good morning recovery recall. we'll discuss what's behind the move, straight ahead. twists and turns, the race for the uk's next prime minster heats up with new endorsements and surprise resignations. the big friendly flock animated film could be the biggest failure of his career. we'll tell you all about it coming up. it's tuesday, july 5, 2016 and worldwi"worldwide exchange" beg right now.

>> good morning. welcome to worldwide exchange. i'm wilfred frost alongside susan lee for sara this morning. >> look who is back. >> i am back as well. fee feels good to be back here in cnbc's headquarters. let's take a look at the market this morning. all three of the major u.s. embassies up over 3%. they are looking like they're going to give up gains today following some losses we're seeing in europe. the dow by 90 points. flirted with 100 a few moments ago. let's look at the 10 year hitting a record low falling 1.381. even though we saw a really in equities last week, the move for bond deals globally has been in

one direction throughout and that has been buying of the bonds pushing the yields lower. let's check in on the asian section. well, asian stocks stumbling breaking the five-day winning streak. rising to an 11-month high in june. you saw shanghai. maybe more military spending to come. across the woboard to europe no we're looking at steep declines for the german dax and france cac. and will italy is a focus because there are some real concerns about a possible italian banking crisis underway hence the losses down. >> the ietalian bank in the eye of the storm. which has been suffering for a long time before the brexit vote.

let's look at broader markets right now as well. the pound at 1.3135. it's down a lot 1% today. even though we've seen like the ftse one rally last week the impact of brexit felt very loud and clear. as we look at things, the yen rising by around 1% to 101.73. oil prices enjoyed a strong week last week. wti lost some ground last week. down today 47.7. part of the reason for the rally last week was oil prices. wasn't just a brexit relief rally. oil prices again today hurting. gold prices, they've enjoyed a decedent run post-brexit. up again today. just over 13%. here in the u.s.

it's a tuesday. it may feel like a monday. there's a lot of economic data packed into the shortened trading week. look out for may factory order. which should show how officials think brexit will impact the uk's financial system. the governor mark carney holds a news conference starting around 6 a.m. eastern time. on wednesday we should point out we are getting the june services index and minute from last month's fed meeting. thursday is june adp employment reports and on friday, yes, it's that time once again, the june job report comes your way. let's take a look at some stocks today. microsoft and man sonsanto. new ideas for digital tools. tesla delivered more than 13,000 vehicles in the second

quarter. that missed the target of 17,000. tesla blames a large number of cars still in transit. >> london stock exchange voters have voted to approve a merger. t approval from brussels and ample time to work out a structure for the deal before britain leaves the eu. both shares falling today. >> going around the world. more stocks to watch, pet row bras petrobras produce oil and only account for 1% of the company's total production. standard life is in focus. freezing uk property fund setting a rise in investors acting to withdrawal their money following the brexit vote. the $3.9 billion fund invests

priorly in commercial real estate. and ten cent to take part in this $8.6 billion purchase of super cell. it would team up with partners to buy. >> a quite change from amazon t online retailer is quietly eliminating list prices. noun known to offer deals. now in many cases it is dropping the mention of the number. the moves comes as it takes steps to becoming an eco-system and expand private label. >> let's talk about tightening the wallets. gold man sacks to tighten belts

due to out flows and poor performance. issues reflect water pressures on the banking industry as managed funds are losing share to low-cost index trackers. a british court has convicted three former barclays employees. verdicts bring five people as being part of a global conspiracy. barclays was the first bank to be penalized over rate fixing. let's go to uk politics as the search for the next prime minster continues. boris johnson showing his support. calling for a quick brexit. first round takes place today. the surprise over the weekend though was the resignation of nigel farage, unrelated to the

leadership battle. nigel farage the leader of the uk independence party stood down. >> that is why i now feel i've done by best. i couldn't possibly achieve more than we managed to get in that referendum so i feel it's right that i should now stand aside. >> so far farage has declined to endorse a candidate. >> we should point out that boris has endorsed lead some. the pro-potents of the exit vote have now pretty much quit their parties. >> well, no, the next leader is going to be from the conservative party. you've got a battle between theresa may as one candidate versus eerd leadsom or gove. you get farage standing down is

sort of unrelated to the whole thing, but it's ceremonial because it shows despite him bpg on the winning side, he's not standing down and it shows the lifl of division still across the country because he's feeling it better to step back rather than be the fore fruont. by the tend of the day we'll probably see it down to four and over the next week down to two. we're going to break, but coming up we'll have more on the race and what it all means. and we'll be hearing from him in just a few minutes. facebook and twitter question today, did the markets rally too hard and too fast last week after brexit. get in touch with us at "worldwide exchange." we'll be back in a few minutes. this man creates software, used by this bank,

to protect this customer, who lives here and flies to hong kong, to visit this company that makes smart phones, used by this vice president, this little kid, oops, and this obstetrician, who works across the street from this man, who creates software. they all have insurance crafted personally for them. not just coverage, craftsmanship. not just insured. chubb insured.

. welcome back to "worldwide exchange." they were closed yesterday for the 4th of july. giving up some of those gains today as you can see. the dow just shy of 100 points. we're looking at about .5% to 0.6% declines. that comes off gains a bounce back we saw last week. one thing that has not bounced back really is the british pound. we look at the pound is at

1.3135. earlier today it touched once again a 31-year low. even though equity markets did bounce back last week, the pound has not done so. let's check in on asian trade. >> good to see you, my friend. give back tuesday is what we're calling it in the asian market. slapping five days of gains here in the market. it comes down to europe. the risk is from the italian banking sector. the brexit aftermath has not been laid to rest and it's not going to by laid to rest for weeks, months, years. so part of that is going to suffer as a result o that, but here is a bright spot, shanghai comp sit above the handle. we saw a growth in services. private survey showed that we

saw services climb to 11-month high. australia weaker for the equities market. down 1%. remember, that's still a political limbo until australia. no outright clear conclusive. the risk here is that the prime minster will be forced to form a minority government. that brings with the risk of paralysis. give back here. snapping five days of gains in the markets and i think the risk comes down to europe. uncertainty over brexit and the italian banks. roll that referendum in italy in october. >> on that note, let's cross over to europe. louisa bojesen is standing by with the losses today. >> high, welcome ba guys.

welcome back to work. here in europe we're looking at the markets being off by a bit. just going negative as well within the last couple of seconds. the ftse lower by half percent. similar story for the cac and the ftse mib. a lot of selling taking place especially in basic resources, insurers. and we're looking closer at some of the moves out there. you have standard life investme investments. they have decided to make changes. we've seen suspended trading. that move comes after an increase iinkree increase in redemption requests after the brexit vote. so part of the insurer standard life that company trading off right around 4 .5% at the moment. year to date off by close tore

30%. they've had a big drop since the beginning of this year. when looking at the home builders you are seeing impacted across the board there. trading off in the region of 4 to 5% at the moment guys. >> thank you so much. good to see you as well. we're going to go to break here, but coming up this morning issuing top sport's stories and yeah, that's a look at the major decision by kevin durant yesterday and how it could shake up the title hopes of every team in the nba next season and what las vegas thinks of the move. good morning, happy 5th of july. we're still dealing with rain showers and pop-up showers. otherwise it's just doing to be warm and muggy. some lingering rain house issers for new york city. your commute is going to be wet, but by later today the rain

tapering off. we saw over 3 inches in the dallas fort worth area. watch out for severe storms. it does include the twin cities. otherwise a dry day for denver. temperature in the upper 80s. few showers by the afternoon. we are dry in la. temperatures in the low 70s. very comfortable there. across the interior sections of the southwest the heat is still a story. dallas pushes 100 degrees later on this mafternoon. we'll be right back.

british companies are becoming more pessimistic about that prospects following the vote to leave the eu. 49 percent are less confident versus 25% who said so before the brexit vote. the poll shows companies expectations for domestic sales, exports and capital spending all dropping sharply. now let's swish focus to the race for the next uk prime minster. joining us from london is jameson lions lowe. he's the founder of observation polling firm. >> long time since the fish market in 2014. >> let's get to expectations for

this prime minster vote. the vetti inbetting markets hav clear favorite. they got it wrong for the eu referendum. do you think they're going to get it right this time. >> i think the current betting market is theresa may. i think there's a much more probability. >> right. you have very confident she'll be the next prime minster then. >> at some point in time last night gave implied probability for led leadsom. 35%. that's way over stretch and i can tell you why. >> please do. >> what is happeninged to is a conservative party deciding who is in last place. really two votes.

going to be about who is it that makes the final two. now, mps get to decide who is in the final two and theresa may currently has more parliamentary support than all of the other candidates put together. she is going to be the final two. what we're going to see in the next few days is who gets to join her on the circuit. the story isn't the press, will it be gove, will it be leadsom. it won't be fox, according to fox. and krab looks pretty unlikely. the movement is going to decide who is it that faces theresa may on the ticket at which point the final two will be presented to the conservative party membership. about 150,000 people will get to chose between the final two.

michael gove he said he kept boris johnson off the ticket. if he makes the final two, this is one of the biggest shoe ins in political history with theresa may perhaps getting 80% of the conservative party membership vote at large. if leadsom makes the final two, you might see a closer race. weave po we've polled conservative voters. they've got strong confidence on theresa may on nhs, negotiation, negotiating a deal with europe, immigration, they have strong confidence and trust in theresa may. andrea leadsom is unknown. we did a little experiment yesterday. we started calling conservative party counselors you can see a

proxy for members. amongst those, we did analysis of early numbers. here are some examples, but so far we worked over what happened. we ran the various scenarios through with these conservative party local counselors and if leadsom made the final two, theresa may would win by 67%. >> we're going to have to leave it there. it's very clear what your message is. the bet lg market rts pointing to the correct winner which is theresa may, the favorite. >> damons lions low, observation. thank you very much. >> you're welcome. >> switching to politics here in the u.s. and president obama is hitting the campaign trail with hillary clinton for the first time today. donald trump will also be out on the road in the same state as democratic rival, let's bring in edward lawrence joining from washington, d.c. with the latest on the race. >> reporter: good morning. both the republican and democratic candidates will be in

north carolina. hillary clinton trying to look presidential while donald trump appearing with a possible vice president shl pick. >> hillary clinton will travel with president obama. his first campaign appearance with mr. obama. clinton says she will be able to bring back jobs to america. >> still people in this country who can't find work and freedom without the ability to contribute to society and put a roof over your head and look after your family, that's not yet what we aim for. >> reporter: the white house says clinton's ticket on air force one will be billed to her campaign, not the american taxpayers. in the meantime, joined for donald trump the governor's family spent the weekend with trump. >> we'll always count it a privilege we were able to spend

time ads a family with a family we hope is the first family of the united states. >> trump tweeted he's very impressed. great people. went on to announce he met with iowa senator. she served in iraq and could be a promotional vice president candidate. >> donald trump will speak at 7:00 p.m. east coast time. hillary clinton along with president obama will hold their event at 3:00 p.m. east coast in charlotte. >> thank you very much for that. meanwhile, donald trump is defending a tweet. trump says the tweet is a basic star often used by sheriffs who deal with criminals as an effort to convey that hillary is the most corrupt candidate ever.

the image was tweeted saturday, but has since been deleted. he lifted it from an anti-clinton website and never meant to offend non. >> let's talk about the box office quickly and talking fish reign supreme. "finding dory" in its third week of release. they debut iing. children's classic cost $140 million to make. let get to sports. this was the most talked about deal yesterday. it looks like kechbl durant has chosen to go to the golden state warriors. he decided to leave thunder and take the talents to the bay area. saying he's join iing curry and

the warriors. signing a contract. >> interesting stuff. big team they will have next year. >> they say one of the best lineups ever. we'll see. >> coming up, much more market discussion and political news for you. 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.

good morning. tesla troubles at another problem to the electric car makers list. delivery miss estimates again. welcome to jupiter, 1.8 billion miles later and nasa celebrates america's birthday in a big way and we'll tell you how coming up. it's tus, july 5, 2015 and you're watching "worldwide exchange." good morning and a warm welcome to worldwide exchange. i'm wilfred frost alongside susan lee in for sara today. >> welcome back, two weeks in london, we missed you. >> thank you very much. it's good to be back. let's check in on the market action this morning. all three of the major u.s. embassies gained last week. enjoying a post-brexit relief rally, but closed yesterday.

european markets declined and declining today. that's hurting the premarket today. we're looking at about half a% decline in the premarket. let let's look at the u.s. 10 your note. further buying of bomb markets. further compression of yields. we hit a record low earlier in trade, 1.381. we're slightly above that level of right now. >> we also saw declines in asia overnight. let's check in on japan's nikkei decline. pretty thin volume out there. that's thanks to some hopes that maybe we're going to get state owned reform at some point and higher military spending in the future from the chinese government. i want to highlight kept interest rates on hold. now, europe as wolf mentioned

we're seeing pretty steep declines. the dax down the french cac lower. let's zero in on italy. the italian banks system is in refocus. we might see a full-blown banking crisis. spain ie bex seeing heavy losses today. >> let's have a broader look. focusing on the british pound. 131.38. earlier similarly the pound is remained anchored to those lows and has suffered throughout the ten days since the brexit vote. not much action in the euro today. 1.1136. the yen stregthening. oil prices. let's have a look at them as

well because of course they were a big factor in last week's rebound as well. wti gained over 2.5%. it softened yesterday as u.s. markets were closed. that's another factor why we're seeing u.s. equity futures pulled lower. let's have a look at gold prices as well. very quickly. higher today at 1.347. >> governor mark carney will hold a news conference at 6 a.m. in the report the bureau says it sees a challenge following the brexit vote. we heard from mark carney last week. he suggests mainstream easing was likely in july or august meeting and hinted only possibilities of the pound. the pound hasn't reacted sharply to the news in the last couple of minutes.

it softened quite significantly when mark carney was talking in his post-brexit analysis. this was a scheduled release. >> and also george osborne mentioned they might be cutting the corporate tax to lend support as well. now, here in the u.s. there's a lot of economic data packed into the shortened trading week. today we're going to look out for may factory orders, also mentioned the banking stability reports. we're still getting a trickle of the head lines. this should show how officials are rethinking the brexit vote and how it will impact the uk's financial system. we'll be checking in on mark carney at the top of the hour. when he starts his news conference. we're going to get the june services index in minutes from last month's fed meeting and thursday it's june adp employment data and friday the june jumps report.

>> here to discuss this week's agenda. good morning to you. thanks so much for joining us. >> good morning. >> let's touch on the post-brexit rally we saw last week. it's seeming to unwind a little bit this morning and, certainly, yesterday when european markets were open as well. is that simply down to brexit or oil prices and other factors at play too. >> i think it's a combination. you have global growth that continuing to decelerate. global trade that's listless and as well you have this overriding concern about the political risk within the euro zone and also the monetary policy across the globe and how that is going to affect the financial system, which you've seen very little effect on the true economic system. >> you've seen the effect of government yields. we're looking at record low in the 10 year treasury. >> absolutely remarkable times.

you haven't had this type of rate environment ever since the -- in civilization so this is affecting all risk markets across the continuum. we don't think we're getting paid well. >> how does that dynamic work. you have worker low government yields, but the stock market has rofred 90% of the brexit losses. >> it's monetary policy back into the loop of the financial system. has very little effect that goes into earnings and what will happen here at one point is earnings will become -- well, they have in the united states been flat to down. that's an ominous sign. you want to be careful about your allocation towards equities. >> what are the markets telling

us is around the corner. we've seen the uk's rating downgraded and yet the bomb market has been bought because it's more of a safe hauchb to hit record lows. that's not a sign of confidence is it. it's not a reason to push people into equities. >> no, it isn't a sign. we think global growth is going to continue to decelerate. we expect the gdp to slow to 2%. again, you have to be very careful. that's a sign that you have to take some caution. it's deflationary environment. it's lack of credit glorowth fr the private sector, not only here in the united states, but across the globe. especially within the euro zone. this is an odd time for global investo investors. here in the united states because you're seeing record yields going lower, it's a competitive yield environment.

a german pension manager is going to be buying u.s. municipal bond here in the united states. why, that's a positive carry doing that arbitrage trade. it's quite interesting so we would recommend investors move up the quality spectrum. if you're u.s. based investor, look towards health care sector as a seem of opportunity where you can find cheaper valuations. >> thank you. good for seeing you this morning. stocks to watch this morning. tesla missed the target of 17,000 vehicles delivered in the quarter. blames cars still into production and ramp up in production. top trending stories of this morning. nasa is celebrating 4th of july in a big way. juneau spacecraft has successfully started orbiting around jupiter.

it was launched five years ago and first aircraft of the since gal lay owe. >> great day to have that start happening. chris evans stepping down. evans tweeting stepping down from top gig. gave it my best shot, but sometimes that's not enough. the resignation coming after falling ratings. this is the rehashed top gear after jeremy packed up and moved to amazon and probably be seen as great news for them as they launch the amazon prime version of the show. >> last show was the lowest rated ever. not i think on the twitter feed there's an argument right now who is more annoying, chris evans or matt la blanc.

>> the annual 4th of july hot dog eating contest takes place and complete with a come back and new record. joey chestnut beating his own record and regaining the mustard yellow belt yesterday. downing 70 hotdogs and buns, which is the most ever eaten at the competition. topping the competitor by 17 hot dogs. >> that's a wide range. >> ten minutes. >> ten minutes we're being told. that is a lot. >> that's a lot. this win is a huge victory for chestnut. last year ended the streak of eight straight wins in a major upset so probably trained pretty hard and said i'm going get that belt back. >> and he did. good for him. still to come, today's must reads including tips on speed writing on the man behind house

of cards. the modern bikini was launched in 1946. after world war ii, the bikini was slow to be adopted because of the revealing nature and didn't take off until stars started wearing them in movies. there you go. >> i'm glad you had that read, not me. we're back in a couple of minutes. we mean what can we do? we mean it's our turn. to do our part. to serve you, for all you've done to serve us. ♪

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catching our attention. secrets of speech writing from the house of cards creator. it's an interview carried out with lord dobs. he worked in the conservative party, but most importantly he wrote the original british house of cards novels that the uk tv show is based on and the u.s. tv show is based on. so he knows a thing or two about writing speeches. it's an interesting article. he draws a distinction between those who will go through a speech line by line for policy implications and those who are not going to remember the details, but are there for the atmosphere. this applies to businesses too. speeches need to try to reach all the audience. get across the message and also touch people at the same time, that's one of his tips. just given the couple of weeks we have had, given the

similarities to house of cards, a tickle from the original create terr create terre on the house of cards. >> brexit and memory of is somme. the emotional impact of the brexit vote should not be underestimated. many european see it as an active repeeaiduation by the britains and would enjoy seeing them learn a lesson. might consider how frostily the english would have sponlded if scott lantd for one had voted for independence in 2014. there has to be some self reflection. >> that is a very interesting final point on that. i've always suggested had scotland voted to leave, would england and wales treated this harshly? i'm not sure they would. we'll wait to see what the rest

of the europeans. do. there's a long way to go. that's the big threat, is there a retaliation. >> that's another huge complication to the ongoing uncertainty. we're approaching the top of hour. the theme is getting ready for "squawk box." >> you're part of that team? aren't you? i am part of the team, but i don't want to give a preview of your show. >> aren't you here as an equal coanch coanchor. >> still, this is something you've been building up tow. >> i hope i get there in time. >> your entire life. sit on the back of your jacket. you saw broadcast news. i think you're ready. you've been practicing. you punching well you read the teleprompter. >> obviously i'll be shedding the jacket because i need to

host the man of the moment. >> i've been thinking about you a lot. number one, in the journal julian fellows, i new book i can't wait to read because we've got to get something. you were in the states. was this your first independence day here. >> i was in fact in a plane flying back from london. . i missed my firth 4th of july. >> is there any animosity, look at these americans, so happy is is there any of that left. >> are you asking me personally or britains. >> for you personally. >> of course not. >> okay. i celebrate equally. i think it's a wonderful thing. >> i read something over the weekend that the entire history of the world both benefitted and changed fundamentally when that happened. and we're seeing evidence of

that because now you, your country has now take tennessn h initiative. >> all i would say is the immediate aftermath. the short term looks terrible and look what the benefit was in the long-term. at the moment we're still at the peak of people's concerns. >> you know obamacare, you see how that works, if healthy people don't sign up, all you got are a bunch of sick people not paying the premiums you need to keep a system solvent. remind me of the eu. if all you got left are the -- that's what we said, the ultimate eu country is going to have greece. >> i still think there's huge

huge benefits. even though who voted to leave would want the rest of the eu to flourish. >> i'm going to play that thing you sent me with a year from now on independence day the queen is going to be there. people cheering that finally england -- unelected bureaucrat in the brussels. nobody needs that. >> a clip i sent you to amisuse you as opposed to one i created myself. i can't wait to join you. >> i'm really looking forward to it. i have to say. come can go up a shortened trading week. th we have jurrein timer weighing in on the markets next. you're watching worldwi"worldwi exchang exchange".

back to work for u.s.

markets today. joining us from boston is jour director of global macro atrophy dellty investments. we asked earlier on twitter, did markets rally too hard too fast and the overwhelming response was yes. do you agree? >> yes, i moean, the market got ahead of themselves going into the vote. nobody was expecting the outcome that happened. the market showed off sharply and then all of a sudden two days into quarter end. then there was window dressing. if you look over the next couple weeks, you have to take a moving average and say we're sort of around 2,000 or so in the s&p. give or take five percent or so and look a little bit through the short term notice. >> response to brexit has been in the bond markets, not just in

the uk where we have record low on the 10 year by u.s., japan, germany as well. does that tell you equities in a relative sense or are scream in buy or all assets are suggests we might have a recession around the corner. >> it's a paradox. the 10 year treasury yield is at an all-time low. s&p is at an all-time high. it's hard to square those two. we don't know if it is a trend. if this movement towards deglobalization is going to work, the only way i can square those two is that if countries try to get out of their sort of excessive debt problem through a sharp currency devaluation which is what britain just did. aggressive monetary policy and the boe just basically promised more monetary easing over the summer. plus potentially very strong

fiscal policy and you have that t try if he can ta or currency. when there's too much debt you will repress the financial system to keep interest rates low to service the debt. when you combine those three, you can theoretically paint a picture where stocks are high and bond yields are low, but even if you look within the stock market. the leadership has been utilities, all the bond. >> aren't we kind of late in the cycle because aren't companies having a tougher time raising capital right now and the leverage ratios are back to 2007 which a lot of people think is the sign of a chop pi market. >> we are definitely down towards the late end of the cycle clearly and you look at earnings growth. we've had four or five quarters of negative growth. ting bond market is still well open. i don't think companies have a

problem accessing capital through the bond market, but i'm very keenly looking at the earning season which is going to start unfolding here over the next week. if the pattern of q 1 repeats. in q 1 the expectations were high and companies beat them. if we see a repeat of that, it will be interesting to see what the overall earnings are because earnings growth is basically dead in the water at 0 and the question is is it at zero on the way to minus five or zero as part of an upward inflection point. we don't really know at this point. >> very quickly, 26 seconds, do you buy the banks. >> the banks are tough here. they're essentially a utility now with high regulations. very low rates and a very flat curve. to me, they're not really particularly interesting. >> jurrien, thank you so much

for joining us this morning. that is it for worldwide exchange this morning. "squawk box" is coming up next.

good morning. global stocks slipping. backing and filling, three steps forward, two steps back. don't get too excited. europe is down, futures are down. gold up again. a full market rundown straight ahead. the veep stakes are heating up on both sides. field of potential running mates seems to be getting bigger. we'll bring you the latest buzz from the campaign trail. and a box office flop of giant proportions. the bfg could go down as steven

spiel burg's biggest failure. it's july 5, 2015 and "squawk box" begins right now. >> good morning and welcome to "squawk box." sitting in with iz is richard bern seen the. let's check in on u.s. equity futures this hour. people state side are getting back to work and clearing haead after the long holdy. the s&p down 10. the nasdaq down 21 at this hour. take a look at what happened overnight in