sglrg good morning everyone and welcome to "squawk box" here on cnbc. i'm becky along with joe kernen. we begin this morning with the tragedy in nice france. at least 84 people dead after a truck plowed through crowds gathered to watch bastille day fireworks along the seaside. the truck was loaded with weapons and hand grenades. it went for more than a mile before police killed the driver. it does appear to be the work of a loan assail i can't. the attacker is a 31-year-old frenchman. that is yet to be confirmed. we are going to have much more on the attack in just a few moments. first let's get a quick run down of the markets right now. take a look at u.s. equity futures. they are relatively flat. this comes after the dow and s&p

500 take record highs once again yesterday. the nasdaq closing at the highest level of 2016. overnight in asia, you'll see the japanese market was higher by about .6%. you can see there has been some pressure on stocks. this has come again as this terrorism story unfolds in france the cac is down by about.6%. the ftse in london is down by.25%. we've also been tracking currencies. as the bank of england failed to lower rates as expected yesterday. we have seen a little bit of that play out in the currency markets. today is dollars is down against the euro trading at 1.11. down against the pound. take a look at what's been

happening with crude oil. it zetd ld by about 2%. it's giving back some of that this morning. >> all right. here are some of the otherle stories we're watching today. presumptive donald trump postponing the announcement of the running mate. trump said he has not made his time decision. we'll go inside the race for the white house at the bottom of the hour. china gdp for the second quarter coming in above expectations. we'll have a live report from beijing in a few moments as well. wall street journey reporting xerox rejected a merger deal with r rrkr donnell >> let's get the latest now on the deadly attack in the south of france. michelle is going to join us now with the latest. >> reporter: good morning. the death toll stands at 84.

french officials say 18 people are in critical condition. there is increased security across europe as the truck plowed lu people who gathered to watch fireworks. witnesses in the resort citidy scribed a horrific scene. running couple people for more than a mile. police eventually killed the driver. appears to be the work of a loan assail i can't and reports in france identify the attacker as a 31-year-old. france's president described it as a terrorist attack. he is also calling up reserves to help police familiarly at french borders. the attack came eight months and a day after isis gunman killed 130 people in paris. neighboring european countries are increasing security. german police said they have tightened controls. the mayor of london saying

safety measures are being reviewed firefightor the city a we've gotten a new video. [ gunshots ] >> reporter: what we presume to be the final moments in that attack. this is going to raise so many issues that we talk about so often about europe over the last couple of years, guys, and raising all those issues to the forefront again. whether it's the issue of the eu immigration, the state of the economy in france which has been problematic, it's just going to go on and on at this point. >> michelle, stay with us for just a moment. we would like to add another voice to this conversation.

retired army kernel is here today. we have you far too many days come talk to us. how delicate of a situation is this in france? what do you think is happening? >> there's a number of things going on. the first thing that comes to mind is the state of physical security at this sigte. it doesn't make much sense a vehicle would be able to drive right down the promenade at a time when in theory it was reserved for people strolling around. so that's a real problem and the police should have been on top of that in the first place should have been barriers at both ends, you can can't drive down there and so on. we see that kind of security here in the united states all the time. even new york there are places you can't drive at all. >> kernel, i can think of places in new york where you could very

easily drive that are not always barricaded. >> that's true p except not during an exercise like this. especially after what happened in paris and brussels and so on. the police almost undoubtedly should have had better physical security of this site and they didn't in this case and there will be a lot to answer for after an investigation here. the second thing to remember is it was interesting the report the vehicle itself was filled with weapons and grenades. i mean, you just don't go up to a store and buy all the weapons and grenades you need. that means that even if this were a loan gunman, the fact the vehicle was filled with weapons, if that's actually true, talks about therefore a wider conspiracy and in addition to that, this guy was apparently noun to the police, was a

violent career criminal and so on. it says a great deal about the inability of the french national police and local police to keep tabs on people just like this. i'm not saying this could have been averted, but there's a lot that went wrong in this particular case and we're going to hear more about it later on after the investigation. >> the president and other french people have pointed out that the french lifestyle heretofore was a softer target than something over here. that was something that you could take pride in thar, the s of life. that's why it's an attack on french life. and probably we're seeing tend of that type of, i don't to say laissez faire, but not quite as cognisant. not as many metal detectors. not as many police.

that's unfortunate. let me ask, we've been talking about this morning. how do we stop this now that they've already disbursed. we know isis is losing ground. we know that it's frustrating to think about it. i'm still making a point if you cut off the head that you can't go in there and get assistance and acquiring grenades. you can't -- this guy obviously looked lielk he was trained too. i think you still can go in at the center of where it's happening and if there's a leadership and some of these people you look up to and ideology, we need -- that's probably. right and it's not loan wolf. it's frustrating to try and stop that, but if you go to the center of all the activity, that would be helpful to do that, would it not. >> yes, it is. the don't forget these are not

mutually exclusive. you certainly can go after the head and you need to go after the body as well. we need everybody needs to redouble the efforts to do that. a good case in point is al qaeda. we went after the head and dispersioned it. that's good news and bad news. the good news it made it much more difficult to coordinate attacks. the bad news is it gave rise to loan wolf attacks, but they were not supported. the second thing to keep in mind is that it's very much different in the united states than it is in europe. for a wide variety of reasons. not the least significant of which is large amounts of explosives, for example, are extremely difficult to get in the united states. it's easy to get weapons, but by and large the large number of people who get arrested for buying weapons illegally and large quantities end up bying

from fbi agents. is situation in the united states is very different than in europe. in addition to that, generally speaking, most people in the united states are integrated in social and economic fabric of the country in europe and particularly in france that's not the case. most assuredly in the southern part of france, that's not the case. you're not going to be able to stop loan wolf attacks, the behavior is impossible to stop once it starts. what you can do and this is most important is to have the best intelligence gathering capability you possibly can and there that requires -- that requires diligence that in some countries, in many countries particularly in the west were not willing to engage in. >> hi, sir. i would just add to the conversation that in the wake of the paris attacks, there was the equivalent of a 9/11 commission in france and those results came

out in early skbrrarly july. that report was done. they have three different intelligence services. police for the cities versus the rule areas. a lot of integration and sharing of intelligence across the various institutions that should be in theory protecting the french people. so there are things within the french security season to be done to improve. i think there's going to be a lot of how this has occurred three times since january of last year and there haven't been changes that in theory could have stopped this. >> i was going to say, interestingly, other countries other than the united states have stove piped intelligence operations and they -- it's not just france: they definitely don't do a very good job of sharing intelligence inside the country. in theory we are better than that, but it remains to be seen whether or cumbersome

intelligence apparatus is as good as it is supposed to be internally. >> that points to the eu even beyond the problems that exist in brussels. hollande mentioned in his speech, they're going to be sending more people to the borders. what does that mean? >> yes, already started coordinating with the german authorities when it comes to the border. i don't know what that means. what we discovered after we went to brussels after the brussels attack was it may not mean much going in. it depend on what side of the border you were on. whether or not people were able to come and go. there were checks at one point: ultimately it's supposed to be a continent with open borders. it's not something they can maintain for a long time. at the major crossing pramgs they can do it. politically speaking when it comes to the eu overall.

once again, remember, france has a very strong leave moment already. the equivalent of a leave movement headed up who has been trying to become the leader of france. if she ever does, she made it clear she wants to leave the euro. she wants to go back to the frank and let france have its own borders. >> kernel, back to the attack itself. the french president says we need, quote, absolute vigilance. do you think no matter what level of vigilance you have, you could stop a home grown terrorist who is not using even now traditional weapons? it's almost irrelevant what was in the back of the truck. he did the carnage with the truck itself. how in the world do you stop that? >> the short answer is you can. if you remember what happened in

oklahoma city in the united states. timothy mcsay blew up that building using fertilizer and car seen. you can't stop the behavior. what you can do is two things, you can minimize the frequency of the attacks by good intelligence and intelligence sharing and surveillance which is something both the united states and europe nobody wants to talk about very much. and, secondly, access if you can reduce the access to weapons, which we're not going to do here either, if you can reduce the access to weapons, you reduce the carnage that occurs in eemp each attack. you're right. you're not going to be able to stop behavior, but you can reduce the occurrence. >> someone tweeted out that talked about what we need to do

for the cal fit. it said if there's a truck run over, if it's a high building, throw people off the high -- the top floor. they went over six or seven things and none of them were conventional weapons. and that's you know just makes the point, once again, i do think kernel places where a lot of people gather in those countries, you see those things sticking up. you cannot get by these. even at teams here. remember where the generators were. >> if you're going to have a huge crowd and it's going to be there, it's not that hard. it's not that difficult to do to harden it up. >> sometimes you see this this country if there's a large event, you'll see large dump strucks or something like that that are not permanent, but are just brought in. >> i guarantee they're going to have to do that. if we check every person's shoe going on to a plane, you're going to have to do that over in france where a lot of people

gather, right? >> it's worth talking about airports again. we forget that airports are extremely easy to attack and you remember the attack on the airport in istanbul it was a large loss of life. it could have been a lot worse particularly if it were done in the united states where you can drive right up to the terminal. we forget about the fact that people in the united states congregate in large numbers in specific areas every day. you talked earlier in the program about congregating in large numbers in new york city without in protection. if we're going to stop anything at place where is people congregate in large numbers every day, one of the places to start is airports. extend the boundaries out so that you can't drive right up to the terminal and so on. that's going to reduce perhaps the frequency and also the deadliness of any future attacks

that might occur. there are lots of things we have to do. the question is whether or not we have the political will to make it happen and so far neither we nor the people in western europe seem to have the political will to do it. >> kernel jacobs, i want to thank you for your time this morning. michelle, i know you're monitoring the events. >> two americans are among those killed. >> a father and son from texas. >> a father and son at least. coming up, we have more records for the stock market. that is still going on this week in china gdp for the second quarter. also coming in just bovr expectations. we'll get a live report from beijing next. "squawk box" will be right back. ♪

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you're here to buy a by switching to xfinity x1. rio olympic games show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. dow futures are indicated higher. set new records once again yesterday. a lot of things to digest this morning. we've been hearing about the terrorism attacks. we also have some financials that are going to report earnings. right now the s&p fumps are down

by about one and the nasdaq is off just fractionally. if you check out what's been happening in the treasury market, it's this point the 10-year note is yielding 1.5. the gold prices this morning, which also have been climbing in recent weeks, you can see right now they're up another 2.60. 1, 3334 an ounce. >> china second quarter gdp coming in better than expectations. eunice joins us now from beijing. good morning eunice. >> good morning. china did have a very steady second yaert quarter. the chinese premier hinted the froet was going to be similar to the first quarter and it actually came in exactly the same. generally most of the strength was from the june data. the retail sails numbers and industrial outlook were better

than expected. the fixed asset investment started to taper off just at the end of the first half. especially in the property sector. that raised concerns because the property sector revival that we've seen here, especially in the large cities, has been credited with helping china avoid a hard landing. mainly the growth was coming from an expansion of credit and infrastructure spending. if you looked at the private sector investment, it ground to a halt and that also raised concerns and questions as to whether or not the growth is going to be sustainable at these levels in the government doesn't come in with more stimulus. the government today said they're expecting to see even further downward pressure on the economy because of the uncertainties overbrexit and later in the day the authorities said they're going to green light additional money in the infrastructure spending in the west to help offset some of those declines. >> thank you so much. tlets talk more asht the

markets. joins us joe and steven. north america chief strategist. larry fink sat in that very chair and said stocks were not justified at these levels. is he right. >> we would disagree with that. we are pretty bullish on equities. one of the main drivers for us is earnings are sets to reaffiliate. i think they're looking in the r. we see a the probably the big surprise for the second half of this year is markets are set up to go higher. reinflammation. his point was the earnings have been so bad. >> i would agree earnings are probably going to nader in the third quarter and skyrocket by the end of the year.

woe would look differently at the u.s. market saying the pricing and forward earnings basically any measure of valuation, u.s. equities look pricey. >> you agree with lar equity fink. >> yes. i would agree we would trim into u.s. rallies and use that underweight to fund a global overweight. japanese equities. so if you look at global multiasset space, you don't have to make the false choice of stocks or cash. we would think europe right now based on valuation cycle is going to be a better risk return. >> part of lthe point is pullin money out of the mutual fund. may be other forces really pushing things up. >> that's a contrary positive. actually one of the most unloved markets we've seen in history. if you look at the individual investor outflows from both u.s.

equity mutual funds. sdwrout flows in 2015 through year to date have exceeded the outflows of 2008 and 2009. we look at an environment where number one earnings are reaffiliating. when you're thinking about earnings, no one really cares how much companies earn. they really care about did they earn more or less than a year ago. did they earn morgsst more or less tharn a quarter ago. the earnings comp gets better at at that time when people are still afraid of equities. >> does this tell you it's an artificially inflated market. >> it's a good question. a lot of people are pointing fingsers at central banks. >> they're taking the job mush more seriously these days. >> they talk about the feds spiking is punch bowl. when the fed hikes, they take

the bunch bowl away from the party. that's kind of a bummer. in this environment they're describing it as artificially manipulating asset prices. you have interest rates that are going to be lower for longer. you have profits inflating and people running for the hills. that sets it up for a second half where u.s. equities, u.s. small caps really outperform. >> if you use that logic, what's happening in europe is going to be more aggressive for terms of monetary easing. the earnings story in europe is more positive. i think the earning story into japan is more positive. so looking at what the european central bank is doing, the bank of japan, i think that's likely to provide more fertile ground. i think the background is that central banks globally will deprive investors of risk free yield. it should be an active strategy

too. >> are you proposing nader as verb. would you like the oed to consider that noun. its totally a noun. you said it's going to nader. >> if you want to use it the a totally novel way and visit -- it's the steven wood usage of nader as a verb. >> thank you. i'll take that. >> i think you should tell the dictionary. >> i'll get on the phone. >> i think it will reach its nader. >> actually you were just trying to use the fewest number of words so we don't waste time. >> like we're doing now. >> yes. >> anyway, thank you. >> thank you. >> steven, joe, take care. >> coming up, the world reacting to the terror attack in nice, france. declarie ining three days of mourning. here at home, donald trump postponing the vice president

announcement in light of the attack. john harwood will join us next. can a toothpaste do everything well?

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reflation. u.s. equity futures at this hour. take a look. there they are. it's a mixed picture. markets around the world digesting the terror attack in nice. certainly around new highs as well. our top story is the attack in nice, france. at least 84 people are dead after a truck plowed through crowds gathered to watch

fireworks along the seaside. a truck loaded with weapons went for more than a mile before the police killed the driver. it appears to be the work of a loan say sal i can't. reports say the attacker is a 31-year-old of ta knee shan decent. the attack came eight months and a day after isis suicide bombers killed 130 people in paris. neighboring countries are increasie ining their security. in agreement with the french security authorities and the mayor of lond says safety measures are being reviewed there as well. that's a dramatic video there of the end of that attack last evening in nice. >> the way this played out, but prior to even that very first thing that i saw, which happened again to be on twitter, so i

guess it's not all bad, but prior to that was a feeding frenzy the media was having with donald trump and pence and that immediately i think in everyone's mind became a non -- it was a story that was going to have a come to later day and i think donald trump, you know, being sensitive to that postponed his vp announcement in light of the terrorist attack. john joins us now. i guess john, we'll even though we know what's going to be all about this horrific attack, but there go back to as if it hadn't happened to what was going on during the day because it was crazy. was it intentional? did something get out of hand? were there leaks? what went on with the way this thing was handled. >> first of all, with donald trump it's hard to know and donald trump has been a master at manipulating the news and getting attention, getting

coverage. he had drawn out his veep process sort of like an apprentice style. >> yes >> the bachelor, something like that. then you had people like chris christie newt gingrich more openly pursuing the job than we've seen in the past. the signals were sent yesterday morning that it was going to be pence. people senior people in the campaign were told it was going to be pence. mike pence flew to new york for that announcements. he's facing a deadline, he has to pull out of the race by noon today. >> today. >> if indiana republicans are going to be able to put somebody on the battllot to replace him the governor's race. so how exactly if trump remains the choice, how are they going

to handle that? are they going to let him put on the papers. >> if pence remains the krois. >> yes. if pence remains the choice, will they allow him to do that and simply not announce it until later. trump indicated last night at a fundraiser he was going to do this over the weekend. he called in to a show on fox last night and said i haven't made my final-final decision. so that fuels the idea that since we did have a split within the family and the campaign, campaign people wanted mike pence. some people, jarred kushner, who is very influence shl. had been pushing newt gingrich. does that reopen the discussion? we just don't know. >> did you see the scuttlebutt that a pro public tape exists of newt gingrich nosupposedly mont ago saying very disparaging things about trump. >> i've seen some of that stuff.

>> it hasn't -- i heard it hadn't really come out. it was pretty damming. it was like he -- i don't know. i'm not going to go in. gingrich is like a loose cannon. >> you've got most people in the republican party at some point have said something. >> have said something negative about donald trump. >> even mike pence i think did. >> and ted cruz is going to be speaking to a huge audience at the convention said the worst things i've ever heard a candidate say about a rival. >> all is fair. when does the first night is monday night for cleveland. >> yes. in theory you could wait -- in 1988 for example, gorge bush didn't announce dan quail until they arrived at the convention. i think it was sunday. so. >> it could be sunday. >> it could happen sunday, it could happen monday. look the vice president gets nominated wednesday night, i believe. >> if pence does go ahead and pull his name from the ballot,

we'll know that by one:00 today. >> yes. >> so when does 60 minutes tape? >> leslie stall is going to interview. >> yes, so maybe that's the de facto deadline. >> newt gingrich was on television last night making very strong security arguments. maybe he still has a shot. he said that we should deport muslims who believe in shir ri law. >> they have 21. never got off the ground. they were hoping for 28. >> they were hoping to unbind the delegates and let a conscious vote take place. as paul manford said in a tweet last night, they were crushed. >> what was the comment newt

gingrich made to you. >> two-pirate ticket. >> did he say that to you. >> yes. >> he must have been using that a couple evenings ago. >> i saw him on, let's see, wednesday night. i said don't you think a ticket between you and trump would be a little hot for the average person. >> yes. >> and he smiled and said it's a two-pirate ticket. i also asked him if he thought he was too old and he said no, it would be quite an old ticket. >> chris christie same kiennd. >> sure i believe newt is 73. >> chris christie is similar to donald trump in terms of the bluster and just being straight talking and sort of, you know, full on straight ahead. >> but the advantage of christy. >> they have a comfortable relationship. >> they have a good relationship. chris christie very recently has been in the center of the republican action. you know, newt gingrich has been

out of it for a while. chris christie has a certainly plausibility to him. the problem is it doesn't balance. it doesn't solidify conservatives and that's the problem that trump has. >> there's also the kushner issue. >> yes. >> still the guy yesterday with the united airlines. that's still even in the news. an appointee of gomvernor krir y christy. >> chris christie, nobody disputes he's got big talent. >> as a prosecutor, he would be a great person to talk about hillary. >> you would be getting somebody with all-star campaign skills. >> amazing. i mean, hillary would not fair well. >> and pence is somebody who everybody agrees is solid. conservative. social conservatives like him.

>> he's not a sentlating campaigner. now, from a lot of the professional campaign strategists who are working for trump, they like that. they want boring. they think they have all the electricity they need with donald trump. joining us now to talk about the nice terror attack. jim, initially watching last night it was horrific and you didn't know what you didn't know in terms of whether the truck was booby trapped, whether it was the beginning of a series of horrific attacks. then you had the incident at eiffel tower. technical thing with the fireworks. at this point today, what are police in france doing? is the incident over? do they even know that at this point. >> they don't. they don't know it's over. what they've got to do is establish who the guy in the truck is, who the terrorist is, who is he connected to. you know, the simplest terms i

would like to say we go right for his wallet, his phone. who is he. where does he live. does he own it, steal it, rental it. who is operating with him. the fact he had hand grenades and rifles in that truck, he had a pistol on him. he had some connections to get those weapons. he wasn't just some loser who decided to drive a truck. he's a little deeper in than that and they have to see where those tentacles lead. that's spun up big in france. of course with our intelligence people around the world as well. >> so we are deciding to -- a lot of us can't help, but have the feeling of almost like this is -- there's nothing the world can do about this at this point. >> yes right. >> we come back to i think we have to try to go to the head of this and try to -- at least start with that and try to do

what we have been, you know, unable to have the i don't know the problem. >> the problem is if there are 50 heads all around the world in various countries that have made access easier rather than more difficult, what do you do? >> i know. do you think we have exhausted all -- i'll ask jim. jim, do you think we have exhausted all the military capabilities that we could bring to bear on isis at this point? we have not, have we? >> i don't think we've exhausted all the military capability, law enforcement capabilitcapabiliti capabilities across all of spears of influence and strategy that we could put to bear on this. we just have not put it on a strong enough footing. let me put this this way, the president has ramped up this state department cyber unit to

counter isis within the last year more so and it's become more successful within the past year. knocking them off twitter, backing them off on in the cyber field, a lot of success, dropping the recruiting some. along with the battle field success. it's still in my mind not enough. if we're doing it better than we were, we should double and redouble those efforts. the same with law enforcement, the same with military. if we're going to take the strategy that the president wants to do this strategy with special opts and drones and intelligence, okay, that's a strategy. let's ramp it up. let's ramp it up higher and faster. in other words, that may be the right steej, but we're not going it strong enough. we need to strengthen all of those things we're fighting on because of the way they operate. you know, they use what that they do is use religion. they're a death cult.

they're not islam of course. they're a death cult. what they do is try to use islam because it transcends the centuries and it transcends national boundaries. you have a guy here in france. he may have been a french citizen. he doesn't identify with france. he identifies with the death cult that transcends national boundaries. he identifies there. >> but jim, in one place right now, houc rk, how many isis guy one area, there are what, 15, 20, 25,000 or something like that. so we're talking about again is unfortunately probably boots on the ground because it's -- they're mixed in with the population. is that -- will that eventually be something that allies need to get together on and go in there and just get rid of all 20,000 remaining isis fighters in the middle east? is that a start? >> i don't think that's the

wrong strategy. i think what happens there is the end game. who wants to occupy that piece of land once it's over. >> i don't know. i just don't know. these are just i don't know if their desperate measures, but you know we didn't -- if this is a weekly thing, that's eventually going be -- it's being politicized already. people faulting president obama for saying this is, you know, like something that should be settled in the court instead of seeing it at a war on the west as a complete war being declared on the west by a group of deranged fanatics. we have to go. jim, it's not -- i don't think it's the time to politicize it, but we're all frustrated and just seems like something different, some different tactic has to be employed. all right. thank you. >> i'd like to seem them ramp it up. >> ramp it up. something. anyway, thank you.

>> when we return this morning, warren buffett donating measure of his fortune to the gates foundation. as we head to a break, quick check of what's happening in the european markets right now. they have been under a little bit of pressure. the cac is down.67%. "squawk box" will be right back. to do one thing & another. only at&t has the network, people, and partners to help companies be... local & global. open & secure. because no one knows & like at&t.

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welcome back, everybody. you can see this morning the futures are relatively flat. one of the things we're watching this morning though is earning's season. that is still underway. we are getting numbers from financials today, include pnc financials. the bank beat estimates by.07. the revenue just slightly below the forecast. the company says the quarter was a good one against a backdrop of global uncertainty. buft has donated. part of his plan to give away nearly entire fortune. his donation was made up of 19.6

million shares of berkshire class b. he makes these donations in july. that reduces the number of shares he owns by about 5% from the previous year. >> i think if -- and we do. we have to watch the stock markets around the world. not to say that you immediately think of money with what happened, but we've got to keep checking europe. it's not -- it almost makes the point that domestically it is a safer place to put money here. so i'm not surprised u.s. market doesn't do down. you saw what happened to the airlines after the fall attacks in france. >> and it's been similar today with shares of expedia and others. they've been under pressure. >> we need to follow europe when we check our own -- >> it's funny you say that. you guys have had ian bremmer on this program multiple times.

in a story today he's quoted saying -- like steven wood was saying look to europe. ian bremmer says these kind of attacks making europe weaker at a time europe don't know what it stands for. you have all these issues around immigration and the terror attacks. and yet you still have people saying the ast great place to invest. >> i was saying we should watch it. i'm not saying invest. >> i know you're not. but you hear people say europe's the place to be. of course you have to watch it. >> tourism is going to be, you know, affected.

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all right. we're back. japanese messing app line making its debut. one of the largest tech ipos since alibaba. >> that's right. it's a dual listing. they also sold shares in tokyo. good momentum to swing over to tokyo. shares took awhile to open since buy bids pretty much outnumber the sell ones. line opened up some 50%. and i asked a few last night why would anyone buy into a chat app -- nintendo rally may have helped the sentiment as well. nintendo has rallied close to

100%. and advertising revenues jumped over 60% last year. that's a new you are source of revenue for them since they make most of their money selling cartoon stickers and games. line stez they plan to use the money from the ipo to expand. they indicated they want to double down on the markets they already dominate in like japan where they get 70% of their revenues and they are rolling out new initiatives like low cost mobile carrier. at the end of it i think tokyo's shares were up some 30%. we have a long weekend in japan and nobody wants to hold risk for the long weekend holiday. back to you guys. >> susan, what does this tell us about the broader ipo market at this point in the united states? there have been some concerns. you get a few good ipos and people change their minds? >> i think so. four times the list price. you know, that 27% debut yesterday for a stock that not many americans are familiar with. that says something.

>> like scott of andreessen. >> thank you. coming up, we have the latest details on the deadly terrorist attack in nice, france. former new york city police commissioner will join us after the break. "squawk box" is coming right back. between life and death. for partners in health, time is life. we have 18,000 people around the world. the microsoft cloud helps our entire staff stay connected and work together in real time to help those that need it. the ability to collaborate changes how we work. what we do together changes how we live.

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a deadly terror attack in france. at least 84 killed after a truck drives into a crowd celebrating bastille day. the latest on the investigation and the global response is straight ahead. a winning streak and a winning week on wall street. the s&p trying to finish up with a perfect week of five new highs for the first time in over 18 years.

but will global concerns and geopolitical worries derail the rally? and donald trump delaying the announcement of his pick for vice president in light of yesterday's deadly attack. we'll talk presidential politics with former texas senator kay bailey hutchison. the second hour of "squawk box" begins right now. live from the beating heart of business, new york city, this is "squawk box." >> welcome back to "squawk box," everyone. this is cnbc, first in business worldwide. i'm becky quick along with joe kernen and scott wapner. we've been watching the futures this morning and here in the united states you'll see that the futures are relatively flat. this comes after a week-long series of new highs every day for the s&p 500. the dow setting a new record yesterday and the nasdaq at its highest levels of the year. again, we're continuing to watch markets around the world. our top story this morning is the terrorism attacks in france once again. this time it was in the resort

town of nice along the mediterranean. there was a truck loaded with weapons and hand grenades that drove over a mile plowing through bastille day revelers that gathered to watch fireworks. 84 people killed. 18 still in critical condition this morning. michelle caruso-cabrera joins us with more on this developing story. >> reporter: the u.s. state department says two americans are among the victims of the terrorist attack. nbc news reports they are 51-year-old sean copeland and his 11-year-old son brodie copeland from lakeaway, texas, near austin. their family issued a statement saying they are heartbroken and in shock. french president hollande has arrived in nice. he announced he is calling up reserves to help police particularly at french borders. witnesses in the resort city in southern france described a horrific scene after that truck drove onto the crowded sidewalk

running down people for more than a mile. >> and we saw the hands on the head like this and just waiting on the floor. and literally crying and praying. >> and we were terrified. we had no idea how close the -- we didn't know if it was a shooter. we didn't know if it was multiple people. >> he was just mowing people down. i can't even tell you how many people i saw die. >> i was in panic mode. so i just ran as fast as i could. >> it's unfortunately not as surprising as it should be. you know, when you see a huge crowd gathered in europe now, it's always in the back of your mind. >> reporter: police eventually killed the driver. new video shows the moment that appears to the show the moment that police killed him. [ gunshots ]

two police officials tell the associated press that identity papers found alongside the attacker belonged to a 31-year-old frenchman of tunisian origin. dow jones reports he isn't known to have any connection to terrorist groups. the attack came months after suicide bombers killed 130 people in paris. neighboring european countries are increasing security. german federal police have tightened controls at the french boarder. that's in agreement with french security authorities. the mayor of london says safety measures are being reviewed. back to you. >> okay, michelle. thank you. joining us now former new york city police commissioner bernie kerik. thanks for being here. there's more individuals in europe probably in the general population than we have here and the security is not what we have here. and that's a bad combination. >> well, not only the security, joe, but the intelligence. their intelligence capabilities are not up to what they should be, i believe.

you know, the french authorities, the intel people have been talking about an imminent attack for the last few weeks. something was coming. so this is stuff they should be prepared for. you know, but nobody should be surprised. >> but you said intelligence. what about like we've talked about? putting a huge truck obstructing anyone from now on they will, obviously. >> you know, the one thing that come out of this is you hear that this guy was traveling for almost a mile. almost a mile. now, i don't know where he started and where he ended. i see where he ended. a mile. >> you can't leave that unobstructed for something like that to happen. we don't around here. >> you see it around the city where we take 2 1/2 ton dunk

tru -- dump trucks and block off when we have to. this kind of attack has been talked about for years in al qaeda and other manuals. dating back i think 2009, 2010 this stuff has been talked about. so this isn't a new strategy. it's not a new tactic. this is stuff they talk about constantly. >> commissioner, you bring something up. you say there had been reports for weeks that an attack was imminent. we keep calling this a lone wolf operation at this point. is that not accurate to think? if there were concerns something was going to happen, that suggests he was connected to a broader network. >> he could be connected to a broader network. he could be inspired or radicalized through the internet. and, you know, i don't know if you saw newt gingrich's rant last night about what should happen. i have to tell you there's a lot of things that he said that people have to think about. you know, we have to eliminate their ability to communicate through the internet. we have to do it.

the inspire magazine, why are they still able to get to it? all these things that radicalize especially these young kids, that stuff's got to be taken down. >> what about what newt gingrich said about sharia law? >> the bottom line is sharia law calls for this stuff. it does. i lived in saudi arabia for 4 1/2 years. i worked for the king of jordan for four years, almost five. i was the interior minister for iraq. i'm telling you, sharia law calls for -- >> sharia law only applicable to radical islam or islam? >> no. it's a part of islam. >> then that flies in the face of everything that we're constantly told that it has nothing to do with islam. >> and you know what it is? it's all about interpretation. you know? the king of jordan follows sharia law. he follows the koran. but he's not a radical. he's not -- you know, he's a moderate muslim who despises -- >> you said you can't really be

a moderate muslim and practice sharia law. >> at its extreme, you can't. the king of jordan calls these people the outlaws of islam. he despises -- we don't have a better ally than the king of jordan, the president el sisi of egypt. they despise this stuff. >> can you tell us as the former police commissioner what is happening today in new york city and other major u.s. cities as a result of what happened in nice? >> you know what, scott? the new york city police department is probably better prepared intelligencewise because they actually have -- we actually have new york city police detectives assigned to europe, assigned to paris, assigned to london and other places. so there's a lot of communications with the french authorities. >> works directly with the fbi too. >> we have the most substantial joint terrorist task force in new york city probably than anywhere in the country. so everything going on there right now is being filtered back to new york city.

we'll have the insight on what happened, where it started. and then, you know, if there's anything that comes out of this that we're not looking at, they'll look at. i have to tell you. we're doing about as best as we can do under the circumstances. the problem is we have to ramp it up. you know, your prior guest -- i didn't know his name. he -- you know, ramp it up. you know, you know what the problem is. you know where the problems are coming from. >> ramp it up at home or overseas? >> both. both. and everybody's focused on isis. forget isis right now. this is a radical islamic movement against the west and non-sharia law. okay? that's what it is. isis, al qaeda, boko haram, hezbollah. i don't care what you call them, this is a movement against the west. >> again, though, how do you separate your friends from your enemies in the muslim world?

>> you know, one thing you have to do is you have to grasp the real allies abroad and get them involved and have them lead this coalition. i've said this for two years now. if i was the president, i would have the king of jordan and the president of egypt leading this global coalition. >> the king of jordan has been very frustrated, i think, by what we have failed to do in the region. they're looking at refugee situation that is -- >> the king of jordan doesn't have the money to do the things that has to be done. >> right. and that support is not coming for the 2 million refugees he has at his doorstep. >> that's exactly right. and he said he has immigration problems. you know, we're talking about bringing syrian refugees in here that we can't vet. the king of jordan himself said this is a bad idea. this is stuff we have to be concerned with. >> 2 million refugees that are sitting in the country. so you try to think of that proportionally here. >> exactly. it's a major problem. >> i think what makes it so not

only difficult but scary to think about in big cities like this is two guys in an apartment in any one of the boroughs inspired but what's happening overseas trying to pull off a spectacular event and we're reliant on the police department to be vigilant. it's a scary proposition to think about. >> that is exactly why we have to reconsider how we collect intelligence. you know, i know nobody wants to hear predicted profiling. nobody wants to hear going into the mosques. nobody wants to talk about it. the reality is we're going to wind up doing it or they're going to annihilate us. that's the reality. so you can sit back and do nothing. or you can get proactive and preemptive and try to address it. but sitting back and doing nothing is going to result in more attacks. >> they eventually get a dirty nuke. and they want them.

>> it's not like they're not trying. you know, that's exactly right. >> for the president to say this is never going to be an existential threat to us. >> that's ridiculous. >> it is to our way of life. >> this is an unconventional world war against the west. that's what it is. >> correct me if i'm wrong, haven't we made a lot of strides with the muslim community here with them sort of policing some of their own in these mosques. >> we have and that has to continue and we have to ramp it up. we have to make sure we're not missing anything. as scott just said, you know what? two guys sitting in brooklyn somewhere comes up with an idea, the thing is, they'll talk to somebody. they'll be communicating. they'll be looking for weapons. they'll be looking for a vehicle. you know, somebody's going to know. but if we're not in there collecting intelligence, we're

not going to know. >> the profile seems to be changing. if you look at san bernardino, these were two people who had government jobs and had a child. which wouldn't fit the normal profile. you're usually looking for loners, young men who don't have a future. >> the one thing that came out of that and i think this is something we have to realize, they were collecting information off the internet. they were on the internet. they were googling things. we've got to be in there. we've got to be collecting that information. we have to be looking for these people online. what's going on on the dark net? you know, what are they talking about on the dark net? that's stuff that a lot of us don't even -- the general public don't even know about. >> you know, commissioner, with san bernardino and with orlando, we spent a lot of time on guns too. and not to say that you don't try to do everything. you do try to do everything. and maybe large magazines you know that we can have that

discussion. but is it always okay for -- you know, we want to keep it non-political, but a certain side will focus almost entirely. the sit-in in congress after the attacks was about gun control. is that okay to be done too or does it distract us? >> last night as soon as this happened, immediately after it happened, i sent out a twitter message. >> i tell you not to do that, commissioner. do not send out tweets. >> i said, listen, stop focusing on the weapon. focus on the enemy. these people are going to get weapons no matter what. they're going to get the things they need to create chaos, death, destruction. they're going to get them. you know, does the magazine thing help? the gun thing help? you know, could it, would it maybe -- you know. it's possible. it doesn't discourage them. >> but people will say let's do

everything. it's not bad to say let's not make it easy to kill a large number of people. but i wonder whether it at times distracts from the core of the whole issue. that's my point. >> i think you have to look at the big picture. >> counterproductive. >> the politicians are doing what they do for political reasons. >> right. >> look at the bigger picture. >> commissioner, thank you. >> thank you. coming up, earnings likely to drive market momentum over the next week. we're going to talk the rally after the break. take a look at futures. they've been mostly muted at this hour. dow would open higher by a little more than four points. the s&p is looking for another day of new highs. that would be the first time you would have five consecutive days of s&p new highs since march of 1998. been awhile. we're back after this on "squawk." get ready for the rio olympic games

by switching to xfinity x1. show me gymnastics. x1 lets you search by sport, watch nbc's highlights and catch every live event on your tv with nbc sports live extra. i'm getting ready. are you? x1 will change the way you experience nbcuniversal's coverage of the rio olympic games. call or go online today to switch to x1. welcome back to "squawk box." the futures in this country right now, remember, think safe haven for a lot of domestic issues that -- with this, you know, all the tumult globally, you know, it forces some people maybe to put assets in the united states. so let's look at europe to see whether there is any angst about the tourism industry. that's not an awful session

given the horrific backdrop with the terrorist attacks. but all across the board, it's red and we will check the airlines. there's no other way to explain, scott and becky, they dropped like 30% after the fall. as the market did okay and even other parts of the transportation efforts didn't do nearly as bad. now they've come back recently. but to try and figure it out, oil went up a little. but you have to think that was partly people canceling. >> and we heard hotel companies talk about bookings being an issue particularly in european cities. >> when i was recently in italy, i heard from people there that tourism already this year was up more than 30% in places like italy because people were traveling fewer to places like turkey or to the middle east or in some respects maybe even to other western european -- >> or paris or brussels. >> i bought tickets to brussels

for my parents that were cheaper than tickets i bought for in the united states. >> i thought about it and then i was in a large place like an airport, i thought about it. yeah. all right. here are the stories making headlines this morning. it is the busiest day of the week for economic reports. we're going to get june retail sales in the consumer price index. then business inventories at 10:00. at the top of the hour, the two most prominent business earnings of this morning. citigroup and wells fargo. and a move to unbind delegates has failed. the rules committee rejecting a proposal to allow delegates to vote their conscience rather than being bound to a candidate. markets are up for five straight days. and sitting at all-time highs.

but larry fink wasn't getting too excited about the rally. >> here we are, we're seeing investors worldwide pausing. we have seen quite a large sum of money being pulled out of equities over the last year. and yet we're at record highs. this rally in my mind is not -- i don't think we have enough evidence to justify these levels in the equity market at this moment. >> joining us right now is jim paulson and mike santolli. what do you think? do you agree with larry? >> i don't so much, becky. i think it's no coincidence that the citigroup index went negative at the start of 2015 and really stayed negative until about a week ago when it finally crossed over zero and has been positive again. that whole period of time where economic surprises came in the

stock market struggled then the first time now we're getting reports better than expected, it breaks out to new highs. i think this is a fundamental based rally that has to do with economic growth picking up not only here in the united states but globally. and as a result the corollary is expecting an upturn as well. the broadness in this rally reflects. >> mike, one thing that larry did say, one caveat, was that if we do see earnings improvement he would change his mind. we're expecting to see a 5% decline. he said if you see real earnings, that's a different picture. >> that's implicit in what's behind this rally. i think you need to have the earnings recovery play out in the next couple of quarters. almost as kind of the cover story for why we're rallying right here. obviously it matters longer term. but you want people to be a little more comfortable with the idea that we have a couple of

quarters of relief. it pushes back against that main complaint that the market looks stretched on a valuation basis. as jim said, i think you could have stepped back. larry fink talking about big investors going to the sidelines pulling money out, that is when the market tends to rally in a surprising way. not the other way around. i think you've had people say you want to see economic growth, high 2%, maybe pushing 3% for the second quarter, the fed is telling you they're in no hurry anymore. so you can rally and just have this kind of pent up buying come into the market which has happened in a dramatic way in the last 12 days. >> what would you tell investors to do right now? >> well, i think becky, that -- you know, i think this might go on a little higher yet. i don't know if it's going to run away. but 2200, 2250. i'm looking for optimism to be more evident before we maybe struggle again. i'm looking for people to start talking about higher rates.

i'm looking for the 10-year yield to get back above. i think it has a ways to go. i would look more towards cyclicality from some of the safe haven bondlike stocks within portfolios. which could be the market does a run up so much as there's just a rotation in leadership. and then i would put more and more away from the united states off shore. i think the united states if this continues is going to run smack dab back into the idea that the fed's going to have to lift rates. and i don't think overseas markets are going to face that struggle. so i think they have greater potential over the next year in the united states. >> if you had a target, year-end target on the s&p, would you be feeling a little bit nervous about maybe you should change that? or would you just stick with it? >> you know, joe, i think that you got to be a little nervous

about it when we're up this high. i think we're going to go higher yet. so i think we could go up to 2200, 2250. but i still haven't ruled out the possibility that we get back into an idea of rate hikes and maybe pull back to that level by year end. >> we had a technician say that if we got through -- >> if we ended two fridays above 2150 or 2160. >> we could see 2400, maybe not this year. but that's what the charts show. the good thing to remember is you can bring it up from 2100 and then no one remembers and he's like i had 2300. you know, that's the annoying thing with you guys. >> i actually think, joe, i think the psychology works in a different way which is your clients don't want you to be optimistic right now. >> i know. >> you're kind of better off if -- by the way, brian belski, he happens to have a 2100 target in the s&p and he justified sticking with it opposed to raising it because of the valuation side.

and the fact that earnings are more choppy. >> that's exactly -- that's the reason i brought it up was because of brian belski. i karg argued with him on wednesday. >> here he looks pretty good at the moment. >> two years ago he was talking about the greatest in history. we finally get up to a point where maybe we can resume it and he's at 2100. what's the point? >> it's not the end of it. >> i don't know. these guys have to cover -- it's more about covering their bases. >> i can't get past -- >> hey, joe? >> it's bullish or not. >> he's got a dog in every race. >> i understand. but still a guy like larry fink saying that -- >> that's new for him. he was begging the fed to raise. >> what stocks look like. >> sorry, jim. what did you have to say? >> the market could be higher by

year end and the pe mobile lower. >> it could be higher, lower, or the same. thanks for that insight. appreciate it. he also told me it was the summer and technical analysis was different than fundamental analysis. >> gentlemen, thank you. >> i could read this right now or -- >> hurry. >> coming up, kay bailey hutchison an donald trump's pick for vice president. we'll have more on the attack in nice in just a bit. i order b14. i get b14. no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business.

among the stories front and center this morning, a senate panel is asking tesla for a briefing on the fatal may 7th crash involving the use of tesla's autopilot technology. reports say elon musk got a letter from senate's john thune. china's economy grew slightly faster than economists were expecting. the widely popular pokemon go game could be launched in many more markets if co-developer nyantic has its way. right now it's only in five countries. warren buffett making good on what he said he was going to do a couple years ago. he's donated nearly $2.9 billion

of his berkshire hathaway to charities. it's part of his plan to give away nearly his entire fortune. his donation was made up of 19.6 million berkshire class b shares. he typically makes his donations this month in july and reduces the number of shares he owns by 5% from the previous year. coming up, donald trump postponing his announcement of a vp after the tragedy in france leaving the reported winner hanging. a look at contenders and what it could mean for his battle with hillary for the white house. and as we head to break, u.s. equity futures. going for five straight days of highs on s&p today.

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indiana governor mike pen pence -- sources of knowledge of the decision confirmed to nbc that he is, in fact, donald trump's choice for vice president. john harwood joins us on set with more. so can we make the bumper

stickers? can they make the bumpers stickers? so it's done? is there the slightest wiggle room in your view, john? >> yes. until it comes out of donald trump's mouth -- >> nbc is saying it's mike pence. >> i was saying it was mike pence yesterday afternoon. and i believe that that was the case. but donald trump himself went on television last night and said i haven't made a final, final decision. >> isn't he just saying that to keep -- >> that's everyone's assumption. but this is a different kind of candidate. i just before coming out here heard from a senior trump adviser said he's going to announce rescheduling plans later this morning. >> okay. >> so we'll find out. as we discussed last hour, mike pence has got to file papers to allow indiana republicans to put another candidate forward for governor if he withdraws. that's by noon. and so one would --

>> the name on the ballot if he isn't by noon? >> that's correct. my assumption is mike pence is going to be the choice and it will be announced over the weekend and he will pull out of the indiana governors race and somebody else will step forward. but as long as the candidate himself says it's not final and we know there was a split within his camp as to who the choice was going to be, you can't take anything for granted. he's very unpredictable. >> it's funny because there's two old sayings. one is the vice president doesn't really matter. then the other one is it's the most important decision that the presidential candidate has to make. and we've seen some evidence of that in the past. i don't want to -- i like dan quayle. i don't buy the media, you know, caricature of him. but that was seen as the time as maybe not being seen as a great choice by the first bush. and then sarah palin. so it does make a difference. because trump picked someone that appeals to conservatives

who -- in other words, he didn't do a maverick move here. he did something in your view probably to contend he has found some religion in terms of being a more mainstream candidate, is that how you see it? >> i think that would be a very solid pick for the circumstances that he's in. donald trump, first of all -- >> does it indicate that he is changing and becoming a more established candidate? >> not to me, no. but it provides reassurance to conservatives they've got somebody on the team who thinks like them. and the way you framed it earlier, the vice presidential choice is not going to make a big difference electorally. but you do want to if you're donald trump and want to get your numbers among republicans from the low 70s up to 90 where it needs to be to win, mike pence is a guy who can help you do that. you want to calm the convention. you've put down the anti-trump

rebellion which they did yesterday. but you still got to get your support up. you want to have a smooth convention. mike pence can help do that. >> we were talking about a tweet earlier or at least it was a comment within a tweet that said chris christie said i don't like finishing second for anything ever. well, he may have finished third. who would be second? would it be newt? >> my belief is that if it's not going to be mike pence, that it would be newt gingrich. >> okay. >> i was told by a source that i believe that jared kushner who is the son-in-law of donald trump who by all accounts may be as powerful or more powerful than paul manafort the campaign chairman was promoting newt gingrich. this is something that, you know, this argument has played out more publicly than many of these things have done in the past. the campaigning ining has been

than in the past. this is a path breaking candidate, donald trump, and i don't think anything he does could shock me at this point. >> all right, john. he probably feels the same way about you. anyway, joining us now former u.s. senator kay bailey hutchison. she's also a cnbc contributor. senator, i know pence was in the house and he was a governor. do you know mike pence at all? >> i do. i've worked with mike pence. i've co-sponsored legislation with him. and i think he is a terrific choice. he covers so many bases. when you're picking a vice president you want someone who's going to go outside of your own base. and trump has his base. it's solid. now i think he picks up the solid conservatives who were not quite ready to adopt trump.

then he goes into the mainstream. he is, i think, the perfect choice. >> i don't know if you decided to do -- if you're going to adopt the donald. that might not work. but have you endorsed him, finally, senator? >> you know, i was waiting to see how the campaign played out. because i think he has brought in a new base. he has legitimately won the primaries. but i just wanted to hear more. and i think this first choice of mike pence for vice president i think covers so many bases about which i was concerned. and i think this is something that will bring a lot of people together. mike pence is a solid republican. he's been a republican stalwart all his life. he has a great congressional credibility which i think will help so much with people who are

concerned about the new base for republicans. >> it still doesn't sound like you're all in though. senator, it still doesn't sound like you're all in. >> oh, i'm in. i'm in. and i told mike pence that. i e-mail with mike, the governor. i like him very much. and i told him if he would take this step, and it's a big step for him. remember he's giving up a lot. it's a very entrepreneurial step. >> forgive me, i don't mean all in on the pick of mr. pence. i mean on mr. trump. are you all in ready to endorse donald trump this morning here on "squawk box" as a result of picking mike pence? >> well, it's not going to make news for me to say i'm going to support the ticket. i'm going to support the ticket. and i think mike pence is a great addition. i think he will be very helpful as paul manafort has been to working with donald trump who is a new person in this arena.

and i think he's done a phenomenal job of getting the politics that are a different base for him. and i think now he is going to bring in people who haven't been ready yesterday to say, okay, now i'm going to hear the substance. i think mike pence has substance and i think he will add that to donald trump. and i think donald trump is doing a very smart thing to put him on the ticket and to clearly have a partnership with him. >> all right, senator. just keep it focused on the political news of the day. you know, there was -- it was just last week it was texas, wasn't it? and now it's really disconcerting and tragic and everything else, the world -- >> i was so glad that they postponed the announcement today because i feel so badly for france and they've tried very

hard to police their people and help them and i think we need a harder line on what we're facing. and i hope that our president does get stronger in this war on terror. it's a war. >> all right. this president or the next, somebody at some point. anyway, senator, we appreciate your time this morning. thanks. >> hey, thank you, joe. coming up, the president of france calling yesterday's horrific attack in nice an act of terrorism. we speak to a counterterrorism expert after the break about how the world should respond. futures not doing much at this early hour. couple hours before the bell rings. actually, well, we'll go highs of the morning. the dow is up now 21 points in the market. s&p going for five days in a row of new highs. first time since march '98 that will happen. stephen king, the master of suspense and the macabre. i enjoy keeping people up at night.

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all right. welcome back to "squawk box." we're showing you shares of herbalife in the market up 14%. it appears as though there is a decision from the ftc or at

least a settlement between the ftc and herbalife. according to dow jones which is reporting this morning that the ftc has determined that herbalife is not a pyramid scheme. that a settlement requires herbalife to prove retail sales, that herbalife has agreed to change some of its business practices, and that it will pay $200 million over claims of misrepresentation. the exact number in which herbalife itself said in the most recent filing along with its earnings was a likely outcome. so herbalife would pay $200 million according to dow jones. that settlement is expected to be announced by the ftc on friday according to dow jones. the government determining that herbalife is not a pyramid scheme. that it will have to prove its retail sales and change some of its business practices. exactly which business practices will have to be changed? we do not yet know that. but a decision appears imminent.

could come today at some point. what obviously is interesting here is that bill ackman was on my program at noon "the half-time report" yesterday not wavering one bit. he has put out 18 videos in the last 18 business days of herbalife distributors making what ackman said were false and misleading claims. he had that $1 billion short that was put on in december 2012. from that moment forward he has not wavered one bit publicly. >> did he say what his position is now? >> he is still short the stock. >> by a billion dollars? >> he didn't say that specifically. he said by virtue -- >> short a hundred shares. >> i think a lot more than that. he said by virtue of his belief that the company was a fraud, a pyramid scheme. it was the reason why he was

staying short. >> can they improve retail sales? >> they're going to have to. >> can they? is that what he's going to hang their hat on? >> i don't know. i guess the ftc thinks that it can. >> well, that's what i don't know. if the ftc says it's not a pyramid scheme, how does he stay short now? >> i don't know what he does now. >> you know, when he first came out and said it was 2012 when april? >> december of 2012 is when he put on the billion-dollar -- >> this is the highest -- this not a new high but it's the highest level we've seen since january of 2014. >> the stock had to go down to the low 30s for him to break even. that's from the cost of -- >> but december 2012 it was at 27.27 but i think he rode that for quite a while, right? >> he said yesterday that there were, what? the carry costs of the trade were about $20 million. . to be in the low 30s to break even.

the stock has been sitting around 60 or so. i think the market had been believing what herbalife was saying within its filing that if you sort of read between the lines, you could think that there would be a settlement rather than a litigation or a shutdown. >> and there were all kinds of caveats in there. >> sure. the fact that they mentioned $200 million number in that filing. and then now it is $200 million at least according to dow jones. but this would go a long way to closing the book or at least many of the chapters. >> why would you stay short then? why would you stay short? >> i'm sure he won't. >> i'm not. he was like that yesterday when he was talking to you. it's going to be really -- it's a big humble pie to finally try to consume. >> and to do it at a time -- >> a crow pie. eating a lot of crow and a lot of pie. can use his profits on valeant to cover the losses. no, wait a minute. >> you can say whatever you

want. >> that was a terrible call too, right? he's about -- is he batting 0.500 now, would you say? i mean, general growth is great. he had some -- >> canadian pacific was great. general growth, great. before that mbia, great. >> j krrcpenney bad, target not great. he has $4 billion and a penthouse -- he owns like a high-rise. so i'm not saying -- >> nor am i defending. >> really? >> what are you doing? >> well, i mean, thank god i didn't buy a bunch of puts on the hong kong dollar after delivering alpha. because i thought about it. he had 180 slides on why the dollar was going to be -- lose its -- >> here's a quote of what bill told me yesterday. he said, i think this is going to end up with the government suing herbalife for a scheme and herbalife capitulating to changes. it won't be $60 a share.

it won't be trading at 14 times earnings. you're going to get obliterated. that's why i've been a patient investor here. i think this is the most attractive herbalife has been and that's why we've stayed short. that was yesterday. >> herbalife agrees to change some business practices according to the wires on the sources on this. >> can the ftc sue or does it mean they're not going to sue? >> i get the feeling they're not going to sue. the settlement is not a lawsuit. the settlement is some changes. >> so what he said yesterday is not going to happen? that's wrong? >> well, he said it's not going to be at $60 a share. >> that's wrong too. >> that's my point. >> most of what came out today i thought was sort of known. but he was still saying it yesterday so maybe he still feels today. >> hopefully i'll talk to him and find out. >> probably won't be. when we return -- >> won't be what?

>> i probably won't be talking to him. >> no i said i will. >> i heard you. i said i probably won't be. because i said that about valeant and you were mortified. i know you. >> please. >> i don't know you. nobody does. >> everybody knows you. there are no ramifications. >> when we return, stocks that you need to watch at the open of trade on wall street. we're expecting earnings from wells fargo and citigroup. you can't change your name when you're citigroup. i don't care how many times you tell me. look at european markets. and coming up the latest on the horrific terrorist attack in nice, france. "squawk box" will be right back.

coming up, earnings from citigroup and wells fargo. here are the future ace head of the numbers now. plus coming up we have the former director of intelligence of the defense intelligence agency. he'll talk to us about counterterrorism and the world's response to the attack in france. "squawk box" will be right back. r craftsman turns an ordinary experience into an extraordinary one. get great offers at the lexus golden opportunity sales event. lease the 2016 es 350 for $329 a month for 36 months and we'll make your first month's payment. see your lexus dealer. igoing to clean betteran electthan a manual. was he said sure...but don't get just any one. get one inspired by dentists, with a round brush head.

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breaking news. terror in france. the third attack on french soil in less than two years. at least 84 dead. the latest on the investigation plus the global and political response straight ahead. earnings alert. citi and wells fargo reporting quarterly results. we'll bring you the numbers and the instant market reaction. looking to hold onto record highs. but will earnings and global concerns cool the summer sizzle? the final hour of "squawk box" begins right now.

live from the most powerful city in the world, new york, this is "squawk box." >> welcome back to "squawk box" here on cnbc, first in business worldwide. i'm joe kernen along with becky quick and scott wapner. and i think citigroup is just out. scott? >> the numbers are just hitting. it looks like $1.24 versus what the street had been anticipating. looking at additional numbers at this point. but they are talking about net income of $4 billion. revenue of $17.5 billion which would be just above what the street had been expecting. also talking about a net interest margin of 2.86%. book value per share $73.19. just looking at the release right now, the ceo says that the results demonstrate their ability to generate solid

earnings in a challenging and volatile environment. says nearly all of the net income came from the core business. and we continued to reduce non-core assets in citi holdings. if you take a look at that stock, it is up by about 2%. this comes after beats for both jpmorgan and blackrock yesterday. we'll continue to keep an eye on this, but the financials obviously a very clear signal of what's been happening with the economy. people have been looking to the financials to see if there was an impact from brexit or to see what they were saying on the overall environment. generally the tone of all these press releases and conference calls have been it's a challenging environment. we're also getting numbers from wells right now. >> yeah. the estimate was $1.01 and that is what the company managed to report on revenue of $22.16 billion which is above where expectations were for wells fargo. i don't know if wells is traded yet on the news.

closed in the middle of its range, more or less. none of these banks have given that there's not a lot of yield curve to work with. so it hasn't been a great period for any of them. the net chargeoffs in the second quarter, $924 million. provisions for credit loss just over a billion dollars. $1.07 billion. and that net income number, $5.56 billion. >> i think wells was trading up by about 1% before the numbers. but it has been light volume this morning. you can see it's relatively flat right now. joining us on the "squawk" newsline is marty mosby. marty, we now have a few of these financials to kind of look through. what's your general take of earnings season so far? >> well, so far what we've been seeing is a rebound in fee income. so we were expecting a very strong 8% increase and we've

seen that jpmorgan, saw it in u.s. bank corps, pnc. that is really the kind of stair step of getting revenue back in. the other thing we're seeing is improvement in the lessening of the energy pressures. so we're starting to see provisions starting to improve as well. so those are the things that had really driving some of the early surprises we're seeing in the earning season. >> let's talk about wells fargo. i realize the numbers are just hitting and you're looking at them at the same time we are in realtime, but what's your general take? it had been up by 1%. it pulled back just a little even though they came in line with expectations. >> it looks like one thing with wells is mortgage banking is a heavy concentration. when you have the dropoff in the interest rates, you can sometimes get a valuation adjustment in servicing which offsets the initial benefit you get in originations. we expected wells to be able to generate the earnings and the revenue surprise in the third

quarter as they get the benefit from the refis starting to kick in with them. right now it looks like they're pretty much on track to start to keep building momentum in the back half of the year. >> explain that to me again. we've seen interest rates plummeting but you're saying is you're not going to see impact from that in originations until the third quarter? >> that's right. so they recognize when they actually closed the loans which will spill over into the third quarters. when interest rates go down, you have to adjust your mortgage services valuations. so sometimes that can be a drag into your earnings as well. initial quarter. just in the second quarter here. >> what do you think about the stock overall? >> what we've been looking at is with these banks, they've gone through a period where they've been able to hold their earnings, sustain earnings. yet their stock prices are still double digits down. the s&p 500 has actually seen

compression in earnings. prices are up on average 5%. so we feel like this is a sector that's undervalued. we just saw very positive capital announcements which will generate 10% total shareholder return with 3% coming from dividends. about 7% coming from share repurchase. so some very strong undertones that should begin to close that valuation gap in these banks as we go through the rest of the year. >> still the bigger question for the financials has been when will the fed ever raise interest rates. and that seems to be less clear than ever. >> that has become the default answer. but what we're looking at is, you know, as you move forward, the capital announcements give you the underlying minimum support levels which are continuing to improve each year with double digit improvements and share repurchase. you start seeing strength and general revenue levels with loan growth and deposit growth which would signal that the economy is doing a little bit better than what we expected post-brexit.

and eventually the fed can kind of see the overall uncertainty calm and hopefully see the window to be able to raise rates in the next six months. >> marty, thank you for your time this morning. >> thank you. okay. and as for the broader markets, the futures right now are indicating for another positive open. in spite of everything that is going on in the news backdrop for the day. up 25 or so on the dow jones. the s&p would trade at another record. nasdaq indicated up 2.5. check out the european markets at this hour which may be more affected by the terrorist attack than what is seen as the safe haven here. but marginal losses across the boards in europe this morning. with the cac down just over 0.3 point. let's look at other possible

movement. okay. there's the airline issues right now. down anywhere from just under 1% on some but to almost 3% on others. and some other travel stocks just in light of what seems to be more frequent in terrorism. like expedia down 2.25. joining us with the latest, michelle caruso-cabrera. >> reporter: the death toll stands at 84. 18 in critical condition. the u.s. state department says two americans are among the victims of that terrorist attack in nice. nbc news reports they are 51-year-old sean copeland and his 11-year-old son brodie copeland from lakeway, texas, near austin. their family released a statement saying they are heartbroken and in shock. french president francois hollande has arrived in nice.

witnesses described a horrific scene after a truck loaded with weapons and hand grenades drove onto a crowded sidewalk running down people for more than a mile. >> and with all the hands on the head like this. and we were just waiting on the floor. and literally crying and praying. >> and we were terrified. we had no idea how close the gun -- we didn't know if it was a shooter. we didn't know if there was multiple people. >> he was just mowing people down. and so i can't even tell you how many people i saw die. >> i was in panic mode. so i just ran as fast as i could. >> it's, unfortunately, not as surprising as it should be. you know, when you see a huge crowd gathered in europe now, it's always in the back of your mind. >> reporter: this is a map of the path the driver took along the boardwalk in the mediterranean city starting at a children's hospital and

traveling for 1.1 miles before it was stopped. police shot and killed the attacker. there's new video obtained by the associated press that appears to show the moment when it happened. [ gunshots ] two police officials tell the ap that identity papers found alongside the attacker belonged to a 31-year-old frenchman of tunisian origin. dow jones reports doesn't have any known connection to terrorist groups. the attack came eight months and a day after isis gunmen and suicide bombers killed 130 people in paris. secretary of state john kerry is in russia meeting with his russian counterpart and says people around the world are watching them for a solution on the civil war in syria which he says is an incubator for

terrorists. back to you. >> thank you. dow jones reporting that herbalife and the ftc are expected to announce that settlement today. herbalife is expected to pay $200 million over claims of misrepresentation in this case. and the ftc has determined that herbalife is not a pyramid scheme. herbalife has agreed to change some of its business practices. the settlement will reportedly require the company to prove retail sales as well. we've got that stock up 12%. back to this morning's bank earnings. citigroup beats the estimates. jeff, just at first blush, anything was surprising, worse than expected, or better than expected for you? >> i mean, it's a pretty good looking number.

i don't see a whole lot at least at first glance through to brush off. the revenues were a little better than expected. that looks to be kind of trading and banking a little bit like we saw from jpmorgan yesterday. i think the real kind of headline, though, was expenses and credit. so on the expense front, expenses were a little higher than we expected. but legal repositioning are countered for that. actually a little better than expected. and on the credit side, they released some reserves. we thought they'd couldn't building. so it would suggest what they see in credit continue to get better and maybe better than it was last quarter. but combination of -- i think capital markets revenue, and sot credit tail winds has drichb a solid beat for these guys. and importantly for citi, their loan growth was pretty good too. it was up 2% sequential. a little better than we were looking for. that's important for them as we look for credit card and international loan growth.

>> so that's been a bright spot in recent quarters, hasn't it? >> well, it's been something we're expecting to kick in. we're talking about kind of the international loan growth. it's been okay. but actually, we need to see that start picking up. which at least preliminarily here looks like it is. >> and when when the june meeting was live, it was a live meeting. live meeting. never live. it was never live. i don't know. maybe it never was. who knows whether 2016 is. we had a good jobs number, obviously. but are we just really are these banks just treading water until that starts happening? i mean a tougher revenue environment i think relatively speaking is good news for the universal groups like citigroup. because it makes management all the more important. >> versus its peers. but it's still not great. i mean, for just overall for

anybody. >> yeah. you'd certainly like to see rates going up. but i think the bigger key is what's the economy doing. i mean if rates aren't going up because of the economy, that's a problem. as long as the economy picks up, loan growth continues. i mean, the rate story to me is much about driving as it is economic concerns. as long as the economy's okay, it'd be nice to have rates go higher. but at least the big banks can still put out earnings like we're seeing now. >> jeff, i know it's still early in the earnings season but already we've heard from jpmorgan, citi, wells fargo, blackrock. all of them have been better than expected than in line with expectations. does that tell you that the earnings season is going to be a little bit better than the street had been anticipating and maybe that justifies the prices we're seeing stocks at at this point? >> yeah. i mean, it does. things have been better than we feared, certainly. but i think it's important to stress better than we feared. it's not like we were raising numbers coming into the quarter.

the real key will be the outlook. are things continuing to get better. so far the commentary has suggested a decent outlook. jpmorgan was actually constructive yesterday. but i think that'll be the real key coming through earnings season here. 2q is beating. but let's see the potential for the second half. >> you cover wells fargo or not, jeff? >> i do not. that's not one of mine. >> seemed okay, in line. but stock's down. it was up and now it's down. >> yeah. >> all right. jeff harte, thanks. is it harty or hart? why not get rid of the "e"? >> i like to keep the silent "e" on the end so i can embarrass tv ancho anchors. >> why don't you get rid of the

"e"? >> on joe. and i like golf announcers. every time he says it i want to message dan hicks. anyway. we will get back to the news from yesterday, the tragic news, the latest on the attack in france. horrific. left 84 people dead. at least a hundred wounded. 18 critically. the former director of the defense intelligence agency michael flynn will join us. stay tuned. "squawk box" will be right back.

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all right. welcome back to "squawk box." want to get back to certainly one of the stock stories that are going to be closely watched today. and that is herbalife. as dow jones reports that that company and the ftc have reached a settlement that herbalife will be required to pay $200 million over claims of misrepresentation, that they will have to prove their retail sales, make some changes to the business practices, and that an announcement could come today. it's my understanding that you could get a press release as early as 10:00, 11:00 this morning. just to give you a little bit of color, i'm told from sources that a deal was reached between

herbalife and the ftc late last night. and that herbalife's board then approved it. the key change that will be made to the business practice for herbalife is that its distributors will now be paid based on actual retail sales rather than just buying the product for their own personal consumption. that they'll actually have to provide receipts of those retail sales that are made. they could still get paid for a certain amount of personal consumption, but a much, much smaller amount than was allowed before. so that's just a little more color on what's happening around this story today. could get a press release, i'm told, from the ftc as early as this morning. dow jones says likely to come today at some point. but that stock's going to be closely watched. it was up about 15% as this news broke. i still think wall street's waiting to see dotting the i's, crossing the t's.

waiting for an actual press release or conference to find out the exact details. and then of course we'll be waiting to hear from herbalife itself which hasn't said anything. and mr. zachman and icahn for obvious reasons to see what they have to say. >> thanks. now back to the terrorist attack in nice, france. a large truck plowed into a crowd celebrating bastille day leaving at least 84 people dead and injuring scores more. general flynn is the former director of the defense intelligence agency. his new book is "the field of fight: how we can win the global war against radical islam and its allies." general flynn, thank you for joining us. we've known for a couple days you were going to be on. we looked forward to having you on having your name been the last of the four or five donald trump was going to pick. and also to talk to you about the book. i can't say that i'm -- you know, that it's even more

fortunate that you're here. because i wish that it wasn't more fortunate that you're here. but because of what happened, you need to at least give us your comments on this latest horrific development in the terrorist world. >> yeah. so -- and thanks very much for organizing this and having me on today and for your viewers. you know, honestly, i'm sitting here today and i could care less if you promote my book. this vicious enemy that we are facing will continue to do this until we organize ourselves internationally instead of having this very incoherent plan. america is the only country in the world that can organize the rest of the world that has a set of internationally accepted beliefs and values to be able to

defeat this enemy. and we have to get off this, you know, nonsense of what it is that we are facing. and this is a very radical form. and i call it a metastasized cancer inside of the islamic ideology. trust me. in my relationships around the world, we have people -- we have leaders in the muslim world that they know, they're scared. they are afraid of what is happening, but they need our leadership to be able to help them stand up and be counted and right now we're not doing that. we have to stop treats this -- and once we have an event and we all apologize for the event. we all say we're sorry that this tragedy happened. and we'll continue to do this. and frankly even when we do have big leadership that figures out how to do this, and i believe

that that exists and there is a way to win this thing. but until we have that big leadership to do that, we're going to continue to see these whether it's here in this united states of america or whether it's a continuation of what we're seeing in europe or elsewhere around the world. in the last 30 days, probably the last 45 days now because it's stretching into the -- i'll add the last two weeks in it. we've seen almost a string of daily attacks like this. this one is obviously much bigger because it happened again in france. i mean, i could go on all day with you about this, but, you know, this is about a recognition of an enemy that has declared war on our way of life. and that is not just, you know, the u.s. way of life. it's the way of life that we in the west accept and certainly nation states -- certain nation states, not tyrannical nation

states accept as internationally acceptable morals, behaviors, and principles. and right now we're going to continue to see more of the same if we don't do that. >> so general, the way that the war has been prosecuted has been successful in terms of taking back territory from isis at least. >> yeah. and see, that's -- and i'm going to -- you know, so if you want to have a debate about it, that's fine. >> i don't. but are you saying the only other way i could see of doing it is if you put a lot of boots on the ground. is that what we need to do? >> no, no, no, no, no. absolutely not. absolutely not. >> how should we do it? >> your characterization of that we've pushed them back in iraq and syria, that is so tactical and so narrow and that's essentially the strategy that we've had. i mean, we do that -- we do this very narrow strategy, this very tactical strategy. and it's very incoherent in my

respect, from my point of view. and they counterattack globally. so theirs is a global war. ours is this little narrow war that we are fighting, not even -- we aren't even sure what to call it. inside of a very small contained area in iraq and syria. this is different. i'm just, i'm telling you that -- and you can say whatever you want to say. it's your show. but i'm telling you that this is different, folks. this is different. this is not something that i just came off the street and started talking about. this is something -- i have studied the threats and challenges to the united states of america for over three decades. this is my life. i understand -- >> general -- >> go ahead. i'm sorry. >> that's okay. so believe me, i am not going to take the administration line on it. i'm trying to get you to say what we need to do and what the president has failed to do and whether that has actually gotten

us into the position we're in right now. and it could have been different if we had different leadership. do you believe that to be true? >> i do believe that to be true. or i'll be honest with you. i was very hopeful that president obama when he first came into office that we would see a lot of change. i was really, really hopeful. now, so what do we do? we definitely have to challenge the doctrine -- this evil doctrine. we have to challenge it. we challenged communism. we challenged nazism. and we have to create what i describe is a sort of new 21st century alliance. and this is where the united states has to lead a group of nations and not just europe and the u.s. but the muslim world. they have to come together. and they have to figure out because otherwise they are going to collapse like we have seen some of the muslim nations around the world already collapse. and some of it's our own fault. >> general, we've got data, we still have to talk about. come back and let's talk more

about this and talk more about your book. maybe some time next week if you can, if you would. is that possible? >> yeah. thanks very much for having me on. i appreciate you allowing me to say my peace here. thank you. >> coming up june retail sales and the consumer price index.

z. breaking news now. the ftc has announced the settlement with herbalife. we're now just seconds away from the june retail sales and consumer price index. rick santelli is standing by at the cme in chicago. rick, you should have the number right exactly now, i think. >> binge. good timing. hot, hot, hot. hey, we're getting some activity. retail sales headline june read up 0.6%. boy, that's a nice solid number. let's see if it holds up under scrutiny. last month did lose 0.3%. so that's not good. from up 0.5% to now 0.2%. when we strip out autos, it's still up 0.7%. strip out auto and gas sales, it's up 0.7% again. that's pretty good. the control group up 0.5%. up 0.5%, that's solid. now let's go to the inflation front. cpi june read as well, well, here we go. up 0.2%.

unlike inflation data yesterday, 0.1% light on the headline up 0.2% when you strip out food and energy as expected up 0.2%. and no revisions on any of these data points on cpi. maybe the most important number, year over year core. now, it was up 2.2%. it's now up 2.3%. why is this noteworthy? i'll tell you. because it was up in february. you know how far to go back to find a higher read than 2.3%? you have to go all the way back to the crisis era of september 2008. so that is a biggie. now, one would suspect with better than expected growth inflation that really isn't cooler. it's about as expected. when you look at year over year, maybe a little hotter. nothing's moving here on the income side. i pegged the 30-year at 2.20.

the 10-year 1.49. nothing's moves. that doesn't mean it isn't trading. it just isn't moving. of course the horrible, horrible incident in nice, france, yesterday may be affecting markets but in the long and short of it, not much moving. after the surge in stocks that we have seen to all-time highs without an accompanying surge or even much movement to the upside in rates, it's been small. it's going to be very fascinating to see how trader react to all this movement, all these ugly headlines, and see what they do for the weakened positioning. so as the day wears on, we'll get more info. and it doesn't end here. we still have university of michigan, empire, industrial utilization, and we'll be covering it all. back to you. >> rick, thank you very much. we've been going through the numbers here on set with steve leisman as well. steve, the dollar index is jumping after stronger than

expected retail numbers. >> well, look. this has been not only the underpinning of the u.s. economy but the global economy. it's been something economists have been tracking. and you heard jim paulsen this morning whom he pegged the change in sentiment in the market to the indicators. i'm not sure it's a one for one thing. but he said when the surprise index went positive, that's when the market decided. so what's nice about that concept and it kind of is the other side of larry fink's idea, is that jim paulsen says there's something actual rather than air underneath the market rally here. and you see that in the retail sales number. little bit worried about the data in the sense that the auto companies reported down sales in may and showing it up 1.1%. the inflation numbers -- okay, did you get the empire state, becky? zblifs looking at a flash on the screen. >> you lost it? that's okay. we're having a little trouble

with the computers on set this morning. you did have declines in apparel. but overall with the core index being -- there it is. empire state.55. we have had stability in manufacturing. i want to leave with bottom line idea. the consumer is going okay, actually quite well. we may get up in gdp for the second quarter. running 2.5% after the 1.1%. so at the end of the day it's all going to average out. >> did you really say that? >> i try so hard and i just blew it. but in any event, we're on track for a rebound in the second quarter. and the consumer is underpinning, i think, the market here and the economy. >> if you add that into what we're seeing in the early earnings report, still very early in the season. this is the first week. but we have seen several big financials that have come in with better than expected numbers. and the commentary we've got from the analysts who follow those, too, is this does provide

some underpinning to where stock prices are right now. >> and there has been some loan growth which is what i look for from the banks that they make money the old fashioned way. they loan it. so it's something where we're watching. i have never had any doubt the companies would figure out how to make money after this four quarters of recession. >> i just want to jump in and say it's now official that the ftc has announced a $200 million settlement with herbalife. there are a number of things happening here. herbalife is out with its own statement where they say and this is the ceo michael johnson. the settlements are an acknowledgment our business model is sound and underscore our confidence and ability to move forward successfully. otherwise we would not have agreed to the terms. that from michael johnson who is the chairman and ceo of herbalife. it's already been reported today that herbalife will pay $200 million over claims of misrepresentation. they will change some of their business practices. as i told you awhile ago this morning, maybe 15, 20 minutes ago. that distributors would have to

prove their retail sales with actual receipts rather than just for recruiting, they can still get paid by some measure of personal consumption of the product but not nearly what they could in the past. you can see herbalife shares are up now 11.5%. what's interesting as well is that kate kelly, my colleague at cnbc, is reporting from a government source that herbalife must, quote, completely change how it operates. as we've said, they must now report how much product is sold. and there's something else incredibly significant to call your attention to here as well. as part of this settlement, herbalife has given carl icahn the ability to own a larger portion of stock. right now he owns 18% of herbalife shares. the largest individual

shareholder. he also has board seats. previously he could go up to 25% of his ownership. the new number is up to 34.99%. so just shy of 35%. one of the stories speculated upon for the last few years would be herbalife's future regardless of what the government had to say. whether it would be taken private, for example. does this make it now easier for that to happen because carl icahn has the ability to increase his ownership to just shy of 35%? is there a private equity firm combined with mr. icahn or somebody else? or a group of folk who is want to try and take herbalife private? is it now easier because herbalife has granted mr. icahn the right to up his ownership stake? all of these things will now be considered as you sort of look forward as to what this settlement really means. >> okay.

i know a lot about herbalife now. >> oh -- >> i get it. >> you got another stock story? >> no. i just want to say i think it's weird the way we get surprised when the retail sales all of a sudden the market's been up for two straight weeks and it's like what's happening and people like larry fink say, geez, i don't see anything that warrants this. then you get employment report at 280. then it goes up another five days. then retail sales. sometimes things do happen for a reason and they make sense in hindsight. maybe it's why when people saying -- >> because people see what they want to see. >> i'm sorry, but i've just got to make this point whether you like it or not. >> go ahead. >> i want to make sure people understand here that the ftc actually filed a complaint in california district court. a complaint for permanent injunction and other relief. what happens is that herbalife

settled that suit. they're not going to agree with everything listed in this complaint by the ftc that was filed today in the state of california in district court. but i guess enough of which they could come to settlement. i'll hopefully have more headlines for you. >> do you need an extra hour for "the half-time report" to talk about this? for people really are interested, that's what i would say, that 12:00 is the time to -- noon, you are going to go wild on this, are you not? >> well, it's an interesting -- >> it's a $5 billion company. it's good. coming up -- you're making money now, are you investing? well, i've been doing some research. let me introduce you to our broker. how much does he charge? i don't know. okay. uh, do you get your fees back if you're not happy? (dad laughs) wow, you're laughing. that's not the way the world works. well, the world's changing. are you asking enough questions about the way your wealth is managed?

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coming up, bank stocks on the move again this morning. we're going to dig into the latest quarterly results and probably herbalife, too, when we return.

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welcome back to "squawk box." a mixed bag for the banks this morning after broadly lowered expectations for the sector going into earnings. citigroup is trading higher after beating on both the top and bottom line. posting revenues that fell 14% from last year. revenues fell 10%. part of reasons they beat was revisions fell too. echoing sentiment from jpmorgan yesterday that the oil and gas sector has stabilized. brexit boost to fixed incomes. equities interestly up 21%. wells fargo was more of a play lender. so while autos an credit cards did miss out. despite having nearly zero exposure to the uk, brexit's impact is felt very, very

acutely at wells fargo through low rates. and analysts say that could get even more painful as central banks continue easing. wells fargo's margin. that measure narrowed six basis points to 2.86% by contrast c i citi's only narrowed two basis points. we are seeing that perhaps the weakness in the oil and gas sector and the amount of banks had to set aside for bad loans peaked last year. that was the big worry at the end of 2015. how much was oil and gas and potentially downgraded companies, how much was that going to hurt the banks. we are getting signs perhaps the worst is behind us. citigroup releasing $254 million in reserves. wells fargo adding slightly but less than in previous quarters. scott, back to you. >> thank you so much. when we return, the world reacting to the terror attack in

nice, france. counterterrorism expert frances townsend will join us next. ♪ [announcer] is it a force of nature? or a sales event? the summer of audi sales event is here. get up to a $5,000 bonus on select audi models. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points

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all right.

welcome back. herbalife's largers shareholder carl icahn releasing a statement. saying in party, quote, the ftc settlement announced today coming a a concluded that herbalife does not appear to be a pyramid scheme. we disagree vehemently on this subject. now that the company reached a settlement with the ftc, it is time to consider a range of strategic opportunities including potential roll-ups involving competitors as well as other strategic transactions. i have the greatest confidence. goes on to say. but sort of alludes to the thing i was talking about. now that this is out of the way, what happens now? >> he's pleased that the board has allowed him to go up to 35% of the company which means he's

going to act. >> he currently has 18%. previously, he could go up to 25%. now, he can go up to 34.99%. >> did you ever see the brand name consumer products company to decide to add herbalife to the staple though? >> i don't know that it would necessarily. >> right. right. >> i think from day one, this was sort of speculated, rumored, thought about, and maybe that's what ends up happening. who knows? it's been one of many stories we've been following but our main story has been that terror attack in nice. more about that is francis townsend. she's a former homeland security and counterterrorism advisor to president bush and fran, thanks for being here today. >> sure. >> this is a day when we have seen situations like this far too frequently in recent months.

it's hard to imagine that france is being attacked again. what's happening here and how much control do we have over any of this? >> so france and western europe are particularly vulnerable when you look at the number of foreign fighters and radicalized there, it's far higher than here in the united states. you've got a terrorist who takes an everyday object, right, a car and turns it into a weapon of mass murder. it means this is not about the weapon. it's about the individual. and it's very hard to predict in advance to be able to stop it. it really puts a burden on intelligence an law enforcement to try and identify early on the individuals who represent the greatest threat. the problem is this guy was not known to french intelligence. he had a police record locally but not anything that would have suggested he would engage in this sort of activity. >> we had bernie here earlier.

what you need to do at this point is more profiling and finding what people are watching on the internet. those are ideas that don't mesh up with what western society has believed to this point. >> and your first amendment rights, right? you're entitled to read whatever you want. but the fbi can look at that stuff if they have an underlying predicate. if there's a reason to see if fran townsend is preparing for an attack, they can look at that with the subpoena and legal process here but i think we have to understand that this is about the ideology, right? what's different about isis is it's not a centrally organized high erarchy hierarchy. this is centralized. >> penetratinpenetrating. >> the grenades. you had to have sol suppome sup >> they may have been fake

grenades but he had a handgun. that's all traceable. we know there's a weapons pipeline because we saw the guys in brussels got weapons for the earlier paris attack and there's clearly a weapons pipeline throughout western europe that needs to be sort of cracked down on. >> hearing that there's a lot more sort of buried over there that people we don't know about, that still doesn't make us feel that great here because if it's greater than zero in this country which it is then it's a false sense of security we're having here. >> i do think it's a matter of time because any one of these attacks, if you've got a single individual who can be self-radicalized by the internet and self-initiate -- >> with a car. >> that's right. so this is a real challenge to u.s. law enforcement and intelligence authorities. they're not adequately resourced to the task. i think we need greater

resources devoted to law enforcement. we know the fbi can't cover 24/7 every individual that's identified as a threat. >> or be able to follow up in a timely manner to discover evidence before the case is forced to be closed. >> which fee which was the case in the early orlando attack. >> every time we unfortunately see one of these attacks, there's a bit of a lessons learned lookback at, were there signs missed? we're not seeing that yet in this one. i think that's more disturbing. if you can point to something missed, then you could put, you know, sort of things in place to track it here. but we're not seeing that so far. >> if you sent guys on the ground and killed 15,000 or 20,000 isis soldiers with a coalition ready to do that, does that solve things?

>> their caliphate in iraq and syria is a form of fund raising that allows them to plant. >> you might think about doing that? >> that would be good but doesn't bring to zero the possibility of these sorts of attacks because this has become a fractured almost populist type movement where it's self-initiated but it will certainly reduce them. >> oil money and driving trucks. i mean, it's a bona fide, something these people that need something can point to and i'm, i'm part of. if there's nothing to say i'm part of -- then i don't know. >> absolutely. a check on the markets. be right back.

one last look at where the markets are trading this morning. we had a good retail sales number that came after the big jobs number on friday and the market has been setting a series of new highs in some of the averages. the dow jones and the s&p. and if it were to close here today, another record for the s&p which is indicated up 3.5. >> an entire week straight records since 1998. >> '98. pretty good numbers from

citigroup and wells fargo and then there you can see what's happening in europe after the terrorist attack in france. fractional losses across the board. all red. there is the energy complex. right now, it is time for squawk on the street. hopefully you'll be with us on monday. good friday morning. welcome to "squawk on the street street." sarah eisen at the new york stock exchange. we begin with the attack in france. details of which are still developing. 84 dead at least including two americans. europe and asia had muted reaction to the china data overnight mostly above expectations. strong retail sales as joe just said in the u.s. up 0.6 and a lot more numbers are on the way but we're going to start with this breaking news out of france. at lea