trading partner for them. so they have to make a deal which is economically rational but imposes penalties. even if britain stays in, these anti-xenophobic issues will stay. and in the united states, too. it's the same kind of forces driving brexit that are driving the u.s. >> thank you. >> make sure you join us tomorrow. we'll know it all. "squawk on the street" is next. good thursday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber. jim creamer is in san francisco. voting begins an historic vote on whether great britain will leave the european union. ten years back to 175 and oils

below 50. the future of the uk hangs in the balance. we go live to london on the vote that could rock the markets. >> a new ruling keeps the status quo at least as it relates to viacom's board of directors. >> and twillio priced above the range. we'll bring you the opening trades, plus talk to the ceo. first up, britain's future is in the hands to the voters. a new poll shows 52 remain, which is a change from a few

days ago, definitely from a few weeks ago. >> a new poll says they're going to stay and it's going to be a nonevent. everything is being bid up but the financials are not being bid up as much as the others. even if we do get a stay, that financial group remains under a lot of pressure. i think that's when the smoke clears, we're going to see that the financial group over there still not strong. that will be the focus. we'll go back to earnings. >> the word asymmetric being tossed around a lot today, jim, because of the way we priced in this remain vote over the past few days. would a leave vote bring real pain, more pain than we thought? >> yes. just because of the way the discourse over the last 72 hours has switched. but i still think that if you leave -- there was so much hyperbole. let's go back to something that i said would be forgotten about but i refused to forget about. we would go back to this idea of the pound crash of george soros.

this is where he'd be most right, you'd come in and absolutely think this is a done deal and they're going to stay and then the pound would give up a huge amount it's been gaining in the last 72 hours. so let's give soros his due. he's out there and if they decide to leave, i think he's more right than we would have said otherwise. but otherwise let's not forget that's pretty much what he said was going to happen which was a leave and pound crash. i'm not going to let him forget that. i'm a guy on tv but the guy really swayed the markets. >> we have no doubt you're going to keep that at the top of your radar. by the way, polls close around 5 p.m. new york time. should get our final decision around 2 or 3 in the morning. let get to sarah ice i don't know w-- sarah eisen, who has been covering this. >> one thing we're watching here

is the weather. there's still a large group of undecided voters according to all the polls and there still is this question of turnout. it has been raining cats and dogs here. british voters did wake up to storms, thunderstorms overnight. it's taken a pause as you can see here in london outside of parliament behind me but there are more thunderstorms forecast for the afternoon. the word here is that could actually give an edge to those who want to brexit, who want to leave the eu because the thinking is they're more determined to come out during the storms. there's also this idea that london is more heavily for the remain camp and that's where the brunt of the bad weather is supposed to happen, as well as in scotland as well, which is also pro remain. unclear what's going to happen with that. it's worth noting that the polls are very close even though investors are optimistic this is going to go one way. you still have to consider it's

a real risk, even though the betting odds in the market favoring remain. >> you've done anecdotal reporting in london pub side yesterday and you made the point yesterday afternoon that sentiment for a leave is very vocal, right? >> absolutely. it's kind of shocking to come here from the new york stock exchange from wall street, which was squarely focused on the betting odds, which reached 84% that britain stays. i came here and i found it hard to actually find someone who was voting in, talking to everyone from at the passport control, london heathrow to some of the crew members here to taxi drivers who are very heavily against the eu. there's a lot of hatred here for brussels and for the establishment there. there is this turn against globalization and immigration. i know it's something that's playing out in the u.s. election as well, and you hear that on the streets, which is just an interesting contrast, right, to

what you guys are seeing, to the pound at the highest level of 2016. i did go to the pub, sat down with a few gentlemen last night. they were all in their sort of late 20s, early 30s and the narrative is that younger folks are in favor of staying in the eu but three out of four of them want to leave. so it's going to be close. >> we'll be checking in with you all day, sarah. sarah eisen covering brexit in london. >> meantime, getting breaking news on macy's. terry lundgren stepping down as ceo next year and jeff janeanet will be taking over. >> starboard, macy's has not been a good investment for that country.

we should add mr. lundgren will continue as executive chairman of the company and they say working side by side with mr. gennette who will step up to become the ceo. the company will transition to gennette in the first quarter of next year and will be added to the board 14 members. still waiting to hear on anything that may be happening in terms of that moneyization. >> ted lundgren was born in 1952. we're not talking about somebody like what happened to target so they had to make a change. there's two lundgrens.

there's the lundgren that deal preamazon with a very good department store merger with a variety of change and then the one who had to deal like all the executives like amazon. in the last couple of quarters they've been very subpar. remember his age, born in 52, this is not unusual for anyone in retail to be stepping down. not minimizing how bad the last year was but just pointing out, come on, nobody works in ceo over retail forever. >> no, certainly not one that has -- i mean, this has been a very difficult period. but again, it is important to note he will remain as executive chairman. so it not as though he's going away. i don't know mr. gennette. do you, jim? >> no, i don't. the cfo is the person you want to care the most about. she's been the rock of gibraltar through a very, very difficult time. macy's i remember delivering

alpha, david. when you talk to people in retail about what the starboard guys wanted to do, there are chop ter chapter 11 talks these days. people would have said this would be a replay of what happened in the 80s. the cash flow for macy's right now not a problem covering the dividend. the trend in the last -- it sound weird to say this -- 180 days in terms of online have been so accelerated that even all the money that macy's has put into online, it's just not enough. >> gennette's a lifer, started as an executive trainee in 1983, worked his way through macy's west, northwest, seattle and atlanta, ran a money's collection. he's a merchandiser, that's for sure. >> you need either a merchandiser or a technology.

you need a guy who went to computer science school, has a degree, runs algorithm and puts clothes on in the morning. amazon is on everyone's lips here. they don't think it's done disrupting everything. a lot of people think the department store is finee. >> we are talking about a stock down 53% over the last year to give you some sense as to the destruction of value that's taken place there. jim, i continue to hear that there may be something on the real estate front. certainly may not be the sale of the building on 6th avenue, but it might be something of some significance to move the needle. we'll see what, if anything, the company comes up with or, you know, whether this transition in some way impacts that move on the real estate. but, you know, haven't had a chance obviously to hear from starboard at all and their

thoughts about this transition of power at macy's. >> well, look, it's important to remember that macy's does have some unique real estate that is worth a great deal of money. but i think the issue -- we have so much capacity in retail that, frankly, if you got a store in a place that's not doing a lot, that's not just killing it and it's in a neighborhood where the aren't -- where the prices have gone up, the rent's gone up, it makes way too much sense to sell. i know the area in brooklyn where they decided to monetize. it made no sense to have a macy's there. it may make no sense to have a big brick and mortar presence in multiple stores in multiple cities because it's going away so fast. >> if we get more information on that, we'll tell you. big news on that. >> and we'll hear from

jean-claude trichet, lord john browne. a lot more still to come when "squawk on the street" comes back.

twilio going public at the big board today, pricing 10 million shares at 15. that's above the projected range and value of the country is about $1.2 billion will trade under twlo. we'll have a live interview with ceo jeff lawson later on today. jim, it will be an interesting test for tech ipos. they're going to hold a coding event on the floor where developers are going to write as many apps as they can right behind me. >> this is extraordinary. you're talking about a company affiliated with what's app and goober. this would have been a $4 billion to $5 billion ipo four to five years ago. this would have been the hot one. there would have been people who would have bid it up maybe to 55, 60 and maybe end the day at

67, comes back later on to the 35, 40 level. the idea of this thing at 15? i mean, holy cow. this is a company that is in the sweet spot cloud, minimum, minimum 20, 25 on this thing would have been at least even seven months ago. so it's a very hot deal. the last round was at 11 bucks and change. the dealers want you back in. wow, is it ever cheap in terms of the growth rate. >> four to five years ago, jim, probably even less than two years ago you might have got i don't know much higher. >> pre-2014. >> but they are able to price up from their last round, i guess, which is what you always want to keep doing, right? it's the down rounds or down ipo that can be a real downer, though if you get a down round before that, you're probably not

going to have an ipo. >> down round was as depressing as talking about the golden state warriors. but these guys tell the truth and the market says these guys are being pinned against the board. >> we all remember that environment, jim, you just described, shooting the high double digits and settling back well above the offer. we'll watch it closely. >> carl, this would never have opened during the hour that i'm on. this was definitely going to be -- this is a piece about what i would regard as maybe a 10:30, 11:30 opening. >> and you would have said i like it but not at this price. >> yes, exactly. i mean, yes. honestly, this is like a shake shack attack! what's happened, a double-digit

customers, uber -- the on thing missing is amazon owns 25% and buy more on the offering. >> but we'll see. we're going to be following the opening of that stock closely. as jim said, probably going to open earlier than it would have. want to move on to viacom as well. ousted viacom directors can remain in place, at least for now. the judge said the five directors removed, sumner redstone and the board of national amusements can stay until the final ruling on redstone's competence comes down. and the two sides have to determine what the view of their status quo is. what is the current board going to be able to do and not do. this sort of paralittic state remains in place. yesterday's hearing, which we don't have the full transcript

of was one of scheduling, though we did get this from the judge, which was somewhat important, on the idea of rule 225 and his ruling on the consents and whether they are deemed to be correct, he said, listen, even though 225 cases are generally narrow in scope, the underlying issue of competency may well be relevant here. if it weren't proceeding elsewhere, it would be a legitimate issue. but i'm not going to wade into that terrain right now because it's pending elsewhere and i'm not going to duplicate that. there are questions of human dignity to a very elderly person. of course that being mr. redstone at 93 and so i'm going to be cautious in that respect, particularly in light of the other proceedings that are going on. the other proceedings, of course, are in massachusetts. so he is deferring at least at this point there. when i said both sides can claim victories, that's a positive, the idea he will at least consider mental competition, for

the current board. but at the same time there is a motion to dismiss. he will continue to consider that as well. he did say he has some skepticism at that that motion to dismiss can be resolved on a clean motion, but he hasn't seen it yet, he doesn't know yet so he's not going to prejudge that issue. we'll see, guys. what does remain is you got a company that can't really do a lot right now and truly is seeing its business disturbed by the fact that many people who would make long-term decisions involving viacom don't want to do so, whether it's a buyer of 49% stake in paramount. by the way, on that potential sale on the 49% stake in paramount, i hear the price is a very large one but whether or not they'll be able to get there is very much unclear. phillippe saying it could add to stock prices. i wonder, jim, why there isn't a

settlement. at some point this thing for the betterment of the overall company, you think they would reach some sort of a peaceful end of hostilities that would result in mr. dauman leaving in sort of a time period. >> it's a kinder, gentler corporate environment, going against what they really want to do. you used the term paralytic. this is a company not doing much at all. paramount, they keep talking about a great slate of movie. every time you look at the slate of movies, you realize more losers. not a great slate. no one in hollywood thinks that it is. i wonder if there's anything creative going on there. it would be great to get together with cbs in terms of a bailout. cbs is tesla and these guys are

solar city and cbs ain't going to play solar city. >> that's a nice analog, jim, i got to give it to you. coming up, more "squawk on the street" on this very busy day straight ahead. a good car has to maneuver quickly. that's also true of a good car company. people have always bought cars. but we saw an opportunity in sharing cars. so we moved fast and launched car2go in 29 cities, all around the world. doing that required dozens of data centers, designed for speed and performance. we built our business on the ibm cloud. because that's what the ibm cloud is built for.

futures sharply higher as the market anticipating a remain vote. not the only news, though. dems on the hill, new ceo at macy's. we'll hear from more in a minute. man 1: i came as fast as i could. what's up?

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dash. one stock down this morning is bed bath & beyond, jim. why? >> it was not a very good conference call. comp numbers not that good. comparable stores decreasing the cut numbers. inventory a little bit higher. they obviously are still being hurt by amazon. they talked about one king's lane as the catalogue company they bought as being an augment agent ation, they didn't call it a savior. they bought back a ton of stock, which was not the right thing to do. they talk about when you walk down the halls at bed & bath, you see people talking about a gore r-- algorithms.

>> you've been talking about buy-backs. it's of the right size they could get something done. >> they've fallen so much. however, the one king's lane, they're still building stores and trying new concept. if you go back in time, they were great merchants. we mentioned macy's is going to be headed by anm merchant. it's not enough anymore you have to be headed by someone who is very young, they have an ability to push product to you when you select something on line. bed & bath has been headed by a merchant from the beginning and it's a little down the line to try to switch directions.

>> home depot. taken to a buy. we'll watch the brexit vote and down here at the new york stock exchange it's twilio celebrating its ipo today. over at the nasdaq, seanergy, a sipping company of all the research today, probably getting the most attention is the morgan stanley call taking tesla to an equal waieight. remember that big call the other day about how tesla was going to own the grid. >> this morgan stanley is a mea culpa all the way around. morgan stanley was saying, look, let's not forget this is a company that's going to build a huge number of cars and the

demand is far greater than people realize. i'm going to be spending a lot of time with ford today. ford is the opposite. other than the 150 series, don't have that demand. i think morgan stanley was stunned about this. it doesn't help their cash burn. they really can't figure out what this does to be able to build more cars. throughout this period this was a car-building story. obviously this is not the direction that wall street wanted them to go. >> morgan stanley also didn't get the banking business. that went to evercore here, even though there was some relationship there. not saying that would have anything to do with -- with him feeling free to express his opinion. but given how positive he's been, it's interesting. one day later, i'm curious. i spoke to a number of shareholders who said i was disgusted a bit yesterday, people still wondering what is exactly the new strategy at this

company after -- if in fact they succeed in buying solar city. >> when i talked with people yesterday here and i spoke with a number of cfos last night, you thought that they want to talk brexit. no. they wanted to talk about survivabili survivability. they wanted to talk about the notion of what elon musk was up to doing this. people were flabbergasted. people think that solar city was a company be hurt very much by the power companies rejecting the power and their new corporate structure, which was to be able to be more biograpuy panels. nobody want to hear about panels. anything that tesla did that did not make it so there would be more plants open very quickly, it's monumental. we know jay leno was talking about why do we criticize a company that is able to put out 60,000 cars? the reason why you would criticize after this deal is you

were hoping they would get to 500,000. this seems like a distraction. we know there are multi-taskers in the valley but elon is challenge $ d by this one is wh people are telling me. it's just not a good call. >> tesla has lost more in market value than it would be paying to shareholders in solar city. another one at its lows is valiant, which we haven't mentioned in a few days. new low, downgraded. they downgrade vrx to neutral. they say some of the parts continue to support upside valuation. they lower their overall target to 35 from what had been 50, noting the drug they acquired when they did the deal, the -- it's not doing particularly well. they see earnings heavily

weighted towards the second half of the year. >> yeah. the spoke points out jpm took an overweight from 12 to 250 and back to 21. now to the neutral today. >> that's not helpful. >> that's an ill-advised arc that i think most people would regard as suboptimal. the way i look at the valiant is that this is what i've been waiting for. i did a piece last week about it. i know the valiant people were that happy about it. a lot of times i don't want to do pieces because i want to please management. this is drug they paid a lot of money for. you've got allergen. i think people still held great hopes for the irritable bowel. allergen is working on a generic against them. this is a story where the stock often starts higher and people

digest it. the sum of the parts is not cutting it. david, you know a balance sheet. the sum of the parts is not equal to that $30 billion in debt, which is the elephant in the room. it not the elephant in the room. it the woolly mammoth in the -- i don't know. it's the steg sauer us in the room. i don't know. what's dead. >> it's that thing from jurassic world, whatever it was that they grew there. >> the one that went against the t-rex. >> yeah. >> that's the end game. >> i don't know in joe papa will have game or not. he had nothing to do with the deal in which they acquired that irritable bowel drug that is not performing as well as had been hoped for but he's certainly inherited quite a bit of problems. $30 in debt but only add 7 billion market cap. when you do your ebitda numbers,

debt is everything when you're dealing with a company like this. >> go ahead. >> macy's up almost 3%. people seem to like that deal as terry lundgren will be moving to executive chairman next year. >> we do have a lot of retailers up. i'm a little -- i just think that the home depot call, which basically says, hey, listen, maybe you don't have to worry about all of retail is also helping. i think there's a kind of a sense, look, terry just in the last year didn't have it, we need someone else. but would i come back and say, yes, they need jeff bezos to resign and work at the "washington post" full time. that's not going to happen. when you go out here, everyone has a view on microsoft, a view on apple and google. then they'll talk about amazon.

it like, wow, yeah. amazon. no only does no one have a bad word about amazon, everyone is worried about web services and it means, what can it eviscerate next, if you're a brick and mortar retailer, other than walmart, dollar tree, dollar general and walmart really put them off to the side, you're shaking. i mean, you're shaking because amazon's so smart and so powerful. no one knows what to do. it's just no one's ever seen anything like it. >> it really is amazing. occasionally you do have to look at respective market values and accretion to value for amazon has been extraordinary, $338 billion market value now, larger than facebook's market value, right up there with the largest of companies and far larger than walmart, about 37 times -- 33 times the size of macy's, jim.

not on the revenue side but at least on what people are willing to pay for those revenues. >> bricks and mortar now regarded almost universally no longer regarded at anything than you have to keep up. it basically said, listen, i know that you think that we spend but we got to spend even more. when you hear that, what that says is amazon spending a fortune but no one has the money that amazon has, nobody, with the possible exception of walmart, which is why i put them in the survivor camp. home depot because not a lot of their product can be easily amazon, hence that upgrade, which also talked about the fact that housing prices are going down. >> you started the program talking about the banks and how they hadn't been up as much as some other days. goldman almost leading the charge with the exception of

boeing, which had some positive comments about the passenger jet market. >> look, the morgan stanley upgrade and boeing -- it talked about the sentiment going down so much you want to buy boeing. interest can go up, which is good for the banks. we were talking about the undervaluation of wells fargo and how just their oil booking business is not nearly is bad. that group can have a little bit of lift here. doesn't get too carried away because i know the numbers aren't going to go up because of that interest margin. i love the boeing call. the boeing call said, wait a second, the buyback and cash flow will overrule what you're worried about with book to bill. boeing has been attracting american airlines and delta and those have about two of the worst stocks. book other than valeant. rather joe papa came on mad money and said we don't have to

sell anything, we're going to sell stuff. we have to roll back prices. you have to roll back prices, you don't have to sell anything, but you're going to sell things. irrelevant bowel, the salespeople are leaving. this does have a feel to it of what we have to watch from the credit side. david, you taught us when there's a big credit side issue and it's not being talked about enough, that's what can surprise you, not necessarily brexit. >> it's something investors are well aware when it comes to valeant. it's something they have to make sure they stay in compliance with their covenant agreements and can meet all their interest payments with these, jim. i continue to hear about layoffs. we got an ipo today. at some of the smaller broker dealers but some of the banks

and capital markets where things have not been that active. i continuing to hear some rumors about fairly large layoffs coming, which is not good for the economy and the cities where they take place. >> let get to bob pisani. >> green all across the board. all sectors are up. talk on the floor, we have a tech ipo winner. 10 million shares at $15 here. this is a lost of first, associated with twilio for ipos. it's the first unicorn to go public this year. it's the first ipo to price above the range since december. and it's really the first silicon valley tech ipo since square. so a lot of firsts associated with that. how come the prices above the

range? it's a hot space. this is a coding platform that let's developers add voice and messaging to apps. the important thing is people stay in the app longer. it's got a small foot, it's only 10% of the company they're floating and very recent evaluations against their peers. it's been an ugly year for ipos. there's only been 39 ipos here to date. they priced most ipos 12% below the range. but that's been good, though, ipos are up 20% from where they started. is this going to open the flood gates? it's certainly going to help. and the big japanese messaging app is supposed to go public on july 14th, it will be dualistic,

and there are several ipos that could go if we start seeing the market move in their direction, including companies like domo, a big data startup, cyber security firm and there's app dynamics, a software firm. as for unicorn, drop box, pin try -- pinterest, would a successful move here do anything? i don't know. twilio will certainly open on the up side. just how much we'll have to wait and see a few more minutes. as for what's going on in europe, you'll see the ftse is at a two-month high for the f e ftse. in the early part of june, 6,

7th, 8th of june the dax is at 200. it's back there. it went all the way down to 9,400 two weeks ago but it's back up there. it was a perfect v for the dax and the ftse. banks are doing particularly well again. they traded well in heavy volume in the preopen here. so citi, jpmorgan, wells farg other and goldman sachs on the up here. twilio indicated 20 to 22. twilio priced at $15 and our early indications are 20 to 22. thank you, ben. back to you guys. >> our bob pisani, thank you very much. >> let's get to rick santelli in chicago.

>> hi, carl. it's not that these areas in the marketplace are shocking or surprising, it's just the fuel for the fire may have been the indication of how brexit was a month ago, how it is today, how that's changed, how algorithm trading could make things seem bigger in the market. no matter how you slice it, if you've been a risk-on market holder, you can get a check. the two day chart of tens, we've moved to the upside, definitely firmed up from what was a test of levels below the 160 mark. you look at a one week, you can see the dynamics. yields maybe a little more exaggerated how they came off that 11 10 a month ago and if y look at the month to date with regard to currencies, you can clearly see what's going on with

that. now let's look at the pound versus the dollar. many traders think if there's any surprise in the vote, this is going to be a huge reversal but the market is telling us there's no surprises. recent polls tell us that, betting web sites tell us that. it pretty hard to ignore what the market has been screaming for a long time. but the pound has zoomed and it's not only against the dollar. this is interesting considering the dance going on is between the euro, a zone area and of course the island. when you look at the pound versus the dollar, you get one picture. you look at the pound versus the euro, you get a similar picture, not to the exact tune but very similar. as the day goes on, of course, we're going to get more comments by many who have been monitoring this like jean-claude trichet, coming up in about 20 minutes, we'll talk about brexit, negative rates, a lot of big issues right now. he has seen and dealt with many of the issues and seeds that

were planted and have grown into what they are today. >> thank you very much. when we come back, we're waiting for twilio to open trading. and also ahead, former bp ceo lord john browne, you'll want to hear his take on the brexit vote. the dow right at 2,100. ♪ okay, so you launched your bank's app. now what? how will you keep up with the new demands of today's digital economy? the fact is: some believe they won't need a traditional bank down the road, so at cognizant, we're helping banking and financial services companies think digital, be untraditional, and reimagine what the bank of the future can be.

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travelers close to the top along with boeing, which got an initiation over at morgan stl stanley today with a buy.

the big story is going to continue to be brexit. we're going to have to wait until the early hours of tomorrow, 2 to 3 a.m. new york time until a final decision is given. >> and no exit polls. i believe they are illegal in the uk. >> almost a complete media blackout. very stringent rules about what broadcasters can say about the polling. not the way we approach these things. >> not at all. i guess we'll find out around 3:00 in the morning, carl. something like that. >> i'll be up. i'll be up. >> you're never asleep. what do you mean you'll be up? you're always up. >> yeah. well, i mean, this is so important. i mean, you know, i've been up for 17 days because of this. >> the betting odds have gone from around 75 for remain, close to 80, jim. and with all that, the pound as

we said earlier, high for the year. hasn't hit 1.50 since september 17th, we almost got there today. >> what's interesting is that the high growth stocks are being hit today and i think those were companies that you kind of said, look, they'll grow no matter what happens in europe. instead what's going on is we talked about the banks, but the industrials, they are weak dollar stocks. they want to see the dollar go down. all the things we're hearing make me feel that the dollar has a shot at going down. >> we'll see. by the way, the dax on track for its best week since 2011. we'll get stock trading with jim in just a moment. dow's up 127. this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack.

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western digital has a real yield and a lot of people have given up on that one, too. do not give up on these. these are going to play to the texas instruments. >> micron having a play here. >> it's not done yet. we got the twilio, which is going to color things. the fangs are doing poorly other than amazon. it's worth noting that because people are reverting to older tech right now. >> jim referring to murrah taking it from reduce to buy. >> when we're out here, we have to talk about industrial internet and you got to talk about ford and the connecting car and who's doing the most to make it so all we got to do is go to sleep in our car and find ourselves at work. mark is going to show us around and what they've got going on here in silicon valley.

i think it's exciting. >> he kind of looks like josh lipton, that shot right there. >> i hadn't thought about that. >> jim, hurry home. >> and don't sleep, jim. we need you back here in the morning. >> sleep's a distraction, my friend. >> you don't need a connected car because you never sleep anyways. you can keep driving. >> if you're on the red eye tonight, say hi to jim. >> you're all over the historic brexit vote, a live report from london and then jean-claude trichet on what's at stake with the referendum. the dow is up 123. don't go away. using 60,000 points from my chase ink card i bought all the fruit... veggies... and herbs needed to create a pop-up pick-your-own juice bar in the middle of the city, so now everyone knows... we have some of the freshest juice in town.

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♪ ♪ good thursday morning. welcome back to "squawk on the street." i'm carl quintanilla with david faber at the new york stock exchange. sarah eisen is in london as the uk votes on eu membership, obviously the story of the day. to a large degree the bulls pinning their hopes on a remain vote.

s&p just below 2,100. >> also happening now, we are awaiting three major supreme court decisions. we will bring those to you as soon as they are released, if they are released. >> let's go to rick santelli in chicago. >> the may read on new home sales is down 6% to a seasonally adjusted annualized rate of 551,000. now, it's not far below expectations but it also had a negative revision. last month came out originally at 619,000 and that was the best read since january of '08. that was downgraded to 586,000. on leading indicators also for the month of may, we are looking for a positive number, albeit a small number, we ended up with

down 0.2 instead of up a tenth or two. and that follows last months, also up a whopper of a number, no revisions now. so that's very interesting. that 0.6 was the best read since april of last year and minus 0.2 equals exactly where we started out in january. of course all these fundamentals may be more important in a couple of days as we learn more about brexit but it seems the markets have a very definite opinion on how this will turn out and it doesn't look like divorce papers are in order but there always can be a surprise. simon hobbs, back to you. >> so months of brexit campaigning are overing. final lly it's a day of reckoni for brits. the "financial times" opinion poll, 48% to remain, 46% to

leave. take it away, guys. >> well, i would just say, simon, a few factors we're watching here on the day of the vote, first the weather, which you brought up. it looks like skies are clear, not raining right now. but thunderstorms are predicted. polls close tonight at 10 p.m. local time. then we'll start to get the early results after 12:30 a.m. midnight. of course we'll be watching the rain carefully because turnout is a factor. a lot of these polls leading up and in fact just the last poll that came out that we've gotten, 52% remain but it was very close. so there's an undecided group and turnout is going to be a key factor. the other thing we've been watching is just an appeal bip the papers, just wanted to bring you a sense of it from the front pages this morning. here's "the sun," very dramatic cover, framing it as independence day. that's a refrain you're hearing from the lead camp, led by former london mayor boris

johnson. he said he hopes that today will be britain's independence day. and "the daily," saying they will not reform on open borders, and then we have "the daily mirror," "don't take a leap into the dark." that's the remain's camp sort of emotional appeal. that is the uk would enter unchartered territory when it comes to the economy. and finally, "out is out," and it says the europeans will not look kindly on the uk if they do choose to leave. having said that, there is solidarity that the europeans are expressing with their british friends.

the british flag frying in madrid over a government building in vienna, over a big building and of course the british tabloid to build this morning, urging voters, sort of tongue in cheek to move in. wilfred, you're out at the polling stations. what are you hearing? >> reporter: i'm here at a polling station. the mood is upbeat. i think both sides are happy to be casting their vote. i was speaking to matthew shattuck over the phone in terms of the betting say they've fallen from 24% chance of exit to 14% chance of exit and

markets have certainly responded to that, very much suggesting we are focused on a remain outcome. the sense on the ground here is much more similar to the polls, which simon, you are mentioned at the top remains pretty close. i think markets know this is going to be a binary outcome either way. even if it's a 51% to remain, they're going to rally to what remains for markets. people are pretty happy, in fact, to talk about which way they voted and the reasons for it, and it feels to me pretty balanced, though clearly the probabilities are being highlighted by the betting markets and what things like the pound are doing this morning. guys. >> yeah, i would agree but only add to that it does feel like the leave campaign is a little more emotional, speaking out about how brussels has stolen their sovereignty and the remain campaigners making more of the economic argument with all the

facts and figures cited by the experts, all threatening it would harm the british economy and could send them into recession in the second half of the year. we'll keep an eye on the polls for voting. later in the hour, i'll get big business's point of view, head of bp, why he's voting in and insists it's very important for britain's economy to remain in the eu. >> markets having a positive action on what they think the outcome may be. all the indexes are in the green. we're joined by art cashin this morning. we talk about this binary outcome. how does anyone have an edge on this one? >> i would like to contend with

the binary outcome. i think if it's a very narrow win for remain, it could be a problem because i think that might fester and months from now come back as a topic again. i think a clear win for remain is a big market boost. obviously win for exit i think would reverse many of the gains we're seeing here and, again, i think a very narrow win would be problematic. i don't know that it would be very clear. >> you're raising a point that the leave camp brings up a lot. they've already shown their hand, right, by even having a vote this close. >> yeah, and i think it will fester and be a bit of a problem. so the markets would have to rethink that, i think. >> how are hedge funds so convinced of a remain? do you believe these reports they've hired their own teams in a country where exit polls are not allowed? >> i believe they have probably hired their own exit pollers. in fact, it would be one of the few things that makes the market

move currently make a good deal of sense. somebody's got to have an even stronger feel than simply the betting pools and a narrow shift in the polls. now, again, voting's a little more than half over and the conventional wisdom had been if it was going to be nasty weather, that would favor the exit side. well, we certainly got nasty weather and that's not what the market's telling us. >> just to pick up the point that carl makes about the hedge funds, if you're in the the market, not only are you trying to second guess what the real vote is, if you're short and see other people covering around you, there's concern they may know from this independent polling what you don't know. during a day like today, it almost has a momentum of its own, which may prove correct or may prove incorrect in this environment. >> you do get that kind of crowd momentum. it works very, very effectively as you allude to on the shorts.

shorts are always very nervous. the amount of money you lose in a short is infinite and, therefore, people are very, very concerned and of course we've got this rather very large russell reweighting tomorrow and that may be another part of the problem. a lot of people who ordinarily would have taken positions in front of tomorrow's recapitalization have avoided it because they didn't want to take on the added risk going with the british vote. >> which they have to then do tomorrow. they have to take those positions tomorrow. >> absolutely. >> so is there a skew into the potential up side or down side of a vote tomorrow, in tomorrow's trade? >> yeah, i think obviously this is showing as -- and particularly in europe, a major bet for the remain crowd. and if there is either a very, very close vote or a surprise on an exit, you're going to see some massive losses and

reverses. >> can you define fassive or are you not willing to do that? >> i would say not only give back everything you've done for today but possibly everything you've done for the last three or four up sessions. >> art, long day ahead. appreciate it. art cashin here at post nine. >> and meanwhile, a sit-in in the house of representatives lasting almost 16 hours. john harwood joins us from d.c. is the chamber clear now? >> no, i don't think so. i think we have a live picture of house democrats still on the floor shooting this via social media with periscope and they've maintained this trying to draw attention, successfully so far, to the failure of the chamber to vote on these gun measures. last night that resulted in an extremely chaotic scene. just take a look at this. >> the gentleman from texas gets

recognition. >> mr. speaker -- [ loud chanting in background ] >> you don't see that in the house of representatives, it's usually more orderly. the democrats are not likely to prevail legislatively. they failed in several votes in the senate. in the house their road is much more uphill than even in the senate. what they're trying to do is put political pressure on republicans. this is something that unites democrats and can galvanize their base for the election this fall. who knows, you can't say anything's impossible. it's not beyond the pale that enough pressure is put on republicans that some very narrowly tailored measure linked to the terrorist no-fly list could pass the congress. i wouldn't bet on it. it's an unusual tactic and

democrats are reveling in it. >> in an usual year, john. appreciate that, john harwood. twilio's ipo pricing above the range of 12 to 14. we're watching to see how the market reacts to the first venture-backed tech ipo on the year. the ceo of twilio, jeff lawson, will join us at 11 a.m. eastern time. when we come back, jean-claude trichet will join us. and the former ceo of bp will join us for impacts on the market and the economy.

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keeping a close eye on the post 5, not too far from us, as twilio, the first u.s. venture-backed tech ipo of 2016 is looking for its opening trade, priced at 15. the range was just below that, 12 to 14. a company that we've known for a long time on our cnbc disruptor list. when that first trade happens, we'll get it to you. >> dow up 138 points as the uk

votes on whether to remain in the european. rick santelli has a special guest in chicago. rick. >> thanks, simon. i'd like to welcome former ecb president from '03 to 2011, jean-claude trichet. mr. trichet, thank you so much for taking the time on brexit thursday. we do have a little delay so i'll get right to my first question. you've been fairly outspoken that you didn't think brexit is a good idea. you also were part of reason brexit exists. there's a mistrust of those who like to control. can you tell me your thoughts on brexit and why you think it was such a disastrous concept for the uk to go its own way, sir? >> thank you for your invitation indeed. it's a pleasure to be with you. i would say it's absolutely clear for me as it is for the imf, for david cameron, for the bank of england that there are

enormous costs associated short term, medium term and long term associated with brexit, not only in terms of gdp losses, which is clearly the case in my view, but also from the more i would say political standpoint, the influence of europe in the world, the influence of the uk in europe and in the world. so there are a lot of costs associated. and i hope very much that these costs are taken into account by the sovereign, namely the uk people that is voting today. for me, we should not say the market know better and it's already a done deal. i think we have to wait for the decision of the people of the uk and it would be a big mistake to say in advance we know already

that they reject the brexit, even if i hope very much of course that they will reject the brexit. >> all right. mr. trichet, back in the days when you were sitting in the big chair, whether it was you or even ben bernanke were very nervous about breaking in the area. is there any positive outcome for negative rates? your thoughts, mr. trichet. >> well, in those, you know, meditation, it's always very difficult to have the counterfactor, what would have happened had they not taken such decision, not only in the ecb but also in sweden, in denmark, in switzerland and in japan. so it's a large, large sect of

countries that have now negative rates. my own understanding is taking into account the exceptional challenges that europe had to cope with, japan had to cope with, exceptional challenges that the ecb had to cope with, it was the right decision to take, even if as all decision of that kind of course is true for the qe both for you u.s. and in europe, you have of course the positive aspect of it, which i'll justify in the measure, but you have to take into account also the negative side of the coin. and it calls in my eyes for the central banks to call upon governments, parliaments, all other partners to tell them we are not the only game in town and you have yourself to play a game and to play your part.

otherwise, of course, it goes without saying the central banks cannot settle all matters. but i would say, yes, i take it that it is justified in the circumstances. >> all right. my final question is linking both together, whether it's brexit, whether it's negative rates, there is an unhappiness in the world. and trump doesn't say nice things about clinton or vice versa. so the comments from previous presidents are brussels on brexit falls on deaf ears. so my question is quite simple. you stated we have to flight deflation at all cost. do you acknowledge negative rates. even questionable, we need to use it. aren't we fighting a rising tide? globalization brings lower prices, lower incomes for the middle class around the world. around the world. i guess my final question to you is all of these issues are linked. maybe those that want brexit see that maybe a little isolation will reverse the trends of

globalization that central banks can't fight. it sounds scary but it sounds logical. what is your thought on the negative side of globalization and the janet yellens and central banks throwing their arms up because your programs, sir, haven't worked and aren't really working. your final thought. >> first of all, it's a very good question. second, i would say the central banks are not the only game in town. they are very eloquent on that point. and when i read what janet says, not to speak of our friend in japan, clearly they are making the point point very clear, loud and clear. the problem is communication because very often the messages of the central bankers are not communicated as they should, in my opinion, very strongly, very forcefully. but that being said, you're right. the i would say the fellow citizens in the advanced

economies, whether in the u.s., in europe, in other countries, have a lot of new challenges, globalization undoubtedly, india, china, all the emerging world, which is progressively taking more and more of the franchises that we're the franchise of the advanced economy. and that creates some kind of anguish on our workers, on our employees. on top of that you have technology, science and technologies galloping. and i.t. is creating permanent new challenges where structuring is of the essence. you have to cope with the disrupting effect of the science and technology advances. and you have also the aging of the population -- >> mr. frtrichet, we're out of time. we're going to have you back again. thank you for answering that

last question. it's not an easy one. >> it would be a flepleasure. >> let's go back to carl. >> we have a decision outside the supreme court. >> carl, the united states supreme court has upheld the university of texas affirmative action program. the decision was 4-3. justice anthony kennedy delivered the majority of the opinion for the court. while it upholds the texas program, his decision comes with admonitions about how the university of texas must administer that program going forward, quoting from the opinion, university of texas at austin has a special opportunity to learn and to teach and has at its disposal the manner and to use data to scrutinize the

fairness of the program. he says the court's affirmness of the university's admission policy today does not necessarily mean the university may rely on that same policy without refinement. as we said, 4-3 decision. justice kagan was recused from the case. we are expecting more important rulings. we're down to the wire with the supreme court only having about five or six key cases left to come to the end of the term. >> though that is a big win. >> meanwhile back here we're watching for twilio to start trading. bob pisani is at post 5. how far away? >> it's been a while. the interest is very strong. let me show you the indications right now. it's 22 to 24. this is a winner. it's a long time since we've talked about a winner in the tech ipo space here. 12 to 14 was the price talk. priced at 15.

now we're looking at indications from 22 to 24. what's taking so long? it's an old fashioned auction. there's probably close to 2 million shares that are going to be offered at open. they're trying to pair them off, figuring out where's the price that will give everyone the right place at the open. these fellows are in communications with the designated market maker over there. he is in discussions with the book runner. in this case the lead book runner is goldman sachs. they are building a book. literally people are saying i'll take 2 million shares, i'll take 1 million shares at 19.50. they get a list, build a book and say here's where we can open at this price with a number of shares for sale that are being indicated. a lot of them are restricted. everybody can't just go out and sell their 10 million shares out there immediately because some people can't, they're restricted

shares. so the whole process, as i've said many times, carl, it's an old fashioned process where there are real humans involved, watching, bidding here. we've come very close several times, within 3 seconds of going and somebody raised their hand and said, wait a minute, i have another buyer and they changed the bidding process. it's dynamic, high tech and it's also low tech. it's one of the amazing things to watch on the floor of the new york stock exchange. hold on one second. same indications. still in that 22 to 24 range and getting very close. carl, i'll shout out as soon as we get within a minute or so. >> just on the math here, you're adding, what, half a billion of value? >> that's right. >> priced at 15, 1.2 billion and now you're up to $7 higher on that. you're effectively creating value as you go. >> dramatically. 15 price opening 22 to 24 is

$23. you're talking about 55% increase in the price. that's an enormous change in a valuation. we're trying to crunch numbers here. the last time we had an ipo price 55% above its price. but those are the indications now. just a minute. hold on. i think they're going to close the book right now. there's an official statement that has to be made. they're going to -- the book is closed. the stock is going to open in 10 seconds. stay with me. twilio opens at $23.99 after pricing at $15. twilio opens 23.99, a 60% increase from its initial price. i think it's fair to say, carl, we've got a winner here. there's mr. lawson talking over there. you see tom farley, the ceo of the new york stock exchange, and they are ringing the old traditional local bells over

there. you can take a look there. tom saying hello to everybody and some of the employees of twilio all standing around. they've been very patient for the last 45 minutes, an hour really to wait for the market to open here. so twilio 23.99. there you see mr. lawson shaking everybody's hands. i know, carl, jeff is going to come over here in just a minute to come and speak with you. right now twilio trading at 24.77. so we're talking about 65% above that initial offering twice. carl, i know mr. lawson is going to come over here. he's taking some pictures here. arguably other than the day they're getting married or their children being born, the most important days of their life here. you see jeff lawson saying hello to everybody and taking congratulations with tom right behind him. i'm going to make sure he gets over there and talk to you very shortly there. carl, back to you. >> by the way, average first day

price gain for a u.s. tech ipo in the past 12 months, 18%. so this is well above the average of the past year for u.s. tech. and there's jeff lawson. obviously the ceo and co-founder. >> priced at $1.2, now trading just shy of $2 billion. many ceos speaking out in favor or against the votes in britain. sir martin soriel and kayla join us now from outside the bank of england. over to you. >> simon, we are a little bit more than halfway through the polling day and many public figures have already been making their positions exit or remain now with everyone from sir richard branson with the heads

to many of the banks with the james bond actor. sir martin sorrell built wpp from scratch into a $30 billion-plus company. we sat down with him yesterday to ask for his expectations on today's outcome. >> very dangerous to predict but if you sort of nailed me to the wall, i would say 53-47 for remain. i think a small victory for remain, but it's very close. we're within the margin of error. the turnout is critical. 66% is what most of the pollsters -- i think all of them have assumed, the same as the general election turnout. we know there are still a large number of undecideds. >> reporter: turnout is exactly what we're trying to parse today with relatively inclement weather throughout the day.

we also did talk to mr. sorrell about the situation at viacom. his company has a longstanding relationship with viacom, not to mention that his wife is on the viacom board. we asked him how he is watching that saga unfold. >> my wife is on the board and we have a relationship with viacom, a significant relationship with viacom in terms of we're buying media on behalf of our clients from viacom and indeed from cbs as well. >> reporter: does that relationship depend on phillippe dauman remaining ceo? >> no, of course not. it depends on the value that viacom or any other television group delivers to our clients. >> reporter: has that value changed in recent years? >> well, some of their properties have strengthened and some of their properties have not been as strong, but that was ever thus. that's true of every -- it's true of your own group and your

own programs. they ebb and flow. it's not like a line going up. the strategies of the various media owners have changed over time. >> reporter: as for his view on what would happen or his perception of what would happen if phillippe dauman were to step down, he said it's just a cycle of life and it wouldn't really change. overnight a new court ruling puts a hold on the removal of certain directors, which i know you've been talking about throughout the morning. back to you. >> thank you very much, kayla. speaking of waking up and having thing suddenly change, this morning macy ceo stepping down next year. >> i did get off the phone with terry lundgren. he's been ceo for 13 years at

macy's and ceo-elect jeff gennette. lundgren tells me the timing has been talked about for the last two years, it's not a new subject, it was just the matter of the right timing for both jeff and for macy's. we made jeff president two years ago. part of that plan was to move him into larger responsibilities and give him exposure to the board. lundgren told me if i would have retired before when results were stronger, that would have been no way that would have been a good time for the company. the business has been challenges and we wanted to make sure that our company was on the right track. he said he won't be executive chairman forever. the question, though, lundgren says is when. he'll leave that part up to the board and to jeff gennette. when everyone feels comfortable, that's when he says the time

will be. macy's is the third largest seller of products online in the categories they sell, which means that jeff gennette has a lot of experience in that area since he currently oversees it. he says you have to start with a great product and surround yourself with people who understand the omni opportunities. now, gennette tells me he believes the growth in retail is omni channel. as far as his background goes, he says he does have a strong online business and stores base. his goal for consumers is to take friction out of the system when it comes to shopping. he'll continue to focus on great merchandise of course, as well as amping up efforts on the in-store experience and mobile. there had been some critique, simon, about whether or not he had enough of the omni channel background but as lundgren pointed out, he has been overseeing that for several years now and has been at the company for over 30 years. >> inevitably questions about

real estate but we'll leave it here for the moment. when we return, the former ceo of bp, lord john browne will join us. why he says if the uk votes to leave, britain would be diminished on the world stage. "squawk on the street" will be right back.

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benefit the victims of the orlando shooting. the concert raised at least $700,000 with 100% going to the orlando fund. >> a giant purple mural of prince was unveiled on side of the music theater. that's our cnbc news update for this hour. back to you. >> let go over to london for the latest on today's historic vote. will the uk remain in the european union? sarah, up to you. >> well, the voting is under way. i'm joined by one of the most prominent business members of the community. john browne, the former chief executive officer of bp.

welcome, lord browne. good to see you. >> thank you. >> you have come out very strongly about britain staying in the eu. you said today you would be holding your breath. >> i will be holding my breath, but i believe that the common sense of the people of the uk will be to stay in the eu. the uncertainty created by leaving would be so great we'll probably never recover from it. >> let's talk about what you're fearful of. we've heard about the forecast of the british economy. how do you see life if britain does leave -- >> in spite of the fact that we have nato as a police force force as it were, binding people together stops unnecessary nationalism, dangerous nationalism, that has marked

europe. secondly, nobody knows what would happen if we were to withdraw from europe. the legal structures are so complicated that the person in charge of of all that said it's going to be years of unmitigated uncertainty. >> you know what the leave camp says in response to both of those arguments and that is it's a patriotic response. the eu needs the uk just as much, they need our trade and cars and alcohol and everything else that is exported from here and it's not really going to be a security concern when it comes to the u and uk ties and the uk's place in nato, why should any of that change? >> because it's all about being better than the other case. i think being part of europe allows us to continue a path of prosperity, a path of peace, whereas to leave will open up many uncertainties, which arguably we'll never recover from. in business terms it's this -- if you had a ceo that said i'll

change my strategy and i'll let you know in two years' time how i'm going to do it, how do you think the stock would perform? not that well. >> uncertainty. >> the cost of uncertainty is high and you rarely recover that cost. we will be prosperous as part of europe. we have our own determination, our own parliament. it's not true to say parliament is muted. it absolutely makes the laws. >> but do you sympathize at all with those that are in favor of exit, have been hurt by globalization, say they've been hurt by regulations coming from brussels, saying they've been hurt by immigrants, migrants coming from eastern europe, it's been a drain on safety net and a drain on jobs. >> i have a great amount of sympathy with some of the globalization around the world, not the least of which reskilling and education and not the least technological change,

which is producing a faster impact on globalization. that i really do. but it's up to us to make that work for people and to stop the middle of all economies being hollowed out. >> my colleague simon hobbs back in new york has a question for you, lord browne. >>john, i think for a lot of people around the world may wonder how the uk got itself in this position. a lot of the leaders are very much from the fringers with one or two exception and yet they've got the uk to this stage and sucked in an awful lot of support behind them. i wonder what the lessons are for other people in other countries around the world. >> i think it's all about make decisions, long-term decisions and sticking with them. clearly there was great concern in prime minister cameron's mind as he was going into the

election about whether he'd have a majority and how he could keep his own party together and this was obviously part of the conversations for that. but in the end, these are long-term decisions. it's like this vote, you know. which ever way the vote goes, the people will have spoken and democracy requires that we do what they say and we stick with it. we can't keep changing our minds when it comes to long-term partnerships which are so important for the future. after all, almost everything we do nowadays, it's about the quality of partnership. it's not about -- just about the quality of the individual entities, whether they're nations or companies. >> if there is a vote to leave contrary to what the markets and betting odd are telling us today, do you worry about the political domino effect across europe? >> obviously i do. it will open up a question in people's mind and may well open up as well a more nationalistic

approach with bad consequences to do with the overall cohesion of nations around europe. >> i mean, it scary stuff. >> very. >> we have seen a rise in far right and far left populous parties. >> we have indeed. >> how does big business brace for the world where political risk is raising? >> british business tends to keep a stiff upper lip in this regard and makes sure it keeps its eye on purpose. the management in economic terms as cost of capital rises as uncertainty increases. so investment, development costs more, which means less is done. >> we'll see what the polls show. they close at 5 p.m. eastern time, 10 p.m. local time.

lord browne, always good to talk to you. >> good to talk to you. >> we'll send it back to new york. >> we have a decision out from the supreme court which could affect 4 million people in this country. hampton has the details. >> reporter: the second blockbuster decision of the day, the supreme court in a 4-4 tie has basically blocked the obama administration plan regarding the status of some 4 million illegal immigrants in this country. texas was among 26 states that had sued to block the plan. i have never seen anything like this in all my years of covering the supreme court, a one-sentence decision that simply reads "the judgment is affirmed by an equally divided court." but of course there are huge ramifications going as far as t in immigration, it means in practical terms very little that t the administration may do between now and the end of the president's term as far as

proactively on the immigration front. back to you. >> hampton, let me highlight what is happening here, and the supreme court has ruled that the administration decision by the white house not to deport certain immigrants is not lawful because they have sidestepped congress on under 26 states, and indeed texas, itself, challenging a sidebar issue of the driver's licenses. so what does this mean now for the 4 million people that thought that they were protected by the edadministrative decisio but clearly now are not under the supreme court ruling? >> well, number one, it is texas specific. but it also means that you have a deadlock, and the administration's hands are tied as far as what it can conceivably do going forward. the lower court ruling stands, and that is what is operative here where at least texas was able to convince the highest court in the land that it was an intrusion on the authority, that they are having consequences of

this administrative action by the obama administration. so, again, it is a standstill if you will going forward. >> okay. hampton pearson outside of the supreme court, and the second big decision of the morning. thank you. meantime, the breaking news in the freddie gray murder trial in baltimore. the police officer cesar goodson jr. was found not giuilty of th depraved heart murder in the black detainee freddie gray, and the most serious charge that he faced, and he was the driver of the transport van in which gray broke his neck in 2015, and there is a live shot outside of the courthouse as that news breaks. "squawk on the street" will be right back.

the big stories dominating the markets are the key vote of whether britain is going to stay in the eu and we will learn tomorrow morning the impact on investments and european banks, and join g ing us with a first cnbc interview is the president

and ceo of harrah's which owns more than 9% of the credit suisse and other holdings. good morning. >> good rn mobbing. >> a strong rally coming through on the european banking at the moment, and what are you making of what is going on? >> well, a belief that the referendum held today is going to be ending up in britain staying in the european union and recall iing before this whe the polls were indicating a different outcome, the banks and the european stocks in particular have are been slammed. in fact, since the beginning of the year, with all of the talk about negative and low interest rates a european financials have performed quite poorly from are the price wise despite that operating earnings have been pretty decent. >> back of the envelope cal you arelation, you own about 1 billion of bnb parabar and $1

billion in credit suisse, and they are down about a quarter and what to you believe is going to be going forward? >> well, the path to successful investing is buy low and sell high, and so, the view after credit suisse does not represent the fundamentals with the company trading half the book value and trading at normal earnings and it is going through the tran sigts and trying to rearrange the investment banks as the earn inings there are mo stable and predictable, and putting more focus on the wealth management and private bank business businesses. it is doing this, and the friction caused by the change is noisy and unbearable for some, but we believe that the company is on the right path, and given today's valuation, the risk/return tradeoff is heavily skewed towards being a buyer in the fairly well run financial institution. >> the market caps are clearly, as you know better than they the

market caps have been battered here sh here, and there is a perception if you are looking at the daily moves tot italian banks and the spanish banks, serious questions moving forward and perhaps some of the bankses are going to be finding it difficult in the future to on the degree of pulling down the system overall, and that clearly why you will see the likes of pnb parabar that they see perhaps the world is safer if britain stays in the european union, and you don't see bigger problems further ahead of the european banking, and are we clear of those? >> well, of course, there is always maybe some problems, but look at the banks' balance sheets and the leverage positions and the ratios today versus where we were in the great financial crisis of '07 and '08 and the banks have significantly fortified the balance sheets and in some case, there is too much capital and thereby dragging down the returns. we'd rather have the banks safe than sorry, and forced upon by

basal three, and these banks will do a good job for preparing for the stormy days. and so even though there is maybe storms in the future, the banks are better prepared today than they were in the past. in the meantime, the market is obsessed with maybe one portion of the impact that interest rates and low interest rates have on the earnings, and they are ignoring the fact that low losses are declining, and credit growth is picking up, and expenses are dropping and thereby these banks are being able to deliver decent earnings despite these, despite the pressure on their spreads. >> you 3/4 of a billion in daimler, and then another half a billion in bm with, and why investing in those two, and

which is the better investmenter or can you lump them together as simply german exporters? >> well, they are two different companies, and the daimler aside are from having a luxury car business, daimler has a big truck and commercial vehicle business. and bmw is of course just premium vehicles benefiting greatly from what is happening in china and you will see the growth in the chinese automobile market and the structural change over time is at the premium automakers, slow ly, they are picking up the market share. now, when you add to this the valuations, and you can't again look at the businesses, but you have to look at the price that you are paying for the businesses, and the price of daimler for instance, 7 or 8 times the earnings for a stock that is safely yielding 5 or #% in the next year or two. the point i am making is that when you look at the sectors combined with the financials that we talked about earlier, you are seeing really good mid-single digit yields and you'd think that in a market

that is craving safe yield, craving investment income, these are very good stocks if that is what you are looking for. >> and mr. herro, pleasure to meet you and thank you for spending the time to speak to us. and he is the chief investment officer and partner there of course of harris associates. and now, we will go to sar ray eyeson who is keeping the tabs on what we are entering the 10th hour of voting and of course, the polls will close at 5:00 our time, the new york time this e evening, and 10:00 local, and keep you abreast of what is happening throughout the night. >> and the aforementioned sara eis eisen, and so there is no exit polling, and so we will not know

until late in your the evening your time. >> yes, this is the time line, no official exitle polls, and the polls will close 10:00 p.m. local time, and 5:00 p.m. new york time. and this is not an official exit poll, but there will be a sentiment coming out in the hours leading up to the vote. then the first official results come at about 12:30 a.m., and just after midnight this time, and starting to get the reports around 1:00 a.m. local, and then sort of throughout the wee hours of the early morning, all of the districts will be reporting, and start to get the numbers, and we should have a clear sense of 5:00 a.m. or 6:00 a.m. and what the british voters are expecting is to get the final word before breakfast. here's some final thoughts from me on what i am hearing on the ground, and it is clearly split, and the polls leading up to today show a slight edge for the remain camp, but it is going to

be close, and there is a large group of undecided voters and the turnout is key, and especially with the bad weather, and it is raining now in london and the thunderstorms are predicted and a lot of people are planning to go to the polls after work, and the young vote is going to be crucial for the remain side, because that is thought to be a key area of support for those who want to the stay european and see their future within europe. the other thing they i will tell you is that the betting odds are clearly favor iing remain and ge up past 84% on betfare today, and that is what the market is responding to. from the betting sites, the volume of the votes for brexit is bigger, but it is the money that is bigger on the remain side which is why those odds have moved so much in favor of the remain. so it is going to be close, and we will wait and see and of course, we will bring you all of the latest headlines and the market reaction straight from the source on this historic day.

for now, back to you, carl. >> thank you, sarah so much. good morning. it is almost 8:00 a.m. at twilio's headquarters out west, and 11:00 a.m. on the street, and "squawk alley" is li live. ♪ they want to get mine ♪ looking on the ceiling ♪ it is just a matter of time ♪ glorious stealing ♪ it is all right ♪ ain't no time jon fortt with me here on post nine, and kayla tausche is outside, and you can mang inwhy. looking at the session highs, and best day for stocks since may 24tha and big