With a trade war truce near . President trump saying his upcoming meeting with president xi will work out for both countries. Stocks set to rally at the open new records within striking distance the s p closing out its best first half since 1998. And playing down the trade risks, nike delivering strong revenues in the Fourth Quarter, customers buying more sneakers and sports gear and china sales surging. First up, the markets. Stocks getting ready to wrap up a strong month the s p 500 on track for its best june since 1955 for the dow, best june since 1938 heading into the final session of the first half, all three major indices are up double digits year to date, led by the nasdaq with a 20 gain europe is higher this morning, hopes are building for g20. You hear superlatives like that, best june in decades, is that a bullish thing . I think it is net bullish the duration, the strength of the recovery, im looking at this on a ninemonth scale, okay the Fourth Quarter was one of the worst Fourth Quarters in memory in decades. December was down 10 the first time in 80 years or Something Like that. So given that context, i think that you can say, a return to those highs is bullish and the way we have done it is interesting with very low yields, somewhat defensive and very high quality stocks tech is still at the core of almost every market environment right now. So when people want to be aggressive, tech works, defensive, tech seems to work. It is good if youre betting on this market a lot of people say, look at 1938, look at 1955, what happened look at some of the sharpest moves higher like this and you often see them in the middle of bear markets and rebounds and that sort of thing there is this debate out there. I think that in terms of the first half, it is all about a rebound from a deep correction from where we go on from here, i find it interesting, the market is acting like there is twoway risk nobody wants to be too negative going into the g20, nobody wants to get too aggressive and assume it will be a great market outcome. First half is not just a rebound. It is also a reaction to pivot from the fed you look at the tenyear, year to date, clearly yields have been sliding throughout that period also you look at that for june, same is true, we have seen a significant move in yields for the one month and for the six months and markets have responded accordingly. Around the rest of the world responded accordingly. Last year more of a theme of the u. S. Is the only aoutperformer, everybody else is struggling europe and asia, similar to what we have seen the u. S. , resounding gains without a doubt again, i point out that it is not just Government Bond yields being very low Corporate Bond yields have followed them down that means stock equity valuations are supported that sounds fine the question is, getting into Second Quarter earnings season, it is probably going to be choppy and sloppy. Are we going to look through that because of the macro, because were anticipating a fed rate cut. To flip it on its head for the week we have seen so far, were down 0. 8 . It has been almost like a start of the rotation we might now see when we get through month end i ing. Financials the second best performer. Back to the yield picture, thats going against the slide in yields we have seen like a little rebalancing of the underperformers. It is but it does track with a decline in the dollar and thats sort of a pivot towards cyclical stocks. Well see if it continues beyond that month end quarter end squaring up a portfolio. One key will be what happens at this highly anticipated meeting tomorrow between trump and xi President Trump is in japan, still no deal in place at this moment and there is a potential of a new round of tariffs on the table. President trump set to meet xi on saturday, just about 12 hours from now he did in osaka express optimism about the meeting earlier today. Listen look forward to it. I think it will be presumptive and who knows, but i think it will be a minimum, it will be productive well see what happens and what comes out of it. Do you think president xi is going to put an offer on the table tomorrow well see what happens. It will be a very exciting day, im sure ultimately it will work out. President sounds hopeful, mike and after going through a bunch of Research Notes this morning and overnight, it seems like the consensus on wall street is the president will hold off from that next round of 300 billion of chinese imports getting tariffed or taxed. That is out there. Truce is, i think, the working phrase but thats what were talking about in december, by the way. The previous time they met, that was a truce and it was supposed to kind of free up the market to look past the trade issue. It was caught up in other drama in december. It wasnt really about trade specifically, but, yes, i think thats now where the consensus has fallen and, again, i dont think that the Market Investors have ever given up the idea that the rational outcome here is some kind of a deal that forced all further aggression. I think with the fed pivot, the market needs there to be no escalation and well talk well talk more about apple and nike later but both the messaging from both companies of late has been we can kind of handle things where they are you hear that from other industrials like cat that as long as we can be nimble and flexible because we know where the ground lays at the moment. It is a question of just make sure it doesnt go into sort of free type rhetoric. That makes a lot of sense ive been saying best time for a trade deal is soon, perpetually soon however, i do wonder then how were going to absorb the slowdown story thats a real story. It is not just about tariffs we just dont know how much damage is done, how much of a psychological lift you get. The other thing out of the g20 is how united other western democracies, rhetoric has been against trump for the trade war. Im not sure that will perturb him too much it is interesting how much other countries want to see this ease and, of course, the global data has been suffering. I would mention it has been a week of weak data for the u. S. This mornings data was not all that bad we got a spending number the preferred measure of inflation, looking soft lately, perked up a little bit,. 2 , 1. 6 from a year earlier it is still not hitting the feds target but actually came in better than expected spending which we know is a big part of the economy rose. 4 , slightly below expectations. Still last month was revised higher consumers are still spending, incomes are rising personal income up half a percent for second month in a row. Thats good. Not a deterioration. Much worse in terms of the data on the manufacturing side of the economy. Also japanese manufacturing, better than expected this morning, still not fantastic eurozone cpi, 1. 2 , nothing to write home about shares of apple falling in the premarket, the tech giants chief design officer is leaving the company to start his own independent design firm. Hes been with apple since 1992 and helped design such key products as the iphone, the ipod and the apple watch. Lots of discussion about this as to why hes stepping down now, how much it means. I think i hope he takes it as a pat on the back hes worth 9 billion in market cap, whether thats temporary or not, a nice statistic he can retire on one thing im interested in, whether this is gives us a chance to talk about it, this is less a Hardware Company now, more a software and Services Company and whether this is we dont know if hes decided to pull back, theyre not giving enough priority and enough investment to the type of work that hes done for decades compared to what Apple Studios might less design centric business right now. I think it is an eye of the beholder type move if you thought all along that apple was lagging, in innovation and no next grade thing in hardware, this would confirm that idea. Not enough for him to do if you also thought that, you know, the business really hinged on this one genius who remained there from the steve jobs era and hes gone, thats a new reason to be negative. I think it is more evolution of the company, guy has been there a quarter of a century or something. And, you know, i think it is one of those deals where it is time to assess where apple sits as a company, but mostly in the direction we have already known it is going. He helped turn around the company, right, with steve jobs, those candy color eed imacs in h 90s if youre wondering what is the next big hit, the next big thing, i think an announcement like this makes you nervous. It is telling you every analyst on the stock published this morning on this news nobody took down forecasts or numbers or anything like that. Not that kind of story, but just examining what the bench looks like at apple and what it says about where the priorities are, ai, services, health care and those sort of businesses one other point, in the fts write up of this, he mentioned his father has been unwell, back in the uk, that led him to miss the big launch party around the new headquarters which raised a few eyebrows at the time that might be a factor on the point that hes british, hes probably one of the Great British business exports of the last couple of decades you would say that. I would we dont have many, so shares of nike lower after missing on earnings estimates, beating on revenues, boosted by Strong Demand in the u. S. And china. Cfo andy campian downplayed the trade risk on the call last night. He got a question if they were seeing a decline in chinese spending listen we have not seen any impact on our business to date. And we see strong momentum as we enter fiscal year 20 joining us is bob derbel at guggenheim securities. This is one of the biggest question marks going into the Earnings Report what would china look like. 22 growth and no impact from a trade war. How surprising is that for a company like nike . I think they have proven over the years their ability to be quite agile and flexible in terms of any global environment. I think it was a concern and i think they did more than really address what those concerns were in terms of outlook and performance. Did they address what would happen if things dont go well at g20 in the next batch of tariffs go through i didnt get any really quantity fiction or exposure type numbers. I think what they you think about their supply chain, first thing i would say is part of the miss was investment in supply chain and continuing to look longer term versus near term when you think about their ability to navigate Global Sourcing and ability to source in china and shift to china and maybe source from vietnam and ship to the u. S. , i think they can manage through it pretty well over the near term and even over the longer term i think they have proven that over the last 20 years that we have been covering this name. The shares are down, i think the big eps miss was chalked up to the fact that costs rose 10 , spending on direct to consumer, spending on digital, athletes and celebrities and world cups and that sort of thing what has got investors concerned . I think thats a piece of it. This is the first miss in many years on an eps basis. But i think when you look at the other metrics and look at the global Revenue Growth, double digit, constant currency, sustainability of the u. S. Plus 7 , the 22 in china, inventory in a great position, i just think this is a company that if there say company to ever give a pass on three cents this is it the other point i would add is Foreign Exchange for the whole fiscal year was 15 cent hit. You think about how they plan their business over the longer term, they move forward and keep their head down and keep pressing and not going to let the strength of the dollar impact how they view the longer term positioning of the company. Were you surprised the extent to which they played down the trade war risk this is the company with exposure on the demand side, on the supply side and plenty of those trade representatives who make sneakers come on and say this is the worst thing that they have ever faced. I think it is a good example of a company where every macro risk in the book is being thrown at them. Global slowdown, Foreign Exchange costing them a billion dollars, china trade risks if you make products Consumers Want and charge more for them, like the vapor max, all the air max iterations now, jordan for women has been revamped, people will just pay. And i think there is a strong statement at the top of the call for mark parker, the ceo, saying we are a brand for china that was a clear signal they will double, triple down on the Chinese Market and they are working their sources there to make sure that this kind of growth continues. Thanks for joining us nike just down in the premarket. Now, still to come here on squawk on the street, round two of the democratic president ial debates, candidates turn up the heat last night in a big way. Highlights and live report from miami next you should be mad that this is your daily commute. You should be mad at people who forget theyre in public. And you should be mad at simple things that are unnecessarily complicated. But youre not mad, because youre trading with e trade, which isnt complicated. Their app makes trading quick and simple so you can strike when the time is right. Dont get mad, get e trade and start trading today. Welcome back it was an intense second night of debates between Democratic Candidates for the 2020 president ial election. And ylan mui has all the highlights reporter the glaoves came of in round two they clashed over policy issues Like Health Care and personal ones like race but they also took direct aim at President Trump. Joe biden said that trump is ripping the soul out of the nation Bernie Sanders said trump is a fraud. For his part, the president appeared to be at least keeping track of what was happening last night. At one point, every single candidate raised their hand in support of providing undocumented immigrants free health care. After it happened, President Trump tweeted this, how about taking care of american citizens first, thats the end of that race democrats also slammed the trump tax cuts and promised to unwind them, and Kamala Harris said the trump economy isnt working for everyone asked how are you measuring the greatness of this economy of yours, he talks about the stock market well, thats fine if you own stocks so many families in america do not. You ask them how are you murg the greatness of this economy of yours and they point to the jobless numbers and the unemployment numbers well, yeah, people in america are working, theyre working two and three jobs reporter President Trump tweeted this morning that stocks went up massively after his election because of enthusiasm for his presidency he wrote, that Big Stock Market increase must be credited to me. Sara, democrats know that the economy is President Trumps biggest selling point, theyre working hard to reframe that discussion back over to you. Thank you coming up, a company that says it is revolutionizing resale is going public today were talking about online luxury consignment retailer the realreal the first trade and well talk to the ceo coming up. Looking at futures pointing higher on this final day of the month of june. And of the quarter dow is up 99 points with 10 minutes until the open when it comes to your customers expectations, theres one thing you can be sure of. Theyre changing by the nanosecond. Thats why cognizant created a unique engineering approach to design and build new digital products. Learn how cognizant softvision designs experiences and engineers outcomes. Cool. Cool. And everyone ive ever opioloved away from me. Thing everything. I blew my ankle out and i got prescribed pain pills by my doctor. If making my detox public is gonna help somebody im all for it. I just wish i wouldve had a warning. Do you focus on in ttodays headwinds . Es, or plan for tomorrow . At kpmg, we believe success requires both. With our broad range of services and industry expertise, kpmg can help you anticipate tomorrow and deliver today. Kpmg just under eight minutes before the opening bell. The final trading session of the first half of the year, will this upward momentum for stocks continue into the second half . Lets bring in kenney pocari, cnbc contributor good morning so the market is up s p is up 17 in the first half of the year how does that set us up for the second half . Listen, i think it is a great move, certainly in the s p, i would agree with what mike santoli said, some of that was the bounce off of what happened at the end of the year last year i feel good about the market i feel good about where it is. The little bit pricey, but if we get lower rates like theyre talking about, thats going to further support the market so therefore the market will do better going into the second half of the year if we get no move on rates, say we get a deal with china, and then the fed decides not to lower rates, you may get volatility of the market may back off a little bit because up until now, it is priced in that perfection it is priced in the deal, priced in lower rates, so you dont get that, you can see the market kind of waffle a little bit, maybe back off but i think it is actually setting itself up for a good second half as well. What is needed this weekend, kenny, for it to be a win for equity markets so heres the deal. I think a lot of it is priced in what it really needs is it needs to hear that were moving forward. It is not going to get a deal. No one expects theyre coming out with a deal. What the market what investors want to hear is they have come to an agreement to have the next conversation Steven Mnuchin told us wednesday that were 90 there so it is a 10 move that we need and so the Market Investors want to see were just moving if he walks away without shaking hands an