breaking overnight. the nikkei soars as prime minister shinzo abe claims a landslide victory in upper house elections. new this morning, the farnborough air show taking off. big planes and bigger deals. the ceos of boeing and lockheed martin join us first on cnbc. elon musk, tweets about a new master plan suggesting details could come this week. it's monday, july 11, 2016. worldwide exchange begins right now. ♪

♪ good morning. welcome to worldwide exchange. i'm sara eisen. i'm wilfred frost. sara, i'm disappointed. we just got back from the uk and you bought -- where is phil lebeau reporting from? >> farnborough. >> maybe phil will pick it up. farnborough. >> that's what i get for mocking you on almost every pronunciation. >> she's been mocking me before the show went live. let's check in on the markets this morning. futures after a fantastic day on friday, the jobs number coming in much better than expected. markets in line with the economic data as opposed to reacting to the rate hikes -- we're basically fat in the pre-market. the dow expected to open 12 points higher. the s&p just below fair value and the nasdaq expected to open up about 7 points. we gained about 1.5% all three

of the major indices on friday. last week, we hit a record all-time low. 1.375% right now. after that big rally on friday from wall street, you're seeing the overseas international markets respond. let's show you the early trade over in europe. green at least for the german dax. up about half a percent. for france and for the ftse 100 as well. italy and spain under selling pressure. italy especially down 1% as there's more noise and more research, i thought a lot of research about the italian banks and what's going to happen. whether they receive a bailout. we'll get to that in a moment. let's show you the action in the currency market as well. you saw a bit of dollar strength on the back of a jobs report. seeing that dollar strength continuing this morning. nothing sharp but it's gaining by a weaker euro, stronger u.s. dollar. in asia, big move here.

shinzo abe, his ruling coalition winning a landslide victory in upper house elections yesterday. likely making it easier for abe to push through his economic agenda, ie, perhaps more fiscal stimulus, even monetary stimulus. the newspaper saying they will issue construction bonds for the first time in four years to fund that stimulus spending. we did see the nikkei react sharply. best move since february. what has helped that moof? the japanese yen weakening after that election. that is some relief for the embattled japanese monetary maker, shinzo abe and his team, kuroda. >> such a big move there. if you look at the fundamental data, it's not like abe's stimulus is really working. the fact it won't be easier for him to do more. should markets rally so hard? i'm not so hard. we did get data on the money supply front from japan.

broad money is not responding to what they're doing on the narrow ends. yes, there's lots of monetary easing. we'll have to see whether -- >> get more fiscal stimulus going. it's been lagging behind. the policy at this point has been weakening the yen. >> the developments politically this weekend mean he has a more powerful bow to shoot his arrows. >> absolutely. in other news out of asia to tell you about. new data showing the consumer price index rose 1.9% in june from a year earlier. that's notably under the official target of 3% this yeerg. still we saw gains 1.5% for hong kong, shanghai ending the first back-to-back gain since april. up about .3%. >> commodities, let's have a look at the action there. saudi arabia's energy minister says the oil market is more balanced and prices stabilizing. the minister was attending a

climate meeting in berlin. prices of oil are 1.5%. 44.7 for wti. they were down last week. i'm not sure if that's stabilizing. it's falling certainly sharply last week and again today. 44.7. gold prices, of course, they've been gaining in the opposite direction over the last couple of weeks. they are just above flat this morning. 13.60 the price of gold at the moment. this week is full of economic data. earnings season gets under way as well. there's no specific economic data today. look for may wholesale trade tomorrow. followed by june import prices. the june producer price index on thursday. also on thursday, pay attention to the bank of england's policy meeting. on friday, we get june retail sales. cpi and the first look at consumer sentiment for july. in earnings, our current reports earnings after the close today. csx and the report on wednesday,

black rock out on thursday. marking the start of earnings season. we'll hear from citi, wells fargo, u.s. bank corp. and pnc financial on friday and there's a meeting on thursday. the back half of the week will be fascinating. many expecting a rate cut from the uk. >> after carney pretty much strongly hinted at why wait, this is his opportunity to start the easing. >> what's interesting in terms of his rhetoric, the week before when i was in london covering that other meeting frngs he was suggesting that august that the rate cut would come. we'll have to see. i think there will be a rate cut this summer. possibly, people will be surprised if it's in august rather than july. britain dealing with aftereffects of the brex it vote. the global aviation group is in farnborough, they come to announce big orders while other companies showcase their latest technology. phil lebeau is there for us and joins us with the ceo of boeing.

phil? >> reporter: thank you very much. i am joined by dennis muhlenberg the chairman and ceo of boeing. should explain to people, we're not usually on the tarmac but we're in front of the poseidon. explain why we're here with david cameron coming in a few minutes. >> we're excited by today's news that the uk will be buying nine. providing new product to the armed forces here and ramping up our supply chain. >> reporter: no better time than this to talk about the impact of brexit. is it too early for you to have a true sense of what the impact will be for boeing and for other companies over the next couple of years? >> it really is too early. we don't see a significant impact right now. we have longer term perspective in our business. we've doubled our presence here in the uk over the last five years. we're going to continue to invest here. we don't really see our plans changing. >> reporter: in regard to this show, it's a little different than past years. the huge orders that we've seen over the last five or six years,

we're not expecting that to the degree this year. the focus is on the backlog. what do you say to investors who are concerned that the backlog is so great that the execution may suffer? >> we feel very positive about our backlog. we have 5700 commercial airplanes in our backlog today. we expect to build -- as steady orders flow, not as great as previous years, stronger in narrow bodies than wide bodies. this is about execution and successfully delivering on that backlog. >> reporter: that means the 737. you've laid out an aggressive production schedule up to 57 per month in a couple of years from now. do you look out and see a day where we could see 60, 65? where is the limit on that monthly production for the 737? >> right now we're focused on ramping the 57 a month. we're after the 42 a month. over a step wise period over the next three years, we'll ramp up to 57 a month. we see that as sustainable.

we're disciplined how we do the ramp ups. while we do that, we'll introduce the new 737 max. >> the elon orthopedic. i know it's not an order, it's a memorandum of understanding that could eventually lead to an order for 80 aircraft word $25 billion. a huge order for you guys. last week the house of representatives passes two amendments as part of a bill that would block that sale. how confident are you that ultimately you get this done? >> it's a significant opportunity for us. it's important that we continue to follow the government process step by step as we have done. it's important that as we go through the licensing process that everybody is treated equitably in this process. we're still hopeful that this gets done. we'll follow the u.s. government's lead. this is an important part of being a global business in the long run. >> you're saying if we can't do this, suppliers shouldn't be allowed as well. is your feeling, you've got to open this up, you can't pick and choose which deals go through. >> this has to be equal

treatment for everybody involved. if we can't get licensed to sell the airplane airplanes, nobody should. we think this is an opportunity opportunity and we want to follow that government process. >> a year into the job for you. what's the biggest surprise in the last year since taking over? >> i tell you what, one thing i've noticed is things like the xm bank reauthorization of. the fact that it was last year supported and approved by the senate and house, yet a year later we're still waiting for a full board quorum so that the bank can fully function. when you look around a show like this, it's clearly a globally competitive environment. so things like xm bank that help us compete on april global stage, that needs to be reauthorized with a full quorum for the board. >> we've heard that for a while. is that hurting orders? can you look at this and say it's hurting our business. we're not getting orders we think otherwise we would get. >> it is. we've lost three major satellite deals because of an xm bank that's fully functioning.

hesitancy in certain others. we need to get the xm bank fully functioning again. >> chairman and ceo of boeing joining us from the tarmac as you wait for uk prime minister david cameron here at the farnborough air show. >> we'll see you in a little bit. phil lebeau reporting live from the boeing ceo. in the meantime, other stocks to watch today. shares of nintendo on a tear thanks to pokemon go. it features augmented reality allowing players to catch creatures called pokemon using their smartphones. people all over new york city have been doing it. i have not played it yet. >> that's why you stayed in the city this weekend. >> look at the reaction for nintendo stock. pokemon go doing so well, it's about to surpass twitter in daily active users on android devices alone. seeking to hire an investment bank to explore strategic options after pressure from the hedge fund elliott

management. tomorrow is amazon's prime day and walmart isn't sitting idle. they will offer free shipping, no minimum purchase on online orders for five days to battle against amazon's big shopping event. >> more stocks to watch. kinder morgan sell to utility southern company for $1.5 billion. deutsche bosses considering lowering the approval threshold for the merger with london stock exchange group. a little bit of a move in the share price for lse, up one-third of 1%. welker health plans and senn teen corp. made competing offers for the aetna assets and looking to shed insurance plans to win approval for merger with humana. summer travel getting a relief at the gas puchl. prices dropping $.07. a gallon averages $2.29. the lowest prices can be found

in charleston, south carolina, an average of $1.91 a gallon. when we come back, it has been a decade since elon musk unveiled the so-called master plan to make tesla into a powerhouse. now he's hinting there's a part 2 and it is coming this week amid what's been somewhat of a difficult time for elon musk and tesla. we'll talk about that speculation next. >> today kicks off another earnings season. brings us to our facebook and twichter question today. will earnings recession end in q 2? much more still to come. we're back in a couple much minutes. [annouer] ist a force of nature? or a sales event? the mmerf audi sales event is here. get up ta $5,000 bonus on select audi models.

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an update on the brexit fallout. president obama saying at the end of the nato summit, he expects britt app to go through with leaving the european union. he also said it's most important that neither side harden their positions in ways that will ultimately do damage to harm their economies, especially as the world economy is so wobbly. on that note, treasury secretary jack lieu is kicking off a visit to europe today. he'll travel to london, paris, berlin and brussels to meet with counterparts and discuss the need to promote stability and growth following -- they will discuss the state of the global economy. british finance minister will meet with wall street's biggest investors today in new york. in a statement, osborne is saying that now is the time to

make the uk the most attractive place in the world to do business. also making the case in an op-ed which is my must read of the day. in the "wall street journal," not the financial times. >> i went to the financial times, naturally. switching gears to corporate tease. elon musk took to twitter to let his followers know about his p intention to publish part 2 of the tesla plan. this follows a difficult week after two fatal crashes of tesla cars and all sorts of questions about how he plans to combine solar city and tesla's stock price. >> and actually produce enough cars to meet the demand. >> that's the biggest question for tesla shareholders. a knockout punch, ufc reporting selling itself for $4 billion. the details of that coming up. first, as we head to break, here's the national weather forecast from reynolds wolf. >> wilfred, sara, good morning

to you. your forecast around the country will be a jumbled mess. we do have a chance of severe storms today across the northern plains moving into the midwest. chicago, a muggy and warm day for you. 91 degrees. new york with 83. a chance of thunder boomers in the afternoon. that would be good, we need the rain in the south. miami with partly cloudy skies and 90 dallas. oppressive heat that's been relentless. that will continue for a couple of days. 79 in los angeles. seattle with 72 degrees. high up in parts of the central rockies including the tetons, maybe a touch of snowfall. 1 to 2 inches. on the other side of the break, more worldwide exchange. sit tight.

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with an expert allstate agent. it's good to be in, good hands. welcome back to worldwide exchange. let's get you up to speed with the market. a blowout session in asia. in part, responding to strong gains in wall street on friday. but also some election results in japan adding more power to shinzo abe's position. we're looking at the nikkei up some 4%. the yen fell over 1%. which has helped that move. gains also for hong kong and shanghai. that is carrying through a little bit to the wall street session in the futures market. as you can see, only slight gains expected after we closed high on friday to the tune of 1.5%. sara. >> inching towards records for u.s. stocks. a news outside the world of business, president obama returning to the white house one day early from his overseas trip and tomorrow he will travel to an interfaith memorial service

in texas for the victims of the dallas shootings. nbc's edward lawrence joins us now with more than. good morning, edward. >> reporter: good morning, sara. a lot of healing that has to go on. the president wakes up in the white house. he will get a briefing this morning about the dallas investigation where five police officers were killed. president obama is back in washington after spending the weekend in europe. he now turns his attention to healing the nation. while balancing the call for justice from the black lives matter protesters. >> i think that the overwhelming majority of people who are involved in the black lives matter movement, what they really want to see is a better relationship between the police and the community. >> reporter: he will travel tuesday to an interfaith memorial service for the victims of the dallas shootings. the dallas police chief says the gunman, micah johnson, had sinister motives for his spree. >> based on evidence of bomb

making materials and april journal that this suspect had been practicing explosive detonations and that the materials were such that it was large enough to have devastating effects throughout our city. >> reporter: brown also mentioned the suspects wrote the letters rb on the his own blood on the parking garage where s.w.a.t. teams cornered him. protests erupted in states recently affected by police shootings, louisiana and minnesota. and cities protesting this solidarity from the east coast to the west coast over the killings of african-americans at the hands of police. the president still facing questions about the feeling among law enforcement that he sides more with activists than police. wilfred, sara. >> edward, thank you very much. in other political news, the rnc platform committee starts a two-door meeting in cleveland today talking about -- key issues expected, abortion, and

trade. the rnc convention a week from today. cbs called it the trumpiest show on earth. >> at no, sir much focus as we feared a month ago. >> looks like trump has it locked up. >> let's move to sports in the final of the euro championships last night pitting portugal against host france. portugal played most of the game without cristianory nald owe who left with a knee injuriment on to extra time. in the 108th minute, he broke through with this strike. portugal won 1-0 pulling off the stunner over france. it's the country's first ever major international title and throws cristiano rinaldo with all the greats. >> that was a surprise, right? >> big time. to another tournament on the grass this weekend. the wimbledon men's final at the

all england club on sunday with andy murray facing milos roo nick. >> the second ranked player winning in straight sets to capture a third grand slam title. the second british man to win multiple tight ms prince william and his wife were there. david cameron, i think, was also there with murray. >> gave a nod to him. >> the duke of duchess -- william and kate. moving on, ufc the most recognizable name in mixed martial arts is coming under new management. "the new york times" says it sold itself to a group led by talent giant wme img for $4 billion. there are other -- the primary owners, frank and lorenzo fehr

it rita will stay on. it's shown in 150 countries and 2,000 hours of material for tv, pay-per-view and streaming service each year. that sport has grown fast. >> a new contender. secret life of pets pulled in $300 million in the u.s. and canada. the movie from universal and elimination entertainment the maker of despicable me follows your pets when you're not home. it is the sixth biggest opening for any animated film and the best ever for any original movie, animated and otherwise. pixar ses finding dore i falling to third. it has made $422 million, making it the top grossing movie this week. >> when does the bourne film come out? >> i don't know. >> mind less blockbuster better than kids movies. market action, plus we head to

the farnborough air show. shows off the late wares and signs deals. marlin hughson is coming up p

good morning. stocks rising around the world. will earnings season derail the rally? >> a cnbc exclusive. the farnborough air show taking off. big planes and bigger deals. the ceo of lockheed martin joins

us live. >> plus, today's top trending stories. pokemon taking the gaming world by storm and this is no child's play. it's monday, july 11, 2016. you're watching worldwide exchange on cnbc. ♪ ♪ good morning. welcome back to worldwide exchange on cnbc. i'm sara eisen. >> i'm wilfred frost. >> how was my pronunciation. >> i must support it. if i criticize -- correct. very nice. let's check in on markets this good morning. green across the screen for the u.s. futures. not to the extent we saw on friday. strong gains on friday of 1.5%. all ten s&p were in positive sector. seeing gains this morning as well. ohm about 44 points for the dow. the ten-year note which last week had an all-time low 3.21%

is at 1.376% this morning. we're seeing gains in europe. but a little bit more muted than in asia. europe up around 2/3 to 1%, if we look at asia, you'll see blowout gains, in particular for japan where we saw upper house election results go in favor of the ruling government under abe which could add fire to his reform programs. in particular, possibility of delivering their constitutional reform which has been much needed for him to push through the sort of supply side reform that he hasn't been able to pass thus far. 4% gains for the nikkei as the yen sells off. the hong kong up 1.5%. >> as for the broader market picture, let's show you the dollar building on strength that we saw after the better jobs report on friday. 11026 is the euro. the dollar is rising against the japanese yen. that's great news for japanese stocks. part of the reason we saw a 4% rise there.

it's moving there. the british pound under pressure, which is something we're used to seeing these days. it's down about .6 of a percent. 128.73. keeps getting weaker and weaker. >> m i'm going back to london. means i'll be able to buy more stuff for you. >> quickly show you oil. it's under pressure that could be a cautionary sign for the market. wti crude down 1.2%. it's now below $45 a barrel. 44.86. brent, international benchmark above the $46 level. >> we've got to focus on that. that's a crazy big move. as you rightly say, we're below 45. somewhere from the $50 stability we thought we were in for quite some time. >> it was rallying but then the steam was taken out of oil's gains. gold also which has been on a roll post brexit and all year long, continues to climb. gold and silver have been standouts recently.

the bid for safe-haven assets, the idea of global easing going into another cycle helping out. this week, the focus is turning to earnings. alcoa after the bell, the banks later in the week, that's going to be what we're watching. there's another decline predicted in profit. we'll see. usually they come in on the bottom line. we'll see if we can get out of the earnings recession or get better guidance to show it's coming in the next quarter. >> focus on the banks of england. we did see a blowout jobs number on friday. markets responded positively to that. as if to say we're still not getting tightening. >> the tootening is key because the bond market barely moved. you're noft seeing the jump you normally would. we weren't heading into a recession. if you remember, the may number before that, it was revised even lower, down to 11,000 jobs. there was a strange contrast month to month on jobs that economists were trying to figure

out. you usually don't see that kind of volatility. >> the easing and the talk of easing following brexit puts the brakes on the u.s. being able to tighten as well. >> goldilocks. >> people liked it. >> good day with no recession but no monetary tightening. the fcc stocks at a record high. stocks tend to do better when the weather gets warmer. landon dowdy tracking that for us all week. she joins us with more. welcome back. >> sara, good to be back. all finally together. summer is officially in full swing while some investors follow the proverb sell in may. looking back over the summer since 2010, there are five s&p 500 sectors at that heat up as the weather gets warmer. we'll call them summer siz letters. the top five sectors, telecom at number 5. here are the stocks who have outperformed. frontier communications, 8%

return on average with -- when you think of frontier, you think of internet and phone services. but it provides solar energy. verizon heats up with an nfrj return of 1.3%. trades 50% of the time during the summer. sara, will, tune in tomorrow for the number 4 spot of the ligs of summer sizzlers. >> i like it very much. let's get on to the top trending stories. pokemon go taking the gaming world by storm. the wildly wop f popular app using augmented reality for them to catch pokemon using their smartphones for the app. it may have turned out to be more than gamers bargained for. reports surfaced of criminals using the app to target victims and rob them. in missouri, police stating that suspects lured players to an isolated location, later robbing around 8 or 9 people. still, social media responds to the game has been overwhe

overwhelmingly positive. getting people walking around and making real life friends. martin shkreli getting in on t if you see any pokemon near 42nd and on the east side, move along. they are mine. i will find out of and sue you. go somewhere else. thank you very much. >> despite the side stories tot it's led to a surge in nintendo prices. it's almost the most used app downloaded app. >> you should try it. >> a magz. >> have you tried it? >> i have not. i've seen others. we should try it together. >> okay. now back to the small uk town much farns borrow. >> no s. >> farnborough. >> aircraft makers coming to the air show to announce big orders and our phil lebeau is there with the interviews. he joins us with the ceo of lockheed martin. good to see you. >> let my bring in the ceo of

lockheed martin marillyn hewson. >> we're hoping the rain holds off. >> the f-35 is flying later this afternoon here. a huge milestone for this program and for this jet. >> it is. we're very excited about the f-35. we're going to have a debut here at farnborough. in fact, the f-35b. it's going to have a vertical landing. the public will have a great show, have a chance to see the capabilities. >> reporter: this is a long time coming. but you know the critics are saying the cost of this program, it's prohibitive. they question whether the u.s. government as well as others buying this airplane, if it's a wise purchase given the cost overruns. what do you say to that? >> i'd say we're excited where the program is. we have 180 aircraft flying today. we're bringing that cost down dramatically from the very first aircraft, which on a development program is going to cost more obviously. with that many aircraft delivered, we're down 57% from the first aircraft that was delivered and we're on a path to

be down to the price of an $85 million jet by 2019, which is comparable to a war -- generation aircraft. >> reporter: when you look at the contracts, the next phase, you're in the process of negotiating that now. where do those talks stand? >> we're on the way to initial production, nine and ten. that discussion is going well. of course, we continue to see other countries around the world make their decisions. denmark just agreed to buy 27 jets. we continue to move toward that as well. >> reporter: a big part of the theme here at the show andry add last week is defense m and a. you are no stranger to that. certainly with sikorski last year. do you see that continuing for the defense sector? >> we're excited about the acquisitions. we're showing our blackhawk helicopter here at the show. that's an armed helicopter.

an opportunity for us to continue to produce that aircraft forearm is around the world. in terms of m and a, in terms of the mergers and acquisitions capability, we'll continue to see that happen in the industry. >> reporter: does that cycle pick up? >> it depends on supply and demand as you know. to the extent that cops come together, we'll owe open companies come together, we'll watch that. it will happen at the second and third tiers in the business. >> reporter: final question. so much focus on uncertainty starting here in europe, you go to the middle east, the far east. those uncertainties have people saying these defense budgets, we're at the beginning of a cycle for an increase in spending. how far out do you see that cycle continuing? >> what i see today is the global security challenges are not diminishing. there's a lot of threats around the world and countries are looking at where they spend their important budgets on. they continue to focus on defense. so you'll see a lot of countries increasing their defense spending because they need to address the threats that are out

there. we're going to be standing ready with our broad portfolio of technologies and capabilities to support them. and we look forward to being there for them as they protect our citizens. >> reporter: marillyn hewson. weather holds up, i think it will, we'll see the f-35 flying here later on today. back to you. >> we'll see you later on c nx. phil lebeau thank you will very much for a great interview. george osborne's lessons for -- don't miss an interview with sat i can't that della at a conference later today at 10:30 a.m. eastern time. we'll be right back on worldwide exchange. th's also truof a od car company. buwe saw an opportunity in sharing cs. so we moved fast and launched car2go i29 all ound the world.

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welcome back to worldwide exchange. a farewell performance in hamilton. three additional cast members also dee paragraphing the musical. all four cast members bowing. set to the west wing's -- it was on facebook live. so they could see miranda and the others say goodbye. sterling, sterling effort from the whole team. >> a lot of people tuned in to facebook live including my sister who was bummed she didn't get the final lottery. it was a modest goodbye. >> an extraordinary performance.

i'm sure he'll continue. he will surprise people. the usa network giving mr. robot fans a huge surprise. the network owned by nbcuniversal, releasing the first 40 minutes of the show's second season on social media three days before the actual release. appropriately, the show about a renegade computer hacker interrupted its own facebook live session with a message from a hacker before unveiling the new episode and went on to other social platforms as well. twitter and snap chat and everything else and took it away. >> i've never seen the show. >> i haven't either. it's a clever marketing. >> i've got to get through it quickly. >> you're way behind. it's so good jack dorsey. the latest victim of a twitter hack. the twitter account was briefly taken over by a group over the weekend. a tweet linked to the hacker's website in a video that displayed the group's name along with an image of a hooded figure. in the same span, they appeared

to have her account hacked by -- they're obviously pretty good hackers if they're getting into the accounts. >> the ceo of twitter. i don't know if that's the best optics for the company. now to today's must-reads. the stories catching our attention. former treasury secretary larry summers writing in the financial times, voters key deserve responsible nationalism. the reason you're seeing the brexit vote and the rise of what he calls demagog, anti-globalization, donald trump is the economics need to change. what he writes is what's needed is a responsible national itism approach where they're expected to pursue economic welfare as a primary objective. but where their ability to harm the interests of citizens elsewhere is circumskriebd. he says not necessarily less integration but more of an awareness of what these

policies, whether they are global by nature or not, are doing to help citizens and just be more inclusive. he gives examples like the italian banks and the bailout from that shouldn't be the word from brussels. >> interestingly, you picked that one. similar themes echoed in my pick this morning. op-ed by britain's finance minister george osborne. it says britain is open for business, he says. our economic trade ties with north america must become stronger. my message is simple. we're not withdrawing from the world. britain will be a beacon for free trade, democracy and security more open to the world than ever before. and he goes into it to say that when he took off in 2010, corporate tax was 28%. it's already down to 17%. he wants to cut it further to 15%. this doesn't mean american businesses should disappear. the fact that britain pulled out of the eu, it's -- very good

tone. offset it a bit -- for the first time in 40 years, the uk will set its own trade terms. that conversation starts with the u.s., of course. his old pal that helped him during the campaign, obama said that the uk would be the back of the queue if they left. they're changing their tune. i wonder whether that message got across during the campaign. >> does he have a role in the next government? under the next prime minister? >> we don't know. >> it's hard to make promises to wall street here in the u.s. if he doesn't, in fact, know how the negotiations are going to go when it comes to london as the financial center. >> right. he's close to the theresa may. perhaps he would remain in government. >> if she wins. >> if she won. we'll have to wait and see. good point, though. we're approaching the top of the hour. the team is getting ready for "squawk box." michelle caruso cabrera is live sass we watch futures go to

record highs. >> could be another good day. as you know. you've seen them. phil lebeau at the farnborough air show. the ceo of virgin atlantic. i'm sure we'll be discussing that editorial by george osborne where he makes a good point that now the united kingdom can be more competitive with the shackles of what tends to be socialist eu policy. could be better off if they get it right. of course, it depends on who is in government as you guys point out. there is a study. people pay to do studies but there are too many bosses. i mean, i don't think that's true where we work, of course. however, i hear it's a problem in other places. we'll discuss. >> well, there we go. i'm interested to listen to that discussion particularly. if there's any veiled implications during the discussion. michelle, thank you very very much. we look forward to "squawk box" in 12 minutes time. still to come, your stocks

climbing towards record highs and bond yields hit record lows. we'll have a weigh in on the drivers next. we'll be right back. josh, don't you haveiends?

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for the privilege of flying higher and higher, tether. ♪ stocks are rallying. s&p 500 flirting with record territory. john bill ton head at jpmorgan asset management. good morning, john. >> good morning. >> how do you reassess u.s. stock now that we have retraced all of the post brexit losses and are heading into earnings season? >> well, i think you got to recognize that the u.s. is looking at two things. we saw evidence of that on friday. number one, we had a strong jobs report. one which was demonstrating that the labor market is still relatively strong. of course, that's the life blood of the u.s. economy. but also one that's not quite overheating yet. the average hourly earnings were

still in reasonable sort of neutral kind of range. so it's suggesting that the economy is warm but not too hot. then, of course, look at what happened in the current season, the bond markets, which suggested that actually the market believes that the fed are very much in a first do no harm kind of approach to the world right now. of course, what that means is, reasonable growth in the u.s. supportive policy around the globe. of course, the likes of the other central banks potentially about to add more unrefined cane sugar to the mix as we talk more about stimulus from japan, possibly the uk and as we move towards the autumn, possibly each the ecv. >> john, as we go into earnings season, which sectors are you looking for possible positive surprises? >> i any sectors that have suffered from the weakness that we saw during 2015 in energy, i mean, clearly energy stocks have been one of the best performing sectors during the course of this year.

ultimately, we'd be looking for some of the headwinds from oil to have passed and secondly, those big exporting sectors which have suffered over the course of 2015 from the strong dollar. evidence that those headwinds are now being taken away would give reassurance to markets -- to investors into u.s. markets. >> john, you've got a global view. i want to ask you about italy which stands out today as europe is in the green minus the italian stock market. how much of a problem right now is the stress in the italian banking sector and how will it play out and how many ripple effects will it cause? >> i think italy is a known issue for europe. i mean, i think what we're seeing is a couple of things coming together. there is a balance sheet problem within the italian banking sector which is well-recognized by the markets. there are mechanisms which need to be put into place potentially to shore that up. the issue you have with negative rates in the eurozone is it means that the ability for banks

to earn their way out of trouble has been severely compromised. i think what we're seeing now with further talk of stimulative monetary policy, just another refocusing on the balance sheet problems and the lack of earnings potential out of the banks within italy and more broadly across europe. it's absolutely pivotal as to how this does play out. broadly speaking if we look at past rallies in european stocks with the exception of the.com boom, they're led by the banks. until the banks demonstrate the ability to earn, it's very difficult to make a bullish call on europe as an investing region. certainly in the equity markets. >> john, do you think we have to see more easing as well across europe and maybe the uk to get economies going again? is that what you expect this week? >> where herein lies the issue. part of the problem is we've seen the limitations of negative rates. we move probably more towards

credit easing. potentially that's the route we go through. as far as the bank of england, clearly market pricing for cutting rates either at the july meeting or potentially the august meeting. certainly, that does seem to be a broad consensus given the downgrading of growth trajectories for the uk. i think what's more broadly helpful, though, is to think what are the levers that the bank of england could potentially fall. we've seen the counter cyclical -- potentially giving more leeway for banks. could we see credit easing, funding for lending, it's making sure that credit gets into the end economy that's more important at this particular point than necessarily the headline monetary policy rate in my view. >> is the bottom line, john, it sounds like you're saying that the u.s. stock market and potentially bond market is the place to be right now if you want to be defensive and if you want to be in a resilient growth

environment. >> well, we're in a world where growth is positive but not spectacular. brexit clearly has removed a few percentage points out of potential uk growth and at the margin takes global growth down. the fact of the matter is, when you're in a low growth world, and a world where you have got stimulative monetary policy, you've got a couple of things going on. first and foremost, a great reaching for yield. that's happening within the bond markets. that's leaking into the u.s. treasury bonds. but also in the equity markets, you're looking for defensiveness and quality. simply put, the u.s. market is more or less perfectly placed for low growth world. >> thank you, john. john built on. 30 seconds left to g highlighting a few things we're watching today. financials is your pick. >> the financials. we're going to gept bank earnings toward the end of the week. you wonder how much bad news is baked in. it's still the worst performing group of the year. it could hardly have a worst

interest rate environment. we'll see that later in the week and "squawk box" is coming up in five seconds or so time. have a great day.

good morning. japanese stocks soaring after a landslide election victory for the country's prime minister. plus we had the jobs report and that still matters to the rest of the world. new this morning, the farnborough air show takes off. big planes and even bigger deals. if there are kids wandering around your neighborhood looking at their smartphones in kind of a different way, even more focused, they're probably catching pokemon. it's the new game that has nintendo stocks soaring. but it is generating controversy. it's monday, july 11th, 2016. "squawk box" begins right now.

♪ live from new york, where business never sleeps, this is "squawk box." good morning everybody. welcome to "squawk box" here on cnbc. i'm becky quick with michelle caruso-cabrera. andrew is off today. let's look at the equity futures. the dow futures are in the green once again. 46 points higher is the indication. s&p futures indicated up by five and the nasdaq up by 19. the s&p 500 trading near record highs. in fact, the all-time closing high is 213082. the -- 2134.72. they were set in may of 2015. they were tested on friday. you saw the s&p closing within just a few points of that record level. 2129. overnight in asia,