The cac is up and the footstsef. The yields something weve been watching closely ticking up a little more like it was yesterday and that was a big difference in yesterdays market rally compared to the risk on tone to the sector performance. Thanks for that if youre looking for a negative, we did come off the highs. A couple of offsets, but it was a more constructive. Were getting back. Ill tell you. I can tell you week ago whats a week ago when i was sitting in for melissa, everyone was bearish. Really . Monday was a big week. It was the s p 500 and nasdaq both down. But that had been after six straight five or six straight weeks, so everyone was bearish the guy from Morgan Stanley, very bearer . Oh, i remember. Swell see. Bo jo, ten more people backing him. He had powder all over his nose. Thats derailed his campaign. Really . Theyre down to ten candidates. Ten. Boris johnson will make the final two. Less than the democrats you know, watching what happens in italy and all these other conservatives bonding together with the liberals and all the crazy stuff that goes on in all of these countries, i is have offered to rent out the constitution to you people you can copyright it for a little bit you can use our method of government for a little bit if it would help. It does work perfectly here there are never any little issues. I agree are you saying that in some facetious way . I think he is being facetious. You cant tell it works very good here, will . I think that how many different parties are going to have to band together to actually form a government and what will it last, about eight months or so before you have another recount. Less than 30 months yeah. Thats a good way to run a country. And are you staying or the only thing is sterling has touched a low. Are you keeping that currency or not youre in the union but didnt day take the currency . That makes well too. We had some good jobs data this morning yesterday some terrible gdp growth for april. Im glad arent you glad youre here . Im always glad you give me something can i just say go ahead. Theyre going to celebrate it. Its a good wage growth data have to hold on to the small positives sh the dollars weakened which can be good. Thats because they think the feds going to lower rates the question is will that actually happen. They brought that up what the wall streets wrong what if a rate cut doesnt come. How does the mark react. Its ticked up. Its so low youve got the scope for both yields to rise and equities for a little bit. But the question will be when will they get a little higher and can we get above the 2900 on the s p or back past the recent highs. The yields climbing as you speak, 2. 71 . I was nervous as soon as i say middle ground on the markets. Powell is in a pickle he looks like hes sum coming to orange man thats the summary orange man bad thats what they come up with. Cnn immediately factchecks for us lucky than cnn is the arbiter of facts. Thats what i really like that. I went to check it out. Most of it they didnt even factchecked they just mocked. Im know. And another guy they both did. Theyre great. Anyway, we doan we dont want to trash any competitors. No, no, no. Importantly, cnbc dissected it and talked about it all day i would like to say accurately. Okay. I stopped looking after a while. You somehow are complicit in giving this guy a podium, which i dont know whether you considered that. I think if you listen, if you want to know what the leader of the free world is thinking a jd you listen to him for a half hour, i think thats the benefit you can possibly do. You decide whatever you want, take from that, but you should be able to hear his thoughts. I agree, i agree. It was very important. And for the markets which, of course, were up yesterday and have been for five or six sessions in a row, its a more positive tone. Yes, the tariffs will come. I kidnapped of took awnd of u think anybody can talk him out of this, these are very long held deep beliefs he has and he thinks theyre very effective and hes going the use them. I dont disagree with that but there was a possibility that a meeting with zee shing pea wouldnt happen. Again, for all of the bluster and a tweet that all of these tariffs are never going to change, hes backtracked and said hes meeting with xi at g20. Were moving toward a deal even if were not. There was definitely progress made with mexico last week and whether theres a safe third country thats going to come through, but watching pence with bret baier last night, he actually went over the exact details of how many new ports there are, howpeople can be deported. 6,000 rather than a couple hundred a day before that. Well see. It with us funny the comments on my emails and texts were totally different its just twitter. Twitter is i dont know its the people on twitter i think theyre millennials. I think its about 90 i think people on twitter is anybody. People on your email or text are people who are actually friends. I was saying earlier i would look at two comments and the next one would say you cant see it because its blocked two. More because its blocked. Two more and its blocked. And i think, i have blocked every third tweet i couldnt see. Its that way around. Its not that theyve blocked you. No, no. Hes a blocker. Im an tev blocker. What do you expect theyre unhinged theyre hysterical youve got to hear both sides. Theyre jumped up and down. They dont accept the election its 2019 and theyre still jumping up and down and kroying. Im hoping president xi is going to phone in today, right, joe . It used to be trump tuesdays and i would be willing to entertain the notion of resurrecting it. I wou would you . Oh, shufrm im not sure the president is. Zbik tech is expected to come under fire today. The House Judicial Committee will be looking at Companies Including facebook, amazon, and google theyll look at how news content is spread on information and misinformation online. Joe. All right. President trump talked about big tech when he called in to squawk box yesterday, and heres what he told us. Every week you see them going after facebook and apple and all of these companies, these that are, you know, theyre great companies, but theres something going on i will say the European Union is suinging them all the time were going to look at it differently. We have a great attorney general. Were going to look at it differently. Theyre attacking our companies. We should be doing what theyre doing. We think theres a monopoly. Im not at sure they think that. Think think this is easy money well sue apple for 7 billion i think obviously theres something going on in terms of monopoly. Staying on the topic of technology, China Telecom giant huawei is hinting that u. S. Pressure on it is hurting sales. The companys chief strategist said it would have become the world ee top phone maker if it were not for unexpected circumstances. Theyre on a black list. The u. S. Cannot by its goods without government approval. Heres what President Trump said about huawei in his interview with us yesterday. It could do vel well with respect to huawei and our trade negotiations with china. China wants to make a deal that i want to make a deal much more than i do. Thats one of the questions you walk away with is huawei going to be part of the trade deal or be part of the sanctions with regard to security weve got wilbur ross on today we can ask him. People try to make a controversy about everything trump says we said it was only a National Security threat and i think even cnbc did something on that i think dotcom did something. Then i watched again pence said obviously we think its a National Security threat, but obviously when were looking at remedies or whatever were going to ask, huawei could come into that discussion, and there would have to be obviously remedies as par of the overall trade negotiations so it could be cte. Right so it could be part of the overall negotiations going on, but it could be both it could be nuanced and neither either or. Its either a National Security threat or a chess piece in overall trade negotiations it could be both. Still confusing why you dont have other national al lies on the same page which does suggestiosugges with some of the tone that its partly true. That its partly true. A couple of the european telco companies, not the government, came around and said were not going to use huawei. British telecom has been saying that since december. Yeah. So it is unclear, but i do think its fair to picket because the secretary and Vice President have maintained a National Security tone. When the president hasnt, hes let it slip in certain comments which he may not have meant. Part of the infrastructure the way its set up, if chinas the enemy, they can use the structure of huawei to get in. Thats part of it. The big earth part of the security issue is if youre not allies and not getting along, youre part of a bigger do you want a Huawei Smartphone i dont. I fear the future in terms of what happens five years from now. I would like to im reading about the decline of the holy roman empire. A little Light Reading . No, but weve got a real threat i think weve learned that about and its not going to be solved when we list the giant tariffs this is the main issue facing the United States and youve got to give trump credit for highlighting that, that by 2025 it would be nice if were still a preeminent power. I would hate for china to dictate terms on us on anything. China no longer says 2025 i dont know that that means theyre changing any of their behavior, but theyre no longer trumpeting their plans. They black us out if we talk about it or theyve got people in Training Camps and they call it job training youre with me. Im not defending that. Of course, not. Okay. Still to come on squawk box, longest winning streak in more than a year the biggest drivers. But first as we head to break, heres a look at the biggest winners. It all started under this buttonwood tree. Twentyfour people came together to sign an agreement that created the stock exchange. Just the right elements coming together. It started when scores more people came together, just down the street and traded bonds that helped pay for the revolution, and the nation it created. It started in an office on the corner where the right people witnessed the telegraph and brought information and humanity together forever. It started with the markets, bringing together steel and buildings and silicon and medicine and rockets. We believe the possibilities of life and investing are greater when we come together. Its why for eighty years weve connected ideas with technology, data with inspiration, investors with solutions. So that every day together, it all starts again. Be go[ laughing ] gone. Woo hoo. Welcome to my house mmm, mmm, mmmmm. Ball. Ball. Ball. Awww, whos a good boy . Its me. Me, me, me. Yuck, thats gross. You got to get that under control. [ dogs howling ] seriously . Embrace the mischief. Say get pets tickets into your x1 voice remote to see it in theaters. We should be entitled to have a fair Playing Field, but even without a fair Playing Field because our fed is very, very destructive to us even without a fair Playing Field, were winning because the tariffs are putting us at a tremendous disadvantage. That was did you know this that was President Trump actually talking about it. He called in yesterday were your ears burning, hearing me talk about you . I did, yes. A week ago i thought you were very bearish a thousand points higher on the dow. That was fast money last week. Yes, it was. Are you doubling down on the bearishness . No. Im sticking to 2900 as a yearend target, which is where we are right now it never flat lines. We go up and done a lot. If i had to bet on it,whats not priced into the market is the potential economic boost from moving Companies Back to the u. S. , from actually bringing jobs back to the u. S i think part of i think those aspects of Economic Growth arent necessarily priced into the market whats priced in is margin pressure, rising input costs, lower exports. I feel like the market is targeting more of the possib negatives,s he of the positives. Its its led to more defensive savehaven areas. Its been led by utilities and all of these sort of low beta safe defensive hedges, and i think what could actually happen as we move through year end is cyclicals could take leadership. So im a big fan of cyclicals. I guess buy rather than sell, but from here the real money can be made by playing sector rotation. If tariffs do escalate, they would fall on the short term youre saying its a potential longterm benefit. Yes i think youre exactly right the positives will take a longer time to perfect late in the meantime well see a fallout from supply chain, et cetera if you take a long view, youve got a super accommodative fed, u. S. Corporations continuing to make money margins havent necessarily collapsed even though costs have increased a little bit that suggestion theyre starting to expert some Pricing Power and our economists dont see another recession for a year and a half or more. How important is the fed in that enchoir equation . I think theyre critical. Same thing in december. Every time the market pivots exactly theyre critical in the bull market and have been since 2009. I think where we are, if we start to see growth improve in the second half and say we start to see improved economic trends, see companies spend more on capex, theyre starting to plan a little bit, that could keep the feds on hold, but growth could drive the market higher. I think its important and their mek niches are probably the most critical right now. Would you buy any stocks right now . Im a being fan of u. S. Tech. China tech looks like theyre in trouble. I doable see them stopping the purchase of u. S. Semiconductors. They buy the chips an seppet for 4 i is hard to argue that theyre going to stop importing semiconductors from the u. S. I do think china relies on the u. S. More than the u. S. Relies on china, so im not necessarily ready to step in. You like u. S. Tech but you said sell f. A. N. G. I do. Software is where you want it to be software has crushed it for most of the year. Semiis interesting but f. A. N. G. Is where im most concerned about. Theyre super crowded and have led things for three or four years. So youve got monopolistic issues rearing for a couple of these companies, corporate, data privacy. Theyve had a regulatory free ride forever and now all of a sudden its in the crosshairs of the regulators so thats the key risk for f. A. N. G. Its not about china but whats happening. If you were to do a ben frachg lynn close do you know what that is in in a brokerage, you draw a line, put the positives and negatives and make a decision and do one or the other. I just think Interest Rates are so low right now you can get 4 in stock. I do end know what the average yield is on a stock. You know what might be theal alternativive . Cash theres all these positive things globe ially you might lo at and sentiment. I agree. The market is back to where it was in january of 2018. What month is it its june, isnt it . Is that a year and a half weve been in this rolling sort of consolidation of gains weve made no headway. Only since 1999, only 4 annual returns. At the same time, the tenyear is lower than it was when the fed started hiking rates. I worry about the law of diminishing returns. That does suggest i dont think they can do it anymore. Weve got one year of 3 maybe we do. But on the low of diminishing returns, yu look around at the rest of the developed world and Central Banks really have a low of diminishing returns so, again. You cant go out of the tenyear to a german bund. Thats an option. Everything in life is relative. I dont know. Maybe were too complacent. I agree were not at euphoric levels no ones at a 3300 antarctica. Target. I see you shaking your head. You know what . You can stay bearish forever and youll also be in demand, people that are bearish they always think theyre smart and ahead of everyone else and usually you lose money. Playing devils advocate. Savita, thank you when the facts change, i change. I wanted to hold you youre bearish, last week. Now youre good. I like value. You like value stocks, i know you like defensive. No, i dont like defensive. I like financials. Exactly. Financials were the big egest yesterday. Yes. Thank you for that. Skip the Straw Movement took the nation by storm. Now the Olympic Games are getting into the antiplastic games as well. Were going to tell you how when squawk box comes right back. What do advisors look for in an etf . Dont just track an index, help me meet a clients need. Is the fund built to sell or built to last . Etfs are only part of a portfolio. So make it easy to explain. Give me a quality fund that helps me get clients closer to their goals. Flexshares etfs are designed and managed around investor objectives. So you can advise with confidence. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Go to flexshares. Com for a prospectus containing this information. Read it carefully. Thats what happens in golf nothiand in life. Ily. Im very fortunate i can lean on people, and that for me is what teamwork is all about. You cant do everything yourself. You need someone to guide you and help you make those tough decisions, thats Morgan Stanley. Theyre industry leaders, but the most important thing is they want to do it the right way. Im really excited to be part of the Morgan Stanley team. Im justin rose. We are Morgan Stanley. 2020 organizers say theyll stand on podiums made from recycled Plastic Waste the materials will be collected from National Households oer the ocean. Theyre trying to collect 4,500 tons of plastic. Going green. Im not sure. Metal for the olympics should be good quality gold. How much is used in mobile phones you cant make you know, maybe a plating. I think they deserve a good quality metal for