foul. "squawk box" begins right now. good morning. welcome to "squawk box" here on cnbc. along with joe kernen and scott walker. just a negative open. nasdaq lower by 21. s&p lower by six. in asia we also saw selling. a weakness around the globe generally speaking except for shanghai. the hang sang and low. european equities lower across the board. the dax is lower by 1%. the ftse is lower by quarter of percent. mib 1.5%. we're not showing you yields at that hour, but generally

speaking they're lower no matter where you are in the world. weaker against the yen. we're sitting right there at that 100 level. pound is now 1.29. went to 1.2796 at one point. price of crude oil up this hour. brent at 47.76. lower by.20. tesla says it doesn't alert regulators until nine days after the accident. the company is defends its decision not to make the news public before a federal probe was announced last month. the national highway traffic safety administration says the investigation is active and would not comment further in response to an article about the time iing of that disclosure. elon musk tweeted the may fatal quote was not material to the

stock. bio tech firm is ready to explore a sell to one of several suitors. san if i has signed a confidentiality agreement. gives access to a treatment that has produced positive results in mice. >> you can't say that something is not material to a stock. that's -- it's not his position to say that. number one the stock did go down. it was material to the stock. maybe he meant it's not material to the finances of the company, but he can't say that either. you don't know how things play out over time. when i first read it, it's like, okay. so not surprising. things are going to happen with autonomous -- you know, there were wrecks all the time. so many people die on the road that are driving so there's going to be wrecks from

autonomo autonomous, but then reading the actual details. normally a semiturns in front of you. you're slowing down a little. this guy straight turned thing. didn't even think about decelerating. that's where it gets a little scary. >> who should determine when something is material or not. >> remember apple didn't think getting a transplant when steve jobs didn't know where he was and he had gotten in the front of the list to get a transplant. they didn't think that was material on the operating table. and steve jobs and the importance of his presence to apple, you're saying, looking in hindsight, that wasn't material. that was material. >> that should be the decider of when something is or isn't. >> i love when you say decider. >> i'm the decider. >> i'm the uniter and the decider. >> it's not easy. it's hard work. anyway, you got a -- that's it.

you're not going to answer the question. >> well, it's a rhetorical question. >> i don't know how to answer it. >> who should be the decider. >> you should. scott of half time report should be the decider. >> i don't know either. the board maybe. >> you don't think -- maybe. you don't think is head lines related to autonomous driving and the deep interest in it and you have this kind of fatality and you think it's not material. it suggests to me it's so obviously yes. >> he wants to know who is the decider. i've made him the decider. let's make michelle the decider. >> i would be a great decider, let me tell you. >> you would think the board or any board would be in a position to say no, elon, we actually do think it is material information and in is disclosed for the sake of disclosure. >> we don't even know if the board knew.

>> all boards sans and this ceo happens to be elon musk on top of everything else. he's got friends and family. >> we've got a pair of economic reports today and some fed speak on today's agenda. the deficit out at 8:30 a.m. eastern skpchlt we always said trade deficit even though it may be a surplus. >> not until someone makes america great again. at 10 a.m. we get the june services index and at 2:00 p.m. the minutes from last month. a fed president and fed governor are also speaking today. we have that going for us. dudly spoke yesterday. said policymakers can be patient on raising interest rates due to low inflammation and uncertainty over prospects for the u.s. economy. i understand how we're down a little bit yesterday and today, but i don't really understand how the u.s. is still reeling

from brexit because all it means for us is interest rates stay lower for longer. even for britain, just means they sell more stuff at 1.27. how great is that if you're trying to export stuff. >> and throw off the shackles of the eu. you have a much more competitive economy. >> i understand the other forces going down because the whole thing might imemployed based on next. who is frexit and we want romania to say so we can use the term romania, but italy, to you point, the pound keeps getting hammered. now nearly as much as the euro. if you had to bet which currency is going to be around if ten years, the euro or the pound, what would you put your money on. >> i've got my money on sterling. >> you do? >> i do. what a rebound last week. you must have been reporting on

it every day. >> he was on vacation last week. >> i was on the ground reporting. >> were you in of italy. >> yes. >> when i go to italy i can't understand how that country is not number one in the world. >> why do you say it's not. >> you've listed all the reasons why. >> there is thatle banking crisis, but you didn't noets that. >> i didn't notice it, i didn't hear a single person talk about it or worry about it. they were more worried about the pound and the soccer game. >> definitely the soccer game. >> one of us live to work and the others work to live. they work to live i think and we over here, we don't live quite a as well. >> and the work is arguable. >> use work in a lieu sieve sense. >> the all i heard yesterday as i was watching tv to get caught up a little bit was italian

banking crisis, big deal over there not in ten days did i hear a single person mention an issue with the bank whatsoever. not one time. >> north, south. >> north. >> venice? and other areas. >> me too, venice. it was saw as mauas saw as many >> theorlando is doing a trip planner. >> or buying some property. >> for more on today's market moves let's bring in phil orlando. steve reese is here as well. he's the global head of strategy j.p. morgan. >> what should with take of the last let's say six trading days. the fact we had our first downwind yesterday in five. what's more representativeover

where you think we go from here. >> we're looking lower. the 6% moved down on friday and monday after the brexit vote was exactly the knee jerk reaction down we thought. we expect a little bit of recovery, but not a retracement virtually of that whole move up. so the move down that we saw yesterday, we think we grind down lower here over the next couple of weeks. >> because you think there's more brexit heck to pay. >> yes. i think there's a couple of shoes to fall. part of what we're hearing from clients and investors last week is in the aftermath of brexit, folks are believing the brexit is not going to happen. no one is going to execute article 50 and we're going whistle past the graveyard. there are more shoes to fall. eventually the market is going to figure that out. >> there is this school of thought you have all these issues around the world. people are worried about the brexit. what else is going to happen in the euro zone which makes the u.s. attractive in the storm.

>> this week is all about rates. what is happening there. i agree. i think we're positioned at j.p. morgan for a volatile summer. we haven't changed our outlook for our position this year. we are not all that negative. we think there are some opportunities. we're focusing on quality, income, stocks look better than ever. especially given what's happened to interest rates and i think there is an earning recovery coming. i don't expect the second quarter news to be that great, but people will focus on an inflection point where the dollar and energy sectors start to help. i think you'll get it. >> why are rates doing what they're doing. >> it's all about what's happening in europe. concern about the situation. i don't think it's an indicator of stress in the u.s. this has been our call all year. we don't think the u.s. economy is heading to recession. unfortunately what is happening in europe, the rates look attracti attractive. >> we're seeing more wall street

houses say the way it is working could be a recession. what do you think. >> we're not in the recession camp. i agree with steve. a massi iive flight to safety trade. ordinarily if you were looking at the economics of that, you would suggest the economy is going in a recession. we think second quarter gdp going to be around 2.5%. that's better than 1.1 we saw in the first quarter. the swing factor the market is expecting a nice bounce up in corporate earnings. that is very much in doubt unless we get a better sense of how long will this strength continue. those are the swing factors that will determine second half earnings. >> i am so curious has to how history is going to write about this time period. all of switzerland's bond are in negative territory. >> we're using brexit to some

extent as an excuse. to me it's that jury rigged union with in and out a single southern country had the -- none of them qualified to be in the eu based on debt to gdp and all these parameters. none of them had it. now we find out about italy's banking problems. people try to estimate what it is. other people will like so much higher than that. >> how much capital you're going to need. >> how much capital you're going to need. >> the loans are beyond 300 billion. >> so now by britain exiting, that's one less strong economy to help the rest of these. >> to your point, exactly. >> it remind me of obamacare. if everyone is sick and the last two guys are on their death bed what is the premium. >> they worked sod hard to keep greece in. they did everything possible. they forgive them for

everything. the uk, do they work hard. no, see you later. what are their priorities that they would let -- they wouldn't do anything to help david cameron to keep the uk in, but they did anything to keep greece in. >> the ultimate country in the eu, it's greece. i love greece, that's another place. i just think. >> it all comes back to if you're going to put your money somewhere, you go down the laundry list of problems in the world. it makes u.s. look attractive. >> maybe we should have never stopped worrying about the eu. >> i agree. >> to what degree do you need to worry. this is the new norm. it's not going to change. >> we don't worry about germany, but now do we worry again about an italian banking crisis going to be the next financial crisis. >> i don't think it's a threat to the u.s. banking system, but it certainly is an threat to the

eu. >> what if the eu breaks down completely? >> created for stability purposes, right? >> thanks guys. >> can you imagine if we try to make one country from south america. >> when i landed it was 1.10. >> we have gone 14 minutes and you haven't mentioned yet. >> what's coming snup. >> i didn't even see this yesterday. k comey made a -- fbi director calling hillary clinton extremely careless which apparently is different than gross negligence. it sound the same, but it's not because gross negligence, that would have been a criminal offense. anyway, in her handling of classified materials on a private e-mail server and that crickets her comments that he made to john this year. >> would you concede that you and the people who work for you

at state department were sloppy in the way you handled top secret information. >> no, let be clear about this, there wasn't a single one of those that was marked classified, either sent or received. >> i'm not sure that's true. now lawmakers are calling for the mib fbi to release the deta of the investigation. that story comes up next. tokyo-style ramen noodles.

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don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. president barack obama and hillary clinton campaigned together for the first time in charlotte, north carolina. >> and there has never been any man or woman more qualified for this office than hillary clinton, ever. >> not even george washington, i don't think. there was no mention during the rally of the fbi's decision to not recommend any charges against clinton, but it might not have been new news to the president, considering that whole thing was planned to fly around on the day when this was coming out.

it would have been bat if she would have been indicted. >> would that have i cancelled the trip? >> i don't think they -- i don't know. is not speaking about it and body language are two different things. our sources. >> charades. >> did he really not know? donald trump also campaigning in north carolina. not surprisingly, he had plenty to say about the fbi's decision. >> but for bill clinton to go and then have what happened today, where essentially, i thought everybody thought based on what was being said she was guilty. she was guilty. and it turned out that we're not going to press charges. it's really amazing, but i'll tell you, look, we have a rigged system, folks. >> for more on the fbi's

decision, we're joined by amon to run down a lot of the water cooler talk, i guess, and then some today. >> yes, that's right. it was a dramatic moment yesterday with nearly no notice to the media and no heads up to the political possesses. t if fbi director joeames comey s up some of the specific details of what they uncovered. here's what he had so say. >> from the group of 30 thousand e-mails returned to the state department in 2014. 110 e-mails in 52 e-mail dhchai have been determined by the owning agency to contain classified information at the time they were sent or received. eight of those chains contained information that was top secret at the time they were sent. 36 of those chains contained secret information at the time

and eight contained confidential information at time. that's the lowest level of classification. despite those extensive findings. comey stopped just short of recommending charges for hillary clinton. here's how he described their ultimate conclusion. >> although we did not find evidence they intended to violate laws of mishandling classified evidence, there is evidence they were extremely careless in their handling of highly sensitive information. >> the next step is for the department of justice to review the fib east recommendations. it is considered highly unlikely the department of justice would go against what director comey said yesterday and it's likely loretta lynch will go along with his conclusion that hillary clinton didn't do anything that warrants kl charges. that said, as you know the political controversy of this is going to continue.

the media today is full of different bullet points of statements hillary clinton made over the past months or year that turned out not to be accurate in light of what the fbi director said yesterday. so this is going to cause some lasting political damage to hillary clinton's presidential campaign, guys. >> okay. so you would think they -- if you were to lead an article in the morning that comey and the president put a bounce in hillary clinton's step, would that be a strange lead for an article in terms of -- is that how you would have seen yesterday's? >> i'm wondering who wrote that. i don't want to sandbag my colleagues. my take, small take is this not a bauounce in her step. she dodges a legal bullet here no question. there were other outcomes that could have been much worse for

her, but the director said she was extremely careless and she's running for the united states. democrats have reasons to celebrate. their candidate is not indicted on a felony. it's good news for them. they got a candidate that is has not be indicted for a felony. good news for them. let's bring in shelby holiday. . senior video reporter with the wall stre wall street journal. my conclusion, he couldn't do that yesterday. he's not going to insert himself into this election and take the democratic candidate in the summer of an election year and indict her for a felony. it's back to the voters need to make a decision. just like john robert said, you want the get rid of obamacare, vote someone in to do it. same thing. >> but if you look at -- i don't think he had a choice.

if you look at what he said, he didn't say he didn't recommend charges because clinton did nothing wrong instead he laid out a laundry list of all the reasons clinton lied about her e-mail server, not sending and receive lg classified information, doing this out of convenience rather than use on r server and one device. she actually had multiple and used multiple devices. he laid out a scathing critique of her job performance. there was a lot of read between the line in that statement yesterday. >> everyone including -- i watched it from the fwining to the tend. the 15 minutes. >> it was a little roller coaster. >> everybody went through the same emotional ride on it. it was like, wow, the sources at cnn had it wrong. he is going to do it. >> right. it was a movie with a bizarre ending. >> then all of a sudden that

came out of nowhere, but we don't think and everybody had that same feeling he was making the case for pressing charges for an indictment then he didn't. i do understand you can say it should always be equal treatment under the law, but political concerns are -- you can't just say that there aren't any and you discount them. no way it was going to happen. >> no doubt she cleared a significant hurdle yesterday. as you said, she's not going to be indicted. that's a very beg deal. this is not the end of her emall saga at all. >> you can see he wanted to dispel a lot of the comments she's made. he wanted to say not only was there not just one at the time that was classified, there were hundreds. >> 110. >> at the time that were marked classified. >> and thousands of e-mails were

not turned over. >> she should have known. >> right. >> she should have known. she's a smart lady. saying the way it was hacked. >> almost undoubtedly. >> the wall street journal is one of many publications that have the words laid out side by said of what clinton has said about her server. what comey has said. it's a direct contradiction. >> this is the journal you're referring to. does that come out every day. >> it's a good one. >> there are reports. some outlets have reported there's another investigation into the clinton foundation. you see any justification? >> to be halfway through her first before we get those e-mails. >> that's a good point. timing really matters here. you have to think there's something going on. it doesn't stop here with, well, she lied, she did a bad job. she may have compromised national security. the big question hanging over

this is why. especially if she knew she was running for president. >> there maybe be personal stuff that's so interesting that she will even take this. >> there's something about the clinton's they have this belief they're continuously persecuted. they have this obsession. >> are you backing off of your blaengt endorsement as a. >> i have to say at wesley we had an honor code and she has violated it. >> i'm shocked. >> we're allowed to take our exams without anybody watching. >> you wrote a book called you know i'm right or something. >> more prosperity, less government. >> i know. >> did you goes to wesley. >> i didn't. >> i did not. >> only women. you knew that. >> that's not fair because even am hurs now. many of the -- you really can't

go there? no way? even now. >> no. it's a women's college. you might be able to change your sex and then get in. >> that's an unfortunate thing, you can do that. that's another discussion. >> why don't we bring this back to e-mail. the political fallout that the biggest question is what impact will it have on those who are undecided because it's not going to change those who are supporters are clinton and it's not going to change the way the trackers are. >> this will be decided by the millions voters who aren't sure. a lot not in love with either candidate. this is surely a negative! the numbers that came out yesterday, 62 increase republicans down some 20% democrats. that weird in terms of who is really motivated. >> it will be an interesting election. >> some of bernies people who thought it was rigged may not

show sglup when we saw clinton take a nose dive in the polls against bernie sanders, that was when these revelations about her e-mail server came out and her honesty and trustworthiness started going down along with her poll number. >> steve: >> thank you. coming up. snap schat cool factor may be taking a hit. now even adults are gasping parents are joining. will the changing demographics hurt or help snapchats bottom line. a look at the s&p 500 winners and losers. welcome to opportunity's knocking,

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are old people ruining snapchat. adult numbers joining the app. we're joined by news editor at the verge. good to have you here. there's this data that's come out about 14% of smartphone owners age 35 have snapchat. >> yes. >> is that a bad thing?

>> it's probably too soon to say, but i would say absolutely not. because snapchat is growing more than it's competitors at the moment and it's pretty much the hot property right now. >> if it's growing, but the suggestion is that it's growing with the wrong, quote, unquote, client tell, older people. i guess historically we've seen young kids say oh my good, facebook is for old people. twitter is for old people or journalists. does snapchat have to worry ant following falling into that same perception. i mean, teenagers worry tham their parents are on there. >> sure. definite definitely. there is something to be said about the cool factor. facebook lost the cool factor years ago. facebook is not cool. i have a younger sister who does not use it whatsoever. with the youngs what is

happening now they've had sway for the past years and as the app as gotten better, people are saying this is a platform i should care about and invest in. you have all the content as far as video and staired story that make it real liable and enjoyable for people to use. >> i don't buy this whole premise of this because all identify been hearing about is the fact that if you want to have a more negative view of facebook, at least from a stock standpoint, at least from that standpoint, they say it's because instagram is not as popular with young people as snapchat is. snapchat your point is growing so fast with younger people that so what if older people are using snapchat. it's at the infancy stages of growth still. >> right. >> isn't that true. >> definitely. it's been around since 2011. the higher features have come out since 2014. now it has a 16 billion dollar

valuation because it's such a power app. you have shared storying from people all around the world. you have the nfl and olympics showing buy on this. >> have 16 billion in valuation. has that shifted at all like we've seen the other companies going down. >> considered like the new establishment. he is one of those people with mark zuckerberg and tim cook who are going to be considering the future and like moving the needle as far as technology is concerned. >> you've got all these phrases you use. the new establishment. there's another one i heard. you don't want to be the new establishment. happens really quick. >> yes, it does, but back to your point, i mean i think the contention here is the growth is

too fast amongst older people that somehow the platform suffers vently. the way we've seen with twitter how it maxed out in growth. >> that's still an open question. twitter suffered its growth stagnated over time. snapchat is still very much about making these deals and getting advertisers on it and all this stuff. as soon as you got advertising ad ad, you have all this revenue coming on. oh, we can show what's going on in the day, it's going to keep growing. >> facebook is not cool. >> no. >> are you on facebook. >> no. i waited it out. it got cool and it's now not cool soy didn't miss anything. when does the $263 billion market cap of facebook reflect that it's not cool. >> it was not cool as soon as you had my generation when

beyond college students came on to it and suddenly it was like oh my mom is on it, this is too weird. i'm not going to join it. >> when does that reflect in the market cap? ever? >> probably not. >> it's not what it was. it . >> i think that reflects something completely different. people use it now to get news and everything else. >> it's cool for some people then. >> i think it's cool for a lot of people. >> my space got rel uncool. >> it exists still. >> i don't know. >> if you're a half time report trade i want to know if i should sell this or not. you're not going to tell me. >> no. >> you won't decide on that. >> i'll be the decider on board disclosure. >> all right. >> i don't know. i'm not joining facebook, i'm not buying the stock. how is that. >> you should join. it's cool. it's fun. >> i'm not going to buy the

stock. >> i've tried. i find the interface incredibly difficult. i can't figure out what to do with it. it took me a long time. >> you're way younger than me. i think i could be your mother. >> when i finish with the dialup on the aol to get on facebook. >> do you have been an atar ri too. pong. it's a new game. coming up, ceos in sun valley. as we go to break take a quick check of what's happening in european markets right now. not a whole lod lot good.

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equity futures going down. looks like it's going to carry through a little bit. the dow jones with an implied average of 88 points. nasdaq would also open lower at this hour. media and tech executives gathering in sun valley coming together for the conference. julia joins us now with more there for. >> reporter: good morning to you. sun valley is the laplace to be for tech and media investors. all the media giants arrived last night. all quiet on the heels of deals in the cable space and rumors that more could be brewing. now one newcomer, she drove to dinner last night with cbs ceo. she is embroil instead a legal

battle of via come we haven't seen just yet. now, didn't comment on the red stone saga, but said went great and always looking for a deal and this is what he said about brexit. >> fortunately we have very, very little of our revenue that comes from the uk. we're not as big internationally as some of the media competitors so it hasn't affected us at all. the u.s. market came back pretty quickly. we went down a bit and over the next three days ended up higher than before it happened. >> we spoke to a number of other executives all predict more consolidation. sold the weather company to ibm becoming manager of the watson program. other attendees include oprah and special guest canadian prime

minister justin. >> one of the best soccer players in the world from argentina plays for barcelona right now. >> reuters has confirmed a report out of spain that he and his father have been condemned to 21 months in prison on tax charges. holy smokes. this guy is a huge stocker star. >> is it appealable. >> it is appealable. they can appeal to the supreme court there. he if i recall was just in the top two of the world's highest grossing athletes along with renal doe from portugal. >> he passed them. >> yes, they are considered to be not only the best soccer players in the world, but certainly the highest earning

between salaries and endorsements. he's going to be fined for tax crimes along with his father. the spanish court system can be appealed through the supreme court. >> he needs pistorius's lawyer. he just got sentenced to six years. >> yes, but the first time around. >> took a long time. >> well, this is a really -- >> six years. >> does that seem normal to you for -- >> it's like california in the 70s. >> this is a huge story. this would literally be if one of the greatest athletes in the united states, the top two, lebron james or colby bryant were sentenced to 20 some odd months in prison and fined a couple of million dollars. it with auz big spect cal. i don't think anybody thought he would be given a prison sentence.

and, again, because he can appeal it whether he will serve it is another story altogether. he was just here in the united states for a big copa america soccer tournament. had its centennial here in the u.s. the final was played at metlife stadium some 15 miles from here. >> did he blow a play. >> he missed a penalty kick. >> national team. >> lost the chili and he said he was never going to play for argentina again. he was going to retire, which was criticized in its own right. this is a huge international sports story. >> maybe he was a little distracted by the prosecution. >> maybe. world cup, right a couple of years ago, argentina. >> right. got it. soccer. are you with me? >> i remember the world cup. haven't seen it. >> this guy is a magician. keep saying the same thing. i think it would be a better

game if you could use your hands. >> one of my favorite lines from the is simpsons. oh, my god, this game is tied 0-0. it's so exciting. >> trying to do everything with your feet seems hard. have to turn up jiside down. >> bicycle kick, you mean. >> yes, that things. your hands, you run down, throw it down. >> currency at the goally. currency in focus. trading below 1 .30. new fall out from the brexit, next.

all right. welcome back. we were talking before the break about lionel messi sentenced to 21 months in prison after a spanish court found him guilty along with his father on three counts of tax fraud. wanted to let you know that under spanish law, a prison sentence under two years which this falls under, can be served under probation. so it appears unlikely messi and his father will actually go to jail. >> kind of like a loophole. like the classified information and gross negligence loophole which doesn't really -- sounds like a law but in practice really isn't. right? not prosecutable. >> extremely careless, joe. >> so that's no prosecutor would -- okay. i get it.

so it's very similar. >> barcelona fans can expect to see messi back on the field in august when the season starts. >> play soccer under probation? >> i guess you are. >> just careless. thank you. global currencies are still recovering from the aftermath of the brexit decision. the pound falling to a new low. just under 1.28. and the chinese yuan hitting lowest level since december of 2010. joining us now kathy leanne, she's a cnbc contributor. nobody's gone belly up or anything yet, have they? who's on the wrong side of things if no one thought that would happen. >> well, we're starting to see the dominos fall. yesterday the big news was all the funds that halted redempt n redemptio redemptions.

it's going to cause individuals to go belly up. and that's going to lead to the slippery slope. >> we can go around the world. who knew that -- we know about japan's problems. suddenly the yen has just soared again. that puts the whole abenomics experiment not working. and that affects us here unable to raise rates. >> absolutely. a strong yen is a huge problem for japan especially since we're in this type of global environment and inflation is so low, with the devaluing of the currency, it makes it tough for them to compete. it's going to impact us. but we're not going to feel as much of the pain, i think, as the rest o the world. >> why does japan even have a

bank anymore? the yen goes up. i mean -- they ease, they tighten, it doesn't matter. >> it's a good question. perhaps to convince their global counterparts to do something together. you're right. currency intervention isn't going to do anything. in order to make this a sustainable turnaround. and i don't see that happening. >> the pound and the euro move together? do they continue to do that? >> actually, the euro is quite resilient. it's fallen a little bit but not like the 15% like the british pound. >> after the shock is out of the way, now do they continue to move incrementally together or no? >> not really. just basically falling at a much more moderate pace. it's because money is moving from the uk on to the continent. >> what if we start to see more concerns about other countries that may want to leave?

wouldn't that hurt the euro. we were talking earlier in the show. if you had to make a bet today what currency's going to be here in ten years, is it the pound or the euro? all of us would say pound. >> you're absolutely right. as you were saying, we think that's going to fall more with the pound. but you're seeing a lot of inflow from the uk. >> you're short euro or pound? >> euros right now. >> all right. >> okay. thank you. >> my pleasure. coming up, the controversy over hillary clinton's private e-mail servers. we now know it's servers. there were multiple ones. she got a big break from the fbi but the fbi director said she was extremely careless. we'll talk to ron hosko after the break.

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global markets on high alert. stocks skid, bond yields hit record lows, and currencies swing as brexit fears mount yet again. let's not forget this friday's job report. donald trump sounds off on the hillary clinton e-mail scandal and the fbi's decision not to recommend charges against the presidential candidate. >> we're talking about the safety of our people, the laws are very explicit. stupidity is not a reason that you're going to be innocent. okay? it's not a reason. >> former fbi director ronald roscoe joins us in minutes. and the iconic ocean liner ready to set sail. we speak to the ceo about the

makeover. the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." >> this music. welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with michelle caruso-cabrera. becky and andrew are off today. almost triple digits down for the dow. going into the close. but after last week seeing a bit of a trace of those nice gains following the snapback following the thursday night brexit decision. there's the european markets which is problematic for our markets here. now 2%. those are big moves across the board. and once again the ftse's down

the least as it has been since that decision which sort of goes into the thinking it's worse for the eu than it is for the uk. in currencies, the euro at 110, the one to look at was the pound. which was down. i was getting the paperwork in. . you got to get the paperwork in to buy stupid gold. and the day of the bad jobs report, it was up 20 bucks. i said i'm not buying it at $1230. i was going to buy it at $1210. so i'm not going to buy it. it's gone. if i need to bribe a border guard -- actually, i'd have to find a border guard to bribe

him. >> you know what he's referring to? saying always keep enough cash on hand to bribe the border guard. which in the united states is a joke. but in the rest of the world -- my grandmother sewed gold coins into her skirt when she left. >> really? gold coins? >> yeah. tesla told regulators about a fatality crash in autopilot mode nine days after it occurred. they disclosed it to regulators on may 16th. however, the news did not become public until last week when national highway transportation safety administration publicly disclosed the investigation. apple will eliminate the 16 gigabyte version of the iphone. apple is said to be setting 32 gigabytes as the minimum due to the size of the photos and video. and several economic reports on the calendar. trade deficit at 8:30 a.m.

eastern time. 10:00 a.m. eastern time, the non-manufacturing index will be released. and a story that broke a few minutes ago, soccer star lionel messi and his father have been sentenced to 21 months in prison on tax evasion charges. however, the sentences can be appealed and according to spanish law, sentences of that length can be served on probation. >> weird. >> which begs the question, why have the sentence at all? >> it's chump change money as well for him. stocks to watch this morning, walgreens out with -- he has an elevator in his house? >> messi? >> probably has three. the drugstore operator earning $1.18 a share. >> amazing.

store it up for later. >> working over there. rejected sanofi's latest. but the biotech firm is to explore a possible sale. general motors, sales in china rose in june. but that is actually down from may. it's a slower pace than when sales rose 7%. still gm sold more than 270,000 vehicles in china last month. >> we did the tesla story again there, right? let me ask you a question. if spacex was a publicly traded company and did a test of an unmanned rocket that crashed ae wasn't zis closed, is that material information? >> you can't buy spacex. >> i know. i'm saying if it was. >> i think so, yeah. it's also hard to hide a rocket

launch. >> i know. but for what's material. >> i don't know what to close that day, it was down $9 on the open. to say it's not material to the stock, it was material that day. it's just like, you know, that's not what -- unless you think something else did it that day. >> right. no. i don't know. i just thought about it again when you were reading that story. it's going to -- >> the failed rocket launch would be material. >> i took a long drive last weekend and i have -- you know, you use cruise control. there are times where, you know, it's on and if you're at all distracted and you start coming up on the car in front of you and you go -- like, i'm not in control here. all you got to do is tap the brake. but for the instant the car is controlling. i can't imagine if you're sitting there and it was steering too. so i don't know. i'm not ready for it. you like to drive, don't you? >> i do. >> i am so ready for autonomous.

i want to sit in the back seat, not have to -- get the next generation. let's move, shall we? to what is clearly the story plastered on every front page not only here in the new york city area but all around the country, of course. and that is the fbi recommending no criminal charges against hillary clinton for her use of personal e-mail server. but calling her behavior, quote, extremely careless. john harwood joins us with more on the reaction. >> morning. and to your point, the surprise in james comey yesterday wasn't that he didn't recommend charges. the surprise was how strongly he criticized her competence in handling sensitive information. this is what i asked secretary clinton about when i interviewed her in march. i said were you sloppy in handling information and she said absolutely not.

comey said she and her team were extremely careless and he also said this. >> we developed evidence that the security culture of the state department in general and with respect to the use of unclassified systems in particular was generally lacking in the kind of care for classified information that's found elsewhere in the u.s. government. >> now, his conclusions are likely to exacerbate the problems we've seen in polling about how americans view her trustworthiness. we saw this in june when we asked voters which candidate do you prefer on being honest and trustworthy. they prefer donald trump by 41% to 25%. and of course hillary clinton's strong suit in the campaign is arguing that donald trump is reckless and she's the competent person who knows what she's doing. no surprise the republican national committee is south with a video this morning juxtaposing her statements with james comey's statements yesterday.

>> all right. we're going to have more on what we're talking about here on the hillary clinton e-mail probe. let's bring in ronald hosko. he's former fbi assistant director. he retired two years ago. this was mid-day yesterday, it was early. so everything in the universe with twitter and cable has already been said. so i'm just going to ask you that as you were watching, what type of -- what was your reaction through the entire 15 minutes? because it changed as the 15 minutes went on, didn't it, for everybody else? >> it sure did. truth is i was not watching. i was listening. and i thought that the director was walking us toward an indictment recommendation. and then suddenly he pulled back. and made this assertion that their judgment was that she not be recommended for indictment or that the fbi wouldn't recommend that way. i thought, too, while he was

doing that he was dousing her with lighter fluid and as he concluded he dropped the match at her feet. he did a point-by-point takedown of the various versions of events that came from hillary clinton and dismantled them. i think jim comey wrote every word of this himself. my supposition is if he talked to anyone about it, it was only his wife on sunday. you know, jim comey is a man of conscience. the director i worked for, he has impeccable morality and ethics. his arrow points true north. and i think this -- he spoke what was in his heart yesterday. but he's a former prosecutor too. and i think he looked at precedent in this type of case and because they couldn't find an intent, one that's not spelled out in the statute, by

the way, they couldn't see it in the precedent. he felt compelled to step away from an indictment recommendation. and you have to look at the reality that, you know, for an indictment you need probable cause. but prosecutors and investigators are looking for far more. you're looking down the road at a substantial likelihood of success at trial. that's beyond a reasonable doubt. and if they don't see that, then it is -- really should be within their judgment to pull back and say perhaps we shouldn't recommend an indictment. >> number one with precedent, intent usually is tough to prove. and there isn't a whole lot in this. number two, there's a spirit of the law with the letter of the law. i understand the letter of the law. but politics at some point enters into just about everything. even with the supreme court. and i keep likening it to john roberts' decision with obamacare. he's one person in a 5-4

decision or whatever it was or that's that close. yesterday jim comey wasn't going to throw cold water on the democratic nominee for president in summer before the november election. it just -- it just wasn't going to do it. but i'm not sure whether when you actually read the law, it looks like the law was broken. and that an indictment shouldn't have been recommended. but i understand he did not want to be the person to do it, probably. >> if you do a cold read of the statute, it looks like all of the elements are met very clearly. and in fact, when he talks about extremely careless, you know, to me that has the same dna as gross negligence that the statute requires. those are identical twins. and so it felt like the elements of the statute were met. but i think the prosecutors and the lead investigator here jim

comey owe a potential, you know, doj and a potential indictee a little bit more. and that is will we prevail at trial? and are we substantially likely to prevail at trial beyond a reasonable doubt? so i think jim comey did his job here. trust me, i am being bombarded with e-mails and texts from friends, retired guys who know the clintons and are outraged. >> ron, it's an example -- too big to jail. >> to underline what you're saying with the supreme court decision, what i hear you saying is that these individuals ultimately want democracy to prevail and have the people decide what to do and have elected officials and to be one person to insert yourself into something so controversial just isn't a good thing is your argument. not that he is pro-democrat or anything like that. >> looking at the big picture.

all that stuff. >> can we talk about just -- so i get what you're saying, sir, but can we talk about intent -- just -- i want to understand this. my understanding of intent is not that you intend to do anything wrong, but did you intend to do the action that was illegal. and she did. she intended to set up the server. she intended to send those e-mails. i mean, so -- intent to me sounds crazy. it doesn't make any sense to me. >> no, and i think that's the struggle that a lot of people are having with this announcement by the director yesterday. because as you say, the intent looks like you intended to be negligent and she was. grossly negligent. extremely careless. particularly by a person who is in a position of great trust who should have had the benefit of security briefings, clearances, signing off on documents that

acknowledge her obligations. >> which would have been very different as opposed if she said i didn't -- i hit send by mistake. >> absolutely. it's far different. >> right. >> this is the struggle. and it seems like the director introduced an intent element that is not in the statute. i believe all of those things that he ticked off yesterday are absolutely true. the struggle is this added intent piece. and i think that's where he is looking at precedent. he's looking at, you know, prosecutions of others using this statute for other similar conduct. if you can find similar. and saying, look, you know, in those other cases, we saw where somebody intended this result. they were intending harm to the united states. they were intending personal gain. and they didn't see it here. and what he's telling us, too, is nor did they see an intent to hide all of this from us. apart from the big hide which

was putting it all on the private server. >> it sounds to me given everything you said and the way you answered the questions, that you think your former boss got it wrong yesterday. >> no. i think, you know, to him in his heart he got it right. and whang he did at the end of the day was put this back into the court of public opinion with the view that this would have been a close call at trial. he put that burden back on the electorate to say, look, you're the voter. is this someone whose judgments you should trust? this is someone by his determinations yesterday, you wonder whether she should ever have a government security clearance. because she couldn't answer the questions the right way if she was asked. >> all right, ronald, thank you for your frankness. thank you. >> my pleasure. okay. when we come back, we're going to talk markets after the break.

check out the 10-year note which touched an all-time low yesterday. there it is this morning. 1.33% is the yield on the 10-year note. "squawk" will be right back.

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joining us now rebecca patterson and joshua fineman. great to have you both here. what's the most important thing you're watching many the market right now? is it steriling? >> yield. i'm watching two things. european banks and u.s. yields. the u.s. 10-year, i don't know when, but we're likely to break 1%. >> holy smokes. >> it's not the first person to say that now. >> no. but it's still pretty rare even though every day that goes by there's more. >> the question is when. does it happen sooner? because we have bigger consequences of brexit and italian banks and et cetera, et cetera. or does it happen later when we get the next recession? >> so you pay 1% to borrow money. >> in america we still get it. >> okay. i was confused. all right. that's weird, isn't it? you can earn money on --

>> yeah. >> but you're telling me i can buy long-term bonds and not worry about it. we hear whatever you do, there's a bond bubble going again. >> i totally agree. a year ago if you had asked me this question, i would have said are you kidding me, i don't want to buy bonds here. we're going to see over the next few weeks the bank of england easing, the bank of japan easing. and so if globally rates are getting more and more negative and it's crazy what we're seeing, 1.3% looks great in that environment. >> exactly. so i think this is more of a global dynamic than a cyclical dynamic. >> josh, you agree these dropping bond yields are more representative of what's happening around the world more so than a pending doom in the u.s. economy? >> i don't think it's impending doom. i think it's combinations of the global situation and change in

perceptions of monetary popgs. you know, we've got more easing coming from around the world. the u.s., we're talking about maybe 1%. u.s. is still a high yielding country. so amazingly so. but also people have pushed out the fed. so those combinations, that's why we're getting low bond yields. but are still done relatively well. >> the u.s. dividend yield was less than what you get on a 1046 year treasury. >> the yield curve shows 60% chance of recession. >> yeah, i'm not sure i would get on that idea. >> not going with the party line? >> we all think independently. i think that's a bit high. i actually think the u.s. economy will not likely go into recession at least in the near term. looks okay to me. i don't think that's what these yields are telling us. i think they're telling worries of the global situation and repricing of monetary policy.

>> after what happened last month in this -- >> it's a good place to steer. michelle, to your point, what's the risk? i think at levels like this you have to worry about what turns it around. there's two major factors that could turn the bond move around. one could be inflation that forces to raise rates. this friday you don't want to just watch jobs. watch the wages. then it will be if we get a policy shift that changes the bonds. >> what do you make of the move in gold then? do you believe it signals inflation? >> no. i think people are saying how do i have a defensive piece of my portfolio and if i'm nervous about buying bonds here because yields are low, what else could i own? and gold has come up a lot off its lows. but it's still a lot below its 2007 lel levels. >> can you own u.s. stocks with gold if gold is continuing to go

up and bonds are continuing to go up? >> one thing that struck me getting ready for this interview -- i spent a lot of time getting ready for this interview. and if you look at what happened since the end of may, you had a collapse of bond yields. but the new zealand dollar stronger. that's not fear. that's a hunt for yield. >> when do you suggest the bls -- election is november. so june's too early. when do we start the 200-plus? august or september? >> one thing is if you start getting those things i think the bond market's going to have to do repricing. >> what is the best bang for your buck? do september? because october you won't know until after -- i think maybe you start august. this is too early. anyway. thank you. >> i don't think the bls -- i don't think they compromise classified information.

among the stories front and center this morning, we're keeping tabs on the british pound this morning. it dipped under the 1.28 mark. it's the lowest level in 31 years as its volatility following the brexit vote continues. the fbi's new york office is looking at insider trading probes. prosecutors in new york have charged 11 people so far this year up from just four last year. bill dudley will make comments for the second straight day today. he said policy makers could be patient in raising rates and low inflation. the huge story in markets is the huge drop in yields which led to a drop in mortgage rates.

causing a big boom. >> the brexit bonus to u.s. homeowners is well under way as interest rates drop total mortgage application volume jumped sh%. now, volume is 66% higher than one year ago and it is all the drive through re-fis. those jumped 22% the week. they are now 113.5% higher compared to one year ago when rates were 0.75 percentage points higher. a drop in loans is reducing the re-fi run. as borrowers take advantage of higher home values. now, the average contract interest rate for 30-year fixed rate mortgages, that's $417,000 or less, that decreased to the lowest level since may 2013 at 3

3.66%. that's all according to the report. there was a small boost in mortgage applications to buy a home although they are mump less sensiti sensitive. up 23% from one year ago. given the rates today, expect them to head even lower towards the end of this week. back to you. >> all right, diana. thank you. meanwhile, titans of media and technology are gathering in sun valley for the alan and company conference. brexit looking to be looming over the meeting. joining us with his expectations for a lot of things but also advertising deals in the second half, also talk brexit and beyond, the olympics, much more. martin sorrell. mr. martin, we go way back. >> good morning. >> the abject to spare that i

know you were feeling the day after brexit. and here i was elated. >> you're referring, joe, that getting up this time of the morning is -- >> don't change the subject. i'm going somewhere here. so you're depressed after brexit and then the news about hillary clinton maybe the news was on other foot. maybe you were elated about that. go ahead. >> i'm not depressed or elated by any of those events. just on the first on brexit obviously i'm sad about the vote because i personally wanted to see the country remain. although the game's not over yet, joe. there's a long way to go. we have probably a two-year negotiation when article 15 is triggered. then the eu themselves, 20 states have to approve any deal

that the british and brussels agree. we may have had a general election. >> the only people clutching to that straw is are the people that were dead wrong it was going to happen. were you a remainer purely based on wpp and it how affects your business? that's an economic argument. as a brit and regaining sovereignty, were you not at least a brexit-erk er in your heart? >> if i can get a word in edgewise -- >> never have a problem with that normally. >> the first was the economy and on the question of the economy, i think even the leaveers were

it was best to stay in. second they think was sovereignty. my view was firmly we were better off inside the tent negotiating or at the table negotiating. third thing was immigration. as a second generation immigrant, i admit i'm totally subjective on the matter. that's where i do get elated or depressed. and i am very concerned about the results of the referendum on ray sigs. and we've seen a number of unsavory events in the country. that populist tendency on the left and the right of course is dmot just solely in the uk. we see it in the u.s. we see it in other parts of europe, italy, spain. it's a general issue post-lei man that you and i and becky and everybody else and andrew know is an issue that has to be dealt with. but the answer to your question

is it wasn't solely wpp. it was about sovereignty and immigration or migration. >> you know, sir martin, the elitist frame it as a racist referendum which i guess, you know, if you want to -- you can do that. you have your right to do that. others would frame it as a move of globalism and statism versus nationalism. you've got unelect ee ee ee eee bureaucrats. you can't think that could be a bunch of racists and it has something to do with nationalism? >> no, it has a lot to do with the issues of 2008. and we're seeing the results of the monetary policies, the low interest rates, the impact that that has had on the distribution

of wealth and income. and we talked about that. and in addition the impact that technology, i'm a believer that the improvements in technology will result in less employment opportunities rather than more. the hollowing out of the middle class, these are all issues that are high on the political and social agenda and have to be dealt with. the referendum vote at the end of the day, i don't think it's about the eu. it was a vote, a disaproproving vote. but outside london in the southeast and in other parts of the uk -- >> sir. >> if we -- you're right, joe. we talk to ourselves in a bubble. and unfortunately we lose sight or lose connection to the economy as a whole. >> do you think there's anything -- michelle

caruso-cabrera filling in for becky. on that note, when you look at the results of brexit, do you think it says anything about the u.s. election? donald trump in the latest polls is behind hillary about the same leave was behind remain in the polls. >> well, actually, in our polling just to be quite clear, leave was always ahead. our final forecast was the 52/48. we always had the leave campaign -- >> was the ft poll showed that remain was -- >> yeah. clearly you were looking at the wrong polls, michelle. but never mind. does it have implications for the trump candidacy? i think it does. a straw poll of the people i saw last night here, there are people who think trump has very little chance. there are people who thinks he has a significant chance.

there are people that as a result of the brexit vote believe they will have a better chance of the decision. hillary clinton doesn't elate or depress me, joe. obviously i think increases her chances. a lot of people were thinking that would be -- >> he is english. >> sorry? >> wilfred frost used that same poll i was just quoting and he's english. >> so wilfred was wrong on that particular one as well. >> all right. i'll tell him. >> you're right in the case of the poll of polls. i'm just talking about the individual poll that we ran. but basically i agree with what you're suggesting that one must look at the results of brexit as having an impact on the polls here. and the impact on populism here. >> sir martin, we didn't get to talk about advertising and what's happening out at alan company.

but it's good to get your take on brexit and everything else. london is a bubble, but what a great bubble as we both know. maybe i'll buy some real estate now. >> yeah. >> well, i think that's -- it's good timing. it's remarkable that the pound is at the lowest level against the dollar since we started wpp about 31 years ago. which when you think about it is a truly remarkable thing. i think you will see a number of people start to purchase assets in the uk. i think the next problem we'll have is the people in britain will complain about foreigners coming in and buying trophy assets. >> all right. well, if you go to the pio out there, i'll make reservations and pick up the check at the pioneer. you know where that is? >> i know exactly where it is. we passed it last night coming in. very kind of you, joe. you're returning the favor. although i didn't pick up the

check, i have to make that point clear. >> that's right. but actually pio is not quite the woolsy. thanks, sir martin. >> thanks very much. all right. from one brit to another. coming up, all aboard the queen mary 2. the iconic ocean liner. it is not a cruise ship. just got a $132 million makeover. carnival ceo arnold donald will talk about the booming in the cruise industry. next 3w4r57.

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welcome back to "squawk box." the futures suggest a negative open. dow would open by 85 points down. an iconic oceanliner getting a makeover. the queen mary 2 set to hit the seas after a $132 million facelift. that's the most spent on renovations by a carnival brand. joining us now from the queen mary 2's docking site, arnold donald, ceo of carnival. good to have you here. >> good morning. good to be with you guys. >> i was pleased in the notes to

discover that i'm not allowed to call it a cruise ship. this is an oceanliner. it goes from point "a" to point "b." it doesn't end up back at the same place. that's the difference, right? >> well, you know, she is the only oceanliner at sea. what that means is she's designed to do transatlantic travel. but the queen mary 2 is iconic. wherever she goes, she's loved everywhere. tens of thousands of people turn out. and she does sail around the world and do other itineraries as well. she's a spectacular experience. >> how long does it take to get across the ocean on it? >> it takes seven, eight days depending on itinerary. there's wonderful entertainment on board. now she's been remastered, there's extra kennels for those with pets. and single state rooms. >> you can bring your dog on the queen mary 2? >> you can bring your dog.

we have a kennel maes for. in fact, we have an english lamp post and american fire hydrant so they can feel at home. >> so are you still allowed to dock over in southampton even in the wake of brexit? no issues yet? nothing like that? >> yeah. nothing from brexit stopping us from the port of southampton. that's correct. >> are you seeing a number of bookings decline in any way? >> so far it's been on currency. no we have not seen anything in bookings. in fact, with of course our brand that is british based and british sourced, thir in the local currency. in fact, they'll -- no impact even from the currency. we haven't seen any change in bookings or anything. but obviously the currency is a drag. as we reported in our last earnings call, we're doing well enough to offset the current

situation on the year. we maintained guidance for the year. >> so let me understand this. you're a dollar-based company, right? if i'm living in the uk and i want to book, and i assume you're more likely to have british passengers because of the nature of the vessel. republic they going to have to pay a higher price now because the pound has fallen so far? >> no, they won't. what happens -- >> why not? >> in the uk we price in pound sterling. there will be no change in pricing. but the queen mary 2, she absolutely is a global product. so she's comprised of british citizens, u.s. citizens. >> you observe the currency cost change. >> we will on this and also with the british based one. that's the biggest impact for brexit, yes. >> tell me how it went going to

cuba. tchs exciting when simon was on the ship. i've been there many times. i don't know if you've seen these articles that painted a maybe not flattering picture of the particular line you used to go both cuba and the dominican republic. >> the brand is one of our ten brands. the net promoter scores in other words the guest satisfaction scores are through the roof. the dominican republic are the highest across other brands. so it's doing fabulously well in terms of experience. then in cuba, scores are very high as well. and cuba's such a tremendous experience. it is the best way to go to cuba on the ship. so far we're the only ones cruising there. it's absolutely the best way to go. we have the best accommodations, best food. we go to three ports in seven days. >> having been there many times,

i would love too see an improvement in the cuban food. there's an article that says from nbc miami that there has to be steep discounting on the fathom line. they're going to as low as $249 in an original ticket of $1500. people don't know why they would want to go and pay to work somewhere. people want a vacation, says the travel agent. making reference when you go on these cruises, you go lay concrete in a poor person's home, that kind of thing. >> well, first of all, it is an impact cruise. and is for a traveler who wants to have impact. you can have a ton of fun. you can do whatever you want to do. there's 40 excursions in our great destination there in the part of dominican republic. and also there's many activities you can engage in that help the

transformation. the reason for the low price, it's a start-up. we can't afford to do massive advertising and so forth. we're doing some experiences. it's a difficult concept. q on the other hand, we're almost sold out through the fall. and this summer we had a late approval so people didn't have time to either plan. >> it's a little slow sometimes. you don't have to tell me that. >> yeah. they made -- i'm sorry. the cuban government was cooperative. >> -- had an individual on whose individual owned the port in santiago. and he calls it stolen problem and that carnival is with stolen property when you dock in that port. what would you say to him? i'm sure he's listening.

>> we will respect everyone's rights as dictated by the authorities in in the u.s., whatever country we go to. if there are any rights being violated, we will cease and desist immediately. but we leave that to the proper authorities. and our origin which is the u.s. whatever we're told in that regard, we honor all -- everywhere we go we're very respectful. we will be no less respectful in cuba. >> all right. mr. donald, thank you so much for joining us with the queen mary. bring your doggies on. looks beautiful. >> it's a beautiful day. come on out and see her. all right. coming up, stocks to watch on the open on the trade on wall street. at the top of the hour, more reaction to the fbi's investigation and outcome of hillary clinton's e-mail servers. bill richardson and judd gregg will join us. check out the futures at this

hour. dow with implied open down 95. "squawk" is back after this.

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the bottom line was helped by increased demand for drugs that are paid for by part d, by medicare part d. and moving on, twitter has named -- >> did you just ad-lib that? >> i said part d didn't i? brett taylor to the board of directors. only twitter board member with experience at another social media company. >> what was that? >> god only knows. i mean, you know -- no, that was, yeah. that was nerves. fluttering. i'm still thinking about bugs bunny. >> it was like a peter brady moment. >> what? no, because that was the answer to the trivia. there was an apostrophe. oh, there's people. hey, guys. stay away from the prisoners. don't feed the animals back

there either. all right. did you see our prison yard? >> beautiful backdrop. >> don't walk out there. you'll get shanked. coming up -- >> oh, coming up, the jobs report just days away. mohamed el-erian tells us what he's expecting from the markets in the post-brexit world. plus what the fbi's decision means for the race for the white house. former governor bill richardson and judd gregg joins u. rotect t, 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.

global markets under pressure. u.s. futures in the red. the pound hitting 30-year lows and yields slumping. ahead of friday's big jobs report, mohamed el-erian tells us what to kp pt. careless, not criminal. james comey recommending no criminal charges for hillary clinton and her use of personal e-mail servers. and donald trump is sounding off. >> our system is absolutely, totally rigged. it's rigged. >> the latest from the campaign trail straight ahead. and new this morning, a messy situation. lionel messi sentenced to 21 months in prison for tax fraud. but will he actually serve jail time? the final hour of "squawk box" begins right now. ♪

live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with michelle caruso-cabrera and scott wapner. becky quick and andrew ross sorkin are both off today. we're less than 59 minutes -- i mean, yeah. no. 89 minutes. less than 89 minutes away from the opening bell on wall street. i did that pretty fast. it's not that easy. i try -- >> not on the mental game. >> down 85 points. i would round that -- yeah. >> i'm resentful to andrew ross sorkin that we do the implied open. i used to do the math in my head. but it used to be andrew's futures when he first started. >> that's the only problem you

have with andrew. love andrew. i miss him. down 85. down 10 on the s&p. but you're good. i'm trying to cover all this bases. >> and you're doing a great job. >> and wilfred was great yesterday. good to see you. >> thank you. a pleasure. >> on the flight home i watched "specter" and i thought of wilfred. >> yeah. >> has the white coat on at one point. >> which he wore to the correspondents dinner. >> he did. i thought of him. >> speaking of europeans -- >> good. thanks. the markets are down -- >> in the next two years at least. >> look at the pound. below 1.30. it was even below 1.28 earlier. it's a record low yield we saw. >> yen at 100 ppz. >> to show 200 and 300-year -- have you ever seen that? anything above 2%, we didn't know that.

we never thought we'd get down here again. maybe it does make sense. that yen, if that breaks under 100, that is unbelievably strong. >> since '95. >> and what's the low on the pound? >> some people are talking par. 1.20. >> an airline ticket? >> a house. >> here are the stories investors will be talking about this morning. several economic reports and fed speak on today's calendar. we get the may trade deficit. then the index will be released. 2:00 p.m. it's the minutes from last month's fed meeting. new york fed president bill dudley is speaking today. tesla told regulators about a fatality in its car using its autopilot mode nine days after it occurred. . it happened on may 7th.

it disclosed it to regulators on may 16th however the news didn't become public until last week when it was publicly disclosed. medivation rejects latest offer from sanofi. however parties have signed confidentiality agreements with med vags which could lead to deals with one of those bidders. joe? [ coughing ] >> you got to read it. i lost it. no, i got it. this news was shocking from lionel messi. doesn't it happen? it's hard. you're a young man. the whole parastolsis you take for granted. it's why we always have water here. the worst thing that happened,

warner wolf's teeth flew out, the sports guy. and that would be -- see, i don't know how you recover from that. >> let's go to the videotape. right? >> soccer star lionel messi and his father have been sentenced to 21 months in prison on tax charges. they've also been charged a total of 3.5 million euros. and according to spanish law, anything under two years can be served on probation. so a two-year prison term -- >> isn't really a prison term. >> no. which i don't understand. i don't understand as we said earlier, the laws on classified information in this country. they're a little bit gray as we now know as well. >> which we'll discuss in one second. i was just going to say, we've been talking about whether the 10-year is going to hit 1%. now the 30-year record 2.908%. all right. now to the other big story,

politics. fbi director james comey recommending no charges against hillary clinton for her handling of classified information on private e-mail servers. with an "s." we now know it's multiple servers. amon javers has more. >> good morning. dramatic moment from comey. he had apparently no notice to his political bosses and said he ultimately was concluding the n bi's investigation into the e mall practices. he detailed extensive findings from that investigation including the fact there was classified information on hillary clinton's e-mail server. despite those extense ifr findings, he stopped short of recommending charges against the former secretary of state. here's what he had to say yesterday. >> in this case given the importance of the matter, i think unusual transparency i think is in order. although there is evidence of

potential violations of the statutes regarding the handling of classified information, our judgment is that no reasonable prosecutor would bring such a case. >> when he says no reasonable prosecutor would bring such a case, what comey is saying is this is a judgment call that was second guessed by a lot of critics including plenty of republicans just yesterday. but it's one that's going to dog hillary clinton through november even though we saw the clinton campaign issuing a statement after this saying they are glad this matter has been resolved. technically it hasn't yet been resolved officially. we're still waiting on the justice department to decide on what it is going to do in light of the recommendations. but loretta lynch says she would abide by the remss from the fbi at the doj. it is highly unlikely the doj would go against what comey recommended yesterday, guys. >> yep. i would agree with that.

thanks eamon. joining us is bill richardson and judd gregg. we have a democrat and republican. let's see how this is going to go down. senator gregg, let me start with you. what do you think of the decision by comey? >> i think you hit the nail on the head. he essentially is turning it over to the american people to decide. but he made it clear he felt she was closely incompetence and deceitful. were she actually secretary of state right now, she would have to resign in my opinion. probably couldn't get security clearance. it's an unusual situation we have. but he clearly decided he didn't want to be the decider of the american political system. he was pretty blunt about what the facts were. >> to underline, i am sure all viewers watched for all three hours, senator, but just to make reference -- you say you hit the

number on the head, you're referring to a conversation where joe brought up -- you want to explain it? >> to john roberts obamacare that one person is not going to decide to throw out something that momentous. i also use too big to jail. you can't. she's the nominee for the democratic party in an election that's going to happen in a couple of months. he can be the guy that suddenly throws that into disarray. >> and i think that's the correct decision on his part. >> so do i. >> were this a smoking gun case, yeah, then he'd had to have. but for this situation to be into this process and undermine the political process -- >> not like he pulled any punches. >> he certainly made his case. >> he didn't pull any punches. it was everything but asking for an indictment. >> governor richardson, were you like a lot who watched james

comey speak and think holy smokes, he's going to indict her as you listened to him lay out all the details of what the fbi found. >> well, the reality of the announcement is that a career prosecutor, honorable non-partisan director of the fbi basically is bringing no charges, an exoneration. he's also saying there was probably no damage to national security. possible hacking. and i think secretary clinton has said this was a mistake, it won't happen again. >> but governor -- >> we need to move on to discuss the major issues. >> discuss the major issues. what about the major issue she faces which is a lot of people think she's untrustworthy and how numerous newspapers have plastered up what she has said about her e-mail servers and what james comey said. when she's given interviews to

harwood, there are direct contradictions. >> this is not a plus. but the reality is an exoneration has taken place. national security was not damaged. >> yesterday is an exoneration. you would call it an exoneration? >> depends on what the meaning of the word is, i think. >> basically no damage to the national security. she was secretary of state for four years. she did a good job. she's a senator from new york. she has enormous credibility. i think we need to move on to discuss the economy, national security, isis. this issue ahead of the fbi, non-partisan career prosecutors has basically said there is no wrong doing. i mean, he said that. that's what i heard. you can construct all these

other theories about carelessness and negligence, et cetera, but the reality is we need to move on. this issue is basically over. but i'm sure the republicans are going to keep harping on it. that's going to happen. they're going to keep reminding the american people. but what the fbi director said is basically no charges. >> senator greg? >> this is why richardson was great to the un. i mean, let's be accurate about this. this campaign comes down to two candidates who have very high negatives. this just reinforces very specifically because the fbi director made it specific on the first that he was snot that confident as secretary of state. that her handling of the e-mail situation was extremely reckless

and careless. and she was not truthful with the american people about what she did. this is why she has such high negatives. so the american people are left with a tough choice. and i think that the fbi director made it clear it's not their choice. it's the american -- >> i like the compliment he paid me, but republican secretary of states had their own private e-mail servers, too, and i don't see the ringing indictment. >> they didn't have servers. they had private e-mail addresses. they didn't have private e-mail servers, i don't think. >> the reality is the they weren't using the state department system. >> bill, you know as well as -- >> and under law, secretary clinton could do what she did. >> no, she can't. and bill, you know as well as i do that when you went into the soviet union or russia or when you went into china, that your server, your personal electronic

devices were not allowed to be used. or if they were, it was a government issue. and when you left they were immediately taken by your security people and tested to make sure they hadn't been invaded. that happened to me in the senate. i'm sure it happened to you when you were at the un. and yet she -- in an act of extreme carelessness, went into these nations with servers which had classified information on them, used them, and then they were never run through the proper security clearance that you do that type of an electronic device. there's an example of mismanagement to be kind on her part. >> but judd -- >> what type of precedent do they want? >> you have to also read what director comey said. there is no credible evidence of hacking. it may have happened, but there's no credible evidence.

>> he said they couldn't prove there wasn't. it's completely different. >> very likely they weren't. >> but there's no evidence that there is. see, we're talking semantics. >> the point is -- no, no we're not talking semantics here. this is much deeper. i do have immense respect for you and i think you've been an incredible representative. but the simple fact is this is not semantics. this is a very serious issue of judgment and of whether or not she's been truthful with the american people. and that is just a fact. the fbi director made it clear. >> all right, guys. thanks so much. governor, where are you? it looks gorgeous. you in cape cod? >> i'm in cape cod. yes, i am. >> come to new hampshire. >> i grew in new hampshire. very pretty. >> we're proud of you as our

citizen. >> thank you. good to have you both here. all right. want to mention bill gross' latest investment letter is out and it has a few interesting anecdotes in here. he talks about the lack of fiscal spending in the economy a a -- because there's a lack of it, to me that means at lest a ceiling on risk assets and at worst minus signs at year's end that force investors to abandon home for feechl returns worry for now about the return of your money, not the return on it. that coming from bill gross, his new investment later. interesting thoughts. >> he's going to be on "power lunch" later today. and we have mohamed el-erian coming up on the show. but they're not related.

>> no. not at all. coming up, we're less than one week away from the top state stat states. up next, the pressure of the impact on markets. "squawk box" will be right back. we got another one. i have an orc-o-gram for an "owen." that's me. ♪ you should hire stacy drew. ♪ ♪ she wants to change the world with you. ♪ ♪ she can program jet engines to talk and such. ♪ ♪ her biggest weakness is she cares too much. ♪ thank you. my friend really wants a job at ge. mine too. ♪ i'm a wise elf from a far off shire. ♪ and sanjay patel is who you should hire. ♪ thank you. seriously though, stacy went to a great school and she's really loyal. you should give her a shot. sanjay's a team player and uh...

activists in north carolina say they plan to turn up the heat on the governor and state legislature over that law that restricts where transgender people can go to the bathroom. businesses are pushing back, too, and it all could shake up our tenth annual america top states business rankings which are only one week away. scott cohn with that story. >> hi, scott. the legislature did adjourn on friday without making substantial changes to that law. we do consider inclusiveness among our metrics in top states. so this will have an impact on our rankings when they come out. but activists and some in the steet legislature.

>> when you pass hateful legislation, you cannot recruit and retain the best and brightest. you're not going to bring companies like paypal to come expand here. you are going to continue to lose concerts and events. our beaches and our mountains are going to lose tourists. >> the human rights campaign which a pushing to repeal the law, they some 200 businesses have signed onto a letter that urges this be repealed. if they're to stick to their guns, they're setting aside a state that has always been a competitive state. proponents of the law say that's what businesses should be focused on. >> businesses who care about being bullied by big grups like the human right it is campaign more than they care about the citizens they skerve or the profit their company makes are doing so to their own debt richl. >> so do businesses put their

money where they mouth is when it's all said and done? businesses threatening boycotts over that. there were changes in the law but the law is still in place and convention and tourism business in indiana is up. we've got a lot more about this on our special website topstates.cnbc.com. our tenth annual rankings come out next week. >> thank yous so much. >> i'd love the ads for top states. they're so cute. my favorite thing. sorry. >> please, continue. >> july 11. don't miss it. coming up, apple may be getting rid of a big limitation. the lack of storage. details about the new flagship iphone. coming up next. plus verizon plans are about to get a bit more pricey. the change to the data plans. "squawk box" will be right back. ♪

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if you're in the market for a new iphone, you may want to wait a few months. "the wall street journal" reporting that apple is getting rid of the entry-level 16 gigabyte model when it launches the iphone 7 likely in september. the new starting point will be 32 gigabytes as apple adds new and improved features that use more storage.

verizon plans are getting more expensives. more data offered in plans. they range from small to extra large or extra extra large which runs $110 a month for 20 gigabytes. verizon will also let customers roll over unused data to the next month. >> so complicated. >> it is. there are thousands upon thousands of new losers out there. this morning no jackpot winning ticket in the mega millions drawing, and not for me. >> you don't buy tickets? >> no. so we're going to talk about it more. estimated $454 million, the pot will increase by about $450 million for the drawing next week. we'll get to talk about that

some more. and everybody's going to say, if i win, what do i do with the money. let's talk about if you had a trillion dollars, what would you do with that? it's the psalm thing as talking about this. you're not going to win. nobody wins. >> i would fly private like other people do. >> i do that already. >> yeah. we're just minutes away from the latest trade numbers. pluss mohamed el-erian will join us.

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welcome back to "squawk box" here on cnbc, first in business worldwide. the futures at this hour continue to show a weak opening in the dow. in this country down about 86 points. on the s&p down 11. the european markets are weak across the board. even bigger losses on a percentage basis than are

indicated here. the german dax down over 2%. as is the cac. only the ftse is dun less than 2%. and the currency markets, 1.10 now on the euro. the yen almost breaking above 100. which -- or below 100. but creating strong against the dollar. and the pound at 1.29. >> also looked like it recovered. breaking data on trade. the may trade deficit coming in at $41.1 billion compared to $37.4 billion in april. knots much impact on -- >> you thought it might be a surprise surplus, right? >> how do we know? how do we know that we're -- >> don't jump the gun. we haven't seen the report. >> may trade numbers.

whether it's a deficit or a surplus. background on the futures. some people think too much, obviously. but 40% obesity rates. have been lower throughout the morning. we're looking at the futures again. let's check the 10-year treasury. you can still get paid to deposit money, though, in this country. ten-year note now 1.34%. >> could break below 2%. >> the 30-year. yeah. let's ask mohamed el-erian. he is joining us now. he is former pimco can we break below 1% this country on the 10-year? >> e with could.

and while we cowl criminal captured by europe. and policy prospects there. so we could. the problem, joe is that in absolute terms these things don't make sense. in relative terms they do make sense. >> if you look at global inflation prospects and you do the difference where it's supposed to be, doesn't seem that crazy. doesn't seem totally orchestrated. although if you blame the central banks for slow growth, somehow they are complicit or responsible for what's happening. but i don't know. they're just responding to the economic backdrop globally. >> so think about it. in terms of the u.s., i think we still have 2% to 2.5% growth economy. i don't think we're in deflation.

the yield looks a little bit strange relative to macro. so we have this massive disconnect between domestic economic conditions and a yield curve that prices, lots of other things in the community. and this is something we don't understand but it's likely going to lead to a further disconnect between economics and advance. >> it's scott. good to talk to you again. bill gross out with his investment letter a little while ago this morning with he says it's time -- and i'm quoting. it's time to worry about the return of your money and not the return on your money. do you agree with that? >> so, i haven't read his letter, so i don't know what arguments he uses. what i do agree with is the equity market seems to be have else completely compared to fixed income, foreign exchange,

financials, property. so the equity -- can maintain this wage. if you believe central banks can continue to repress financial volatility. >> let me be more specific. and i should do that. you can probably better answer the question. he talks about not only what's happening with monetary policy, but also the lack of fiscal pals or anything on the fiscal side. he says, to me that means at best a ceiling. and at worst minus signs at year's end that force investors for future returns. then he says the worry for now is about the return of not the return on. >> so it is right that we have a very unbalanced policy that we've over-relied on central

banks. it's going to be difficult to get fundamentals to legitimatize financial crisis. so he's right there. the timing is tricky. because the timing really depends on markets losing trust in both the willingness and effectiveness of central banks who continue to do what they've been doing. >> i feel like we're almost there. >> i agree with you. i have said -- joe has heard me say on set we are coming to the point where central banks are less effective. in the case of bank of japan, becoming ineffective --. >> if not counterproductive. why haven't you been telling me about italy and who knows if that's the tip of the iceberg in the banks in europe? that's where i say is brexit causing this? or was brexit the result of what was already happening in e the

eu? in a system that was almost bound to fail because, you know, it wasn't thought out well. >> i have been warning about the european banks. a yield curve that takes away all earning potential. a recession that is likely to undermine credit quality. and third, certain elements that amplified the concerns mong investigators. so be really careful. why? because they've lagged the u.s. italy hasn't had a program so they've been able to become come play sent. now they're looking at them being lag. >> explain the way the risk of the -- it's not you're worried about a u.s. bank having some failing italian bank.

it's nothing like that. it's that the way to solve the problem in italy, the way to recapitalize under the new rules means that a lot of individual mom and pop bondholders could lose a lot of money. now you have a large group of italians they've lost money because of new eu rules. and another voice angry against this institution that clearly the people in the united kingdom are angry about as well. therefore plays into this whole idea of a threat to the structure of the european union. >> so that's exactly correct. this is not a lehman moment. this is not about banks counterparty risk. dead death has been sold in the retail segment. you have a lot of italians who hold this. and the political arm in italy does not want these losses to be imposed on them. they do not want these holders

of bank debt to be billed in as eu regulations foresee. so you have yet another tension between the political arm. and that adds to the issue of do the technocrats worry? >> yep. i mean, not that they would be better off under a different scenario, but it's hard to tell them that when it's about new rules. >> would you be a buyer today? >> i would be a selective buyer on u.s. equity on dips. i would stress look for companies that have strong balance sheets, positive cash flow, and good management. they tend to overshoot on the way down because they're widely held and they serve as the atm when people hurry. i just don't know about the absolute level.

it's much easier to talk relatives at this point. >> what do you think overall was overdone? the brexit decline or the brexit rebound? >> i suspect the brexit rebound was more -- yeah. and i understand why it happened. keep an eye on the effects segment. >> everybody that said it couldn't happen are the ones that -- so mohamed, let's say every country elects a associate democrats. then will the world finally be saved? is that what we need to do? >> if we get a comprehensive policy response that includes structural reforms to promote genuine growth, more appropriate

fiscals then better economics will justify asset crisis. >> so that's a yes. feeling the bern. all right. spend our way out of this. >> it worked in japan. >> through the right with a couple of structural reforms. i'm not sure what he means by that. >> don't over-simplify. if you do just one of the things, it's not going to be enough. >> all right. thank you mohamed el-erian. coming up, more than 300 captains of industry nothing off the table. i'm joined by tim armstrong when "squawk box" comes right back.

media and technology moguls gathering in sun valley for the alan and company conference. this takes place amid companies like viacom and yahoo. julia boorstin joins us live with a guest. >> tim armstrong, thanks for joining us here this morning. sun valley's always about deals. we understand that the latest bids for yahoo were just due. now, you're leading -- what do you think it's worth? >> two years ago we had the conversation that kicked off the verizon deal. we're one year out from the close. we're happy where things are at right now and on the yahoo

front, the same thing i told you last year is we're really focused on aol. our goal by 2020 is to get to 2 billion users. we're working on strategies to get there overall. i wouldn't comment on yahoo. this week focused on where verizon was going. i think we'll have a productive week. >> before i let you off the hook on yahoo, though, i know negotiations are ongoing. a lot of people are saying of all the companies making bids for yahoo, aol verizon makes the most. how do you think it will fate into your time. we've talked about this before. from a consolidations standpoint, you see silicon valley platforms getting closer to content mixes with ad systems overall. i think it's happening at a broader level and i think from our standpoint, you know, we're trying to focus our business in

on the 2 billion users and creators. so i think, you know, i won't comment on yahoo specifically. i know you want me to, but, you know, we're really focused on our strategic plan. we're going to do everything within that plan to get to those goals overall. i think we're going to continue to go down that path. >> we were talking about your predictions for m&a. specifically between silicon valley companies and media companies. >> if you look at the landscape where things are at right now. it's hard to imagine that platforms which are not everyone of investing content won't end up in more content deals. overall consumers migrate to high quality content. great differentiator for platforms. overall if you look at the players in silicon valley plus players like us, all of us are

hydrating towards important trend. if we were sitting here five years from now, i'd be surprised if you don't see it played. >> there's been a lot of conversation about brexit. how much are you thinking about brexit in terms of aol's exposure to europe? and how concerned are you on the impact going forward? >> i've been in europe the last two weeks for two different trips. both in france. i had a lunch with president hollande in france. brexit was a big topic oerl. but i think people are trying to focus in on reality now. i think this will be an interesting conference to hear global leaders, what their viewpoint is most people you seek to in the media on the east

cost -- for us we can't worry about that. the macro's important but for us the micro of our business is super important. >> the other part of uncertainty is the presidential election. which candidate do you think will be better for your business and business in general? >> since we own "the huffington post" and handle things on media properties, the more people discuss it, the more intense the election gets, the better for our business. up until the election, we're going to cover it as closely as you guys are overall. and i think at the end of the day, who you want is the best athlete to emerge from that election cycle. we don't know who that is yet. my guess is there's going to be a lot of page views for voters trying to figure it out. so far from a business stand point and the election standpoint. your guess is as good as mine. i don't know if we're going to get surprised in the u.s. but brexit was a surprise. >> so you're not making endorsements?

>> i'm not. the only endorsement i'm here is it's great to be here. the company has been a huge asset for us. nancy was the one who did the alen company. >> great. tim armstrong, thanks for joining us. >> thanks, julia. coming up, another hit for tesla. the automaker defending its decision not to tell about the autopilot crash until nine days after the accident. we'll have that story next. and as we head to break, quick check on the stock futures. dow jones industrial average would open lower as we see yields fall. 10-year yield near another new record low. we'll be right back.

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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. more trouble for tesla. the electric car maker says it didn't alert u.s. safety regulators about a fatal crash involving the autopilot feature in one of its cars until nine days after the accident. >> turn off your phone. >> sorry about that. >> you're on tv. >> phil lebeau calling me joins me with more. was that you dialing my phone? >> it was. get through the intro as quickly as possible. scott, there's two issues

involving this accident of a model s that was in autopilot mode on may 7th in florida. the first one did tesla follow the rules in terms of notifying federal regulators, should they have notified or let investors know. here's the timeline, may 7 when the deadly accident happens. tesla starts investigating shortly after that and still in investigative mode, it says, when on may 16th it notifies the national highway safety traffic administration. two days later tesla has a stock offering, secondary offering raising $1.46 billion expanding for the model 3 production in the future. it's not known about this accident until june 30th when nhtsa announces the probe. now the question of whether or not tesla should have alerted regulators sooner, follow the rules there, in regards to that, tesla tells us because the accident took place in q2 tesla would have been ob gly gaited to notify nhtsa in q3. that's how the laws work. notify them every quarter of the

deadly accidents. as part of regular ongoing communication and not a part of formal process, tesla told nhtsa about the accident while still in the process of conducting its investigation. with regard to the issue of telling nhtsa the regulators. with regard to telling investors over the weekend, elon musk was asked about this, tesla was asked about this, and elon musk e-mailed a reporter that the disclosure of the crash is not material to the value of tesla and, guys, that's the rub that a lot of people have right now. him saying that, the disclosure of the accident, is not material to the value of tesla, despite the fact that the company was going through a secondary stock offering after the accident took place, should they have alerted the public and said look there was an accident involving a tesla in autopilot mode, so you know we're investigating and don't know if it's because of the autopilot mode, should the public at least have known about that. later on the bid for solar city

and no mention of that as they were going through that process. these are the questions that are really at the heart of what people are asking about tesla right now. >> phil, do you think that musk has a credibility issue in the market? >> i think this one definitely raises a credibility issue in terms of you're going forward with a secondary offering and you believe that this non-disclosure, it's not material to the value, look, part of the value of tesla is this future technology. it is autopilot. it is the idea that they are moving towards self-driving vehicles. that's part of the allure of the model s and the model x. that's why sales have been strong relatively speaking. >> in the risk disclosure in the secondary -- in the prospectus for those things, they come up with all kinds of stuff that might happen that could influence it. >> right. >> this is something that had happened. so i mean, you know, you're going to put in all these theoretical things that might

affect it, it seems like something that actually did happen should have been disclosed. >> what's interesting, is that he sent that elon musk to a reporter saying look, this is not material to the value of tesla. that really lit the fire with a lot of people saying wait a second, who are you to decide that's not material to the value. >> the owners of the stock disagreed when the stock came out. >> well, you make a good point, michele. if you look at how this stock reacted and how it's reacted since the news has come out, i mean it really has not been under as much pressure as you might expect. we don't know if there is a defect with at pilot system. that's still under investigation. >> right. thanks, phil. >> thanks, phil. >> you bet. >> coming up, sports news, wimbledon could be setting up for a dream sister act finale. more details coming up next. ♪ i've got all my sisters and me ♪ shaquille o'neill in swiss. i haven't worked in swiss since. everyone called me crazy.

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frenemies becoming the "f," the friend part getting more significant there. i always think maybe comcast wish they had bought netflix when it had a very low market cap. just get rid of them then. this is, obviously, pretty amazing. you have to go to ap application to get on it now. it would be great to do it on your cable box. awesome. all right. make sure you can watch peeky bonders. >> thank you for the recommendation. >> "squawk on the street" is next. ♪ good wednesday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber, michael santoli at the new york stock exchange. the rush in to safety continues this morning with the premarket negative gold about $30 away from 1400. lots on the docket including ism services and fed minutes this afternoon. europe looks a lot like