Lee. Good morning, susan. Good morning. Good to see you as always. Great to have susan with us. Lets get to the market action. Futures at this hour are pointing to a slightly positive open. But as you can see, its essentially the s p higher by 0. 2 . The dow just below flat. The nasdaq just above flat. We did hit alltime highs last week. Gains for the week, more muted. The s p and the dow up less than hf half a percent. Tech was the best performing sector after notable earnings. The tenyear yield, a tight range last week in and around 1. 55, 1. 6 and were in that range again now. 1. 587. Volumes for the week, hopefully coming back from vacation lets get the top corporate story. Verizon set to announce to buy yahoo for around 5 billion. Reports are that yahoo will no longer be an operating company. Instead, it will be a Holding Company for stakes in alibaba. Yahoo says marissa myer not expected to stay on after this deal is completed. At last, we think we have the deal and the announcement to come. The democrats prepare to open their convention in philadelphia today. Dnc chair, Debbie Wasserman schultz has resigned this after an email leak showed dnc leaders worked to undermine the campaign of Bernie Sanders during his primary fight with Hillary Clinton. Meantime, former new york city mayor Michael Bloomberg will endorse clinton this week in a speech at the dnc. Now, an independent, bloomberg was first elected in the big apple as a republican. He was a member of the Democratic Party until 2000. A new poll finds republican president ial candidate donald trump about each with clinton in the gop convention. Much more from john harwood at the dnc in philadelphia in just a few minutes. Lets check in on the global picture. Check in on europe and how its doing in the early part of the session. Gains across the german dax. Also similar gains as well. The broader markets in asia as well. Mostly gains and commodity shares, the weakness in commodity shares dragging hong kong lower. A bull market last week. Guess what . Did you know influence back into asia hit the highest since 2014. We have seen strong gains the last month. Record highs here in the u. S. But in muted fashion each time. Its over the last months, both europe and asia performed well. The broader markets, the dollar index up 3 4 of 1 last week for a fifth straight week of gains. Its on track for another week of gains if we look at things this morning. The dollar higher by. 2 of 1 . Not against the pound and the euro. But movement this morning, relatively muted. Lets have a look at all prices as well last week. We saw wti down around 4 for the week as a whole. We are some way from that 50 level we were holding on for most of may and june. Were at 43. 94 this morning. Up around half a percent. Gold prices, two weeks of declines in a row for gold. Again, slight declines, though, relative to the gains we saw post brexit. Up another half of a percent this morning. 13, 14 the price now. Lets get back to the top corporate story. Announcing an agreement to buy yoohoo. Landon dowdy joins us with the details. Is it yahoo i kind of like yahoo. Reports say theyve agreed it a deal with verizon which emerged as a frontrunner in recent weeks. The Telecom Country will pay 4. 8 billion to acquire the core internet business, including the email service, sports and sites. Along with advertising and some real estate. The deal is expected to be announced before the u. S. Markets open today. Theyre expected to keep the yahoo brand. Its unlikely Marissa Meyer will stay on board. She stands to make 50 milli million shes already earned 100 million in cash and stock over her fouryear tenure. Last week, yahoo reported the decline in earnings over the past seven quarters under meyer. The stock is up in the past three months. Once the sale is complete, yahoo will become a Holding Company in yahoo japan and alibaba. Analysts say the majority of the market comes from. Back to you. The majority of their value of 36 billion hinges on alibaba and yahoo japan, which some say is worth 8 billion as a business on its own. Well see the future and what it holds as a Holding Company. Thank you, landon. Other news, tesla and solar city are close to a merger agreement. Elon musk is the major shareholder in both companies. Theyre in the final stages of carrying out Due Diligence. Tesla announced it made an all stock offer for them worth 2. 8 billion. Solar city evaluated the bid but has not publicly responded. In other corporate headlines, shares of nintendo getting slammed in asian trading. The drop after the company cautioned that pokemon go would have limited impact on their the 18 , its down. It was the worst day for the stock since 1990. But even with todays drop, nintendo shares are still up around 16 since the game launch on july 6th. Only a onemonth time horizon. Other tech news. Apple could hit another milestone this week. Theyre close to selling the billionth iphone. Theyre set to post Quarterly Results after the close tomorrow. All eyes, of course, will be on that tech company in general reporting well last week and leaching the sector to the best performance of the s p last week. Theyll be crossing the billion iphone sales mark. Thats a drop of 17 from a year ago. So maybe theres maturation in the smartphone market. Lets get to stock to watch. Ericsson ceo is stepping down. Hes come under fire with swedish media questioning his pay especially after weak Quarterly Results. His departure is days after they reported stocks declining. Philips on target. Despite concerns over brexit and Political Uncertainty in the u. S. Philips matching the Second Quarter results as higher volumes and cost controls improving margins. Lvmh, behind louie vuitton, is selling donna karan. Donna karan is the Parent Company of guess what, the namesake in dkny brands. They own brands such as mark new york and calvin klein and tommy hilfiger. More stocks to watch. Reached a deal with the Pennsylvania Attorney general to settle a troeb that includes board resignations. Makes a 23 billion offer for it. They control the chocolate maker through super voting shares. 1 move in hershey this morning. First quarter profit the carrier is backing the fouryear targets but post brexit, theres significant downside risks. Theyve dented Consumer Confidence and slowed bookings. Shares are up today. A new Top Executive at alliance wants them to forge closer ties. Allianz will become more involved in that part of the company than in the past. They named manny roman as a new chief executive. Shares are up 1 in germany. Its a heavy week for economic data. Well get the schiller home price index. The fed also starts a twoday policy meeting on wednesday. Durable goods, pending home sales and decision comes your way at 2 00 p. M. Eastern. Theres not a press conference this time around following the meeting. On friday, the chicago pmi and consumer september imts. Its a heavy week when it comes to earnings. A dozen dow components and 177 S P Companies reporting. 3m, caterpillar, apple are outs on tuesday. Well hear from boeing, cocacola and facebook on wednesday. Thursday, its conocophillips. Ford, alpha bets, amazon, exxonmobil and merck report on friday. Its highly populated. Lots and lots of earnings. When we saw the market continue to see yields to cut. Thats been the development for me of markets the last couple of weeks. Stocks have gone higher and for once, bonds deals are higher as well. A shift out of bonds into equities and if the data continues to be good, we might see the yields tick up a bit. You know what im watching and didnt have on the calendar, the boj meeting. Theyre talking about whether or not there will be an unleash of new stimulus, possible fiscal stimulus by the abe government. Im watching that too. On friday, we have the European Bank stress test. Everything coming fast this week. Youll have all of the details. Back to politics. Hillary clinton set to accept her partys nomination for president this week for the start of the convention and its not going as planned. The dnc chief forced to step down in the wake of the email scandal. John is with us. Good morning, wilfred. The Democratic Convention kicked off with shades of the same disfipgs as we saw with the republicans in cleeflds. The clinton ticket hoped to focus on the rollout of tim kaine as her Vice President ial choice. Instepped, because of the leaked emails that showed that Debbie Wasserman schultz, the democratic chair had been favoring Hillary Clinton, which is something that she denied at the time. She was forced to resign. The positive news for democrats, they achieved that forced resignation by the time this interview aired between Hillary Clinton and cbss 60 minutes show in which she said she was going to run a campaign that didnt look at all like Donald Trumps. He calls you crooked hillary. What do you call him . I dont call him anything. Im not going to engage in that kinds of insult fest that he seems to thrive on. Whatever he says about me, hes perfectly free to use up his own air time and his own space to do. Im going to talk about what hes done. Donald trump wasnt going to let Hillary Clinton have the airwaves on her own. He sat down with our colleague chuck todd on meet the press. Not only did he say that the United States under his leadership might pull out of the world trade organization, he repeated the comments that he made about potentially not living up to nato obligations if nato allies had not paid their bills. Mitch mcconnell said this about your nato remarks in the new york times. He said it was a rookie mistake and that once you finish the comment here. Its a rookie mistake and it proves that trump needs People Like Us around to help steer him in the right direction on some basic things. Hes 100 wrong, okay . Hes 100 wrong. Now, that kind of intra party discord is not what republicans are looking for. It appears that donald trump got a very slight bump among Republican Voters at his convention. Question now is going to be can Hillary Clinton run a smoother operation over four days and come out of this convention with more momentum . Well see this week. John, as we look at the Democratic National convention, emails are not a word that Hillary Clinton embraces given recent events. But the latest email issue for the Democratic Party, is it more of an issue for the party than hillary herself as candidate . Is she getting hurt by this . I think it is obviously not beneficial when you start your convention with a forced resignation of your chair. But Bernie Sanders, who was the victim of this behavior, the one who was disfavored by the Democratic National committee was a good soldier when he was on television over the weekend. He was not trying to fan the flames. He has called and did repeat his call for Debbie Wasserman schultz to leave. But once that was done, he indicated that he was going to focus on donald trump and helping Hillary Clinton beat him. Thats why Hillary Clintons campaign wanted to hear. One final question, john. What about the endorsement from Michael Bloomberg thats impending . I think thats no surprise. Michael bloombergs gun rights, Gun Control Group had previously endorsed Hillary Clinton. Michael bloomberg had threatened to run as an independent in the event that donald trump and Bernie Sanders were the candidates. But its pretty clear that once Hillary Clinton got in the race, that was someone who his liking. It will provide some slight benefit to Hillary Clinton. But not a lot. Because everybody knew where Mike Bloomberg was going to come down. Jop, good stuff. Thanks for joining us this morning. John harwood reporting from philadelphia. Im looking forward to this week, Donald Trumps twitter feed. No doubt, hell try to make sure the focus isnt purely on the dnc and i imagine some spicy tweets coming out with him. Thats a good way to put it. Very political. Coming up, were going to get highlights from this weekends g20 meetings, Brexit Impact and the story from china straight ahead. Youre watching 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. You know what, guys . Theres a lot of tree branches and dry brush over here. We should probably move the bonfire over there. [smokey whistling a tune] im guessing smokey liked that idea. We hit fresh alltime highs again for u. S. Equity markets. Albeit in muted fashion. The s p and dow up around about a quarter of 1 . The nasdaq up over 1 . Were poised for a slightly positive as you can see. Essentially flat in the futures markets right now. Oil meanwhile is up a little bit. We were down almost 4 last week. Some way, not only from the 50 mark now but the 40 mark. Up 3 4 of a percent this morning. Just below 44. Susan. A deadly weekend in germany. Suffered four violent incidences in the past week, a bomb went off last night outside a Music Festival taking place in southern germany. A bomber was a 27yearold syrian who had been denied asylum to germany. That the man blew himself up after being turned away from a festival. At least ten people were injured. Earlier yesterday, a 21yearold syrian refugee was arrested after killing a pregnant woman in a machete attack in stuttgart. They have arrested a friend of the gunman who killed nine people on friday before killing himself. The 16yearold afghan teen may have known about his friends plans before he went on a shooting spree. Last night a vigil was held outside the Shopping Mall where the attack took place. Switching gears. The brexit dominating weekend. G20 meetings in china. Were joined with the highlights. Eunice . Thanks so much, wilfred. The topic was brexit, brexit and more brexit. There was almost universal concern about the impact of brexit on European Growth and therefore, on to the global economy. The g20 issued a communique and said they were planning to use every available tool at their disposal in order to prop up growth. The g20, there werent a lot of specifics. One thing that they did agree on is that the brexit needed to be negotiated as quickly as possible and in the least disruptive way. Otherwise, as the imf david lipton told me, there could be a slowdown on investment as well as spending. This is what he had to say. The big question going forward, how brexit will be addressed when the uk begins negotiating with the European Union about what the new rules are going to be. Whats most important is that theres an amicable approach that they approach this with a sense of mutual gain and find a way to agree on some new rules without creating a period of unnecessary certainty. Meetings followed the Republican National convention. There was a lot of talk of donald trump and his economic policies. Theres a big concern about rising protectionism in the United States as well as elsewhere. And one of the targets of trumps policies is mexico. So i sat down with the mexican deputy finance minister and i asked him a what thought of the antitrade rhetoric, if he was concerned that it could translate into policy and hurt relations. This is what he had to say. More integration is good for the economies. This all the sentiments happening, of course, is not something we believe in those. We believe in free trade. The integration of our economies. All this relationship that we have are more profound than the another major topic that came up was the health of the italian banks. The European Commission is negotiating with the Italian Government to try to come up with some sort of rescue plan. I spoke to all the players, the European Commission, the Italian Central Bank governor, as well as the tal began finance minister and all of them had generally the same message. That is, they felt investors fears were exaggerated and that theyre working closely and quickly to come up with some sort of solution. The eu is going to be unveiling the results of the Bank Stress Test later this week. Guys, we should have more light shed on Banking Sector then. Eunice, thank you very much for that indeed. The European Bank stress test out on friday. A new report today predicts a global deals might drop 1. 6 trillion, with a t, if brexit takes the talks take too much time. The forecast from law firm baker and mckenzie find the activity will decline in any scenario. A disorderly exit will mean a bigger decline in global transactio transactions. European pulled 1 billion euros each from four large Investment Funds following the uk brexit vote. The Financial Times says shah roaders, fidelity and invesco were among the five Asset Managers in june. Theyre either based in since september 2011. Coming up next, air bnb is suing its hometown of San Francisco. Well tell you why that comes your way. As we head to break, heres the National Forecast on the weather channels kelly cass. Good morning. Wilfred and susan. Yes, were looking at another hot, hazy humid day across much. Lower 48. But now weve got a potent storm system moving into the northeast. Maybe taking the edge off the heat a little bit anyway. 95 in new york city and there is a chance we could see severe storms with this particular system stretching back into parts of the ohio valley as well. Washington, d. C. Could get up to 100 degrees. The first time weve done that in about four years. Getting very close. Well be watching those numbers closely. Regardless of the actual number on the thermometer, though, its going to feel well into the triple digits today across so many areas in the middle of the country with that humidity factored in. 95 for a high in dallas. 83 seattle. 88 degrees in chicago. And yes, 95 in new york city. Wrachblt well be right back. Ewd from bank of america to earn 1 cash back everywhere, every time. At places like the batting cages. [ crowd cheers ] 2 back at Grocery Stores and now at wholesale clubs. And 3 back on gas. Which helped him give his players something extra. The cash rewards credit card from bank of america. More cash back for the things you buy most. Welcome back. Air bnb is suing its hometown San Francisco over rental regulations. The rules require them to only advertise hosts who have registered with the city. Hosts cant exceed the number of nights theyre allowed to rent. It can be fined per violation. The company says its not responsible for hosts following city rules. Still to come, this mornings top stories, plus well get ready for the trading week ahead. The focus on earnings and more earnings. Stay tuned. Youre watching cnbc. First in business worldwide. Ed s monkey dont even. Narrator and explore a world of possibilities. Kubo its beautiful. Narrator visit discovertheforest. Org to find the closest forest or park to you. You fine but your passengers in your carsmell this. T smells eliminate odors youve gone noseblind to for up to 30 days with the febreze car vent clip break out the febreze, and [inhale exhale mnemonic] breathe happy. A developing story. Verizon and yahoo about to announce a 5 billion nintendo plunging because of pokemon. Leadership in chaos, the chair of the Democratic National committee ousted on the eve of the partys convention. Its monday, july 25th, 2016. Youre watching Worldwide Exchange on cnbc. Good morning. I am wilfred frost with susan lee in this morning. New highs for your more muted fashion than weve seen recently. We are just below flat for the implied open. Nothing significant. The dow by 6 points. Seeing gains across the rest of the world. Particularly in europe right now. Around about a half to 1 of gains. Germany is up just over 1 . France just below that level. The ftse 100 just above flat. More earnings out of europe coming from the ecb on friday. Asia did see gains for many of the markets. The two main ones, japan and hong kong were basically flat as well as shanghai. Nikkei just below flat this morning. If we look at the broader markets, susan, we saw some losses in the oil markets as well. Lets check in on oil markets and wti crude. Declining after a pretty tough week for oil down 4 . The u. S. Dollar, meantime, check on the dollar index. Playing into the boj meeting this week as well. Since people are expecting possibly more stimulus and the yen as you see trading at 106. 31. More weakness in the japanese currency. The pound stronger than the u. S. Currency, the euros pushing to 110. Gold pricing, lets check in on gold prices and how they are performing so far. 13. 15. A bit down from last weeks levels. Lots of data and earnings to move markets this week. But the top corporate story is a deal one. Verizon set to announce an agreement to buy yahoo for 5 billion. It will be a Holding Company for its stakes in alibaba and yahoo japan. Yahoo Ceo Marissa Mayer is not expected to stay on after the deal is completed. Other news this morning, tesla and solar city, close to a merger agreement. Elon musk is the largest shareholder in both companies. Reuters reports that the two companies are in the final stages of carrying out Due Diligence on each other. Last months tesla made an all stock offer for solar city worth 2. 8 billion. Solar city formed a special committee to evaluate this bid but not publicly responded. Shares of nintendo slammed in asian trade overnight. The drop after the company cautioned pokemon go would have a limited impacts on earnings. The stock closed down nearly 18 , the most allowed by daily limits. It was the worst day for the stock since 1990. But even with todays the nintendo shares are up since the game launched on july 6th. To philadelphia, the big story this week in the u. S. A number of big political stories as well to get you up to speed this morning. Democrats are preparing to open their convention in philadelphia today. Democratic National Committee chair, Debbie Wasserman schultz has resigned after an email leak showed the dnc leaders worked to undermine the campaign of Bernie Sanders during his primary fight with Hillary Clinton. Meantime, former new york city mayor, Michael Bloomberg will endorse clinton this week. In a speech at the dnc. Independents, bloomberg was elected in the big apple as a republican. He was a member of the Democratic Party until the year 2000. Todays Democratic NationalConvention Theme is titled united together. First lady, michelle obama, senator Bernie Sanders set to speak in priemts primetime. Joining us it ben white to discuss this. Chief economic correspondent at politico. Good morning. Its the focus particularly after this email, second email scandal. Is the focus on what Bernie Sanders has to say tonight. Bernie sanders will be big. Elizabeth warren has been add ds to the schedule tonight. That will be an important address. Democrats, Hillary Clinton want to hear a unity message from Bernie Sanders. They want him to exhort his supporters in the liberal weighing of the Democratic Party to get behind Hillary Clinton to stop donald trump. So they wants to put an official end to the primary battle tonight. That will be the main focus for democrats. Can sanders be vocal in his support for her and get the people on the left to come to the table and be clinton supporters. Obviously the democrats didnt want to start the Convention Week this way. Ousted their chairwoman. No. Its another distraction for them. I think the reuters headline this morning was democrats in disarray heading into the philadelphia convention, not what you want. They moved pretty quickly after the emails came out saying the dnc was working against sandsers. She resigns before it starts. Shell open and close the convention. But that will be it for her. Theyre going to stop the bleeding before the convention starts. Does it hurt hillary . Its not helpful to have this be the major headline going in. It does give credence to bernie supporters who say it was rigged against us, the party was against us at the start. It makes the supporters more angry and less inclined to get in line with the nominee. I think they ultimately do that and will be supportive of Hillary Clinton. But its not helpful to start out this way. What do we make of clintons vp choice. Its not the choice its not. Tim kaine is not exactly a wall street centrist democrat. Hes a pretty progressive democrat. Elizabeth warren would have been the one. He would have been that is something that the sandsers wing doesnt like. You saw donald trump trying to play this up over the weekend saying this guy is owned by the banks. All that stuff. Hes not. Hes a pretty progressive guy. This was of the safest pitch you could go with, wellliked among republicans and democrats. Ella peel to blue collar voters to too. And the white male. Shes not going to win white male voters. Trump will. Hes up 23 points among white male voters. She needs to bring that down some. Is it really an issue that doesnt focus too much on hillary . I think it probably helps him a little bit. I mean, it allows roocepublicano say this was a rigged process. His message that it was rigds for insiders and hillary is a tool for wall street, at the margins its helpful to him. I dont know how longterm it will be an issue. I think theyll dispense with it relatively quickly. For trump and republicans, this is a nice way for them to start their convention. They will make hay of it how they can. What about the bloomberg factor . Hes widely respected and a very successful businessman and maybe contrasts a little bit with donald trump in terms of the amount of money he actually has, not what he says he has. I think it will make a difference to independent voters. You see this guy who has been a republican, is now aligning with the democrats. Hes going to say, look, we cannot risk the American Economy on donald trump. Hes too dangerous. I think thats a big thing for dems. I think that will help. Ben, thanks for joining us. Ben white from politico. Right now to our top trending stories of the morning. With the dnc kicking off today, hillarys campaign is taking it up a notch. The hillary 2016 app launching yesterday in the app store. Each user is given a Campaign Headquarters which they can cows mize and complete app challenges. Its home to quizzes such astrum or false. Its aiming to get them into i havent downloaded this yet, have you . No, vi nt. Its on the list after pokemon go. Ladies who rock outer space hitting toy shelves soon. A science editor at m. I. T. Proposing a legos set celebrating the female stars of nasa from sally ride to nancy grace roman. The proposed set is aiming to shine a light on the contributions of women in science, technology, engineering and mathematics. Garnering 2500 supporters, including an endorsement from nasa itself. Im going to put my check mark to it as well. Its specific, a lego set to promote it. Anyway, go for it. I like it. The ceo behind pokemon go spilling details about the future of the game at comicon this weekend. It will welcome more pokemon creatures over the course of the next few months and years. He also revealed customized poke stops will play a big role in the games future direction. Has a big future and presence already. Two gamers, illegally and apparently unknowingly crossed the border from canada into the u. S. While playing pokemon go. The two gamers were discovered staring at their phones by u. S. Border patrol agents while they were trying to hunt down pokemon. A spokesperson for Border Patrol stating that both juveniles were so captivated by their pokemon go games, they lost track much where they were. People obsessed. Must reads coming up. Check out equity markets in europe in early trading. Decent gains across the board. Germans germanys dax up over 1 . Stay tuned. Youre watching cnbc, first in business worldwide. Mr. Clean gets tough on dirt and grime and grease in just a minute mr. Clean will clean your whole house and every room thats in it. Floors, doors, walls, halls hes so tough, he cleansem all grimy tubs and tiles hell do so your bathroom looks clean as new mr. Clean gets tough on stuckon stuff cleans kitchens in a minute. Mr. Clean will clean your whole house and every room thats in it. Mr. Clean, mr. Clean, mr. Clean welcome back to Worldwide Exchange. Must read stories. My pick from the Financial Times. Its titled the fight of Hillary Clintons life. Edward loose writing, playing it safe is a natural instincts. In these times, thats the highest risk approach. A visceral disdain for the status quo. Nor is it sufficient to scare people about the risks of a Trump Administration and of course, this is the moment that Hillary Clinton has to step up to the plate this week and try to offer something that attracts people outside of her course and tries to commit some people that dont like her that shes the choice. My pick is also ow is from the wall street journal. Its titled trumps big data gamble. Mr. Obamas data scientists ran more than 60,000 election simulations to figure out which states to allocate resources and which counties were the most promising sources of votes. I find this fascinating that its kinds of like a moneyball approach to the big electorate force. Donald trump and the republicans might be missing out. He says its overrated and not going to use big data. So far he just seems to rye rely on his own charisma and controversial statements. Which are working so far. Getting ready for squawk box. Joe joins us with a look at whats coming up. Good morning, joe. Good morning. There is a political backdrop, will of. Do you feel you have a good handle on all of this . I feel like i wouldnt be able to do im still figuring out the difference between an mp and a pm in terms of do you feel like you have a good handle on whats going on . Does the dnc have your email yet . You got an im with her tshirt underneath . Im shocked. Im not going to be drawn in this. Im glad they i wasnt included in the emails. Im shocked, number one, that they had it out for bernie. Who knew . And number two, that they apparently some members of the Mainstream Media apparently cooperate with the dnc. Bernie is playing ball this weekend. It seems like hes not going to criticize them too much. Hes pleased he has the after all that, the one thing they thought hed get was a vp that would pass muster with him. He didnt get that. Were finding out how he did. Well see. I know that dws tweets, i like that. Thats her name. Dws tweets. I like that she, there was some of the controversy at the rnc. What did she say . She said you want to see how to really run can i help you i can help you guys out if you want to see how to control a convention. Yeah, but you know what, we digress. Wasnt it like eight out of nine straight another good day on friday. Futures called up at least when i was coming in this morning. Still got a lot of earnings that will not only show us the last three months but the outlook for the next three given all thats happened. Then weve got yahoo and verizon which one of those, i think its going to say that at one point yahoo was valued at 100 billion. Going for a little less than that when its all said and done. At last, were getting the announcement on that deal. Its long overdue. Thank you, joe. Very welcome. 13 minutes time. Coming up, wall street is coming off gains with a ton of earnings and a fed meeting on the docket. Could the markets extend the winning streak to five . Well get more from federated investors coming your way next. E to most businesses. The ibm cloud has tools that can help see dark data and put it to work. Hello, my name is watson. Working with watson in the ibm cloud, we can help an Energy Company predict pipeline corrosion. And help a startup to use social data to predict market trends. Now businesses can get more out of their data. Thats what the ibm cloud is built for. Nojosh, dont you have mofryeah, 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 to Worldwide Exchange if youre just waking up. Lets look at the market action. Hit new highs in markets. Albeit in more muted fashion than weve seen recently. The dow and the s p under half a percent. The nasdaq up over 1 . Tech the best performing sector. Were broadly flat in the premarket. Just very slightly. Lets have a look around the rest of the world as well. Asia did see slight gains as you can see for hong kong and shanghai. Most of the region holding on to some sort of gains. Europe was seeing better performance now. Both asia and europe over the last month have been pretty strong. Germany is up 1 . The ftse 100 just above flootth flat right now. Around about right now, we can see the dollar gaining against the yen but slight losses against the euro and the pound. Finally, oil prices weve seen another week of losses. Down below the 44 level on wti. Losing 2 3 of 1 . 43. 9. Susan . Developing story out of florida. At least two people were killed and more than a dozen injured in a shooting outside the nightclub in ft. Myers earlier on. Police say a person of interest was detained at another location and shots were fired. Five blocks away from the nightclub. Detectives have not yet determined a motive. Well keep on top of this and bring you information as we get it. Lets get back to the markets. Joining us from new york, phil orlando, chief strategy and Portfolio Manager at federated investors. Phil, its a busy week. Lots of earnings, gdp numbers and fmo meeting thrown in. For a sleepy week in july, theres a ton of stuff going on. Dont forget the convention. Its going to be a busy week. How does that impact markets . Is there any direction or information that youre looking at . Well, certainly the fed front and center. Our best guess is the fed does nothing this week. Theyll probably give us clues as to what their thinking is for perhaps september or december. We think december is the likely next rate cut rate hike from the fed. In terms of earnings, earnings have been poor but not as bad as expected. Thats a trend likely to continue. Gdp on friday, we think 2 1 2 is the number were carrying. But we think that could be the high watermark for the year. Gdp in the third and the fourth quarters could be closer to 2 as the strength in the dollar and the weakness in oil prices begin to filter through the economy in the second half of the year. We take a little bit out of Economic Growth. Phil, the last week or so, theres been encouraging signs. Not only have equity markets marched higher. Weve seen bond yields go up and the dollar strengthening. Does that suggest theres some kind of fundamental strength thats driving the equity market now. Theres no question that some of the key economic fundamentals have improved over the last months or so. Starting with the labor market data in june was much better than may. A couple of the ism have perked up. Retail sales better. No question about any of that. However, we dont have enough time to factor through the post brexit situation where the dollar has strengthened by 6 . Oil prices are down by about 15 . And additional dollar weakness and oil strength were fundamental underpinnings of of the expectation for better earnings in the second half of the year. If those things are going the wrong way, then that suggests that the strength in earnings and the strength in Economic Growth that many have been expecting the seconds half of the year may be coming into question as well. For those reasons, were a little cautious right here. Phil, what do you make of earnings so far . Clearly, its supported equity markets, particularly the tech sector last week. Are there only beats coming through because of low expectation or is this a funds mentally decent i think managements have done a phenomenal job of lowering the bar. Youve had a 2. 5 in share purchases during the quarter. The one bugaboo in Second Quarter earnings, which is the energy sector, hasnt gotten rolling yet. The Energy Stocks within the s p 500 are going to produce a year over year revenue decline of 20 . Earnings decline of 80 . Once those Companies Start to report through, the overall positive tone of earnings will slide a little bit. When the dust settles, we should probably see earnings down about something on orders of 5 to 6 year over year for the Second Quarter. Thats pretty good. So far weve seen a 6 positive surprise from earnings since a lot of people were looking for much worse than this. Does that justify the valuations were at . Thats the 64,000 question. Were sitting right here in about 22 times trailing earnings, about 19 times this years earnings for the s p 500. We think that valuation is a little high relative to the headwinds that were looking at. What are the economic effects from brexit, whats the fed going to do in the balance of the year. And the market really hasnt focused on the last point. But what fiscal policy are we pricing in to be beyond based upon election results. Thats very much a crapshoot. Phil, in terms of valuations, one sector, i suppose thats undervalued relative to historic multiples is the financial sector, it being the only one in ex is it this a big buying opportunity for them. Did they actually display they are making money during the quarter . People have a negative outlook because of the thats right. The reason financials are under pressure is because of the fed. There was an expectation that the fed would hike rates four quarter points hikes and that would broaden out, widen out margins. That hasnt happened. Our best guess is the fed gives us one quarter point hike in december. Because of the reduced ex peck takes on the widening of margins, financials have stayed under pressure. One thing thats interesting, stocks will get broken out literally in a couple of months. It will be they continue to do well, they should continue to do well. The financial stocks, the banks, et cetera, will stay under pressure until we have a better sense of what the fed is going to do with interest rates. You mentioned earlier, the potential impact that the election could have on markets. I suppose we learned from the brexit vote, that politics could have a huge impact on markets if something slightly unexpected happens. Do you think that the risk is correctly priced if we did get the outcome of a Trump Victory that markets would react negatively theres the potential for the market to react negatively in a number of ways. Trump could win, i dont think thats priced in. Trump could get crushed, in which case the democrats run the table, including the republicans losing their firewall in the house of representatives. I dont think thats priced into the market as well. Until weve got a better sense of the mood of the electorate and how this is going to play out, we may not know that until november 8th, the reality is that we think stocks are a little high and investors ought to be a little more cautious. Phil, thanks very much for joining us today. Thank you. Phil orlando. Glad to be here. That is it for Worldwide Exchange today. Thank you very much for joining us this morning. Have a lovely day. Squawk box is coming up next. Announcer if the hardest part of your day is the staying awake part. [train horn blares] sleep train has your ticket to a better nights sleep. With a 100 night low price guarantee, sleep trains love your mattress money back guarantee, same day delivery, plus helpful advice from the sleep experts, its no wonder more than a Million People fall asleep each night on a sleep train mattress sleep train [train horn] your ticket to a better nights sleep good morning. Verizon on the verge of acquiring yahoos internet operations. That internet pioneer was once valued at 100 billion. It will sell for under 5 billion. Email leaks rock the party. The Democratic Convention about to kick off. Not before dws tweets announces her resignation. What goes up, must come down. Nintendos stock craze got up and went away. Its monday, july 25th, 2016. Squawk box begins right now. Live from new york, where business never sleeps, this is squawk box. Cant wait to go to philadelph philadelphia. Welcome to squawk box. Im michelle carusocabrera. Becky is off today. Another big week of earnings. Economic reports a fed meeting and of course deals. Well get to that in a moment. Lets break down the markets. The u. S. Futures suggest a slightly negative open. I would call it flat. Overnight in asia, europe is positive at this hour each in the wake of more violence there. Asia, mixed. Flat. Call it totally flat. Barely budged. European equities, positive last i checked. Thats where they remain. Germanys higher by 1 . France is higher. Ftse, italy, spain, marginally higher. Price of crude oil at this hour lower,