little bit stronger. Seemingly waiting for a catalyst here when it comes to crude coming off. After a down week. Yep, absolutely. As for the tenyear treasury note yield, we saw some heavy selling in treasuries last week for a change pushing yields higher. Now were at the 157 level. Were stable. Well get the housing index later today and then later in the week more housing data as well for you. As for the u. S. Dollar, the biggest has been the pound which continues to strengthen the post brexit potentially on deal news of arms holding which is a British Company which means that 32 billion dollars has to be transferred to buy this company which is a huge currency trade. As for dollar yen, also moving higher as well, continuing from last week, which has been be t sentiment in general. Japan softbank is being u. S. Chip a. R. M. Holdings. The all cash deal has been approved by both Companies Boards of directors. Its a significant push for softbank in mobile technology. Theyve already owned sprint. They will double its count over the next five years. This combo comes less than a month after the uks decision to leave the European Union which has push down like sara said, the value of british pounds. The finance minister, the new one, philip hammond, shows britain remains attractive even after this vote. Its open to business, so to speak. Switching gears, an investigation is under way after three louisiana Law Enforcement officers were kill and three more injured during what officials are called an ambush. Jay gray is live in baton rouge with the latest. Jay, what can you tell us . Reporter lets talk about the injured. One officer in Critical Condition fighting for his life. This is where it all unfolded starting in this parking lot of this car wash stretching to that Convenience Store there. Lasted only a few minutes. Three officers killed, all three, husbands and fathers, one with a newborn son. We know that the investigation is also center odd whan appears to be a massive digital footprint from the suspect gavin eugene long. Just hours before the attack he posted a cryptic message on social media that reads just because you wake up every morning doesnt mean youre alive and just because you shed your physical body doesnt mean youre dead. Police and federal agents continuing to search here and online digitally and say that this is just the beginning of whats going to be a long and very difficult investigation here. Dominic . Sa sara . Thanks. Well be following that very closely in baton rouge, louisiana. We have a political event happening. The rnc will get under way in a few short hours in cleveland, ohio. Donald trump is expected to receive the gop nomination on thursday. This team for today, make america safe again. With several servicemen and women expectinged to speak in washington. Joining us. Tony fratto. Tony, there are so many things, so many messages flying across the nation, across the world right now. What is going to be the lightning rod at this particular rnc in cleveland, ohio . I think it really could be this law and order theme. Obviously the Trump Campaign wants to might its theme. We saw that over the weekend. It was a theme that repeated multiple times and introduced his vicepresident ial pick mike pence. It could backfire though. We see these events happening across the world and as you mentioned we know in very stark ways over the weekend in new orleans and recently in dallas. Its a question of whats going to happen outside the convention as well this week and seeing how the city and the rnc deals with is expected to be pretty massive protests. What does that mean, law and order theme . What does that mean, that message . Its a great question. I dont know how much of a finer point theyre going to put on it. There will be a lot of talk about benghazi. If you look at polling, sara, today, youre still seeing very high concerns among voters of the threat of terror even though we know the chance of being involved in a tear terrorist attack is very, very low in the United States, people are worried about it. So that theme does have some resonance. We know theyre going to talk about benghazi, about terror. Hes going to double down on his interest in trying to he called it, i think, extreme review this weekend of people coming into the country, previously referred to it as a ban of muslims. I think youre going to see that. I think hes going to double down on it. Tony, as we talk about the rnc right now, this comes ahead of the Democratic National convention as well. How much will jockeying for position will donald trump or mike pence have to put into place this week ahead of the democrats . Its a very big week for them, dominic. Its rare to see a nominee coming into his partys convention with the level of negligence. I shouldnt say it never happens. Its rare. He needs to reintroduce himself. Hes got two big tasks. One is to reintroduce himself to windows. Hes going to have pretty much to himself dominating the airwaves to reintroduce himself and present a better candidate than the voters have seen and the second is to try to unify the party. Again, thats going to be a very, very steep hill for him to climb because he ran in the primary in a very disease advicive way, not just attacking the candidates but attacking some very fundamental views of the parties. I was going say, tony, because of everything happening in the world. I dont hear much from you and the press on Economic Issues and what is going to make or break the selection potentially. Is that on the back burner . They have a day, i think its tomorrow, where theyre going to talk about the economy a bit more. But i dont think its a driving issue as much as some would like it to see. Obviously we pay close attention to it. Were looking out over the next year to 18 months, i think we have questions where the u. S. Economy is going. The big question is about income and inequality and wages and unemployment. But i think theyre going the try to focus on this theme that does have resonance with trump voters right now which is this question about law and order and concerns over terror. A plethora of issues to address at the rnc this week. Tony, thank you for joining us this week. Toe nay fratto. Sara. Now to the deadly coup attempt in turkey. Thousands have been rounded up and are arrested as alleged coconspirators as the turk eric cabinet prepares to meet for its first regular session. Security forces continue to raid security facilities. A private News Agency Says Police Special forces raided the special Turkish Air Force academy, detaining four high ranking officers. So they continue to go after those. A big geopolitical story, of course, happening in turkey. On our shores theres still a lot of stuff on the agenda. You have netflix reporting results after the bell. Landon dowdy joins us now with three things to watch for these particular Earnings Report sthoos thats right. Wall street is looking for two cents a share on revenue. But beyond the numbers, here are three things to watch. First subscribers. Analysts forecast domestic and International Streaming to be in line with expectations, paying subscribers will be in focus as growth has been using it. Impact from the price increase. Many Analysts Expect the price to lead to thirty quarter forecasts. Tack a lo take a look at the shares. Theyre down. Netflix and comcast announcing this month they reached an agreement to introduce comcast into the box later this year which many believe could provide a nice lift for the u. S. Subscriber base. That was the darling. Netflix, the best performing stock. How things have changed. When we come back, todays must read stories. As we head to break, u. S. Futures reporting a higher start. Dow futures up 9. 5 . Stay tuned. Youre watching cnbc, first in business worldwide. Now to the must read stories. President obama writing this piece titled Merrick Garland deserves a vote for democracys sake. Hee writes, this is, quote, much more serious than your typical case of washingtons dysfunction and if we allow it to continue, it could weaken our most important institutions, erode public trust, and undermine our democracy. Hes, of course, sara, referring to this idea that he has at least nominated Merrick Garland, whos the chief judge for the u. S. Court of appeals in the d. C. Circuit. A stepping stone reviewed by many to possibly a Supreme Court nomination. He talks about this idea its been so long. More than four months. Of course, they left, congress has, for a sevenweek recess. It could be a very long while. Timing is interesting. I mean i wonder if this was a planned thing. Because of the rnc happening in cleveland. Because the president had to come on television and talk about another incident of officers getting shot yesterday. I mean it seems like that thats where the National Attention is right now. Im not sure how much steam hes going get on that one. Its a confluence of crazy events and president obama has made a lot of Public Comments about all of them so far. So the rnc is top of mind for every oped writer across the country. I went to the Washington Post today. Robert samuelsson who is a frequent contributor. The title on this piece make America Great again, he write is not a policy. Its an exercise in mass psychology. He writes the idea is to get people to displace their anger and frustration onto groups that have eroded americas greatness. Mexicans, muslims, the chinese, political and financial elites, and the media. The trump treatment is to ped hatred and resentment for his political gain. Its an interesting read. He talks about some of trumps policies. He talks about banning muslims and putting up the wall. He says that would be harmful to american jobs and if you if 11 million people, immigrants, have a force to leave this country, that could also have a Significant Impact on this economy. Its worth the read. I would say wi would always want to focus on primarily the political and Economic Impacts of these types of policies and thats the reason why we want to see more. Thats why so many oped writers talk about this idea of trump and clinton and what they could mean given or collective well being. Were approaching the top of the hour, so that means the team is getting ready for squawk box. Andrew ross sorkin. Do you have something i apologize. Were going to be talk about about what happened in turkey over the weekend late last week and talk about what happened in nice and baton rouge. So we have all those ins to hit. Plus we have a couple of big issues to talk about. Mark lashry is going to be joining us. Hes going be with us at the top of the 7 00 hour. Were going to talk markets. Lots to discuss. A little more on politics. Judd gregg. You know what took place on 60 minutes with mr. Trump and mr. Pence and rick perry will join us. Well talk energy and politics. You can imagine where so many of these conversations are going to go. Thats where were at. You have a full agendagenda. Maybe thats going to be mine. If its tuesday, it must be sorkin. Yep. Thank you, andrew. See you soon. Thanks. Coming up on Worldwide Exchange, a world of worry, but stocks they keep climbing. Steven wieting will weigh in on the markets next. Youre watching cnbc, first in business worldwide. [click] im coming back to you [click] p . P . H you wont see these folks they have businesses to run. They have passions to pursue. How do they avoid trips to the post office . Stamps. Com mail letters, ship packages, all the services of the post office right on your computer. Get a 4 week trial, plus 100 in extras including postage and a digital scale. Go to stamps. Com tv and never go to the post office again. Like having something your fit you, just right, thank you randall. Every stitch and seam of your Home Insurance, tailored to fit you and your budget. With unique features, like claim free rewards. Ohh customized Home Protection extra features all at an affordable price im going to live in this. In means getting more from your Home Insurance with an expert allstate agent. Its good to be in, good hands. Welcome back to Worldwide Exchange. With futures pointing higher, joining us in studio is steven whyting. Steven, were just talking about the fact that brexit, done, turkish coup, while failed turkish coupe. These are overlays. The big picture this year has somewhat been more Effective Central Bank policies to extend the cycle to ease credit Market Conditions internally in economying. And a major powerful injury. All of these things have been moving in a constructive position. Theyre offering relative dividend deals. So this is putting thungs together for a rally. We have this situation where the rally is intact. The shake it off rally. They talk about playing a huge part. Theyre improving. You can argue. Some say the earnings session still goes on. Unbalanced, is it the Bigger Picture or corporate fundamentals that you think are going to drive it . It feeds in. When you say earnings recession, sicyclical industries, those th do go up and down with real economic sessions, the last three cycles, earnings have fallen 59 , so going down 3 , 4 , what i think this quarter will be is closing in on flat, you know. Estimates have been too low. For seven years now, every single quarter will look back. Well get close to flat and i think well start to have improvement in the second half of the year. If there are no political shocks or turns in the economy, well go up. What qualifies as a political shock . What we saw in the case of brexit was very local. You take a look back at 1997. We had southeastern economies fall 12 and global gdp grew 2 . Weve had cases in the past where in 2011 the eurozone economies contracted nearly two percent over two years and the World Economy still managed to huddle ahead at 2 . All of those instances have proven to be buying opportunitieses for u. S. Stocks. Bear in mind wi didnt go down that much. Again, bullish. Look. We have very small equity overweights. Two years ago we had large ones. Seven years into a u. S. Economic cycle where its havled. You are further in. Certainly we view this in a late cycle contest but a lot of things weve seen this year, whats happened in labor markets has suggested that this goes on a bit longer. How conservative or liberal have you gotten in terms of your view in terms of where markets can head right now in the second half of the year. Do you feel this is more of a cautious environment or do you feel its safe to go out there given the realm of corporate earnings . Coming into the year we argued that it was a late cycle virn and we spent two years generally risking portfolios. What were seeing is not absolute value in markets but relative value. Thats why 4 yields in the United States for corporate securities are a strong buy in a world where 33 of Government Bond yields have negative yields. Youre paying up tremendously. Its this relative opportunity that makes us optimistic for certain securities but not in a very, very broad seventy. Do you buy the losers and banks and Technology Stocks . I think you have to be very selective in buying losers. That generally seems right, but losers in u. S. Financials, thats one thing. Losers in the eurozone where you have real significant questions are in the uk where you have policy questions, youre taking a more significant risk. Steven wieting, thank you very much. Thats what im going to be watching. That does it for Worldwide Exchange. Thank you, dom. Squawk box is coming up next on cnbc. Bage. In her kitchen yup, shes gone noseblind. She thinks it smells fine, but her guests smell this. Ding, flies, meow febreze air effects heavy duty has up to. Two times the odoreliminating power to. Remove odors youve done noseblind to [inhales] mmm. Use febreze air effects, till its fresh and try febreze small spaces. To continuously eliminate up to two times the odors. For 30 days febreze small spaces and air effects, two more ways. [inhale exhale mnemonic] to breathe happy. Good morning. Global markets somewhat mixed after failed coup attempt in turkey and frayed nerves in france following last weeks terrorist attack in nice. Earnings will be front and center as we count down to opening bell. Softbank to buy a. R. M. Holdings for 32 million and the Republican National convention about to kick off in cleveland following another deadly attacks Police Officers, this time in baton rouge. Itsmond, july 17th, and squawk box begins right now. Live from new york where business nerve sleeps, this is squawk box. Good morning. Im Andrew Ross Sorkin along with joe kernen and Michelle Caruso cabrera. Becky is off. Before we do that, right now in france, theyre observing a moment of silence for the victims of the terror attack in nice