Oil is back below 48. Our roadmap begins with more volatility after last weeks postbrexit rally easing capital requirements. Plus, tesla deliveries come up short. The stock is down 4 . And the u. S. Are passing sued i arabia and russia in oil reserves, and falling below 50 even in the wake of those terrorist attacks in saudi arabia. Both oil stocks and futures moving slower than Economic Growth after the u. S. Equity markets posted their best weekly of the year. The dow and the s p gained 3 . Last week we used the term roller coaster a lot. And i dont know if you noticed, europe is having a banking crisis. Ground zero is italy, theyve had some issues again with month i depashi, and theyre not dramatically lower, and the situation and what triheyre gog to do with the recapitalization. They could hurt a lot of individual bond holders. Crisis is the right word . Italy is having a banking crisis. Many of their banks are bankrupt. The question is how. January 1, all the rules change. You have to do a bail in, where you eat through the whole capital wall of the bank, and heres the one data point you need to know, 1 3 are all italian bank bonds are held by mom and pop investors. It is a absolutely a political crisis. How do you think referendum on constitutional is going to go in the fall. And not to talk about the percentage of loans that are bad. 17, way above we ever got in the depth of our crisis. And monte depashi, he was told yesterday we want you to get your epls down to 20 . Are you kidding me . Its horrific. Politicized lending is their problem. Well talk about that as the morning goes on. For more, lets bring in ernosto ramos, and mike moran, head of currently Economic Research at standard and charter. Good morning to you both. Good morning. Michelle was saying how long can we coexist with whats happening with italy, and the disconnect between this tenure yield. This has been on the burner for a long period of time. Its been able to be prolonged because the ecb has done everything, and global Central Banks in general, which has allowed this to go on for quite sometime. I think the ownusa on europe, and weve seen the stress on the financial side. Offshore, out of europe, has been well contained. If i was to tell that you a ftse would have rallied as much as it did in the event of a brexit vote two thursdays ago, you would have told me to leave and lets not come back for a while. So, i think there is this i think theres kind of yield grab going on. Outside of europe, europe is ground zero in that sense, and its going to be really tough to work through. If you look outside of merging markets in particular, i think the news has been quite a much more positive one, because it all comes back down to Central Banks. The trade is about Central Banks. Is the fed going to raise Interest Rates. Is that why yields are solo . Why are we looking at 10. 4 are people terrified of something, or is that when the swisse 50year bond is in negative territory . Is that for ernesto . You have marginal demands for japanese investors where ten year yields are both negative so they have to go to the u. S. Market and that keeps driving our yields down and its making stocks relatively attractive especially in the u. S. , relative to bonds because also relative to european and other types of stocks. So we are were constructive on the u. S. Market on the u. S. Equity market and we see Earnings Growth coming back over the next 12 months maybe at levels of 10 to 12 , so thats constructive for the u. S. Market. Those are mostly not out in the u. S. So were constructive in the u. S. Eck wid equity market. How do earnings come back four quarters down, the longest recession since the crisis . Yes, carl, that is back in the rear view mirror. As we go forward, we maybe get another negative quarter, but three strong quarters mostly driven by oil Company Earnings as Oil Companies have rebounded from 30 to 50. Youre going to see oil earnings coming back into the s p 500, and thats going to be one of the main drivers of ernies recovery into the u. S. Market. For a long time, the narrative was earnings would face a fading headwind in the dollar, right . When the dollar was starting to lose some of its strength. Is that still alive . I still we are still very cautious about what the profits outlook is going to look like. Outside of the s p 500, looking across the broader economy, we are seeing the growth rates and corporate profitability slow down. This is going to take i think a little bit more time to kind of play out, but its not really good news, and you know you look at it on a historical perspective, that is often been a sign or an indicator of tougher times ahead. So were very cautious of what the outlook actually is. I think going back to your point, im not sure if its pure kind of risk off, safehaven demand. Fear . Driving treasure yields low. Look at em credit spreads. They havent widened as much as you would have expected, if this is a liquidity credit crunch. Its forcing your benchmarks, g 7 benchmarks in response to what the outlook is going to look like for Interest Rates. When the credit spreads in the market theyre pretty tight. Is there any way emerging markets trade expect for u. S. Interest rates . It seems em gets hammered when u. S. Interest rates raise, and all the fundamentals dont seem to matter much. Is that simple . Youre going to count down. One of the most important, sensitive drivers for em, the fed outlook has been number one. Think about to january, february, that was about the feds delivering more hikes, and remember we had the china issue. Where is china really in their growth cycle. Our view is weve seen depreciation on a very gradual basis, and that kind of is quite good from a stable standpoint. But i think china is the next issue to kind of keep an eye out in terms of em. Ernesto, i was surprised to not even see oil move in the wakes of saudi arabia. Weve had so many terror ifist attacks and markets dont even budge anymore. Weve named half a doesezen. Like anything else we get used to a constant barrage of news flow and it stops becoming a surprise, so the move in oil has been significant, and speaking of the earnings in general, if you look at individual stocks, you can find some very interesting Earnings Growths Like Digital Realty trusts, which is one we earn in our large cap growth portfolio, and theres individual stocks out there that are very strong growth regardless of what the overall Market Growth is. So its a stock breakers market in a low yield environment, but still a stockpickers market. Not every vote will rise at the same rate as the tied goes. Finally we began with barons trying to argue their relative value. If you look versus the s p on a historical basis. Do you buy that given the Interest Rate we were just talking about . We were positioning ourselves into a little bit more financials up until brexit. Brexit upended things into a very conservative agree, as risk became the norm, risk came off the table. Interest rate hikes completely came off the table and thats going to keep the Net Interest Margin under pressure for a more considerable length of time. We are rethinking that. They are cheap. Most banks or very many banks in the u. S. Are trading under book value, which is unusual, but given the financial conditions in the u. S. , its not surprising given that its interest margins, and pressure. So its a bit of a value trap in my opinion right now. Ernesto ramos, good to see you both. When we return, teslas latest numbers disappointing the crowds, and taking another look at the futures, the doe would open by 78 points, and the s p 500, 21, more from the ncy when we return. We return. 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. Herthey work hard. Ade, wow, that was random. Random . No. Its all about understanding patterns. Like the mail guy at 3 12pm every day or jerry getting dumped every third tuesday. Jerry every third tuesday. We have Pattern Recognition Technology on any chart plus over 300 customizable studies to help you anticipate potential price movement. Theres no way to predict that. Td ameritrade. Tesla shares are down sharply after the electric carmaker missed its delivery target for a second consecutive quarter. Phil is in chicago with more. Tesla has long said thats when our production will be at what we consider the full production for this year where they are right now and thats when we expect to hit the target. Lets remind everybody what the full year target is for everybody for tesla to deliver between 80,090,0000, and 90,000 vehicles. Thatten mys theyre going to have to increase deliveries in the second half of this year by more than 50,000 vehicles, at an increase of 74 . Second quarter deliveries a total of 13,370, and tesla says we had about 5,000 that were in transit so we couldnt fully book those as deliveries. T twothirds being model ss, and means theyre behind pace, unless theres something in this report for the haters and lovers of tesla unless you buy into teslas projection it will hit deliveries of 2,200 vehicles per week this the third and 2,200 in the fourth quarter, thats why you look at shares as people are saying do you know what, i didnt expect them to miss delivery guidance for the Second Quarter or delivery expectations, because there really wasnt specific guidance, but analysts were expecting deliveries closer to 17,000. Guys . The debate continues regarding this fatal crash back in early may. Yep. Does are questions raised in your mind about the testing that company did in advance of this technology . Not so much about the testing. About whether or not this vehicle, the auto pilot platform should have been rolled out as a beta platform. Its still in beta test mode and even though they make it explicitly kpleclear to people have to stay engaged and you cant turn off your mind and start tweeting or reading or taking a nap, that you have to stay engaged. There are questions about whether or not this should have been rolled out to this degree. Now, tesla may be able to come back when they sit down with investigators and say heres all of our data, because we monitor all of the vehicles. We get that back and this is what were showing. Was this an anomaly, or was this an example of, heres the problem when you have a system that people are not going to be fully engaged with, or potentially may not be fully engaged with, thats the big question here. One more thing to consider, after a crazy month of news for that company, as we all know, solar city, the crash. Not just right, solar city and that deal not being particularly well received. So many directors have had to e recu recuse themselves, whether direct or otherwise. Thats still on the table, and of course the crash and this lack of deliveries, carl. But the stock itself, phil seems to always holed d up pretty wel. Theyll say its nothing more than a cold stock and got real true believers who will always be their to cushion the blow. And the true believers can look at this on deliveries and say we always knew that second half of the year would be when they have to deliver, so who cares about the Second Quarter. Haters will come back and say, you expected most on wall street expected 17,000 in deliveries and they werent close to that. Theres something for the haters and lovers in that report. You have to believe hes like a jeff basos, that hes some kind of tremendous change agent of the era changing so many Different Industries just like jeff basos, and keep giving them a pass on issues. Yeah. And basos track record, people say, well, someone is doing it. Maybe musk will be next. Phil lebau. Finding dori generated over 50 million, bringing the domestic call to about 380 million, but spielberg adaptati adaptation of the childrens book, 22 million, the film cost about 140 million to produce. Ouch. This is hollywoods model to swing big and sometimes you get it over the fence, and sometimes you dont. Do you have kids . Did you see it . Either one . We saw dori. My kids are not with me. Theyre enjoying the summer in main. Did they see it . No, they did not see it before they left for summer camp. Party time at davids house. And my wife and i havent seen it either, i should add. That goes without saying. Tim adams, the ceo of institute for the center of if i na fa nance, well take another look at the market. That would be the first five day win streak since the beginning of march. Back in a minute. Ah the freedom to watch your directv with unlimited data from at t. The steady stream of entertainment. Your favorite shows. Streaming on. You can just keep streaming. And streaming. Hello jim. So much streaming, but id really like to go home now. My arms are very tired. Seize the data get our best unlimited plan ever so you can stream and surf all you want with unlimited data from at t. A good car has to maneuver quickly. Thats also true of a good car company. People have always bought cars. But we saw an opportunity in sharing cars. So we moved fast and launched car2go in 29 cities, all around the world. Doing that required dozens of data centers, designed for speed and performance. We built our business on the ibm cloud. Because thats what the ibm cloud is built for. Some members of the United States navy ringing the opening bell on this day after the fourth of july, as is tradition here on the floor getting a big round of applause as they make their way. Love seeing that. As we said, about eight minutes to the bell. Oneal securities. I hope you had a great forth. Its the best holiday, although i still like christmas. Where are we after did you expect last week the way we recovered . Its funny. Talking with bond and gold markets, and the stock markets it was a contraindicator. By no means do i think its going to collapse, but im not surprised at the weakness. It was so violent, the market needs to churn again. It broke every tactical support, and it bounced right back so that churn has got to happen. Whats the biggest driver at this point . Listen, its going to continue to be brexit, but also be what every central bank is going to do. We heard from bank of england, from the fed on wednesday, so all of that stuff will hold the market inne check. I dont think anything will drive the market until early next week. Why were people buying both stocks and bonds . That was the confusion, right. I think we said last week to bill griffith, it was counter intuitive, it was that safety, kind of fear not sure the market was telling you what was really going to happen, so i think a lot of the reaction in stocks was just that boom rangers kind of overreaction after we had gotten whipsawed down, and it bounced right back. Today well see kind of stocks react a little bit differently, kind of pull back a little bit differently and churn. We all remember the disaster that was the jobs number last month. Do people are they putting stock into this 180 estimate . Is it 180 or 167 . I think theyd like to see a b 180. If it is a real strong number, then theyre easily going to say last month was really an aboration, it was an out lilier. I think the fed and every other bank has made it clear rates arent going anywhere until we figure out the impact of this brexit and what the economics are going to look like. Theres a lot of complaceancy in a sense. We bounce back certainly on our markets prior to brexit. Obviously the ftse, the 250 is different, we should make that point. It seems to be the move down was so out of line and the market did, you hit the nail on the head, it bounced back to where we were. Now its going to focus on the economics and earnings which start next week. Earnings arent expected to be so great. Energy expected to get slammed this quarter so theres going to be this realization that economics are not maybe as strong as the market would lead you to believe. And thats where you think youll see some pullback. I wouldnt see it pullback and tested levels again. Kenny, good to see you again. And you. Opening bell, just about four and a half minutes away. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. But we mean so much more. We mean how can we help . We mean what can we do . We mean its our turn. To do our part. To serve you, for all youve done to serve us. Youre watching cnbc squawk on the street, live from the Financial Capital of the world, the opening bell in 90 seconds on a busy holidayshort ended week. A lot of data coming our way. Jobs number on friday, although adp will be a day later because of the july fourth holiday. And the same kind of thursday preview that wed like to train around. Oh, so accurate. Worth pondering. Michelle has declared italy faces a banking crisis, as that is getting an out sized amount f attention, as the Italian Government considers some capit capital objections. And could be a little bit to focus on, but they definitely have to figure out what theyre going to do. They were having this problem prior to brexit. Oh, yes. And you can always continue to kick the proverbial can down the road as long as possible. And the stress test for italy coming out in a couple weeks. That may be the next catalyst that force some decisionmaking. Meanwhile, as you know by now, the dow has recovered 93 of its brexit losses. S p about 90 , nasdaq about 85 . July lane down thas been down t generally a positive month by as much as 5 in some cases. So we continue with the kickoff to the third quarter. Theres the opening bell and the s p at the bottom of your screen. The big board, the u. S. Navy represented by captain gregory davis, and commander demetil demetilo pastrini, and their recent ipo, earlier this month, so now its a matter of waiting for some