>> give me one. >> comcast. it's been great. the roberts have done a fabulous job. >> give me one you're really looking at. >> you had black and decker. my analyst loves it. >> you haven't decided yet, we've got to go. >> thank you for helping us. >> appreciate it. make sure you join us tomorrow. "squawk on the street" begins right now. thank you, sir. good morning and welcome to "squawk on the street," we're live from the new york stock exchange. carl has the day off. let's give you a look at futures as we are perhaps seeing a bounce. i say perhaps but really i think that's a pretty definitive bounce right now as we look ahead to the open this morning. of course you can see all the major averages up rather sharply. europe, as you might expect, also in the green. let's take a look, and you can see again, not making up, in any way, the losses that we saw both

on friday and monday in those markets, but strong rallies without a doubt. how is our ten year doing, you ask? and you shall be answered, 1.468, sometimes that's what i can't get over. >> it's the only thing you need to look at rather than oil. >> and if it goes back to 50 we'll see how the market does. >> oil trumps boris. remember we don't use his last name anymore. now it's boris johnson. oil is trumping everything because this market is so screwed up. it's what we look at. >> that's where we're going to start. our roadmap does start with those global markets. it doesn't say they're screwed up, it says they are actually facing the brexit fallout. could today' session finally provide some relief, or is it only temporary? we always like to end with question marks. >> president obama weighing in calling for a pause in the

post-brexit hiteria. his word, not mine. we're live in london and brussels as the world watches for what is next in terms of the exit of the uk and what the eu is going to do. president obama warned against financial and global hysteria in the wake of the brexit vote. >> i think that the best way to think about this is a pause button has been pressed on the project of full european integration. i would not overstate it. there's been a little bit of hysteria post-brexit vote as somehow nato is gone, and the trans-atlantic alliances dissolving, and every country is rushing off to its own corner. that's not what's happening. >> it's not clear what actually is happening. >> that is the best advice i've heard yet.

now the republican, h, how coul say that. do you think italy is saying we want to close our banks? we want to do exactly what they did in the uk? it's madness. who would do this? do you -- anyone who is running italy or spain, now seeing that their banks are going to have runs on them. who wants that? >> going to have runs on them? >> i'm saying after you saw what happened, when you saw royal bank, and when you saw barclays -- >> you would worry about what would happen. >> and right now -- >> and could it conceivably get to that point. >>s in italy i'm concerned about. >> roll it back. >> i'm saying he's thinks there's hysteria, given what i'm hearing, and there isn't runs on the bank, that preferreds, and the credit and the bond size, which you have taught her is far

bigger, is saying this rally is right. >> today, i don't know if we have them, but let's take a look at the banks. that's where we're started, which is the appropriate place to -- i mean, barclays, lloyds, you go on from there, whether it's hsbc, or credit swisse. >> or deutsche bank. >> the bonds are good. >> i'm saying they're not -- they're not falling apart. >> and nobody expects that dade bank. >> to the point of hysteria perhaps is not necessarily something we should be thinking about. >> right. >> but there are so many unanswered questions. now you're starting to hear the whole line of maybe they can redo it or maybe if johnson comes in they won't invoke start c cal -- >> that makes things more confused in a sense. >> right.

the norway version, basically s what they had. i know people keep saying will they give me the norway version. >> a look at the banks, are up -- you know, up. >> i don't want to get too in the weeds here. i'm saying if you see oil up, you see the dollar down and you see interest rates going higher, then you can start looking at u.s. stocks. unfortunate unfortunately, when we look at the u.s. stocks numbers are coming down because of what's going on in europe and that's unavailable. we know that's happening because as you said yesterday, the issue is recession versus nonrecession and that is -- they can roll back whatever they want, but it's been set in motion and it's recession versus non-recession and that is not what we were talking about. uk recession not going to be that impactful here. european recession, certainly more so. >> $660 million imported in goods last year by the uk. obviously we just got a 10%

tariff. i think europe' a little bit stronger than people think. i just don't see europe unraveling. i don't like the domino theory. i think what happened was anti-domino, that when you look at what happened aud-- >> that it will prevent other exits. >> italy, that's probably the one least on the table, that can least handle the banks -- >> i find myself if italy were to exit, what would its borrowing cost be? >> what's their outstanding debt load? third largest sovereign bond market. >> if they didn't leave in 2011. the election this weekend was more of a vote to stay. we've got to deal with the facts on the ground. other than hungary, with the mag air party. some would say the aero cross gang, that's the national party, only party anti-immigrant, they may be kicked out because that's not a democracy. that's not a domino.

>> let's set up the day then here. all right? as you've said, the done is no longer -- >> it's weakened a bit. we don't want to have to cut numbers. >> you saw jay and jay up yesterday. >> we saw the european markets up. let's call it between 2% and 3%. our banks have suffered significantly and we're down what 6% from thursday? something like that? >> right. >> so is that it? has the equity market dealt with and discounted the effects of brexit short-term before we figure out the effect's longer term? is. number cuts are real. >> the number cuts are from those relying on the eu. >> and trucking slowed down. you could argue that freight has slowed down. i was dealing with some of the airlines yesterday. holy cow, david, the numbers are big. the numbers are just big.

because the dollar again will hurt tourism. real estate coming down, that's also been a big prompt to the economy. >> right. >> now jp morgan's number -- you asked me usually the key to the markets. >> please. >> i'm going to jump that. jp morgan has 2 point five million, barclays is next, and i think there could be a case to be made huge market share could be picked up. >> but that's going to happen over time. that's not going to happen tomorrow. >> and here is the issue, cert term, we have a bounce. longer term, they'll be winner and losers. there's number of cuts galore. very few companies can afford. within the confines of a foolish note, it's just you can't -- that's huge european business. >> it does. >> people don't think of it as european business. if you go over there, it doesn't matter what language the word

search is. they use it. >> no doubt and facebook, as well. leaders are holding a brexit summit in brussels, and willfred frost is there with the latest. pilfred? >> reporter: let's just remind ourselves, all 28 leaders of eu states are coming together after that brexit result late last week. probably the most seminole moment since the berlin wall. david cameron is allowed to attend today. he's unceremoniously booted out so the remaining 27 can discuss what's next. he arrived a little bit earlier. this is what he had to say. >> while we're leaving the european union, we must not turn our backs on europe. these are our neighbors, friends, allies, and partners and i hope we'll seeing the closest possible relationship in terms of trade and cooperation

and security because that is good for us and them, and that's the spirit in which the discussions i think will be held today. >> now of course his comments there were quite constructed, forward-looking and positive in stark contrast to comments by the leader of the uk independence party in front of european parliament earlier. here's a taste of the tone of his speech. >> i know that virtually none of you have ever done a proper job in your lives, or worked -- or worked in business, or worked in trade, or indeed, ever created a job. but listen, just listen. >> meant to be smoothing over relations before these negotiations, nigel doing quite the opposite. it's about five and a half

minutes long on youtube. the bottom line, a lot of angst with david cameron for having risked this guy delivering referendum, i'm sure they're delighted the person they'll be negotiating the uk with is not from the independence party and will be from david cameron's conservative party, on who will succeed david cameron, guys. >> thank you very much, wilfred frost, updating us on all the goings. >> how about iceland's work? >> iceland ousted england. it was not good at all, you're right. all right. take another look at the futures as we head to a quick break on "squawk on the street." you can see where i've set up for a much higher open after two significant down days in the market. we have a lot more "squawk on

the street" live from post-nine when we get back. ♪ it's here, but it's going by fast. the opportunity of the year is back: the mercedes-benz summer event. get to your dealer today for incredible once-a-season offers, and start firing up those grilles. lease the cla250 for $299 a month at your local mercedes-benz dealer. mercedes-benz. the best or nothing.

earlier on "squawk box," former treasury secretary, larry summers spoke about the

challenges facing central banks around the world. >> you have a system that i've been warning on this show for the last year and a half, is more brittle than usual because central banks don't have room, and you have brittleness and you have a bad -- and you have a bad shock, and that's a prescription for a quite difficult situation and i think that's what markets are discounting right now. >> he's been saying lower for long longer, longer, longer. this is a man who was close to being the fed chair, but was then withdrawn from consideration. he's been right by the way in terms of saying look, rates are not going anywhere. >> but the problem is, you know, why do we even have the vote? there's just not a lot of great economic activity. >> why do we have what? >> why did brexit happen? a lot of this is because people

can't find jobs, particularly people in their 40s, 50s, and 60s who have been laid off by globalization, and digitalizati digitalization. stocks do well in a global environment, so we can use those central markets as an example. there haven't been a lot of jobs created or inflation or wage gains other than those that are mandated on both coasts in particular, which is why the restaurants are hurting. look, i totally get that. the one thing -- i'm a stock guy. yesterday, i ventured into brexit only because it's hurt a lot of stocks, but the issue that i have, is the less economic activity most of the industrials and the material stock which is have been pretty good, and the discretionary stocks, 20% of the s&p are challenged and that's where the numbers are going to come from, and special numbers are going to get cut and i'm weconcerned abo

that. >> right. we're going to be living in a very low-rate environment for a long time. mr. summers makes the point there's no bullets left. >> by the way, the japanese 20-year came close to negative territory. 20 years. you want to lend money to the japanese government and you're not going to get anything back. 20 years. >> the germans should -- you and i both know germans should go borrow $500 billion and put the whole continent to work, right, because they borrowed nothing. mu i never hear a bad word about this politician. they could create jobs. the long regime did build the autoba autobahn. i'm saying there's lots of opportunity to put people to work but the governments have to do it. yesterday i spent a lot of time with the port authority and they talked about building the trade center.

it took the government to do it. the governments have to step up. >> are you talking about the original world trade center. new trade center. they don't call it freedom towers anymore. i'm just saying the governments have to get involved. the governments have to get involved, and that's not what's happening. you can't save anything at that rate. >> no. >> that's why i come back to bottom market equivalent stocks. you can only trust triple-as. my faith and full faith in credit is in alex gorskj, and jay andj and j was up. >> this is not meet the stock. this is stock. meet the stock is not my show. >> we're going to go from "meet the stock" to meet the currencies. >> he's on top of it. let's talk about currencies. they continue to be the eye of

the storm when we're talking brexit. sar sarah eisen is still in london and still talking currently, sarah. >> reporter: there's no place i'd rather be, david, and the pound is getting some relief, but the outlook here is still very murky. also keep in mind we're coming off a record two-day drop of 12% for this currency against the u.s. dollar and many strategists are just slashing their forecasts for the currency, as well. the uncertainty factor remains high and today the focus is all about the politics, who is going to be the next prime minister of great britain in place september second and some of the leading contenders include boris johnson, the former mayor of london, and is michael gove, the justice minister. both of them are the brexiters. there's also theresa may appearing as a challenger, who campaigned for britain to say inside the eu. george osborn was thought to be a contender, as well, the

finance minister. he took himself out of the race, focused on mending the british economy, and all really important for global investors because the next prime minister for great britain will be leading those tough, and complicated, and long negotiations for britain to leave the eu. for instance, can they retain any of the trade benefits with europe? that's just one of the big unknowns here. for now, there is calm though. the safe havens which have been so strong, the yen, the dollar, are coming off a bit. there's a lot of parts and the political aftershocks continue on both parties. there's currently a no-confidence vote for the opposition leader. we'll find out the results of that in the next few hours. >> a lot of different things. we haven't started talking geopolitics about russia or china, how week that is. >> the chinese stock market, one

of the better in the world. don't talk about that. every was fretting on friday. china has been a strong market that says something. makes me feel a little bit more sanguine about the situation. we don't have a decline in china. i will point out, watch the stock like avago, that's the stock that always used to bounce back first. watch broad com. >> okay. we will. >> we'll also be watching for your mad dash, jim, because that is what is coming up next as we count down until the opening bell. we've got a lot more "squawk on the street" right after this.

. we're tight on time, about six minutes before the opening bell. let's get through this mad dash. >> terms being used today that i don't like associated with the stock, with a company that i do like. apple, cowan. the focus on iphone seven is appearing a powder keg by apple that a super cycle is setting up for the iphone in 2017. david, one thing i have learned as much as i do like the company, apple, when you hear super cycle, that's the coal super cycle in 2011, the fracking sand cycle in 2011. >> the housing cycle. >> 2007. remember bob toll, he said that's the on coming train, he said it could be a long-coming downtu downturn. correct, bob dole. this stock is going to go up

because the count report lays out how 2017 will be a great year so therefore you have a $9 ten, ten times earnings, people are going to say i want to buy it. i want the watch to be bigger, the watch has to get better. i just called my wife. i think what really matters is a super cycle is a term that i don't like because it's often led to too much bullish enthusiasm. there's a lot of bareishness. don't believe the hype. >> down 26 1/2% this year. >> a super psyche cell like the cubs, okay? the mets had a super cycle. how did it end? >> when was this super cycle? >> last -- oh, last fall. >> it ended in tears. >> yeah, tears. >> like a three-inning super cycle. >> that's awful it ended in tears. >> i'm saying super cycles are like betting on the warriors.

no it just never works out. >> we've got the opening bell and a lot of things to cover individually for you. i want to talk about mckiesson maybe some viacom, a little bit of news on monsanto after this. >> i like cutting numbers. as a supervisor at pg&e, it's my job to protect public safety, keeping the power lines clear, while also protecting the environment. the natural world is a beautiful thing, the work that we do helps us protect it. public education is definitely a big part of our job, to teach our customers about the best type of trees to plant around the power lines. we want to keep the power on for our customers. we want to keep our community safe. this is our community, this is where we live. we need to make sure that we have a beautiful place for our children to live. together, we're building a better california.

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you are watching cnbc "squawk on the street." we're live from the financial capitol of the world. the opening bell will be ringing in about 55 seconds, a arcbishob dolan will be ringing. you already answered my question, what's the key to the question? >> it's going to be jp morgan. if you want the lower risk, it's travelers. you know i think the world of travelers. it's been for so long. my problem was the hottest tech stock going into the downturn, david. flash prices have turned up, and

western digital down 10% yesterday. >> and avago. >> and broad com, avago should bounce the highest. >> and there it is. right on time. the opening bell of course here at the new york stock exchange. we'll take a look back at the real time exchange at cnbc hq, and we see we've got a lot of green on the board as you might have expected. here at the big board, overseas ship-holding group, for the transfer at the nyc. at the nasdaq, automatic data processing celebrating the tenth anniversary of the adp, national employment report. >> carnival cruise, once again they delivered. i was concerned about zika. higher prices on higher bookings. >> nice. >> ccl. >> carnival cruise. >> that's an interesting sign.

there's still a lot of things against them, could be management being so strong. that's the only earnings story today that matters, and it's good. the quarter looking good. always have to wait for the conference call. but very well-run company. the only data point earnings wise that i care about. i know you have a million stores in the wall street. >> they brought me my pad. isn't that good? that's good. i left them up on my desk. this helps me a little bit. >> they bring me coffee, some of the things that i was looking at. let's start off with some news. how about mckesson. they did a deal this morning, the first deal since brexit. these things are of course in the pipeline for quite sometime. the concern about the current tumult in the market is it will have an effect on futures in the activity, particularly large m and a activity, as we saw, uncertainty does have a tendency

to keep ceos and others on the market on the sidelines. jim, they take a unit that they're going to be combining with another company that's owned by private equity, to create essentially a new company. mckesson technology solutions and change healthcare are getting together. why is it important? we're talking about a $3.4 billion revenue company owned 70% by mckesson and 30% by the private owners. they're going to take on 6.1 billion of debt at this new co, pay mckesson 1 point t$1.25. they still have 30% riding, then they'll do an ipo, and the tax-free split off of the remaining shares which will be a very large percentage, but there's question whether they'll be able to do it in a tax manner but that will be down the road.

2%, although the market to be fair is up almost 1%. >> to be fair, mckesson has been along with the stock, the three me musketeers of the period before we got into the selloff. mckesson has not rested. you know the three b's, they got rid of beckman culvert. these big healthcare companies, david -- >> yep. >> -- they care about keeping their stocks up than almost any group. they do amazing things. they never rest. that deal could have been held off because of the uk. it's just full speed ahead. healthcare companies in insurance. i don't know what's going to happen for sigma anthem. mckesson was not willing to tolerate where the stock was. >> and they're freeing up

capitol to do some other things. >> i like what they're doing. >> yeah. that was an interesting transaction at least and has that stock moving higher. lending club comes out, affirms that its current ceo, its interim ceo becomes its full-time ceo. chairman becomes chairman. scott sandborn named officially as the ceo of the company. they also do announce some cuts to the workforce, and a handful of other things related to the investigations that followed the firing of the company's founder and ceo back in may. the ak did not seem particularly alarming. let me take a look how the stock is doing. >> i don't know. i'm doing some work. >> stock is up 4%. we're talking about a company stock that had a high of 16 on monday. >> i'm concerned about the risk there. >> you are? >> it's too early. >> to be continued? >> yes, exactly.

to be continued. i'm worried about those in that business model. >> value fell below, rebounding back to 1949, let's call it. there's look at lending club, by the way. valiant, jim, i mean -- >> yeah. >> -- you can look at the market cap, but it's the 30 billion in debt, and what mr. papa will be able to do in terms of flexibility as the ceo of the company. >> the company got in touch with ben stata and sent an e-mail, which says valiant has very limited exposure in the uk and ireland. 1% of annual revenue, so that that's -- >> positive you're afraid to say that word in terms of valiant. >> limited exposure, to the uk. dav david, thank you for that. >> it's less than 1%. there you go. >> that is very small.

>> why was it down almost 8% since the uk voted to leave the eu? >> not because of brexit. >> not because of brexit? >> because of other reasons. here we're taking that off the table. >> people starting to speculate, purchasing square, the hedge fund, and one of those companies, jim, has a great deal of international exposure. >> and that stock is -- they had a good quarter. >> valiant quarter wasn't as strong, but david, they only have less than 1% in the uk. >> valiant does. >> just giving you a little bit of head's up. >> i hear you. >> people are concerned. >> it's more of debt silence. >> it is without a doubt, debt issue. >> i don't know that you can be taught much. you know far more. >> nope, nope, nope. >> let's talk about the banks. >> okay. >> which are up this morning.

bank of america, city, gold man sa sac sacss, and this is not a huge rebound. >> no, it's not. there's not going to be interest rate increases and people think this group is so linked. i don't think it's -- it doesn't matter what i think. i felt remember we're -- people were looking for stress tests to be good, and for a green light to do buybacks and suddenly have this brexit, and you're starting to look at european exposure, and other than wales. i was talking to the former ceo. wells is a domestic bank, more friendly to oil than it is to brexit. people just care about net-interest margin. no one cares about share anymore, no one cares about revenue streams away from that interest margin. all they care about is the tenure and they think it is bad. >> it is bad and you're still talking about a group under a lot of pressure in terms of from regulators.

who knows what's going next. they have enormous capitol at this point. what is the adjusted return onneon equity now? >> these things are trading well below tangible book. >> they're seeing fractions, fractions. gold m goldman sacks is well below its tangible. bank of america was, what, 1550? >> that was a joke. we've got to point that out. a lot of viewer it's give me two big cap stocks who have held up really well in the dow, they're really interesting? >> the dow that have held up well? >> verriizon -- >> and the age of? >> walmart. >> walmart has been cutting prices, being more competitive than amazon. the whole basket. walmart acts so well that you almost regard it dollar tree, dollar general, and walmart. ross stores, two days up, not

even a good quarter. this is about stress on the worker in our country. and walmart hanging in, feeling there's going to be large oppression against amazon. i urge people to look at that stock. what it says is, wow, the consumer ain't doing that well. >> they may be benefitting from the fact their international strategies never really gone very far. >> the uk was bad for them. >> yes. the uk was bad for them. >> how are they doing in iceland? >> i don't know. only about 300,000 people. i read somewhere their soccer team is part of the basketball team. kidding. >> a lot of these guys are part-time guys. they beat the full-time guys. >> they've got five million people in that country. >> you went to norway. >> i did. and i was there during the

olympics. >> how do they have so many people on the olympic team? >> and they have game and a possible strike there that's been moving oil up. what really matters, absolutely, is i think inventories are going to be down. >>il and inventories will be down. i continue to think we're not pumping the way we were. one of the really good drillers and service companies telling me that exactly. >> with the s&p up 1.1%, let's get over to bob and what's moving, bob? >> reporter: europe is bouncing back and it's holding. you'd not be surprised to see some of the most beaten-up sectors. look at london. prudential, and the insurance firms, difference than the united states, but the department store, banks like lloyds be up, and even the companies in the areas that are

basically dealing with materials like bhp billiton. today you want to watch volume here. take a look at the sectors. very heavy volume, a lot of sboug constitutional selling. it will be a sign of seller exhaustion for the moment. i want to give some indication people are trying to come in and buy bargains right now. you see banks being helped by the fact rates are going up a little bit, energy and industrial and the fact the dollar and energy is a little bit weaker, over sold conditions, as well. we're approaching the end of the quarter. there are a lot of traders who have been on the wrong side of this deal. if you look at the quarters so far, we're doing better than the rest of the world. so germany, and china, and japan are down much more than we are. there are sectors that have been

rather than beaten up recent recently, and i would anticipate to buy the most sectors, like airlines, or retail, or texts, the big name banks have got a lot more than fiv5%. some of the tech names, definitely rather have been beaten up and we've got two, three days to go in the quarter to see some attempt to buy these groups. the banks today are on the upsi upside. we're going to get the second round of the stress test on wednesday. i would not be surprised to see announcements from buybacks for example coming from some of these banks, particularly at this price. remember jp morgan is up, but it's down almost 10% in the close yesterday, in the last several days. a lot of prices notably lower. the dividend yooeields, bank of mark and city group still pay a

paultry dividend deal. i wouldn't be surprised to hear of a hike, as well as some buy-back announcements from some of these firms after the stress test. also, we mentioned tech being challenged. it's been a tough time. it was much discussion on this. jimmy mentioned it. we had the big price decline in june and april. it's been rather ugly. these are big names, apple, microsoft, alphabet, all down double digits. finally, carnival cruise line, you mentioned this briefly, really very good numbers. revenues not bad. advanced looking for the remainor of the year are well ahead at slightly higher prices and that's certainly optimistic comment. no comment on the brexit there overall, but they do expect earnings to be pretty good for the remainder of the year. right now the dow, up 185

points. david, back to you. >> thank you very much. the s&p up 1.1%, bob. >> captured a lot of what i'm thinking. do people jump in here? i think people -- i'm looking at situations, some of the ones he talked about, but mark silversoul, there's still a lot of worries but there are still american stocks that have come down. >> american company comcast has been benefitting from being a domestic only. >> huge. up 11 1/2% this year. gold is down. >> gold is down, yes. >> let's go from equities to debt, and let's head to the one pit, at the cme group in chicago. good morning, rick. >> reporter: good morning, david. you know, obviously the trigger for much of this is brexit. we are still have very spongy global economics for the most part, but what brexit did do of course is cause a very strange phenomenon. it caused a real rush to fixed

income paper. yes, even the fixed income paper of the uk, and of course that is a huge driver. we see a one week of charted tens. we're 20 basis points, we're 80 below where we started the first trading day of 2016. look at one week of gilt. it's still under 1% at 98 basis points and really does underscore. it doesn't matter really what the issues are. if you have a printing pressure in pretty decent shape, if you can buy your own securities and iou's, you're in pretty good shape. a one week of boones's. not anywhere near the minus 17 basis points of friday. here's an interesting one. let's check out their two year note, shall we? minus 65 basis points, the

biggest negative on the entire curve. if we look at a year to date of that chart, which is the notion. this just raises the bar for dragy, and on jgb's, the tens being so negative, minus 21, but this is by appointment. some day it won't and those are it is days we're going to learn the most and i come back to this $1 chart, it's mostly against the euro, but it's not on the bottom and certainly not hot top. we'll be looking at the dollar trade weighted in that, and that's probably a little bit more telling. david, back to you. actually. rick santelli. want to do a couple updates on existing situations for today's facebooker report. starting with monsanto, the enormous potential deal between

byron mansano. he was previously offered $122 a share in cash. there has been a meeting between the respective ceos of the two companies. there was no real progress made towards a deal. they did not actually -- people close to the situation indicate have any real movement in terms of price. now this is not unexpected, and in fact, both sides seem to be not digging in, but both sides seem to be preparing for what i would call a slow-mating dance, but there was at least a meeting and there were talks. again, no progress made in terms of a price or a number of the other considerations that monsanto certainly has, or questions in terms of not just structure but approvals and everything else that goes along with the potentially enormous deal. jim byron's made no fact they're fully committed, and their debt

cost may come down, their ability to have done the rights offering. they don't seem to be put off at all by the tumult in europe. at this point, they've got to have some more meetings, certainly one would expect between the ceos to see if they can make some other progress. the other deal is sanofe and medication, which they're expecting to potentially ramp up. santafe has been sounding out to shareholders, as it will need to. we're in the middle of this consensuual solicitation. 60 days in which they have to collect consense to throw out the board of directors. the question is, what will they come to, what they've been hearing from shareholders and i have, as well, is we're going to make something that starts with a 6. will they get that? i guess that is unclear, but has been made very clear to santafe,

that they want something at least $60 a share. the unaffected stock price is around the mid-30s so that would be quite a premium. sanofi, they did it in the genzime deal. things were 25 cents but they may want to throw one in here, too. if you can make it clearly related to a specific revenue stream, or just a ref new target perhaps, it makes it easier to understand on piece of paper. sanofi has to make its move, and we'll see whether they've got anything in their pocket. a little bit update for those ongoing situations. >> there's been a little bit of collateral. vitech has been one of the worst companies. sanofi owns 20% of the general. but regeneron has been horren

duo s and em52 are saying maybe that's all they're interested in. >> it's been -- >> and that key oncology franchise is this notion maybe there's no bid underneath, there's no sanity bid. we've got a lot more on these marketings up for the first time since we saw that brexit vote. ok team, what if 30,000 people download the new app? we're good. okay... what if a million people download the new app? we're good. five million? good. we scale on demand. hybrid infrastructure, boom. ok. what if 30 million people download the app?

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what do you got? >> i'm looking at brexit numbers, not on holdings, goldwin goes diageo. north america davis, 32. asia is 20, europe is 24. this is the british johnny walker. remember, so suddenly, all of their stuff is in strong currencies back to weak. so this is the exact opposite of what we see when we had a strong dollar and how bad it is. diageo has been very hurt by chinese giving, before augmenting their deals, they gave johnny walker blue. they're going back and doing that. so diageo could be one that's take over or fundamentalists. what do you got? >> i'm looking at the s&p, and i've got a guy from everlane, named michael preysman. turns out the food chain is corrupt, and this guy is busting it open. >> i'm going to watch that. >> really? >> we've got a rally going on

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> . ♪ and good morning and welcome to "squawk on the street." simon hobbs, live from post nine of the new york stock exchange. carl qiintanilla is off. we have sarah eisen. wilfred frost is there in europe, both will join us shortly. there you see the markets. stocks rebounding after two days of losses led by banks. energy stocks are priced to recover. no deal on safe haven recoveries, and around 147. we have some economic data, consumer comp tenancies. hi, rick. >> hi, and we'll keep that money number for a second. let's look at june richmond fed manufacturing fed index. we're looking up two or three, down 7, minus 7, that's the

weakest since january of 2013. consumer confidence for the month of june, 98, the best read of the year, because we have to go back to october of last year to find a higher read at 99 and change. so, 98.0, best read since october on consumer confidence, and we are seeing a very small amount of selling start to come in treasuries, maybe it's the dur ability at least of 37 minutes in with regard to the strength in global equities and of course our own equity market. simon back to you. >> it's a 219 point gain on the dow after heavy losses that we experienced on friday. down over 600 points and of course followthrough yesterday. there is some rest. many in the meantime have their focus on what is happening with london, the brexit vote, and now the european summit in brussels. sarah eisen is standing by in london.

sarah, how serious is this talk the uk could walk this back in some form? >> reporter: there's certainly more calls and cries for that simon, but prime minister david cameron shot it down yesterday, this idea of a do-over vote. the current problem, britain needs to figure out a prime minister. on thursday we'll find out who the contenders are, and by early september, he or she will take office. this is a person that is going to lead the negotiations out of the eu. here are a few people that are in the running. and keep in mind, george osborn, finance minister, did take himself out this morning. it could be the two big brexiters, spokes people that were leading the outcamp, boris johnson, former mayor of london, michael gove, justice mayor, or someone who wanted to stay in, teresa may, edging out johnson in a new ugov poll today. clearly, so many uncertainties abound of what this agreement is

going to look like and how long it's going to take. both political parties here are in disarray. there's no competence vote currently for the leader of the opposite party, jeremy corbyn, which we should know the results of in the next hour or so. the aftermath and aftershocks continue for the brexit vote. earlier, right here we got a chance to speak with one of the members of parliament, only one who is part of the uk independence party. he wanted out, and wouldn't say who he wants in as prime minister. i wanted to share some interesting thoughts he had about who might be the next president of the united states and this idea that the brexit vote has also sorts of parallels with donald trump. well, listen to what he said about donald trump. >> i think he's a bit of a thing-skinn thing-skinn thing-skinned narcosist. i think in a vote in american presidential elections and i will respect whoever it is the americans decide what they should have leading them. since 1776, it's you guys on

your side of the atlantic, and we've respected the outcome. i would just ask you to respect the outcome of this decision. the fact that we're leaving the european union means we're going to need even closer ties and interdependence around the wo d world. >> reporter: this has left the country around the world, and a planned rally for those that wanted to remain here in a few hours where they're expecting, simon, to trafalgar square to show up. >> sarah eisen there in london. meanwhile, all major averages are in the green as they recover from the brexit hang over. our next guest says there are ways to create value in a post-brexit world. joining usa richard turnel. i guess they're rebounding any way? > >> i'm not sure how long the

rebound is going to last. there's definitely opportunities to make money post-brexit. we're in an environment, we know global growth will be weaker than it was. we're in a period of long, political uncertainty, and interest rates are likely to be lower and for much longer than we anticipated. so what does that mean for investors? it means investing in income-oriented assets, which that's nicked income, it means alternative sites are going to be in demand, and hedging assets, which can protect you on the downside, will become much more frequent and much more in demand, as well. >> let's come on to the fixed income, and the dividend, that's a drum that's been beaten. i want to play you a clip of richard branson, a head of the virgin group. we know many of the big landowners, and house builders in the uk have fallen 30% as a

result of these two days of what was carnage for many people. that was echoed by branson who is mostly a private-held company. just listen if you would, richard. >> and we're not worse than anybody else, but i suspect we've lost a third of our value, which means -- >> a third? >> yeah. >> wow. >> which means you know, which is dreadful to people in the workplace. we were about to do a very big deal. we canceled that deal. that would have involved 3,000 jobs and that's happening all over the country. >> on the one hand, richard, you have clearly uncertainty from value created by richard branson, and on the other hand people will say, that's a very long way away from what i'm investing in and the markets we have here. this is not a u.s. phenomenon. what would you say to those people? >> i think you're going to see major economic implications particularly here in the uk as a

result of this vote. you're hearing from richard branson, the uncertainty going forward. anybody thinking about investing into the uk is going to pause for thoughts. we don't know what the rules are and we don't know what we're investing in. if you look at equity investors, i look at the mark the reaction and much looks rational. it hasn't been a panic selloff, there's been no dislocations. you've seen a repricing of risk following a significant event. and broadly, we wouldn't be stepping in today to buy many of the assets which have been hit the hardest, like uk property, areas at the banks, these areas remain under a significant under pressure, and a significant uncertainty and you're not paid enough to step in and buy those assets. where we would be stepping in is where you see high-quality businesses, strong business models, and cash flow paying dividends, which have been hit by the broad risk selloff, and is now a good opportunity to

enter. >> richard, just to get a little bit more detail, something about two thirds of the s&p companies have dividends-year-olds exce y it's a bit expensive. will that be a bit concern or do you think the s&p fi500 represes the quality and yield you're looking for? >> people have been investing and we've been talking about for a number of years now. when people say dividend stocks look expensive though, they often, in comparing the valuation of those stocks to the broader market, when you look at the valuation of those stocks compared to bond yields in traditional asset classes they look incredibly cheap. the key is you have to buy the companies that are going to sustain and grow dividends going forward at the quality companies, the ones that aren't going to be cutting the dividends in the future.

that's where the u.s. market scores very highly, has a lot of high-quality, cash generous businesses where you would see potential for businesses to grow. > >> i'd like to get back to the banks where you won't take the risk of owning them. why not? is the underlying balance sheet really there in question or is it a function of earnings power? i'd love to get a little bit more of a sense as why you would contain to avoid them given the huge fall many have seen in their stock prices? >> yes, this is an earnings issue and it's a share-price issue. it is not a solvent issue, and that's a very important point. you've seen some improvements in the balance sheets and the central banks have stepped in and provided liquidity. we're not seeing any signs of funding stressed at all across the european banking system. it's not a solvenetis issue or im man's issue. many are facing issues before

brexit, and brexit has only exacerbat kpaszer ba exacerbated those pressures. those pressures which have been around for sometime are not disappearing and that environment you're not being paid enough to step in and bay the banks. >> richard, to step in to the point you're making, should people head again for the dividend stocks or fixed income where there is yield that's positive, is that true of big professional investors like yourself who can move very quickly, who three, six months down the line might turn the big ship and you could do that with some ease, does that also apply for people trying to invest for the longer people at home? the basis is still short that you buy low, sell high, and that isn't the case can treasuries or the dividend stocks whose prices may fall in the future, or do you think they won't, they will continue to rise in terms of the price action?

>> i think you've just got sustained downward pressure on bond yield, which isn't a three or six month view. it's sustained downward pressure because global growth is already weak and it's going to take another hit as a result of brexit and because you're going to see lower interest rates and more quantitative easing out of global central banks over coming months and quarters so that's likely to be sustained. you've got to clearly look for value in the market. avoid those areas at the greatest risk. the u.s. treasury yields above 150, and compare that negative yields in japan. every time you see pressure on u.s. yields, you're getting foreign buyers to buy those assets so they look cheap on a global basis. dividend stocks, you want to avoid the expensive dividend areas, which sheriome of the bo proxies are able to sustain their growth, look far from

expensive in this environment, particularly when you think they're underpinned on this very low level of government bond yields. >> richard, good to see you from bla blackrock on london. >> and come we come back, how a weaker sales could impact in the u.s., and the swiss frank and dollar. we'll be back after a quick break.

the impact of last week's brexit vote could impact the retail sector. our next guest will have some insight into the weeks ahead. oliver, let's start with you. in what particular ways do you envision last week's vote to part ways with the eu will affect our currency? is it about tourism? just general confidence? >> there's few aspects. translational risk is the key factor and retail about ten% of revenues to europe. that could be about a 1% to 2% earnings, as well as overall revenues. you should also acknowledge these psychological factors. in tourism, tourism has been a

problem spot given the stronger dollar, so tourists-related stocks include macy's, tiffany, hudson bay, and could be cautious, too. we like ross, ulta, and target, as well because they're domestic retailers and we encourage to think about, a, beta, b, higher yields, and u.s. stocks in terms of how to make money in this environment. >> if you could talk about the positioning of u.s. consumers heading into this market turmoil we've seen recently. we've just had an upside surprise on consumer confidence. it seems like real consumer spends i spending is running about 4%, yet retail stocks in particular have been rather weak. is there a little bit of a disagreement between the economic data and the markets on this? >> yes, i would agree. and i think one of the things i would like to point out is some of the largest global names have

actually less exposure to the uk market. for example, nike, vf corp that owns vans and timberland. we estimate 3 or 4% of their revenues come from the uk market. there are some smaller names like fossifossil, deckers that ugg boots. much more to oliver's point. >> if we could drill into nike, and under armour, as well, they've really been significant underperformers as investors just turning away from the general category, or are they too expensive with their p.e. premiums? >> yes, there is a p.e. premium, and i would note there is an overhang of inventory, and we have sports authority, going through liquidation, and

addidas, which is waking up after years and we'll see tonight with regards to nike. these futures, which is orders for the next quarter, they're going to decelerate. the only question is how much are they going to decelerate and we'll see that tonight, and if we're seeing a little bit of inventory buildup in western europe, and china as -- again, as addidas starts to wake up, i would note nike, the full long-term story remains intact. these guys are drivers of innovation. >> it's a build upon to laurent's point. health and wellness remains a very good trend. we think there are structure positives to thinking about health and wellness, as well as beauty. our pick her is lululemon and uta, and they'll still invest in certainly things and it's domestic. as we think about how to play this market you want to look for

structure trends and retail is very cautious. we're having a problem with mall problem, amazon risk, and rising wages which kind of work both ways but we're facing a new era in retail, so this is just another layer of anxiety to add to the consumer and if someone were closely watching in this environment, just because this is such unpleasantrecedented volatility. >> thank you very much, olive, and laurent. much more ahead on cnbc, the recovery.

something of a breather for the uk pound today, but it does remain near those 30-year lows. the plummeting pound against the rising dollar shows heightened volatility in currency markets and underscores the flight for safety. so what this means for the global economy and company earnings, joining us post nine, allen ruskin global cohead of

deutsche bank, and travis arner, worldwide market, sarah eisen will join us very shortly. allen, this isn't a huge bounce here for the pound. you might have expected more? >> i think the pound is at the epicenter of the storm. i think you can get a balance from a lot of other indicators. i think global risk appetite is going to be okay. u.s.e equity market should find something of a flaw. the pound is pretty much a sell and uptick story. >> sarah join us. >> reporter: i'm just wondering how much is baked in, in terms of the pessimism and the uncertainty about the politics and the economics of what's going to happen in the uk now we've seen the currency lose, what, 12% of its value. >> i think the politics is priced at this point in time, sarah, so i'm sympathetic to that view. where i'm more concern side over the longer tomorrow, how the uk will finance its current

deficit. in the past, this deficit, 2/3 rds, we'll have a record, balance-based deficit. that's the big achilles heel in the medium term. >> reporter: and the follow-on question would be if the pound faces more pressure, how many of that spills into the euro, which will really hammer u.s. corporate earnings? >> i don't think it's going to impact the euro. oddly enough there's some cem cemeterceme symetry, the uk will find some entry into the euro. i think it's going to remain relatively brilliant. you're looking at something like 105 at the end of this year. >> reporter: joseph, how much stronger is the u.s. dollar going to get from here, and how much impact is that going to have on the u.s. economy,

exports, and earnings? >> i don't think it's going to get too much stronger. what we saw was a reaction of markets that were wrongly positioned for this vote. no one expected this, everyone up and down the line and the markets were hugely expecting this to go the other way. so the initial move that we saw is a shock. for the dollar, i think we've seen the big move so far. the rest of it is going to be as to how this plays out with the u.s. economy and i don't think it's going to have that much effect. the u.s. economy is not that dependent on exports. you will seeing some but it's not going to affect the market. the bigger impact will be what the effect is on consumers if there is a continued fall in the equities, which so far has not happened today. >> reporter: another thing people are worried about, when you look at the shock waves from this brexit vote, joseph, is the

chinese currency, and now back to five and a half year lows. is that going to continue and cause all sorts of new headaches for global investors? >> that i think is maybe as important as what's going on with the british and the brexit. because the last time the chinese had the currency at this level both in august and in january, there were huge reactions around the world and equities and other countries. we haven't seen that so far, but the devalue way of the yuan is a planned event from the chinese government. i think the line we're looking at is the old high, if it goes through thathat,, markets is no focused on that, and certainly the british vote was a huge focus for the markets. but i think as that companies do calms down, we'll return to china and it's a very important topic. >> we'll see if the pound can

steady. thank you. simon, i'll send it back to you and say london is the biggest foreign exchange trading hub, 40% of volumes happen here and that's one of the big questions when it leaves the eu, will that continue. back to you. >> indeed. sarah, thank you very much. in the meantime, the man who called the market turnaround. >> monday, you see if there's further selling. you can turn them tuesday morning about 11:00. >> and director of operations will return triumphly after this short break. andrea sikon. medical doctor from cleveland clinic, watson, let's review the electronic medical record of the next patient.. no problem. it's a pretty huge file.

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thank you. i stay focused 24/7 and never sleep. ordering chinese food is a very predictable experience. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. . good morning, everyone, i'm sue herera. here's your cnbc update. faced with a massive global recall, takata's ceo offered to remain. he said it's his role to hand

over the torch after handing over a recovery path. he did elaborate on when he might step down. ikea issued a massive recall for at least 27 million chests and dra drawers that can tip over on to children. a number of children have died as a result of deaths in the last two and a half years. every two weeks a child dies under falling furniture or tvs. first lady michelle obama, arriving in morocco, during which she will encourage girls to stay? scho in school. and pat summit, the winningest coach, has died from alzheimer's. she led the women's tennessee basketball team to eight basketball championships in her 38-year career. she was 68 years old and an amazing role model for many, many women. that is the cnbc news update.

david, back to you. >> thank you very much, sue herera. let's get back to the markets, moving higher at least for the first couple sessions. beginning, the recovery from that hang over from brexit. the director of floor operations, called what may be a brexit bottom. >> monday, you'll see if there's further selling. you can probably get the baby bath water selling on tuesday, and you can turn them about 11:00. >> you're a little bit late. we started turning early. >> i meant to say 11:00 fra frankfurt time. >> we do see some sort of a move up after the tumult we've seen. is this sustainable? >> i have my doubts about it only because the pound sterling, which led on the downside is up, last time i looked, less than ##

1%. the last two days, historic 30-year lows so i'd keep my eyes on this. what we've been talking about with the foreign currency specialist is also accurate, undercover of what's happening in europe, china is slowly devaluing its currency, and when the markets begin to shift focus to that we could see a little bit more volatility. >> and the question, welcome back to capitol flight and to things of that nature, which seemed to be our focus earlier this year and china sort of faded as its economy did not fade as much as people were concerned it would. >> no, if you go back even a little bit further into august of last year, when they were concerned they were going to devalue their currency, we had a precipitous drop that makes this look like a hiccup, so we'll see. >> so just to understand here, didn't the chinese say, look, we're not going to any longer just pay the dollar, we're going to go to the basket of currencies.

if the dollar is strengthening but they're focusing on other currencies which are weakening, isn't that part of what they said they would do? >> absolutely correct. it also will give the markets some anxiety because you're achieving the same result, you know. they're doing it again undercover of being part of a basket of currencies, but -- >> with whom they trade, that's why they're doing this. they trade with europeans whose currencies -- >> their currency and their goods would be cheaper. >> we had mario saying we should kind of operate from the same play book, policymakers around the world, is there any part of this bounce we're getting today or people just not expecting a lot on that front? >> i don't think they dug into that too much, but if anything, that would give me a touch more apprehension because i think for him to say that means you know we're all out on particular extremes in central bank policy,

and we've got to learn to coordinate with one another before things fall apart. i mean, you've had greenspan and others out there talking about one of the more dramatic stressful times that he's seen in a very long career. >> yeah, greenspan was particularly negative last week when he joined us. larry summers on "squawk box" this morning saying -- and he's been sounding this for sometime, mark, saying there's not a lot of bullets left in terms of central banks and what they can do, and lower for longer seems to be the way we're going to keep going. >> i think they're kind of stuck in a rut here. all of the central banks -- we've got negative policy in japan and europe. there are not a lot of places to go. should there be a sudden-fully negative shock that hurt world trade, and we'll see. it's going to be tough for europe to be very aggressive with britain because they're a very large customer of germany. they're a very large customer of france. we'll see. >> but to come back to where we

are today, this does underline the idea. it may be incorrect, but there was an idea there would be a sudden repricing and that would be it. could we conceivably just had the repricing for that one event and everybody can carry on for now? i mean, where are the -- i'm not saying they're not going to come but where are the additional waves of sellers that we fear? >> part of the problem is it's possible you could have temporarily repriced but i don't think so because we're still on a vacuum. who was in charge in britain? what are they do doiing? are they going to article 50? i think everyone is greatly concerned and i think it's just too much of a vacuum out there and we've got to watch angela merk merkel. she started in a counsnconsilto mode, and has turned into a more stern mistress, so we'll wait and see how that comes out. >> what do you think from the idea that in a world of

unappealing options you have the s&p 5 s&p 500 yielding 2.2%, and under weight stocks versus bonds, outperformed? >> i think for the first time in a long time, you're beginning to see people look at companies and who are their trading partners, where do they derive their revenues from, and i think that'll make for a slightly smarter market. i think we are only through halfway of act one in this drama. >> and what about -- i mean, i'm wondering what the next clarifying event will be for understanding where equity prices should be, or what an appropriate market multiple is, art? >> well, it could come from a variety of things. if the right-wing in france were to file for their own referendum, that would surprise everyone. i would just keep a very close eye on angela merkel. i think however she succeeds or

fails, will be how the eu winds up going. >> all right. art, the always presient art casion. take a look at dick's supporting goods after gold mans sacks put it on its buy list. "squawk on the street" will be back after this break.

european banks continue to be under pressure after the brexit vote, is there more pain to come, or a big bounce ahead? find out at trading nation.cnbc.com. more "squawk on the street" coming up.

welcome back to "squawk on the street." stocks mostly higher. utilities sticking out to the downside in a reversal kind of day. the sector did holed up during the market's two-day swoon post brexit, in today' early trading. meanwhile, energy the best performer overall as crude oil

rallies. e ex-protection names, newfield, out restoration all leading higher between 4% to 6%. for the year, energy is the third-best performing sector up by about 10%. back to you. >> volkswagen has reached a settlement, the doj, and the ftc. we're joined now with the details. a higher figure than we initially thought, phil? >> reporter: a higher figure. this is the ultimate fine they would pay. we'll explain that in a little bit. let me rundown the numbers that were just laid out in washington by regulators in this settlement for volkswagen involving about 475,000 diesel models in the u.s. that do not meet emissions regulations. 14.7 billion, that's the cap on the maximum, 10 billion in buybacks and compensation and that's if everybody participates. believe it or not a lot of people will not participate, whether through laziness, whether i want to keep the car

and i'll keep a lower settlement offer. 10 billion is the max. 2 point sev 2.7 is going to the epa, and here's the deputy attorney general. >> we can't undo the damage that volkswagen caused to our air quality. you can't suck the knox out of the air, but what we can do, is offset that damage by reducing pollution from future sources. >> all right. what about those faulty diesel vehicles, the 475,000? a lot of people have been asking me, what's the compensation, what do i get back from my model? it works like this, you get a buyback value what the car was valued at in 2015, mileage, condition of the vehicle, et cetera, according to the national auto dealer's association. in addition, you get between

$5,000 and $10,000 and you have the option if you like your volkswagen to have it fixed although they haven't figured out what the fix would be. the earliest would be october of this year. this is going to spread out for the next couple years as people decide whether they take the buyback, whether they get it fixed. by the way how much is this going to impact volkswagen even more than it already has? sales down 12.4% year to date, and remember, vw still faces a criminal investigation with the doj, as well as criminal investigations in germany, and south korea. they're not out of the woods yet. shares down 43% over the last year. simon, the quote of the day from one vw owner who i talked with or who i heard from today is i'll gladly take the money and apply it somewhere else. i will not be going back to volkswagen. let's see how many people follow that same approach. >> how should we think about $15 billion as a figure, feeling they've deliberatery thougly mis

country? >> it's more. let's at least compare this with toyota, and general motors, the two biggest scandals involving recalled vehicles? it's much more on the civil side than what gm and toyota were paid or wound up paying, in part, because it was deliberate, it was fraud. >> right. >> you can make an argument it was just as bad at toyota and gm. people were killed in some of those cases, however, that was more corporate negligence. it was not out and out, we're lying about what we're doing here, and that's why it's -- volkswagen is paying much more. that 14.7 billion, that's the maximum cap, may end up being around 11 or 12, which would still be more than toyota or gm. >> certainly if you compensate people in the case that is tax claimable, isn't it? i wonder if in this case a large proportionable would be taxable for vw back at hq? >> i haven't done all the

numbers there. you've got a good point there. thei the there is that element there. >> i was going to say they can carry forward for years. there is silver lining in this in the deal they've done. >> i think that's a small silver lining relative to everything they're going through right now and the fact of the matter is you still have a number of cases where civil, they're going to say, i'm going to be part of a class-action suit and i'll roll the dice in court and expect to get a little bit more when it's all said and done. we'll see if that happens. >> phil, thank you very much. meantime, the dow is currently up 169 points so we're up highs, but it is a decent bounceback after two days of straight losses. we're straight back.

great time for a shiny floor wax, no? not if you just put the finishing touches on your latest masterpiece. timing's important. comcast business knows that. that's why you can schedule an installation at a time that works for you. even late at night, or on the weekend, if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. welcome back. let's get right out to the cme group where rick santelli has the santelli exchange. i'd like to welcome biederman. you're in san francisco, thanks for joining us. >> thanks for having me again. >> listen, let's get this out of the way.

yes-or-no answer. did you see brexit, the leave on the referendum coming, charles? >> no, but our good friend jim bianco -- >> no, bianco did. and the reason is ask is a simple one. the last two times i've been on, you've been bearish. >> yes. >> really what i'm trying to get at is brexit is one of those easy things and there's no doubt it's a catalyst, no doubt it's a match in a tinderbox, but it's the tinderbox i want to talk about. why have you been bearish? >> one, the fuel for the rising market, which is flow shrink, stock buybacks is declining the june was the least amount in many a month. june is not over yet, but for the first half of this year we've seen one third decline in announced buybacks the that's the only fuel that's taking stocks higher. companies giving money to shareholders by reducing the share count. we're also seeing a dramatic

decline in growth in the u.s. economy incomes. everybody talks about spending and gdp, but it's incomes that count and companies are do recall worse, and individuals, as evidenced by income tax collection aring about a 2% gain in incomes. that's not enough to take the economy higher. without zero interest rates we would be in a recession. we're in a manufacturing recession. with brexit causing delays in slowdown in investment, the world is entering into a global recession. >> i don't disagree, but do you think that the path to recession is unavoidable? we're getting pretty long in the tooth here. i think larry summers used the word brittle. i think there's a lot of things brittle, but a lot of things are

nuts. >> i think there is one more upswing likely. you know every other central bank, i mean japan and europe, they're doing qe. they're buying equities, helicoptering money into the markets. the u.s. is the only major central bank that's not doing qe. so, you know, the unofficial pr guy to the federal reserve hilsenrath said janet is now considering lowering rates. what is beyond lowering rates? qe. a higher dollar will hurt emerging markets. there will be tremendous pressure on the united states to help the rest of the world by reducing the dollar value, and qumt e will put money into the market. remember, there's an election coming up. i do think that we probably will be going down under the fed decides that, hey, we've got to do something to help.

>> well, listen, charles, always be careful. >> so it's going to be volatile. >> always be careful when the government knocks on the door and they say they're there to help. of course i'm channeling ronald reagan. i next time i want to debate why the dollar is so did did -- it depends on which side of the institutional balance sheet you are. thank you for onlying us today. simon hobbs, back to you. over to dominic chu for a market flash. >> the s&p 500 financials index moving up today in early trading. if you look at some of the big names that make up the sector overall -- the large banks, those sort of names all up north of is% to even 2% for some of the bigger names. if you look at those moves. it's a big of a reversal. over the last two days, financials were the

worst-performing sector in the s&p 500. i just want to go across the atlanta ecreally quick to check on some of the non-u.s. international institutions. on they're starting to bounce back a bit, but credit suisse still weaker, but the financial sector is a big focus. we'll see if the stocks hold up. >> i think as far as barclays and royals bank in scotland, it's worth noting that they fell by 30 percent. >> so the commentary is these are not bouncing back really? substance. that was important in terms of how challenged they are, if not in a systemic sense just a repricing of the ability to -- >> r&b, barclays, a lot of them lost 35%, 37% of their values over the two days, so yes in

context certainly not a great move higher, although they would just say -- some traders are saying some sense of stability being brought back. it's not to say they aren't doomed to go down lower in the short to medium temple, but at least today it's a brief respite. >> the u.s. banking are bouncing here. it's not really about the yield story, which has often been a tell and of course we have the second round of the stress tests coming out this week, so maybe people are positioning for better positions. >> and we talked about a sector that's been underperforming for quite some time. there's been so many times even two year arguably, from financials have appeared to be a value trade. the one that everything says is destined to go higher because of the suppressed levels, but they just never seem to get out of their own way.

you wonder if the brexit vote is casting a new light and if that's the catalyst perhaps for a little bounce here, we don't know fully what's going on, but the second sector has to be doing something for the markets to go higher,dom chu, with the dow up 167 points. thank you. let's look at what's going coming up illustrates we're going to continue to track the rally. to invest about 1.6%. we're going to talk about what this brexit business means for your retirement funds. different strategies on what to do next? also noted investor paul holland will join us. he has insight into tech and europe. all that and mowre on "squawk alley." qo:é@d8j8j8j

good morning. it's. >> caller: -- 8:00 a.m. out west, 11:00 in the east, and "squawk alley" is live. ♪

good morning. i'm jon fortt. stocks rebound a bit. right now the dow is up about 1%, 145 points, the s&p and nasdaq doing even better, this as the heads of the eu are said to meet in brussels. wilbert frost is live in london with more. >> reporter: yes, all the leaders are here now. they've had their usual family photo. they managed to put slight smiles on their faces, of course those strainedat