Transcripts For CNBC Worldwide Exchange 20160719

World Wide Exchange im sara eisen. Along with dominic. Hes in for wilfred frost. Check on the u. S. Futures and the dow giving a little back. Perhaps a pause from the break. A break in the action for sure. Much more on the market in earnings and economic agenda in just a minute, but first the buzz of the morning. Did you see this. I saw the highlights. I was in bed by the time it actually happened. I had to wake up this morning very early to go and do this. Heres what happened Melania Trump stepping into the political spotlight at the Republican National convention. Her husband, presumptive gop president ial nominee, donald trump, introducing her, walking out in sell wet to the queen song we are the champions. It was very dramatic. Giving an emotional speech that showed a softer side of her husband, but shortly after a journalist pointed out a two paragraph section almost adentically matched a speech Michelle Obama gave. Check out the comparison here. Barrack and i were raised with so many of the same values, like you work hard for what you want in life. That your word is your bond that you do what you say youre going to do. That you treat people with dignity and respect. From my young age my parents impressed on me the values that you work hard for what you want in life. That your word is your bond and you do what you say and keep your promise. That you treat people with respect. Well have a lot more from cleveland a little later in the hour including a response from Trump Campaign on the whole plagiarism controversy which no doubt is trending on twitter. It was huge on social media. Im wondering whether or not the rest of america outside the social media platforms feels this strongly. Noticed, cares. Exactly. Good point. But still a big story for this morning. Lets get back to the markets overall. European stocks. We are taking a break from the action. We saw modest gains yesterday. Decedent gains throughout the course of the past week. German dax down. It will ftse 100 in the uk down by about. 38. The ftse mib in italy off by about 1. 5 . Certainly a break in the action. Red across the major horses if you will in the european markets. Lets check out whats happening in asia. The nikkei up by 1. P . The hang sang in hong kong. The ftse Straits Times off by about. 5 as well. As you take up the asian markets here, japan the notable standout there in terms of the asian markets overnight. Lets show you the Broader Market picture rights now. Starting of course with the price of oil. Wti overing above a dollar a barrel. Brent international off by about. 3. All those hedge funds betting against the british pound, including aqr which is said to have made a billion dollars on friday after the british referendum. The pound has been climbi ining steadily ever since then. Its in the 1. 30 region. A pause from what we have seen over the past two sessions. Even the japanese yen not showing the kind of weakness weve seen. Were near where we were at the postbrexit lows. Were hovering right around there. You have to be curious that the hedge fund story like you said. On the flip side, stocks have recouped all of the postbrexit loss. Exactly where will we were before the referendum results were out shows you the comeback incentive after the fear that was initially felt after the result. The big question is whether its fake or not or a pause. We bounced back a bit, but doesnt mean things. How much has to do with Central Bank Action . Yes, the rhetoric has heated up. Theyre here to provide support. Do whatever is necessary. Weve also seen better Economic Data out of the u. S. Well get to netflix in a bit. Well get to that in a moment. As for the 10year treasury note yield we are seeing buying. 1. 54. Were off the record low in the 1. 30s. As for gold coming off a twoweek low as well. Nothing extreme. We are seeing gold up a bit. Sara mentioned those earnings from after the bell last night. Netflix shares plunging after reporting slowest subscriber growth in three years. A 2 Service Price hike that went into affect in may was partially to blame for the letdown. So joining us to discuss the numbers. Hes a analyst. Porter, ive got to say with netflix, everyone keys on the subscriber growth numbers. Is this a cause for panic . We know netflix has been a huge performer, are the number there is to justify the evaluation. Whats interesting is netflix blames the media for emphasizing the price increase. The real core market is very mature and full of strong new competition now. You have amazon, you have hulu and even sony crackle. And all of the content providers are starting to stream their own content now. In europe the eu has come down and said we want to see more local content and not u. S. Content. They keep talking about some day, some day, some day theyre getting into china. Theyre never going to get in china because la tv the dominant netflix of china owns 99 9 of chinese content. I mentioned subscriber breath. Many countries around the world, content acquisition cost has been a heated point for this company in the past. How do those content acquisition tack up given the fact the Competitive Landscape is what it is at least in the u. S. And places in europe. Its only going to get more and more expensive for netflix. Thats the crunch theyre facing in terms of any kind of operating income. Theyre subscriber growth has slowed down. The market in their core market here in the u. S. Is mature and the competition is very intense and Everybody Knows that the Linear Television market is slowly, slowly eroding and its all going to streaming and all of the content providers that net netflix has been acquiring content from are getting the business themselves. Theres not a great future for netflix as a stand alone. Its stunning to me, porter, the shift in sentiment on this stock, i think last year best performing stock in the s p 500. It was already down almost a quarter of percent into the earnings and now a 12 slide. Is this about the change in the International Growth . That really seems to be the big disappointment. Outside the u. S. , 1. 5 million new subscribers. Is that the worry . They advertise the beginning of this year that they were going to go from 60 countries to 130. That i have done that. The content theyre offering in those new country ss very thin. Not producing anything like the results in terms of subscriber growth they were anticipating. Sound like youre not a buyer on this dip. The other nasty little secret about netflix, you talk about content cost, they have more than 12 billion off balance that they bought and dont have to pay for until they air it. They have over 6 billion coming through commitments, coming through among on these content licenses this year. And yes, with the 340 pe, they can raise money pretty quickly, but its just going to root the profits. What you have to focus on is how are the competition doing . Amazon has added significant new subscribers in 2016. Hbo that i recall real competitor has tripled the growth that netflix was predicting. Kpigts is going to be a huge point on contention going forward. And speaking of netflix, season two of cnbc binge start streaming today its on the media bid. Karl sits down with the stars and creators on what you binge check it out on apple tv, hulu, everything else. So binge, season two streaming right now. On the agenda today, the Housing Market on focus again. June is out. They are forecast to rebound slightly after dipping in may. Building permit seen rising 2 last month and then the earnings really getting going here with goldman sachs. Johnson johnson United Health all reporting earnings. Then after the bell microsoft United Continental after the close. Gold weve heard from all of the big banks. My big thing is the Investment Bank so far this year. Its been doing well. Thanks to brexit. Well see how staustainable that is. What should you look out for when Microsoft Opens the books today. Three things to watch in that report. The street is looking for earnings of 58 cent as share. Just short of last years marking the fifth Consecutive Year over year decline. Beyond the numbers here are the first things to watch. The cloud. This is the bright spot. As youre glowing 120 in the previous quarter, second the linked in deal. Though its too soon for the 26 billion acquisition of the networking sight to impact earnings. Analysts will be paying close attention to how the big buy could affect the company. Last but not least, Macro Economic conditions. Most analysts dont see indication ks of the brexit vote impacting the quarter, but a weaker dollar could provide headwinds there. Things are looking okay. Stock is up 8 . Thank you so much. Certainly Microsoft One to watch. Other stocks to watch this morning, shares of vm ware rallying. On that vm hike its overall outlook. You see the shares. Yahoo posting earnings that missed estimates. The company also acknowledging that tumbler, its biggest acquisition under ceo, is now worth only a third of what it paid for the firm back in 2013, those shares not off by much, but of course everyone is watching for the Overall Results of that particular sell. One of the things thats happening is our supply because its growing so quickly is outpacing demand. Its can you describing this shortfa shortfall. Of course we have ibm reporting and revenues. The better numbers came as a shift to high growth areas like the cloud are paying off. Within that we continue to see very good momentum in our cloud business. Cloud up 30 within the quarter. Thats a theme that our clients continue to move toward as they think about how to get to a hybrid cloud environment. Ibm certainly a focus. Got some other stocks to watch. Know var tis may hike this year. Regulators are investigating whether crieser inflated sales figures. It is cooperating with the justice departments investigation. Ericsson siting week product demand in most of the market. Were doing to stay on the car theme. Three u. S. States are expected to announce new lawsuits against vox wagon today, maryland, new york, and massachusetts are seeking Civil Penalties and other injunctive relief. Resolve existing and potential customer claims. Volkswagon face as Court Hearing next week. Seeking approval for a nearly 16 billion settlement with regulators and car owners. When we come back, donald trump is expert testimonied to fish well take you to cleveland live, next. New way to keep up new way to keep up with the data from over 30 billion connected devices. Just 30 billion . So, a bold group of researchers and computer scientists in Silicon Valley had a breakthrough they called. The machine. The machine. It changed the basic architecture of computing. Putting a massive pool of memory at the center of everything. And by doing so. It changed the world. Its been a part of every new technology for the last 250 years. Everything . Everything this year, Hewlett Packard enterprise will preview the machine. And the future of technology will begin. See star trek beyond. In theatres july 22. Welcome back to world Wide Exchange. Donald trump expected to win his partys nomination, but this morning its his wife everyone is talking about. Tracey joins us. What an uproar. No question about it. She came here. She was the keynote speaker. She would you say poised. Got a great response. Then shortly after her speech it was discovered that parts of her speech were very similar to something that we had heard back in 2008. Reporter donald trump is expected to formerly get the nomination today. Introducing his wife. My wife, an incredible woman, Melania Trump. Reporter her words to show a shofter side. Kind, and fair and caring. Reporter but this morning there are questions in similarities to Michelle Obamas speech in 2008. You work hard for what you want in life. Your word is your bond. You do what you say and you keep your promise. You work hard for what you want in life. That you do what you say youre going to co. In a statement the Campaign Says quote, writers took notes on her life inspirations and included fragments that reflected her own thinking. End quote. Hours before mrs. Trump told nbc she wrote the speech with very little help. Earlier, delegates walked out. The chair walked off stage amid a failed attempt to prevent votes for trump. Focused on benghazi, national security. Islamic, extremist, terrorism. You know who you are. We are coming to get you. Reporter todays theme, putting americans back to work. So today theyll be talking about things like jobs and the economy and obama. And targeting Hillary Clinton and trying to show the differences. Two of Donald Trumps children are set to speak tonight. And trump goes back to new york and comes back to speak later in the week or is he speaking. Reporter hell come back and be the keynote speaker on thursday. Thank you very much. Speaking of president ial politics. The Obama Administration is asking the Supreme Court to rehear the case to shut down plans for more than 4 million Illegal Immigrants to remain. Last month tied 44. Blocking the immigration plan from going into affect. Its rare the Supreme Court grants a rehearing. The government is hoping the court wont decide on the request until a new justice who can break a tie is actually confirmed, sara. Moodys may cut Credit Rating of turkey to junk status in the wake of the countrys failed coup. The coup reflects broader political challenges in that country, evaluating associatesed credit risks. Political upheaval adding to issues the government faces. Moodys had lowered the outlook on turkey to stable back in 2014. S p a competitor to moodys said it will assess the implications of the coup in a few days. Coming up, could russia be banned from the ray oio games . Heres tooldays national forecast. Good morning. Lets take a look at the forecast. A lot of sunshine. This is going be the dominating feature for you. Atlanta possibly some thunderstorms, 93 degrees. Miami sea breeze with storms along alligator alley. Out west a little bit cooler and still the sunshine big time feature for you in los angeles. 18 degrees by big bear. 82 by the staples center. Were going to have this heat continue for the next couple of days. Folks, hydration is going to be the key. We have more coming up after the break. More on world Wide Exchange. Josh, dont you have friends coming over . Yeah, so . 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 and good morning. Looks like futures are taking a pause. Its early. We are down here. After being positive and finishing at a record high. Want the s p closed at a record high yesterday. It is down six points in the early action. Nasdaq down 14. As for the treasury bond market action, we were looking yesterday at the highest yield tsz of july for the 30 year and 20 year. Seeing some buying of the bonds. Nothing extreme though. 1. 54. Here on world Wide Exchange were going to watch the sports team as well. The International Olympic committee is holding an emergency meeting today to consider an historic move to ban russi russia from it will rio games. This follows a report from the World Antidoping Agency alleging Russian Sports and government officials both conspire to conceal hundreds of positive drug tests from their athletes over the past five years. The wada stopped short of demanding a ban, but the ioc says it will decide quickly. Olympic leaders have banned countries in the past such adds south africa and afghanistan, but only for go political reasons. Owning beach front property may not be a top priority anymore. Sales in the hamptons dropping. Realtor town and country says sells volume fell 53 and by 48 in tout hamton. Only 29 homes were sold in those towns due to lack of inventory. Tend to lag when the stock market underperforms. They run in seven year cycles. The stock market surnled 30 in 2013 which was followedly record home sells in 2014. Perhaps impacting the hamptons. Ive looked at air b and b and home away and its still pretty costly. Youre a hamptons kind of girl. Im not. Coming up this morning, including earnings weve got also Economic Data and the things moat likely to drive the trading day ahead. Stay tuned. Youre watching cnbc first in business worldwide. My Analysis Shows your stories are actually about human connection, even love. Great storytelling needs drama and empathy. My cognitive apis can help any business Better Connect with its audience. You should try writing a book. Find a remote hotel. Bring the family. I do not think that is a good idea. Good morning. Markets now some red arrows this morning following another record day for u. S. Stocks. Todays test earnings reports and housing data. And the road to the white house, Melania Trump pitches her husband to the gop convention, but this morning she finds herself amidst some controversy. Were going to tell you why straight ahead. Today is tuesday, july 19, 2016. And youre watching world Wide Exchange. Good morning and welcome back to world Wide Exchange on cnbc. Im sara eisen joined by don chew sitting in for wilfred frost this morning. Lets get a look at global markets. Thank you to our own peter for this stat, the dow has been riding a sevenday up wave. That is the longest streak. It hasnt been on that much volatility. We havent seen crazy moves up, crazy moves down. Just every day seems like were on the verge of another record. The past of least resistance. Is up for right now. Supported by earnings in the economy, would you say. Only because the economy yes, the data points are coming up perhaps a little more positive on balance. Maybe a little too early in earning season to say whether or not those earnings are going to affect the overall market. I will say this, a lot of traders were talking to these days say the market yes the path of least resistance has been up, but its been going up for quite a streak here. Maybe a little bit of a pause. Yesterday we did see weakness in the markets and we still set a record. We are seeing rotation in certain sectors. Technology, materials had a good day yesterday though strength for some of the more defensive had record highs. Of course. Those valuations certainly a question for a lot of investors right now. Perhaps taking the cue from europe. Lets show you quickly the early action over there. We are seeing some selling today with the german dax. The euro stocks coming off a threeweek high. Italy also getting hit hardest of the bunch. The banks continue to be in the cross hairs concerns about the capitalization of those italian banks. As for the asian market overnight, green in japan as well which has been having a good few sessions on the back of the weaker japanese yen which saw another 1 mover lower. That helped the japanese nikkei close up. Red across the continent. The shanghai comp closing about a quarter of a . Thats a stop side of things. Lets check out the Broader Markets. Oil. Wti 45. 14. Itis brent 46. 80. As for the 10year treasury note yield, we are seeing a tick at least a little pit braps to the downside here. Maybe just about four basis points 1 p. 54. As for the dollar against major currencies here you take a look at whats happening major all. The euro 1. 10. Turk ir lira been a focus. 2. 977 lira turkish for every one dollar. Let check on gold. Gold futures are ticking up a little. We have seen weakness as of late, but still gold prices showing strength. Todays agenda includes some housing data. June Housing Starts at 8 30 a. M. Eastern time. They forecasted to rebound slightly is and Building Permits which is a good gauge of earning. Earning central, gold man sax, Johnson Johnson all reporting Quarterly Results before the opening bell. Microsoft and United Continental out after the close. Around 88 total s p 500 companies will report earnings at the end of this week. Something to watch for sure. Among todays stocks to watch. Netflix getting crushed this morning after it posted weaker than expected growth measures. Some customers cancelled the streaming certifies. And the company now forecasts slow r than expected growth in the u. S. And International Subscriber markets here in the current quarter. As for the rp take, heres marten. I think theres some growing pains. As they subscriber growth slows, that mathematically has to happen. I would suggest the data is suggesting that. As that slows they need to lean on rate more. That reflects their status as a compliment versus a replacement and the better alternatives. Of course netflix not the only stock to watch here. Watching stocks of yahoo here. Revenues topped estimates. No details from ceo on the expected sale of yahoos core internet assets. Thats due in coming day. And the big one here, ibm sharing rising in the early trade. The company beating the street on top and bottom lines. The ship to cloud base Services Starting to show signs its paying off a bit. H this is a stock thats up huge since those january low. Steve so the market anticipating the rebound. Perhaps. The first night was clouded in a bit of controversy, a few controversies in fact. John harwood joins us with details. First there was the uproar. And then Melania Trump was it really mileage richl john . People can decide for themselves what to call last night. Let me step back. As you indicated they started with some protest on the floor for never trump forces. We didnt hear from them later in the day. Then got to deliver the controlled message. The theme was restoring american security, law and order. And have roady julianny delivered that message in an extremely effective way. Who would trust Hillary Clinton to protect them . Then we had donald trump making an unconventional introduction to introduce his wife melania. She appealed. A softer side of the campaign. She was very poised. Delivered it well, but very quickly people noticed the similarities between her remarks and Mitchel Obama in 2008. Barrack and i were raised with so many of the same values, like you work hard for what you want in life. That your word is your bond. You do what you say youre going to do. My parents impressed on me the values that you work hard for what you want in life. That your word is your bond. And you do what you say and keep your promise. That you treat people with respect. Now, the challenge here is the Trump Campaign has a very small staff and so you see some of that reflected in the use of a fragment from Mitchel Obamas speech in twaikt2008, but the p politically for trump is it feeds the question what is behind the story people are telling. Thats been the question trailing his business career, does he really offer what he says hes doing in the trump lawsuit that hes defending himself on . Thats why this plays into that question about donald trump. How much is behind. Im not sure it was the exact same language. It seems like the same theme, but it doesnt seem like the same language. Very close. Very close. A lot of people put up the side by side ver baits of each particular speech as well. Including obamas former speech writer who said, john, that michelles former speech writer was all writer of Hillary Clinton. Small circle. I want to bring this back to one particular talking point here. Glass eagle, big banks, main street versus wall street. Head licen headlines how the gop is going to view the banking industry. They put it in the platform. They did. What can you tell us from a colored perspective on how the platformed are shaping up. This is an attempt by the Trump Campaign to get to Hillary Clintons populous and try to cut off her ability to run as a populous. Remember, donald trump says shes the one who is prowall street. S so donald trump is trying to reach out to some of those populous democrats who might bedy disaffected from Hillary Clinton and this is part of that. The question is how much. I guess its in the platform, but is it something donald trump supports and b could have a real chance of passing if he becomes president. Whats the likelihood . I doubt its going to happen whichever one of them is elected president. Hillary clinton because shes not supporting it and with donald trump, the question of donald trump is what policies are important to him . It is not hes thot a policy driven campaign. Its a personality driven campaign and so he talks about making tedeals with the congres and that sounds to me like an issue if push back comes from industry, from politicians, that might quickly get started. Thank you. John harwood in cleveland for us. Which brings us to the twitter and foosbook question of the day. Was the speech that controversial. You can see there on social media. Well bring you the results in the show. Yes, it was ripped off. It really doesnt matter in the grand scheme of things. Top trending stories. Name and shame. That the is how chinese courts are pressuring debtors to pay up. For ten days the name, were plastered across billboards of two shanghai rail way stations. In some cases photos of the debtors were shown. Im not sure i like that. All this talk about pokemon go sntd the only app taken to the app store. Two locator apps called radar have take tennessee an the app storm. Kind of like waz, i guess. For players logging in where they can find pokemon on a map allowing other gamers to find them later on. Its all about getting the edge and trust me people want it with pokemon. Coming up, todays must read stories. As we head to break, best wishes to starbucks ceo howard shults, its his birthday today. P . P . H welcome back to world Wide Exchange. Todays must reads. Mine is the wall street journal. The National Labor relation boards prosecution of boeing for opening a new plant south carolina. Instead Washington State is decided by faceless burr cat, mrs. Clinic tonight would stop the agts sis from top to bottom with lowest learners. The case for donald trump according to this columnist is it cannot be Hillary Clinton and that is the republican seemingly strongest message here and he outlines why when you become president of the kbrieunited st its not just you, but you bring in staff. And he said Hillary Clinton would bring Big Government sort of antiproductive at least if your republican kind of people into the government and that was this republican or this right leaning columnist take on why you should back trump. Im going to balance things out a little bit because my pick is in the new york times. The most extreme republican platform in memory. The Editorial Board there writing, quote, it candidly admits that polls show the party was harmed by Public Perception that the gop does not care about people. Young voters are increasingly rolling their eyes at what the party represents. The report warned many minorities believe republican dos not like them or want them in their country referring to the idea after mitt romneys defeat in the last president ial election the gop had to do an assessment of itself to see how it could be more inclusive. This has become a very divisive gop. Really kind of hitting certain groups against other. Everyone is going to their corner and talking point on both sides. Ref. Were approaching the top hour and that means the team at squawk box is getting ready. You know what to do. You know how to butter somebody up like that. I tried it because i love you and respect you so much andrew and youre a fantastic journalist and i loved your column. Its trump and pence on the same ticket, but not on the same page. I read it. Tell us a little bit about what youre talking about in this particular column. I just wanted to see what both of these gentlemen think on Business Issues. Weve talked about issues they dont agree on in other places whether it be iraq or other things and here we are on Business Issues of course. Donald trump on the ticket as campaigning on his business expertise. Its really just a walkthrough of what those issues are. The biggest by the way being the bailouts. Bailouts both of wall street in 2008 and later in 2009 of the automobile industry. Pence in both cases voting against and in both cases donald trump saying that they needed to did that. So its just interesting to see how these two fellows are living together or will live together. So well see. We got a taste of it in 60 minutes interview. Nonetheless, let me tell you what we got going today. We have a lot of things on top. Were going to be talking about the convention. Im still trying to process what i saw last evening, but nonetheless, we have got earnings and reaction to ibm after the market. And netflix after the market. Goldman sachs coming up. And the most important person is here our guest host for all three hours. Taking the place of becky this morning, kayla. I can promote a lot of guests this morning. One of our own. We love it. Thank you andrew. See do you in a few. Season two of cnbc binge will start streaming this morning. Karl sits down with the stars and create terror ofrgs what you binge. House of cards producer puts everything into perspective. Take a look. Trump versus underwood, who wins . Underwood, probably a mile. Clinton versus underwood. Underwood by a mile. Life collides with netflix season. Check out binge season two. Of course coming up here on, the dow is on a seven session winning streak. Were going to get more insight from Michelle Meyer, bank of america next. Youre watching snoo ining cnbc first in World Business worldwide. You get use to pet odors in your car. 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 world Wide Exchange. Joining us, Michelle Meyer of bank of america. Were looking at a pause in u. S. Futures right now after what has been a pretty tremendous period of buying. Seven straight sessions for the dow all the way to record highs. Is that backed up by the data. The data has been better. Its not been spectacular. It has been better. The june job report was strong. That reversed the weakness we had in may. And is the softness we had in april. Retail jobs came a little better. We think the data surprises have been net positive, but youre not seeing a massive acceleration in the economy. Just seeing some slight pickup. Is modestly okay or just positive enough to keep this market going the way it has been . I mean, were not talking about a skyrockets markets, but we are talking about one showing some optimism. Can the data keep coming in the way it is and still propel whats the perception about the u. S. Market. I think its a function of the u. S. Data. Its also a function of the belief around central bank policies. The fed the going to be on hold for a really long time. Other Central Banks are going to continue to provide liquidity. Seems to be the assets. If that sentiment starts to shift in part because the data does look better and fed language turns a little more hawkish, you have another part of the puzzle that complicates things. Is the data good enough to get us out of the earnings recession either this quarter or next which also seems to be a prevailing view or at least an increasing view. So from our equity strategist, theyre looking for earnings to be less bad, but still bad. So. Still declining. Yes, but not as bad of a pace. When you think about the corporate sector blodly, most signs point to an environment where its still declining. If you look at core kpap goods theyve been falling for the first several months. When you look at gdp accounting its likely to be negative. You mentioned on balance the data has been okay. Has been great and hugely positive. Are there parts of the u. S. Economy industrywise, specific sectors or parts of the kpi that worry you the most going into the second half of the year. To me its a function of the things more externally oriented. Thats where the concern comes from. Manufacturing sector, the trade deficit, will that continue to be a drag on growth. I also do worry about Business Investment. Its been painfully weak throughout the first half of the year. Part of that was the residual of the job energy prices. You still have the decline in energy investment. It seems to be a bit more widespread than that. The bad scenario would be that the weakness in Business Investment weve seen in capital starts to extend into labor. You get weakening job growth. That feeds more broadly into the economy. So far we dont see evidence of that. The labor market has been fairly resilient. Thats when you start to paint that picture. If the data has been better and the market has been better, then why is the expectation that the fed will just be on hold forever. Great question. I think its more the initial gut reaction after brexit was to price out the fed and assume that youre going to have this coordinated central bank support to under pin the markets and support the economy. From a u. S. Perspective, they are clearly concerned about global risk, but they also need to think about whats happening in the domestic economy. Our baseline call is they hike in december. Now, you have to have everything go right. I think the fed is risk reverse, but all else equal, i think they will go ahead and hike. As long as we continue to see what were seeing which is a move up in inflammation and gradu gradual. Always good so see you. Bank of america, merrill lynch. And, of course, our twitter question of the day, again, whether or not melanias speech was ripped up. Thats it world Wide Exchange. Squawk box coming up next. At the post office. 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. Good morning. Shares of netflix under pressure. The stock falling sharply under weaker than censexpected subscr growth. Suddenly comcast is at new highs. Plus dow component, johnson and johnson. The road to the white house, donald trump with a dramatic entrance on night one. His wife melania pitches her husband to the gop convention, but this morning shes facing accusations of plagiarism. We will tell you why and remind you about neil kinic. Straight ahead. Its july 19, 2016. Squawk box. Good morning welcome to squawk box right here on cnbc. Lets take a look at u. S. Equities futures at this hour. Youre looking at red arrows. Nasdaq looking to open down. As well 17 points and the s p 500 about 7. 5 points off. The dow is riding a 7day winning streak. One more up day would make it the longest since march of 2013. Ov