Transcripts For CNBC Worldwide Exchange 20160727

Good morning and welcome to World Wide Exchange. Oon cnbc. Im sara eisen. Good morning from me as well. Lets check in on the global markets. U. S. Equity futures after a mixed session yesterday that actually managed to close positive. Looks like the gains continue this morning. It is a busy day in terms of kbhik data and earnings. Dow futures up 48. S p up 5. Nasdaq futures up 31. As for the 10year treasury note yield, it is fed day. Day two of the decision. Well expect that in the 2 00 p. M. Hour. No news conference, but of course traders will be pursing the statement the 10year treasury yield sitting prefed, 1. 57. Still very low. Stimulus talk from japan today. Check out the japanese yen which is falling. Pre pressured on more expectations of further easing. This comes among reports japan the government will unveil 265 billion of stimulus in a passage. The move according to the reports is an effort by shinzo abe to reflate and stimulate the economy. Though the amount the japanese government will spend directly to boost growth is unclear. The announcement comes earlier than expected. Pressures the bank of japan to match the big spending plan with additional easing at its rate review which ends this friday. I think its worth pointing out the moves are based on expectation of fiscal stimulus opt to monetary. We focus on the japan for the rest of the week. When we get to the bank of japan decision, i wonder where the markets are expecting the outright helicopter money aspect of monetization. If they dont get that, we will see a reversal of what we see today . Is the market expecting a big stimulus. May or may not get it. Certainly today seeing it on a fiscal side of things. That comes back to an election. Allows him to deliver this freely. I would add a bigger point on your fiscal stimulus note. Maybe thats where the markets are globally. Monetary policy is maxed out. Maybe investors are going to start pushing for fiscal policy. Sharp declines in china overnight. The shen zen take a look at the bottom. Some concerns about security regulators imposing new rules. Hong kong managed to close hire. Lets have a look the european markets as well. Once again, today, stllugging o disappointing earnings. Regardless of france doing well. Ftse 100 up 3 . We just had uk q 2 gdp coming in stronger than expected. It only includes seven days of the postbrexit world. April, may, and june, but a little bit of positivity for the Outgoing Team of cameron and osborne. I suppose a pat on the back as they depart. Lets show you the Broader Market picture where oil has been under pressure for several sessions in a row. Yesterday dipping. Thats where we sit this morning. Brent is below 45 now 44. 42 down a percent. It has not managed to drag the entire market down. As i mentioned, the s p closed positive yesterday. The dow only closed off 19. The question is if Oil Continues to fall after we start to get some relief on the heavy weight earnings front, will they take down the market. The dollar on the flip side has been a bit stronger going into the fed. Though, i wouldnt say any kind of meaningful strength. Not expecting an Interest Rate hike or anything like that. Stronger against the dollar this morning. The pound continues to get beat up around 1. 31 level. As for gold, sort of moved across from the dollar lately. Off less than. 1 . Apple getting a nice earning. The company sold more iphones than wall street had expected in the Third Quarter. Revenue outlook better than most analysts estimates. That helped ease concerns that iphone sales will hit a wall. Revenue growth in ipad sells. Tim cook says the firm saw growth globally. Were not going to get into products or product transition. However, weve taken what weve learned from last quarter and we did see a number of encouraging signs. Talked about the number of countries that we saw double digit growth in during the quarter from japan to brazil to india. Some Even Stronger numbers than that in russia. We also are very happy with the switcher rate that we saw. Overall, a few words. Only look at the numbers you see apples quarterly profit fell by 30 . Revenue was off for the second straight quarter. Results still managed to top consensus. Joining us on the news line now to discuss apple results is danernedan. Dan, thanks very much for joining us. Is this share price pure and simply is a beat on the iphone sells. I think its a matter of what we would look at mathematically as the Second Derivative when positive or in english, things are less bad than they had been. So how many quarters have we had in the last ten years where apple beats handily. Semis a sells are a Record Number and the stock goes down. We have bitter sweet result the stocks are done, but the result is uchl. Things are eroding at a less accelerated pace. People are starting to look ahead to either the iphone 7 in september and the iphone 8 or 7 s whatever were going to call it in 2017. Apple has over a billion devices in the field. All get upgraded at different times. Thats tremendous Kinetic Energy for a company that has a Customer Base to keep coming back. The outlook for the first time in a couple of years people arent saying okay this is great, but next year is going to be bad. People are saying next year is going to be great. Thats a big switch in potential sentiment. I think were starting to, i dont think were there yet, but getting some appreciation for the services business. The gross sales of Consumer Spending on their products within apple mostly with other companies, but using apple toll do it was 10. 2 billion in the quarter and net to apple 5. 2 billion. Thats a tremendously high margin business. Tim cook said on the call by this time next year, youre going to have the net portion to apple be a business that would be a fortune 100 company in its own right so i think people are starting to see thats a real number. Its kind of funny they have 5 billion in sales in a quarter and 23 billion and people are still doubting it, but thats where we are. We know tim cook has sort of tried toll persuade investors to look at it at a services company. As for the stock reaction its been sharp. Were seeing a 6 gain here. More than 20 decline in the last 12 months. How much upside is there based on what apple delivered, that less bad quarter, and what it is managing in terms of future expectations. Right. The problem with trying to guess the exact stock price for apple is its been financially hard to justify its low price for quite some time. Even up here at 103 or so its trading at around 12 times earning. And theyre trading at about 9 times. Its hard to justify the price even being this low, but i think that we have to take a step back and say, well, apple is still going to have a handicap. People are going to say their sells to wit the iphone. Were not going to get a tremendous run from here to the iphone in 2017. I think weve taken sort of the pressure off a bit. I think well have the ability to rise or raise the rates the stock trades in. Well go from there. This is a Great Company that, you know, people continue to doubt so it will have these Trading Opportunities along the way. Its still a good company. Thanks very much. Dan ernst with capital partners. The other big mover of the morning is twitter. Shares going the opposite direction plunging after the social media firm posted its slowest quarterly Revenue Growth since the ipo. The company also offering very down beat Current Quarter sales guidance. This despite news the user base grew more than expectsed. Saying Second Quarter performance and outlook reflects a continuation of trend discussed last quarter. Michael graham, says twitters ads are less effective which has been weighing on the brand. Theyre seeing a shift towards video ads, but not seeing increased budget. Advertisers love to see engagement. Were now seeing ten gaugement with the ads that the advertisers want to see. Twitter cfo say tempting to reassure investors saying the company is working on bolstering direct response. They also talked about the fact their new streaming collaboration deals with the nfl and other networks are going to take time to see results. Only two nfl games next quarter. Youre not going to see that starting next quarter. Thats one case if you believe they can get a foothold into live video and change the way people think about why they come to twitter, the other would be if you just say it continues to get cheaper as a ripe acquisition target down another 10 after earnings. The acquisition is interesting. Aside from the issues with video which we know for a long time. Its they already have almost all of the big advertisers on the books already. So any kind of incremental low hanging fruit isnt there. They need to pick up new p customers six quarters in a row disappointing. It has been a disappointment. Hes be he says the political ad spending is going to ramp up the quarter. So maybe. Good for news and stuff like that. Its just hard to imagine because we use it. Its a powerful tool. Hillary clinton uses it. Bernie sanders uses it. Donald trump uses it. Does he . Its become so engrained and sort of the news business. Its hard to imagine they cant seem theyre not making enough earnings. Deutsche bank shares which are falling in germany trade this mornings. The banks profit plunging amid a turn around effort. Results were hit by weakness. Shares of Deutsche Bank fallen 45 . 4. 4 today. Was an additional provision based on litigation expectations which is one of the reasons is shares are off again today, but overall, i think the thing to remind us with is they are making a loss still. The expected loss was in fact fractionally better than expected. Highlights the woes that Deutsche Bank particularly faces. Have not made the progress that will a lot of u. S. Banks have made since the financial crisis. Deutsche bank really the clear proponent of that. Of course as we approach the stress test results on friday in europe. Just a reminder of the struggles the banks face. Is there more faith in the europe stress test yet. In terms of credible. I think they are credible. The difference with this one is were not going to get a clear pass or fail. Its going to be important. Well keep looking ahead to those on friday. More stocks to watch today, akamai rose, but the Company Warns Third Quarter results could drop at its big Silicon Valley customers invest in their own infrastructure. Analog devices is buys lin r linear. Its a 24 premium to mondays closing price. Match rose 41 p. Online dating site was boosted by more users signing up for premium paid services. Wilfred, buffalo wild wings, reporting a Third Quarter drop in same store sells. Earnings matched forecast as the decline was offset by higher revenue thanks to the opening of new locations. Sally smith will be on squawk box. That is a first on cnbc interview at 7 30 a. M. Eastern time. More stocks to watch, panera raises results. Same sells rose more than 2 . Elumina raising 19 . U. S. Steel reporting a anymo ii narrower loss. Flat rolled segment returns to profitability. Shares rising 2. 6 . Juniper networks fell 11 . Network and Telecom Equipment maker warns challenging markets will continue to pressure. Also keep an eye of tesla opening the doors of factory until nevada yesterday. Offering a peak at the massive facility where it plans to start making battery sells next year. It says it will have completed tesla aims to start producing batteries in time for the laumpk of model three sedan. Last week unveiled new master plan for future growth at a news conference. Musk addressed how he will pay for both that plan and the factory. Listen. Were seeing very good participation from our suppliers in the capital cost of the model three ram. And so were expected with model sx revenue with money we have now. Potentially with a modest capital raise, but i wouldnt say a significant one. The factory could eventually support 1. 5 million electric vehicles per year. June durable goods out. Nand for bigticket items expected to decline again. June pending home sells out at 10 00 a. M. Fed not expected to do anything on the rates front today. As for earnings, boeing, cocacola, comcast, the parent of cnbc, and monday lays are reporting before the open. After the close well hear from amgen and facebook. History was made in philadelphia as the Democratic Convention formally nominated Hillary Clinton for president. The first woman to be chosen by a Major Political party. Followed by a speak from her husband. How many peoples lives are better, you know its hard and some people think its boring. Speeches like this are fun. Actually doing the work is hard. Some people say, well, we need change. Shes been around a long time she sure has and shes sure been worth every single year shes put into making peoples lives better. Spoke for 45 minutes. Coming nine years after launching her first president ial bid. It was Bernie Sanders himself after days of trying to unify the party to move to select clinton at the nominee. That was certainly a moment to watch tonight at the convention, well hear from president obama. Vice president joe biden. And tim kaine. Well have more on the national Democratic Convention. Still to come a live report from asia. Well talk about the big stories a jump in japanese stocks. Stay tuned watching cnbc. First in business. Worldwide. Welcome back to World Wide Exchange. Good morning. Shinzo abe and his government. Covering the story out of singapore. What do we know and when can we expect the stimulus . To be honest with you, its been very, very confusing and the markets equities, the nikkei and the dollar yen has been very choppy today and for the last couple of days as well. Weve really been headline driven. We got reports. We have not gotten anything concrete on confirmed from the japanese government yet. We got reports we could see a stimulus passage between 27 and 28 trillion yen. The issue here is what components of this is going to be direct spending is going to be new money. We got run report suggesting its going to be 13 trillion yen. Weve been up and down on the reports throughout the morning, but basically we did see dlarn jump business much as 1 . Then it did come back down from session highs on reports from the ministry of finance. This was actually confirmation that they were not considering issuing a 50 year bond. We saw sentiment creeping in. Up by 1. 7 . The big openended question. Whether the bank of japan will come to the party as well. Quite frankly once again expectations in terms of Monetary Policy really seem to be all over the place. I wanted to highlight china very quickly. Its been coming along. Been quite quiet for the comp sit. We got the worse daily performance in six weeks. Some of the blue chip financials were under pressure today. Thank you very much for that update from singapore. Still to come on World Wide Exchange, tim cook talking pokemon, but is he playing the game himself . Stay tuned youre watching cnbc first in Business World wide exchange. Its me, arty come see what i collected from the creative galaxy in my idea box. Would you help me make art . Each one of our journeys keeps us young hey, i have an idea well never get older. Arty go be amazing amazing announcer give your Cardboard Box another life. Gilman go get it, marcus. Go get it. Coach gilman used his cash rewards credit card 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 and good morning. Lets get you up to speed. Dow futures are higher. S p futures up 5. Nasdaq up 31. Helped by apple which was responding very positively to a less bad as dan ernst told us earnings beat and guidance. Mine while twitter going the other direction. Much more on what to expect on the day ahead on the political and earnings front. Well be live on the floor of the dnc where history was made last night. Much more coming up on World Wide Exchange. We call it dark data. 80 is invisible 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. Igoing to clean betteran electthan a manual. Was he said sure. But dont get just any one. Get one inspired by dentists, with a round brush head. Go pro with oralb. Oralbs rounded brush head cups your teeth to break up plaque and rotates to sweep it away. And oralb delivers a clinically proven superior clean versus sonicare diamondclean. My mouth feels super clean oralb. Know youre getting a superior clean. Im never going back to a manual brush. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Good morning. An apple a day. The tech giant trading back 100 a share. Twitter getting hit hard. Plus the race for the white house. Bill clinton pitches his wife as best candidate for president. A live report from the Dallas Keuchel Convention Just ahead. Youre watching World Wide Exchange on cnbc. Good morning and welcome back to World Wide Exchange on cnbc. Im saraizen. I like that song. I dont know what it is, but its cheesy. Slow, cheese si music. Good morning to you from me swem. Lets check in on keep it going. Keep it going when we do the markets. Get some elton john in there. Theyve taken it away from me. Lets go to the markets. The nasdaq by 31 points. Yesterday we were essentially flat. The nasdaq was the best performer. All three raild towards the tend of trade and the afterhours performance you can see now. Coming up in more detail. Around 4 in the premarket. Europe lets have a look at that performance also yesterday rally towards tend of days trade. Sitting pretty again this morning as you can see. France up very nicely 1. 5 . Germany index up despite the fact Deutsche Bank is falling sharp. Ftse up. Came if better than expected although thele earning only includes seven days of postbrexit world. Still growth. Asia performance in morning, japan soaring on reports unconfirmed reports we will see some kind of fiscal stimulus in japan all be it the focus later in the week will be monetary stimulus. Chinese stocks disappointing on regulatory fears. Lets have a look at dollar markets and oil as well. The dollar not doing too much this morning. We await the fed decision at 2 00 p. M. Will be a huge surprise to see any change in the Interest Rate. Oil prices coming up for you as well. A slide again yesterday. Were now comfortably below 43. 42. 7. One of the big reasons for the strength in the premarket here the top corporate story which is apple. Shares popping this morning on better than expected Quarterly Results and an upbeat revenue outlook. Among the most important metric, apple sold more iphones than forecast. This is a classic case of apple beating low expectations. I think the two quarters weve seen the sale sign come in and reset numbers to the downside thchlt is a different case. Youre actually seeing numbers that met expectations and an outlook that was okay. So im overall i think this is good as you can expect out of apple. 40 medical malpractice iphones sold and the iphone drives about twothirds of apple. Double digit growth in services which is key. The company has been focused to diversify away from iphones and ie pads. I think the share price jump is because as we know slightly better iphone sales than expected. The interesting is the Services Part of the business. Way higher margin. People are signing a much bigger multiple in terms of model. If it does continue to grow or if people think this is a services company. Then we can see a transformational divs in the share price. Today a decedent move. Get the overhang and question which has been hanging over apple which is down 20 over the last year and that is as the iphone market matures and saturates even in places like china which have become very kpetstive, chast the next thing. What else is going to drive revenue. Marcell ozuna gave a nice boost when she was on it. I would have fun it it. We know your taste in music. A different story at twitter shares down sharply Company Posted slowest quarterly Revenue Growth since ipo. Six quarters in a row of disappointing earnings. Company offering weak Current Quarter revenue guidance. In comments to twitter coo says he sees good signs ahead with the life streaming nfl deal. Good premium advertisers all be it investors seeing it a different way. Deutsche bank shares falling. The banks profit prunging in the last quarter. Amid a turn around effort. And on the Bank Santander reporting 50 drop from the prior year. As restructuring cost took their tole, but the bottom line number was actually in line with analyst estimates and shares rose a bit reverse course in european trading. Airbus reporting a 1. 1 billion charge. Warning full year cash flow target could be at risk. On track to meet 2016 order target. Right. To pair off economic reports a fetd decision and a flood of earnings are on todays agenda. June pending home sales at 10 00 a. M. Fed wraps twoday meeting. Fed not expected to change rates. Have after close well hear from amgen and facebook. Face sbook the biggie. Plan don doughty joins us what what to watch. The street is looking for 81 cents a shire. Beyond the numbers here are three things to watch. User growth, facebook analyst saying there is still robust demand for the social networking sight and he expects a increase in monthly active users. What happens app crossing a billion users and instagram continues to take traction. Stocks of facebook are up 12 in the past three months. Second watch to see if the firm is maintaining revenue momentum. Growing concerns of competition. Less engagement means less ad spending. Twitter reporting enhanced pricing pressure on tuesday. The third thing to watch is emerging opportunities. Investors want to see progress with opt tus. Given all the money facebook has invested. Stock has certainly run up. Landon, thank you. The theme for day three of dnc is working together with prime time speeches from mike bloombergberg, president obama, biden, and Hillary Clintons running meat, tim kaine. From your perspective down there on the floor last night. What was the reception to bill clinton. This is a Political Party that is still trying to come together. We were outside the Wells Fargo Center here in philadelphia just before as the delegates were walking in and we had hundreds of Bernie Sanders supporters out there along the fence line shouting and hollering at the delegates who supported hillary walking into the venue last night. That is a sign of a Political Party that does not have unity, but theyre trying to get that last night inside the venue. We saw Bernie Sanders as the man to wrap up the role call vote of is t the states. He came out personally. Heres that moment as he wrapped up the role call state for Hillary Clinton last night. Madam chair, i move that the convention suspend the procedural rules. I move that all votes, all votes cast by delegates be reflected in the official record and i move that Hillary Clinton be selected as the nominee of the Democratic Party for president of the United States. Then you saw the convention take a turn away from Bernie Sanders in the deviciveness of the primary season here for the Democratic Party. And bill clinton using the clinton marriage interestingly enough as an argument of strength. Talking about how he met hillary back in 1971 saying she is the candidate here to bring the Party Together and defeat donald trump in november. Heres what he had to say. Hillary is qualified to do this. She is the best darn change maker i have ever known. Then a moment on video that back to the last Campaign Season as they had Hillary Clinton presented to audience live here. First up they put a montage of all the previous president s of the United States and a video of Hillary Clinton shattering that metaphorically glass ceiling. Sending a message that this is the first party to nominate a female candidate. Underscoring the history of the evening last night. A big night here and leading up to president obama speaking here tonight. Well see what highway has to say. Former president bank account and first lady seemed to have knocked the ball out of the park with their speeches. Do you think the respective spouses can go on better now. Its a fascinating dynamic to watch. Burglar particularly when you saw bill clinton talking about the marriage. Its been a liability for the team. Bill clinton returning to that theme last night and talking about that moment where he first spotted Hillary Clinton in class and approached her and was nervous to talk to her. How her strength really aappealed to him from an early stage. Personalizing Hillary Clinton here in a way he was trying to break apart from the political caricature that weve seen of her out in the campaign trail. Thats what spouses can do is tell personal stories in a way thats separated from the political. I wonder if thats because his record has come under increasing scrutiny. And a ha nafda. Some of his policies on crime. We just lost eamon in philadelphia. The point i was going to make was your must read yesterday the Democratic Party has moved left. It is interesting to see how the Bernie Sanders has received him after they had gone after some of his policy. Crucially they do have tall speakers from whichever side of the party theyre from, giving a you nig you ni united message. Mark cuban taking to twitter last night blasting donald trump t billion narl investor tweeting in part maybe donald trump didnt release taxes because Hillary Clinton paid more in taxes than trump made in income. Cuban notes he gets similar offers almost daily and calls it great business. A little bit of support there. He always gets a lot of attention when he goes on a tweet storm. Speaking of that, time for top trending stories of the morning. We have a viral video. Elizabeth banks making a huge entrance. Take a look. Thats always a question. Next trading story, tim cook says hes a big fan of pokemon go. Just doesnt know how to pronounce the games name correctly. Augmented real estate eed reali popularity. Called it incredible, but also called it pokemon. The number one thing is to make sure our products work well with other developers kind of products like pokemon and thats why you see iphones chasing pokemon. Hes criticized as the dad who doesnt understand his kids playing. At least he appreciates the value of and it is paying attention. When we come back todays must reads. First a look at this day in history. 1940 bugs bunny made his debut. Since then the wisecracking rabbit has appeared in more films than any other cartoon character and has his own star on the hollywood walk of fame. Stay tuned. Youre watching cnbc first in Business Worldwide. [click] [click] man youre beautiful im coming back [clicking] back to you my must read. I pick it out because with so much other stuff in focus from earnings i suppose we slightly forget we have crucial meetings coming up. This article goes through the different perspective the last two or three meetings have been dominated by special events. Things like brexit. They can focus on fundamentals in own countries and also mentions the bank of england its pretty clear the decisions were going to get from the bank of japan easing of some form. Not sure what. The bank of england, the big question is the fed. Can they start to consider hiking again. Things have kuturned around qui significantly. Is that the highs of the year. Its at the highest its been in a long time. Remember that jobs report. Its come back. 287,000 jobs added last month. Weve seen progress and inflation is higher. This is a fed thats been very cautious before on any risk, including global risk. It will be interesting how that talk about brexit. No one expect as hieng today, but when do they start putting it on the agenda. Absolutely. We are approaching the top of the hour. Team is getting ready for squawk box. Joe kernen is in new york with a look at whats coming up. I have a feeling with can expect some famous bill clinton impersonati impersonation. Hes a complicated man. I didnt see it. I was out. I was up. I did not see it. I havent even seen a sound bite. Together, its a complicated couple of people. Even separately. I was thinking about that. You have hillary on one hand and everything weve been talking about the past six months, but then youve got bill too. Think about bill. You put them together and its very i dont know. Its deep. Im not going to do why did you say that. I have to say, joe, ive been made to done impersonations. If you look up and if you look up in the whites you can get a little tearry depending on, i dont know, im not going to. You no wh you know what im interested in is earnings. Were going to have a gentleman on that says the green shoots. Thats what is causing what were seeing right now. I also though saw something from did i get these things from mark grant. You know what qe globally is running right now per month. Did you see this in 180 billion. Thats a lot of stimulus. Just makes you think, zero even paying money paying people to borrow, wouldnt it seem like theres some money going where it probably shouldnt be going. Seems like maybe we dont know what it is or where it is or what the problem is, but maybe thats a longterm problem. Today its going to be more about the middle of earnings and earnings season and yesterday kind of set the tone. Mcdonalds didnt do so well. Today well see if apple had a 27 drop in profits in the Second Quarter of declining revenues, but better than expected and thats going to help the dow so i think europe is up pretty nicely. Were set to open higher. Great stuff, joe. We look forward to squawk box and more bill clinton. Still to come, parade of earnings and reports of more stimulus from japan. Well talk about those big stories with jeff kleintop. 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. Welcome back to World Wide Exchange. Joining us from boston, jeff. Good morning to you. Thanks for joining us. Earnings continue to come in up pace and, certainly, been moving the market. We also get the fed today. Will the fed move market at all or is this an earnings week. I think its an earnings week. I think its very likely in the statement, but no indication of a very near term move given how early that rebound is, but i think the most important thing is not so much the micro picture of earnings what we get every day, but the Bigger Picture in the fact that analysts have been raising earnings expectations over the course of the next were for several months now. Thats a big trend, big change in trend. Is it justified jeff, give us the view on the earnings season so far. Started off strong, but now its gotten murky min the middle. It does that. We get a mix of Companies Across different industries. Only in the Financial Sector do we continue to see downward revisions to estimates. The key is more stability here. Not ha sharp rebound. We just dont have enough global power for that. Jeff, talk us through your top sector preference given some of that. Are financials attractive valuations or are you going for tech. Interesting opportunities in both. Tech does continue to be great opportunities there investors should be focused on tech, but think about financials for a minute. It has been the worst performing sector. We have the europe Bank Stress Test results friday. If the results are favorable, meaning only one bank in italy fema fails and a contained crisis, that could be good things for the bank. Particularly if we hear from the fed and starts to stabilize or lift longterm Interest Rates. Consumer discretionary has made a little bit of a move here higher in the last few sessions including some of the Department Stores like nordstroms. Is there reason to think those results are going to look better when they report in the next few weeks. I dont know. The consumer has been very spotty so far this year. Thats a tougher call to make. We would stay more focused on the business spending side of things. Have a lot of cash. Little bit of demand here as it relates to capital investment. Thats why tech still looks like a good place to be. You said earlier you thought the global picture was Getting Better as well as the u. S. How reliant though is that on what Central Banks are doing. I think were in a post central bank environment. I dont think what theyre doing is hurting, but i dont think its helping much anymore. We got used to all this additional stimulus. When i look at where the levers that theyre pulling would normally be helping, i dont see it. Instead i note sara mentioned the city fwroup economic surprise index just before the break. In the u. S. Its on the rise, but its on the rise in all the g 10 countriy ies including tho that arent seeing any qe right now. So jeff, with improved outlook, especially in the u. S. , sit a risk that the fed is going to tighten sooner than the market is anticipating. Thats the key thing to watch. I think because earnings estimates are final stabilizing and maybe moving a bit higher, the market is better poised to handle a more hawkish fed. They may be looking at in the in a new light. Jeff, great stuff, thanks for joining us this morning. Only about a minute left. Few things to watch today. Im be watching the consumer names i cover. These are consumers staples, food and beverage companies. Theyve struggled toll find solid top line growth so well be looking for that. Any signs of Revenue Growth and changes in the industry. For instance monday lay making the bid for hershey. That sit for World Wide Exchange. Squawk box is coming next. Where, in all of this, is the stuff that matters . The stakes are so high, your finances, your future. How do you solve this . You dont. You partner with a firm that advises governments and the fortune 500, and, can deliver insight person to person, on what matters to you. Morgan stanley. Your Business Needs Better Technology to drive better performance. So you need it to be reliable and fast. Really fast. Introducing the comcast business Summer Savings event. Fast Internet Speed to drive performance, plus cutting edge wifi for your employees and customers, and voice mobility so your calls find you wherever you are. Get some of our most advanced products at a great price with over 500 in savings. Call today and ask how to get these savings plus a 250 prepaid card. Comcast business. Built for business. Good morning. Apple surge. Guidance and revenue and profit were down from last quarter. Hillary clinton becomes the first woman nominated for a Major Political party. Going for the gold, u. S. Mens Basketball Team warming up for the olympics. Barely breaks a sweat. Its wednesday july 27, 2016. Squawk box begins right now. Good morning. Welcome to squawk box. It is just the two of us this morning. Im andrew along with joe kernen. Becky has the day off. We have another big morning for the markets today. Have a fed meeting on tap. More Economic Data and wave of earning reports. All we will be watching including boeing, cocacola and comcast. They are among the companys reporting earnings before the opening bell and after the close, we have a lot o hear from as well. Amgen and facebook. So a little bit to talk about there. Last night it was all about apple. The stock surging after the company said it sold more iphones than wall street had expected. In the Third Quarter also offering revenue outlook for the Current Quarter that is better than most analysts estimated