monday. do you have a gamble before we go? >> well, i think based on what we're seeing, probably around 200,000, very sustained, considered growth that we'll see. >> okay. that's the number to watch. we appreciate you being with us. talk to you very, very soon. i want to thank joe greg for a great couple hours. a lot of fun today. join us tomorrow. and "squawk on the street" starts right now. good tuesday morning, welcome to "squawk on the street," i'm carl quintanilla, and let's kick off the second half of the year. futures are positive here as goldman upgrades net flix, ism, auto sales, china phi showed expansion for the first time this year. ten-year yield above 254 this morning, and europe has green numbers as well in the early going. road map begins with the first day of h 2, what the first half says about the second half.

not all stocks can be gopros. >> general motors recalls another 8 million cars. today mark the end of the rebound in autos? >> better late than never. time to buy netflix, content, customers, country, all king. hashtag impulse buy, twitter, buy it now button making an acquisition of its own. futures pointing higher first day of the second half, s&p and nasdaq coming off the longest quarterly winning streaks since 1998 and 2000 respectively as we wait for manufacturing, construction numbers this morning, china pmi better than the alternative at 50.7. it's pretty strong, but no, ma'am numbers not as strong. >> china, when the number came out, up at the moment, but i said, no, better than expected. that's not possible.

we've come so used to china missing. don't forget. if you go back to 2008, last time china was in charge, stocks went higher and higher. caterpillar went up pretty much into all these china pmi numbers so these things really, really do matter. i find that china correlates with the stalled out industrials. you need to see that sector starting to move. it's been stalled for a little bit. >> caterpillar's the best performer on the dow so far this year. >> you know, in the last three weeks i've seen shifting back to -- absolutely -- i'm not, you know, shift back to old tech. got a lot of moe money tum. shift back to oil and gas, and the industrials have been unbelievable. they were resting. i think they were resting in part waiting for baltic freight to move up or stabilize that to happen, waiting for any news on china, and now i think you'll see a wave of buying. dow stocks related to china

stalled in the month of june. they had been great until then. they could reaccelerate. >> acceleration in dow stocks related to china? >> china, yes. i think that's -- oh, no, it's absolutely possible. when you look at the s&p, what is really been driving the s&p is the inversion trade that we talk about a lot, the takeovers like the ppg yesterday, a big china business, but has not mattered, and the consolidation. you know, what regard as consolidation in oil and gas where you see a lot. you saw a big deal yesterday, everyone yawned, but because of the way that -- how things shake out in iraq, a huge multiple expansion in oil and gas, and that was the focus of the last few weeks of the quarter. i don't think that's over, by the way, i'm getting too many reads drilling picked up. sounds insane. i had a sand company on last night, emerge. sand a commodity? not with fracking sand. they are sold out.

guys, what's the biggest problem? what keeps you up at night? he goes, demand, too much of it. >> a good problem to have. >> demand, too much of it. >> he signs contracts wow into the future to provide fracking sand. >> issue was fracking sand, you can't get enough sand. it's a big gating point. moving from 4,000 rail cars to 8,000 rail cars next year to get the sand around, a hundred year supply. confided to me after, you know what, the way it's drawn down, i'm not going to have sand. sand, remember when intel made semiconductors out of sand because there was so much of it. well, not the kind of sand -- this is a big american growth story keeping it in front because it rings the bell about drilling steel. as for july's, jim, last year was up 5%, before that, down, and up before that, and six or seven years before that. july is strong.

>> yeah, june, one of the weakest months historically so when we came into june, listen, those who didn't sell in may, sell in june. these kanards did not work, june was great, one of the worst months of the year, but now going into july. those who rely on those data about what's going to happen from the calendar, well, do they have to come back in and buy? you know, the gopros of the world say you do. >> oh, man, we'll talk about that later, i'm sure as we watch that stock potentially go up even more. let's get to auto sales. they will be out soon. chrysler beat estimates reporting the best june sale since 2007. toyota, general motors, and ford report results a bit later today. all this after gm and chrysler announced more ignition switch recalls. focus on gm for a moment. 8.4 million additional recalls. our auto reporter, who i had on

yesterday while anchoring "street signs" was shocked at that number, and, yes, they are doing a specific look at every single one of their product lines and perhaps they've gone so far more than any other auto maker might, so they're going to recall anything that has, you know, the slightest hint of a problem. although, in this case, you're talking some fatalities, a number of crashes, injuries, ignition related, but not quite the same as we saw with the cobalt when this started earlier this year. >> obviously, i want to see the numbers, and, yes, that's why you're on the 2:00 show, an end passioned stop trading moment. >> gm was halted. >> there's a good piece in "the washington post" if you want to know the compensation fund, best article on it, but i know -- i don't mean to sound glib for a second, but if you want to look

back to when bp hit its low, it was june of 2012. what happened at the low? i was searching through that news. ken feinberg was appointed the master of the bp trust fund. that marked the low meaning people were really scared when he came in saying, hey, all claims are going to be honored. he came in yesterday saying all claims are going to be honored, and you know what? a bad number, stock's at 35, we called -- >> yesterday, the stock barely budged, down maybe -- >> no. >> then it rallied. 29 million automobiles at this point recalled. i mean, this is a company that does 12 million a year -- units, sales, 64 million cars out there, getting close to half of all the calls. >> yesterday's recall a million shy of all the cars they sold around the world last year. >> look, this is undeniable this

has to impact them somehow. >> maybe you say that, but maybe that's not the case? we sit here, waiting for demand to slow as a result of concerns about safety issues of gm cars and workmanship, but it didn't seem to happen. >> some suggest they put the number out, the recall, knowing today's number would be strong. >> i think there's recall fatigue. i've had a couple cars recalled, and i look, oh, it's not my problem. >> this is '97 to 2014. >> they are sensitive. i'd recall anything, if there's ten instances i'd recall. mary barra is doing a courageous job saying, listen, get ahead of this. one of the things in the times is they can't get ahead. wait a second. they are, if they have any sort of sense there's something wrong with the car, they bring it in. they're bringing it in. >> do that over and over again and it doesn't impact buyers's

psychology? >> who wants to buy a gm car, it'll be recalled in seven months. >> millions of people. maybe this is the straw. maybe this is the straw that breaks the camel's back. hasn't happen yet. we'll know soon. cramer, why didn't you sell it at 908. >> different than other scandals, i recognize that, but interesting to note you bought news corp. on the lows of the hacking scandal, bought walmart on the lows of the foreign corrupt practices act. every time -- >> things get discounted. what can i tell you? bp at the bottom in bp in 2012, most people were shorting their bonds, betting for bankruptcy. they didn't get it. is this asbestos? remember the memos on asbestos? killing people, causing cancer. don't tell anybody, we're find. >> litigation too.

>> the ceo's wife was taken by vioxin. it was one of the most amazing drugs i've taken, and well -- >> and you only took a couple, what's next? >> had to switch to another that didn't do the job, but people wanted viox even though there was a recall. they were demanding it because it was such a good drug. now, i don't think people demand my gm car. >> no. >> we have a beat on nissan and chrysler. chrysler 9%, well above the estimate. net flix up, and the firm upped the price target to $590 from $380. citing international expansion, opportunity to boost margins as the customer base grows larger as reasons for the move. the international story has been out this. timing's curious on the note. >> people, when they see the note, i immediately twisted, oh,

come on. what they are doing is they are saying, listen, if we use hbo penetration numbers, 43% penetration, 30 %, a haircut from time warner downgraded, by the way, there's 62 million international hubs by 20 17. when you see tam, people need to understand the concept. that's total adjustable market. they use a total adjustable market of 207 million. there's 7 billion people in the world, who doesn't like netflix? come on, goldman, use the $7 billion number or say families? i mean, 7 billion people. >> not 7 billion house holes, though. >> so cut it. >> buffering in certain parts of the world is a challenge. >> it's tough. >> in korea. now i think, you know, with extraterrestrial life, why limit this? do you think orange is the new black wouldn't sell on mars? we're really, like, i read the stuff, and, no, look, say this. i wish i upgraded.

this is a piece where i said, i wish i upgraded earlier, but i didn't. i've been thinking maybe the average price per unit goes up. i missed it, but not really. >> all right, so parse your words a bit, then. is it absurd? this multiple? getting ridiculous, and with this analysis, if you want to call it that, is it a way to say, okay, i'm on board? >> i think you have to say you're on board, yes. that's what it is. you want to have some sort of, like, hey, i didn't miss this one, you know, betting, of course, that it's going to go up. it's not going to -- it's not going to get a takeover bid anymore. too big. that's my thesis for a long time. netflix, one of the problems that every analyst has is you got to be able to go into a portfolio manager meeting saying, yes, i recommended netflix. no one says -- in a few weeks, we'll forget it on the list. oh, yeah, of course, netflix is

good stock. >> the public has a short memory, that's why. >> yes, they do, very short. gopro is up again in the premarket. it's been up 10% or more in each of the three days as a public company. >> all right. gopro was 30 times over subscribed. now, what does that mean? people on twitter said i put an order on fidelity, why didn't i get my hundred shares? this is the over subscription, and 30 times over subscribed? a 3% position for the billion dollar fund, you got 1%. go in in the after market and keep buying. i don't know a portfolio manager buy site guy who is comfortable buying above 40. the cfo and ceo were amazing at telling the story. i wonder, after two quarters from now if the stock doesn't have a twitter feel. remember twitter, it's public, excited, up to 70, people short it. the lockup occurs. early part of the life cycle, and i think a lot of people

feel, wow, i wish i got my whole allocation. it's an allocation neutral fund issue. they need to come into the after market. >> they placed it well. >> really well. >> there was a lot of demand for it. >> placed really well, great way to put it. >> multiple now at $44 a share? going there with me? >> i am. i'm going there with you. >> i saw someone use a $3 number for 2016. >> for gopro? really? >> how 1 that possible? i can't get there. >> i saw the market cap is bigger than u.s. steel. >> you know, it's, like, you know -- look into, you know, the -- you know, the ross company was bigger than u.s. steel back in '58 before castro. i mean, like, you know, what can i tell you? >> u.s. steel was big. >> bigger than u.s. steel. >> that's right. look how that turned out. when we come back, the mysterious new button on twitter

causing buzz in the tech world. later on, the president of audi is here, and a look at futures as we kick off the month of july. more "squawk on the street" from post nine in just a minute. just take a closer look. it works how you want to work. with a fidelity investment professional... or managing your investments on your own.

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all right. call it a possible win for impulse buyers. a new buy now button appearing on multiple tweets monday on products linking back to the site fancy. recode discovered the buy now buttons only surfacing on twitter's mobile app, not the web version, and tapping the button did not do anything yet. some wonder whether it was just a test, sort of trying something out there, checking it out, seeing if it works. idea of commerce and twitter is not one that's foreign to many people. >> right. >> or that at some point you will be buying things via twitter, if not also consuming a lot of your media via twitter. idea being the power of the platform will come to bear eventually as they test and figure out various things. >> you know, look, i thought this piece tweeted out this morning, carl, really did make you feel like 400 million active users by the end of 2018,

talking, again, about an event that gets people going, this is the world cup, by the way. world cup today, i'm sure that will be a tremendous drive. my issue here, again, is that you're talking about long term mod earnization, and until you get that, i don't know. it is gratifying to see anthony, an old friend from the days of when he was first at goldman, to be the cfo. i think that's something to cause people to buy the stock. >> that's a big deal. >> it's a very big deal. >> noto was supposed to go to the hedge fund focused on media, but with a significant presence over the last few years on venture capital, where you thought he would have added expertise, noto, now running technology banking -- >> they went public -- >> the formal cfo of the nfl. >> did a great job, i've known noto since the 1990s when he was

at goldman. it's an event that says, wow, twitter got the best cfo you could possibly find. that's worth some points to the stock. more than the report, even. >> you know, depending on the company, the cfo is often the second most important person in the organization. listen, we talk about capital allocation. >> yes. >> and i know so many investors, that is their first question, and that's where it all starts. >> noto's discipline, won't let something happen with all the money, he's a guy who is so trusted -- look, when he went -- wish him best of luck, didn't want him to leave goldman. why? because noto did the twitter deal, priced it well so everyone won, and when he leaves, i said, oh, no, man, he's the best around for tech, and sure enough, goes to the firm he priced. >> we have sat here for years, all three of us, actually, you know, this guy's been moving.

>> goldman, nfl, goldman. >> longest winning streak in history. >> army guy, by the way, like bob mcdonald. >> coming in at a good time where analysts are accelerating expectations for user growth. the stern note specifically mentions world cup as -- >> isn't that funny? >> twitter 1 a destination to discuss world cup much i don't know if you saw today, the men on the u.s. team added 3 million followers since the cup began. >> look, twitter is -- if there's an event, we know the olympics was a huge twitter expansion, and this is obviously bigger. look, when it got to 29, people, listen, buy twitter. waped out the insider selling, and, of course, people sold a lot inside. seems like they were told, buy, buy. this is the affirmation that twitter is an investble stock. noto would not go there if it was not.

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i know you think cisco is a growth phase. they have -- everyone admits a better mouse trap. i recommended since it was public for "mad money", and it's not done. these recommendations are going to get people talking. maybe i got a new great growth stock that's profitable, but continues to go higher. >> continues to go higher. what's fuelling the growth of the company, jim? >> switching. this is one of the moments where people want the highest, fastest switch in telco, and they have it. remember, i think cisco is thee buy in this period because it's turning around, but a risk the momentum stocks look for companies that are profitable, growing, and a billion dollars quickly. >> stock up over 5% now, other stocks moving, which we'll check out four minutes from now when the opening bell rings on this tuesday on wall street. stay with us on "squawk on the street."

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of the world, opening bell in over a minute east time. busy morning already. new cfo over at twitter, upgrade of netflix, and auto sales all day. i got a beat on chrysler, up 92. estimate was six, sooe san a beat, porsche up 11, their best june ever. >> are auto sales going to peak out? they are a function of how many years autos have been on the road, and this is a 12-year-old fleet here and gasoline is high so you really can make an arbitrage here and say, i have to buy a new car, save money with gasoline. the idea you call peak autos, allen, we have to wish well, now mark fields. >> final week. >> yep, he'd tell you you can't say how many cars you sell given the differential in older car.

>> estimate for 16.4 annual rate, but we were wondering if we'd get above 16 again. >> 9 million was artificial. you can walk away from your home than your car because you can't get a job without a car. there's the opening bell, s&p, green on the top. here the big board, "mad money" on last night, jim spoke to them on that and we'll play the sound for you in a little bit. nasdaq, jason industries, a manufacturer of industrial belts, hoses, and couplings. with all of that, i wonder if we're going to get -- yeah, gm auto sales numbers here. phil has that. phil? >> carl, this has people saying, are you kidding me, given all the recall news, gm did better than expected on sales. yes, according to the latest numbers from the company, june sales up 1 %. that compares with the edmond's

estimate of a decline of 8.5%. substantially better than expected. we got numbers from ford who did better than expected. ford recording a decline of 5.8 % of june, and the expectation was decline of 6.5%. looking at ford, gm, chrysler, porsche in there, nissan, all better than expected, that's 16.4 sar, i don't know we'll go well above it because it's not going to be a blockbuster month like it was in may, but there's a chance we could see that sar above 16.4, which is going to be better than what many were expecting out of wall street, but, again, gm up 1 % for the month of june and many expected a decline of 8.5%. guys back to you. >> there you are, right there. look, gm is doing well. phil -- you know, listen to phil, i mean, i got to tell you, my trust owns this, down three, down four just because the

headlines are bad, but remember, feinberg appointed at the low, bp, this could, indeed, mark a low. >> ford may be the only disappointment. ford sales for u.s. down 5.9, the estimate was 6.6. better than expected, but in terms of an absolute number. >> ford, a latin american -- china accelerating there. if they get latin america and europe back to where it used to be, we'll look at a company and focused on the wrong thing if we just focus on the u.s. the swings as feel feels tells you, the swing are in latin america. get that on target, boom, goes higher. >> best month for ford fusion. >> funny, you go to europe, and gm is everywhere, you know, the cabs. >> sure, of course. >> look, these are big international companies. we're just so used to europe being horrible. don't count out europe when it comes to auto sales. porsche being a gracious.

>> china is important for gm as well. >> more than used to be for ford. gm is a -- when you see china pmi, you should be thinking gm. >> stock above, i believe, where it was halted news pending yesterday. >> yes, this is amazing. >> after we heard about the 8.4 million car recall the company instituted. >> a lot of lawyers come on, listen, go for broke on gm. you know, this is one -- ken feinberg, who i think is a brilliant guy, okay, talk about 2.6 million cars, several million to families killed, you hate talking money and death, okay, but there's a lot -- if you're a lawyer, you know, obviously, you might want to go for broke. i think a lot of people say, you know what? i can get paid immediately, you know, victims's families predetermined payments could be received within 90 days. terms in "the washington post," and 90 days gm cutting you a

check, tempting. >> he said money's no substitute for loss. >> money is a pretty poor substitute for loss. the best you can do under the circumstances is rob justice. i think the rough justice will be accepted by a lot of people. >> many of the stocks mentioned early on, twitter, netflix up, and before we get back to them, perhaps, jim, i want to go to sell gene, a rally here. giliad yesterday and today. >> the money's coming back. you know, the money really disappe disappeared. take a look today, the remarkable drug for macular degeneration. they use weakness to buy another 2%. celgene this morning, like a netflix situation. a guy comes out, we have somebody putting new valuations

on not just the multiple my low ma. i know you know that situation. chron's disease, maybe the holy grail, which is arthritis, meaning baby boom. >> back to the conversation about viox earlier, right? >> right, the ceo, auto immune, don't get excited, jim. i, you know, the two things i look, cannabis, and the idea of auto immune, translate to arthritis, and bob said, jim, there's no trial for you. meaning drug trial. meaning, oh, no, i mean, meaning -- that sounds bad too, drug trial, meaning i'd like to be in the experiment, experimental drugs, no, that sounds like timothy leary. >> i think you should stop there. netflix is up almost 5%. that's going to be a new high.

>> yeah, i think netflix -- you know, i looked at the time warner downgrade. i like time warner very, very much. goldman is basically saying the future is netflix. it's the -- might as well make it a network. if it's a network, it's worth more, international network. netflix executes well after the faux pas, but they -- >> look at hbo, by the way, which is pretty powerful. in fact, extraordinarily powerful. i wonder why they don't change the name time warner to hbo? >> when they do, will you demand a commission because they should. >> i won't. it's a friendly suggestion. >> read the report, subscriber opportunity, children's impact on our -- i mean, you know, look, you read the report on netflix, come back and say, wow, a thick report that says, darn, i wish i did it earlier, but

better late than never. >> biggest gainer on the s&p. with that, dow up 91 points, 1966 on the s&p. let's see what's moving on the floor. hey, bob. >> tech, health care, energy leading, nice rally here, nice volu volume, floor activity, and utilities are down, market leader in the first half of the year, everybody got that wrong, is utility, selling that today. makes sense. sell the winners, buy the people that have not done so well. important thing today, we have a little of a seasonal thing that goes on. i never realized this. interesting thing put out. the last two days of june and first five days of july, markets delivered positive returns 72% of the time. never saw that, just like a santa claus rally equivalent for the first half of the year. i'll track that to see if that happens. year to date, s&p 500, you know what we need in the second half? i told people yesterday, everybody said the same thing. more growth. a lot of people are an tis pitting 3.5% gdp growth for two

quarters. we have to deliver on that one, anticipating that for a while in the second half of the year, we wanted that last year and didn't get it. the economic data mixed here. manufacturing data, we'll get some of that today. it's been good, but gdp numbers not that good. durable goods have been fair. thinking of the manufacturing numbers, did you see what happened in china? decent numbers on the pmi for june. definitely some improvement there. new order components, best in 15 months. that got some people talking. china's not been a great performer in business. shanghai down 3% on the year, we're up 6 %, so the china market is lagging. copper is moving, copper right now at a three-month high. you know china consumes roughly 40% of the world's copper. that has things moving. copper and iron ore stocks mixed this year. trading to the upside this morning. speaking of china, the world cup is influencing events around the

world. gaming fell 3.7% in june, that was reported, everybody blaming the fact that they watch the world cup. gaming stocks to the upside, interesting little thing. finally, on general motors and phil was talked about this earlier, one of my trader friends mentioned he thought general motors recalled more cars in six months than made in three years. not quite, but close. confirmed 28 million vehicles sold worldwide by gm in the last three years, and the total number of recalls, 28.9 recalls. almost the same. back to you. >> thank you, rick santelli is joining us from the cme group in chicago. rick? >> hi, david, good morning. seems as though the world's fixed income markets, even though central banks have a big thumb on the scale, is taking intoing t into account some of the data around the globe, whether it's

china or japan, the report was not a golden report. it was not bad. you see, i mean, an increase in interest rates. a two day of fives, see how we build above yesterday's high? a two day of tens. take it back to may 1st, it's an important chart showing as much as we see a little sell off today, it certainly looks as though lower rates seem to be built into the chart formation. let's look at what's going on with regard to jgbs. it's a fascinating story, of course, in that their interest rates continue to make new lows going back 14 months. there you see 55 basis points for their ten year. the pound versus the dollar, on everybody's mind, there's a good econ 10 1lesson, keep it simple. currency used to be vied as stock in the country. if your stock is good, your

currency is good. the chart is building, sideways staircase, all the technical building of momentum demonstrated before your very eyes, the best levels on the pound versus the dollar since the fall of 2008. look at the other european currency, the euro. look at a chart going back to the beginning of may, and i think this is very critical because even though the euro is not flying, when you look at the next chart, a two day of the dollar index, you clearly see the handle there is 79. we settle a whisker above 80 last year. looking at our currency, it is a proxy for stock in the u.s., you know, a lot of debate what it means. carl, david, back to you. >> all right, thank you very much, mr. santelli. no real new big m and a news, but judging from the conversations i continue to have in general where people don't tell specifics, but generally speak how busy they are, i

expect to see more. we did, though, get background to a big deal that's already out there. talking at&t and directtv, and sometimes interesting to read the details taking place that led to the deal, and something that bubbled up here is confirming what we already knew, at the very least, the chairman of dish and mike white, who runs directv had some brief conversations, and, in fact, signed confidentiality agreements to consider exploring the idea of leaking the two companies. we all know that if dish and directv got together it would have created a regulatory morass. if it was approved, synergies would have been astronomic. they don't tell you it's dish, but i am. company a is what -- >> company a. >> company a back in december, and then in april, signed a

confidentiality agreement. didn't go far, and, of course, during this point in time, not in december, but not soon after in march, got at&t enter the fray. they originally, interestingly, at&t's first conversation about a deal was back in july of 2013 when they discussed the strategic merits of it. but at&t comes on strong, and, again, you know, not clear there was a great deal of enthusiasm or passion behind the idea from either side because of the regulatory problems, but they talked. the real question, jim, what are they going to do with direct and at&t, of course, onltar, probably going to get married if they approve the deal with sprint and saying many times, most likely a few weeks away at this point for the announcement on a deal with what will be a $2 billion breakup fee. remember, i told you that a couple weeks ago, and likely to take the lead in terms of

management and the like. what is dish going to do? all that spectrum. by the way, the stock performed well -- >> right, i'm listening now, and i say i would be remiss if i didn't tell viewers, i hear you talk about the company as of the world, i said, why don't you buy that? if something's going to happen, transactions, acquirer goes up, the target goes up. i'm just going to tell people to buy it even though it's going up because i should have done it with charter. i should have done it with dire dire directv. >> an entire group of those who distribute signals, if you will -- >> everyone i'm ahead on, and then i read in the darn journal tomorrow, breaking the story that company a -- >> no, we know that. now, the question, again, is what dish is going to do, and all that spectrum. i'm still expecting -- perhaps something interesting, but we don't know. >> there's a spectrum shortage. they have the spectrum, go guy

the stock, just buy it, okay? >> we have an aws 3 spectrum in mid-no ben ber this year where they participate, okay? >> got it. buy it. i can't take it anymore. >> i like that. >> just buy it. when we return, trading as a public company, and what the ceo says about the spinoff. later on, the biggest consumer products companies in the world, and it just completed two takeovers in the same month expanding its reach. the chairman and ceo of kripgle live after the break. in a world that's changing faster than ever, we believe outshining the competition tomorrow quires challenging your business inside and out today. at cognizant, we help forward-looking companies run better

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separate company. tim was on "mad money" last night explaning the thinking behind the spinoff. >> the founding principle of the separation was create two competitively positioned viable businesses going forward to pension division, balance sheet division, and talent division equal. as a result, we have well positioned companies. >> excited to have these guys on last night? >> yes, when i went to the timken, at that point, they told me over and over again, listen, if we split this up, it's disastrous, the engineer, the ball bearing company, incredibly high precision company, and timken, the name sake, said i'm in favor of this, relational forced this. goldman sachs opined the guys were right. within timken, they came around to it, and wealth creation is

extraordinary. under balance sheet, for both, they are the best performing -- amazing quality of steel, and as tim told me, listen, the market wants a pure steel play. letter x is one, and new corp. a disappointment, but i think they are great. this is working. again, oil and gas, when you're drilling, mission critical, you you're down 14 miles, you can't have that drill bit break, and timken makes the best steel in the world. >> and, of course, a play book and blueprint for other potential splits. relational uses this to say, look what we did at timken, which they already are. >> you know, in the book, i said this one has to split up. i know the relational guys, they are so good. they say, jim, we thought of it ourselves. >> it would be nice. >> they are very good. >> he's still, by the way, executive chairman of hp. >> they are good.

>> by the way, settled that autonomy suit with shareholders we should mention as well. stock trading after the break, s&p is above their record close, and "squawk on the street" will be right back. yup. all five of you for $175. our clients need a lot of attention. there's unlimited talk and text. we're working deals all day. you get 10 gigabytes of data to share. what about expansion potential? add a line anytime for 15 bucks a month. low dues... great terms... let's close. introducing at&t mobile share value plans... ...with our best-ever pricing for business.

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it's time for cramer in trading. >> i'd be remiss not to talk about jd.com, and it became public at the same time, the two stocks broke the ipo log jam because they were well priced and people did well. barclays and jeffreys like jd. call attention to the sun trust piece, rob peck, making us money, sensational, stocks at 9 39 29 and will hit 35 quickly. growth numbers are extraordinary. obviously, this is a prelude to alibaba. jd goes higher. >> you said yesterday the summer's a guessing game about how alibaba does. collecting clues here? >> well, the 250 billion -- then

lowered to 200 billion. >> kind of a big number. >> yeah, a little bit. >> well, maybe we have to get used to the lull of large numbers. >> incredibly profitable company, alibaba, with incredible mar gyps. >> right, jd.com is the prelude to alibaba. >> different to a certainly extempt as well. we have to point that out. it's almost more akin to google the way -- it's the search results coming through its platform. >> true, true. i bought something on alibaba and didn't realize it. stuff for the restaurant, rob peck, the best, he was the best on twitter, he's at sun trust, not telling you to endorse it, but he's a bright guy and a reasoned piece to say it's going to 35. >> what's on mad tonight? >> i'm telling you, i'm doing a very deep dive, and something

involving what goldman recommended today which is restoration hardware. we're in a moment where the rich are so rich, and if you cater to them and execute, i have the names, and i got to tell you, boy, is the rich people are so rich. really, i was listening to governor christie and i wanted to immediately move from new jersey to florida because of the taxes, but in florida -- there's a lot of rich people in this country. >> there are. you know, my favorite stat of the day? in new york city, 30% of the apartments between 49th and 70th and between park and 5th are vacant ten months out of the year. >> yeah. >> just a place to hang when you're here. >> the new way to launder money, park money, we know that. if you're in an unstable country where they mite not take it, buy new york real estate. >> a lot of rich people in the world. there's a lot. >> jim, see you tonight. >> thank you. >> i wouldn't mind if they paid

taxes, but they are not because they are not residents for tax purposes. moving on, where will the marlgs go in the second half of the year? that kicks us off on the next hour of the program. the new york attorney general joins us to talk about extracting $9 billion and look at twitter, attracting, of course, goldman's finest as the new ceo. that and more in hour two of "squawk on the street." ♪

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welcome back to "squawk on the street." we have a couple data points coming out momentarily. may construction spending up one-tenth of 1%, that, of course, month over month number that follows a very big revision. okay, one tenth is just a fifth of the half of 1% we were looking for, but last month's two tenths was upgraded to eight tenths so balance there. now, let's look at june. ism. 55.3, 55.3, looked for a number a bit closer to 56. last look at 55.4 is up revised. put a face on 55.3.

55.3 is the best number since november. it seems to monitor -- all the surveys, china or europe, have taken an extra prominence, and many are improving, but it's also about the recent range with regard to assessing that improvement. interest rates have ticked down just a bit on this data. sim simon hobbs, back to you, buddy. >> thank you. june auto sales out today, better than people expected. phil lowe bowe has more. phil? >> the big three, came in doing better than the street estimates there from edmond's. chrysler up 9.2%, better than want expectation 6 an increase of 5.9%, ford's decline 5.8 %, but the surprise here is general motors up 1 %. the street expected a decline of 8.5% in june.

chrysler has been on fire for the last couple months, talked about it in the past. this month, month of june, jeep is the story. jeep june sales up 28 %, strongest brands last month, and general motors, brands positive, june sales far better despite record recalls in gm's june industry sales rate expectation, 16.6 million. that is the expectation from general motors. most on wall street are expecting an increase of 16.4 million for the sales rate in june. shares of general motor, and don't forget, coming up, guys, at 11:45, cnbc exclusive, talking with the head of au audi usa, talking sales numbers for the month of june, but bottom line is all the numbers coming in so far, much better than many people were expecting. not surprised if we see the

sales pace move above the 16.5 mark. sigh mop, back to you. >> thank you very much, phil. >> dow up triple digits, a good start for the first trading day of the second half, first trading day in jewel. more to digest this morning. and doug sandler joining us and lipd see, chief economist, and the auto sales are better, the manufacturing number also points to improvement. is this why you are not revising your second forecast lower after the dismal gdp in the first quarter? >> well, it certainly is clear that manufacturing has been able to maintain this steady momentum that we've seen over the past couple of months. certainly, a news rise in orders from machinery, equipment, and autos. but remember that sustained production alone is not a long-term trend. we need a ramp up in consumption as well. this is really why i have not revised the way of my forecast of about 2% in the second

quarter. consumers have pulled back in the first couple months of the first quarter, and, of course, this is against the backdrop of significant weakness at the start of the year so ranging around the 1.5 to 2 % gdp level, not significant growth, but positive. >> still enough, doug, to keep the record rally in the stock market going? looks like today. >> certainly seems that way. there's not a lot standing in its way. as said, the macro data looks strong. next week, the micro data, the companies's earnings, and in may, it seems strong, and fedex is no better indicator than the general health of the economy, and shipping was up 8 or 9% and air cargo up a percent. a lot of good things there. nothing standing in the way. maybe what is in the way for investors is i talk to people

waiting for a pull back to get back in the market. i think they'll be left on the sidelines as they have been the last two or three years. nothing on the horizon we see as predictable or significant enough that justifies sitting on the sidelines awaiting a better opportunity. >> there are people that are very concerned about what the fed is doing, let me aim the question at you, and ahead of the financial times today, that as far as he's concerned the fed is under estimating the risk in credit markets threatening now financial stability with the rates low for long routine. the irony, that the fed is trapped in its own policies, fearing a sharp sell off in bonds, policymakers are delaying a change in guidance when the only way to get through this is to indicate rates are going to rise and normalize the situation. it's exactly the same more or less what the bis warned on sunday. are you concerned? >> well, you know, it's interesting because yellen has come out and warned against financial markets stability

making that the unofficial third mandate of the fed, but at the same time, the yellen fed seems much more comfortable with keeping interest rates lower longer than, perhaps, the bernanke fed would. warned gechs changing monitor policy based on examinations. against the backdrop of heigh n heightened expectations for growth in 2015 and 16, that's not necessarily enough. she wants to see that positive momentum come into fruition, meaning they will be low prates for quite an extended period of time. 2014, 20 15, maybe 2016. >> if you had the ear of yellen, what would you tell her? >> i think she's done the right things, playing the hand quite well. in the end, i mean, you're fighting global deflation, and what you have to do is overcompensate on the other side, so we're kind of negotiating a happnegotiate

ing a handoff with the economy. i think the handoff is going swimmingly, and you need to watch to see if that baton is dropped, and it's not yet. that's why the markets, i think, are awarding the market with higher valuations. >> yeah, but, doug, what does it take for treasury yields to rise? >> looking for a two-stage bear market. some started last year, which is the, you know, the tapering of quantitative easing. that'll continue, you know, for a couple more months here. when that ends, we think rates could be around 3%, maybe higher, and seconds stage of the bond-bear market is the actual raising short term rates. that may be a couple years out, you know, along where lindsey was talking about. in the end, there's very little upside for a bond investor. >> all right. thank you for joining us today with the dow up 109 points, good to see you both. >> thank you. more management changes over at twitter today. former gold schneiderman banker, anthony noto joined the company as cfo. for more, we are joined this

morning on the cnbc news line. good to talk to you as always. >> good morning, carl. >> you know noto pretty well, competitors on the sell side. he a gold schneiderman, you at ing. how material is this? >> i think it's material material. i think, as you said, i've known noto for ten years, somebody with a strong drive, very thoughtful, very strong intelligence, and i think to a certain degree, brings a following on both, frankly, the buy and sell side, which could dramatically change the way twitter is known or is received on the street. >> really? tell me what would be different? mike has worked with noto as cfo, moving over to run strategic investments, so what does noto bring that's truly different and how does that manifest itself in the relationship with the street? >> i think he brings a deep knowledge of how the street actually works.

he was on the sell side for probably ten years, on the banking side at gold schneiderman fgoldman side for many, many years, knows a great deal of the ceos and executives around silicon valley, so i think, you know, approached to the cfo position. likely to be slightly different, and, again, one that's probably maybe much closer to what the street expects that of -- maybe a cfo that's historically been maybe vp of finance and treasurer as mike was at yahoo! et cetera. it's a different approach. >> a human business, that's for sure. you had a good call, youssef, had a buy, target was 40. what do you do now? >> that's true. well, the good news is this is still not the most expensive

name within ourup verse. trip adviser is more expensive, yelp is more expensive so twitter is trading at parody with facebook, but you're right. we have a $40. to keep the buy and get excited about the name, we have to see good numbers coming out of the company in the next couple weeks. the fact that their download ads have been formally announced earlier this week, i think, is very, very positive. i think that could be a needle mover for them, the fact that they've moved and announced e-commerce, you know, opportunity, again this morning, is, you know, added to that, but, yeah, i think there's potentially more upside, but we just need to get more confirmation of that this earnings season in a couple weeks. >> and to that point, youssef, what's going on when noto arrives at twitter? >> i think the ceo probably has

more the run end of the business opposed to reach out to the street. i think anthony will have to, you know, maybe be a lot more present in talking to investors and in reaching out to the sell side. i think that's important, and that's something, as i said earlier, knows how to do very, have well, and then, you know, you just keep that message consistent. you can't miss a quarter. you can't, you know, you have problems, and have to deliver, and that's something anthony pushed the ceos for the last 15 years, and now he has to do it himself. >> youssef thank you for coming to the join to join us. >> naung. up next, a $9 billion fine bans for a month, for a year for clearing dollars and admission of guilt. one of the agencies that's punishing bmp. the attorney, cy vance is next. any other way.

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. admitting guilt agreeing to pay $9 billion for violatings sanctions laws in the u.s. french bank suspends parts of the u.s. dollar clearing operations as part of the larger settlement. here on set this morning, first

on cnbc, cy vance who led the investigation. cy, good to have you. >> good morning. >> this is the culmination of hard work. how difficult was it to get to this point? >> foreign banks and misuse of our system is complicated, witnesses and information lies abroad so they are long term complex investigations that require a lot of effort, but in this case, as in the six prior cases that we've completed like this, we absolutely believe that our country has sanctions to prevent rogue governments and people associated with terrorism accessing our financial system in order to move u.s. dollars, and i think at this -- if this case stands for anything social security that we have sanctions as a country, they need to be enforced, and if they are enforced, our office, just a few blocks from wall street, is an integral part of the cases. >> the size of the fine, dollar trading ban, dozen or so employees forced to leave, how much does it reflect an apparent

willingness to flout the law by bn prk bnp? >> it demonstrates a deliberate, sustained, indifference, in fact, disregard, to the american laws. that a company and its executives knew what the laws were, and said about to evade those laws by hiding the source of the transactions and the money by removing identifiers on electronic payments, creating satellite banks to make sure that sudan's involvement in money transfers was not known, so it was sustained. it was persistent. it was consistent. >> it was hidden. any thought on the regulatory part on the decisions about the fines in endangering the financial system, a fine so big that could hurt the bank and lending? >> yes. any responsible prosecutor's

office, particularly like ours and the southern district and the u.s. department of justice, weighs all factors before it makes a decision. we listen carefully to presentation by bank's counsel and the bank itself. we consulted with american regulators on how -- on the impact of this case and how it could be managed, putting foam on the runways so to peek to make sure bnp would be in the best position to thrive. >> the dollar clearing, cuts to the heart of what banks do. what are they goinged to do? contract out for a year? >> it is a possibility, but the bnp stock was up today. >> because they keep their dividend. >> it's interesting, isn't it, that having failed to have any scalps for the financial crisis, you guys in the doj now decided that money laundering is the thing, no longer going to just slam the bank in total saying

you didn't have sufficient safeguards within it, $9 billion, here we go. clearly the way forward now? >> simon, i think that's an over simple my kags, and the money in this case was phenomenal, and the conduct was deliberate and sustained, so when you do that conduct intentionally, there has got to be a fine proportioned with the conduct that was admitted. the regulators and the federal reserve have their own administrative responses to this. i know they are responsible, they will work with the bank. >> if you see it from outside the united states, the perception is different, as you know, even the president of france was petitioning president obama over this. you know, if you take this legal, this muscular legal reaction, trace it on dollar lines, what you do around the

world, they don't have to be dollars traded here, but anywhere. you are jeopardizing according to the governor of the bank of france or the french finance minister use of the dollar around the world, and ultimately, people will slip. they will move to the euro, one reason why it's strong at the moment, or the chinese currency so you will lose ability to regulate those people and reserve currency or dollar reserve currency declines, isn't that clear? >> i don't know that it's clear, but you have to balance concerns like yours on financial viability, and this is the 7th bank case completed, and none of those banks have done anything but survive and thrive in the aftermath of the investigations and finds, and in each case, commentators like you said this is an outrageous amount of money. >> with respect, sir, the order of magnitude is changing. credit sweets was fined one billion, and now it's up to 9, and lord knows what you'll do

with barclays on the dark board or not negotiating with them. >> that's the attorney general. >> in general. it's a muscular system threatening the viability -- some argue, of theback banks. >> well, simon, i want to put this in perspective. the -- what we want to aspire to as a world community is peaceful coexistence, support of humanitarian value, and a world free of terrorism. if you do not enforce sanctions that prohibit countries and individuals accessing our financial markets in order to move money for countries like sudan, then you're going to undermind the very principles that i think everyone at this table thinks are paramount. we try to strike a balance. i think we did. bnp it great counsel acknowledging the plea agreement was appropriate. that's where we are today. >> what is the final answer when people say no one's going to jail, no individual criminal charges, some lost jobs, but in

the en, you punish shareholders, and that's not a disincentive to not behave. >> it was said the other day, a powerful statement, he said that ultimately the shareholders have to go to the leaders of the financial institutions. this is not the first time. this is the 7th time, and incyst that compliance be in accord with international standards, so this is -- this is essentially a management issue because what's been happening in terms of sanctions enforcement has been underway for six years now. what i would say, though, that the investigation into individual culpability continues in our office. we have a ten-year statute of limitations, resolved corporate misconduct, and we will see what we have going forward. >> do you think there will be criminal charges? >> unclear at this point, and i do not predict. >> what do you say to those going after sanctions, clearly violating the u.s. law, but what about the housing crisis and financial crisis and have not seen criminal charges there?

>> well, our office has dieted a federally charteder bank within the last three years for allegedly misrepresenting information to federal agencies. i think these cases are all complex, and they are not easy and many factors are in play. there's always a desire for a simple outcome that people want to feel emotionally satisfied by. that's not oh prosecutors evaluate cases, and we just need to look at the facts we have and do the best we can as we do in each of our offices. >> cy, thank you for coming in. >> thank you. with that, over to dominic chu for a market flash. >> pharmaceuticals stock soars after the company announced positive phase three treatment of irritable bowel syndrome and expects approval next year. stocks up near session highs,

11%. for the first half of the year, salix up 50%. simon, a good day for that pharmaceutical company. back to you. thank you, the company behind dial, an interview with the ceo of henkel. that's after the short break. in today's market, a lot can happen in a second. with fidelity's guaranteed one-second trade execution, we route your order to up to 75 market centers to look for the best possible price, maybe even better than you expected. it's all part of our goal

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who knows if it's the goldman netflix upgrade or twitter up, but this is the first triple digit gain for the dow since may, and we are at 2 % within s&p,000. >> maybe it's july. the last few years, july has

been a strong month. >> the strongest of the year for the s&p. >> see how the next six months go. everyone focusing on data, manufacturing sales as carl said, reading how rapidly the economy is expanding. we welcome the ceo of henkel, the $47 billion company, headquarters in germany, maker of dial soap and others. welcome. >> thank you very much. >> people know around the world, and you actually make the nike and adidas together, as well as the world cup ball, but this is your largest mark, north amer a america. >> it is. >> how are things? >> grew 4.3% in a very challenging market, you we are seeing global growth picking up, and emerging markets, despite the press, was the strongest in 2011, and double digits and russia, despite the crisis,

growing 5%, so we are seeing a slight pickup driven by stable markets. stable europe, but overall, long term good u.s. >> people know you for the hair care brand in this country. what's interesting 1 in the mature markets, difficult to grow, though 4% is good in north america, is the acquisition. why are you acquiring smaller brands? what the thinking is this about margin? >> in the u.s., we did an acquisition that made us the third largest player in the hair professional market, very attractive market because that's where the trends are. trends for hair care is establish in the professional market. in europe, we bought a set of brands that make us the second largest and consolidate top two position in the laundry care business. the reason we find them attractive is you might have

lower growth, but the profile is attractive in the mature countries. >> some of the global brands, nestle, frips, looking to spin off or sell assets under performing. an article in journal that they are getting rid of power bar. are you doing the opposite, adding to the portfolio or do some get spun off and others added? >> from 8 to 11, we spun off, and now we build up the core, so everything that was on core we got rid of in the range 8 to 11, and now building in the core, but we are in the regions whether it's mature or emerging. >> in what categories, specifically? >> it's hair care, laundry care, additives to laundry, and technology business and adhesive business. frips, you can't have a smart phone without it being bonded together by henkel adhesives. >> we see the world in asset

markets. that's our perception. your perception is different, 7 47,000 employees traveling, i imagine, continuously. what do you tell your chirp about the future, your four children, what do you see we may not see? >> so, the shift to the emerging markets is real. >> and continuing. >> it will continue. absolutely no doubt so unless you have an international education, you will over, in the long period of time struggle to find attractive jobs, international experience is vital in large organizations, and while the growth in the emerging markets slowed down, that is still where the future's going to play. that's one big america, i believe, has a tremendous advantage long term with the energy that transforms america back into an industrial power house and long term huge opportunity. >> good to meet you sir, thank you very much for stopping by, kasper rorsted, the ceo of henk henkel. >> thank you very much. it's not argentina switzerland,

but argentina against the united states, hedge funds, that is. we talk to one of the players for team usa, jay newman is here for cnbc exclusive next. markets broadly higher, i want to point it out on the way out, the dow up triple digits, and the s&p starting july with half a percent gain." squawk on the street" will be right back. state farm, saved 760 bucks. love this guy. so sorry. okay, does it bother anybody else that the mime is talking? frrreeeeaky! [ male announcer ] savings worth talking about. state farm. intercourse that's painfulit...! due to menopausal changes. the problem isn't likely to go away... ...on its own. so it's time we do something about it. and there's help. premarin vaginal cream. a prescription that does what no over-the-counter product was designed to do. it provides estrogens to help rebuild vaginal tissue and make intercourse

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about an hour into trading, dow up triple digits, stories we're talking about, 7:30 on west coast, and 10:30 on wooes e-east coath. >> sales up 1% versus a lost. management changes at twitter, former goldman banker, anthony noto joining as ceo, and the first hurricane of the season could form just in time to wreck the 4th of july. a tropical depression swirling over miami projected to strengthen and forecasts have it sweeping strait up the coast as the holiday weekend approaches, david? >> thank you, carl. the supreme court rule against argentina a couple weeks ago letting a ruling stand the country must pay off hedge funds and other owners of unexchange

the bonds left from the 2001 default. argentina has 30 days to decide whether they want to make a deal with the bondholders or potentially default once again on its debts. elliot management leading the charge against arigentina and speaking up for the hold outs waiting to be paid. it had significant victories in the supreme court, and yet argentina refuses to come to the negotiates table. jay newman, senior portfolio management at elliot management. nice to have you. we spoik months ago about this same thing, but recently you had significant victories. yesterday, there was a press release saying nobody's negotiating with us. it's not too late, though, jay, is it? >> absolutely not too late. although, as you know, we've been trying for over ten years to get argentina to the negotiating table, but so far, no negotiations, no discussions, and no promise of future negotiations. we're hoping that argentina, the government of argentina will not

push the country to the brink of default because that's a dead end. >> i mean, bringing that up, looking at the price of the bonds right now, trading 85 cents to the dollar, not that many people who believe default is really likely here. i'm surprised to hear you say it in the sense you think it's likely. >> always optimistic, hope they come to the table, but so far, there's no sign of it. yesterday, we read -- i think what you read, that the government of argentina is going to send a team of people, unnamed, no titles, and no indication what their authority is, to meet with a special master, daniel pollack, to mediate this dispute, but so far nothing about argentina coming to meet with bond holders face-to-face to negotiate a resoluti resolution. >> what about you going to the special master to perhaps make some sort of an offer? for example, i know in the ipf

settlement, there was -- it was not just cash. there were bonds taken. would elliot, for example, as a hole out, holding the paper, be willing to take not just cash for your payment here and obviously recovery value and bonds, and why not make that over to the special master? >> we've been clear and public about the idea we're flexible in terms of what a default -- what a sit on would look like and the reference to paris club are good examples how a resolution might be structured. in the case, argentina settled an obligation of $5 million issuing bonds sold by the investment bank, and in the case of the paris club rs and this is quite important, or jen tee that recognize the after the same amount of time we dealt with our climbs, regular these the total claim of the paris club, principle, interest, and

penalties and agreed to settle it paying a portion in cash and others in bonds. it's what the settlement might look like with uneducatixchange bondholders. >> sounds like an offer here, does the special master aware of that, argentina aware of that? given i don't believe this country -- i don't understand why they go down the road of real default, given the inability to access the capital markets, what does it mean to their people? one believes they will sit down and negotiate with you. >> we're hopeful they recognize the benefits of settlement. we talked about this last fall. benefits are enormous on a variety of levels. first, argentina has lived in self-imposed isolation international capital markets for almost 12 years, and the settlement of the disputes with the paris club and bondholders are important for reenindustry. we estimate and it's based on

what research we've seen from various analysts, the argentina government could save something between $70 and $80 billion in lower interest costs over the next decade. the provinces could save upwards of a billion dollars a year on reduced interest costs. businesses could save $2 billion a year. these are human, and that's before the fact that foreign direct investment is raring to go and ready to be back in, but waiting for the dispute to see if they can resolve it and restore its credit rating. >> a big number for them for recruit interests, par plus accrued, penalties and something else. i don't know how big the pool of unexchanged bonds is, but could be $15 billion, right? >> we heard a lot of numbers over the years from argentina, mostly in attempt to s sow fear

and concern. the most recent work seen is the number of claims, amount of claim, and, by the way, only argentina knows this and produce no sub stanuation of their numbers, and the work we've seen suggests it's half of the 15 billion, but 7 to 8 billion in bonds that are subject to new york law. that is -- it's not a small number, but as we discussed, in the context of paris club, 9.7 billion, and this number is mangle, and could be settled on terms that are in net cash flow positive for argentina. >> talk about net cash flow positive, you guys bought $400 million in principle, never released it publicly, but 20 to 30 cents on the dollar, sitting on a huge potential wind fall? you get what you're after here, could be worth 1.5 billion, that's a 20 bagger. not bad, jay. >> we started buying bonds near

par and at par, and we're just one creditor. there are something like 20,000 individual italian bondholders. there are thousands of argentina bondholders, there's german and japanese bondholders, and most of those individuals bought at par on original issue so we're just one -- >> and then didn't exchange. >> did not exchange because argentina made 25 cents on the dollar offer. that's where we've been for the last ten years. >> jay, we'll see where it goes here in the next 30 days, important, but appreciate you coming on. >> my pleasure. >> back to you guys. down to the wire for argentina. coming up, southwest goes international, a new age in budget travel, the caribbean. that is next.

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welcome back to "squawk on the street," shares of generac moving, downgrading the maker of generators to a price target from $65. seen limited system pickup, and the stock is down 3.5%, but, carl, off the session lows, back over to you. >> thank you. going to the cme group with rick santelli for the santelli exchange. hey, rick. >> i have one of your favorite people here, ira harris. we talked about mr. carney and janet yellen. seemed like they changed the dynamic from two weeks ago, putting the ball on the other side of the line, and that, of course, listen, we're snugging up, and it's inevitable, but he has backtracked that. >> walked back a bit.

last week, talked about following in yellen's footsteps, unemployment numbers may not mean what they mean, and there may be more slack in the system. plus, they now want to attack the housing situation, especially in london that's getting somewhat out of control by their own words, not putting words in, that's what they said, with macroprudential tools. >> a word invented to put their nose in a bigger place. >> a bag of tools that we don't have to raise interest rates that get into every crack. we can attack where we think may be somewhat of a bubble -- >> are they scalpels? >> they would like to think, not that the british economy is big, but far big r, seen in new zealand, israel, and other places. some success, some not.

may have to raise rates, which is what the market said. if you look, interesting thing was the short sterling, 90-day intersection rate contract, did not budge. >> your guys's version of the futures? >> correct. >> on a scale of who is doing a better or worse job, do you think janet yellen is an improvement over ben bernanke? >> i'm going to accuse you of inflation. you gave her a higher grade when you graded her out -- >> last press conference, i gave her a c because i said if she was on a university like university of chicago, but on the scale of central bankers, what did you give her 12? >> a d-plus. she was all over the place backtracking. sets the market up, backtracks. we hear about inflation. first of all, you can want believe -- no thresholds because they removed it from the unemployment, so they are going to smooth out this inflation, so if inflation goes to 3%, they would say -- >> only thing that smooths out

is deflation, and yet, other than the 19 30s, it's not happening. that's my opinion. back to you, carl. >> okay. i'll pick it up, thank you very much, rick. a new player in international air travel, mean lower prices for the caribbean? that's ahead on the show. market's in the green, dow up triple digits on this, the first day of the second half of the year. cawhat age you are. take them on the way you always have. live healthy and take one a day men's 50+. a complete multivitamin with 7 antioxidants to support cell health. age? who cares. hi, credit report site andour i have a problem. i need to speak with your fraud resolution department. ugh, we don't have that. what should i tell him? just make that super annoying modem noise... (shuuuuuuuh....zzzzzzzz...de ee...dong...shuuuhh...) hello?

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three destinations at this point out of baltimore, out of atlanta, orlando and one to jamaica in a few minutes. it continues to expand and would eventually like to go to another 50 destinations outside the low er 48 u.s. states. including mexico, the caribbean we're there beginning now and parts of northern south america. we talked to the ceo last week at the southwest headquarters what's behind the expansion? he says it's clear. they need to take the southwest model to other markets beyond the continental u.s. >> we're going to have to bring something to the market that is better. bring a better mouse trap. what are our competitive advantages? we believe we have better service and lower cost and lower fares. if we can do that, we can go into markets, lower fares,

stimulate travel, and that's how we can expand. >> that expansion is one reason why shares of southwest, boy, they've had a great run this year. it's more than doubled -- shouldn't say more than doubled. up 43% year to date. that's doing better than a number of the other airlines in terms of their stocks and they've had a nice run this year. for southwest airlines this is just the beginning. they're strategic about their expansion, guys. they think the caribbean, while there's a lot of competition there, is ripe for their long-haul aircraft to now go to those markets. so expect what you're seeing here in baltimore to now spread to other southwest cities here in the u.s. and they'll be going to those destinations in the caribbean later this year and starting more next year. back to you. >> i guess i can no longer call them the largest domestic airline. phil? >> they are not just domestic. that is for sure. >> all right. thanks very much for the story. phil lebeau at bwo.

over to kayla tausche. what's coming up on "squawk alley" next. >> sarah, netflix is up getting an upgrade fra goldman sachs, seized 34% for the stock. where will that come from? we'll tell you. and twitter, what deals will the ceo do for that? talk about that. and gopro up better than 90% since its ipo kevin o'leary says, don't buy it. what does he say now? that's ahead on "squawk alley." ? ? what if the plane gets delayed? what if i can't hide my symptoms? what if? but what if the most important question is the one you're not asking? what if the underlying cause of your symptoms is damaging inflammation? for help getting the answers you need, talk to your doctor and visit crohnsandcolitisinfo.com to get your complimentary q&a book, with information from experts on your condition.

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we've not seen this for a while. a triple digit gain on the dow. up 124. not a bad start for the second half of the year. ben willis join us us from princeton security. what's happening here? >> well, not a lot, quite frankly. moving on little volume and market participation. the fact of the matter is, the economic numbers we're seeing are satisfy enough. they're not great. just like the economy. they're good enough to continue the bull move. >> but not -- you say not a lot, but actually we're seeing a 3/4 gain. unusual, in the last 50 days or so, seeing less than 1% moves. getting a little more exuberant into the session? >> right. the economic data we saw first

coming out of china met expectations. european numbers met expectation. question out of europe, particularly germany. the fact of the matter, the idea for the world sitting on their hands, the money that's moving now is putting bullish bets in, but the market participation to me, from what i've seeing, is very light. >> stupid question, then. are we over -- >> i'm perfect for that. >> overrationalizing the move? ascribing a reason the stock market high when actually it's lifting on low volume and needs confirmed when others come back into the market on higher volume? it might correct down or stay where it is. >> correct. what we're seeing, for the last few months, sector corrections rather than broad market. again, it goes to the theme where i think this year in going forward, the market will be a market of stocks, where you're going to get your best returns by stock picking. unlike what the "wall street journal" wrote yesterday. i think you'll see firms like black rock, going into the management business, will in fact be picking stocks.

so if you're looking at the major indices, moving on the fact that there's less participation in a holiday week on lower volume, but again, the story is positive enough to take us to the plus side. same way we'd have the discussion, the last few days, to the down side. not a lot of reasons than to drift slowly downward. >> but we have a heavy economic week. a jobs report thursday. >> janet yellen talking -- >> speaking tomorrow about manufactures. the dow transports, what it's worth a new intraday high. >> very old school. s&p 500 and 400. again, leadership, keeping a chloer eye on the russell 2000 than say the dow jones which actually lagged the s&p on the last quarter results. >> i thought you said -- kayla old school. >> you calling me old school? a new one. thanks very much. nasdaq up 1%, over to

"squawk alley" and continue. >> thank you so much. good morning. 8:00 a.m. at twitter headquarters in san francisco, california. 11:00 a.m. here on wall street. "squawk alley" is live. best day for the dow since the end of may. up 120 points. good morning. welcome to "squawk alley." with us as always, kayla tausche here at post nine. jon fortt in silicon valley. dennis, we'll get to you in a moment. start with twitter today. the social network naming anthony