ng else on the market. >> taylor swift's 1989 is now the fastest selling album in more than a decade. it's thursday july 9th 2015 and squawk box begins right now. >> live from new york where business never sleeps this is squawk box. >> good morning. welcome to squawk box right here on cnbc. becky and andrew are off today. the new york stock exchange looking to get back to business as usual this morning. after a technical issue halted trading for more than 3.5 hours yesterday. there's tom farley on cnbc yesterday afternoon. >> around mid-morning started to see some concerns about the way trading was occurring. customers weren't getting all the messages back. i made the decision consistent

with our rulses to suspend trading because we wanted to make sure that nyse stocks wouldn't be negatively impacted. >> trading on platforms other than the floor was uneffected and despite the halt nyse consolidated volume which captures trading across all platforms was heavier than normal due to the global market sell off. speaking of stocks let's check on how today's session is shaping up. u.s. equity futures looking for a bounce back after the big sell off yesterday. dow futures implied with an open plus 150 points. here's big stories we're watching today at this hour. >> we'll start with china. beijing taking drastic steps to prop up it's market there. along today's move banning shareholders with large stakes in listed firms from selling. it closed up nearly 6%. elsewhere, south korea rates overnight but did have the

country's economic growth forecast. and then of course have to keep updating you on the situation in greece. meantime germany's central bank warns that greek solvency should not be increased more from our colleagues overseas in just a moment as we go toward sunday with some optimism i guess. >> i still think they do it. >> no they do a deal and both sides get to say yeah we're doing something. >> i never thought they were. but stranger things have happened. >> it sounds like it's going to come down to whether they're allowed to restructure debt which germany says no and the u.s. says they need to do. >> u.s. we don't like the a word in this

country either. the administration. >> so the shanghai we know already -- it's not 6% -- we don't have to worry about that. >> when you ban selling it's really only one way it can go right. >> but when we're watching europe it's like hey -- you know if it starts selling off later in the morning it's like our future's off. so we're done. we got that in the bank. >> 6%. 6%. >> the question is will it bounce or is there finally some sort of trust in the authorities there to clean this up? >> boning up and studying up on how the whole stock market rise is. it was done to become more free market oriented but then you see how much they're involved in

orchestrating this big run up. they said might be a problem here when stocks didn't rise on the president's birthday. it's like wait a minute. something's wrong. can you imagine saying that here. if our market didn't go up on president obama's birthday. >> when is president obama's birthday? i don't know. >> there's a problem if he calls up jack lew. we got a problem here. we're having a big party at the white house tonight and the market was down 150. >> august 4th it's coming up. thank you. >> i'm not even going to say that. >> the birth certificate. >> donald trump brought that up in an nbc interview. >> even my face can't even -- my eyebrow can't move. >> earnings fell short of

estimates hurt by lower aluminum prices but revenue was better than expected. company has been trying to reduce it's alliance on legacy commodities and ceo on cnbc yesterday. >> the business showed real resilience in face of all the head winds. prices dropped 22% over the course of this year and then when you look at productivity and cash excellent. you put this together and see all of this has been done by many day in and day out working tirelessly on getting the transformation of this company down. >> obviously you saw aluminum prices there were a problem and commodity prices the other thing that had people concerned, selling off with the chinese stock market and combined with the other stuff. crazy day.

united. >> united. the wall journal homepage and then the new york stock exchange. >> the glitch. >> which if you hadn't been able to trade on all of the other exchanges it would be like china is down. where would we be? but there would have been a panic. >> if you decided i'm out of here you could have been out of there basically and that definitely helped. among the other stocks to watch, shares under pressure after the company cut it's full year guidance blames the negative effect of a stronger dollar and challenges in eastern europe. ibm you heard at the top of the show, the company announcing it made working versions of an ultra dense computer chip that has about 4 times the capacity of the most powerful chips that are currently being sold.

>> getting a lot back today. that's how it looks now. future's pointing to a higher open. sharply there so. 144 points on the dow. s&p with an open of 19 points. >> that continues to be a closely watched story where the volatility is unbelievable. particular particularly. that's been the way of the world lately but japan and the hang seng are higher as well. crude oil and other commodities have been closely watched because of concerns about what's happening in china. that is getting a lift as well. the ten year note yield. we have fed speak today. 224 is the yield there. take a look at the dollar as

well. euro dollar 110. it's been an interesting story because of the safe haven trade as well. the picture is at 1161. a slight decline at this hour. >> janet yellen speaks tomorrow. watching that. our team of global reporters spanning the world to cover the big market stories. jeff is in brussels following debt negotiation with greece. michelle is still on the ground in athens. let's start with eunice in beijing. >> that's right. i can tell you guys how the government here orchestrates orally oralor or rallies. the chinese media is saying now you're seeing the national team at work. we did see the results of that. the market rallied by 6% they

also told senior managers that they couldn't sell shares for the next six months otherwise they would face severe punishment. today we learned police were investigating what they called malicious short sellers and in the past couple of minutes they came up with results saying they have 12 financial institutions as well as other individuals who had been engaging in who they call illegal acts. all of these managed to relieve the investors here because they feel comfortable at the rally but there's a lot of caution and anger directed at the government. we saw protestors in small groups but outside of the regulatory office and a lot of the investors were telling us they're still unclear where the market is going to head because more than half of the companies listed here still have their share suspended and for that reason everybody is waiting to see what's going to happen when those shares resume trading. now to jeff in brussels.

>> thank you for that. the european markets are getting a break today because we don't have any more negative news headlines on the story. >> the greek banks in trouble. it's not big news. everybody understands that and there's other reports floating around from sourced officials saying the four big banks will have to be reduced to two. all of this part of managing the message as we come up to really what matters this weekend whether greece remains in the euro zone. they have to deliver proposals explaining how much pain they're prepared to take before the close of today to give the leaders and euro group finance ministers the opportunity to study them before it takes place

on sunday we did see funding over a three year time frame. that would suggest they're coming back to the table as honest brokers but the tougher question will be how prepared is mr. tsipras to impose cuts on state benefits and significant hikes in taxes. let me send it over to michelle in athens. >> let's talk about one of the key issues when it comes to those negotiations with greece. now we're hearing from jack lew and christie lagarde if they think it's a good deal. they own over 300 million euros to the world. they owe more debt now than their previous debt restructuring. you can only understand it

through. look at that number. the other debt 194 billion for a total of more than 300 billion. we couldn't list it on the full screen. one of the true things he said as the minister of finance was greece never got a true debt restructuring. they ended up with more debt. that's not how it's supposed to work. he never told you the other side of the story. if greece had not accepted this deal all the cuts and budgets he never wants to make they would have had to make them overnight because greece ran a primary budget deficit into late last year and still is now so they needed bailout money so they took that money and that way they could keep employeeing people thousands of people would

have lost their jobs overnight. the austerity would have happened within months and would have been far more brutal. now christine he guardlagarde saying there should be a hair cut. they say you know what is amazing about the imf is they insist they're a super senior creditor and everybody else should take a hair cut except for them. now he's getting ammunition from jack lew of course. what is also incredible is when they both say oh the imf says we need a debt hair cut but they don't agree with anything else the imf says they want to pick and choose what they're going to do and finally you're probably wondering why on earth are the germans so unwilling to talk about restructuring? what is obviously that huge problem. when you look at all the debt the greeks owe, that 194 billion that's the most concessional.

the greeks don't have to start paying that until 2023. at almost 0 interest rates. so the germans and everybody else in europe says why are we talking about that debt right now? why don't you do some reforms? why don't you get your economy going and when you do your prior actions we can talk about extending maturities. it's incredibly complicated and unbelievably political. you can approximate sure that will be a key issue as we go into this weekend. >> and michelle in your heart of hearts what happens? your current probability for a grexit -- i still think they're going to get it done. don't you? >> i can't guess at this moment.

moment after moment when they could have gotten a deal done and they didn't do it. >> 50/50 is the easiest. >> the tone was much better than we've seen before but you have to see the list of prior actions and those are all the things they promise they're going to do. they're going to do those first prior to getting the money. so let's see if they do them. >> if the drachma was worth 33 euros would the quality of life of the average greek be worse than if they agreed to some of the austerity if their currency was worth a third of the euro? >> it's probably a choice between two different devils, right? you'll have a lower income under austerity but if you go to that you'll face higher inflation because this is a country that lives on imports and you can't

buy as much so everything on the shelves becomes much more expensive. no matter what. i should have held up the communist news because their headline today says agreement or drachma everybody is going to lose or suffer because it's either inflation or an internal deval you wags . >> i know it's because it always has it on the cover there. >> just trying to help. trying to get your props for you. >> i have a question quickly michelle on the cash situation there. the temptation for ious. we have seen this in emerging markets during crisis. is anything going on with that? there's some reports that people are already talking about parallel currencies and the

lines are so long and greeks are putting their money in chanel purses. what's going on? >> the local paper of record reports there's preparations for an iou system and when you talk to people within the government they say, look it's only natural to begin preparations because for the first time we get an admission today that they said we have enough cash for the atms until monday. we haven't heard them discuss when they might run out of cash until this point. that would suggest you have to come up with another thing that you can use as a proxy within the country. the question is how do they decide to implemented those ious? do they use those to pay the government workers? or do they use the ious simply to mimic deposits in the bank?

for both? do they use them to pay arears. all of those choices lead to what is the value of that currency and how much inflation greeks see on the ground as a result. they'll have tough choices on that front. >> okay. i feel bad we didn't talk to eunice. we get 6% and it's like oh that's all fixed. >> he's there. >> i know she is but i feel bad that we're still so greek focused and get a 6% balance in china. the big worry is that the government loses control. all the other stuff weren't working. they regained a little bit of control. the way they do it over there should be able to maintain control. if you tell people you can't sell anything it's going to be hard for the market to go down. >> to your point in an exchange

i had yesterday he makes a similar point that the political fall out from what's happening there is much more important than the financial fall out because the ability of the party to step in with any reforms financial or otherwise is questioned as they try to do whatever it takes here and the market still goes down. >> if they throw everything they had at it -- it probably still needs to go down more because it went up so much and you just got the four classic signs of a totally overheated you know margin debt. record of any country ever held by retail investors and trading volumes. >> some say they can do more. why can't they step in like japan did. >> they really are. >> and maybe also the concerns about whether the market slide there is so heavy and then now we should be very concerned.

maybe that's why we've seen our stocks sell off as overdone as well stocks here didn't participate. why should it be on the down side. >> it's scary to look at. >> feels different coming down. >> new york stock exchange is closed. united flights are grounded and it all came together. 280 points isn't that bad. joining us is bill stone, chief investment strategist. bill out of all the things we just mentioned is -- what is the most concerning and if nothing is and you think we ought to buy it tell us that then. >> it's hard to wave them in the sense that greece is in and of itself so asmall but it has -- you have to give it that the contagion risks out there.

i think china at least in the longer run is the one maybe that deserves that much attention because it is the second biggest economy in the world. the question is whether there is any real connection between the financial markets and the economy. you can make a good case and you talked about it there that is you know what it was going up like crazy and we know the economy wasn't doing well and that was the recent time. i remember clients coming to me and saying shouldn't i own chinese stocks because back when the economy was doing really well and i would run the numbers and they had no correlation with with each other and in other words chinese growth and chinese stocks and you continue to have these worries but you to look for or maybe make that second step to say there's some sort of possibility of contagion. so far i have to say there is a possibility. i just think in both cases it's

not the likely case. >> once again we can start connecting dots which makes it even more ridiculous. connecting dots to what the fed does in september. >> all of this really scary stuff happening in the world and all we can do to bring it home is say it could make the fed less hesitant to go up a quarter point in september or wait until december or maybe put it off until next year it comes down to that with traders in this country? all that matters is is free money forever? that's why we look at all of these extraneous events to see how it effects a quarter point or not or the timing of a quarter point. ridiculous. >> and it certainly figures in you know? every number you run in terms of in the history i think that's why it's so looked at is that there's typically a sell off around fed moves but you're right.

i think there's a little bit too much. >> we are global now. we get the dollar stronger when we already have head winds during earnings season the fed actually has to consider currency when it's deciding if the rest of the world is weak and you'll see a huge spike in the dollar if we raise rates and you already have that head wind with foreign currency and they have to worry about that also. earnings season comes and everybody is low on revenue. it's crazy. >> yeah i think they're going to spend a lot more time i hope anyway focussing on the bigger picture around. again who knows how greece and china plays out going forward here and they'll be watching that data but right now we've seen the nice snap back in the u.s. economy and we seem to be on that path. >> that's what i wish they would actually focus on is getting --

i think the fed is partly to blame here too is we need growth initiatives in this country in terms of cutting back on regulation and getting off of zero interest rates and the companies start using cash not just in a financial way but start using it to do what they're supposed to do now. that's the real issue. it's better than the rest of the world but we're on hold to do things we need to do while we're watching the fed dealing with the rest of the world. >> yeah it certainly for all of us if you asked me would we be closer to normality at this point i would have said so. it does get to be a bit wearing to frankly spend all of our time on maco events and not as much on individual company work. >> thanks bill. so yesterday bernie sanders said

the real unemployment rate was 10.5%. that's not because we trended toward socialism already a little bit and away from private sector solutions. it would actually be better to go even further down that road to deal with the 10.5. is that what you gleaned from that? actually more government answers to deal with the 10.5% unemployment unemployment. >> they're not only ones. we can't do what everyone wants to do and talks about doing. we can't even do that -- you cantlay the blame, i don't think, at the feds feet for the reason why growth isn't where it should be. there's a number of things that could have been done that have not been done. >> the effect of staying at zero has caused this but maybe you're saying it's not their fault they

had to stay at zero. i'm not disagreeing with that. >> i don't think if they raise rates we'll get better growth. >> that's a theory. >> it is a theory. i don't dismiss it. if money isn't going where it's supposed to go to do what's necessary long-term, there's a problem. it's capital being misallocated by holding prices at a level where they wouldn't normally go. wages or prices. >> i do think the fed has had to do more than it and a lot of others would have liked it to do as a result of others not doing anything. >> but the benefits -- when did the benefits of qe end and zero end? years ago probably. so just a chance of there being something negative is not worth taking. >> coming up another win for an activist investor. plus why yahoo! is betting big on sports and taylor swift shakes off a streamsing

controversy. 1989 is the fastest selling album in more than a decade. but first as we head to break, a look back at this date in history. ♪ can a business have a mind? a subconscious. a knack for predicting the future. reflexes faster than the speed of thought. can a business have a spirit?

can a business have a soul? can a business be...alive?

xçó0 welcome back. making headlines today there adding two directors including a partner's nominee to their

broad. we'll talk a lot about activists next week at delivering alpha hosted by cnbc an institutional investor. the company unveiling a version of its fantasy sports mobile app this week. it lets people wager real money against friends and in bigger online tournaments. yahoo! will keep about 10% of the entry fees. >> and in entertainment news taylor swift's 1989 is now the fastest selling album in more than a decade. the album topped 5 million sales in the u.s. alone. she's coming to the tri-state area this weekend. >> duh. >> are you going? sounds like you're going. >> i'm not going. i'm going to be away. >> i had tickets but sold them for a significant profit because they keep skyrocketing. you're going? no. i don't believe you. >> did you have to get them from

a scalper like sarah. >> with your daughter? >> daughter and son and wife. so i got that going for me which is nice. >> you'll be very on trend. >> i went to the last one. i've done this already. here i'm going again. i love her. love her. but there's a lot of teeny teeny boppers around. right. have you done this? anything like this? >> no. >> not yet. >> do you want to stand in for me? >> no. >> because you can't. i'm acting like i'm not excited. i'm acting like i'm not excited. >> but her songs are great on the new album. >> i haven't heard a lot of the new album. >> i was at the red -- i can't believe i know this. i was at the red tour. >> that was a good one too. >> it was. and it's a good song. >> that's what loving you is like -- >> we have pepsi earnings. i want to bring you earnings

alert here. looks like a beat for pepsi reporting their second quarter results early here. i'm looking through the numbers. the expectation was for 124 on pepsi earnings coming in nicely above that. 132. organic revenue growing 5.1%. a lot of people look at that organic revenue number. revenue also coming in at 16 billion. the expectation was for 15 and the shares are reacting positively up 2.25%. gross margin increased for pepsi. that was actually the 12th corner in a row. they have been able to expand that gross margin measure profitability. if you go through the numbers it looks like the beat for profits comes down to pricing which is something you're seeing in a lot of the consumer names and that is they're able to price higher adjust the package sizes of the

frito lay chips and beverages to get more revenue out of that. they're dealing with currency pressures like everyone else. russia is an important market for them. so is venezuela but they warned up about that. they're also raising 2015 outlook. originally it was a 7%. now they're expecting the growth target to be 8%. >> that's the key. >> solid quarter. >> that's what wall street was hoping for. price hikes plus cost cuts. >> productivity. >> plus expanding gross margins. then you get the ability to raise your outlook for earnings which they have done. that's why the stock is reacting in the manner at which it is. >> you're seeing flat volumes so the key is the pricing and productive across the space. pepsi has been executing well on this. >> got snacks. >> they have snacks. >> people are drinking less soda. i don't think they're eating fewer fritos. >> no they probably are. >> doritos.

>> they had a bad wrap where everything kills you or you're worried about it. did you see the guy the other day that lives on bacon and eggs? he's like 112 or something. >> protein, low carbs. >> do you remember when smuckers bought the peanut butter company? that made sense to me. but salty snacks and soda. sal at a snacks and soda. >> people are snacking more instead of big heavy meals so the snacks are right. >> but they're snacking on tofu chips or something. >> kale. sorkin. >> who doesn't love kale chips. >> kale chips. >> coming up controversy this morning about hollywood's walk of fame. we'll tell you about that. next first though as we head to break a look at yesterday's s&p 500 winners and losers.

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♪ might as well right? just keep going. this is red. loving you, scott -- >> you're really excited about this. i hope the glow translates through tv. because this is not fake. >> do i pretend i'm not excited and people know i'm excited or do i pretend i'm excited and people will think i'm faking that i'm excited. i'm excited. >> i didn't know you were going.

>> i'm going. >> you are impressive. >> good seats. >> we're in the pit. you have to move from the seats to the pit. >> do you dance? >> no i don't dance ever. i don't dance, shop, or karaoke. welcome back. controversy about hollywood's walk of fame. despite calls for their removal, bill cosby and donald trumps stars remain in place. the hollywood chamber of commerce announcing that they will remain. saying they're awarded for professional achievements and not for a celebrity's politics philosophy or irrational behavior. civil rights leaders are expected to hold a news conference later today asking the chamber of commerce to remove the stars. >> speaking of donald trump he is losing business deals and now he is getting combative in an

interview with katie while doubling down on his comments that sparked so much controversy. >> we're taking mexico's problems. mexico is beating us on trade and they're beating us at the border but mexico doesn't want to take this. so what do they do? send our stupid politicians and we have sanctuary cities and nonsense. it's a disgrace and if i didn't bring it up you woen evenuldn't even be talking about immigration. >> i have been to the border three or four times over the years and i have many people that live around the area. i'm going to arizona this weekend where they want to talk to me -- some people say i'm the most popular person in arizona because of my stance. >> when was the last time you were there. >> probably three years ago. >> if you haven't been there in three years how do you know -- >> it's bad then and it's worse now. it was terrible then and it's worse now.

it's worse now than it's ever been. with we don't even have a border. people are flowing through like water. there is no border right now. >> got a little combative at times with our nbc reporter. >> he is obviously defensive and blunt. >> i mean golf tournaments now are trying to run as fast as they can away. >> you need to have walked the entire length of the border to have an opinion on this or can you maybe have read or have some feeling that maybe there's a problem with the border? do you really need to be there? that was your gotcha question. so you haven't been there. >> that was just a snippet. >> i watched it. it was combative. but that's what you would expect. don't put me on the spot. >> but even fellow republicans are bashing him for those insensitive comments that he made. you have to admit.

>> right. everybody in this day and age, you saw -- i won't say anything about cosby or trump at this point because i know better with twitter and everything else. i suggest you do the same. did you see whoopi yesterday? >> i read about it on twitter. don't come to my house and kill me. getting like death threats because she said something that wasn't totally negative about cosby. i'm not going to say anything either way. >> coming up chinese stocks bouncing back overnight but the story isn't that simple. beijing slapping curbs on selling. the details when squawk box comes right back. when a moment spontaneously turns romantic why pause to take a pill?

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pepsi shares are on the rise this morning. earnings and revenues topping estimates. also raising the eps outlook. stock is up 2.4%. >> another day, another wild swing in stocks in china. overnight the shanghai composite jumping. still stocks plunged close to 30% in the past month and reports say the chinese companies have now lost market value. here to walk us through what is next and whether we should be worried in the u.s. bill adams, senior international economists and designer of the conference board leading international impact for china. >> good morning. thank you for having me on. >> is the concern here that the policy officials are lacking credibility in their efforts to fight this chinese stock market

slump or just the fact that it's get sogting so out of control to begin with that can slow the economy. >> i don't think you could say that would be hike a 30% drop here in the united states or in another advanced economy stock market. the chinese stock market is much more volatile than other global stock markets and in a lot of years there's very little relationship between what the stock market does and what the economy overall does or even what earnings per share of companies in the stock market do so i think for a number of reasons the volatility we've seen in the chinese stock market, both the big run up and last month's correction are less of a concern for the growth outlook and for americans either considering investments or considering what business will do in china in the next year then it will be if it's effecting our country. >> on the issue of what it means for inside china, i want to read

you something that the well-known investor sent me and i want you to react to it on the other side. the issue there is more political than financial. the chinese communist party and reform matters has taken a hit and that's significant to their economy. do you want to react to that? >> i never believed before this correction that china was moving toward an entirely market oriented economy. they're pretty committed to a mixed income at this point with a large role for the state so they don't really have the same qualms that americans do about intervening in a capital market or their economy when they see something they don't like. >> but the point is they intervened and it didn't work. >> why doesn't there seem to be faith in the government to have this under control and stop the pain? >> well momentums is a powerful force. if you look at what kicked off the stock market boom in china it's that they were opening market to foreign investment and

if you look at what began the correction it was the announcement that chinese stock wouldn't be added to global indexes. we wouldn't get a big global reallocation to stocks. so on both ends it's driven by policy announcements. only one of which was made in china and i think that they're, you know, it's controlling the direction of stock markets for even consider even for the chinese government is a difficult task. the bounce we've seen overnight is a big bounce but comes after a large drop and come with a lot of stocks in china still suspending and chinese companies applying to have their stocks frozen so that the stock price can't fall further. >> all right. bill thanks for your two cents. telling long-term investors to stick with it. when we come back the hedge funds most exposed to the big sell off in china in the next month. stay tuned. we'll name names. squawk box will be right back. ♪

welcome back to "squawk box." the turmoil in china and greece taking a big toll on some powerful investors. kate kelly joins us now. a lot of turmoil in both of those areas, obviously. >> i know scott. you guys have been talking about it all morning looking at shanghai. though they got a reprieve overnight. >> making your head spin. >> right.

but the number of offshore investors in chinese stocks is still relatively small, they're already feeling a bit of pain. the china index shows a decline of 3.5% in june. the first time in some time and also trims the first half gains to 19% which is still not bad, of course. and of the major global hedge funds with exposure to chinese stocks, there's already some evidence of setbacks. one is och-ziff. they have an asia fund called the asia master fund. the fund however, still up 12% year to date. still there are some hedge funds that have been registering gains as well. brevan howard's up in late june. and greenwoods asset management up about 2% for june as well. it will take a sustained pullback to erase the sizable gains these guys have made which

in many cases are north of 20% or 30% given the euphoria in these markets for much of the beginning of the year. but it certainly gives market participants pause. which is taking many measures to try to halt the carnage and maybe have a day of success. i don't know. >> well, i mean look. we joked earlier. if you stop selling or say you can't sell the chances are the market's going to go the other way. >> my money's on the government in this one. >> they haltsed a third of stocks on one market. they've also provided money for people to have added margin. >> it wasn't the easiest market for foreign investors to get into to begin with. >> that's right. and the idea was to improve confidence and sort of support for these markets last year by allowing offshore investors to get involved. and many people did take advantage of it. although in the scheme of things it's still a minority. obviously there were some great upside to be had.

so some people took advantage of that. >> some day you might be able to make lot of money betting against the command and controllability in the communist party in china. up to this point you've lost -- every time you've tried to do that, you've lost. >> there's a good journal piece on that this morning i'm sure you've seen. the point of -- the sort of difficulty of controlling these markets and the fact you can make it -- >> if they lose control, it can hit the fan. the journal's piece would have been a lot better if it was down. >> but that's one day. it's kind of like the oil market slide. we'll see if it continues. we had a reprieve there as well. >> i think we'll hear from some of these guys and women next week at delivering alpha about china probably. >> absolutely. i talked to mary ernest yesterday. she said china's a lot scarier to me than greece in some ways. even if the issues are contained. you don't know what's going to happen. >> got to read quick. go. >> coming up, this morning's top stories.

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xçó0 emergency measures by china taking hold overnight. stocks spiking after china banned large shareholders from selling their stakes. the ceo of allianz is here with a breakdown of today's global market moves. we're calling it the big halt. >> remain calm! >> internal technical issue halted trading for more than three hours on the floor of the new york stock exchange. bob pisani here to tell us what went wrong. and earnings season is here. pepsi out with numbers. we'll break down the number and talk cola wars. the second hour of "squawk box" begins right now. ♪

live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box" here on cnbc first in business worldwide. love this guy too. i wish he was opening for taylor. i'm joe kernen along with sara eisen and scott wapner. some new emergency measures by china having the desired effect at least so far. the shanghai composite rose 5.8% after regulators banned shareholders from selling. it was the biggest daily percentage gain in six years. and it basically erased wednesday's selloff but not quite. because if you go down 5.9% you don't get it all back if you go up 5.9%. >> you're a mathematician.

>> if you go down 50%, you need 100% to go back up. >> oh. >> in the meantime -- why do you think i have this job? in the meantime u.s. equity futures are rebounding as well. but we're not getting it all back at this point. we're about 100 points shy. that's a good start if it were to hold up. up 165 points is what the dow is indicating. and nasdaq up 53 points right now. >> after losing 261 yesterday. in that weird trading session. >> yeah. earnings season getting underway here. pepsi reported earnings this morning. adjusted quarterly profit of $1.32 per share. about 8 cents above what analysts expected. also pepsi raised its forecast for the year to 2%. revenue came in ahead of expectations and the company managed to expand its gross

margins for the 12th quarter in a row. we did say currency would hit its 11 percentage points. the stock is reacting positively to the report. it's up about 2.25%. global markets again in focus today and cnbc's reporters join us from around the globe to bring us the latest. geoff cutmore covering greek negotiations in brussels michelle caruso-cabrera in athens athens, and eunice yun. >> let's begin by telling you we got a little under 12 hours left before the greeks are meant to put fresh proposals on the table. they need to come up with something detailed and credible as we go into another emergency summit on sunday which is being billed as the make or break as to whether greece leaves the

eurozone. we know the greeks have already applied for an emergency loan over three years. that is under consideration by finance ministers even as we speak. but greece really needs to deliver over the next 12 hours or so. otherwise patience will become frayed here and will not help their cause as we go into that sunday summit. so we are on deadline watch as far as this new greek package is concerned. let me send it to michelle out in athens. >> thank you, geoff. the greeks are waking up to another round of capital controls here in the country. they are no longer allowed to carry more than 1,000 euros cash out of the country if they cross the border. so up until now money could not leave the money electronically. now it cannot leave physically either. banking association says banks will be closed until at least monday. they say closed until monday.

my qualifier, at least monday. the stock exchange closed until at least monday as well. banking association also saying that there's enough cash in the atms until monday. implicitly hinting at the possibility they could be running out. we haven't heard them acknowledge that up until now. greeks also reading in the paper today that maher row draghi told a newspaper it's going to be incredibly tough to get a deal done. let's get to eunice yun in beijing. >> the chinese media is invoking the image of a national sports team saying they're taking action. the government authorities said they had enlisted state-owned enterprises to stop selling shares. they also instructed senior corporate managers to refrain selling shares for the next six months or they would face severe

punishment. the police have started investigating what they call malicious short sellers and just over an hour ago we learned that more than a dozen financial institutions as well as some individuals were found to be engaged in what is called illegal activities. now, the investors here have said that they are still very cautious. many of them are angry at the government and in fact we saw some protesters in small groups outside of the regulatory office today. the investors have also told us that they're still uncertain because more than half of the listed companies here in china are still seeing their shares suspended. so many people here are still waiting to see what happens once trading resumes of those shares. guys, over to you. >> all right. eunice yoon thank you so much. our thanks as well to geoff cutmore and michelle caruso-cabrera this morning. joseph? >> scott. how are you? good to see you. thank you. >> you too. >> we have a guest host we liked

so much last time now two hours. allianz's asset manager with the sunday deadline looming discussing outcomes with elizabeth corley. our guest host for the next two hours. and we just assume you know about the u.s., but you spent a lot of time in europe with merrill. >> i did. and asia. that's right, i did. before i was with allianz. just a few years. >> yeah yeah. well, you were 6, right? >> i started really early. exactly. >> at this point, out of take your pick they were like six things yesterday. is it a pattern? is there any single thing there that makes you -- that gives you any trepidation about the u.s. market? >> it depends which part of the u.s. market you're talking about as always. i think we felt that -- we talked last time u.s. treasuries a little overvalued.

you've got o toe outlook of whatever comes out of the fed. in government debt in particular, we've advised clients not to go too close. still some interesting corporate debt out there. some very good companies doing great things. but in terms of the economy, i mean, the u.s. yesterday we heard the minutes from june. i think it's looking okay. if we're going to have data-driven moves, then most is in the right direction. so it's certainly, i think, strong enough to withstand small global shocks. the issue is whether you have one after the other and political action due to it. >> there's been three or four well known guys and respected guys talking about the global debt markets being as overvalued or in bubble territory. and you just wonder could something like greece it always starts small. it was tsipras at one point. isn't it possible that this

could begin unraveling? aren't there a couple of roaches, you see a couple of roaches come out from underneath the cabinet, you know there's more. >> i don't get roaches in my house, but i know what you mean. i don't live in new york exactly. but i know what you mean. the question is is there a contagion risk from these things? greece, probably not. there's a lot being done by mario draghi over the past years. we've seen most of those steps actually work. so we think there's a low risk from greece. but really low risk for the eurozone and europe. if it's badly handled and we have a messy and prolonged action whatever it is. whether it's shadow currency a bailout, going back to the drachma, that could suppress european growth and eurozone growth. but we've seen the recovery this year. we've seen the resuming of some bank lending. we think europe is okay. >> sorry to interrupt you, but if you didn't take a hard line

with greece and then you embolden the other country -- where there's leftists. like, they're swarming in all these other countries. >> like roaches. >> yeah. in this country too actually. but they're swarming over there. and, i mean portugal italy, spain. i mean if you didn't handle greece, if you gave them what they wanted could that even be more of a problem than just losing one country? >> yes. that's exactly right. and i think that's why, joe, everybody's saying and we just heard from geoff that mario draghi is sounding a word of caution. that's why we have to be very thoughtful. we don't think there's going to be a capitulation from the finance ministers or from the heads of state this weekend. >> hang on. don't you own -- doesn't allianz have more than a billion euros worth? >> we have a greek insurance company. so matching liabilities with local currency is not a problem. in fact, you want to do that. so we're not at all worried about that. the exposure is absolutely limited on a huge balance sheet and linked to known liabilities.

so we're not worried about that. >> you started out this conversation by -- it sounded like you were going to suggest while you weren't worried about greece being an issue, you were worried about something else. >> that's right. i was going to lead into something else which is i think the situation in china and emerging markets is a thing that should be front and center of a discussion. today's news is reassuring. we had all the characteristics of a bubble there. overleverage, huge issuance, stocks way out of control. so we were in bubble territory. we've seen a correction. and it does seem that the government -- the state interventions have slowed that down. but what we have to understand is is this going to have an effect on consumer spending? china's on this long-term path to go from consumer-driven growth. and i think that's something we need to watch now. at the moment it seems okay. but i think that's the thing we will be watching and i think long-term china is a great buy. right now we think if anything the valuations will come off

more. >> where it became a problem, how much would china have to slow? i mean so -- >> it wouldn't be any one thing to be an issue for the united states. if you look at the balance of trade for the united states it's nicely diversified. latin america you were talking about pepsi earlier. latin america is highly relevant. mexico is highly relevant. europe is highly relevant. at the moment the biggest issue is what happens to the dollar rather than the economy. >> what do you think happens to the dollar? do you think we can get back down to parity? >> that's a great question. i think it's been interesting to see how resilient the euro has been in the last few weeks which suggests that probably if anything, that the dollar is reaching some of its peak in terms of valuation. we think it might strengthen a bit more but we don't really see it going through much more than 1.10 quite honestly unless there's a meltdown in europe. >> are you british? >> i am. >> so who knows what happens with the uk i don't know in terms of the union over there.

but the prospects for the euro if greece -- whatever happens with greece they do seem to realize now that there has to be more fiscal coordination. >> correct. >> does it last? if the uk says i'm out of here which i don't know whether you think that's likely or not, but are we getting into a point where we think that the euro has a better chance of the whole experiment working or less of a chance of working right now? >> depending on your good point at the beginning, how they deal we the greek crisis. if they go soft in terms of trying to muddle through, it's not just about greece then. it's about other countries which are exhausted from austerity even though they've done the economic and labor market restructuring they needed to do. assuming we end up in a situation where greece is contained and again, that's our core scenario this kpoub good for the euro. >> what's the next thing they need to do to make it an actual union? why would the germans want to bail out the greeks?

we wouldn't ask that question here. why do we help people in appalachia? where people need help in this country, it's a union. it's an actual union. >> share debt market. >> we settled that awhile ago and now we're arguing about this flag. but we settled that that we're going to stay together. and i don't see it over there. it's like the germans are going, wait a second these greeks are living beyond their means. and the greeks are saying these germans didn't even pay back world war ii. they're all different. they're not the same. >> they're all very different. >> are they a union? >> it's like the united states. each state has its own economy which you've accepted that there's a transfer. there's a transfer to have wealth and value and you've accepted that there's a reasonable fiscal collect system. the big issue for europe is if you look at the quality of the institutions in some of the countries, they're not all at the same level of maturity. for example in germany, if you're bankrupt in germany, you've wellched on a promise. it's deem z as something you just don't do.

culturally writing off debt and moving on and starting up again even here in the united states is something you can do. you've got cultural differences. and the bottom line for greece will be collecting the taxes on a respectable basis. >> i'm afraid to use the word wealth. >> is that right? >> it has something to do with wales. >> don't use the "w" word. >> don't use the "w" word. >> okay. >> there's got to be ood way of saying it. if you don't pay back your -- >> if you fail to pay your debts fully and thoroughly. is that snap y i? >> anyway, that was great. we appreciate it. >> thank you. >> she's here for two hours. >> i know. >> he's trying to get rid of me. >> someone who walks on egg shells every day. >> i do now. when we come back the new york stock exchange planning a normal open this morning after yesterday's big halt. bob pisani will be here with

what stopped trading at the new york stock exchange. then china stabilizing the stock market. and pepsi out with an earnings beat earlier this morning. we'll dig through the report with an analyst. should you be buying the stock? all of that when "squawk box" comes right back.

welcome back to "squawk box"

this morning. the bank of england leaving its key interest rate unchanged. as expected european markets mostly higher this morning. take a look across the board. from germany to portugal there's a lot of green on the board this morning. earnings news out this hour. walgreens boots alliance. 15 cents above estimates. the company increased its full year outlook as well. revenue did fall a bit short of forecast. walgreens also raised its quarterly dividend to 36 cents a share. we're just over two hours away from the opening bell down at the new york stock exchange. less than 24 hours ago the exchange was scrambling to resume trading after a technical issue atted trading for more than three hours. bob pisani was in the middle of it all. he's now with us and he joins us with the latest on the "squawk" set. >> the interesting thing is we still don't know what the problem is. they did release a statement last night that added a bit of

clarity but not much. the nyse experienced a technical issue and consistent with our regulatory obligations the decision was made to suspend trading as we worked to identify the cause of the problem. the root cause was determined to be a configuration issue. well, that settles that. now that we know what the problem is. this is fancy tech talk. all of this is fancy tech talk meaning there was a server or hardware configuration that was not set up properly. it's a software problem. that's the issue they're dealing with right now. they are routinely given upgrades because of all the other software. there was an upgrade the night before. right at the open we had connectivity issues. meaning messaging traffic was having a problem. they supposedly fixed it at the

open. i think what happened was in the process of fixing that problem, it created other coding problems. this is a problem with these complex systems where they have to interact with everything. they're not quite clear all the time on the outcome of trying to fix these things. so i think that is what caused the problem. so there are two issues that are really important at this point. number one, can you keep these glitches to a minimum? how do you do that? the s.e.c. has been trying for years to require all the exchanges to upgrade their systems regularly. this year they did institute a new systems testing and upgrades. i think the s.e.c. is going to be investigating that to make sure that the nyse was in compliance. >> they are at a minimum, though, right? we're not talking about these types of things every week every month. >> last one was what? three years ago? >> there are little glitches that go on all of the time. this was an egregious example of

what happened. it doesn't happen that often. it's amazing the systems work so well. the second thing is to make sure there's an adequate safety net out there. in fact, we saw that yesterday. archipelago which is the electronic trading system continuing to operate well. and nyse listed stocks own others that continued to operate well. so essentially think of trading as a river and there was a rock that was dropped right into the middle of the stream and the stream went right around it essentially. now, where i think the nyse floor adds considerable value is at the opening and close where they have a monopoly and that's why the floor is still important. so hopefully we don't have this debate flowing over. we're over that debate. you and i have been debating this for 15 years about the floor. >> -- to see where everything -- when you don't know where things are trading, you start wondering, you know if it had been -- if you didn't know where

any of the big board stocks were, you'd be china, this that. but seeing where they were made it so much better. the pent up selling didn't build up. >> and this was not the flash crash. i mean the important thing, this was a software coding error. we need to keep those -- >> how many guys yesterday said to you, united you know glitch there, "wall street journal" glitch. this has got to be a hack. weren't there conspiracy theories all over the way? >> you and i aren't conspiracy theorists. but did that not go through your head? it went through my head immediately. the first thing i said was can you tell us what the cause is and can you rule out cyber attack? and they did quickly. >> is it 100% ruled out? >> they made a statement that it is not a cyber attack. i asked the president of the nyse whether it was. he said it wasn't. >> doesn't it make you think how unprepared we are if it actually were? >> yes. i was out with some high level

security people working for the federal government a little while ago and said what's the things that worries you most. they said the two things is an attack on the electrical grid and attack on the financial system. so yeah. that immediately went through my head. so i don't think it's a crazy idea. >> they're 100% confident this morning goes off without a hitch? or a glitch? >> they said all systems are operating fine. >> i'm going to ask a boring basic ceo question. why do a major software upgrade in the middle of the week? >> normal practice it is done over the weekends. but sometimes there are new systems that come up and you can't avoid it. these things happen all the time and they go off routinely. it's fairly rare to have an event like this. every once in awhile it goes through the complexity of it. it was similar to the trading operation that happened. that actually was a coding error very similar to probably what happened here. so we can keep these to a

minimum but never get rid of them. this is a characteristic of complex systems. you're going to get coding errors. it's going to happen. upgrading cars upgrading stock trading systems, upgrading airline routes and things like that. all we can try to do is keep it to a minimum. i think the important thing is figuring out why the damage was so severe. this was much more severe than most of these have been. and this is an issue for the coding people to look at. what did they do? and i suspect when they tried to fix the initial problem, it created a kas katcascadeing series of other problems. the bottom line was the system worked. and the market -- people were not disadvantaged. at least in terms of prices. there were certainly some people on the floor that were unhappy. >> it's embarrassing, right? >> no, it's not good for the nyse image. not at all. all they can try to do is minimize it. there will be an investigation. i suspect the s.e.c. will look at whether there was any violations here.

and there'll be discussions about it. given this is a young team it's a new team that's there, i think they handled it very well. there's a certain seasoning you get with crisis management. >> i asked sara about it and she went, oh. you said that earlier, didn't you? >> i said it to you. not on television. >> thanks for letting us know that, joe. >> did you hear anything he said at all? >> obviously sara hasn't learned yet. >> don't say anything like that. >> you know what? he said this was a tough day. that was an understatement. >> we were asking to have him on very early. i would like to have him on early, but given how tough it was to solve the problem, i know his attitude was he had to fix it. >> he came on with us at least twice. >> farley. >> so bitter.

>> you made another friend joe. coming up -- >> i wish someone would talk about -- you think he's mad? i wish someone would talk about me like that. they never have. horrific fireworks accident claiming -- do you believe this -- the digits of two nfl players over the fourth of july weekend. that story coming up next. i aflac? aflac! i thought you said this guy was the best? oh, he's a horrible stylist. gah? but he's the best at paying claims fast! really... mmhmm. paid mine in just one day. one day? yea. aaaflaaaac! in just one day, we approve and pay.

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. welcome to "squawk box." among the stories front and center this morning, victoria's secret parent l brand fell short of estimates. the eu filing formal charges guest mastercard today. they want to know if they're raising the cost of card

payments. and ibm announcing it has made working versions of a dense computer chip. it has four times the capacity of the most powerful being sold. and we talked about this before going to break. firework accidents reportedly claiming fingers from two nfl players. doctors amputated the right index finger of new york giants defensive end jason pierre-paul. he refused to see members of the giants staff at the hospital yesterday. even with the lost finger his career -- i can't imagine it would -- it says might not be in jeopardy. we'll see. and a similar story from the tampa bay buccaneers. cornerback c.j. wilson also injuring his hand in a fireworks accident. his father says wilson lost his index and middle fingers. but neither one of these were as bad as the guy that shot one off his head. >> why is this happening? >> i don't know.

it's -- you know -- >> i don't even know what to say. >> i don't either. >> because there's a lot of things you could say but it's not funny because someone's dead and another guy lost their -- >> i'm thinking about the nfl guys with these multi-million-dollar contracts who are playing with fireworks. with their hands. >> fireworks are pretty cool. >> do you hold them in your hand? >> no. i don't. but i don't think you're planning on holding them when they're going off. >> you're not planning they're going to explode in your hand. >> maybe they need better safety warnings or something. >> the safety warnings are pretty big on the fireworks. >> are they? >> yeah. >> are you kidding me? >> i had to go to indiana to buy the fireworks. >> walk across the suspension bridge. i knew exactly where to go over in covington. >> you walked across the bridge?

>> yeah. i was 15. yeah. i loved fireworks. >> we're both from cincinnati. >> yeah. >> one thing we have in common. >> moving on. >> quickly. >> thank you. east side of town though. there's no rivalry. i grew up near where pete rose grew up. that says it all. on the west side of town. >> home of the ice cream. you want to go down this road again? >> it's like a microcosm of the country. >> oh, god. moving on. actor tom selleck is being sued for allegedly stealing truckloads of water for his ranch in drought stricken california. the local municipal water district claims a truck tanked up at a hydrant more than a dozen times and hauled water to his ranch. the district hired a private investigator to document the alleged thefts. it's seeking an injunction barring selleck from taking any

more water. the sheriff's department told nbc news they investigated the allegations but could not find any criminal wrong doing. >> the story was everywhere last night because a pi had been hired to investigate -- >> the pi. >> yes. pi investigated magnum pi. was it for avocados. he has them on his property. >> he has a 20 acre avocado farm. >> he needs water. >> and a horse corral. >> how will we have guak without that? >> exactly. coming up china announcing more emergency measures to stabilize the stock market and gaining some traction. the shanghai composite erased the previous day selloff. we'll talk to an analyst who says china could be poised for big gains. and as we head to break, look at

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we are back. goldman sachs out with a report saying they expect a monster rally in the chinese stock market over the next year and that's partly in response to china's emergency stabilization efforts. overnight china announced shareholders with stakes over 5% would be banned from selling shares for the next six months. the shanghai composite spiking on the news closing up 5.8%. we're joined by a china bull the former cio at global advisers. >> good morning. >> you're banning and stocks are going to go up. that's the way to deal with it? >> it happened here in new york with the financial crisis. >> six months? >> i've seen it before. >> why doesn't it seem to be working? >> well -- >> it spiked percents today.

>> just today. look how much they've done in the past week. >> despite what i said i'm not a big believer in the government trying to do something with the market. just in general. whether it's in canada the u.s., europe china. i'm just not a big believer. this is a story of a lot of consumers -- we've heard the story moving from exporting to consumption. they were consuming real estate. that didn't work well. now they're consuming stocks. they're going to have a problem with that too. luckily we'll see more foreigners come in because we've seen the stock connect and mutual recognition of funds. these new steps for the chinese government to allow foreigners to come in will more than offset the domestic investors. >> as the country tries to shift to this you don't think there's any fallout dramatically from a new breed of investor getting into the market and then watching the stock market essentially crash right in front of them and that not having ripple effects over the longer term? >> i can't answer that too

clearly except for the fact you've had 150% run-up. how much has an investment into the stock market? last year the biggest product launched in china was used as a parking space in alibaba. when you look at the investor and ask them how's your experience been? generally i've had my money in cash. >> is there a longer term fallout maybe as someone like the well known investor jim chanos suggested the fallout is more political than financial. the inability of the chinese communist party to stem the selling in many respects will have much longer lostasting effects. >> i think that is true. when you look at the restrictions put out there, i believe that the china security finance corps, the restriction

is not to allow selling or shorting of small cap stocks. my feeling is they're trying to protect the chinese investor who's generally -- i hate to say it -- a bottom up picker. very similar to a u.s. investor during the tech bubble and crash who were also very new amateurish investors learning for their first time what does a bear market feel like and what does margin feel like after the fact. >> that's a great point because a lot of this is speculative opposed to investing. but what about the whole policy on margin accounts and leverage around it? i'd love to hear that. is that going to shift now as a result of this experience? >> from what we've seen with the chinese policy makers they're reactionary. the finger pointing has started. and complacency is something they can't do. so to turn off the spigot is something we'll likely see. it's something we've seen in the u.s. as well. enron leads to something. there's always going to be a

reaction. >> i think it's interesting that this made the front page of "the new york times" in the u.s. today. i mean finally people really starting to notice here and they're starting to wonder what e the impact is. what would you tell people who, say, own alibaba or other chinese stocks that trade here or big companies that have chinese exposure? >> i would say get used to it because you're about to get more. if you're in a state pension plan or globally if you're part of a country that has a sovereign wealth fund you are going to get more chinese exposure whether you like it or not. ftse included china in the world's largest emerging market etf. and s&p dow jones will follow. whether you like it or not, etfs any pension that has a policy allocation will increase chinese allocation. and ragt now i bet they're jumping at the chance. >> so to your point and i thought the conversation you heard when msci was thinking

about increasing the china waiting and things like the eem which the average investor is likely in was maybe a sign of the time. okay. maybe it's gotten a little too hot over there. >> right. not a little too hot. it's super hot. >> wasn't that a pretty good sign that maybe it's got too much? now we're thinking of increasing the waiting on something like that where the average american investor can have more exposure to a market place like that? >> that's -- i have to say that's true, but if i were to open up the magazines that whatever is the time magazine of china right now, wouldn't surprise me if it said end of the stock market which sounds like 1982 here in the u.s. >> and you're still a long-term bull? >> yeah. >> i guess the question for me is is this the time? you said people should be piling in now. if you look how the valuations rode up they probably have more volatility. and we're probably not at the bottom yet. even though the interventions have helped sustain. timing is important. >> my life as a hedge fund

manager, i would say right now if you are in then you have to figure out do you want to commit for the longer term but if you can't chop off the arm to save the body. but if you are thinking right now i have had cash i was smart, then enter now. but now is not the time to buy insurance. the house is already burning. >> richard, really interesting conversation. thanks so much. >> thanks. >> richard kang. pepsi out with earnings this morning. stock is on the move higher. we'll dig through that report next.

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pepsi shares are on the move this morning. the company beating earnings expectations and also raising its outlook for earnings. joining us now is ivan fineseth. has a neutral on pepsi stock. were you impressed by these numbers, the fact they're able to still raise margins and also raise the outlook? >> not really. the growth is really coming from their snack food business and the key problem is that their key carbonated beverage business is still flat slightly

declining. more importantly the key measurements we look at we look at the economic profit still being flat. >> so you're in the camp that wants to split up the company, food and beverage which doesn't get talked about any more because he successfully got someone on the board? >> yes, i absolutely believe they should do that. there's no synergy is selling soda and snack food. the only thing is they're consumed together. >> aren't we past that though? they've been able to prove that having the snacks business has been great because it's balanced out the weak volumes of the beverage business. they're cutting costs with productivity and they continue to increase profits on pricing. and they've proven that it is good. it helps leverage with the grocery stores to have both. >> well from the operating standpoint of the business if one division is doing poorly and another division is doing well overall the company could be doing well. however, you want both

businesses to do well because they are both key businesses. and the key dominant business is still they are a soda company. or a beverage company. >> so what would it take to get you to like this stock? or are you just not going to like it unless the spin off beverages? >> no. they don't have to do that. what they have to do is to allocate capital to have a rising return on capital. because our key measurement and driver is that the biggest driver of increasing shareholder value is a rising return on capital. over time their return on capital has declined from about five years ago, about 15.5% to just around 6.5% today. >> what do you think about the move to promote hugh johnston? he's officially named vice chairman. is that a succession move? >> possibly. overall i think it's neutral. i don't think it's negative.

i don't think it's that positive. more companies and more investors and regulators are calling for splitting different offices, so they're combining it. but it's a non-event to me. >> i think it's interesting because our analysts have a slightly different perspective than yours which is we like the diversification and the thoughtful way they're handling the succession. what do you think about the move to speed up the north american business? doesn't that go against the snack food/beverage split? if anything they're going to consolidate around latin-america as a region. >> well latin-america is a key growth area. so doing that may allow them to focus resources and management expertise in other areas. so it's not a negative. if one region is doing well and another is doing poorly it's going to have a negative effect on the stock. >> but it suggests there might be some synergies in distribution deals as sara was

saying around the two businesses actually. >> well but you see here's the thing. the snack and beverages, they're not produced in the same factories. they're not even delivered in the same trucks. both the frito products and pepsi products show up in different trucks. >> i think coca-cola would be thrill fire department they had the business pepsi has now. it's a totally beverage-focused company. >> yes. the other thing is they really don't do that much cross promotion. you would think they'd have coupons on a bottle of pepsi saying you could get a discount on a frito product. but my view coke benefits more from a sales of doritos than pepsi does. >> interesting perspective. there are investors that still feel this way. ivan feinseth. >> is there a single snack that ends in s that isn't

unhealthy? >> they're great. >> unhealthy. is there one that isn't great? >> i'm not a tostitos person. >> with salsa? are you out of your mind. i like the scoops. i like them. cheetos. tost tee toes. fritos. >> we have a deprived life. we just get the doritos in europe. we don't get the others. >> you've got to go to a great gas station in this country. >> i was just there though. you do have those toilets. wow. >> maybe i don't go into the same toilets as you. but it's possible. >> they have little spray things on the regular toilet with warm water. >> yes. >> they're unbelievable. and you got to pick a knob to flush. which got me confused. i was afraid to touch anything. >> equity futures slightly

higher this morning. we're done with toilets. >> goodness. >> futures pointing to a rebound on wall street. now up to session highs up 172 ahead of the open. at the top of the hour david gerstenhaber weighing in on the bubble in china spp it a bubble and is it popping? and he'll talk about the prospects of a grexit.

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>> are you still on toilets? >> no. we were on streets. go ahead. >> alcoa has actually kicked off the unofficial start to earnings season last night. earnings falling short of estimates hurt by lower aluminum prices but revenues were slightly better than expected. the company has been trying to reduce its reliance on its legacy commodity business. when we come back media executives gathering in sun valley. aol ceo tim armstrong joins us. plus steve leisman just touched down in germany. he'll bring us up to speed on german public opinion on a possible bailout deal for greece.

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china's market surging overnight. a new proposal on the table for greece. add earnings to the mix and you have a recipe for wild swings on wall street. david gerstenhaber tells us where he's putting money to work and why he thinks stocks are headed lower. the stock exchange wardrobe malfunction. >> i've never seen this happen. >> yesterday's big trading halt should it alarm investors? and what it says about the

trading system. media moguls gathering in sun valley to talk business and make deals. we have tim armstrong as the final hour of "squawk box" begins right now. live from the most powerful city in the world, new york, this is "squawk box." yes. it is. that's what i mean. welcome back to "squawk box" here on cnbc first in business worldwide. i'm joe kernen along with sara eisen and scott wapner. becky and andrew obviously are off today. we're less than 90 minutes away from the opening bell on wall street. the futures are better if you're long than last time we checked. up 174 on the dow jones after losing 260 yesterday. we had a day last week where we lost 350, remember? and we're well below 18,000 on the dow. but we'll get some back today. there's what's happening in europe. those are all nice moves across

the board. scott, i mentioned yesterday when they put apple in the dow, i said there's going to be trouble. look where the dow was. see apple yesterday? apple was 122 yesterday. $706 billion. i argued now matter how great the products are, no matter how great the future is. getting to a trillion is tough. $784 billion was the highest. 706. it'll bounce today probably. >> it wouldn't be the first huge technology company to go to the dow and have issues. >> exactly. or even worse, aig. if they hadn't added it to the dow, we wouldn't have had the financial crisis. wouldn't have happened. here are the stories investors are going to be talking about today. chinese stocks actually rising today. the shanghai composite closing up 6% almost. taking steps to prop up the market there. and among today's moves, the

securities regulator there banning shareholders with large stakes enlisted firms from actually selling. meantime the bank of england keeping interest rates unchanged. policy makers trying to improve wage growth with more turbulence in the global economy. then in corporate news pepsi shares rising this morning. earnings and revenues topping estimates. and the company is raising its outlook. pepsi sharing up about 2.5% in the premarket. if greece is to get yet ood bailout from the eurozone it will have to go through germany, that country first. and that's the country to which greece owes the most money. some 68 billion euros. but we did see earlier, steve, michelle did a great report on what greece owes to others. but it comes later. it's in the 2020s of the 194 or so. we're playing -- this might be craftworks for you.

we're not playing any dead. we're playing german industrial music. steve leisman is in frankfurt this morning getting ready for this weekend's big vote. we sent you over there. that's good, steve. can you -- is it palpable that something's going on? >> oh, yeah. yeah, you can feel it. this is the place where if there's going to be a greek deal, it's going to happen. i just want to tell you what we heard this morning. i love the way the guys at the control room get their kicks. i'm here in germany and they're playing whatever it is they're playing at volume 11 in my ear. thanks guys. appreciate it. turn it up. now you want me to dance, don't you? i'm not dancing. sop here's the deal, guys. germany is the place it's going to happen behind me the european central bank building. sorry, no cheesy euro sign behind me anymore. those days are done. but here's the deal. this has become here in germany and across europe and the united

states about angela merkel and the choice she has to make between check in politics where only 10% of the german public according to the most recent poll supports giving greece any leeway. and her legacy. and i want to show you this cover that came out. and this translates at lady of the ruins. and she's standing you could see here on some greek columns fallen over. it says if the euro fails, then merkel's chancellorship fails. it chastises her for the decisions she's made and the rise of the hard left wing in greece. whether that's fair or not, i don't know. but this is being cast if she lets greece go then down the road there could be others who go. and the whole european experiment which was from her party where she came from was a big euro integration supporter here. at a conference just across town being put on by the bank.

the bank president had some pretty harsh words for greece. this is what ehe said. >> the greek government has not only walked out on previous agreements but has been widely criticized as an unreliable negotiation partner. k a little other a week ago it came to an end and the greek government has stopped honoring its payment negotiations towards creditors such as the imf. >> so guys what we were told today and i think michelle has talked about this this morning is that if the greeks don't submit a plan this is from a german official, then it's going to be hard for them to meet on sunday. they need it in by midnight tonight for it to be reviewed. and the best way to end this is now we dance. joe? >> steve, we're going to stay on this. i don't know if you can stay with us, but we're going to stay

on this topic. with us on set david gerstenhaber our guest host today elizabeth corley. david, let's start quickly and just looking at some of your interview notes, to figure it out you've got to get inside tsipras' head in your view. >> kraeyeah. >> what about the notion he says we'll do three years and the pension and tax stuff. just get out of this mess for now. is that likely for sunday or you don't know? >> i think it's impossible to call. he has been very unreliable in terms of what he's done thus far. and he's a wild card. >> does it matter to the decisions you're making with the money you manage right now what happens to greece? >> it does. greece is overhanging the markets. it's a relatively small part of the eurozone but it clearly is impacting flows of capital. and i think that defensive

posture is probably appropriate. >> we have a checklist of items to go down. and then we want to get -- i want to talk to you about apple too. we were just talking about it. you were twitching over there as i was saying it's tough to get to a trillion dollars. but china, they definitely are manipulating the market. if they can continue to do it probably would be fine. but the question is if it just gets too heavy for anyone to be able to hold up. but it worked today. >> it's come down a long way. it may be a little bit late to be panicking on china. >> yeah. >> so yes, they can manipulate the market. they're trying to manipulate the market. and they had some success overnight. >> so it's telling that you said maybe the worst is already -- maybe they already lost control. that's why it's down a third. >> yes. no question. the -- >> the better short back then.

>> much better short back then than it is now. now everybody wants to be short. it seems like it may be late. >> all right. i was talking about apple. i want to ask you one question. because obviously there's no one in the world that doesn't know how cheap that stock is and how great its products are. i always ask the question who has not yet at $784 billion market cap when it was at $134 who had not acted on their bullish intentions at that point on apple? who was left to buy it at a higher price from the people that already own it? >> that's a good question. i don't have a good answer to that question. >> but you'll stay in there. just sooner or later it will out. that's what a money manager decides. that sooner or later it's going to be reflected is that it's got great growth it's at ten times whatever. no matter the technicals whether everybody already owns it, it's going to eventually -- >> no i don't think it's a matter of technicals. it hasn't done anything adverse

thus far. >> hard to grow to the sky though. >> no question. there's no question. >> the suggestion is to your point that there are some funds, mutual funds who are underweight apple in terms of their overall weight. they need to get in. and as icahn has talked about, that creates in a sense the de facto short squeeze in the stock eventually which helps take it higher. how about that scenario? >> no i think that's a reasonable scenario. it's a large piece of the index. unless you think the index is going down hard and unless there's any negative news on apple, there's no reason the stock should underperform. >> we do it less from technicals and more from fundamentals. we think it's one of the strongest consumer brands in the world. got extraordinary ability to extend beyond that. coming out with a great product lineup still. underperforming expectations. >> there's ways you could paint a scenario for the future

looking back three years from now where you'd say, wow, we didn't -- we thought that the penetration of the iphone in global markets was so low that it only had one way to go and that was up. we didn't realize company "a" or company "b" or samsung, we didn't realize they were going to leapfrog technologically over apple. and it always happens to tech companies where you don't see it coming. >> i think that's right but their brand goes beyond the product. it's got a consumer trust element in it. if they wanted to diversify, if they started to anticipate they were maximizing penetration. >> what did we decide on the watch? failure, no? >> but there's also things coming early. i think we shouldn't judge it in the same way we judge more classic -- what about google glass. >> i don't think they set out to make it a mass market. >> sales have dropped off sharply. >> virtually every headline that's come out over the last

how many weeks has been somewhat negative about the watch. >> i don't think apple expected it to be a blowout kind of product. >> i don't think they expected it to be a dud. >> i don't know that it's a dud. >> look at the experimentation, you know. a lot of this is finding a community interested in something, listening to the community feedback innovating and getting out there. i think it's interesting to see the way in which they bring the consumers into the development. >> let's move on. so you're going to stay long. >> i am here to stay long yes. >> i'm fine with you on that. how about airlines? we talk about airlines all the time here. i don't know if you watch, but i argue with andrew constantly. he says airlines have a spot and no one else can get it from the government. you're able to charge whatever you want. so it's basically unfair as far as competition. i argue for 20 years they had a negative effect on capital for 20 years. >> correct. >> so finally all the legacy carriers go bankrupt we let

them merge. now we're going to try to fix pricing. after we let them consolidate. is it unfair they're doing so well now? >> i don't think it's unfair. we've reduced the number of carriers to a handful at this. >> oligopoly. >> yes. and they haven't added at the pace they might have. they have underperformed recently. >> and they're such an easy target. you've got airlines and people will say they're making too much money just because their bag was lost last time or they had to wait on the tarmac. it's like cable companies. had to wait with comcast. who's going to take comcast's side in that when they waited for the guy and he didn't come between 2:00 and 6:00 right? it's an easy target. >> are you worried about the collusion investigations? >> not really. i think that it's too obvious.

>> right. what i was saying you need to collude to come to the capacity? doesn't every company need to -- even apple. you don't want to make so many iphones iphones. >> it's exactly right. these are cheap stocks. if you don't mind fighting the market, it's probably a reasonable time to be long these stocks. >> so you'd be buying delta, any of the others? >> i wouldn't buy them in any great size. >> what should you be buying in size right now? can you tell us anything or need to buy it first? >> you liked japan a lot last time. >> i like japan. we're seeing stocks respond accordingly. and the economy is doing okay. it's not doing great, but it's doing okay. they have quantitative easing in the system there which is keeping liquidity flows high. they have institutions which are

shifting out of bonds and into stocks. and so you have a natural flow into the stock market in japan. i think the setup is pretty good over there. >> okay. got to go again. thank you. >> all right. >> appreciate it. coming up the new york stock exchange shut down yesterday raising questions this morning about the stability of the nation's high speed trading system. so could glitches and halts hurt america's global market dominance? we discuss that next. everything seems to be running smoothly this morning. check out the futures. looks like a higher open for the board. implied open for the dow of 175. "squawk" will be right back. can you spot the difference? the wind farm on the right was created using digital models and real world location-based specs that taught it how to follow the wind. so while the ones on the left are waiting the ones on the right are pulling power out of thin air. pretty impressive, huh? now, two things that are exactly the same have

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just want to bring in some breaking news here. pg&e got this done on the beauty brand. going to sell 43 of its to -- this is part of p&g's efforts to spin off a lot of underperforming brands. this is a big one. $12.5 billion. the reason you're not seeing a whole lot of reaction is this

was a long time to be rumored and speculated and reported on. that both coty would be the buyer here of the beauty brands and they were going to fetch a price around $12.5 billion. that is a good price to pay according to analysts. and we'll continue to see p&g's strategy. they have failed to really bring back top line revenue growth. we are counting down to the opening bell on the new york stock exchange where trading was halted yesterday. good to see you. broken markets. they left the end out. >> that was the name of the book, but don't worry about it. >> who's counting. what is your take on what happened yesterday? >> listen we're in a technological world.

there's always going to be a software glitch. there's no question. there's constant exchange glitches. there was one on edge-x. no one talked about it because it's a minor exchange. there will be more of these. i think the new york stock exchange did a good job. i think tom farley in his statement, he mentioned the close was the most important thing for the stock exchange. >> getting that across. >> the close. not the clothes. >> he's a good looking dude. >> you said it. not me. >> hey, no man crush here. but the bottom line is they did what they were supposed to do. but here's the thing. as a professional trader we traded all day long. we didn't stop trading. i traded on many. with that said i'm hearing an argument saying that fragmentation is good. but here's the difference. there's competition and

fragmentation. right now there are over 40 stock exchanges. of which five of these have less than 5% market share. they're irrelevant. we don't need 11 stock exchanges. we need closer to four or five. >> i thought we learned yesterday that we do. >> not 11. i would take more than one. because then i'm stuck in one spot. but maybe i can deal with three. why do i need 40 dark pools? why not have about ten? unless you're coming to the table with something creative and competitive like iex is when they came out with their new system, why do i need a system that has a pricing rebate that flips around? that's not what the market is about. we're trying to aggregate liquidity. >> i hear you but the genie's out of the bottle. how are you going to put it back in? if anything, it's going to go further the other way. >> the s.e.c. has to stop issuing. but if you don't have 3% market share, you should not continue to have a protected market

quote. there's no need for all the fragmentation. here's the funny part. a lot of high frequency traders agree with me. they're they'red they're tired of it. all types of investors are playing in the same pool not disintermediation where all of this noise goes on. that's noise. that's not what we're supposed to be doing. and i think yesterday could be a good way for the s.e.c. to step in and say we do have an issue here. fragmentation is not good. okay? competition is good. there's a big difference there. >> joe, it's interesting earlier other joe was asking about the risk of cyber attack. don't you think we'll see natural competitive forces squeezing out? the amount of security for other things is just going to squeeze them to the wall. wouldn't it be better to allow

that competition? we heard earlier they don't like institutions of governments intervening in markets. >> i'm a free market guy as well and i would never say i want all this excess regulation. but exchanges are owned by three families. so ten of the exchanges are owned by three families. there's no need to have four exchanges at one facility and in fact a lot of them are operating in the same data center right now. it's time aggregate liquidity. then you're not going to see 200 share fails. you're going to start to get chunkier stuff. i've got to move stock -- >> there's a reason you're using the term family. you know what i mean? are you implying something here? >> i like to use color a little bit. >> i see that. am i okay? are you okay with me? >> i'll take care of you. >> you think this will hit the typical investor? >> i think it's a confidence thing. when you see a headline that the new york stock exchange is down it's a confidence thing.

we're in a 24-hour news cycle. they'll get over it tomorrow. they read the headline. it was halted. but one good thing the new york stock exchange did was they didn't halt across the board. >> we've got to go. should be more confident it works. >> five four. thank you kwb joe. good to see you. coming up, yahoo!'s big bet. that's where at&t can help. at&t has the tools and the network you need to make working as one easier than ever. virtually anywhere. leaving you free to focus on what matters most.

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the company unveiling a retooled fantasy sports mobile app. it lets users wager real money against their friends and on bigger tournaments. playing its daily fantasy game is legal in 45 states. all but iowa arizona, washington, montana, and louisiana. users can deposit up to $600 a day. meantime paramount striking a deal with amc and cineplex. they'll be available for online streaming and on store shelves just two weeks from the time they leave the theaters. the chain wills have to share a portion of the revenue from the film. that's interesting. i think that's great for the consumer actually. here's a good one for you. the russian government releasing a new psa this week. the topic of interest? a safety guide to selfies.

okay. we want to show you some of the pictures. because they show some unsafe selfie shots like what would happen if you were taking a selfie of yourself on the stairs. >> or mountain climbing. >> or on a mountain you could fall. stumbling down a cliff, falling off a boat getting hit by a train. the ministry of russia said -- >> don't do it there. >> we've noticed the number of accidents caused by lovers of self-photography. it's constantly increaseing since the beginning of the year. >> don't stand on the edge of a boat and take a selfie. >> or in front of a train. >> or a dangerous animal. all right. we'll get jobless claims on the other side of this break.

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what's in your wallet?

welcome back to "squawk box." we have an increase of 15,000 on initial claims from a slightly upwardly revised 282,000 to its current pace of 297,000. i can hear everybody out there shuddering as we get close to 300,000. settle down. most likely there's some holiday distortions here considering independence day. but in the grand scheme of

things, having these numbers at levels we haven't seen in a long time is a bigger dynamic. but many will be nervous we're this close to 300,000. we'll continue to monitor. if you look at a different timeline it's hovering around 2.34 million. that is up a little bit from about 2.26 million. splitting hairs to some extent. yields moving back up a bit after a couple of challenges intraday off where we settled last year. of course it's mostly about stocks and with stocks it's mostly about outcomes. and outcomes it's mostly about people that have outcomes. the chinese in particular. but the market bounced today. we'll see if that takes pressure off the notion that economies are exactly the same and reflected in totality by the level of their equity markets. back to you. >> thank you. rick santelli. 190 almost the dow futures.

let's get reaction to the numbers here. with elizabeth corley. sure you don't want to see jobless claims move up to 300,000. it's volatile. the trend has been solid. >> i agree. i think you're going to get noise around the trend line. and so we wouldn't panic around that number at all. i think if you look at e the other data. driven factors coming out, they're broadly positive. homeownership is slower to start but the other data is pretty positive. >> we're talking so much about china and europe. the u.s. sort of has been this island of prosperity as they say on wall street. how resilient do you think that is in the face of risks and not just from china and europe but latin-america has been slowing down and other places. russia has been impacted. can it really stay strong throughout all of the global turbulence b turbulence? >> we think the u.s. economy has the most resilience. it's fantastic the way it's bounced back from the crisis. there's been a lot of managementive balance sheets. there's been restructuring.

and you've seen real gains in the economy as a result of that. there's still some scope to see further productivity improvements. and you've had very responsible management whether people like it or not from the fed which has remained very accommodative. >> when do you think the fed does move? >> great question. it was interesting. i think you commented earlier in the show that looking at the june minutes is like it doesn't matter anymore because we're in a new world. i think you're right. i think it's very difficult to predict. there's still a chance it could be september if the data suggests its supported. we know there's a split view. we know there's some who are very sensitive to international developments and clearly if we see a bad july and bad august that could mean people are more cautious. you've also got others. it was san francisco commissioner john williams who was saying this is around data-driven dependency within the united states. i think we're going to see a very interesting discussion coming in terms of what's going to happen. >> do you think it's more or less likely that it happens in september. let me also point out for those

watching and listening that dow futures are up nearly 200 points now. >> it's amazing, isn't it? there was a bounceback due. i think you can't predict whether it's more or less likely right now. there's so many overhangs as to whether china is going to settle down and whether we'll see the eurozone muddle through on greece. once you got more directionality on those things then it comes back to the domestic story. and then if the data is looking positive, the chance is still there. >> all right. we're going to hear more from you. i want to ask whether that means the secular bull market is over. we'll talk about that in a moment, but we've got to move on here. >> media moguls meeting in sun valley idaho. our julia boorstin is there and joined by a special guest. hi, julia. >> we're joined by tim armstrong armstrong. ceo of aol. of course this is where aol's sale to verizon was hatched last

year. you've done this deal and you just told me off camera you're meeting with 70 companies while you're here. what are you pitching to them? >> sun valley does a tremendous job of having people come and having a week we can meet with different people. over the course of three or four days, my meetings break down to three big buckets. one is the software form and how we do sales and advertising. second bucket is really about partnerships in the contents base and things we can do with the content companies. and the third is really just people that have interesting business models or research or whether it's start-ups or large companies. and so i spend my time during the week meeting with those types of people. >> there are always deals that come out of here. what types of deals based on what you're hearing do you expect to see this year? >> there's been kind of a very well-worn path over the last

years here. i think today you basically see a complete mixing of the digital and offline people together. and i think linear and ott and really the video space i think is a tremendously hot space. there's a lot of discussion about it. i think that's probably major, major topic here overall. >> to both traditional cable companies. for both digital and traditional advertising. >> yeah. so our systems and why it's interesting for us to be at sun valley is we have linear tv ads that we're powering running in australia right now. we have content distribution happening right now in our system. when we look at the business we're powering 30,000 or 40,000 other publishers. video ads and content syndication. >> yesterday i spoke to mcadam. and he said he's on the lookout for more acquisitions. i know verizon's in a quiet period now, but what type of company would make sense for

verizon? >> here's the beauty. i'm still learning. i think lowell is a great leader. he has a great vision for what he's doing. and i think from our standpoint you know our area is very contained. within verizon we're very focused overall. the broader verizon picture, they've been methodical about what they're doing. he has a vision for where things are in video and where things are going in video. verizon is doing a good job about being at the forefront of where these things are. >> you don't have your eye on any accuracyquisitions? >> we're constantly talking to partners and companies and those things. we just did the verizon deal. we just did the microsoft deal which is global and huge. we're excited to work with them. so we probably did two of the largest deals in the entire world in the interpret space last quarter. we're in heavy digestion mode right now. >> how much are greece and china a topic here in sun valley? >> i think global economies are

a topic overall. one nice thing in idaho is you get a world view. i think there's a lot of discussion about what happened in china early in the week in terms of what's going on with the markets in china. and, you know greece is on a lot of people's minds also and how it's going to affect the european economy. on both of those, a couple years ago people were wondering what the u.s. economy was going to do. one of the things i've heard at this conference a lot is how strong the u.s. economy is. and it's nice to actually be -- see the country performing well the economy performing well here. and i think people have been fairly bullish on how the u.s. is performing in the midst of the two bookends, europe and china. >> you have international exposure as well. you have products in china. how concerned are you about that mark of volatility impacting your business overseas or having some trickle-down effect? >> our company is growing internationally. but there were things last year like the fx rates that affected

business. that could be a headwind going forward. but the reality for us is the global economy is a massive opportunity. 4% of the population of the world lives in the united states. the majority of our business is in the united states. so we see the 96% opportunity. and also 96% opportunity to go global populationwise with 2 billion more people coming online mainly through mobile. then the second piece is we're in businesses that are both predicted mobile and video to really be $40 billion each. so $80 in the next three and a half, four years. so we cannot work fast enough to get your systems and people and talent. our teams have done an amazing job of putting together a global platform. >> bullish despite that volatility. in terms of the new york stock exchange trading being halted yesterday and you nieted systems going down and wall street journal.com not working, do you think they're a coincidence? >> i didn't spend time on it

yesterday overall. but we are spending time on security. that part of the business is becoming a real business in the economy overall. and i think, you know it's unusual when you see three things like that happen in one day. so i think everybody has watched that situation carefully and probably made calls into their companies to think about where things are at. but i think it was an unusual day yesterday. >> i know we're out of time. do you think the folks here are concerned about cyber security? >> yeah. i think it's a big subject. if you broke down some of the subject matters i've been hearing, it's about where they're going. it's about data and how to use it. internet of things are coming. interpret security is definitely you know, a topic, but i think the drivers are really where's the growth coming from and then security is one of the things that is you know has to be a leg of the stool. i think it's one leg of the stool. not the whole stool.

>> tim armstrong, thanks fn ss for joining us here in sun valley. appreciate it. over to you. >> thanks. up next, is now the time to buy chinese companies? we're going to focus on some big adrs when we return.

welcome back to "squawk box." making headlines the european

aviation safety meeting in luxembourg today. the head is calling on regulators to share information beyond their own borders and help avoid attacks. china's stock market surging overnight in a volatile session again after losing one-third of its value since mid-june. trading here getting hit hard. look at alibaba. the stock sitting near it's all-time low going back to the ipo. dom chu has put together a list of other chinese adrs and affected stocks here. >> alibaba last fall was $120 stock. now it's fallen. it's down about 35% since there. if you look at the chinese stock market versus our stock market we're looking pretty darn good now. the reason why, over the past month you know about the chinese volatility. the orange line, the s&p 500, we're down about 1.5% over the last month. the shanghai composite, over a quarter of its value erased. again over the past month. if you look at what's happening

overall with some of these chinese stocks that are happening, at least here in the u.s. the ones that are traded in the u.s. but are big blue chip type companies in china. jd.com is down 16% year to date. alibaba down 12%. china mobile down 12%. and baidu down 9%. this not from their highs. if you look from their highs, alibaba down from its high last fall. china mobile lost a lot of its value. that underscores the risks for these stocks. and of course a lot of investors look toward one to get the exposure. this is e the etf that tracks the listed in hong kong. year to date it's down 1% maybe. but since its highs over here it's lost about a quarter of its value just again in the last few months. so chinese stocks certainly not for the faint of heart at this point. the question becomes whether that market sentiment changes in the next month or so.

back over to you. >> great. all right, dominic. thank you. up next, jim cramer from the floor of the new york stock exchange. futures right now are nicely higher. last we looked. somewhere up around 200 as far as a snapback from yesterday's drubbing. stay with us.

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let's get down to the new york stock exchange. jim cramer joins us now. it's great, isn't it jim, when china is able to manipulate it well enough that's fine with us and we're going to go up on that. any of it make sense? >> no. but i think that we're trading one for one. i mean when you see china open and you watch the s&p futures, they're trading one for one. i think when it becomes mainstream, lead story in "the new york times" today that all these defenses have failed when they have succeeded last night and when there's actual big money coming in from america. i know there were some big money buying the stocks that dom just talked about. because they've gotten from the point where they may have been at 30 times earnings to 15 times earnings. i was speaking about companied like baidu. they criminalize selling.

>> but what about, jim, the companies that are american companies that have been betting on china as a growth story like mcdonald's or yum brands or nike or even apple?cdonald's or even apple. >> last night on "mad money," i talked about given there is such a huge preponderance of growth from apple in china, that's why apple was down so badly. the fears are still going to be there. the consumers are going to slow. i did some analysis how much young would be hurt by it. expensive meals not a staple over there. >> back to normal today, jimmy. do we have too many places to trade stocks? are we happy that we do? >> i think that competition turned out to be really great. we need competition everywhere if we want to do something. if we are share holders, we hate competition. >> jim, want to get your quick

thoughts on what looked like another solid beat on the bottom line, top line in raising earnings guidance? >> i saw the organic growth. i disagree with ivan. i think the combination of beverages and snacks works, because the supermarket loves it. they do more float and trading off those than the next 14 brands combined. very good quarter. very solid. nice commodity lift. the prooice war in soda seems to be over. decline in the rate of regular soda. frito-lay, new products great. good quarter. >> he said the only synergy is you eat salty snacks and you are thirsty. >> the synergies involve the supermarkets. they just love these guys. >> and walmart. >> a pretty good synergy.

i think chicken of the sea should buy hellman's. >> can you feed the mayo to the tuna? >> you should be an investment banker. you have great ideas. >> this is no worse than some of their ideas. >> smucker's and bread. we can do them all right now. >> thank you, jim. when we return we wrap things up with our guest host for the last two hours elizabeth corely some final thoughts ahead of the market open. tomorrow, former ecb president, john-claude trichet joining with his view on greece that could keep them in the euro or not. our cloud can keep them safe and accessible anywhere. my drivers don't have time to fill out forms. tablets. keep them all digital. we're looking to double our deliveries. our fleet apps will find the fastest route.

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♪ and that unlimited 2% cash back from spark means thousands of dollars each year going back into my business... that's huge for my bottom line. what's in your wallet? an announcement from facebook. it has updated its controls for the new speed. they have expanded the options for controlling your own news feed, a topic frequently discussed among facebook users. it will let you prioritize which friends and which topics you want to see at the top.

stocks on the move. equity futures claiming a sharper higher earning. walgreen's raising their full year outlook and quarterly. coty is buying p&g beauty brands force $12.5 billion. check out shares of netflix, raising $750 a share from 600. the forecast for stronger than expected worldwide subscriber growth. let's get back to the guest host elizabeth corely global ceo of orleon investors. with we were talking about the u.s. investors as the bright spot. it made me wonder. if you think this secular bull market in bonds, namely in u.s. treasuries is over? >> a great question. you phrased it the right way. a secular bull market.

it goes back to u.s. treasuries and german bunds. do they represent good returns? no. does it mean we are going to see a massive shift out. that's the key question. >> with the amount of capacity that seems to be available in the world, could you ever see a hyper inflationary spiral again in our lifetime? >> in our lifetime? >> sarah's lifetime. >> well you can never write off inflation. the way i think about inflation, an economist once described it like this. it is like the catsup bottle. there is nothing coming out and suddenly all over your phase. you face. you have to be very careful with inflation. >> look what we are doing. if you had described what we

have been through over the past eight years and they did say that, the printing presses, remember, the commercial. it has been nonstop around the world. >> they have been wrong. is there such a thing as asset inflation. >> i think you have asset price support from very good easing. >> asset inflation by the fed. i get worried. >> to your point. >> let's look at the news headlines. you saw mna and you are seeing companies buying back their stocks and do all sorts of efficiency measures except for growth. >> long-term planning. they are op timmizing their

business as much as they can. is the risk out there? absolutely. creating inflation as opposed to managing inflation. >> could we be in a 10-15 year period where the highest interest rate we have is 4%. coming down from the 8% 9% 10%. never going below 6% people said, ever. >> as soon as you get to the point there is no return this is the new normal that's when it surprises you. >> is this weather conducive to writing crime novels? >> this is perfect weather. glooming coming down. people sit in. >> you have written how many? >> i have had five published, work on the sixth. >> crime novels? >> just on the side. >> same person. >> same central characters. there is a risk they die. they are quite bloody quite graphic, they are not cozies. >> what about sex? >> that's in there too.

the first book i wrote had four murders and two sex scenes and the guys said how did you think about the sex scenes? >> it is great having you. >> it's been fantastic. >> thanks sarah. >> thank you, scott. >> welcome, joe. >> let's go to break. make sure you. >> julia: us tomorrow, "squawk on the street." all systems are go. the ncse says a day after the nearly four-hour trading halt at the oldest and most iconic stock exchange in america. opening bell is going to be rung by a company with the ticker hack. that's interesting. welcome. i'm carl quintanilla with jim cramer and david faber.