Lets look at u. S. Equity futures. Yesterday the markets were weaker this morning things are mixed. Dow futures up by close to 12 points s p down by 2 points nasdaq down by about 15. In asia, the nikkei was down almost a percentage point. Same thing for the hang seng the shanghai was up by a percentage point the cac is down by 1 now. Ftse is down by a third of a percent. The dax is off by 0. 6 the tenyear note, the yield yesterday settled at 2. 15 this morning the yield is below that 2. 146 breaking overnight, saudi arabias king ousting his nephew, the ksitting crown prine and putting his son, Mohammed Bin Salman the former crown prince was in charge of saudi arabias services footage showed an amicable change in succession the saudi all shares is up sharply today on the news. A check of crude prices, this is seen as a potential wildcard when it comes to crude with the change in power. Were seeing it holding on to modest losses here this after a big loss in yesterdays session. This happened fast. Because the president was just over there in saudi arabia western sensibilities, pro sort of coming into the 21st century. Economics. Thats why the stock market is up they talked about he had gotten a lot of power for being 31 years old. He is like deputy crown prince or assistant or crown prince understudy there was conjecture would he be elevated to this post. When was trump over there . A month ago. Yeah. Its already happened he rolled out the red carpet for trump when he came had a close relationship very interesting that it happened that quickly. The rise in saudi shares has something to do with msci saying saudi shares could be included in msci indices at a future date the other big story is someone getting ousted at least stepping down Travis Kalanick, the uber ceo, and Arjun Kharpal joins us from london i thought it was going to be a leave. Is it definitely not a list . Hes never coming back never say never . Joe, what we understand is that there was big infighting in the board. The Board Members forced him to resign but travis is still a major shareholder in uber, he sits on the board, so hes not completely gone, just resigning from the ceo position. That leave mispositis many posi at uber. They are searching for a replacement. No one has been put forward to the fore we had departures from uber, from twitter a pool of talent in Silicon Valley to choose from. So this leader needs to be as innovative and aggressive as Travis Kalanick was, but at the same time operationally tight. Uber is expanding into new markets, new product area, and rumor brs a s about a potentialo we need someone to lead the company forward. All right well talk about this for three solid hours. He would will beat the bushes until we find as much as we can. They basically what was happening at that company in todays world could this is really the only outcome probably that could have happened at this poin point. Can i ask a well move on. Can i ask a question who would be stupider, a person who didnt know there were only 24 hours in a day or someone who believed i didnt know there were only 24 hours in a day. Someone got you with that already . Someone said laughing my fao, joe squawk doesnt know every day has 24 hours who is really stupider someone who doesnt understand sarcasm or the person who doesnt knows there 24 hours in a day. Its close. Is it it is close. I cant tell who would have to be more absolutely stupid. Any way. I dont want to focus on one tweet. I went to grad school for gods sake do you know aqua man . Yeah. This is worse than when i was kidding about aqua man staggering i learned that when youre maybe three years old n s old, n how many hours there are in a day. Grad school at m. I. T. , i knew by then my son knows. Hes five. Your son probably knows theres 24 hours does every minute have 60 seconds . Only some only odd numbered. Thank god were not on the metric system. Are there 24 hours in the metric system never mind walgreens and theranos reached a deal to settle their legal dispute. A tentative agreement calls for the lab Testing Company to pay the drugstore operator less than 30 million. At one time walgreens hosted 40 theranos Blood Testing Centers the deal has not yet been finalized a ed according to the journal. Republicans claiming victory in two special Congressional Elections yesterday. John harwood joins us from atlanta. He has more on that. Good morning good morning. Big sigh of relief from the white house. They won both of these races, too close for comfort in South Carolina for Mick Mulvaneys seat hes the budget director now but a win. And in georgia, karen handel, the republican did better than had been expected by the polls preelection. She won and she ended up after a campaign in which she did not talk much about donald trump, thanking him in her victory speech last night. Special thanks to the president of the United States of america no surprise President Trump was on twitter last night saying he had blanked the democrats in the special elections, which is crew they are all republican seats, to replace people he picked in his cabinet. This provides a boost at the president s attempt to get his agenda through it calms republicans jitters as the senate is preparing to take up the healthcare bill and they hope to get on to tax reform positive evening for the trump white house. This was watched so closely you point out what the president said about all the money spent on this. What does this mean to the democrats . I know it wasnt necessarily the democratic leadership looking at this race as one they should be pouring a lot of money into, but a lot of money came pouring in from democrats around the country. Democrats really wanted to win this race. They threw everything they had into it. They thought this was theirsho to embarrass President Trump, show that the socalled resistance was going to slow him down jon ossoff had tremendous funding. Republicans linked ossoff to nancy pelosi, not a popular figure in georgia. If you look at big picture, how democrats over the course of these specials ran reasonably close in the republican seats, theyre looking at a pretty good 2018 midterm election. One where they could make gains. But they have not proven they have the ability to punch through and flip the house if theyre going to do that, they have to win seats like they did last night heavy College Educated district. The kind that is the least friendly within the republican universe to donald trump they were not able to do it. They have a lot of work ahead. For now republicans, i think the most immediate effect of this is to calm the party and allow them to move forward with a little bit more spring in their step over the next couple of months as they try to deal with these big issues john, thank you very much coming up, china winning a big market victory after a fouryear battle it could mean billions of dollars flowing into the china stock market those details next and a full market rundown is straight ahead. Your muscles look good, but we should be seeing more range of motion. Im fine. Okay, well lets see you get up from the couch. Im sorry, what . Grandpa come. At cognizant, were uniting doctors, insurers and patients on a collaborative care platform, making it easier to do whats best for everyones health, every step of the way. You may need more physical therapy. Ugh. Am i covered for that . Yep. Look. Grandpa catch grandpa duck woah ha there you go grandpa. Keep doing that. Get ready, because were helping leading Companies Lead with digital. upbeat dance music dance music abruptly stopping dance music starting then stopping livestreat the airport. E sport, binge dvrd shows, while painting your toes. On demand laughs, during long bubble baths. Tv on every screen is awesome. The allnew Xfinity Stream app. All your tv at home. The most on demand, your entire dvr, top networks, and live sports on the go. Included with xfinity tv. Xfinity the future of awesome. Welcome back to squawk box. The queen of england will open a new parliamentary session today. Her speech begins at 6 25 a. M. Eastern time back here in the United States we get the latest read on housing with may existing home sales out at 10 00 a. M. Eastern. On the earnings front, carmax and winnebago before the bell and oracle after the close President Trump is taking his Technology Week initiative on the road. Hes headed to cedar rapids, iowa where he will talk about technologys role in farming and agriculture. He will hold a rally there later in the evening chinas stocks taking a major step towards global acceptan acceptance with msci adding china shares to the emerging market index china has been campaigning for the decision for four years, msci previously excluded the shares because of restricted access to chinas equity markets. Well talk more about china stocks with mark mobius at 8 15 a. M. Eastern time. Back to the Broader Markets now. Joining us is michael tyler, chief Investment Officer from Eastern Bank Wealth Management and tom manning. Guys, great to have you with us. Good morning. Michael, starting off with you. You look at the markets what is the outlier in terms of performance is oil oil hitting fresh bear market territory just yesterday im wondering if you think the markets can maintain record levels even as this asset class, oil, is in a bear market i think they are oil has always been the most diverse sector compared to the rest of the market the least correlated, if you will, compared to other sectors. Its not surprising that oil is going one way, the rest of the stock market is going another way. When you look at oil, how far down will it go . I dont think well see much below 40. I think well be in a trading range. Right now the u. S. Shale producers are the marginal producers and theyre much more flexible than the saudis or opec has been thats a good thing. The rest of the market is producing good Earnings Growth and can keep going until you find a point where the fed kills it with too aggressive action or the prices get too expensive so far neither of those have happened all the good points, of course thomas, in addition to oil, you look at what is going on with the yield curve, you wonder if the other Asset Classes are sending a warning signal for stocks the spread between 5 and 10year yields are the smallest since 2007 we may be looking at inversion if the fed keeps acting and acting hawkishly what are your thoughts that the signals other Asset Classes are sending in the face of record high levels. It does appear that the stock market or the bond market has it wrong now. With stock market yields at 215, and the stock market moving higher, theres diversion going on here. And its hard to tell which one is right at the time with shortterm rates going up and longterm rates not moving higher, we continue to have this debate internally about where the next move is i think at this point we believe the stock market is more right than the bond market usually we dont think that way. The bond market has a good pulse on where things are going. The economy is strong enough, we think, for rates to rise later on this year but in the shortterm, i think the market wants proof of that in terms of what youre doing now, michael, you have taken profits in Technology Stocks what kinds of stocks the f. A. N. G. High flyer stocks some of those have been so fast, gone up so fast. Particularly the ones that are small portions of the benchmark. Are they overvalued i dont think theyre overvalued theyve had a friend douse run b tremendous run. Stable stocks have been beaten up we are still overweight total stock market tom, youre in f. A. N. G. And long f. A. N. G youre not concerned they moved too far too fast were long f. A. N. G. To the extent that its a fairly big segment of the market in terms of the weightings. So were not necessarily overweight those areas relative to the market. Growth has seriously outperformed value this year it would be foolish to move out of those areas at this point given the momentum behind them like michael, we do agree theres better value in other segments of the market we are rotating. We are seeing rotation in the market we want to stay ahead of that. Rotation into what ma banks, one of the best performing sectors this month . You saw the warning shot across the bow in technology so weve been lighting up a bit in the technology space. With energy declining, its ban tough sebeen a tough sector to be in. Healthcare, theres some great value in certain Healthcare Providers at this point in time. Michael, you also found some values and bargains in energy. What areas are you looking at . Any concern that some of the dividend payers in the Energy Sector could come under pressure as oil prices go closer to 40 . I dont think that dividends now are under pressure the remarkable thing in the oil sector has been the degree to which the cost of extraction has dropped significantly over the past several years thats changed who sets the marginal price what you can also see is that companies will be much more adept at plugging holes, restricting supply as needed to keep the price within a trading range. Thats different from even two, three years ago when prices fell from 114 to 126. When you look at the Energy Sector, what sorts of companies are you finding values in . Are you in the ones that are more levered to a move higher in the price of oil like some shale operators . I think theres a lot of risk there. Were mostly in the integrated companies, large integrated companies. You have some cushioning from the downstream but i think that you theres room in all of those areas, but primarily were sticking with the integrateds. Michael, where are you finding value in terms of other sectors out there . You say there is no clear catalyst for the markets to move higher at this point i dont think there is. I think that right now you have to wait for the earnings to come through. We had 14 prgs ea earnings gron the First Quarter aided bay doubling of oil prices year on year now oil prices are dipping the weaker dollar relative to a few months ago is helping. I dont think youll see double digit Earnings Growth again for the next few quarters that puts a bit of a head wind into the market but i think the earnings can do decently. Tom, youre expecting a pause in the markets then resumption of the move higher later this year thats right. Theres no clear catalyst to move the markets higher. They could drift a bit liar the resumption of healthcare reform and tax reform could be a catalyst yes. We think that the market up 10 now year to date is generating largely the full years market return with maybe a bit ahead of it. Tom, michael, thanks for your time appreciate it. You bet mattels ken doll getting a makeover the company is releasing 15 new ken dolls featuring three body types. Seven skin tones, eight hair colors, and nine hairstyles. Barbies Senior Vice President saying by continuing to expand our product line were redefining what a barbie or ken doll looks like to this generation i love that. The next gen ken coming a year after they gave barbie her own makeover do theyhave the najarian bald with the man bun thats a good look when did you cut the man bun off was that before the longest day of the year or the 25th hour of the last solstice you notice i never turned my head i never cut it off its there. Business up front party in the back. No, no, no. Dont show dont show is there a totally dr. Evil is there abald ken they should thats why i dont think its fair were not going to overcome the antibaldite stigma. There could be the liesman, you still have the crown john fort could do it hes young and hip. Thats what i mean. Until they do that i have not looked through the full collection of dolls like kids, some day they may be bald, they cant feel good about themselves shouldnt be bald shaming. Bald shaming is no one should do that. Agreed. When we come back, House Speaker paul ryan pushing for tax reform by the end of the year well ask chris coons if the timeline is realistic and what he wants to see in a potential tax bill as we head to break, look at yesterdays s p 500 winners and losers think again. This is the new new york. We are building new airports all across the state. New roads and bridges. New mass transit. New business friendly environment. New lower taxes. And new University Partnerships to grow the businesses of tomorrow today. Learn more at esd. Ny. Gov at crowne plaza we know Business Travel isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. Welcome back youre watching squawk box live from the Nasdaq Market site in times square . Good morning welcome back weve been watching the u. S. Equity futures after the markets end slightly lower yesterday, things are mixed this morning dow futures up by 12 s p up by a point. Nasdaq up by 1 poin3 points fedex posting better than expected earnings and revenue. Among the reason, higher rate s. Adobe systems offering upbeat guidance on the cloud based suite. Mike santoli suggesting another a should be added to f. A. N. G shares of lazboy rallying after they increased their stock buyback authorization. House Speaker Paul Ryan giving a major speech on tax reform and he told Brian Sullivan he expects to get this done before the end of this year we all agreed on the timeline gary, steve mnuchin, the house and senate tax writers, we believe this fall is the time to get it done, get it done before