Futures coming back slightly, but now goldmans out with a new very pessimistic note on the market. Hp is buying samsungs printer business for 1 billion. Were going to talk to hp inc. s ceo about that deal in a cnbc exclusive squawk box, donald trump saying were in a false market. And janet yellen is keeping rates low because president obama wants her to. Well have much more from that interview coming up as well. First up though, futures are recovering a bit after this mornings losses following the friday selloff sparked by those rate hike fears. This morning atlanta fed president Dennis Lockhard saying theres been enough economic improvement, he says, for a, quote, serious discussion about a hike at next weeks fed meeting. Nearterm theres enough economic momentum to basically say the fed has met its goals, in the medium term, mike. Yeah, seemed pretty noncommittal. Obviously they were going to be having serious discussions at the meeting in september anyway. I think the market, the bond market, will be calming down a little bit as probably had those futures firmed up. Not just here but globally. To me its not just about the fed. Its been almost a global temper tantrum, other countries, qe, maybe were starting to rethink how much more is there. The german bund yield going to 0. 4 , but it has been a big move. Weve seen it in the japanese bond market as well, and the uk bond market. I guess were really finally contemplating might the end of qe, and whether this is it, the great bond bull market that so many times before weve expected it to be over, is this time going to be any different . Yeah, i mean, look, i think the sentiment conditions surrounding bonds maybe you can make the case. They set the stage for the ultimate lows in yields. 1. 36 in the 10year, whatever it was negative around the world, but to me its still a little premature. Were still not back up to levels we were in before the brexit vote. We still are down tremendously in yields from the beginning of the year. So you can say the low is in without really saying that theyre going that much higher. I mean, i think you could have it both ways. The big question is wasnt that the premise for a lot of other investment activity, for stocks being where they were, people coming on here repeatedly telling you how many trillions of debt trading at negative yields and you could pay a higher price for stocks, that was the logic for a while. To mikes point, prebrexit, we did get to 1. 7, which weve not been able to crack since, we got awfully close today at 169. As goldman says, david, youve got debates, a fed meeting, weak data, net weak they argue, and thats why they say again 2100 year end. Yeah. And an economy that keeps kind of chugging along with an employment number that really wasnt too bad after people sort of got another look at it from the last month. You know, carl, were only a week away, right . Roughly a week away from that fed meeting. Nine days. Next tuesday and wednesday. And the quiet period starts tomorrow. So this is it. Thats it. Im very good here reminding people of the calendar. Thats my role. So nine days, im counting down. But fridays still at the end of this week . It is. It is. And we still have to work on this friday, i believe. Economic data picks up toward the end of the week as well. Retail sales. Its a quiet day today. Today its about fed speak, which seems to matter more these days than the market. Its like everything i was gone last week and all of a sudden rosengren is a hawk, which i think caught a lot of people by surprise because hes been one of the most outspoken doves, and i think thats why people are watching braynard today. Not only is she a governor, she votes at every meeting and considered part of the inner circle, but shes also notably been worried about the rest of the world and sort of dovish on her idea to raise rates. So she changes her tune, that would really Say Something about next weeks meeting, which odds are still below 50 that they move. And that would really catch the market off guard. The thinking is thats the last shot for the fed to drag Market Expectations higher. If they were to wish to do so, right . So if you have the dove to come out and say, look, we think september makes some sense, that could be seen as some kind of decisive move. But even if not september, again, youre not seeing the shortterm treasury yields shoot up the way you would if everyone was saying septembers on the table. Its a much more general sense of central bank fatigue, or just, look, we had kind of a peek in demand for bonds short term and were working that off. Honestly you could look at a chart and tell you the same story. But how do i approach the equity markets if we do get september or even if its december, were at 50 basis points, right . What kind of a multiple should i expect, michael, in a market that clearly has had a strong multiple given the underlying growth rate has not been particularly good especially when it comes to the top line . No, i mean, i think the problem is we started valuing stocks on yield, right . So a huge percentage of the s p 500 trading at a higher dividend yield than the 10year, that story gets complicated if the 10year starts to go up. Also starts to make people rethink what was my reason for buying, right . Right. So i think if you look back to that taper tantrum in 2013, you had 10year yields go up 3 in a hurry, stocks were much cheaper on a p e basis and went down in four weeks, not terrible, but a gut check. Were going to stick with the markets. Joining us vice chairman and head of the Investment Group with ariel investments. Good morning to you. Good morning, sarah. So on this conversation weve just been having, if the market is worried about the Federal Reserve raising rates in september or december, weve been here before. Is there any reason to think that this time might be different in terms of the selloff . Yeah. Youre never going to do very well in my opinion trying to predict when were going to get a fed hike or trying to time Something Like this. What you can do well on is buying the parts of the market that arent expensive and selling the parts that are. Clearly the parts of the stock market that are overpriced are yield sensitive stocks, reits, utilities and some drug companies. And the parts of the market that are cheap are the more cyclicals and financials do better in a higher Interest Rate market. Youve got to be discriminating about this market. A lot of people are saying financials might help cushion the blow here if we get a selloff on higher rates like we saw on friday, like its looking like today. The question though, charles, if we get a rate hike and that slows the economy down, thats not very helpful to the banks. Right. But obviously and again, this isnt exactly unique perspective, but the reason why were going to get higher rates is because the economys not that bad. We actually have a better employment situation. We have a pretty good car cycle. We have a pretty good housing market. We have a very strong oil market. We just discovered billions of barrels of oil in west texas. So the economy is not that bad. Its going to get better. And thats why Interest Rates are going to go up. And in that environment the stock market is actually not that expensive. So you say that aside from financials there are some of those cyclical sectors and stocks that look like theyre inexpensive. Where might they be . And are they really dependent on kind of the data that shows economic momentum for the next month or two . Yeah. So a lot of light industrials. We love borg warner thats trading at 10, 11 times forward earnings. Its a great company, power train company. And its a little bit higher beta. So another big thing thats going on right now is anything thats considered market sensitive is very cheap. So a stock like borg warner or annekster. Trading more like 10, 11, 12. Charles, we also have an election coming up, as you know, about eight weeks. Donald trump was on squawk box this morning talking about the Federal Reserve, talking about janet yellen. Listen for a moment to what he said. Shes keeping them artificially low to get obama retired. Watch whats going to happen afterwards. Its a serious problem. I think its very political. I think shes very political and to a certain extent i think she should be ashamed of herself. Certainly doesnt give investors confidence to think that a fed would be very political. They say that politics has nothing to do with it. Does trump have a point . And does that worry you . Actually, on this point i dont think he does. I dont think janet yellen is making her decisions based on trying to help obama or clinton. I think they have a view that the World Economy is weak enough that its not a great time to raise rates. I dont happen to share that view, but i dont think this is political. And just as an aside, it would be nice in my personal opinion my advice would be that he actually was doing fine in that interview until he started taking the shots at the fed and thats where he got a little bit off track. But it does raise the question about what happens to the fed after an election and the fact that the fed is becoming a punching bag. Certainly in terms of credibility it needs to remain completely independent from whats going on with politics. If it does raise rates in september, can it do that . So that is the fair criticism. I think a lot of people have been critical of the fed for not having taken advantage of the many opportunities they had to raise rates because right now they have no bullets in the gun. And they have not much to do if we did go into a recession. So theres a lot of fair criticism of the fed should have taken rates up to normal levels. Interest rates at these levels are very hard on pension plans, very hard on savers. So theres lots of unintended consequences. But the point is this is not because of politics, its not because somebody was trying to get somebody elected. It was because they had a view that the economy was weak and that they couldnt take up rates. So its, i think, dangerous to attack the integrity of the fed or to the fbi, its just not healthy. Charles, i mean, part of the premise of criticizing the fed for being political and holding off on rate increases is that presumably that means the fed thinks if they raise rates the markets are going to fall apart, its going to be bad for the incumbent. Is that something you think would be the case at this stage . Yeah, so in the short term theres no doubt that rumors of a fed increase take the stock market down. That is true in the short term. And as we all know the value of a stock is the discounted present value of their future earnings. So the higher the discount rate, the lower the value of the stocks. All of those things are truisms, but the point is that Interest Rates are artificially low right now. Were at the lowest rates for the 10year that weve had since Alexander Hamilton was secretary of the treasury. These are unsustainablely low rates. Theyre going to go higher. When they go higher certain parts of the stock markets, particularly reits and eutilit s utilities, are going to come down. There will be some short term volatility. You invest over long term, not the next three months. Yep. Got a preview of that on friday. Charles, thank you. Always a crowd pleaser to bring up Alexander Hamilton, carl. When we come back, Kayla Tausches interview with Barclays Jes Staley and whats at stake for his company. First though, Health Concerns becoming an election issue as Hillary Clinton now diagnosed with pneumonia. The latest on the race for the white house including squawks interview with trump this morning straight ahead. Take one more look at the premarket. Dow down 394 on friday. That was the fifth biggest drop of the year. Were back in a minute. With this level of engineering. Its a performance machine. With this degree of intelligence. Its a supercomputer. With this grade of protection. Its a fortress. And with this standard of luxury. Its an oasis. Introducing the completely redesigned eclass. Its everything you need it to be. And more. Mercedesbenz. The best or nothing. On the campaign trail, Hillary Clintons health now clearly in focus. And donald trump speaking out on many issues on cnbc this morning. Our chief washington correspondent john harwood joins us with a recap. Good morning, john. Good morning, carl. It was a very bad weekend for Hillary Clinton, as you can see from this video. She collapsed leaving a 9 11 commemoration ceremony yesterday. That is not what a president ial candidate wants to see. And then her staff provided halting, not entirely candid reactions to it, explanations for it in the hours after before finally coming out with the fact shed been diagnosed on friday undisclosed at that time with pneumonia. But donald trump had an uneven morning this morning reacting to those events. In the beginning of the interview he just did on cnbc with joe and becky, he did exactly the textbook response that you would want from a candidate trying to keep the focus on Hillary Clintons problem by wishing her well. Take a listen. I hope she gets well. And i hope she gets well soon. But, you know, it was quite sad, to be honest with you. And i hope she gets well soon. No satisfaction, believe me, whatsoever. Now, that was disciplined trump. Thats what republicans would want to see. But then he went on in the aftermath of the controversy over whether his supporters are racist or whether hes encouraging racism to refer to Elizabeth Warren as pocahontas. And then he went onto question the independence of the Federal Reserve with these comments about Interest Rates. They want to keep the market up so that obama goes out and let the new guy, whoever that new lets call it the new guy, okay . Because i like the sound of that much better, but that the new person that becomes president let him raise Interest Rates or let her raise Interest Rates. The Interest Rates are kept down by president obama. I have no doubt that thats the reason that they are being kept down. Now, the problem with that statement is first of all it casts doubt on the Federal Reserve, which is an independent agency. Janet yellens stewardship of that agency, but also cast doubt on Donald Trumps own opinion on how he would interact with the fed if he were to be elected. He went on in that interview to question the upcoming president ial debates, which he is slated to do along with Hillary Clinton. So the moderators are going to be very unfair to him. Hed rather have no moderator. Raises a question of whether hes actually going to show up for all those debates. Again, donald trump by putting more attention on himself and the things that he says rather than Hillary Clintons problem is not necessarily helping himself this morning, guys. John, when you say it was a difficult weekend for clinton, i wonder can you break that down . Is it because of what some argue is a lack of transparency . Is it the fact that it now inhibits her ability to drive the conversation to issues the way shes been trying, obviously. Both of those things. Look, Hillary Clinton both of these candidates are old by historical standards. Hillary clintons 68 years old. She has been facing what shes denounced as conspiracy theories about her health and related to her coughing and other things from conservatives for some time now. When you then collapse on camera, blame it on being overheated on a day that isnt particularly hot, that only encourages people to question whether she is authentically healthy at this moment. And not to have come out quickly and said, look, she was diagnosed with pneumonia. Which may not be a serious thing at all. Shes being treated with antibiotics. May not be a big deal. But you make it look like a bigger deal if youre not forthcoming about it. And she has not released medical records since a letter from her doctor a year ago. Donald trump of course has not released records. He said in that interview today that he had a physical exam last week. Hes going to release the data later. The only thing hes released so far is that ridiculous letter that he got from the doctor which everybody is ridiculed for it being not serious. Well see whether he comes up with that stuff. But, no, health is not something to play around with as a president ial candidate. Hillary clinton is leading this race. And to have that kind of video that came out over the weekend is not good. Yeah, not to mention the fact shes missing a few days of campaigning here to rest. John, thank you. John harwood in washington. When we come back, hp inc. Looking to disrupt the copier industry by acquiring samsungs printer business. We have an exclusive with hp ceo dion weisler coming up. Counting down to the opening bell, a look at where futures are headed, losses have been cut in half. Dow futures down 65, s p down 7, nasdaq down 18. Much more squawk on the street straight from the nyse straight ahead. Energy is a complex challenge. People want power. And power plants account for more than a third of energyrelated carbon emissions. The challenge is to capture the emissions before theyre released into the atmosphere. Exxonmobil is a leader in carbon capture. Our team is working to make this technology better, more affordable so it can reduce emissions around the world. Thats what were working on right now. Energy lives here. Experience the thrill of the lexus is f sport. Because the ultimate expression of power, is control. This is the pursuit of perfection. Just about seven and a half minutes to the opening bell. Lets bring in kenny pulkari joining us here at post nine. From what i can tell is about to light a fire. Thats right. Up on the day, i think thats where you have to start. Weve already had premarket selloff. Yes, european markets are still down, 1. 5, almost 2 certainly in some of them. But i think friday was a reaction to a need, right . People needed a reason to just take some money off the table. They got it with rosengren, theyre not going to get