Transcripts For CNBC Squawk Box 20160705

Shanghai hanging in there. Higher by about half a percent. European equities, of course, this one often the last week or so has been the tale how we begin the trading day. Ftse might be down. Spain ibex down one and a quarter. Interestingly was in positive territory. 6522. It is higher than before britain voted to leave the eu. Take a look at crude, wti down about a 133. Natural gas has been rallying this year down about the same amount. I want to thank you for being here. Bern stooen was a merrill guy for quite a long time. Made quite a name for himself, but for him to come in here and be the guest host for an hour is really good for richard bern seen the advisers. I think it says you couldnt get anybody else. That may be true to some extent, but im thanking you. Its nice to see you. Im glad youre here. Im sure he didnt need to set his alarm. Couldnt wait to get here this morning. Chopping at the bit. I think either works. Cham champing or chomping. Its champing. 6 02. If youve never looked up a list of common mist stated. Its really fun. Theres raising my hack ls. Sand toe the line, its toe. If you had any idea about how much Economic Data is going to be packed into this shortened trading week, in may you have factory orders. Wednesday we get june Service Index of the ism. And the minutes from last months fed meeting, we get to hear more about whether theyre going raise rates. Its been like nine years and weve talked about it every day just about and weve had one quarter point increase. Were going to continue to talk about whether theyre ever going to raise rates. Did you see the 10 year today . Thursday, its the june adp employment report and weekly job claims and on friday, unbelievab unbelievable, sit already again the jobs report. Life is going really quickly. Here we are again. First week, first friday, first week of the month. That means the summer is going way too quick. It is. Now to british politics as the search for next prime minster continues, Boris Johnson throwing his support behind Andrea Leadsom to replace David Cameron. Hes not going to throw support by the guy that stabbed him in the back. Leadsom is calling for a quick brexit. She was a brexiter. Shes not like that other lady that was a remainer. A quiet remainer. And then someone saying leave. Yes. And the first round of the parties leadership takes place today. The big surprise over the weekend, nigel farage. That is why i now feel that ive done my bit. I couldnt possibly achieve more than we managed to get in that referendum so i feel its right i should now stand aside as leader of uk. So far farage has declined to endorse a candidate. Were going to talk more about the brexit fallout with wilfred frost later. Hes going to join us. Are you not watching in the afternoon . Does he come sometimes . He does. I try to watch every day. Maybe its on my dvr. When was this . Hes done it a couple of times. Can you imagine how long a day that is. Hes doing five to six. And then hes doing the three to five. I asked him, you probably didnt see this, i asked him if he was here yesterday for the first july 4 in the states and whether he was still harbors any resentment. Our vote to leave . Yes, and then we basically changed the world and became the only remaining super power and they kind of have a navy left at this point. I dont think you should throw that around. I know. We have a lot of viewers. I would like to buy some property. Everybody else outside of britain is going to buy britain. Where would you buy. I want kenzington. Thats where all the french are, arent they. Are they . Im a fan of north london. Thats where i lived. Really . Yes. Speaking, news just in from the bank of england. Amount to the first easing of policy since the vote to leave the eu. Lowering capitol requirements for british banks. A move to raise lending capacity. It also says for now uk banks will not be able to increase dividends on stock buy backs. Bringing do you highlights of the remarks as they come in. Stocks to watch today, microsoft and man san toe teaming up to start in brazil. Digit too manies that will be applies applies applies applies to production. How about tesla delivers more than 14,000, but missing the companys target of 17,000. Tesla blained a large number still en route to customers. Those shares are under pressure again. Down nearly 4 . London Stock Exchange holders have voted to approve a merger. The lsc is confident it can get approval from brussels and ample time to work out a deal before britain leaves the eu. A lot of these deals were still in question. They appear to be going through both as the european stocks have been lower under pressure today. I did not miss this. I did see it. Whenever it comes on i wish i hadnt seen it and on espn i look away for a second and theyre covering this thing t. Guy who won, i think he ate 70 hotdogs in ten minutes. I dont need to think about that. I dont need to see it. I dont want to think or know anything about it. I dont know why people do it. I dont want to cover it. Its not a sporting event. It was the annual july 4 hot dog eating contest. It featured a comeback and a new record. Joey chest n joey chestnut. Hes a really good hot dog eater. He beat his own record. He gained the belt yesterday. As i said, i didnt want to bury the lead. He ate 70 hot dogs and buns in ten minutes. How would you like to have him at your tailgate. I just dont want to be anywhere near him before or after. Thats the most ever eaten at the competition. Topping his competitor by 17 hot dogs. This win is a huge victory for chestnut. Last year stony ended chestnuts streak at eight straight wins. He had something to prove. Do grow prowith that eventually. They are pro. Theres a pro tour. It was on again when i walked out of the room. I cant escape this thing. Now i think thanks for including that in our joey chestnut. What an athlete. Lets get back to the markets. A check on futures this morning. We saw stocks under pressure. You can see dow down. S p down, nasdaq down too. The question is now which way do we go on this knife edge. The euro a little bit weaker against the dollar today. You can see that 1. 1144. The pound same story. Weaker, down to 1. 31. Theres the yen. Its at about 101 to the dollar crazy to see it go below 100. Looking at gold, its up another eight bucks. The countdown is on to fridays job report. Joining us brad mcmillen. Our guest host continues to be richard bern stooen, ceo of bern seen the adviser ss. Also a cnbc contributor. We always talk about how important sit in right of whether we raise rates or not. Now we had brexit, i dont know if its an important report or not. Its not going to give us an indication do we get a rate hike. You dont want one anyway. I never thought they should have done the first one. We were in an environment where inflammation expectations were fall sglg youre a money manager. You love the qe. You love the extraordinary measures. Anything to lift up financial prices so it looks like you know what youre doing and you get more clients. Everybody makes money. Dont you think eventually you want to worry about wanting all this free money. Look, free money is an interesting way to drin it. I think the question is should the fed be raising rates in an environment with a nominal economy is not that strong. On the one hand you have everyone complaining the economy is punk. Were seeing the worst recovery and you have people who want to raise rates. I misspoke. People will pay you actually to i forgot. Brad, what could happen this friday that could change any of the calculous for the next hike. I think if we get a terrible jobs report, its going to change the narrative completely. We had one bad job report. We get another one, we really need to start worrying about jobs which is what kept the economy going so far. To we Start Talking about so much pattern we could always cut a quarter point, but do we ever go negative do you think . Were 138 today. Do we ever duonegative. I dont think we do. Given structure of the u. S. Economy. Negative wouldnt do anything for us. Negative has too many costs, too few benefits. Other things they can do. Fiscal policy probably has to come back on the table at that point. These are records. Soil a supply thing again or are we getting worried about demand now. Both, really. I think this fridays report will be important to see if that or not. The weekly claims dont seem to square with the weak job reports so i dont get that as far as our economy goes. What is pressuring here oil is the dollar should be stregthening as well. I dont see why its not more of a safe haven. Even more than the japanese yen. We have currencies working against oil, but look, there will be a lot of the other data to watch this month over the next couple of weeks is the chinese data. Its been week out there. To the extent we dont see an improvement, the demand story there is going to collapse because a big part of their demand thats been propping up oil prices has been oil going into their extra siegic reserve thats just about full. Once that goes off the board and we dont have that anymore, the narrative is going to turn real bad. Shanghai kposive overnight. Why do you think that is, the chinese issues as youve said havent gone away, the concerns about the economy there. The old saying in the United States was dont fight the fed. You take that overseas; doesnt have the same ring. Dont fight the pboc. Theres also in certain places around the world and even in the oil sector for a lot of the oil companies, youre coming up against easy comparisons as you go through this year so if oil or commodities or anything frl a lot of different countries, it doesnt have to get better. All it has to do is stop getting worse and by the end of the year, comparisons are pretty good. Theyve already made all kind of move. They let the yuan depreciate. I dont know how you feel about the auto makers, but theyre dividend yields are pretty huge. That i have been trading poorly after the latest Monthly Sales numbers, what would you do with the auto makers . I think it makes sense. Weve seen sales continuing at a rate. The u. S. Economy, we dont need things to get substantially better. We just need a lot of things to stop getting worse. Theres signs that actually starting to happen. So i dont expect jobs to go down. I expect them to come back and people are going to continue to spend. Theres still enormous demand for autos. The manufacturing number got lost amid all the stuff last week, it was up a lilittle, 53. The Services Number were going to get this week, does that give you enkourngment . Exactly right. Weve seen two huge head winds here. Weve seen the strength of the dollar. Oil is going to start to revive. Weve seen the manufacturing drop thats coming back. Companies have adapted. Weve seen jobs continue to grow despite the terrible last report. In other words, weve gone through a terrible sixmonth period, but the fundamentals are still here. Were still solid. Were also going to see earnings. I just thought of that too, is june the end of the quarter. I guess. Oh, god. Theyre coming. Were going to have another snapshot and its not going to be great. People are pointing out its the longest earnings recession weve had in history. Youre looking for down 5 again. I dont see i mean, i know it feels good when you stop hitting your head against the wall. Thats an upside for people, but this is you keep coming back to the best house the a bad neighborhood. Not even. I think we are in a profits recession, but the people are noting the rate of change has troft. The worst part with two quarters ago. When that happens, you start getting rotations. Thats actually happening. Look at the Energy Stocks for the most of the year. Material stocks for most of the year. Thats the signstarting to chan nobody catches on not at the troft, but about see that happen and still have ha 13810 year. My guess is yes. Because im not the best forecaster of Interest Rates. A year from now, the 10year will be higher. I dont think im going on a limb to say that. Except people said that for five or ten kwleers. But dont forget, you said weve been in the longest recession since who knows when. So were going have earnings. Thats something were going to be focused on. Then the conventions. Well. This is going to be a political and were going to have a lot. Even though its going to start getting sboog the summrmmer roo will cnbc be there . We are going be there. Everybody is doing well with a political year, advertising. These conventions could be interesting. July 16, getting underway. Picking some general. The list has been expanded, but pretty establishment names. The post is saying its flint. Michael flint. Then it must be right. You know the post is accurate on all sorts of things. One of the best youre talking about the new york post. Oh, good. I thought you were talking about the washington post. If i could fgive a shout out to a marine. Sa just wanted to say hello. Thank you all for joining us. Coming up the veep stakes is heating up. Well continue monitoring comments from bank of england, governor mark carney Just Announced an easing on bank lending rules. Theres a look at the ftse. Squawk box will be right back. At the beginning of the 21st century, the earth needed to find a new way to keep up with the data from over 30 billion connected devices. Just 30 billion . A bold group of researchers and computer scientists in silicon valley, had a breakthrough they called. The machine. It changed computing forever. And its been part of every new technology for the last 250 years. Everything . Everything this year, Hewlett Packard enterprise will preview the machine and accelerate the future. See star trek beyond. Welcome back to squawk box. Lots of political buzz over the weekend. Hillary clintons fbi interview and new potential vp picks. Kelly, it was a weekend that underscored just how bizarre this weekend is. First of all, donald trump sent out a tweet which called Hillary Clinton the most corrupt candidate ever. It pictured a star that matched the contours of the star of david over a pile of cash. Now, this took intense criticism. It turns out that it had first appeared on a white sur prem cyst website. Donald trump said thats not what he misrepresenteant. It was the same as sheriffs badges or a plain star. Secondly, Hillary Clinton had a three and a half hour interview with fbi investigators looking into the cko controversy over h em. Email. We expect to hear from the Justice Department soon on the outcome of the fbi investigation. We dont expect Hillary Clinton to be charged. That does not set the controversy to rest in part because of that meeting. Finally in this campaign the veep stakes is the third most significant thing that happened over the weekend. Nevertheless, the progress is fwriending on. From Hillary Clintons point of view you had some of her choices. Donald trump was meeting his with potential choices like mike pence t governor of indiana, joe unithe governor from iowa. Praising tom cotton, the senator from arkansas. We are two weeks away from the convention and a remarkable view of what is happening. The controversies and the kind of controversies that loom over both of these candidate. Steve jo john, that was the most foe controversy that weve seen. I dont want to get into this. I dont know if i would be talking about it. Trump over the last year, theres been 30, 40 things people try to get traction on and see if it will stick. Im talking about the media from time to time. The mexican judge or the american judge with the mexican herita heritage. That was something that got a lot of traction. This thing with the star, hillary is not jewish, but Donald Trumps soninlaw who is a main part of the campaign is and so is his daughter. To say that was a straight face and i looked at the Huffington Post and i just thought it was i dont know. I think that people are not going to use that to make any determinations. Thats one that as a slow all this stuff against the wall, thats not one. Does it bother you that the image came from a neo nazi white sur prem cyst website. I dont know if he knew it came from that or not. Hillary is not jewish. I dont understand that. It makes a lot more sense maybe stuff on antisemitic have messages embedded in them that occur to people looking at those websites. Right. I dont know whether at the time he knew that it came where the, you know, where the original image came from. If shes being interviewed equity the fbi and its a sheriff type its like a Law Enforcement badge. Huh. You think that was a you know what, if you guys hear dog whistles everywhere. Everything sg a dog whistle. That one, i dont know. Youve got no problem with it, joe. What are you talking about . Im saying i dont think i veronica converted to jude yichl. How are you making the connection . I think the connection comes from where the image originated from. You hope so anyway. A lot of the media does. To me it seems throwing it up against the wall and hoping it sticks. Every person can decide what theyre comfortable with and what theyre not. If youre not uncomfortable with it, thats your sensibility. I saw it. It looks like a slfrs star. If it hadnt been originally from an antiis a mittic or white supremacist website, then would it been construed to be antisemitic even though hillary is not jewish. The typical image you see of a star usually has five points to it. Not a sheriffs star, i dont think. I understand. All right. Shes appearing in front of the fbi and talking about crooked hillary and flthree and a half hours and this has been going on for about a year. Joe, im not telling you what to think. Just saying the people who understand that appeared previously on that website might raise questions about why was the Trump Campaign using an image that came from a source like that. And the cesspool that is twitter, i dont retweet anything. I dont actually i try not to say anything either because its just i dont know. Its the end of days, john. The stock price, they deserve. We got a few days ahead of us. Hopefully. The way social media takes us. Anyway we didnt talk about the veeps or anything. This general is not going to be veem. Who is going to be hillarys veep. Im betting on tim cane. Trumps veem im betting on chris christie, but well see. That would be taking it to him. Thats two pretty abrasive aggressive guys. In your face guys. Yes, no yquestion. All right. We can agree to disagree. Nasa yjuno reaches. We have the details straight ahead. Here is a look at last week s p winners and losers. Trolling for a gig with braindrone . Cant blame you. Its a drone you control with your brain, which controls your thumbs, which control this joystick. No, im actually over at the ge booth. Were creating the operating system for industry. Its called predix. Its gonna change the way the world works. Ok, im telling my brain to tell the drone to get you a copy of my resume. Umm, maybe keep your hands on the controller. Look out ohhhhhhhhhh. You know what, im just gonna email it to you. Yeah thats probably safer. Ok, cool. If news just in from the bang of england. Its lowering Capital Requirements for british banks in a move that will theoretically raise the lening capacity. Now uk banks will not be able to increase dividends or strong buy backs, contrast to what just happened in the u. S. Okay. Carney holding a conference there morning. Says hell be straight with the people about the vote to leave eu and the bank will take whatever action is necessary to support jobs and growth. You can see britains market there up nearly half a percent now. He says britain the markets have managed this volatility relatively well and the ftse 100 is higher nonthan it was before the vote. Time now for the executive edge. Twin keys, ding dongs and ho ho will hit wall street later. Upon completion of the deal, the company will take the hostess name and go public. Current management will remain in place. Bought hostess after it filed for bankruptcy back in 2013. The company is proving as persistent as the t winke itself. Some high school has the 40yearold. Its just dusty. You may need it sometime. You never know. I dont know if you have a place where you stockpile a lot of water and backed beans and stuff like that. Put some there. It may be the only thing that keeps you going. It was one big leap for nasa juno spacecraft. Celebrated as juno completed a do or die engine burn to sling itself into orbit. The goal of the mission is to learn secrets below the planets surface that could shed light on how and when it formed. Mapping the planets magnetic fields. After 20 months of collecting data, it will dive into the atmosphere and be crushed and vaporiz vaporized. I think about how long it took to get them there. 2001, that was headed to jupiter. It takes five years to get there. I better be clear. I know we didnt really send men there because people want to watch for, but in the movie, 2001, a space odyssey. That mission was to jupiter and because thats where thats where you remember the piece in the moon and the signal was coming from there. Took a long time. They were suspended animation for a while. Im glad with one worked. Duane five years. Its not all about money. Whats the return . Whats the actual tangible return. I think theyre going to do some science, figure stuff out. I think theyre going after the stuff they dont tell us. Theyre going after that same signal. Lets get to sports because this story is amazing. Durant, the biggest free agent surprise has decided to leaf the Oklahoma City thunder and take the talents to the bay area. Hes joining steph curry and the Golden State Warriors. The mvp is expected to sign a 2 250,000,000 contract. Now favored to win the title. Dropping from eight to 301 odds. I dont know how closely you follow the nba, is he doing the right thing here. I dont know if durant is, but is anybody ever going to beat golden state again . Its a very different r different style of fence. It was a little bit sad. I liked reading what Oklahoma City said about durant. He really was the guy. He was. There was seattle. I guess he went to Oklahoma City. The super sonics. And totally and their own identity. What do you think now . People, listen, talk about you social media. Out raged he made this move. It seemed to be nakedly jumping on. Why would anybody be surprised . Because he meant so much to Oklahoma City to the franchise. I dont think proathletes care. You look around the world, you look at european soccer, right, they all great loyalty and then they two to another team next year. I havent wantched it. Im more focused lately on the competitive eating. The hot dog. Its so gross, but the track stuff. Those guys dont care who they play for. Joey chestnut. There is a really Competitive Eating League . There is. A Competitive Eating League. They go on tour. There you go. Coming up. The bfg could go down in history as the Biggest Box Office flop. As we head to break, a quick check of whats happening in the european markets. After those comments from mark carney, ftse 100 up half a percent. In a world held back by compromise, businesses need the agility to do one thing another. Only at t has the network, people, and partners to help companies be. Local global. Open secure. Because no one knows like at t. Welcome back, the bfg bringing in 20 million over the weekend. Good morning to you. Box office pro. So why was it such a miss . What happened. Audiences just didnt want to follow stephen speeld burg down this path to watch this film. You had a lot of competition from finding dory which has been doing fantastic business for three weeks now. Were there signs this was going to be a flop. They test this out with audie e audiences and all this investment. And weve been tracking the film on social media. We just didnt see it pick up early p any interest. Came out in con. Not a lot of conversation following that attraction. Thats not a good sign for a film opening up in the summer. What did it miss . I would look at the commercials and think the character looks creepy. Was it that or plot . An observation like that when you compare it to Something Like finding dory which is going for the same kind of demographic, even the color pallet which seems for friendly. That can make the different in the world. The color pallet. The more cheerful colors you react to on a markets campaign. Bfg came with a slightly different Marketing Campaign. When youre deciding what to watch, youre going to go with what seems a little more appealing to you at the moment. Maybe somewhere a along the Marketing Campaign for the bfg missed that. Dory looks like a feel good movie. Bfg, not so sure. When i saw the commercials, i thought it looked creepy. I didnt feel good at all after watching finding dory. Did you see it . I saw it. Its sort of an interesting movie. The first one came out in 2003. Were coming off a time in 9 11 where the film was about the fears parents had, leaving their children, going off on their own. It jumped the shark. The octopus was driving a truck down the freeway. You may not a connected to it. It is ridiculous to talk about. Its a movie about a talking fish, but youre problem is the octopus driving the truck down the highway. Thats just one small part of it. If you have any type of cup of water, they were no longerer just confined to the ocean in this thing. They were everywhere. Its fantasy, joe. I understand that, but i dont know. Youre saying it was a way to get out of plot kind of kept the plot going. The octopus i did like. What did you kids think. They liked it. Andrew told me he cried when dory found her parents, which it was like years. I know how long tropical fish live. They werent waiting around years. I remember watching home alone when i was little and crying at the part where the mom comes home and will they have the big hug. To be able to evoke any emoigs about fish is pretty good. Probably going be the highest grossing of the year so far in a couple of weeks. Toy story four is coming up. He thought three ended are you serious. Yes. Toy story two didnt seem like a good idea, but it was a pretty good film. Did you see the one that was on before, that was amazing. I love those shorts. This was a cute little bird. Competition next week. Film looking at that children demographic, family demographic. Probably slowing down. The bfg is going to by affected more next week. In the summer its a little difficult to find sleepers. Secret life of pets, jason born is coming back. Thats another film. There you go. Now youre talking too universal. Keep going. Then you have suicide squad from warner bros due for a hit at the end of the summer in august. Do you still go out to movies. Every now and then. I go to a place now that has the have you been to the reclining seats . Unbelievable. Can you stay awake . No. You pay 30 to take a nap. Maybe thatsy had trouble following the plot. Begin voting if the next prime minster today. Wilfred frost the here to tell us what to expect. Ive made it. I hope i can come over there for the rest of the show. You are. You have to sit in andrews chair though. Sounds good. Conversations on various trading floors, helps us uncover insights. Insights that help investors predict market closes, well before markets close. You know, your analysis has helped us improve our predictive accuracy by over 500 . 550. 2, to be precise, but we can always do better. I like your attitude watson. Writ ibritish companies are becoming more pessimistic over the brexit leave. By the end of last week, the ftse was at the best level since when . Tenmonth high. The old tie high . Up again today. The pound is falling. If you look, the pound has been the great gauge of ukrelated brexit fallout that has hit another 31year low. This is going to usher in a recession for the uk. Why does that make sense when the pound is so much cheaper . Now, your saying it is obvious why it is happening. It is good fort ftse 100, which has a lot of international earnings. The ftse 250 is still down. The next 250 biggest companies. Some pockets around europe are still down. Mark speaking just now, highlighting the impact the pound could have in an exit way. Impacts on commercial real estate. The pound is going to be good for some pockets when it is weak. It is just a question of when that comes back to bite you. A lot of other really interesting factors. We have seen the uks credit state is downgraded. Bond yields are a record alltime low. In the shortterm, the impact has not hit uk borrowing weights. Is it confidence in the uk or longterm worries about the uk . Whatever manufacturing is left in the uk just got a lot more competitive. It is interesting. We have tons of reports from every brokerage firm. Not one said that uk profits could surprise on the p up side. Thats the immediate effect. The pound falls. The translation effect. If currency falls 20 , 30 , boost of profits. Even if you see the ftse 100 back up to highs, whatever, the sector thats being really hit is the banks. Yes. The main fear on that because of the yield curve effects. Much more pronounced faction in the uk. The idea that you might lose market share moving forward. This is the sector that has a big sur plus with the rest of europe and the sector thats most likely to see some kind of retaliation and attempts to grab market share. We are going to have trouble with a couple of things depending on how the Financial Markets react in the weeks following brexit. Number one, we know that some people think the central bank set us up for soom tyme type of of reckoning. You worry about the uk post brexit. I am more worried about the eu post brexit. If we see weakness across europe, it may be because of this house of cards. If the eu by itself was ready to implode with or without a brexit, how do we know which will cause the problem . The economy . We see bpms down sharply today. How could the u uk leave all that . You dont want to be in bed with bailing out that . You are blaming me as if i decided. The italian banks are the interesting shortterm focus. The bigger factor for contagion, dutch, german, french elections and that will be a real telling point. Wolf is going to stick around and take richard bernstein. Thank you for joining us. Great to be here. Coming up, america ket strategy session to get you ready for this weeks jobs reports and the flood of earnings reports right around the corner. Stay with us. Stay with us. Stocks under pressure. U. S. Futures lower as the post brexit rally fades away. We open the playbook for the second half. Weekend fireworks, those were spectacular. We are talking about the campaign trail. Both candidates hitting the road with just a few weeks before the conventions in the battle at the box office, giants, tarzan and the perb are trying to knock dori from the top spot. Did they do it . The second hour of squawk box begins right now. Live from new york city, this is squawk box. Welcome back to squawk box here on cnbc, first in business worldwide. Im joe kurren along with kelly evans and will ford frost on the set jacketless. Becky and andrew. He is jacketless. You dont need that jacket, my friend. I have to adapt based on current surroundings. But you are not losing anything but taking it off. Lets go right to the markets and look at u. S. Futures. Been improving all morning long. They were down triple digits earlier after rallying 3 . Check out the price of crude oil which is slumping today. This is probably a really surprising week. I dont know if anyone would have predicted the global he can x equity markets. Lets get to wilford. Punch it. This is headlines. In the headlines this morning, the bank of england has announced its first moves to ease policy since the results of the brexit votes were announced. It has lowered bank Capital Requirements to spur lending although banks will not be allowed to increase buybacks or lendings. Tesla shares are under pressure after they miss delivery targets for the Second Quarter. They said they expect to deliver about 50,000 vehicles during the second half of the year, which would still leave if short of its own projections. Saudi officials are seeking to reassure citizens about security following a series of suicide attacks on monday that killed at least four people. There has been no claim of responsibility. Isis has carried out similar bombings in the kingdom in the past. The death toll stands at 175 in bag dag from the suicide bomber this weekend that targeted one of baghdads biggest commercial districts. Britains vote to leave the eu left in its path. A bit of a breck from the rally post brexit. As we watch u. S. Stocks to climb back to where they were prebrexit. We take a look at some of the winners and losers. All ten sectors have become winners so far. Lets take a look at best. Energy and financials, up more some of the sensitive, economically sectors. The best performing sectors up 6 . The worst performers were the ones more defensive, Interest Rate sensitive, Telecom Stocks and utilities. They were up but only up about 2 , 3 , as for the individual stock winners. Some of the winners an losers are due for a reversal. John deer, extra space storage, clorox and columbia were some of the better underperformers. As for some of the worst performers, dardent, humana, dow and Tractor Supply company. They were down. These stocks have been left behind. All of the focus is going to be whats happening with the european banks. A lot of them weaker this morning. Well see if they carry through into trading today for the u. S. Financials as well, guys. Weve changed it to the 800pound gorilla, the italian banks. 17 percent. At the height of the financial crisis, it was 5 . The contagion aspect is huge. The idea you have Credit Suisse near historic lows and Deutsche Bank near historic lows. The italian banks are going to be the epicenter. All of those italian banks are going to be a huge focus for investors as they wonder whats going to happen given the brexit vote and what it means for the economies and the banks elsewhere in the region. Central bank will bail it out somewhere. Italy, the gdp will be nowhere near where it is supposed to be to be in the eu. The bureaucrats will look the other way. Greece has never had that. With the italian banks, it is a question of whether the central bank will bail them out. The law says it has to be creditors to bail them out, not the state. We have the germans saying you cant break the law, you cant bail them out. They have been suggesting it is a possibility. Publicly still saying, yes, it will hit. Thats why you are seeing the issue in the italian banks. Will the italians have to break european law and bail them out or will they suffer . Germany was the first to violate the master treaty. You cant have deficit over 3 . They had a horrible recession in the early 2000s after the. Com cra crash. These socalled rules have not been from early. They had those rules for a reason. Also, there needs to be flexibility when you are in the middle of a down turn. How is anyone not a euro skeptic . Why is it such a dirty word, because of the move to globalism and statism . It is so fashionable. I dont know if euro skepticism is a dirty word but parts of the exit campaign have been painted with a negative light, particularly the rhetoric around immigration. They have argued over sovereignty. That comes back to important things. We saw nigel farage resign as leader of ukip. That was not going to be in the next government either way. The fallout immediately after the vote is probably at its peak. I think that will come down as people move forward and realize it is not quite as negative as they suggested. Bring back the lire and devalue it. I dont know if it would in the very longterm. In the shortterm, your going to see italian borrowing rates soar. Were kicking off our market round table ahead of fridays job reports. Joining us now is tom lee and sasad sethi. Tom, i think that you were looking at brexit not necessarily as more half full than half empty, werent you . At least not quite as conservative. You have to connect a lot of dots in how it hurts our economy. It is a negative shock . Was it . You traded right back. We almost made back everything we lost and the ftse traded up. Thats a shock. Thats why they are scratching heads. The uk is higher. The equity markets are telling us maybe the damage is limited. We are left with lower Interest Rates. I think investors are kind of confused at the moment. I dont think thats a bad thing. I think it shows that maybe the markets are a lot less invested than we think. My takeaway, i think there was a lot more cash on the sidelines. Thats why we had a huge selloff and we are able to recover most of the decline. Most people arent invested. I love the story over the weekend talking about people on their laptops who were buying when this created that huge downdraft. We had three of these, last august, february and this. So it shows you that yields sorry low, the income for trade is still there. All trading at 20 to 21 times earnings. The tenyear at 1. 4, what i think is interesting is that if you actually have a decent earnings and you actually go forward with some good growth in industrials and technology, you could see the market go up and maybe you have actually make some money here with the other sectors coming down. It is a lot of money on the sideline. I think you get some good news in this market. We have had five or six years of good stock market activity because of low rates. If it is going to be lower for longer, why should we be surprised the equity markets are going up again . Have we finally turned the corner where we dont want zero . It is earnings na will take us there. You had multiple expansions since then. Can you move from 17 times on a p. E. For the whole market. Thats whats going to cause it. With low Interest Rates, that does grease the wheel for a lot of companies. We have seen equities come off and the one move thats been unequivocal is bond yields. There has been a lot more. That suggestion much more fear out there than optimism. If i had to say, okay, what are some of the lasting damage . Interest rates low Interest Rates werent good. Now, they are lower, which is bad. Some of the data wasnt unequivocally negative. The exports number picked up. Thats four months above 50. The interesting thing is, any time that number has fallin below 50 and held two months above 50, four times it has happened, the s p revenues have always accelerated. I do think earnings are going to start to come through and help us feel better about the danl. The offset is the u. S. Dollar. If the dollar gets really strong, that is going to hurt earnings. If the dollar moderates and oil comes down, not to the 2025 level, that could be something that is positive. I think the dollar is still weaker relative to q1. It is comping every year. Oil at 26 was worse for the global economy. The euro was 108, almost 112. The euro is still a bit stronger, one quite interesting factor. I suppose that the other thing last week that might have been the bigger driver for market bounceback was oil prices. Now, they are off again. I think if oil stay ns ths i band of 4050. What happened last year was industrials. The company stopped doing anything, because they were worried as to the demand. You start getting that back in the game and you get auto parts, suppliers, airlines, all those will start doing better as long as the confidence is there. If you see a freefall in any of the markets, dollar getting too strong, we go back to that uncertainty. I think people will step up and do trade deals with the uk, it is hard for me to connect the dots a the way back here for whether we show down in any meaningful way. What about the uncertainty of m a, uncertainty. Uncertainty, brexit. Next week, when earnings start coming out in their forward look, are they going to talk about the uncertainty . They can. They love it. We talk about the uncertainty. Thats why we are missing it because we probably mismanaged it. Before brexit, we probably were thinking that companies have some visibility in the second half because of the dollar and the isms are turning up. Right now, thats gone away. In a way, the last seven years have been marked by a lot of uncertainty. Maybe we are seeing the markets get a little less hair trigger on it. We are not seeing 2016 for the next hike . I dont think so. If anything, it will be after elections. You have to have a couple of good quarters of steady earnings and no more blowups in europe. As soon as something happens there, they start catching a cold and we say, hey, step back. We never go negative here, do we . Do we go to 1 . I think inflation is probably going to be the next thing investors are surprised by p. Actual inflation . Yes. Thats reflation. I think we kind of tested february where the feds said, maybe we go negative. The markets hated that. I think they learned hopefully their lesson. You are right. You look at your labor prices and oil stays where it is, there is going to be some embedded inflation in the system. I dont think rates can go too much lower. There is not much room to cut. There is not much room in between. Julian fellows ever come over here. Could you bring him on set . He comes over quite a lot. Is he impressed with my knowledge . He was. He also wanted to talk about his new book. We had just talked about downton. He enjoyed it. It is reviewed in the journal. I actually thought about that. I might look at it. I wouldnt admit it. He has a new nbc show coming up and he suggested in our interview last week, there might be a downton film. There might be. I think it rests on people like that. It needs those characters. Still to come, more brexit fallout. The focus turns to replacing uk Prime Minister, David Cameron. We will talk to the ceo of one of the biggest tech firms in the uk about operating during this period of uncertainty. As we went to break, check out the turn around in the ftse, score box. Coming back in a couple of minutes. Minutes. They may want the latest products and services, but they demand the best shopping experiences. Theyre your customers. And by blending physical with digital, cognizant is helping 8 of the 10 largest u. S. Retailers meet their demands with more responsive retail models. Ones that transcend channels and locations, anticipate expectations. Creating new ways to engage at every imaginable touchpoint. Its a new day in retail, and together, were building the store of the future. Digital works for retail. Lets talk about how digital works for your business. Welcome back to squawk box. Take a look at futures. Under pressure. Coming off our strongest. It was 77 earlier. You saw the effect of weaker europe markets. P ftse 100, turned into positive territory. Up half percent at last check. Moving a little off the lows but looking to open lower this morning. The nasdaq down 17. Fallout for the brexit continuing as the race for David Cameron uk Prime Minister heats up. Joining us with more on how it could impact Small Businesses, steven kelly, ceo of tech group, one of the biggest tech groups in the uk, provides payroll systems to more than 50 of all businesses in the country. A business adviser also to p David Cameron. Thanks for joining us. Good to be here. One of the labels was that an exit from the eu could hurt big business but be better for the smaller businesses. Is this an opportunity for them . I think the Small Businesses are looking for some degree of certainty and confidence. We see it could be a golden era for British Business triggered by two things. Materially, nothing has changed in the last two weeks apart from one big factor. The pound is a lot cheaper. That signals possibly a very positive time for uk businesses to export overseas. The other factor is i just got someday ta from the companys house which registered new businesses. We had a record back in may, a week of over 50,000 new businesses registered. Just to give you some information, wolf, there were 800 Small Businesses in the uk. Now, over 4 million. There is a high degree for the exporters that this could signal a very positive era. You are an adviser to David Cameron. If we look back at the campaign, did he run a far too negative campaign on the down sides as opposed to highlighting the up sides of the remain. I think the reality is in many respects a lot of complex issues, immigration, the economy, trade and what we always thought to do was to make sure the issues were really put front and center in terms of what matters to Small Businesses. In reality, 66 , twothirds of all the jobs created in the uk are created by our customers. What they wanted to know was what the impact was on things they cared about three months ago, three years ago, and today, like regulation, red tape, bureaucracy, tax and how could they actually trade much more efficiently but with europe and also on the global stage where we have become a very open trading partner. Thats what they really kind of were pulverized by. I think in reality to everybody probably the result was a shock. Now, it is definitely a time where we as Business Leaders feel a huge responsibility to step up and provide confidence and a degree of certainty about the future. And our Small Business customers, as i said, in terms of the highlight of the new registrations that came through, have a high degree of optimism and with a cheaper pound it could be a very positive time for uk businesses to be exporters and really kind of address some of the balance of trade elements. Steven, quickly, can that confidence return until there is a new uk Prime Minister in place and hoist best outcome for British Business . You have to look at the real economy. We just did some surveys in a program called walk with me around millennials. The level of optimism in terms of these entrepreneurs who were born from 1983. These are the guys who are saying at least 60 of these guys think they will be serial entrepreneurs or start more than one business. What we need to do is look at the real economy. What we are seeing, people are getting up at 5 00, going to work, looking after their colleagues and looking at the export markets with a high degree of opportunity out there. So i think there is a lot of stuff in terms of the political elements where we were meant to stand up and provide leadership in these uncharted waters. But, from a businesss point of view, it is very much carry on, keep calm and take advantage of the opportunity. Steven kelly, the ceo of sage. Oh, no. Coming up, the nation about to getting p lottery fever. I like this. I am going to buy a ticket. I did last time. I didnt win. Maybe this time. Find out how much the big megamillions jackpot has reached. Dont walk outside. You will get hit by a piece of sputnik. More likely that that will happen, that you will die from something falling from the sky. People said brexit would never happen. Could the bfg and tarzan top dori at a crowded Holiday Box Office . Thats next on squawk box. S how much money was spent on advertising in the u. S. Last year . The answer, 180 billion. Welcome back. I guess you have to be in it to win it. The megamillions jackpot has grown to 449 million after a drawing produced no Winning Ticket for the multistate lottery winning prize. It ranks as the seventh largest in the u. S. When you talk to her about that, i think you might have someone better . To host the program. Your coanchor was a game show host. I dont know. I will have to verify that this afternoon. You guys have the same birthday. And sarah eisen, all three of us, all in the same year as well. More squawk box coming up next. Next. Welcome back to squad box. Futures lower. The dow and s p 500 recovered more than 90 of their brexitrelated losses. Just one economic report. The government releasing may factory orders at 10 00 eastern. They are expected to drop by 8 . Investors looking ahead to friday morning when the jobs report is out. President obama makes his First Campaign appearance with Hillary Clinton traveling with her to North Carolina. The president won that state in 2008 but lost it in 2012. It was the fish versus the flops. Finding dory is the Box Office Champ taking in about 50 million more. Dory is only 60 million shy in becoming the top animated movie of all times. Warner brothers legend of tarzan took in more than 41 million. The biggest bust of the Holiday Weekend goes to the bfg. It took in only 22 million and its budget is set to be 140 million. One surprise, the purge elec year. It made 35 million and only cost universal 10 million to make. Hillary clinton and donald trump back on the campaign trail after the Holiday Weekend. President obama will join Hillary Clinton today in North Carolina. The candidate will hitch a ride on air force one from washington to charlotte. For more on the race, lets bring in susan delpurcio, a veteran of the Giuliani Administration and former chief of staff of senator joe manchin. Thank you for joining us. Anything we dont know about the veep picks . When it comes to donald trump we may see a head fake. He is talking about a lot of different possibilities. He likes to surprise people. Interesting report about Lieutenant General Michael Flynn being in the fray. That makes a little more sense. I think donald trump looks as this more as a casting call than probably what he needs to woo some of the conservative people in the party. On the democratic side, i think it will be tim kaine. Hillary clinton likes to be comfortable. There are polls out that Elizabeth Warren didnt poll well. I think she brings a lot of potential drama to hillaryland. They already have to worry about bill. They have a white house to be concerned about. They want someone who can fold in and work into the campaign instead of trying to make their own. With trump, i dont think there is any way he picks the general. I think he picked the general so someone would write the story about who the general was. In that story, it says, he is the guy that got fired for wanting to talk about islamic jihad. You are back to thinking the Obama Administration wont say islamic jihad. This guy god fired for it. He needs a legislature. I think the head fake will go to scott brown. You may see him picked as the vp. Scott brown . Yes. He was the first senator, former or sitting senator to endorse donald trump a week before new hampshire. We know that matters a lot to donald trump when it comes to loyalty. He does have the legislative experience and frankly his family and everything works well in that casting image for donald trump. Chris, i think tim kaine would be a pretty safe pick and one that would focus the attention back on Hillary Clinton, which she needs to do. It depends on what their calculation is. There are two schools of thought. One is you kind of go with safe choice and socalled safe choice against senator kaine. He has governor experience. If they are concerned at all about the base or bringing out the base, maybe you can start considering Elizabeth Warren, cory booker. There are a lot of other names bantied about, labor secretary perez. My instinct tells me they are probably going to play it fairly safe. I think the onus of the pressure is much greater on trump given the divisions in the republican party. He has to choose someone when those republicans are reluctant to consider voting for him. Wake up the next day and go, maybe i can think about it. The irony with trump is, it is not a question of who he wants to pick. It is who will take the job. I am not sure he will get the best crop of candidates. The reality is a lot of the good ones wont consider it. When you are talking about scott brown from massachusetts as a vp, we are not talking about the cream day la cream of a candidate that would be considered from vp. You will see a candidate that will work well for the rust belt strategy. It doesnt bring you anything. What trump needs is somehow something more dramatic in terms of sending a message to his base and specially to republicans and insiders in this town and to be honest to the media to change this narrative that is on going that he is completely not able to control his campaign. After the u. S. Chamber of commerce, i think that donald trump is really not worried to going to his base. He is looking at a completely different strategy. I dont necessarily know it is one that he will win by but it is certainly one that he is trying to use. Susan, is it true, what chris says, that trump will have to take more of a wild card attempt than what clinton has to do . Is clinton able to play it safer now that the sanders star has fallen . Both candidates need someone they are very comfortable with. Donald trump needs someone he can send out and do what he is asking to do. Hillary clinton needs to feel a level of comfort in her campaign in that there wont be any more drama caused. When you have the bill clinton and the president of the United States, a lot of people around her are making news. She needs someone to fly and keep the message and keep it straight. Which conservatives do you think would say no to trump . The one that is he wants i think are being vetted . Which ones are you talking about that would say no . Ryan, obviously, was the former vp. People of that ilk. Senator corker, people who hesitate and pause. Governor kasich from a democrat. Thats not helping him with conservatives. But it helps him with a calculation, to conservatives and insiders that he is taking this seriously. Governor kasich wont even consider it. Part of the problem is he has done so much damage, when you come to choices like this, you have to send a powerful message. It reminds me of what mccain did with palin. He chose her to change the narrative and it blew up in his face. Thats a difficult spot when you are in a campaign and you have to choose a vp to change the narrative of your campaign. Damage, changing the narrative. Cow say the same is true of Hillary Clinton. This email thing continues to hang over her head. I think the difference is with secretary clinton, it is not about choosing a vp thats going to change the narrative. It is upon secretary clinton, she has said in the last fou days, she has to go out there and clearly reearn and earn the trust of voters. Thats what every candidate has to do when they run for president. It is no different for secretary clinton. It is more obviously important for her. Whether it be the emails or whatever issues shvoters have. You have the time leading up to the first debate to establish the message and position with the voters. The reality is that you have two candidates that are going to engender strong emotions on all sides. It is going to be a real challenge for both of them to penetrate with those voters that dont like them. It is a much bigger problem for trump given the number and mistakes and divisions he has created in his campaign. Susan, in terms of fundraising, does trump need to raise as much money as hillary . He needs to be competitive, thats for sure. He needs to give himself a sizeable donation to show all the other big donors that he is willing to put his own money in. It is very hard for a billionaire to ask other people for money. The other thing is that the rnc, the Republican National committee, does need a lot of operation for boots on the ground to get voter turnout and do those things. Donald trump doesnt think there is a real need for it, so he believes he doesnt have to raise as much money. I disagree with that. There is nothing going to be more important in states like ohio and pennsylvania to get your vote out specially when you have governor kasich in ohio or Governor Walker in pennsylvania, more focused about getting their u. S. Senators reelected than getting donald trump elected for president. Chris, thanks. Saw san, thanks. Airline stocks hitting some turbulence in the first half. Are they worth another look . As we head to break, check out the price of crude. It is dropping after a rebound last week. More squawk box in just a moment. Moment. Welcome back. Futures in triple digits. You mentioned 77. We are down 88 again right now. 12 on the s p, 26 now on the nasdaq. Talk about the futures, switching to twinkies, dingdongs and hohos. Ho hostess has announced they will switch to gores. The current owners, apollo will hold a 42 stake after the deal. Current management will remain in place. Apollo and hostess after they file for bankruptcy in 2013. In this day and age, whole foods and school lunches, you cant believe these exist anymore. Are these as good as Krispy Kremes . They are not. People dont think there are really any Natural Ingredients in them. We are here in new york city with a different perspective than the rest of the country. There is always a time for them, even when you are in new york city. You walk into a home goods. You think they are selling stuff for your home. They are selling the most elaborate candies and snacks. People go in there pretending they are getting a throw pillow. A what pillow . An accent pillow for the couch. It serves no purpose. It is too stiff to sleep on but it is there to add a punch of color. So you can have your national flag. Or the state you hail from. Do you know how to fix the pillows . Yes. I have tried to fix them. I never do it right. There is a certain shape. It is important for them to look good. They are accent pillows. The S P Airline Index is down nearly 24 year to date. Our next guest has been calling airlines stupid cheap for over a year. He is mark ukkos of morgan creek capital. Sorry if i butchered that, mark. I appreciate you making the case for the airlines. It is a space we have been warned against investing in time and again. Why do you like them here and who do you like specifically . I think the big thing is that people still view the airlines like they did many years ago, as a bad business. For 30 years, it was a bad business. The whole industry didnt make money for 30 years. The last few years, they have been on a rampage of profitmaking. Right now, we like the older airlines as opposed to the newer airlines, delta, american, united. They have a huge advantage over the new airlines like jetblue. Their older planes, less fuelefficient but they have an advantage in the shortterm. That is not showing up in the stocks, is it . They had a tough first half. They had a difficult first half last year when i was with you guys about a year ago this time right before the holiday. I called them stupid cheap for the first time. They went up a lot the second half of the year. They have given back and they are stupid cheap again selling as low single digit pe multiples. What about International Airlines group, British Airways and easy jet . What does brexit mean for them . Is it an opportunity or a big hindrance . We think brexit is going to be a head wind, pun intended there, for a long time across many industries. Travel certainly is going to be one of them as people sort out all kinds of things from trade to immigration and things like that. So the real problem i see for the Budget Airlines in europe is, again, this fuel efficiency problem. They have very fuel efficiency planes. That hurts them in the shortterm on earnings. We think brexit is a problem, is going to continue to be a problem. One of the reasons, playing defense is more important than playing offense. Globally, we think there are some good airlines out there in addition to the us airlines. One of the concerns since last year has been overcapacity. There have been some comments, more recently about them trying to hold down on that and maybe support pricing, specially to move through the summer. We read not long ago that airfares are at record low levels actually. What happens with airfares and the capacity concerns from here . I guess i need to find that source on the record low airfares. I travel a lot. I am not seeing it in personal travel, business travel. I just booked a trip for later this month and paid very significant fairs on delta. We dont see the same level. We are probably not talking about the business traveler. Airfares are at a sevenyear low this summer, aimed at more of the casual traveler who is much more price sensitive than you are on your business trips. Im talking about a personal trip that i paid through the nose for on delta, going to a faraway place up in northern michigan. I think the perception versus the reality with airlines has always been off for the last few years. I think thats why they are up a lot over the last three years. I think they will be up a lot more Going Forward. People still believe this is a bad business. I think technology has changed that. We now pay more for certain seats than we used to, because of convenience factors, load factors are way up. If you have been in an airport lately, you will notice that it is very crowded, the wait times through tsa are very long, not just tsas fault, a volume issue. Lots of positives for airlines. People just dont like it. Particularly when oil prices are going up. We think they might head back down here a little bit. That will help. With your money, you are complaining about one fair you had to pay to go up to northern michigan. Seriously . I am not complaining. Im just stating it. You dont have a net jet card . No, no net jets. Because you choose not to have one. We are assuming you are a successful fat cat money manager. You could have one if you wanted one, right, mark . We all make choices about how we spend our capital. I like to give mine away. There you go. Excellent, excellent answer and good for you. Appreciate it. Best dressed throughout all of brexit coverage. Did you see that . He is an interesting guy. I could see him being a brexiteer, but because it was so important for his business for remain, he was a huge remain guy. He doesnt get a vote. He also announced leading up if there was a remain vote, he would offer a sale. Off of the brexit polls, he announced that sale and overnight, as you know better than anyone, as the results came out, he had to unravel. He was going to charge for bathro bathroom visits. And offer standing room only. I dont fit very well. Nor i. People dont know how tall you are, right . 65. Thats pretty tall. I would like it. I would but it is very tall. You know who also is tall . Taylor swift . You know who also is tall, kelly ellison. But you. Poor phil. He handles it well. He does. Still to come here on squawk box, did the Golden State Warriors just lock up the next nba title, the big weekend signing that is shaking up the league coming up on squawk box. Box. Can an established bank move like a startup . Its a question we get from some of our largest banking clients. The face of their business was tellers. Then atms. Today its their mobile app running on the ibm cloud. Across every transaction, the hybrid cloud helps their data move quickly and securely. Our clients are building out features and pushing updates faster, on five continents. With the ibm cloud, they can move at the speed of any startup. Welcome back to squawk box. Kevin durant, the biggest free agent prize has decided to leave the Oklahoma City thunder and take his talents to the bay area. In the players tribune, he says he is joining steph curry and the Golden State Warriors. The 2014 mvp is expected to sign a twoyear, 54 million contract. Vegas likes duran as mots move. The thunder dropping from 830. You are wondering whether durant will fit with the warriors. For oak owing, it is big. Specially in college, less so. How many games did they win last year . The warriors . 74. So you add kevin durant. You think they are only going to win 64. They dont have to win that many to win the title. They didnt win the title this year and they didnt even look that good in the title series. He was on at 9 00. You didnt see any. I watched all of it. I went to one of the games. They lost. How did you get up . I am not up until 3 00. I am not one of you guys. You easily did that. I sleep in until noon. The big sporting occasion to watch whales, the european soccer championship. They were an 81 shot. What . Whales, still in the semifinals. England crashed ages ago but whales. Which championship . European soccer championship, semifinals. Have there been some goals scored . There have. A lot of goals scored this time around. The best was iceland. I said they should change rules and let you use your hands. What are you talking about . So much easier. I watch him trying to use his feet. Thats impossible. Use your hands. Just run down there. A lot easier. Coming up, the game of lets make a deal and the brexit, the post brexit world. Fred weinberg gives us his forecast plus tesla missed the production mark again in the Second Quarter. Had that other bad press last week. Week. Fallout from the brexit. Legendary dealmaker, Peter Weinberg is our special guest. It is air force one versus trump force 1. Donald trump sizing up a potential running mate the latest buzz from the campaign trail. Byebye, blackberry, finally retiring the device after more than a decade. The final hour of squawk box begins right now. Live from the most powerful city in the work, new york, this is squawk box. Welcome back to squawk box here at cnbc. First in business worldwide. Im joe curran along with becky quick and wilford. Futures are down. Surprising a lot of people post brexit. Today, we are giving some back. Down 90. S p down just under 13. The nasdaq down 25. Its interesting. Among todays top stories, the bank of england has Just Announced moves to ease policies since the results of britains vote to leave the eu were announced. It has lowered bang capital. That helped british stocks recover and move into positive m territory. We are off the highs so too are u. S. Futures. The u. S. Holds more oil reserves that saudi arabia and russia. That is according to a new study. Recoverable oil in the u. S. Hitting more than 260 billion barrels, higher than saudis 212 billion and russias 256 billion. It is the first time the u. S. Has surpassed the worlds biggest exporting nations. Peak oil. You can see the shares, price of oil under pressure. Peak oil. I said, i got a great idea for a story. Someday they might be right about something someday. We havent seen it. Every single thing has been wrong. There is a lot of Economic Data packed into the short and trading day. Today, may factory orders and in june, the Service Index. Thursday, the june adp employment report and weekly jobless claims and on friday, the biggy, the june jobs report. News breaking overnight on nasas juneau spacecraft. Scientists at nasas jet propulsion celebrated as juno completed a do or do engine birth to sling itself into jupiters orbit. It capped a fiveyear journey of 1. 8 billion miles. It is to learn secrets below the planets surface that could shed light on how and where it formed. Juno will spend the next three months getting into position to begin mapping the planets magnetic field. They will dive into jupiters atmosphere where it will be crushed and vaporized. There we go. Details of another space trip. Where did franken stestein w . They worked in a lab. We were just talking. We wanted more culture. This is not a different word but just an odd pronunciation. Aluminum. That is a different spelling. We spell that differently. We say aluminum. For laboratory. Laboratory. I think i am not different than the rest of the uk but we will pretend it is a uk pronunciation. Sir lawrence olivia, won all those awards because they have the accent. You talk and i am mesmerized by what you say. It is very weighty. It is lucky you write good scripts for me. Can you talk like that . Im a british citizen but i cant talk like that. You are worries about an already dismal year. The United Kingdom about to get much worse. According to thompson, reuters and u. K. At the lost level on record this year. An inbound, cross border mna is down 74 . Joining us now, legendary Peter Weinberg. So this adds to the problem. It is already weak enough to war it doesnt p . I think when people are calling for the end of the mna, it is premature and overstated. All the force that is were p at work creating this level of activity, low rates, tons of cash, all the old chestnuts are still there. I think if you look at the uk market, which will be slow, it is about 6 , 7 of the global m a market is looking for opportunities that did not exit without this dislocation. If you look back at the crisis, which was totally different than this in every respect except for one, it seemed dark in the same way it seems dark here in terms of whats going to happen. If you go back to the crisis and look at wells fargos purchase of wachovia bank, that could have been one of the best m a deals ever done. Black rocks purchase of barclays global index, that changed the nature of that organization in a very positive way. That was done in 09 of prudentials acquisition of star edison in japan out of aig. I think a lot of people are feeling that there is opportunities created complex in the uk obviously but not off the page. Didnt we announce the pickup . You have a big fall in the pound. You think there are a lot of people flooding in to look at it. As we all know, literally, nobody knows how brexit is going to be accomplished assuming it happens, which i think is likely. Nobody has any idea. 150 laws that have to be addressed and changed. It is just very hard to kind of see your way through that but it depends on value. To your point, the pound is cheap. The dollar is very strong. There are some industries i think where acquisitions could make a lot of sense. Can i ask you given be your history at golden sax international, what is going to be the impact in terms of the financial business in london Going Forward . I think everybody is trying to figure that out. I actually do think that resources will kind of leak into the continent. I think that will happen. I think it probably makes sense to happen just as sort of a diversity of your bets across the region. So i think it will happen but not that quickly. Whether or not euros are going to be able to clear in london, thats a huge point. We are not going to know that for a while. The reason some businesses are head quartered in london, there are other factors. Not just accessed. Tax rates as well. We hope they wont suggest they might cut Corporate Tax to 15 . Does that the no offset a lot of this potential leakage . It helps. No one feels today in my view pressed to do something in the uk right now p. There is no reason to do it. A lot of the statements that were made, it is attracting a lot of people to look at opportunity there. What about if people say overall global uncertainty adds to it and it will hurt m a. Thats what people say, uncertainty is the enemy of m a. It is. The world has become so comfortable with uncertainty. 15 or 20 years ago, there was a blip in the market and people stepped back and said, lets wait a year. It does affect m a. Our view is that is not going to. What does global zerp. Zero interest policy around the world. What does that do for m a . Is that positive . It is very, very positive. It is going to be longer now. It is going to be zero longer. That should be positive. I think in particular. I think the private equity community. Financing spreads have tightened. There is an enormous amount of capital. That is important, both in the Corporate Community and also there. Everything is at least half full. I think it may be threequarters full. I dont get it. In the last week, we announced three transactions, a middle Eastern Company buying a french consumer business. A german Company Buying a u. S. Consumer business and an irish Company Buying a u. S. Health care device company. This is in the last week. They were kind of looking at some of the factors you are talking about which affected their view. They were looking at their opportunity and its above and beyond brexit. Whats the election do . For m a, it would blow our Corporate Taxes, be positive here . Yes, lower Corporate Taxes would be a huge positive. What do you think in the market . I think the election, it is just so early. Who knows. I think people, when we start to approach november, people will start to kind of think that. You think Hillary Clinton would lower Corporate Taxes . I doubt it. I personally doubt it. You dont know. Maybe. Bill clinton would . He would, indeed. She might put him in charge, she said. That got my attention. Not of tax policy, i dont think. You believe trump would lower Corporate Taxes . I do. You think that would be are you going to vote for trump . I didnt say that. I said lower Corporate Tax rates would help the economy. I am not sure if it was done in conjunction with trump as president that would have the same effect. I hear about his trade policies, they are probably not as draconian as Bernie Sanders and where the democratic platform is being pushed . I dont know. Thats true. I was going to ask you about the drugmakers, health care, m a, that kind of thing. How is that going to be affected by all the things we are seeing. Who is regulating what now . Health care has been a big source of some of the big dealmaking we have seen. I think health care, if you put aside the uk, i think the dynamics going on in the Health Care Industry are unaffected by that, in terms of pricing, in terms of expense and the cost to serve patients around the world. So i think actually there is still going to be a ton of activity. In the u. S. , there is just an enormous amount of consolidation that we believe is yet to occur. There are some very large Drug Companies in the uk and that will affect the frequency of transaction work there. We are coming to earning season again in the q1. Investment banking was a big negative. No time to rebound. From the big firms. We think the financing markets are going to be fine. I think one thing about brexit and this is very different than 08. The markets have operated really, really well. In 08, they didnt function. These markets, even through the 23rd and onward in june, the markets have operated really, really well. I think the markets are functioning and the big banks will be fine. You do . Thank you very much for joining us. Thanks for having me. Peter weinberg still to come here on squawk box. Tesla in the slow lane. It has been a rough few weeks for the automaker and the company missing its delivery target. Shares falling in the premarket. Phil lebeau joining us after the break. Break. Welcome back to squawk box. Swimmers on high alert this weekend. A toxic allera algae outbreak. Gabe gutierrez, you are going to show us. Reporter hey, guys, good morning. The smell here is just putrid. We are here at a marina neighborhood just off the open water. This stuff is collecting here and has been here for quite a while. Scientists questioning how long will it remain . When it sinks down to the ocean floor, researchers are expecting massive fishkills in this area. It is having a Major Economic impact. Many businesses report cancellations in martin county. Four counties, martin, st. Lucie, palm beach and lee counties. A lot of debate on what caused all this. Many factors from population growth to pollution. A lot of people wondering, whats it going to take to get all of this out of here . The army core of engineers has started reducing the water flow from lake okeechobee in the hopes it can stop Something Like this. The full Environmental Impacts remain unknown. I know those counties well. Martin us just north of palm beach county. We are here in stewart florida. Palm beach is under a state of emergency. Local officials took great pains to insist that their beaches were clean. There was some small amounts of algae that were found on some of the beaches. They insisted it is safe. Yesterday, in the stewart area, martin county, there was one beach that was closed. Still, the smell here in different parts of the area, a lot of people didnt come over the Holiday Weekend. Again, those businesses are reporting some cancellations in the full economic and Environmental Impact of all of this is still being figured out. All right, gabe. Appreciate it. I fully expected you to throw Climate Change cause in there. I am sure we can figure that out. Yes. There are many factors, Climate Change, higher temperatures, all that is factoring in. Some people are blaming industry. Other people are blaming the politicians for not getting involved. I think thats more likely. I think Climate Changed if affects them too. Another pronunciation difference. Algae for us. Which makes more sense tesla shares are under pressure after the automaker missed delivery targets for the Second Quarter. Lets get to phil lebeau. He has more. How are they going to make their yearend targets . They claim they are going to make them. A lot of sceptics say they have come far short of expectations. How do we believe they will do it in the second half . Let me show you the numbers for Second Quarter deliveries. This information was released over weekend. A Holiday Weekend. Release it when there is not much news flow. 14,370. Some said they are at least going to deliver 17, 17. 5. That is behind pace for the full year. They expect to deliver between 80,000 and 90,000 vehicles this year. If you do the math. So far, they have delivered just over 29,000 vehicles in the first half of 2016. Folks, they have to deliver 50 thousand in the second half of this year and they say they will meet that delivery expectation in part because when you look at their production schedule, this is teslas claim. They expect in the third quarter, the production will hit 2200 vehicles per week and hit 2400 per week in the fourth quarter. Thats why they believe they will be able to deliver 50,000 vehicles in the second half of this year. Take a look at shares of tesla. They have been all over the place in the last week, in part because of the news flow. You had the model s accident, a fatality involving a vehicle on autopilot in florida. This second half, we said all along it was going to be a back loaded year. I dont think anybody was expecting them to be this far below this pace that they need to get to in order to hit 80,000 vehicles. Phil, the contrast between tesla and gm. Gm is below its preipo price, a 5. 5 dividend year. Sure, auto p sales have slowed. If you compare the valuation even after teslas recent selloff, it is interesting to note. One other thing to keep in mind, kelly, we have talked about the valuation of the established automakers. Almost everybody is in agreement in terms of when you talk with analysts and people in the industry, there is huge skepticism that the established automaker, not just talking about gm but ford, toyota, nissan, any of them, there is huge skepticism that these guys can truly manage through a recession. If you look back historically, none of the automakers have done that. Everybody is saying, show me you can do it. You can tell me you have got your prodecks schedules down and are ready to make a profit. You have to show us. Thats what we are seeing right now. If we see gm shares down 23 , kind of hinting that the auto investors are pricing in almost a recessionary outcome. I wonder what happens if we turn the corner. They have definitely priced it. No doubt about that. Now, the question for a lot of these investors is when do you believe that these guys truly can manage their way through a recession. We know that one is going to come at some point. The question is whether or not the Auto Industry is ready to handle it. They say they are. They brought down their cost structure, any can handle a lower sale threshold but historically, this is app industry that has not done well during recessions. Going back to the journal, there was one observer who said when tesla announced their auto make technology, he sold the shares, which in retrospect looks like it would have been a good time to sell. Do you think this is going to end up becoming a bigger headache for them than it is worth, specially as nitsa and all those start to catch up . Too early to say. When you look at everything, what is likely to happen when they look at all the data in nitsa, they will say, we are going to have to have some parameters put in making sure people use this technology in certain instances. It is not enough to say, sign on the dotted line and agree to Pay Attention when you are on autopilot. There may be nitsa saying, do we have to force people to take more control of the vehicle when it is in autopilot . Idris elba is another person that has an accent but can talk american . They are actors, though. You did it pretty good. I know you can do it. Damian lewis, andrew lincoln, walking dead, talks just like a southern guy. He is english. Still to come here on squawk box, the end an era for blackberry. We are back in a couple of minutes. Minutes. Welcome back to squawk box. The futures are lower, around 85. It got around 55 when the ftse turned positive. That had been negative until the boe announced measures. Oil is down. Thats a problem. The s p is down 12. Nasdaq is down about 25. That was a big week. Threeday gains last week were the best, depending on whether you use percentage gains or point gains. Sth the best since some time last year. The best since the week of the 11th. It is a switch that many made in the u. S. Years ago. The u. S. Senate is retiring the blackberry and moving to the android or the iphone. A senate staff will no longer receive new blackberry devices because production of the classic model is being discontinued. A memo said that future fulfillment could not be guaranteed. Remaining phones in stock can still be used. I dont know what it says if you have your own private email server. Maybe you still use a blackberry and several other devices. I just wonder, they are allowing android and traditionally the view is only blackberry and iphones are secure enough . Apple has made a big stake. Coming up, new data breaking on the state of Small Business across the country. Both president ial candidates will be on the campaign trail today. The latest in the race for the white house. Thats next. Thats next. Welcome back to squawk box. This is making headlines. The u. S. Stock fund up 1. 5 . International stock funds down 1. 1 on the quarter, down 2. 7 so far this year. Britains Ruling Conservative Party holds its first vote on who should be the next Prime Minister. Five candidates have put their names into consideration. The candidate with the fewest votes will be eliminated in contention. The next vote takes place thursday when another candidate will be eliminated. The multistate, megamillion jackpot up to 449 million. That makes the seventh largest ever u. S. Jackpot. It has played in 44 states in addition to washington, d. C. And the u. S. Virgin islands. Could get two candidates eliminated. Likely only one but possible for two. The members of parliament slim it down from 5 to 2 over the next week and the 140,000, 150,000 members vote by september. A quick narrowing. There is only 329 members of parliament. They can make up their minds pretty quickly. At the risk of not foeg whkn who the uk will do . Troy lamet is the big favorite. That came out of nowhere. Troy zamet has bigger back. She has been hard line on immigration. She is kind of getting away with being inbetween. She came out and said leave means leave. I thought suddenly the other one was. She is a big favorite because she is almost 100 certain to get on to the final two. She has good backing and then it is probably between gove and ledson to be the other person. May is a big favorite either way. Once the other four have worked out who the one is to face may, it will be a tighter race. Because may is so definite to get on the final two, she is a big favorite and then it goes out to 140,000 whether than 329. Where does Boris Johnson materialize . He was born in the u. S. In new york, gave up his citizenship a few years ago, because he didnt like the taxes, which i kind of agree. For being too low or too high . The u. S. Citizenship claims tax on global earnings. I will trade you one de blasio for one bojo any time. I will throw in some cash. The mayor of london doesnt have much power. Bring him over here. It doesnt really matter. You will do an even trade . Why not. I am not sure p it is up to me but i accept particularly if there is cash thrown in. Ashley madison, now a target of an investigation. I forgot thats what that is. I thought it was the full figured gal store. Thats lane bryant, right . Ashley madison sounds p like an infidelity dating site. Part of my analysis for that the end of the world is near. Twitter, Ashley Madison and facebook. One is surely much worse than the other two. The companys new executives are speaking out. The breach, which exposed the personal details of the sites members cost Avid Life Media more than a quarter of its revenue. If you are on that list, you wouldnt want that type of notoriety we dont embrace hacking but this is one is kind of new data breaking on Small Business employment in the u. S. The latest paychecks, join the Small Business jobs growth rebounded in the month of june. The National Index is up 0. 21 hitting its best level of 2016. Here to take us through the results, marty musi, ceo of paychecks. We have rebounded reversing mays decline but hardly significantly. 0. 21 . Are we get to get overexcited about this . Does it have implications for fridays wider jobs number . I think so, wilford. It is the highest than it has been a year. It is up. 44 year to date. 2016 has been pretty good for Small Business jobs growth. Last month, we foreshadowed the jobs report drop. I am hoping with this bounceback we will see the jobs report up the end of this week. Quite a lot of sector differences as well. Construction very strong. Construction came on strong, particularly on the east coast and in the south. In the southeast regions, doing the strongest. We are seeing lots of growth in the south. Construction, other services. Leisure and hospitality. Some of those jobs parttime. Thats not great news. Parttime employment by the way up almost 10 of total employment. Thats up almost 4 Percentage Points from a few years ago. Pretty interest on that front. From a region perspective, the south still the strongest, southeast. You say florida, georgia, virginia, North Carolina but not as strong as washington, d. C. Is that right . The economy growing in the d. C. Area. Is that all the Public Sector or bha . We are seeing a nice jumpup. They were down toward the lower end of the range. Washington, d. C. , virginia, have seen a nice bounceback in that southeast region. Florida has continued to be strong with construction for homes. I think the other good point is that wages are up. Our data shows in Small Businesses, wages are up about 3. 5 over last year, which is a pretty good size jump from where it was, under 3 . Some of the minimum wage increases are starting to kick in now. 3. 5 . The minimum wage increase and the outlook is still pretty good. A vastly different picture than a lot of the macro analysts will come in and talk to us about. I any think it is. We saw a drop in the last half of last year, first half of 16 has been pretty good until last month. I think thats good for Small Business jobs growth. It looks pretty good. We go into the summer and people tend to hire up. Its nice to see construction up. You mentioned the parttime work aspect of some of this. The wage growth, though, is that across the board . Yes. Thats across the board in Small Business. It is interesting na the job growth rate in Small Businesses is about a half a percent less where minimum wages have been increased and half a percent more where minimum wages have not been increased. We will have to watch all these minimum wage increases to see if they have impacted job growth overall in Small Businesses in the coming months . Marty, thanks very much for joining us. Marty mucci, ceo of paychex. You know who charlie hunt is, sons of anarchy, british. He would never he is a motorcycle gang. I am in complete shock. And kristen bell. What is the new one. No, bueno. Un pocito. You can drop the pretents, because i can see you can speak our form of english over here. Are you going to do this tease in english . I am from ohio. I am not doing it in english. I cant. It is your show. You are allowed to. Ill do some of it. When you come on Worldwide Exchange in studio. I cant. Coming up, donald trump colin farrell. Irish. I have seen him as a vampire. They are all actors. Thats their jobs. So are we. Dont kid yourself. Donald trump and Hillary Clinton hitting the campaign trail this weekend but not without controversy. Going to bring you the tweets and a new list of potential running mates when squawk box comes back. Comes back. Democratic nominee set to hit the trail today. Joining us today, larry kudlow and basil smith. How significant is this that they are campaigning together . Very significant mostly because of the state they are in. North carolina, obama won in 2008. It is an important state for democrats and one we think we can win and the fact he is out there with her. Is the president by far her Biggest Campaign tool, more so than potential running mates or her husband . Absolutely. He was a popular press, 53 , 54 . Particularly for the communities she does well in, people of color. She needs a lot of young people to get on board as well. Some have gone previously to Bernie Sanders. There is going to be a shift over to her over a period of time. It has to be a short period of time. The coalition that is supported obama, it is important for him to bring those along to her. You better get the sanders crowd before the going is too late. I agree. Obamas numbers have improved. That does cushion it. She has had a terrible week. Trump had two weeks before that. They are basically even. I am interested, North Carolina, you are quite right. It is an important state. It is flat. Pennsylvania, florida, ohio, virginia, North Carolina, georgia, new hampshire, real quick politics average, all tossup. Im going to assume it is a tossup going into this thing. Your other point, bill clinton, who is a friend. Have you interviewed bill clinton . He has been. He was a friend of mine a long time ago in my deep, dark past. You welcome me back. I have said many times the guy ran a good Economic Policy with the help of my pal, gingrich. His goingson last week were off the charts. You cant do that. You cant double park your plane and go in and see the a. G. And on top of Everything Else im not a lawyer. I dont know about the fbi. He sees her monday. On wednesday night, a federal judge stays 30,000 emails between hillarys top staff and the clinton foundation. You can say it is coincidence. It might be a coincidence but it sure doesnt look like a coincidence. Thats the part of this. We had my pal, barney frank on thursday on your show. I believe you were there. I was watching. Even barn nir barney acknowledged that was a big mistake. Lynch has to directly answer to that. Which she did. Her problem. But 34,000 emails from the state department to the clinton foundation. You wonder why so many middle eastern countries, money found its way in . Hundreds of millions of dollars. Look, again, im not a lawyer, basil, you know more about it. It looks real bad. It is showing up in the polls. Not for the email but it will be 27 months before they get around to that. Maybe. It can be appealed. I think the republicans have held their president ial hopefuls on this hopefulness on this notion that hillary is going to be indicted. I think thats they had better than hillary. I dont know about that. Even president obama would say i dont know about that. Had he have held out this hope that hillary was going to get indicted. In my opinion, thats just not going to happen. We are at the end of the investigation. If she doesnt get incompetent dieted, then it is all okay . I think it is all okay. I think the polls are close now. After the conventions, after the first debate, i do think you will see a widening of the gap. I thought it was interesting that the libertarian and the green party and the journal poll took more from Hillary Clinton support than they did from Donald Trumps. I want basil to be right. I have said to republicans, do not run this race based on some hope she is going to be incompetent dieted, bad policies, bad politics . I think the big problem she has, we are in a lousy economy, a business recession right now, not yet consumers. She has no growth. What is her growth plan . She wants economic justice, social justice, environmental justice. What does that mean . She wants to raise taxes on corporations, raise taxes on Capital Gains. She wants to raise taxes on the estate tax. She has no tax reform, she has no Corporate Tax reform, basil. Thats the Biggest Issue in the country. Did she talk about the statutory rate . She hasnt talked about that. Tax breaks for apprenticeship programs. Thats in part one of the way that is germany has driven its economy. She has talked about revenue sharing. She has talked about Immigration Reform in connection with all of this. I do think she has talked about growing the economy. She may not have talked about it in terms of statutory tax rates. She wants to raise the Capital Gains tax rate, raise the statutory rate on the inheritance tax. She also wants to increase and lower the ceiling where it kicks in. She wants to keep the alternative minimum tax. Thats not good. Her language, not bills, but her lang winl is tax the rich, tax the corporations, et cetera, et cetera. I dont believe that is going to sell. I think that is Bernie Sanders stuff. Trumps own plan, which will be coming out probably in a week or so, he has gone through traditional gop. Lower tax rates on corporations, large and small, which i think is the single biggest kicker you can do, lower the rates on the individuals, roll back regulations. These are traditional antireception naustrums. She doesnt have that. She is taxing rich people. I think it is a loser. He is being slammed by the u. S. Claim ber of commerce. Herehere. Where do i sign up . The end of loopholes. They are on the run. They are going after him because they feel he will cost the economy debt. I think Hillary Clinton has a much more sound plan. Show me growth, basil. You know it and i know it. I didnt want to be partisan. This country has to grow 4 , 5 in the next ten years to catch up. We are short, however you do it. 5 million, 15 million jobs. She is not talking the language of growth. She is not talking the language of growth. So far and let me come back to the tax reform, Corporate Tax reform. There is a by partisan tax consensus. Even president obama pays lower Corporate Taxes. Shes not there, basil, until she gets specifics. Shes talking about growth in different ways, though. I talk about bringing more immigrants into the picture, they would be paying taxes if you had sound Immigration Reform. Shes talking about debtfree college. This is a situation student debt out bases student credit card debt. For free . She said debtfree college. Basil, michael, larry. Ive got to go. Youre a great fella. Well welcome you back any time. I will frame your democratic membership party. You know im an old democrat. Give me ten minutes with hillary and im going to sell her Corporate Tax. So far they havent called back. Gentlemen, thanks very much. Still to come, the newest cash crop, well tell you why for going against the grain and banking on the organic business. Were back in a few minutes. In. Potential cash crop growing in california, jane welsh joins us with the latest seeds of success, jane . Reporter well, joe, you may have grilled hamburgers or hotdogs on the fourth, but as more americans jump on the organic craze, quinoa could be californias new cash crop. Thats tim schultz, one of the largest growers of rice and grains for Companies Like whole foods and now quinoa. They produce the about a half Million Pounds of the gluten free grain on 250 acres. This year theyve tripled that. Now, its grown up in the andes in south america, but lundburg is getting twice the yields in mendecido county in the specific. Its not easy, its new. Its brandnew and a lot of people come to us and say, youve got to grow it at 10,000 feet and here we are at the edge of the pacific ocean, right, and its what are we, maybe at 50 feet, if that, and its growing beautifully here. Reporter now, he expects to only sell about three Million Dollars worth of quinoa this year, but this is an experiment, and one reason why this is good to grow in california, its a w weed. It doesnt need a lot of water. Joe, im sure you guys are huge huge quinoa fans. Willford . I am. I love the quinoa with some cranberries, some walnuts. I know it didnt take a lot of water. Its hard to read. I think i call today quinoa. Is that what youre calling quinoa . Like acai, too. Still dont know how to say that. Acai . I did grill a lot of burgers and a lot of dogs, but two two vegetable burgers. You have to go black vaccibe you go veg. There was no juice, they were hideous. All right, jane. Coming up, the pound moving lower again. Were going to get a check on currencies as we watch futures when we come right back. Right. Shipped from here, on this plane flown by this pilot, who owns stock in this company, that builds big things and provides benefits to this woman, with new cabinets. They all have insurance crafted personally for them. Not just coverage, craftsmanship. Not just insured. Chubb insured. Welcome back to squawk box. U. S. Equity futures coming off a strong week, the dows implied lower, 72 points. Were watching the pound here, when the ftse talked about liquidity measures coming off the banks. The pound is actually look at that, just over 1. 30. Thats another significant milestone crossing below 131. Im going to talk to you tomorrow morning at five 5 45. Have fun on closing bell. Thank you for having us. And please join us tomorrow. Right now its time for squawk on the street. Good tuesday morning, welcome to squawk on the street, im carl quintanilla. Some right arrows to start with italian banks, earnings, and continued brexit fallout. Europe is down