♪ 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, the nikkei

gape gaining 4% as the shinzo abe won a landslide victory in the upper house elections held yesterday. this is likely to make it easier to push through his agenda. the nikkei up by 4%. the shanghai composite was higher as well. in the early trading on the european markets, innings are mostly in the green there as well. the dax is up by 1 1/3. the ftse up by 3/4 of a percent. we should take a look at crude oil prices. energy giving back some ground. in fact, wti down below $45 at 44.84. >> still no clarity perhaps on what will happen with the italian banks. that may be why. that's the outlier. >> this week is full of economic data. ernest season gets -- may wholesale trade followed by june import prices and the fed book on -- also on thursday, we don't

normally pay attention to this. but the bank of england's policy meeting is going to happen. on friday, june retail sales, cpi, industrial production and the first look at consumer sentiment for july. in earnings central, alcoa reports earnings after the close today. csx and young brands on wednesday. jpmorgan out on thursday. marking the official start to earnings season. we're going to hear from citi, wells forgo and pnc and others on froo. ufc is the most recognizable name in mixed martial arts. $2 million like ten years ago. valued at. valued at 4 billion now. it's coming under new management. "the new york times" reports the league is expected to announce that it sold itself to a group led by my agent. parent group wmeimg. for about $4 billion. other backers include private equity firms, kkr and silver

lake. also in michael dell's investment firm, msd. the primary owners, frank and lorenzo fertitta will stay on as minority investors. they took it to a new level really. ufc's fights are shown in more than 150 countries now and generate 2,000 hours of material for a tv pay-per-view and streaming services each year. they also bought the rodeo, the bull riding. he's got img and all these other things going on. but he garon he owe he tells me my situation is still like -- >> most important to him. >> yeah. >> there are synergies. you threw the ball out at the baseball game. you can make an appearance now at ultimate fighting. >> no one really could be a fighter. more of a lover than a fighter. not much of a lover either. do you have to be a fighter or a lover or none of the above?

>> most of us fall in the middle ground. >> he says, yeah, like the most -- wakes up thinking about my career, wakes up and works on it all day long and then has time for some of these. >> did you ever see cars? >> what about the cars? >> remember his agent, he's like hey, you're my best friend. you want to come with me? >> it's great seeing you. talk to you later, bye. >> he may have other things going on. >> we'll talk about this later. bringing up cars makes me think of animated films which makes me think of secret life of pets. i want to talk about that. >> oh, yeah. >> our kids just saw it on friday. >> super cute. comcast stock ran up last week on thursday and friday to all-time highs and a lot of it, the buzz was about how this movie was going to do. they wanted it to do 95 million, it did 103 or 104. something like that. >> kids love it. it's tied in with mcdonald's. we stopped sto get breakfast and we had to buy one of the toys.

>> that's what i want to talk about. so if the -- let's say -- >> didn't get a happy meal. i had to pay two bucks for a toy. >> let's say there's 2 billion shares outstanding and the stock goes up a dollar or two. you look at 4 billion pds. i'm trying to figure out what kind of multiple you put on a billion dollar movie. it will probably do a billion dollars or something and everything else. it's impossible for us to understand a multiple. >> the franchise -- [ overlapping talking ] >> you can have merchandise. you can have sequels. you get one of these things and when you launch the first one like minions. the pets are doing different things. >> and it's animated, you can do whatever. >> the simpsons never got old. >> talking about other -- the bunny is so cute. someone drew it. it's not cute. it's not a cute -- >> it is cute.

of course it's cute. >> this pokemon thing. >> we got to read about that. you see the crazy stuff happening. >> she was just telling me about it. >> i looked at her phone and there's things happening. it's like mixed. >> they're mugging people to get their pokemon. >> it's the story coming up. it's crazy. i don't know how to explain it. >> what the heck. cyber security company imperva. to help explore strategic p options. >> it's a play on impervious. >> pressure from the hedge fund elliott management. tomorrow is amazon's prime day. walmart is stepping up. the competition. walmart will offer free shipping and no minimum purchase on all online orders to battle against amazon. >> free shipping even if you -- >> as long as you become prime. it's an invented holiday.

>> for that day they do -- >> getting you to join prime. >> exactly. >> here's the nintendo story. crazy. shares of nintendo are on a tear thanks to pokemon go. the viral game features augmented reality allows players to catch and train special creatures called pokemon using their smartphones. it's been available in the united states since wednesday. quickly tomd the list of downloads on the app store. it's expected to be released in japan soon. it's free to play but offers in app purchases. it has support from high-profile people cig chrissy teigen for example. she's been tweeting about it and playing it. hedge fund martin shkreli gets in on the fund. he's tweeting if, you see pokemon near 42nd ond the east side, move along. i will find you and sue you. they're mine. go somewhere else. thanks, manage: listen to this. some controversy about the game over the weekend in owe fallon,

missouri. outside st. louis, police say robbers used pokemon go to lure victims to a parking lot yesterday morning. they put up a so-called beacon on a location to draw players to the spot. police say around 2:00 in the morning, four teens robbed a person at gunpoint who was playing the game. >> wow. >> it wraps reality. you're looking at a screen but it's matched up with the skreet there. >> your daughter plays it. >> and my son. when they told me about this new game with pokemon. i said pokemon, really? >> treasure hunt. >> it's the way it's done. resurrecting pokemon as being something -- >> it's pocket monsters. >> you play on the phone and you see what? >> describe it to me. >> you snap it or something. >> you could have a pokemon

around you. >> pocket monster. why are you laughing? stop laughing. just because the camera is on you. >> he never thought i'd out him on that. >> pocket monsters. >> especially with what he's done. >> speaking of, we should talk about the global rally following friday's strong jobs report here in the states. u.s. stocks are set to open solidly in the green. joining us is drew maddox. you have ubs's deputy kmeef economist. friday was something to watch, drew. you're looking at stocks sitting within a couple of points of at time highs. >> it tells you one is wrong. >> my view is that the bond market is wrong. you're seeing inflation pick up. you'll see that, i think, later this week. you're seeing average out of the earnings to -- you've seen a recovery in job growth. looks to me like actually the slowing in job growth since the beginning of the year has more to do with the fact it's hard to

find good people than we're not producing enough jobs. it's increase lg i difficult to fill the roles created. >> i kept seeing that. one person or one side has to be wrong. i don't know why. >> i think it's different this time because you're looking at global forces that are -- >> if it says that one is risk on and one is risk off. that's supposedly why. we've been told all along, if it's going to be zero and stay there for a long time, stocks are the only place to be. not only that, in low interest rates, they'll stay low. multiples expand. i don't understand why they're mutually exclusive. >> it's risk on -- >> how does it end? >> they're only about five years old. >> how does it end? >> doesn't end until rates go up. as long as they stay low, based on what becky talked about, the global -- >> so -- >> you're safe with multiples being as high as 20 times earnings then. you got to put your money

somewhere. where are you going to put it? >> my view is that it works until it doesn't. then once it breaks -- >> recovery. >> once it breaks down, once either inflation picks up and yields are moving higher or alternatively the economy rolls over, one of the two sides will be right. one has got to be wrong. >> if you look at the bond market, what do you do with your money in the meantime? it could last five years, ten years. nobody knows how long we'll be -- >> if it it's japan, it could be 20. >> if you're looking at the long periods, what should you -- should you put money in the bond yields that's what i think a lot of investors are trying to figure out. >> ask yourself the following question. would you like to put your money into a bond and lend it to someone and get back the less of rate of inflation? >> no. >> or less than you length them on a nominal basis. we have finite life spans, right? >> the idea of negative yields

makes sense. why would you ever defer. in augmented reality maybe. >> that's what i'm going to do. >> you're going to upload. >> download myself. >> what if -- what if global bond yeeds are telling you actually that you will make above the rate of inflation? what if the whole world is becoming japan? well, the evidence of that is pretty low, i think. we're actually seeing inflation in the united states, we're seeing wage inflation in the united states. we have i think unlike japan, particularly the united states, we have positive population growth which typically leads to positive growth in the economy on a real basis. and if we look ahead to kind of productivity numbers, if we look ahead to what looks like the second quarter is going to look like for productivity, it looks like it will accelerate. our growth rate is relatively stable but our rate of payroll growth has slowed.

real growth in the economy is beginning to look like the potential seems like it's beginning to creep up a little bit. not fast. not enough to get the fedex sighted certainly. but it seems like it's moving. >> i think if she raises rates, it takes some of the pressure off other banks. i look at all central banks as being linked together. if one begins to pull a little too far from the others, then the others have to follow. but if the fed is low as it is, and maybe it should be higher, everyone else has to be that much lower. >> they don't have to work so hard if the fed raises. >> they don't have to be as negative. >> friday was such a good day for i think japan up as much as what we did friday as -- >> as the abe election. >> i'm back to thinking that gold is the place to be. you know the big wrap on gold,

it doesn't pay any interest. if cash pays negative interest. >> then it's a bonanza. >> it's no worse than bondo owe you're not getting a yield anywhere. you might as well be in something that's been the currency of the world for -- >> you can get -- >> i don't think it's over for gold at all. what's that? >> you can go through the storage cost rate. how much does it cost to store x amount of cash. >> you have to buy a safe, right? >> it doesn't cost money to -- if you're going to hold -- >> get a lot of it. >> fort knox. >> i mean, i didn't -- i may have sold maybe some -- i would have sold something maybe to buy some gold. comcast has been better than gold anyway. i'm not bitter about this at all. but i still think gold might be -- >> he tried to buy at the low. right.

>> got through all this paperwork. >> in-app purchases. >> such as pokemon. >> am i uploading myself or downloading myself? >> i don't know. you can go either way. >> you know that about me. not that there's anything wrong with that. if i take my brain and go make it hardware download, is it uploading or downloading? >> i think you would up load. think of yourself as upgrading. >> probably not going to be able to -- smart enough to do it. i'm going to get an avatar. i've reserved andrew's avatar. >> why do you want andrew's avatar? >> i want to look like andrew. >> you don't want to look like you? >> my avatar -- >> crazy future for all of us. >> andrew, thanks for coming in today. good to see you. when we come back, nbc news confirming that the trump campaign is vetting retired general michael flynn as a potential running mate. we'll be joined on the veep

stakes after this break. for decades, investors have used a 640 stock and bond model, with lite in altnatives. yet alteates can opportunities that traditional assets can' and even though they're theye actually designed to he meet very traditional goals. 'shynvesco believes people should look past conventional models and make alternativea core part of their portfolios. translation? goodbye 60/40, hello 50/30/20. ♪

donald trump expected to

announce his vp pick. a lineup of speakers will be announced also. meantime, this is -- bernie sanders may or may not at some point endorse hillary clinton. will it happen? when will it happen? he may appear at a rally with hillary clinton in new hampshire tomorrow. here with the latest on the campaign trail is chief washington correspondent t john harwood. >> i can solve that miss for you, joe. it was a quiet weekend in the campaign as the nation was digesting the aftermath of the horrific shootings in dallas. the earlier police shootings in baton rouge and minneapolis and the candidates wisely lay low over the weekend. it's going to accelerate this week. donald trump is honing in on his vice presidential candidate. let's look at who the leading prospects are. number one in my book, this is where my money is. mike pence the governor of

indiana. donald trump will campaign with him on tuesday. trump has said he would announce his pick before the convention. you've got newt gingrich, the former house speaker, chris christie, of course the governor of new jersey who ran earlier this year and retired general michael flynn who is a democrat and critical of obama. that name was floated over the weekend. as i said, my money is on mike pence. secondly on the democratic side, hillary clinton over the weekend made a series of policy conceptions on health care to bernie sanders. proposing or affirming her support for letting people buy into medicare at age 55, expanding funding for community health centers, reaffirming her support for some sort of public option in obama care. bernie sanders in return sealed the deal. he's going to endorse her on tuesday. but that event, again, is likely to be overshadowed because president obama is going to speak in dallas with a message of unity for the entire nation.

so don't know how much attention the sanders, clinton event will get. certainly it's welcome on hillary clinton's camp. she has been struggling to finally unite the party, get the last vestige of sanders supporters holding out. that will give her some sort of boost if not immediately over the next few days, guys. >> some of the hollywood types that are way left are -- they were mad -- it was bizarre john. the world is topsy turvy. they were made at comey too. they thought if comey indicted her, that would be bernie's chance. mark ruffalo, some of those types. >> tim robbins. >> susan sarandon. they may never, even if bernie does do it, they may never -- i don't know how many are there? >> you get in the campaign and you may be an extreme long shot and you may understand that. but once you get a taste of that electricity of the crowds and

the adulation of people, it's hard to give it up. >> i was going to say, i spoke with one of the guys organizing the bernie, pro bernie events that will happen at the democratic national convention. he was so anti-hillary and i said, well, does that mean you're going to vote for trump? what do you do? he said, this is a quote john, we will never vote for the demon named hillary because we fear the devil named trump. we will only vote for a saint. so i'm not sure how many of the bernie sanders -- >> sounds like a genius. >> but they're hardcore. i'm not sure. they're talking about trying to disrupt the democratic party and getting people to deregister from the dnc. >> wow. >> i think michelle, there's a group that may feel that way. but i don't think it's a very large group and i think that what is likely, hillary clinton has been getting in polling somewhere in the low to mid-80s

of democrats. you pretty much need in our modern party system, 90% within your own party to be truly competitive. i think it is likely. i don't know where she's going to be within her party five days from now. i think she's likely to creep up a little bit once bernie finally gets on the stage and holds his hand up with hers, the sort of classic unity salute. there's some holdouts and some never hillarys too, just like there are never trumps. i don't think there's too many of them. >> john, over the weekend,th democrats put together their party platform. there's a lot of influence from bernie sanders and elizabeth warren. is -- people who had been looking back and forth at the two parties -- >> certainly it gives ammunition for republicans to use with centrists.

but the truth is, the party platforms don't influence too many people. it's an insider's game. it's a fight among people who are trying to send signals about the future and the things that hillary clinton accepted from bernie sanders, i wouldn't bet a lot of money on hillary clinton, for example, when she becomes president expending an enormous amount of political -- >> i think $15 -- >> everybody making -- >> $15 federal minimum wage. >> they endorse the idea of eventually going to $15 minimum wage. do i think she's going o push that and it's going to be front and center? i doubt it. >> something else that i was thinking -- oh, what is the -- i know there's a real clear politics like combination of all the national polls, john. we follow that. but every once in a while a big

one comes along and i'm sure like rasmussen was way wrong last time, i think. i don't know if people still follow that. gallop you probably follow more. when is the next big one due to be released that includes all that fbi stuff from last week? >> i'm not 100% sure. i think we may have a poll coming out this week. >> nbc "wall street journal" right? >> uh-huh. >> what's the gold -- is that the gold standard now? we work for them. we'll say yes to that or who was closest last time? >> well, i'm not sure who was closest last time. but i consider the nbc "wall street journal" poll because it's fairly conservative, it doesn't swing, you don't see it lurch from a big lead for somebody to a big lead for somebody else. i think ours is the best -- the

"washington post" abc news poll is also a good, pew research center is good. right now there's a rough con senn ses on the average of polls of four or five points. >> national weather service before fbi. >> that's right. that's right. we will see whether that had a significant effect. >> when you talk about -- you got 40 and 40. we're either talking about the middle 20 or the middle 15. i mean, it's bizarre. >> yep. >> all right. what -- >> john, who is your vice presidential pick? >> 121 days. >> my vice presidential pick? for hillary, i want her to pick al franken. >> for trump? >> for trump, well, let me think about that. can i get back to you on that? >> man, you're going to weasel out of it? >> i'm a weasel. i think you're probably right about pence. i wish -- either pence or --

does it matter? i don't know when you got -- >> were you going to say kudlow? >> kudlow has some ideas that i thought had sommer it. i don't know what will finally happen. >> i wanted to make sure you weren't picking kudlow? >> no. he's my treasury secretary or commerce or labor. or maybe all three. we'll combine them. >> trade rep. >> if there is ever any trade again. >> coming up, thanks, john. the farnborough air show in england kicking off with large deal announcements. we'll talk to the executive chairman of air beast after the break. look at s&p win irs and losers.

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welcome back to "squawk box" efrk on cnbc. let's check out the u.s. equity futures. the markets are indicated higher once again. right now the s&p futures are indicated up by 1.5. remember on friday, the s&p closed at 2129. that was within just under a point or just over a point from the all-time closing high. at these levels, you'd be opening at a closing high. we're going to be watching this closely today. dow futures up by 20 points.

the nasdaq indicated open up by 11. look at the ten-year treasury yield. that was within a few basis points of an all-time low for the yield. right now the ten-year note is yielding 1.373%. these markets are at odds. we'll be watching both of these closely. couple of stocks to watch this morning. kinder morgan is selling a stake in the natural gas line -- $1.5 billion. well care health plans and senn teen corporation made competing offers for some of aetna's assets. aetna is looking to shed medicare advantage programs to help win approval for merger with mu humana. a historical look at stocks that do well in the summertime. landon dowdy is tracking summer sizzlers. we do this, i think, every year, landon. it works well because we do have

summer every year, normally. >> which is a very good thing. i don't hate summer. do you? >> no. i don't. that's true. >> that's good, joe. it's officially in full swing. sell in may and go away. that may not be the best course of action. looking back over the summer since 2010, there are five s&p sectors that heat up as the weather gets warmer. we're going to call them summer sizzle letters. telecom at number 5. here are the stocks that outperformed. frontier communications has an 8% return on average with more than 80% of the trades positive. when you think of frontier, you think of internet and phone services, but it provides solar energy to residential customers. also, verizon, it heats up with an average return of 1.3%. the telecom company sizzles positive trades 50% of the time during the summer and joe, tune in tomorrow for the number 4 spot on my list of summer sizzlers. >> thanks so much, landon. heavy hitters.

talking to heavy hitters on the phone and all the heavy hitters in aviation. >> i'm still more important than you. >> his agent called in. even though it's 3:30 in the morning. >> he's on vacation. i don't know if he ever is on vacation. i don't know if he ever sleeps like kramer. i don't know. >> that was a good phone call, right? he's so busy with that deal that he called you. >> you remember wall street? money never sleeps, pal. >> that's right. >> giving him a lot of it. that tells you something. all i care about is sleep. i love it so much. >> heavy hitters on the phone to heavy hit ners the aviation industry, they're all at the farnborough air show striking deals for the latest aircraft on the runway. phil lebeau joins us with the founder of air lease executive steven halls i. phil. >> reporter: michelle, you're -- you're going to be leasing 12 of the aircraft that virgin

atlantic placed an order with airbus for, right? >> these are the largest version of them. they'll get the first deliver any 2019. we have two deliveries in 2020 and 2021. >> reporter: you have your fingers all over this industry in terms of aircraft leasing. >> yes. >> reporter: a lot of talk about a drop in orders here at the show and whether or not we see an industry slowing down. you don't see it that way, do you? >> no. the backlog of orders at airbus and others are at all-time record highs. production rates are still increasing. we're deploying aircraft four or five years ahead of time. good example is the virgin deal. our deliveries in 2020 and '21. we're placing aircraft four or five years in advance of dlif ris. >> reporter: this is about a global market for commercial flying that's not slowing down. >> exactly. i mean, last year we had about

3.6 billion passengers worldwide. the u.s. represented a little over 700 million of that. but the industry is still growing at 5%, 6% a year. on a cumulative basis that's very significant. >> reporter: against at that backdrop, when you look at air leases, stock, or any of the leasing companies, it's as if investors look at it and say yeah, there's more people flying and more planes being leased out. yet they don't seem to look at the stocks as growth stocks. >> yeah, which is unfortunate. i mean, in our case, we double our size of a company every three years. the airline industry itself doubles every 12 to 14 years. it's still a growth market. but the financial analysts don't seem to understand that -- >> reporter: what are they missing? >> we'll have to see. performance will eventually show them that we're a growth company. >> reporter: so many of your customers when leasing from you they want upgraded or business class seats. >> exactly. >> reporter: how much more growth is there in that business

class market? you look at what's happening between europe and the u.s. that's exploded in terms of the number of seats. >> atlantic has exploded. a lot of airlines done away with first class. they've upgraded their business class cabins. for example, the large u.s. carriers like delta, american united, they offer a high quality business class product. >> reporter: is there enough demand, though? >> it's a growing demand. >> you're not worried about too much. we hear this from people saying you can only offer so many business class seats before you hit a limit. >> it's a small fraction of the total number of seats. maybe 15 to 20% of the seats are premium seats. it's not the overwhelming portion of the market. but it is the high yield element of the market. >> reporter: what market right now or region worries you the most in the world? >> i'd say brazil is going through a tough time. in terms of economic growth, political instability, russia is

still recovering from the sanctions imposed by the western countries. other than that, we are seeing strong growth everywhere else. >> executive chairman of air lease. every year we talk to you, you have optimism over this market. >> it will come around. >> reporter: guys back to you. >> phil, thanks. >> big planes and everything. pretty good gig. before we head to break, check this out. one unlucky woman at at&t park in san francisco had to sacrifice her beer for her safety over the weekend. paul goldsmith's foul pop-up was headed straight for her. so she raised her tray and her beer and snacks took the hit. adding insult to injury, she didn't even get the foul ball. it was claimed by another fan. >> somebody took that ball from her after she sacrificed that? >> that's not right. when you're there, bats come flying. >> you got to pay attention. >> it's a numbers game. >> that's why if you're buying a

lottery ticket, you're definitely getting hit by a ball. >> at least she was paying attention. that's good. >> exactly. >> see her face. >> we talked about this earlier. the secret life of pets. fetching a big weekend ahead. i don't know. i'm going to stick my neck out. there might be a sequel someday. i'll have the numbers from the box office next. as we head to break, here's a quick check of the european markets right now. it's green after what happened in japan.

welcome back to "squawk box." time now for the executive edge. summer travelers getting a bit of relief at the gas pump. prices dropping $.07 over the week. gallon of regular unleaded averages, this is like a symphony. $2.29. it's like -- i can't remember high school. but it's not that different i don't think. the lowest prices can be found now, maybe half that, in

charleston, south carolina. an average of $1.91 a gallon. they have to pump their own gas. so here -- well not here, right across the hudson, some of the cheapest in the nation. another reason -- i'm a new jersey -- they pump it for you. >> i love that in the winter. >> they do the windshield. >> then your hands don't smell like gas. >> they clean my windows. >> they do mine, too actually. >> i gas up in new jersey. i drive to new jersey every day from the city. >> that's right. >> for the studio out there. >> that's right. going out there today. >> they wash my windshield too. >> they do sn. >> the one near the station on palisades or the one from the corner from the station. >> right down the street. >> i need bugs are hard to get off. do you notice that? >> the guys get them off. >> you got to use serious elbow grease. otherwise, you do it and you get back in and it's like, they're

all still there. the remnants. >> last thing that enters a bug's mind is the windshield. switching gears. >> you're going to hear from peta. >> probably. corporate news. another project tease from tesla's ceo elon musk to tell you about. he took to twit toer let his followers know about publishing part 2 of the tesla master plan. >> does this -- >> this is amid inkwir i was the two crashes of tesla cars. if the fact pattern holds, that would be the case. >> it would be tough to work without that i think. >> when you're in solar panels and electric cars, yep. i mean, paypal didn't require a subsidy. >> the blue is starting to come off the rose. too many -- >> it's not just the production

delays. it's this autopilot. they've had two crashes, one which they didn't report for a long time. there are now questions about that. >> no brainer. >> the solar city deal. i expect things like that are going to happen with autopilot. that's the nature it. >> that was a trojan horse. they put this out there. the customers didn't even realize they were buying an auto driving car. autopilot car. they turned it on overnight tnd it was a way to avoid the regulators. at what point do they catch up with it and say you're basically running a beta test around the nation. it's one thing if you choose to do that. >> that's how it generally works within the auto industry. you run tests. they're not necessarily testing everything exhaustively. >> a self-driving car has a lot of different implications than a new upgraded software in a car. >> for sure. >> granted, that ultimately -- >> lower but if you're going to have these things on the street, it just strikes me as something that regulators would want to

weigh in on. >> probably. in the list of transgressions, the solar city thing bothers me a lot more. financial shenanigans in my opinion as -- >> that would bother me in a huge way. as a citizen, this bothers me. >> i saw a twitter or drudge or somewhere this morning, the prototype of the developers rushing to get the flying car into production. they had a picture of a little -- of a car with wings. i'm thinking, man, that's -- >> that's jetsons. >> no it's not jetsons. there's going to be some problems there. we heard about one guy driving into a semi. i mean -- >> if you're flying, you won't hit the semi. >> the beta testing -- >> beta things being out -- >> flying cars? >> doesn't bother me. >> really? >> yes. >> turning right on red in a flying car, you think that's going to be easy to do? >> it's going to be great. you're the one who wants to live

forever. you have to come to grips with this. me. 85 i'm done. you want to go on and live with this. >> you remember newton. gravity is different than driving along on four wheels. >> but we defied everything. phil is at the air show today where they defy gravity all the time. >> drones are falling out of the sky. >> for now. >> you get yourself a car and drive out there every day. >> i bet ben franklin didn't price insurance correctly when he first started. >> talking about life and death. it's a different situation. it's not a product that fails, it takes somebody out with it. >> there's a lot of people that pilot their own planes, single-engine planes. would i ever take flying lessons? you read about it so much. i want to live so much. >> people die when cars first came out and on horses. >> i'm going to find it. >> there's an argument for saying betas shouldn't be on the

road. even wozniak said this is like a beta version on the road. >> i'm going to get you a picture of it. >> let's tell you quickly, there's a new contender taking a bite out of the competition at the box office this weekend. the secret life of pets pulling in more than $103 million in the united states and canada. the movie from universal and elimination entertainment, which is the maker of despicable me, follows what your pets do when you're not home. it's what we thought they were doing. it's the sixth biggest opening for any animated film and the best ever for any movie. pixar finding dori fell to third. it has made $122 million. makes it the top grossing movie of the year so far. mike thompson from s&p will tell us why he's predicting disappointment. that's after the break. stick around.

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second quarter earning season kicking off slow companies this week alcoa black rock, jpmorgan, citigroup and wells fargo. for more on what to expect this

time around we're joined by mike thompson, s&p investment advisers, five quarters of negative comparisons year over year. >> four. it will be five after this theoretically. >> that's if we have another negative quarter. but right now the consensus is that we'll actually squeak by and get a positive one. i wouldn't read too much into that. i've been dead wrong. i thought this was going to be short-lived after one or two negative quarters but it's been four. revenue growth is negative and we're going to be -- right now looks like we're going to be down negative 5.3% for the quarter for the entire s&p f. >> from what, revenue? >> on earnings. >> i thought you said earnings would be positive. >> that would be next quarter. that will be five. this is four. quarter four. the expectation for the next

quarter, quarter three is for 2% growth. that would be the break. >> when the last energy comp falls off the previous year, right? >> that's right. let's look at next year calendar year earnings are expected to jump into double digits, 14%. i mean, that is all comps. thats is all comps. this quarter alone, energy is a drag to the tune of i think it's down itself 89% for the quarter. but even if you take out energy, right, for this quarter, joe, you're still negative, down about almost negative 1%. a general weakness in earnings growth. >> when does the dollar drop, strength of the dollar drop off, strong again versus euro. >> that's really the interesting thing because we've been going through this and the dollar has, you know, only strengthened. that's actually going to actually have a negative impact

in terms of, you know, repatriation of foreign currencies. honestly, joe, that is right now one of the things when you talk to analysts what they are trying to sort out. we within our own firm have been having this kind of crazy debate about what percentage of revenues and try and derive from there earnings are from the s&p from international businesses. you know, our best estimate is that you're in the 30% handle for revenues, but we don't really have as good an understanding, nor do most analysts. >> what would it be without currency for revenue. how much is revenue down year over year. >> revenue is slightly negative. i think it's down about a half a percent. >> then without currency it would be up. so we are growing? >> on the top line. on the top line. >> that's why i said revenue. >> it is top line, isn't it?

>> yeah. >> the same thing. >> yeah. the challenge is this, right, you've got slow growth. it's really interesting. what's happened is with analysts, there's so much more is going on below the line. in other words, a lot of the earnings growth is not coming from the business itself. it's coming from a lot of engineering. that's where the challenges are and how do you defend the evaluations we have right now. >> so markets high, brexit happens, ftse goes high makes sense in 0 interest world. >> i think it does matter. when s&p is better than treasury ten year. that's why this is happening. >> one of these days they will. i think this time. >> fundamentals are being trumped. >> good one.

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markets near all time highs with earning season ready to kick off in the united states while brexit is still on the minds of many investors. we'll talk market expectations and find out where the world's largest money management firm is putting trillions of dollars to work for clients. black rock global chief investment strategist is here and that's straight ahead. united technology ceo greg hayes joins us from the international air show where some of the biggest deals are made. find out what's on the radar and br wlex will impact business. it's addictive, fun and could be dangerous. latest mobile craze could have

you searching near and far from pikachu. live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box." this is cnbc first in business worldwide i'm becky quick with joe concernin, michelle cabrera. you can see stocks are higher once again. s&p up 5 points. on friday it closed at 2129, which was within about a point of closing high of 2130. would put it above that level continue to track close to closing bell, nasdaq up 19. oil prices have been under pressure this morning. you're going to see right now

wti down 51 cents to 44.90. >> cracking below 45. all right. here are this morning's headlines. a big week ahead for fed related speeches. july meeting of policymakers draws near. a dozen speeches and events this week. wow. one of those is today with kansas city fed president esther george speaking on the economy at 10:00 eastern time. more from steve liesman. radio business public, indicated this year. 117 stations across the country and ipo would raise $100 million. gasoline prices down 7 cents. average price $2.20. that's $0.54 lower than a year ago. this week full of economic data and earnings, the season

under way. no economic data today, but toll tomorrow look for may whole say trade followed by june import prices. fed beige book wednesday, june producer price index thursday. also on thursday, pay attention to the bank of englanded policy meeting. friday retail sales, cpi, industrial production and first look at consumer sentiment for july. in earnings we have alcoa reporting after the close today. csx and young brands on wednesday. jpmorgan and black rock out on thursday. marking the official start of earnings season. we'll hear from citi, wells fargo, u.s. bank corp. and pnc financial on friday. the jobs report was crazy on friday. 30,000 the month before, then what was it, 280. >> 287. >> we see how much flux there is in that.

i'm just glad fed has the same amount and raise same amount of variability. >> we go from going to do it in june or july for sure, then we got to 38 and not doing it here at all again. then we get friday and definitely doing it now in september. >> i'm just glad that our lives are based on -- >> it's just -- >> if you ask dan fisher about this at jackson hole, you're like, really, it's been years and one month is going to make a difference? >> one month will make a difference. i think there's got to be a way to get off this train make how. i think of it from a longer term standpoint, especially something that affects the economy, six fonts to a year. lags in policy are long and variable. >> rules based system would work better. >> i think if there was a rules-based system that accounted for variability, john

taylor is probably writing in right now, the thing we proposed does have some flexibility in there. i think that would be something that might be a better way to go about it. i'm not sure, joe. we're going to talk about that in jackson hole this year. we're going to get direct fed commentary this week on the massive jobs rebound. i'm sorry to correct you, michelle, but it's 14 fed appearances. >> probably didn't do all the counting, new information. so she said -- >> 12. >> 14, you're right. >> now we'll be clear. >> the question is whether they all stick to what is the assumed script. that's this. the fed is on hold through the summer while it awaits information about the impact of brexit and won't begin thinking about a rate hike until data in the fall. the question becomes does the fed speak put september hike

back into play. here is what it looks like in terms of this whole week. esther george, tuesday, kaplan, harker, mess ter. i'm interested in esther george. a leading hawk. does not dissent, voted not to change. may be reassured rebounds in economic data but more closely following foreign financial market developments. s&p says last week's data should put to rest fears recovery is faltering. >> plus all the major have come back from brexit. >> it's huge. it's like it didn't happen. >> currency markets and bond markets. >> bonds remain lower. it's interesting equities have trouble with the bond rate. that's the story when you look

at the fed forecast. they forecast the federate, at a lower interest rate for the fed. it takes more juice, more energy. >> try 0% interest rates and argue the stock market should be doing well. >> when should the stock market be doing well. it's supposed to be doing well at 0. people keep saying that. >> something is wrong. >> the bond market a discounting mechanism about the future. >> it is. >> getting played this time. >> you can't ignore the reality that's out there. ecb is negative, bank of japan is negative. $11 trillion in bonds globally are negative. it's not like the fed and u.s. interest rates can be completely immune to what's going on globally. the only thing i would say to watch, joe mentioned retail sales report, consumers been doing very well, running 4% clip and watching that. >> consumer didn't do as well in

the last gdp revision. >> went down a little bit but it's this quarter we're talking about, the second quarter number, looking for 2 1/2, 2% gdp rebound. you're spilling coffee all over the place, becky. it's because you're concerned about the consumer. >> hold on. stick around. we'll talk about the earnings season, markets, christina hooper, u.s. investment strategist, fellow wellesley alum, good to have you here. >> great to be here. >> we had a discussion very interesting. there are people who argue the stock market is rising but yields are falling. two different stories. which of those will be correct. at the same time joe points out, hold on, when yields are going down, down, down, down, where else do you put your money by stock market. it's a natural place to go and this relationship makes sense. what do you think? >> i think a little of both because you can't control yields. so many different factors are impacting yields on the long end that it tells so many different

stories. right now it's telling the story of strangulation of yields outside u.s., global uncertainty outside u.s. that's bringing investors to it. so at the same time certainly stocks become one of the few options for investors. but i don't know if it's painting an entirely rosey picture. there are a lot of issues out there. >> such as? >> certainly a lot of uncertainty about brexit. i know markets seem to have discounted over the shorter term but we do expect it to have an impact on growth in the next several years. >> why laugh? the pound is much cheaper. that should help tourism and everything else. if countries worried about staying or leaving start to get their own houses in order in terms of structural reforms and forced to do it instead of being protected by stronger countries, why wouldn't that event be

positive. >> that could be longer term outcome, one or two years. >> markets are wrong. markets are wrong here. ftse wrong, all wrong, all above where they were before. all the experts are right, this is a horrible thing. >> not necessarily but it's too early to tell. it's too easy -- it's too early for the stock market to discount this. >> can i make one point about this, joe. one of things that happens in economics is when stuff is set up to do one thing, one reality and then you have a different reality, and what's happened is with brexit if london leaves uk, you may have what's called idol resources. things may be idol. if it actually happens or in the way it's thought to happen. >> the same language will it's funny. >> my point is you have, for example, banks in london that are there based to do business through the eu that may not be the perfect place to be. >> michelle, it goes right down party lines in this country, too, brexit versus non-brexit.

60% of republicans think brexit is a good thing. 90% of statist, socialist, democrats think it's a bad thing. >> i wasn't making a political point. >> you can't help it. >> it's a simple reality, joe. when you have a factory in place and it changes, you have declined economics. i fail to see what the possible political aspect of that is. >> possibly offset elitist spin on this. >> that's absurd. >> talk about it three hours a day. >> both parties. >> not both parties. i'm saying the elitist spin -- god, i talked to sir martin last week. i swear, he couldn't get out of bed the day after, the day after it happened. >> christina, what do i do here? do i buy stocks or don't i? >> well, you need to have exposure to risk assets but extremely selective about it. this is not an environment in

which all stocks will go up. we're going to have to worry about fundamentals. we'll have to worry and focus on those stocks. >> you know whey want to buy? i want to buy utilities because it pays a dividend and yield. is that a good idea? >> in general, yes. looking for a yield is a good idea. >> all stocks go up s&p a point away from all-time high. 500 of them and they have been all been going up. but from here on out we're going to need you to tell us which one? >> no, joe, but what investors do need to do because risks are increasing globally, we might be seeing a good economy in the united states but as we know that can change. >> how do we know third increasing not decreasing. finally the culmination of all these screwups over the past five years are coming to a head. how do we know risks are increasing. >> we know uncertainty is. >> it was more uncertain before brexit, whether they were going

to do it or whether they weren't. there's always uncertainty. >> we don't know exactly how this is all going to shape out. >> when do we ever. if it's up 10% in three months. >> the market gets it right half the time, just so you know. the market gets it right -- the market is not always right and elitists are not always right, not always wrong, not always right. joe, you're not always right, you know. i think that's something we can probably go back and look. >> what does it look like. >> i think it's something like taking joe out to dinner or doing something really nice. >> no. >> i think you're right, looking at the other side, contrary. >> i think we would be wrong not to point out the client's need to worry about risks. it doesn't mean you don't take risks but you have to be

discerning about the risks. >> we've had a churning, rolling correction for the last two years. nobody thinks we're immediately going up 10, 12, 15, 20% right now. >> which usually means -- all. >> all this consolidation has been done. we'll see. >> it could very well but that doesn't mean all markets are going to go up. maybe the u.s. market is going to do a lot better than other markets. >> i think this week when you start getting earnings and this notion you had a guest in the last hour, there's a pretty good chance of a decent double digit rebound in earnings, all the other stuff falls away. we can have a discussion about brexit ad nauseam, but double digit returns, economy showing solid economic growth, even 2, 2.5% range, you have a risk to go higher. >> i don't know about the spanish banks, though. what is that one bank? >> italian bank?

>> no -- [ speaking foreign language ] >> that's italian? >> it's a popular word for bank in general. there is a lot. >> when did you say that? the producers, they love it. [ speaking foreign language ] >> did you have them do that? >> i didn't ask for it. >> it does sound beautiful. >> they told me, it's ready. how am i supposed to get into this. >> this reminds me of kevin kline and a fish called wanda. >> he speaks everything with an italian accent. >> it reminds me of morticia. >> when you speak french -- >> thanks for having me. >> i love it, joe.

>> when you come back, get your story straight. you're going to have to be skplaeng h explaining how everything is peachy. coming back top states for business. get a preview next. 7:30, ceo of united technology will join us. entitled people. "squawk box" will be back. sic p♪ the first stk index was created over 100 years ago as a benchmark for average. yet manyeople still build portfolios with strategiethat just track the benchmarks. but investing isn't about hieving average. it about achieving goals. and invescbelievesdoing ty about hieving average. requires the art and expti hh-conviction investing. translation? it's timto bench the benchmarks. todd spaletto, president of the north face, we are working on the prototype to match customers to gear.

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welcome back to "squawk box." s&p futures up by 5 points which would put s&p above its closing high. it closed friday 2129, closing high 2130.82. we'll continue to monitor this as we get closer to opening bell. dow futures up by 53 points and nasdaq indicated to open up by 20 points. >> a new contender takes a bite out of the competition at the box office this weekend. the secret life of pets. the maker of "despicable me" follows what your pets do when you're not home. something you've always wanted to know. it's the sixth biggest opening and best for animated movie.

"finding dory" fell to third but made $432 million making it the top grossing movie this year. >> let's get to scott. i was thinking about the new hbo thing. is it that time again? we're getting ready to reveal america's top states for business. this is our tenth year. ranking 50 states for competitiveness in 2007. every year he likes to keep us guessing. scott is in this year's top state to tell us. you're there now? >> yeah. >> is that awkward back there? >> nothing there. are you going to give us hints? >> giving you hints. we give you what we call diabolical hints. those will start kicking in during the day today. as you said, it's the tenth year, so very interesting things planned over the next couple of days. we do like to draw this out painfully, so we'll be talking

about it a little bit today and counting down america's top states for business tomorrow with the top state where i am revealed tomorrow on the closing bell. you will also be able to see where your state stacks up. here is how we do what we do. we started our study during an economic boom. >> sales, traffic, future expectations, they are all looking up. >> kept it going when times got tough. >> starting to think the unthinkable. >> a slow recovery, now a crossroads. through it all our mission is the same holding the state to standards, at stake 2500 points. which state has the top workforce, where is the lowest cost of doing business. best infrastructure to get your people and products on the move. we measure each state's economy, the quality of life, technology an innovation. we grade education, business friendliness, cost of living,

and access to capital. >> it's not just the scores and the points and all of this fun, there's a lot of serious stuff at top states.cnbc.com talking about competitiveness, what it takes to be america's top states for business. also this week we'll tell you who has done the best over the past 10 years that we've been doing the study top states.cnbc.com. #top states. >> i'll make a guess, texas? or virginia has been up there. >> we've done texas, virginia, minnesota last year, south dakota. >> i love trying to guess. why can i not see the background a little better? scott, i want them to focus on the background because we need clues. >> we want to see the wall behind you. >> it's all locked down. >> last night scott tweeted a picture of him taking off from the airport saying we're on our way to who knows where for this.

my point was you were leaving from california so we could take california out of the running. you had a comeback. >> well, california is a big state. i mean i live in california, fly to southern california all the time. it's a lot easier than driving. you can't take that out. >> i can't take take state off but i love trying to guess. >> the extent we go to in the office when they book all the feeds. they shield it so nobody in the building knows. >> i'm going to figure it out before they unveil, scott. that's my mission. scott, thank you. we'll see much more of you this week. when we come back we're going to talk about how the world's largest money management firm after brexit announcement. strategist richard turn ill will join us. empire selling for $4 million, the details next.

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giant wmeimg for $4 billion. other backers include private equity firms kkr and silver lake, also michael dell's investment firm. this is a company that's gone from about a $2 million evaluation about 10 years ago, joe, to $4 billion. >> i looked that up. coming up after the break, united technology ceo greg hayes will join us from the air show in farnborough. talking defense deals after the break. actor, comedian and co-star of "ballers" rob corddry is here. stick around. "squawk" will be right back. those new glasses?

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welcome back, everybody. among stories front and center start with breaking news out of britain. dropping out of the race for prime minister, only leaves may to succeed cameron. she dropped out because of the controversy over the weekend where she talked about being a mother so maybe having a better idea of what this would mean for her children and grandchildren's future. created huge controversy and

dropped out as a result. take a look at the dollar. see the pound trading at 1.3. aetna may have several potential buyers for medicare advantage insurance programs. reuters is reporting well care health and centene. trying to win regulator approval for $34 billion deal to buy humana, take a look at the futures once more ahead of the monday open. you could see right now s&p futures indicated to open up by about 6. that would put the dow above it's all-time closing high of 2130. it closed within a point of that on friday. could set a record high for s&p 500, 49ers time since may of last year if these levels hold. s&p as we mentioned less than a point away from all-time closing high, less than 5 points from intraday high. the latest aircraft orders and the most efficient engine technology both hot topics at the air show.

phil lebeau joins us with united technology. >> thank you very much. let me bring in greg hayes at the air show. we were talking before we went on. brexit a big part of the conversation, prime minister cameron was here earlier today. what kind of impact do you think brexit will have not only in your business or aviation industry here. >> as we think about it, there was some initial concern, hysteria about brexit but if you think about it, uk is one of the moves investable places to manufacturer, quite frankly, it's a great place to invest for the long-term. while there's going to be some associated with brexit discussion long-term we think this is a great place to manufacture. we do over a billion dollars of aerospace manufacturing here. >> is the fear overstated here in europe and relative to the united states? >> like anything, the fears of

the unknown. i think once they get down the path, they start to understand what it means, it's hard to imagine a scenario where you're going to not see still a robust market here in the uk. >> this is an interesting show because there are fewer large orders announced. it has people talking about, are we finally seeing a slowdown in demand for new airplanes. is the industry finally slowing down. you see it perhaps a little bit differently, right? >> phil, if you think about it, the orders, of course, this year aren't going to be big gigantic orders. the fact is boeing and airbus, bombardier all have record back logs. the focus for the industry next two or three years is about execution, executing on the backlog. think about turbo fan, deliver 200 engines this year, 400 next year and 800. for us it's about executing on the ramp as it is for all the aerospace suppliers. >> with that backlog you think you're past the problems of the initial ramp up? >> i mentioned before first

aircraft got delivered to lufthansa, 60% better fuel born, 50% better emission, lower noise. to date since the engine has been in service since january, 99.75 dispatch reliability. a great engine, delivering what we told the customers it would. >> at the same time ceo al baker, out there, very vocal about his complaints regarding your engine. what do you say to him when you talk to him about his kemp's that this is just not living up to the performance expected. >> what i would say to him, i think you're wrong. i think the engine is doing exactly what we said it's going to do. we don't want to negotiate in public, qatar a great customer long-term, i expect we'll have a long future with akbar and qatar airlines. we think the engine is great, lufthansa, indigo, all guys operating today, they would tell you it's a great engine.

greg, i know joe has a question for you back in the studio. joe, go ahead. >> probably would have started talking about this anyone. great to see you. after rebuffing honeywell, it's possible utx would do a big deal. i wonder, is that still on the horizon? cody wasn't retiring at that point, was he? do you think regulatory concerns, antitrust issues, if he's out, you're young, maybe go from the other way. >> joe, i said it back in february, i'll say it again. we don't need to do m&a to grow the business. if you have an ton to create value for shareholders we're going to look at that. with the backlog on the aerospace side, growing urbanization we see on commercial side of the business, utc has great growth prospects. we donned need m&a to grow. >> greg, it's michelle here.

you talked about the uk earlier when phil asked about the brexit impact and how competitive the uk economy is. compared to the rest of europe, how do you see the uk? will they be able to compete even if they aren't associated with eu? >> you know, michelle, it's an interesting question. i think you've got to go back to what i talked about in terms of the competitiveness of the uk economy. a competitive tax policy, tax rate. they have got system of taxation that only taxes profits that you make here in the uk. got a great labor force and very flexible work rules, which is something you don't see on the rest of the continent. >> greg, one last question. you talked a little about it in rebuffing honeywell. overall do you see any record for large m&a in aerospace. >> i think large m&a is difficult, phil. from utc perspective we're $30 billionaireo space supplier.

unless you show real value oems, consolidation, customers say we don't need bigger suppliers. not that we won't see consolidation in the supply chain but probably very little activity. >> ceo united technologies joining us here at farnborough. surprisingly some sunshine, maybe flyovers in a bit. >> thanks. >> our thanks to greg hayes as well. our take on global markets for the second half of the year as well as the ongoing brexit impact we're joined by richard turnill, global chief investment strategist, joins us from london. richard, thanks for being here today. >> my pleasure. >> let's get straight to how the markets have changed in a post brexit world. how have your views on this changed? where are you feeling like there's opportunities and where are you feeling like you need to pull back a little? >> this feels more and more like we're an environment of low returns and high volatility for sometime. that post brexit, those things already being exacerbated. you're seeing returns being

pulled down clearly in fixed income markets, the fallen yields and equity markets as well impacted by what's likely to be slower growth particularly here in the uk and rest of europe, also some impact on the rest of the world. then the political uncertainty ahead of us going to last not weeks or quarters but potentially for years. that's going to create ongoing volatility in the future. in that environment what will investment do, in come, equities and income, greater source of return going forward, areas like emerging market debt, investment grade look very attractive. inequities, i think you've got to focus on quality. you've got to focus on those companies in the long-term. when there's benefit from technology change and sustaining earnings growth in what is a very growth challenged world. >> let's break that down into two camps. first of all, fixed income. as you mentioned, yields are close to nonexistent for a lot

of traditional instruments that you'd be using. is it worth it for people -- i know you said volatility rises, if you're getting next to nothing on some of these investments, is it worth it or are you simply talking about places you get higher yield as you mentioned in emerging markets? >> i think we're going to be selective with income. it's very hard to find value in fixed income anywhere. yields accepting low levels. the forces driving yields down are still in play. arguably post brexit they have got even stronger. those forces are very low, not potentially falling global growth. central bank policy expecting a rate cut from the bank of england later this week followed by qe. we're expecting more qe in europe, actively buying more fixed income assets including credit. we're expecting more qe from the bank of japan later this year and the fed on hold for

foreseeable futures. those forces driving down remain in place for a long period of time. so fixed income i still think plays an important role. what you need to do is focus on where you're getting sufficient reward taking risks moving out of some of the safe assets. two areas we focus on, investment grade credit, which is getting particularly well supported by ecb purchasing but also emerging market debt. in a world where there's so few places to find attractive income right now, emd, emerging market debt really stands out. more stable dollar environment and with the fed now on hold, we think that creates a much more attractive environment for investing in emerging market assets. >> it's michelle here. i'm reading through asset allocation, if anybody gets your release actually, there's 13 asset allocation possibilities here. you specifically say when it comes to em debt make sure it's local currency, right, you don't want to worry about the dollar. when i look at these 13 different breakdowns, your

neutral to positive on everything except you're negative on european equities. why is that? >> you're simply not being paid for the risk right now in europe. specifically when you dig down and look at areas like the financial sector, we see the risk to european growth skewed to the downside, full impact of brexit is yet to play out. >> even doing whatever it takes? >> well, i think what you see is ecb supporting bond market but actually ecb has been doing whatever it takes for some time, yet equity markets moving lower, bond market doing very well. i think ultimately you need to see a recovery coming through in europe. i think ecb alone isn't going to support equity market. one of the key lessons of the last few years is that monetary policy alone is not solving financial global crisis. >> shocker. >> move away from the policy onto other areas. ecb, bond market, much less

convinced it supports equity market. >> richard, why do you think uk outperformed other forces following brexit? >> i think in the initial reaction it's about sterling and what that means to translation effect and what it means. >> you said slower growth. >> it remains significantly challenged. small cap area they are doing to see slower growth in midcap area is going to see lower growth. i think the exporters, you've just had -- in fact, 15% devaluation in the currency. we think that could go lower still. uk exporters one of the few beneficiaries of this trend listed in the uk. >> must be a lot in the ftse. must be a lot in ftse. >> 80% of revenues in ftse come from outside the uk. >> richard, i thought you were going to say, yes, the one exception because i see it

written here in the report, the one exception for your negativity on european equities is large cap uk exporters. you guys are actually recommending them, right? >> yeah, i think they are really well placed. think about what we're looking for. we're looking for quality. we're looking for dividend growth and companies will benefit from significant exchange rate movement. many of those companies listed right here in the uk. >> as far as for sovereign issues, was there any part of you that said i'm glad this is happening in terms of not having bureaucrats in brussels overrule parliament and overrule british courts. any part of you thought rush to globalism wasn't good for uk? >> no. >> no part of you. >> you didn't hear ceo of utx just now ahead of you when he was asked about uk competitive vis-a-vis eu, made all the points about why uk was more

competitive than european continent? >> look, the uk is not going to disappear. you can remain strong long-term place for investment. in the short run, any company looking at making incremental investment right now is going to pause. at the very lease they are going to step back and think about is this the right thing to do. they don't know what they are investing in today. they don't know what decision they are making. we don't know what the uk's relationship with the rest of europe is going to be. we don't know what our future policies will be. we don't know if uk is a single nation. don't know if uk is going to be a single nation anymore and don't know what the implications are for the rest of europe. at the very least that's going to lead to many companies taking a pause. >> a really good wall of worry. thank you. >> all right. thank you. >> thank you. >> coming up, if you see people walking around aimlessly staring at their smartphone even more than they normally do, not to

worry. they are probably just catching a pokemon. details on the latest mobile craze that revitalized nintendo. that's after the break. actor and comedian rob corddry will be our special guest. swaukz coming right back. ♪ [announcer] is it a force ofn? or a sales event? the summer of audi sales event is here. get up to a $5,000 bonus on select audi models.

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welcome back to "squawk box." shares of nintendo getting a pop thanks to its new popular game. pokemon go using augmented reality to allow users to catch virtual pokemon characters in your real life surroundings using their smart phones. the app was rolled out july 6th, currently available in the u.s. where it's dominating the list of top free apps on the app store as well as australia and new zealand, expected to be released soon in japan. look at that move. very big move. as a result of one popular game. >> when we come back, actor and co-star hbo hit series "ballers"

rob corddry will join us. we'll talk show biz and politics after the break. check out futures, dow up, nasdaq up 20, "squawk box" will be right back. xxxx

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>> you need you to do something for me. clock me. gets the competitive juices -- >> i assumed an open hand because i can ball it up for

you. >> thank you. >> "ballers" former nfl player turned manager played by dwayne the rock johnson. his business partner, rob corddry. hbo on a roll. i mentioned, did you watch -- i don't know if it's a competitive, a new eight-part series on hbo. i'm like -- >> the one with john turturro. >> yes. >> i don't watch anything when it's out. >> i hear it's scary to watch all eight right away. >> my hands sweating a little bit just -- >> it's exhausting, right? >> it is exhausting. it is. >> so tired from all the tv i'm watching. >> i was -- i'm a recovering broker. you're a financial analyst in this. >> yes. >> let's talk numbers.

>> you know what i'm talking about, too. all of life is selling, as you know. in that job, even when you're trying to do good things, they don't want to do good things. they don't want to do the right thing. they are always selling. you have that spirit glen gary ross closing all the time. >> there's one specific moment in it where i have to sell myself to the office, and i get that -- i get that sort of boiler room glen gary moment. that trope in all the financial movies, sales movies where you just kind of rally the -- coffee is for closers. >> that's not you as a normal person. >> obviously. >> your guy watches cnbc 24 hours a day. >> yes. >> do you ever as an actor? you have someone like your self doing it for you, probably, like the guy you play?

>> i haven't watched cable news regularly since i left "the daily show." >> but you watched a lot of it there. >> i had my fill. i had cnbc going here and two c-spans. i watch it now, and i have no outlet which to express -- you know, there's no joke pipeline for me. >> so this is sort of an environment -- >> looks like entourage. >> people want to come back as a rock star, i think i want to come back as an agent. >> really? >> the good agents, like the ones -- >> i don't know. >> financial analysts putting people in -- >> some don't -- >> back stabbing. >> some people are accountants, dentists nine hours a day. that's a pretty good job. >> a glamorous job.

>> not a bad job. what i love about what these guys, our characters do in this show is that you read in the paper contract negotiations are stalled. that's all you read. talk about contract negotiations are stalled. this show unpacks that, all that stuff, what happens behind the scenes of that stuff. it's written by football players, you know. we have football players on our staff so it's very accurate and you get to see what happens behind the scenes. that's my favorite. >> really that crazy? really that crazy in real life? >> yeah. this is what they are telling me. >> what is -- so compared to the first season, there's a different plot line this year, right? >> yeah. it picks up sort of where we left off. dwayne's character and mine have their own office, but dwayne decides to take down the biggest financial manager in miami, because he's got a grudge.

that's played by andy garcia. >> great. >> yeah. >> plot lines about tumbling yields, your players saying what do i do. >> tumbling yields were too controversial for us. hbo was like, let's not -- >> no brexit exit. >> let's don't touch it. >> a lot of these guys make a lot of money we've all heard. there are guys in real life trying to help their buddies not go the route of some of what we've read about where these guys don't have any money because they have bad investments. are you a good guy or bad guy? >> i'm a good guy. >> you don't go below bbb? >> no i'm not going below bbb. >> we're not talking about bras we're talking about bonds. >> you like krcht and dcht better? >> my character, i don't think he ever sleeps because he's very

good at his job. i think he's one of those savants. he's a guy that never gets hungover, you all not doing that. >> looks great. >> thanks for having me. i love talking bbbs. >> i bet you do. who doesn't. >> coming up, anti-trump forces will try to make one last push before the convention in cleveland next week. we'll talk politics and possible veep picks for both presidential candidates at the top of the hour with national review columnist john funt. stick around.

global markets in rally mode after jobs reports. earnings season, will it help markets to new highs? stick around to find out. countdown to gop convention is on. donald trump expected to announce his vp pick this week. on the democratic side hillary clinton might get an norm from bernie sanders. the latest in the race for the white house straight ahead. got to catch them all. nintendo's new pokemon app fueling an environment across the country. a big move in the stock.

why the game is getting players in trouble. 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 with becky quick, michelle caruso-cabrera. of 90 minutes away from the opening bell on wall street. the futures right now are up again after a very strong session on friday. better than expected jobs report. nice that good news was good news. considering the fed is out of ammo, you better finally let the baton get passed through the underlying economy rather than thinking it's always going to be about staying at 0. the best of both, staying at 0 and 280,000 jobs.

maybe it is goldilocks. >> exactly. let's get to stories investors will be talking about. nikkei soaring in overnight trading up to close to 4%. this comes after japanese prime minister shinzo abe's ruling party won in upper house yesterday. his wins likely will make it easier for abe to push through his economic agenda, that third arrow we've been waiting for. again, you can see nikkei up by close to 4%. in american politics news breaking just this morning that house speaker paul ryan will give a speech at the republican convention next week. politico is reporting ryan will write the speech himself. it will be 10 minutes long and it will focus on house republican agenda and the need to unite around republican candidates. and in other political news, dropping out of the race as prime minister only leaves may in the running to succeed david cameron. will fred frost joining us.

this coming as nigel saying it's the only candidate you should be supporting because she supported brexit. >> backing her and then a few hours later she dropped out as you just reported. she didn't have the support so pulled out sooner rather than later. the only candidate remaining, essentially wins the race without going to a vote for party members. time not reported but much earlier taking over prime minister than early september we expected likely very soon indeed. markets have liked this news of the pound rallying to a session high. it was below 129 against the dollar earlier. it is now close to 130, moving around 1% against u.s. dollar as the news broke. markets like it, it means a quicker transition, quicker move back to certainty for clear

leadership. also because she was the more eu friendly of the candidates having backed to remain. either way brexit means brexit, that's the conservative party confirmed to win leadership. current prime minister david cameron go to the queen and offer resignation and queen would invite the new leader to form a government. guys. >> thank you. not going to be as good as margaret thatcher, is she? probably not. >> goes to show you that it's a global phenomenon. you saw the interview she did. >> leadsom. >> i have kids and more worried about britain's future because i have kids and she doesn't have kids. maybe neece and nephews. >> they released the transcript of it. she took issue. >> so things that you say in an

interview, spontaneous interview where you're just trying to make one point, but that can ruin your -- it's like the glass jaw that's happening here, which is one of the reasons i think trump has had 50, 60 things he's probably said and two or three stick. you don't know which ones, but it is -- with twitter and social media and everything else -- >> in the interview asked several times about having kids. >> it's amazing. it's not what you do anymore. you can say things and you have to hide out. >> twitter prevents group think. elite used to be the only place for a platform. >> amplifies group think. people follow people. people only watch cnn or fox. people only follow conservatives or -- i've got a pretty select group of people i'm following. i don't see a lot of other

people. >> i don't. >> i see something that ruins my morning, i'm never looking at that again. >> let's get to farnborough. virgin atlantic with a deal with airbus. let's get to phil lebeau. >> i'm going to bring in ceo of virgin atlantic. you have the big story, big story placed with airbus, 12 stretch versions, 1,000 flying potentially up to 400 people. how important is this deal in terms of driving down your cost and efficiencies? >> for us, it's a perfect airplane from an efficiency perspective. we save about 30% of fuel versus 747s. >> which is what they are remassing. >> most of what they are remassing. it's a great airplane from a noise and nmptal perspective. 50% less noise and far less emissions. we think this is exactly the right airplane and we think our customers are going to absolutely love it. >> you think that timeframe?

>> 2019 and 12th would be 2021. so over about a three-year period we'll take all 12 of them. >> you noticed and we talked about this earlier, the growth in demand for business class travel transatlantic, the u.s. and europe. it has exploded in the last 10 years, the last 5 years. any concerns we're hitting a limit there? >> i never know when there is a limit. always concerned about the marketplace. with a weak pound we've seen since brexit vote, it's a little more expensive now for brits. >> which brings up the question. are you noticing more americans coming over? >> one of the things it's really early to call at this point. we were pretty full for the summer already. but our goal will be to take people both directions. we think this is a great time for americans to visit united kingdom. >> brings up brexit and impact of brexit. for an airline like yours, transatlanticwise, are you looking at this and saying i think that we can continue

growing as we were or how do you look at it? >> i'd say we're in a holding pattern to use an airline term. we don't have any planned growth overall, although we are till grog a little in the transatlantics. we've recently announced next year starting service from manchester uk to boston, san francisco and new york. so three new services for us. we do still see this as an opportunity but i would say cautiously. >> ceo virgin atlantic. we have to wrap this up because funny, there's a storm coming in. >> thanks. >> guys, back to you. >> yeah. we can see it over your shoulder, phil. looking dark in the skies there. thanks. in other corporate news, another project from ceo elon musk. he took to twitter to let followers know about part 2 of his master plan. following inquiries into two crashes of tesla cars and stuff

happening before a stock offering and him deciding whether something is material or something is not material. >> to merge, not to merge. >> he's young. we don't know yet. is he -- steve jobs is a tough act to follow. he could do whatever he wanted. stock option timing. not disclosing transplants, all that stuff. you know, if you've got it, flaunt it. >> tesla is a visionary company. >> rubber meets the road. >> we'll see. we'll see long-term with $2 gasoline and everything else. people love those cars. >> they are beautiful. >> we'll see whether production ramps up. >> the only electric car i've considered. >> without subsidies. >> one of these places in new jersey where all the high-end cars are, right? all the high-end cars are foreign, except for tesla. >> american made car.

>> if you were -- had the financial clout -- if you had the financial clout and technology of porche, mercedes, some japanese and you were working on an electric car, look what happened to netflix. suddenly everybody has competing services, now you're bidding for content. now on comcast. did you see that? >> i did. >> well, bmw can't make an electric car? gm and ford? mercedes. >> did you hear what i said, go to the parking lot, all these high-end cars, occasionally a cadillac but almost never, right? >> talk about the high-end cars making competitors -- >> gm and ford, i question their ability. >> not like bmw in 2025 isn't going to have an electric car and everybody is going to -- i just don't know. it's like apple. we're all going to have iphones

in 2025. >> more than an electric car, working on -- >> working on that, too. >> can't wait. >> what's great about competition. we all benefit but you can't marry companies. >> no, you can't. no. >> a few stocks on the move, twitter downgraded to neutral from buy by suntrust. engagement continues to, quote, be challenged. cbs filing to take its radio business public. the company currently operates 117 radio stations. preliminary plans indicate $100 million would be raised in a planned ipo. yahoo! downgraded to hold from buy at bit offal research, market share in digital advertising. coming up decision 2016, gop convention a week away. going to talk the race for the white house next. as we head to break, take a look at futures this hour. we could close at new highs here if this keeps up for the rest of the day. don't miss it. >> a lot of risk.

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uxc, ultimate fighting championship selling itself. the official announcement just out. a group led by talent giant

wmeing is buying mixed martial arts. price tag $4 billion. other backers private equity terms kkr and silver lake and also michael vels investment firm. >> just 120 days until presidential election. voter anger over a lot of things like jobs and economy helping fuel the rise of some of the nontraditional candidates like bernie sanders and donald trump who is set to announce his vp as soon as this week. for more on what caused this populous wave let's bring in jan funt, columnist with "national review." great to see you. >> thanks. >> let's start this way. solid number percentage that will never vote for hillary clinton and solid number that will never vote for donald trump. >> i think for hillary, i think it's close to 40. >> just before fbi report it was 42, trump was about 43. >> and after the fbi report.

>> we don't have any polls. >> you think 45 is out of the question? >> we're dealing with the two most unpopular candidates in modern polling history. >> let's add it up. let say tied at 43. two times 43, 86. this election is about 14% of the people? >> believe it or not, there's a small sliver of people who like both of them. i think they have been in a cave the last month? >> what? >> is trying to split up that 14% -- i think winner of electoral college. >> the election decided by two groups, people who stay home, independents who can't stand hillary or republicans who think donald trump isn't a real republican and people who hate the other candidate so much they will get out of bed. >> you saw the primary up, 60% for republicans, down 25% for democrats. what does that mean? >> you know, i don't think that

means that much. donald trump certainly brought in new voters. so i think people in ohio and pennsylvania and michigan are going to put those states in competition. hillary was an old front-runner. bernie sanders did bring in new voters. i think it's a whole new ball game for the fall. >> if you use brexit as an example. >> i was there for that. >> very good for donald trump. who stayed home? the young people, the people who were going to vote for status quo. animated -- >> they thought it was over, looked at the polls. >> close. >> we are seeing the biggest caveat in this race is the polls are increasingly wrong because you can't reach people with cell phones as easily and people lie to polsters. people also don't signal their true intentions. >> do you think there's -- i took statistics and like all psychology i thought it was like a pseudoscience almost.

what's enough? some of these, 2,000, 1500. is 50,000 across the entire country -- >> per poll. >> will that -- or will we not know until 200 million people vote. >> the biggest thing not discussed is margin of error. tied -- >> the more you do, the less the margin of error. is there a number you could do -- >> it costs too much to do it. the costs become exponential. 1,000 to 1200 gives you the best value for your dollar. 3.5 probably. >> the rules committee, rnc meeting this week. "the wall street journal" had this article that said there is a possibility they are close toblg moment where the rules committee could announce on day one of the convention there's going to be a vote to unbind the

delegates. >> well, there are a lot of delegates who say they are already unbound with the exception of 1976, which is ford reagan race, you really can't prevent a delegate from voting their conscious or abstaining. >> based on their party rules they are not supposed to do that. >> first of all rnc rules trump state party rules and only two states have penalties at all for delegates voting against the person they are supposed to. >> what do you handicap the odds. >>ening donald trump has an 80, wi 85 chance to be nominee. we have a week to go, he can make a mega gaffe. he can pick a strange vice presidential candidate. it's 20 points down to hillary in women. that's a gap we have never seen in politics. if after fbi report still ahead, if even after the fbi report he can't close in on hillary. >> that's half a reflection of donald trump and half a reflection of the people who

support hillary. >> and another reflection of how cynicle people are they expect this from anyone running for president. >> 40, 45 vote for hillary after what happened last week. i'd say 38 1/2 even if she had been indicted would still be voting for her. >> three out of ten democrats say she should have been indicted. >> they still vote for her. >> donald trump said they would still vote for me if i shot someone. >> she did shoot someone. through this whole election i said that. you have one person that says to people crazy stuff. you've got another person with a 25-year history with her and her husband of doing stuff that is so beyond the pail of anyone that's run for office. yet we're all inured to it. >> both candidates have showed an inability to articulate reality. let's leave it at that.

>> there's articulating and cgi. >> they are liars, both of them. >> one didn't enrich himself from state department influence. >> well, i'll tell you, the real thing we have to worry about is if we elect hillary. >> she's not going to be allowed to have any classified info if she's president. >> the clinton foundation inquiry is still going on. there's a danger if hillary clinton is elected president, we could have a constitutional crisis after a few months of her being in office. the clinton foundation -- >> not a few months. it takes 27 months to get the e-mails. >> that's right. they have been deleted, too. >> they are gone. >> they recovered some of them. >> none of the good ones. >> john, based on what you said just talking about what happens at the rnc with donald trump, what's the safe choice for him to pick for vice presidential candidate. >> someone who doesn't create headlines, isn't new like sarah palin with lots of new stories swirling around. somebody like newt gingrich,

he's had everything written about him. he's old enough so he's not going to want to be president in his own right like corker from tennessee. he can always ask in the end. general flynn would be a little risky because he would inject islamic jihadism right into this race, a lot of political correctness. he was fired by obama. >> what's the downside. >> the problem pence is running for governor of indiana and re-election. >> got to decide by friday. >> better come quickly. >> lloyd benson. >> indiana doesn't have that law. only a few states have that law that allow you to run for both offices. >> so the key is pick somebody that the reporters already know so they are not going to create a dan quayle phenomenon or sarah palin phenomenon, we don't know this person, let's find out what's bad about him. >> hillary goes with tim kaine.

she does horribly with modern. >> probably tim kaine. >> ohio. >> republicans would gain that senate seat, which is difficult. >> so messed up. >> there's always the chance she goes back to her original idea, a hispanic julian castro from texas, currently housing secretary. >> john, thank you. thank you for reviewing everything on a national basis. >> come to cleveland. it will be fun. >> castro -- >> speeches in the original. when we come back, you've got to catch them all. pokemon go craze might be getting some players in trouble but nintendo stock rallying on the phenomena. nintendo shares up 10%.

when we come back, earning season is here. as tide looks to rise again, what it means for the market. track the markets. s&p on track to open at a new high at least based on its closing high. we're going to talk technicals right after this. "squawk box" will be right back.

welcome back to "squawk box." making headlines, just a few

weeks away from fed policymakers. no shortage of fed speak ahead of that meeting. fourteen fed speeches and events will take place this week. begins today with kansas city federal president esther george giving her outlook for the economy. gasoline prices in the united states down $0.07. consumer products giant kimbe y kimberly-clark suspending operations in venezuela. led to high inflation and shortages of raw materials. >> wow. >> can't get the stuff to make diapers. >> right. >> i feel for -- >> so horrific. it's like watching mad max but real. so sad. >> middle and upper middle class people going through the

garbage. >> people are so desperate for stuff. >> this is -- go back 20 years, my parents vacationed in caracas. you're not supposed to go backwards. shares -- we almost had an anomaly. >> exactly. >> shares of nintendo are on a tear thanks to pokemon go. the viral game features augmented reality that allows characters to train special features called pokemon. using smart phones pokemon doing so well about to surpass twitter and tinder in daily use on android devices. not without controversy, outside st. louis, police say robbers used pokemon go to lure victims to a parking lot by putting a so-called beacon on a location to draw players to that spot police say around 2:00 in the morning. four teens robbed the person at gunpoint who was playing the

game. >> i don't understand what any of that means but i believe it. >> a beacon, looking for pokemon. >> i can set up a beacon? >> that i don't know. >> big surprise for mr. robot fans. usa network releasing first 40 minutes of the show's second season three days before the official release. the show about a renegade computer hacker interrupted its facebook live session with a message from a hacker before unveiling the new episode. "usa today" is owned by nbc universal. >> and earning season is beginning this week, as you may be aware. it's easy to figure it out. you do the quarterly -- you think quarters. june was the end of the last quarter. >> here we are. takes about a week to close your books and figure it out. >> close your books. close. santelli joins us with why the

earnings recession might be over. how long, four or five quarters? >> this would be the fifth if it's negative. >> the one we're reporting now. >> the one we're reporting now. year over year, fifth. the official forecast right out of consensus for 5.6% decline s&p earnings. the thing about that, the usual typical margin of outperformance, upside surprises run about 3 to 4 percentage points so essentially brings you within hailing distance of a flat performance. key here preannouncement, number of companies learning of lower earnings and promising better, a much more benign preannouncement season. in fact, best one since early 2011. alet of people think essentially expectations have gotten low enough. to me the question really is what does it mean for stocks considering s&p 500, broad market has not really suffered on a net basis. obviously on the verge of all-time highs here, not really suffered during this so-called earnings recession. one of the reason those yield

stock utilities, telecon, everything that looks like a bond supporting this market. yield sectors bigger than financial sect or right now. the question is do you ease evaluation concerns when you have a little bit of potential for earnings growth in the back half of the year. i think probably. by the way, we were more expensive than stated number at all-time highs, numbers going down significantly versus timts. right now you might be in a better position if those earnings come through. the question to me, joe, do we get another sector rotation. index level hang in there, utilities sell off and industrials, consumer diseasary stuff take up the lead. >> we've watched for a long time. we've been churning around two years. now we know rates are going to stay low for an extended period. >> we think we know this. >> multiples don't need to contract. >> multiples don't contract on the fly.

>> we're doing to talk to a technical analyst. marcel is going to do this. resistance is strong. if you get through, i think we're on. aren't you starting to think about that? >> i think it would be perverse if he weren't do click to a new high. i don't think it's down -- >> more churning. >> for a little while. >> we had someone on earlier saying, you know, there are uncertainties in the world, a lot of uncertainty. >> i hadn't heard that. >> and there's risk factors in the global economy right now. >> i've heard. for 25 years the story has been europe structurally broken but stocks are cheap. >> still cheap. >> europe might be fixing itself, depending what happens. >> any century now. >> let's break that tie. we just talked about fundamentals, talk about technicals, katie stockton, eig's chief technical strategist, bring up chart of

s&p 500 and see what joe is talking about churning around this 2100 level, now a little bit of a breakout. do we believe it? >> talk about it, on the verge of a new all-time high for s&p 500. for me it's very important not to see just a little inch above that but a confirmation of a breakout. that saved me at least in my market views, you know, to avoid false breakouts. >> is there a number you associate with that with a convincing, confirmative. >> consecutive fridays, two closes about that level. that would convince me we've broken out and you can arrive at upside targets. >> for the novice viewer why does friday matter so much more than monday through thursday. >> the weekly close is where the market settles. to me it's where investors are comfortable closing out their week and sitting over the weekend so they can relax. >> what did you say significant? what is that number for significantly higher?

>> 2400. >> what? 2400. >> it sounds crazy. >> maybe that's what i mean. >> the width of the channel. >> two fridays above 2135 we could see an upside. >> that's the target. in the interim it makes sense to be more cautious because there's really nothing worse than a false breakout, right? so if we do fail here, we have to give the market a chance. >> neutrogena is good for that. >> does the summer throw anything off? fridays are lightly traded. a lot of people out on vacation during those times. one way or the other? >> i don't put a lot of weight on volume to be honest. as long as you have a close an not just an intraday move there, then it's real. >> any other major averages that stand out to you as ways to. >> s&p 500 doesn't end there, of course. the international markets are in a worse position. greater loss of momentum especially in europe as you can

imagine. that's something we need to keep in mind. not like we're free and clear once we clear 2135 for s&p 500. indeed even nasdaq composite still faces resistance from 2000. >> i haven't checked, transports confirming all this. >> transports have underperformed up until last week. last week we finally saw more offensive positioning and that would be bullish if it persists. as it stands the leadership really has the more defensive -- >> utilities continue to do well? >> the trend is good there, as you can imagine. >> will that be okay for overall s&p? >> i think it will change if the breakout becomes more decisive. >> you follow commodities, too? >> i do. >> is gold in an upturn now? >> it looks like it, scooped out and broken out above a couple tiers of resistance. >> five years ago. >> wild, arrive at a target of 1580. i know. i know.

>> fill out the paperwork. fill out the paperwork. >> comcast going up 67 today. >> in the interim looks like a pullback slightly. >> but not to 1210. >> i think more 1300. >> oil stays between 35 -- >> i'd be patient there and let it settle in this mid-40s range where there is some support. loss of momentum has been somewhat greater than expected. >> katie -- >> british pound stays above 130? >> gosh, yeah, i think the trend there persists? >> goes down? >> goes down. >> how far? >> gosh, i don't know how far. >> 30. >> seems a little extreme. >> where does drachma go? >> i can't envision that. >> the drachma, italian lira. >> 14. >> thanks for coming on. >> thank you. coming up, job growth bouncing back in the u.s. but a new report, growing number of managers in companies could be

hurting the economy. don't you know that. if too many people are managers. more details after the break. futures, up 56 now on the dow, s&p. >> are we allowed to say that? >> no, you're not. a bold group of researchers ancomputer scientists in silicon valley, had a breakthrough they called... the machine. it changed computing forev. and it's been part of every new technology for the last 250 years. everything? everything! this year, hewlett packard enterprise will preview the machine and accelerate the future. see star trek beyond.

welcome back to "squawk box," shares of hertz global

increased. increased according to an s.e.c. filing. >> wow. >> doesn't look right. there's something -- >> yeah. >> you put in data -- that's why we need artificial intelligence so even charts know what to give you additional info about. >> what's happened. let's talk about another story. your boss and your boss's boss could be costing the american economy $3 trillion a year. the number of managers add administrators has doubled in the united states just in the last few decades, much more than the growth of other positions. that boss surplus is the topic of a recent study in the harvard business review. joining us right now co-author of the study gary hamill, co-founder of management innovation exchange and visiting professor at the london business school. professor, you are confirming what a lot of americans have thought for a lot of years. too much top heaviness that's out there.

what did you find in your study? >> well, let me just start with data. what we know now in the u.s. economy we have 24 million people who are managers, supervisors or administrators. that doesn't count all the people working in i.t. you add to that an equivalent of 18 million people complying, paper pushers. put those numbers together, 40 million people, about a third of the u.s. workforce is engaged all day every day in bureaucratic work. our research suggests half of that surplus requirements, we could cut the number of managers and administrators by half, cut this busywork by half. if we did that we would double productivity growth over the next decade. if you look at recent u.s. productivity growth, abysmal, 1.3% a year. if there was a way of repealing that bureaucratic tax over the next decade, double productivity growth, a chance of raising

incomes and improving income across the u.s. economy. that's the core of the data. >> but then who would go to all the meetings and brown bag lunch specials they have? >> yeah, exactly. so much of that work just isn't adding any value. we've been looking for about a decade at a group of what i would call post bureaucratic van guard organizations. these are companies like new corps, steel business, consistently the most profitable bank in europe and a bunch more. when lou at these companies what you see is that on average they are running with half the bureaucratic load of their peers. half the administrators. let me give you an example close to home. i was at a plant making jet engines, some of the most complicated things people make. in that plant they had 300 employees and a single

supervisor. if you said to an average boss we're geology to move 1 to 400 span of control they would think you're insane. the first challenge here -- there's several. the first chal elengechallenge, admit you can run large organizations with -- >> the question is how do you get there? this is something private equity guys have been doing for years, 3g, private investment firm, they have been good at stripping out beaurocracy. it comes at a heavy cost. every time someone lays off workers like that, they are criticized. you're losing jobs and good paying jobs. how do you actually get back, once you have a blow to beaurocracy, how do you get back to a position to streamline things. >> i would say a couple things. first, if you want to really tackle this problem we have to get angry. we have to be a lot less resigned and more indignant about what this is costing our economy. gallop does a survey every couple of years when they look at how many employees around the

world are truly engaged in their work. last survey 13% of employees are truly engaged in their work. the number is higher for the united states, 30%, but nothing to be proud of. what that says, we have a lot of people every day coming to work, physically, obedient, diligent, smart, but they are not bringing their creativity, they are not bringing their passion, their initiative, they are leaving all those things at home. so when you go into these van guard organizations, you find they are bringing more gifts, substantial productivity, far more engaged and are in good jobs where they have a chance to bring all that capability to work. >> professor, it's michelle here. as you're talking, you're coming to us from london. everything you said remind med of the european union. i think about the eu, so many leaders, so little leadership over there. what you're saying about companies, could you also say about governments an things like european union? >> yeah, you know, i think what

you see both in government and in business over the last few years, you see a tendency towards more centralization rather than less. the fact of the matter is people in power are very clever at getting more power, very good at constructing persuasive arguments. as that happens, our trust in large institutions goes down. people lose their share of voice, get disconnected from workplace or government. the consequences we've seen in brexit. this is not just a problem for the private sector, this is just as much a problem for the public sector. there are examples, there are alternatives out there. the problem is most leaders, most managers have never been inside of a truly lean organization. so what you see happening is a lot of organizations are getting lean operationally but they are getting fatter managerially. there's simply no excuse for that. >> gary, i want to thank you for your time. very intriguing study. >> preaching here to the choir, not here at cnbc. >> in 2014 going to spinoff it's

equipment rental business, hertz, which it did a couple of weeks ago. hertz at that point -- hertz holding, inc. under hri, we saw it on the chart at 11, recapitalized or whatever. >> now the stock is up in the 40s now so it's been totally different share price. >> has somebody been buying it mistakenly because of these headlines? >> no, in it for a while and bought more but just you saw the chart looked like it went from 1140 because it's a spin overon that business. >> coming up jim cramer is back. he's going to join us live from the new york stock exchange next. we'll get a take on top stories. suggests a positive open. "squawk box" will be right back. that's why iave the spark cash ca from capital one. with it, i earn unlimited 2% cash back on all of my purchasing.

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let's get down to the new york stock exchange where jim cramer joins us now. we don't always do it, jim. you're a guy that knows about fundamentals. you pay attention to technical-type stuff. here we are on the cusp. do we go or hit here and then sort of fail again?

we have been here a few times. one of these days we are going through here. >> i love the interview. i love what you said that if we do break out we are off to the races. i believe that. if we get oil going back up, we get the dollar stabilizing here, don't ask for more than that and get anything decrept in terms of the banks, anything, because that's later this week it will happen. it is possible you don't get anything decent from the banks and oil takes out 45. once again as your technician said, no. but it sure feels different. even though it was lighter volume as you guys pointed out on friday. it was a lot of stocks. not just j & j, 3m and honeywell anymore. >> there is a lot of worry. there always is. when you hear there is a lot of uncertainty it's like when is there not? really? >> never! there is always. we have all wanted the transports to break out. the rails break out. but we need the airlines to break out. then it's like, no, the problem

is the semiconductors haven't. no. we have a lot going right. we need oil to go back up. i love the fact that so many people got short off brexit. only will ford frost understood it and it wasn't so bad. >> i don't know which markets to necessarily hope for. i don't know what's in synch anymore. i love that if rates are at zero -- bonds are at new highs, stocks are at new highs that something's wrong. i always thought financial assets move in -- try getting stocks at new highs when bonds are at lows. >> i have been saying it on "mad money" and it doesn't resonate with people who know this is the end of the world. in italy they were like, hey, don't worry. i don't know. how are your atms? they are not as negative there as we are about them. >> so great. don't go there too often or you

won't come back. >> they love us. geez, i don't know. they love us more than we love us. >> north, south, east and west. the worst part of italy is great. >> exactly. >> we live like dogs here. we do. we don't live hilike -- it's better. >> we do okay. >> it's nice. >> we work to live, they live to work? >> just heard a story about how 30% of us are showing up engaged for work anyway. >> every day, ready to play. when we come back, a check on the markets ahead of the opening bell. plus, get ready bargain hunters, walmart is stepping up the attack on amazon prime day with more deals. we'll tell you how next. first a quick programming note. don't miss microsoft ceo satya nadella live at 10:30 eastern time.

tomorrow is amazon's prime day. walmart isn't sitting idle. the retail giant eliminating the $50 spending limit for free shipping for five days to battle

against amazon's big shopping event. >> a scary moment for aerosmith guitarist joe perry. he collapsed during a concert last night in coney islands with hollywood vampires in new york. he stumbled off stage. video shows perry sitting down on the front of the drum platform, standing up and stumbling off stage. right behind a stack of speakers. the band posted on facebook that joe perry is stable and resting. he's 65 years old. i think it was a serious health issue. i don't know if it's completely what it is. >> listed as critical overnight. >> in the old days, you know, sitting there, stumbling off the back of the stage. >> would have thought something else. >> or wouldn't have meant anything. with the old aerosmith or anything. >> it wasn't a real concert -- >> unless someone was stumbling

around somewhere. johnny depp is in the band and playings guitar. >> and alice cooper. >> you're so --! >> no, i'm not. you don't know about the hollywood vampires? >> out's big with the johnny depp news. they have been touring around the area. >> i go to the opera. >> bye, everybody. time for "squawk boon the stre." >> "the opera." [ laughter ] good monday morning. welcome to "squawk on the street." i'm carl quintanilla with david faber and jim cramer. the s&p at an all time closing high. earnings season, fed speak, data, ipos and more. europe is higher. stronger pound as the uk has a presumptive new prime minister in teresa may. oil coming off the worst week since february. thed