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 least 84 people are dead in

the city of nice after a truck ran down people celebrating bastille day. michelle with the latest. >> reporter: new footage shows the truck that killed 84 people filmed by a freelance journalist. the 28 ton truck with hand grenades plowed through on the french riviera. people jumped into the sea while the semi moved more than a mile on the boardwalk. police shot and killed the attacker and there's video obtained by the "associated press" that appears to show the moment when it happened.

the u.s. state department said two americans are among the victims of the attack. nbc news reports they are 51-year-old sean copeland and 11-year-old from texas. they were on vacation. two police officials tell the ap that identity papers alongside the attackers with 31-year-old frenchman of tunisian origin. no known connection to terrorist groups, not yet, at least. eight months and a day after suicide bombers killed 130 people in paris. >> michelle crusoe cabrera. thank you. for more, the paris bureau chief at the financial times. thank you so much for joining us. >> no problem. >> we're still waiting for some more word about the attacker's apparent motivation.

what do we know at this point? >> well, we know a little bit more about the attacker. he was tunisian. he was born in tunisia. he had a work permit. so he had a residency in france. and he was 31 years old and resided in nice. we know that he was a father of three and went through a bad divorce. that's pretty much what we know. so president hollande cried this out as a terrorist attack and investigators try to establish whether there's any link to terrorist organizations like isis or others. but that's pretty much what we know now. >> a lot of discussion here in the states about the method of this attack, the fact it involves a truck. you don't need to go through airport security. you don't need a gun. although, in this case, it appears he did have one. how does this evolution and the

nature of attacks especially in france, how is that being discussed there today? >> i've discussed the situation with some terrorist experts and they're telling me that it's a modus operandi that isis in terms of attacks. but now, in france and nice and particularly after the euro tournament, it's been so well guarded. but, you know, you have to use less guarded areas or, you know, places for attacks. so that's basically what they're telling me at this point. >> we last spoke with you a few months ago after that brutal shooting rampage in paris. three attacks in your country since january 2015. what is the mood?

what is the response in france? are people feeling numb to it? what do you think is going to be the political ramifications for francois hollande after extending the state of emergency? >> the mood is very grim, as you can imagine. the political fallout, i think, you know, this time as you pointed is just big attack on french soil and president hollande, a few hours earlier, had announced that he would, the state of emergency would expire at the end of this month. so it looks pretty bad. and today, a position party is already reacting pretty negatively pointing to negligence or failings of intelligent services. and last week, parliamentary can

came up with conclusion about the failings of french intelligence services. so the pressure is going to be very high on president hollande this time. >> what you haven't mentioned is whether there's a backlash on immigration and possible membership of the european union. inevitably in this country looking into the eu, there's a perception after the uk voted as it did that france may follow that track in some form. is that your reading of the situation? is that what people are saying so far? >> i don't think people are drawing conclusions but there's definitely the far right to benefit from this latest attack. as you know, there are presidential elections next year

and in less than ten months and the reader of the national france is already predicted the second round and has, you know, an anti-immigrant stance and she's in favor of exiting the eu. so there's definitely the anti-immigrant sentiment growing in france. >> although, anne, we know he was a french tunisian. so it's not like he was a fresh immigrant as far as we know. we talk about intelligence services. all reports indicate he was known for committing petty crimes. why is this going to be seen a rebuke of intelligence services when it's hard to imagine anybody could have predicted that a petty criminal could do this. >> i mean, you're completely right. there are questions about a

recent reform though in 2008 that merged several services, and resulted in sending out a terrorist network of field agents. and this network has been reduced and criticism that it shouldn't be the reform was that it was a bad move by nicolas sarkozy at the time. there will be questions about the reform and also the failings. because for some reason, police are not able to detect this kind of attack. maybe it's not detectable. but at the moment, there's a high criticism over the reforms

of intelligence services. >> once again, the world mourns for france. ann anne-sylvaine chassany. the new york stock exchange will have a moment of silence. but in the meantime, trying to watch some of these bank earnings today. citi and wells fargo before the bell. higher after earnings beat estimates and profit falling less than expected. wells basically a match in the second quarter. earnings and revenue in line with analyst expectations. look at the futures following that mixed set of data in the last hour. david, sort of decent numbers and deposits in lone growth but remains troublesome for these guys. >> there's a thought that perhaps, well, if there's a continued push in the mortgage market given historically low rates could benefit from that being how strong their business is in that area, but to your point, that interest margin has

been a concern all along. wells does not look to be opening much lower this morning. deposit growth we saw significant yesterday with j.p. morgan. people recall 10% year over year. a stunning number in some ways but that does continue perhaps a sign of people at least, well, not sure. i guess it's unclear why there's so much deposit growth whether it's coming from other places. perhaps europeans putting money here as a result of negative interest rates or a sign of other things. >> if you look at the survey we had from ubs this week suggesting wealthy people in this country have the highest cash deposits. >> financials are the best performers this week. they're still down for the year but that seems to be the story and that's the rezyl yenls given they faced such increasing pressure on margins in the form of low interest rates that they're compensating that in other ways and this week has really been, what a rally it's

been. the four days in a row of record highs for the s&p 500. multiple sessions for the dow. if we get it today, that's the first time since the late '90s. the japanese yen had its worst week since 1999 and that helped carry the japanese stock market up 9%. >> i think what's interesting is the market appears to be moving ahead of where the analysts were. if you look at bank of america, merrill lynch. the highest in nine months in the week that ended on wednesday and of course, the fundamentals are good. retail sales are good. we're picking up from a strong employment report that we had last friday. i think the tenor is changing to the point that sarah makes in this rotation to cyclicals and financials. >> absolutely right. retail sales with a 0.6. we were looking at 0.1. some individual sectors building. it's the biggest increase since

2010. you might watch a home depot and see that reacts. no surprise, we've got fed officials saying two hikes this year, still in the realm of possibility, they say. >> it seems like of all the fed speak, the big takeaway is that they're not in a hurry to raise rates. 11 of 12 actually grew, got some declines in clothing and food service. >> so got to get through industrial production in a couple of minutes and university at michigan at the top of the hour. we'll get u.s. reaction to the terror attack in france and what both presidential candidates had to say. we'll take another look at that and the futures which remain solid. more "squawk on the street" in just a minute. from over 30 billion connected devices. just 30 billion? a bold group of researchers and computer scientists in silicon valley, had a breakthrough they called... the machine. it changed computing forever. and it's been part of every new technology for the last 250 years. everything? everything!

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industrial productions now on deck. let's get to rick santeli. >> the read for the month of june up twice expectations. up 0.6. now we did as much as but not much. down standing down 0.3. and industrial solid. let's look shall we. we expect a number close to 75. 75.4. no revisions there. and 75.4 isn't necessarily jumping out considering we had 75.7 in january. 75.6 in february. but it's definitely better than

low read of the year which was 74.8. that was march. that took us back to 2010. so less negative on our last look and virtually solid across the board on the data points today. inflation a little bit hot. the only thing that isn't happening is lots of trading treasuries but not much yield movement. sarah, back to you. >> rick santelli, happy data today. thank you very much. in the meantime, we follow the terror attack in france that left at least 84 people dead as you can see, french president francois hollande is speaking now. he said about 50 people are at this point between life and death after the nice attack. clearly as many as hundreds have been injured. we'll continue to monitor that. and at the same time, john harwood with more on official reaction in this country. john, good morning. >> good morning, sarah. you know, as we've seen time and again with these horrific episodes, the presidential candidates are forced to react.

both hillary clinton and donald trump phoned in to television shows last night, put out tweets saying they stood in solidarity with the people of france. donald trump saying he was the law and order candidate. we've got to stop this sort of thing. but the more dramatic consequence was with donald trump because he was all set to announce his running mate at 11:00 a.m. here in new york. but all indications, it was mike pence, the governor of indiana. he had campaigned with governor pence earlier in the week. his family met with governor pence for breakfast at his home. then we had governor pence fly to new york last night. laned at the airport and waiting for the announcement and facing a deadline himself. because he's got to withdraw from the indiana governor's race. he's seeking reelection by noon today in order to let indiana republican haves the chance to nominate a successor to get on the ballot in that gubernatorial

race but donald trump after the attack postponed that announcement, said he has not rescheduled it yet but expect to hear it later today but donald trump, also during his interview on fox last night said he had not made a final, final decision on his vice presidential choice and newt gingrich who was considered the other finalist with mike pence went on fox himself last night and took a strong stance in the war on terror. here's newt gingrich. >> western civilization is in a war. we should, frankly, test every person from here who is of a muslim background and if they believe in sharia, they should be deported. anybody who goes on a web site favoring isis or al qaeda or other terrorist groups, that should be a felony. and they should go to jail. any organization which hosts such a web site should be engamed in the felony. >> that's a controversial prescription.

i was talking earlier today with a former bush administration national security official who said, what about the first amendment? newt gingrich just put out a facebook message a while ago saying, my remarks were distorted. he's going to clarify those. but we've got to figure out whether or not donald trump is moving in any different direction just before coming on air, i got a note from a trump campaign aid who said my instinct is no, he's not going to change his mind but paul manafort on television this morning saying until it comes out of donald trump's mouth, it's not final. >> one last quick question here on gingrich. is there something about the nature of this particular attack and the way it was done that you think might make some of those proposed solutions more aggressive? >> well, i think the more attacks we have, orlando, paris, san bernardino, now this and nice, the more pressure there is for people to demonstrate toughness and i think that's what newt was doing. the question is whether the policy prescription is practical

or not. >> john harwood in washington. thank you so much. the new york stock exchange now going to hold a moment of silence for what we know now is 84 people killed in the attack and according to hollande, at least 50 more between life and death. here's that moment of silence.

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7 minutes until the opening bell. wells pfargo and citigroup. topping expectations while wells fargo matched estimates as quarterly earnings are slipped. more results and what do you do with the stocks? paul miller at capital markets and gerard and rbc.

paul, i know you have been looking at the bank selloff this year for opportunities. now that you've got the three big earnings, what type of opportunities are you finding? >> well, i mean, what we're really looking for is that flat curve and the tenure. tenures bounce a little bit. if that tenure continues to lay here, we don't think there's a lot of opportunity but that has tenure comes up, if it does koukoucome up, you're going to sit there and say, why didn't i buy all day long. and any of these institutions like a usvp, we would be buying today. >> gerard, is that really what it's about? looking at those net interest margins which have narrowed both for wells fargo and citigroup this morning or is there more beneath the hood that makes these banks compelling to you right now? >> i would say that the interest rate environment is critical because it does impact the margin as paul pointed out and

you just referred to and point out that the large money centered banks have the capital markets activity which, as you saw yesterday with j.p. morgan and it was more prevalent today with citigroup, those numbers were better than expected. so you do have that kind of boost but i think most investors are looking at the federal rates and if there's no action on the short end of the curve and the yield curve continues to flatten, these banks are going to still have that head wind victim back. >> can i come back on the point given what gerard said about the idea there could be a refinancing boom that would boost wells fargo. what would that be based on? where's the profitability in that if the mortgages are becoming less, would it be a one-off set of new mortgage fees? >> it will be like a one off thing. if you get a solid refire boom, you got six or seven out of

wells fargo but that would help earnings. bottom line, it's all about the yield curve and rates. if rates continue to stay here, it will burn itself out and you'll be sitting with these things probably where they're trading today. >> what did we learn about some of the other risks that were faced like oil and gas. the oil exposure have been heavy on these stocks. it seems to be getting a bit better. >> you're absolutely right, sarah. it is much better this quarter versus the first quarter. you might recall the regulators had a special shared national credit exam in the first quarter directed at energy. everybody had the boost up their reserves. that did not happen in the second quarter particularly with the price of oil stabilizing in the 40s. so not much of a problem, still way on the stocks but nothing like it was six months ago. >> paul, what does it mean for the other banks that have to report next week? what can you extrapolate?

>> well, one of the surprises out there is very strong so far with the banks that have released. so that's going to help offset some of the margin pressure but saying that, what we're not getting is any guidance. we're expecting lower guidance down the road and the banks have pretty much said, steady as it goes. so we're going to have to sit there and see, but so far, the banks earnings are better than we expected. but we have to sit there and see what rates go to really see where things trade throughout the year. >> we briefly touched on it, but u.s. bank also recording. is there an investment theme here? the super regionals versus the wall street firms? where do you want to be? >> i think you can be in two areas. you can own some of the wall street firms especially if you feel positive about the capital markets but we're also seeing with the regional firms as paul said, penny growth and the return of capital. but the other big issue that's coming up in our view is that if

the environment doesn't change, we expect to see big merges in acquisitions in the next 18 months as the big regionals start to merge one another to get the cost savings to drive the earnings higher. multiple ways to play the banks in the next 12 months and we think the investors can win with the different strategies. >> can you name some names for us? who are you looking for to do some deals? >> it's going to be hard to say but you can certainly match them up, if you get the social issues addressed. that's who's going to get to run the office but if he's under assault from activist investors, you have to wonder if they remain independent. anybody that's not earning their cost of capital which we argue is around 9% to 10%, if it's in the 6, 7, 8% range, you have to wonder if they'll be vulnerable. regions out of alabama. all the companies need to get

the r.o. e. up, and if they can't, you wonder if mergering is the west wbest way. >> a lot depends on the highest level since june 24th. thank you both. we're not done with some of the big earnings. next week, some 85 s&p names will report including b of a and starbucks, at&t, so it's going to be a long next week still ahead. meanwhile, about 5 points we need for s&p new high. as sarah mentioned earlier, we've got four consecutive all time closing highs on the s&p this week. four in a row, in order to make a perfect week with five record closes. we haven't done that since 1998. >> and a lot of credit here and remaining active but if you look at the earnings picture so far. we've seen a lot of good

reception from wall street. the data has been better. the city surprise index which has measured the data points relative to expectation and started to move up. >> there's opening bell at the bottom of your screen. on the big board today, it is boeing celebrating its 100th anniversary. over the nasdaq, the navy seal foundation assisting the special warfare community and families. one story that has not gotten enough attention today that ordinarily would is herbalife expected to settle with the ftc for some $200 million, revise business practices. they covered it this morning on squawk. for the company, for squawk and especially for icon and bill ackman. >> it's interesting in reading the press release, carl, even though the company is benefitting today and the stock market up 11%, you can see it right there, it was quite a rebuke from the ftc to be fair.

quote here from ftc chairwoman ramirez, they have to operate legitimately making only truthful claims about how much they're likely to make and compensate consumers for the losses for what we charge are unfair and deceptive practices. strong words from the ftc part of this settlement with herbalife. we'll wait to hear more from the company itself and the ftc. i believe there's a 10:00 press conference settled but as you see, the stock is up, of course, the fear had been that they might close them down if they said it was a pyramid scheme. it's not. mr. ackman has been short famously for this years now, waging his own personal campaign saying that the campaign is a pyramid scheme. mr. icon alternatively has been a big supporter of the company. got on the board of directors and a large shareholder.

>> he was on the halftime report yesterday in anticipation of this and his suggestion was it could be bigger than $200 billion, the largest in the consumer protection area ever and more importantly, that question to the detail david is giving there how they change the the business and what the valuation would be. the valuation would fall. that's not what's happening yet on the stock market. in short, is it working? however, we have to see what the detail is in the news conference. >> yeah. i was just looking at some of the other big movers in the opening trades. cbs is at the bottom of the s&p 500 right now. notable downgrade from ubs. they kept the price target but went down to sell for neutrals. interesting. don't believe the macro backdrop includes back strength and advertising in the second half x olympics.

they cite the valuation and earnings growth. how that comes from the super bowl and political ad spending. >> interesting downgrade from them. cbs stock down almost 3% and of course, it's been sort of wrapped up in all the drama involving viacom and speculation where sherry redd stone and her father gain control of the board of directors and what might follow is some sort of a deal in which viacom and cbs were combined under the leader of the ceo but specific to ads, they've been very positive. quite positive. and others in the industry generally have described a robust environment for advertising. but this analyst disagrees. >> we have to see the story play out to see another. and he doesn't see a catalyst. >> notable downgrades. the cbs over at ubs. the csx cut by stefil today and

cut over at wells and there's chipotle. morgan stanley cuts it into equal weight. targeted at 405 and a survey of consumers. 2,000 consumers. they did it back in january and now did it again. about 13% of consumers are not planning to go back anytime soon and those that are are going less frequently. the argument is that it takes time to recover from the e. coli crisis. >> at the bottom of the s&p, the travel stocks in the wake of what's happening in nice overnight. price lined and expedia, remember that price line's european operation booking.com is the bulk of the priceline operation. 80% of the operating profits so a slowdown in european travel or travel within europe would presumably hit priceline and we've seen this marginally in both after previous terrorist attacks. more importantly, it's the cruise line company, world

caribbean and carnival. there has been slowdown, particularly in mernls travamer take the cruises and the like for their fear of where they go with the terrorist threat in europe and of course, in addition to that future currency effects, particularly with the likes of the uk but that's probably one side. more, it's this idea people will be reluctant in discretionary spending. holidays. if it's one thing you have a choice about through the year, it's the disagregree you spend e holiday. not falling out of bed but reacting to those events that we've seen again, in france. the third terrorist attack in just 18 months. >> did want to hit a couple of names on the old m and a front. monsanto news that buyer had or i should say we got the news from buyer itself it raised from 122. monsanto not doing much at all with 104. what i can tell you is, of

course, the bid itself which really is in a sense bidding against itself by is reflective to a certain extent of the frustration the company has that while it has had face to face ceo talks and the company's advisors and unable to get monsanto and offer a non-disclosure agreement and look at what is information that is not part of the public realm to make a decision as to whether exactly how it feels about its bid at current levels. yesterday, i had reported on a number of large shareholders who perhaps also may have some frustration and are certainly well aware of the opening of the window to nominate directors at monsanto in early october. and the possibility remains that buyer for its part would move to a tender offer or even a proxy if it chooses to do so if it continues to see itself somewhat frustrated but right now, 125.

a lot of shareholders say that's not the number they want. but it's unclear whether they're going to get a higher number if monsanto doesn't engage. >> dow is up 28 points. let's send it on the floor for more detail on the last trading day of the week. take it away, bob. >> the important thing, small gains in the overall market. most of the s&p sectors were on the upside. i want to focus on the banks once again. i want to show the banks with the earning report and by and large, beating expectations. maybe a little disappointment on the revenue front but did well. j.p. morgan out yesterday with about 2% here. it's a little early to characterize the earnings trends but let me take a shot of what i'm seeing here. five or six banks already out. overall, net interest is on the soft side. we knew about that. that's the rate environment and the flatter yield curve. credit is improving overall. long growth has been improving overall and surprising, the

guidance is steady. nobody is implying that second half earnings need to come down and that's what everybody is caring about right now and very little talk on the impact on brexit overall and that's why you see the banks hold up well. lack of implied taking down in the second half and bear in mind, a lot of the banks do not have that significant overseas revenue. citigroup far and away is the most important bank in terms of overseas revenue. over 60% outside of the u.s. j.p. morgan, significant. bank of america, you'd be surprised. it only gets a small fraction outside of the united states and big regionals like wells fargo and they're 100% revenues in the united states. so bear in mind, brexit can be somewhat limited overall. the important thing about these big super regions and a company like wells fargo, earnings have been relatively steady despite the flat yield curve. look at wells fargo. they're one of the biggest

mortgage originators in the country. it helped offset the margins, the yield curve issues for them. steady numbers for a lot of these banks. come back here, scott. we had a successful ipo yesterday, advanced pierre foods holdings. 22 right now. it was 18 million share. 21, the price stock was $20 to $23 and priced in the middle, like it might open towards the high end. it is the biggest company in the united states that does u.s. ready to eat food. so they supply sandwiches and salads to a lot of restaurants and cools arouschools around th states. back to you. >> thank you very much, bob. let's head to the bond pits and the cnbc group in chicago. good morning. >> good morning, david. viewers listeners, quick chat here. all morning, i was stunned how

little rates were moving given there was some in top to bottom. my apologies. the boards here at the exchange were showing stale yields. following charts are correct and i will always try to give you the most accurate information available. let's look at the two years and a one week, maybe more importantly. it did respond to the data. and its response is enlightening considering how little upward movement yields we've had considering what's going on in the equity markets. you're seeing we're flirting with the highest yields of the week. let's look today, yes, they moved on the data and you can see it there. and if you open it up, the same dynamic is twos. here's something fascinating. let's hold the next few on june 13th. kind of prebrex-brexit. if you look at tenure, you could see we are starting to get to lofty areas.

how many times do we talk about 157? it's the next key bottom of the year on the closing basis after we took out the february 166. we're testing it. the first time since the mid 130s. this is crucial in terms of a close for a week. what happens when you get these counter moves? it actually is. we have a little bit of steepening and tens minus twos and 30s minus fives. this is the one you have to scratch your head over. rates are going up. data is better. why isn't it moving? i'll give you a guess. f. e. d. they don't believe the fed is going to look at this and do anything. maybe there's opportunity on the greenback. back to you. >> rick, thank you very much. you set that up beautifully days ago. rick san tetelli in chicago. hi, jackie. >> good morning, carl. we started the session lower with crude oil but now we've

paired those losses. it's not surprising to see the see saw pattern for some time. close to 46 dollars a barrel. and positive out of china. all eyes on china with the demand picture for crude. so good data good for crude. in the meantime, tragic events overseas not impacting the crude oil trade over here because of global supply glut right now not worried about any outages anywhere. back to you, carl. >> jackie deangelis, thank you very much. >> in the meantime, technology is underperforming here in this rally. bertha coombs is here. >> part of the reason why the nasdaq is underperformed, not gained as much as the larger big averages this week and still, not about 4% away from a new all-time high. that's one of the technicians

are watching to see the nasdaq participate. it's always better when the nasdaq leads because of the fact that it has a wider variety of more rising kind of stocks. if you take a look at the travel stocks, not surprisingly today, they are among the biggest losers. priceline, expedia, all being pressured in the wake of the attack in france. we're also seeing some pressure when it comes to chip stocks. wells fargo with the call cutting not just nvidia. >> coming up, new all time highs for both the s&p 500 and the dow this morning for the fifth consecutive day. if we retain these levels or move higher into the close, that will be the first time we've achieved a week of gains in 18 years. we'll dive into what's driving the rally and how it should affect your decisions after this break. son. ge! a manufacturer.

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looking beyond those, to the broad base that's continuing to strengthen making the case for 2300 for the s&p 500 by year round. steven sootmyer joining us now from bank of america, good morning to you. >> good morning, simon. >> this is an important breakout after a period of really sideways trading. what does it mean for you in your analysis? >> it means three things. one, we can complete a cyclical consolidation on the breakout we saw earlier this week. and the breakout in 2013 and friday, very rare. closed to a 252 session high with a span over 300 calendar

days between new highs. we call a new high of a long pause. 24 times since 1929 and quite solid after that. it's conceivable to see the market trade up into the 2300 to 2400 range when this occurs. >> i'm not sure we have it, but consumer stock for the first time. apparently pretty cheaply. 2.5 times oversubscribed but you can see the stock looks to be opening quite nicely there. a rare consumer foods offering, simon. >> let's come back to the ipo for more analysis later. stephen, let's pick up the broader point you're making about the market. it's an important breakout, confirms for many people that we're still in this bull market. there are those who will say, technically, maybe we're

overbought in all ten sectors unusually and others say, well, should there be blanket buying from here? what would you say and answer to those two questions, really? >> sure. of course, the market is short-term overbought. we've got a lot over the last several sessions but overbought is a good sign. i mean, if you weren't, i'd be worried. the other thing is dial back and look at your weekly momentum indicators. they are not quite overbought. so i think when you look at the market, aeflt thi lot of things for it. solid patterns across the u.s. and globally, could be breaking out of a head and shoulders bottom. breaking out of a head and shoulders bottom. but the patterns are in tact that are bullish. not just in place now but prior to brexit. i would have told you the same story. improving breath in the market. you had head and shoulders

bottoms developing in auto markets around the world and bullishly position. if you pull back, i'd be willing to buy into this from what i'm seeing on a technical side. >> how should people weight what you're saying against the analysts who have been pretty pessimistic or at least cautious or bumping up against the year end targets. how do we see the broader calls? >> well, i mean, it's two very different disciplines. i always look at different things and then technical, it's just another piece of the puzzle. for me, it's really all about supply and demand in the market. the fact that people are willing to buy the market as it's going higher. i'm having a hard time finding people to step in here and buy when i talk to people across the world. it's just a lot of non-believers in this rally.

i know some sentiment indicators that people are here but a lot of internal indicators here at bank of america, merrill lynch that suggest they are overly bullish here. i use them as a discipline here. >> thank you, stephen suttmeier. >> when we come back, a look at the markets. looks like dow is up 37 points. financials underperforming at this hour. s&p 500 still in record territory. doesn't take much these days. herbalife is surging. the ftc set to hold a news conference in about ten minutes time on that regulatory victory for this company. more "squawk on the street" in just a moment.

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due to the fact that company had lower expenses, able to release some money set aside for bad loans and saw an absence of legal costs in the quarter but talked about brexit and the impact for the most global bank on wall street from that vote. there was a trading spike from equities but interestingly, he said brexit made interest rates go so much lower, it meant that energy companies and oil and gas companies that would have been downgraded or unable to refinance debt were able to go to the capital markets and do so and that actually kept the bank from having to take more than the $100 million in losses it took from oil and gas. he did say there are preparing for a world growth if central banks continue to ease, it would be no surprise they continually change their asset base and readjust their balance sheet to reflect the day-to-day business

as usual role but that lower for longer is the name of the game and too early to see exactly what impact brexit will have, although any small dampening he expects to be limited to europe. on wells fargo, it's felt acutely and in the company's margins. they did see broad loan growth across autos, credit cards, mortgages but the fact that yields stayed so low means they're making less money on the loans issuing. they're conservative on the oil and gas sector and the companies they're lending to there but certainly, the weakness there and the worry seems to have peaked earlier perhaps the end of last year. i want to show specifically when we talk about yields. we saw the margins come in by six basis points. analysts thought the worst might be over when we started the year but you see they're going nowhere but down and that's what you see wells fargo shares down

2%, guys. >> kayla tausche, thank you so much. when we come back, a lot more on another record setting day for stocks on track for a third consecutive weekly gain. haven't done that in a couple of years and awaiting the press conference on herbalife, the federal trade commission saying the company has agreed to restructure and compensate consumers. we'll take a look at that event when it begins in a few moments. back after a break. ♪ approaching medicare eligibility? you may think you can put off checking out your medicare options until you're sixty-five, but now is a good time to get the ball rolling. keep in mind, medicare only covers about eighty percent

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i'd have driven the length of a football field blindly. not funny at all. don't text and drive. the more you know. welcome back to "squawk on the street". sara eisen and record highs once again, coming in okay and the macro data is a little better than expected. in the meantime, we await a press conference at the ftc on herbalife. the commission saying the company has agreed to fully restructure the u.s. business operations, pay about $200 million to compensate consumers settling those charges that herbalife deceived consumers into believing they could earn substantial amounts of money selling nutritional supplements and personal care products and we'll take you to that event

live as soon as it begins. in the meantime, we follow these deadly attacks in france. at least 84 people are dead after a truck plows through crowds gathered to watch the bastille day fireworks along the seaside in nice. michelle caruso-cabrera is there. >> francois hollande addressed the country in the last hour and said of the 84 people killed, many of them are young children and also foreigners. he said 50 people, quote, are between life and death. earlier, hollande visited one of the hospitals where victims were taken. the spokesperson for the children's hospital said they had received 30 teens and young children, two of whom had died and the children crushed by the truck suffering multiple broken bones. the youngest patient, 6 months old. no clarity on the child's condition. she said the hospital staff had been trained for mass casualties because they weren't expecting an attack. nice was really a red mark for attacks.

those video filmed by a freelance journalist shows the 28 ton truck loaded with hand grenades and weapons down the boardwalk and plowed through the rebelers for the bastille day fireworks. officers race towards the vehicle and shine light inside of it. two americans among the victims. sean copeland and 11-year-old son from lakewood texas. the attackers believed to be a 31-year-old tunisian and not formally identified. reuters believed they know his name and not known by tunisian

authorities to have radical views. back to you. >> thank you very much. in the meantime, the ftc news conference on herbalife is just beginning. let's listen to that. >> a chance to change their lives, quit their jobs, and gain financial freedom. herbalife's marketing materials claim consumers regardless of background or experience could earn part-time income ranging from $500 to $1500 per month and substantial full-time income showing pictures of herbalife members enjoying expensive houses, luxury cars, and exotic vacations. testimonials also in english and in spanish assured consumers they could achieve this dream. some herbalife distributors reported earning $16,000 per month. others said they were multip

multimillionaires. how many of you would like to make at least a million dollars a year, asked. another said, we went from bankruptcy to being set for life. but the ftc charged that this wasn't true. that the dream portrayed by herbalife and reinforced in these and other testimonials was an illusion. the vast majority of herbalife distributors found it could make little or no money selling herbalife products. in 2014, the average amount that more than half of the elite distributors notice received in a year as reward payments for recruiting others into the herbalife program said that amount was less than $300. the company's own survey results show that the majority of people and a retail business. people who leased space open a nutrition club and worked long hours, made no money or lost

money. the small minority who did make a lot of money paid for herbalife not for selling the company's products but for buying the products themselves and then successfully -- >> that is the ftc press conference on the herbalife ruling which david is clearly a win for the company because they are not saying that it is a pyramid scheme. it is not. so it's just rebuking them. >> very damning. and then -- >> the stock reacting positive. >> we read some of the complaints, to put it into perspective in herbalife but amassed over a series of months leading to that. the stock plunged at that point and then, of course, the back and forth between many of the bulls including icon and one point, dan loeb saying this company is going to be well undervalued, ackman just continuing for years and years,

countless conference calls and allegations and different things brought to different regulators but here we are at this culminating moment where the ftc saying the things that ackman alleged but not doing anything to shut down the company so the stock is reacting positively. >> will the new rules enable to make them to the extent they have to before? that's the point that ackman is making and still has to be resolved. >> for now, the stock is up 17% on this news. we're also keeping an eye on banks, big week for bank earnings with fewells fargo and j.p. morgan. the earnings reports and what to do with those stocks. oppenheimer and company. not as enthusiastic of a reaction here for the banks today. what is your takeaway given this difficult operating environment with the macro, brexit, and of course, super low interest rates? >> you can always break bank earnings up into two components.

the first one is earnings before credit costs and that's very sluggish and that's a function of the low interest rate environment. and that's pressuring that interest margins. so even the best companies out there like j.p. morgan had 2.6% revenue growth year on year. wells fargo just under 12%. just very tough to come by revenue growth. it's positive and that is generally underappreciated. and it's how outstanding credit quality is. and how much banks have derisked their balance sheets and you see it across all geographies and all product categories. delinquencies are low and not just low, but fraction of what they used to be. and ultimately, the banks earnings are going to be much more resilient than any kind of weaker economy than people give them credit for. >> we should also note that the

domestic economy appears to be better. what kind of read did you get, for instance, on wells fargo often seen as a good gauge of consumer demand, commercial loan demand as well as housing? >> the loan demand is there for the plain vanilla type of banks. upper single digit, year over year rate. and then that's positive. and credit is amazing. i've been covering this industry on and off for 30 years and just the delinquencies and losses are a fraction of where they were. and i think that is one of the things that ultimately will help banks win. so the thing is if you think about, yes, the current environment is hostile but if you think about how do you win in bank stops, one, at some point, rates go up and two, they're allowed to return a lot of capital now. most of the banks are returning 70% to 80% of the capital that

come in the form of buybacks and if you're a company like citi bank that can come back at 70% a book, it can mean good growth in book. and the third thing out there, some day i think will benefit banks at some point, relief from the kind of operating risk capital requirements they're under now. if you look at, for the big banks, about a quarter to a third of their assets are completely fictitious regulatory assets called operational risk. so if you strip that out of the banks asset base, they're earning very decent return on their equity with credit and market risk. >> we'll leavethere. thank you. >> update people on the continuing wrestling match between national amusements, the controlling shareholder of viacom and viacom's current board of directors and its

management. you may recall my reporting for quite some time on the management of viacom's desire to do a deal to sell 49% stake in the paramount studio to others reporting, wanda of china potentially or other potential chinese bidders that would have the effect of valuing paramount far above where people currently value it as part of viacom. moments ago, national amusements, the controlling shareholder here of viacom, of course, its board composed of the likes of sherry redstone puts out the following statement saying it's one of the most valuable assets and might result from a paramount transaction would be outweighed by the significant impact on the strategic flexibility to best capitalize on this important asset and point out the complexities of joint ownership and undoubtedly extend far beyond that to divisions of

viacom to take on partners. very much a negative reaction here from the controlling shareholder of viacom to this continued plan which was reported on in the front page story in the "wall street journal" to sell at 49% today. judging from the press release and going on to say the decision should not be made by individuals who may be leaving the board shortly, that being the five directors that they're trying to replace. it certainly would appear that any hopes that is done for getting a deal done for the sale of the 49% stake in paramount have been dashed. at least according to national amusements. carl? >> when we come back this week, we'll have more on this terror attack in france, jim woolsey will join us and ian bremmer in just a minute. you're here to buy

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you may not with interested in war but war may be interested in you. and we have to stop pretending this is a matter of a criminal activity and talk about taking the terrorists to justice. no. they want to destroy us. they want to destroy our civilization. they want to destroy our country. and we had better get moving before -- they have chemical weapons of some kind of other they got, they being isis. and affiliated organizations. we better get moving before they end up with something even more deadly than chemical and we have to stop fiddling around. >> what instituconstitutes no l fiddling around? >> in '99 in the clinton administration when we went against the serbs to keep them from massacring, they were flying hundreds a day against serbia.

against the isis, we're flying a few dozen here and there. we're not serious. and we need to move quickly to pull together the kurds and as much as the turks that will come with us. orchestrate, define, and let them do most of the ground fighting but to be involved and lead, we're not even admitting that we're at war. the president can't even name who we're fighting. i think if we fiddle around like this for another two or three years like we have, we're going to find it's not just a city occasionally that is hit by terror attacks. it's a lot more. >> this is a criminal who drove it through people. horrifying as that is, how would a war thousands of miles away have prevented him and others from doing that? how does that solve? >> we have to oobliterate.

the same thing outside of the middle east we would inside the middle east but we cannot treat them as if they're just a kind of a crazy renegade group that occasionally inspires somebody. they're theocratic imperials and trying to build their caliphate and they're working very hard. >> some would say it's the increasing desperation. >> there's been modest gains and we need more. and we should have started on this a long time ago. we were spending millions of dollars training handfuls of people. we have not put this front and center. and we have to do that or we're going to lose. >> ian bremmer is on the phone,

tweeting in outrage, not sympathy as the appropriate response to this. you would agree with mr. woolsey. >> no, it wouldn't sound that way in the sense that i think most of the world, we have a 20th century perspective on it. the idea that the americans through military force can resolve all of the problems that are out there is quaint. and archaic. the issue we have is that you have very large numbers of muslims in europe. most of them born there. they are unintegrated in these societies. and they are -- they don't feel like they have opportunities an d no willingness to integrate them. >> i recognize myself as the straw man this man wants to argue against.

this is certainly not a question of just poverty driving people into desperation. >> i didn't say that at all. [ talking over each other ] >> after 9/11, when we saw how many -- >> the toverreaction. >> what we said was basically this is a situation -- >> ian, just let the director finish his sentence. >> okay. he interrupted me. >> we said the root causes of terrorism are quite clear. their wealth, status, and education. these are not people who are given by provoverty especially e saudi arabia to some kind of economic desperation. they are religiously motivated.

they're theetheocratic. >> it's about radical islam. there's no question the nature of apostulation. it's this broad region and particularly in europe, something that we are going to have to deal with for decades but the idea if you ask yourself that propagating a war thousands of miles away is going to somehow lead to fixing problems that exist in france among populations that are born there is foolish. >> i think you are not only wrong -- >> the reason why most americans -- >> i think you are completely wrong in wanting to leave their homeland alone and do what they want in their homeland. that's the basis of the caliphate. i tell everybody this is the beginning of the caliphate. the caliphate is getting bigger

than that's what encourages them more than anything else. >> the lack of these home governments, not just talking. you mentioned saudi arabia yourself which is very different. going to war in saudi arabia as we know. >> what are you talking about? where do you get these things to invent? >> the oil wells, the one thing that provided so much for people to be willing to tolerate their leadership, that's going away. the willingness of the united states to act as the global policeman in this part of the world. >> that's such a straw man. it is absolutely ridiculous. >> before we go, do you believe it's a matter of time before something like nice happens in this country? >> maybe not too long. because the people who have the point of view this gentleman does may succeed in keeping us

from taking out isis' homeland. >> director, thank you for your time. ian, we always thank you for your time. ian bremmer of the eurasian group. as we head to break, there's the markets. up 21 on the dow. it's been a stunning run. we look at potentially five record highs for the s&p and the dow on the trot. that hasn't happened for 18 years. more on that after the break.

news may be small but significant stops on pace for another record setting day in the wake of good sale figures and the bank earnings not bad either as we embark on earnings season. for now, andrew simeon, manager of morgan stanley and david loo lool. why do you think people should be cautious here, andrew? >> the market has gone up a lot since post-brexit.

i think there's too much cautious out there. telecom were up 23% and technology and health care were down. i think the rest of the market has to catch up to the risk off trade. >> do you think the market is going higher from here. are you confident in what's happening here and the rotation into the cyclicals? >> i think the rotation is coming because i think the market is starting to anticipate the economy is accelerating. the acceleration is going to help the earnings in those cyclical areas that have not benefitted. >> you're confident with these levels and how much higher? is this the beginning? >> i think the s&p estimates are $120 for this year but i think you could get $5 or $6 out of the cyclical sectors for the market. i think there's upside from here. it's hard to say today because the market is at a very big move but i think there's too much caution, too many people one side of the vote which is cautious and that, look at the citi bank.

it's turned positive for the first time since the beginning of 2015. that tells me the economy has started to pick up. that tells me earnings are goeng to pick up. >> it's a breakout over the last ten days to the point that andrew is making. >> i would share a lot of his views in that the market has gotten very far, very quickly. i'm of the view that the longer a market rally continues, the weaker the investment base becomes but you're continuing to see investors bid for utilities and high dividend paying stocks. i think the hesitancy basically tees us up for more stimulus coupled with the growing u.s. economy should provide cyclicals but i think things need to shake out in a certain way with central bank policy and the trajectory of overall economic growth. >> i wonder if the takeaway is when it comes to post-brexit and just other types of events like

this, it's very hard for investors to get a clear picture as to what the geopolitical ramifications from these major world events are for prices. it was completely wrong. you remember the prognostications post-brexit. >> i think political risk is one of the things that is going to affect the market in the second half of the year. the decision to leave the uk showed what they're thinking over across the atlantic. we have the presidential election here come this fall. elections around the world coming up before the end of the year. i think we need to watch politics closely because what we're seeing, the voter base is frustrated. it's upset. we need to weigh the possible implications for the economy when thinking about the trajectory of assets going forward. >> to my point, the question is, do we? because andrew, it doesn't seem that simple. >> i think the lesson of the last year and a half is that it's all about earnings. and we haven't had earnings growth. if you look at the sectors that really cause no earnings growth, they're going to turn positive year over year. energy prices at this level will

be up 30% year over year by the end of december. okay, so these numbers for the cyclical areas are going to get easier as we get into the second half of this year. politics plays too much of a role and it's ultimately about earnings that drives the stock market a market. >> there are things for discussion during the presidential campaign that potentially are major. >> i think the next two, we're going to worry about these conventions. the market could have a problem because of the conconventions. i agree with that. >> where does that leave you overall? >> when the dust settles, if the numbers go up, which i think they will, the market is going higher but it doesn't mean the next couple of weeks, there's anxiety because of politics. especially as david said because it's a pretty good move in the market. >> david, you. >> i would agree with that. over the long run, stock prices follow earnings and it's my view that earnings will rise in the

long run. i think the key takeaway from investors is exactly what we've been saying. markets have moved very far, very fast. we need to make sure that the fundamentals are keeping pace with asset prices and i wouldn't be surprised to see things consolidate a little bit. >> thank you both. andrew and david. >> thank you. >> coming up on the show, the former chairman and ceo of continental airlines, we'll get his take on how terror is impacting travel with many travel stops in europe under pressure. much more. you're watching "squawk on the street" on cnbc. 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

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i'm courtney reagan. here's your cnbc news update at this hour. we're learning more about the attacker who plowed a truck into crowds in nice. the driver identified as 31-year-old tunisian-born

frenchman. he was reportedly not on the french intelligence watch list but was known to police as a petty thief. at least 84 people killed in the attack including two americans. the attack prompted donald trump to postpone the announcement of his vice presidential pick. nbc news is reporting indiana governor mike pence has been tapped as his running mate. a formal announcement expected this weekend. meanwhile, britain's brand new prime minister is in scotland. the government should be fully engaged in brexit talks. scotland is considering a separate deal on relations with the eu on the brexit vote. nasa released amazing pictures of pluto. it's what it would be like to ride aboard an approaching spacecraft. 100 photos taken over six weeks. that's your cnbc news update at this hour. >> thank you very much, courtney. in the aftermath of the terror attack in nice france, how will the global economy be affected? gordon is the former chairman of

continental airlines and of course, cnbc contribute for. welcome back to the show. >> thank you, simon. glad to be here. >> it's obviously horrific what's happened in france. what would the analysis be within the suite here? what extent do you have here to cut back capacity because people are less willing to trooavel? what are the decisions now? >> we made that when traffic fell across the system by 20% and new york by 30%. devastating, quite frankly, for revenue. so nice and france and a general spot, heavy august traffic. vacation spot for europe, it's going to have a negative effect on revenue and several in general. >> although if you look at, i mean, i know for the airports of paris, there was a slight delay, but most, so far, maybe because we have this regrettably,

usually a quick recovery after obviously a temporary slowdown and a paralysis in many senses. >> that's been my experience. whether it's an accident on an airplane that causes a temporary kind of paralysis but these repeated attacks in brussels and paris and turkey and istanbul, when you read about it every day, i remember we had to cancel a flight. we did two a day but start bombing the cafes and nightclubs every day and people quit going there. >> yeah. i mean, it's interesting. i wonder if there's a divide between inevitably, europeans who are in a sense may feel more in the midst of it and you've got to get on with life and travel and americans who may feel that it's simply they don't want to travel in a very different sense because if you look at the way the cruise lines are impacted in particular, the softness came in particular from americans wanting to take european vacations. >> and simon, they have so many other choices to make.

europe has been traditionally a vacation spot, but the caribbean and latin america and certainly asia offers alternatives. they say, let's just sit this one out and go somewhere else. >> what about the security impact for the industry itself? i mean, clearly this is a softest of targets. these are people watching a fwo firework display. it's not an airport. there was no security lines. what is the latest view on the degree to which we tighten what we do here to protect ourselves? >> i think that's a concern. all you need is the driver's license to have a lethal weapon. how do you prevent that? i'm not sure that i'd be the expert to talk about it but it is the complex issue that the governments are going to need to address. >> i'm curious about your take on european airlines in general right now which are already suffering in the wake of the brexit vote. all of that uncertainty as to the uk's relationship with trade which could really impact this industry with europe. what kind of position are they

in? >> even with business declines, you get decline in revenue on the airlines. they are facing a specter of declining revenues, declining trade and of course, the terrorism on top of that is going to compound the problems. i look for them all to be off in revenues over the next 12 or 18 months. >> i'm just wondering specifically, there was this open agreement in the eu that allowed a lot of these british airlines including easy jet and the parent company of british airways to set up new hubs and markets without having to, i wonder how valuable that is to some of the british airlines in particular. >> well, it is. that will be filled by others but quite frankly, that's such a lucrative market, the united kingdom and europe that somebody's going to fill that need whether it's in the eu or outside the eu. >> as far as long haul is concerned across the atlantic, your counterparts will be

sitting there in realtime and looking at the bookings in the wake of the brexit and the wake of what happens today. how rapidly are they able -- if they do see a slowdown and that has yet to be proved, how rapidly are they able to cut back their capacity? how does that work in realtime and will, if there is overcapacity because people decide not to go, will people see that instantly in the air fares they're offered? >> i think what they'll do, simon, is look at the break point. they can reaccommodate you via another route that you want to go rather than non-stop. and the bookings either way out and cancel the flight if it's not going to make money over the next 90 days. >> and how soon can they do that? would they be doing that a month or two months out or six months? >> they'll be looking at it starting today. and watching the bookings as the

revenue falls up and the cancellations quite frankly. they'll pick a point and i don't know if it's going to be severe where you can reaccommodate that passenger in another way to get him to his destination and cancel your flight. >> gordon, just before we let you go, what's your view on the domestic airlines and the profitability and capacity questions we've had there? >> i think we've got four really good air carriers that compete heavily in the marketplace. good quality air product. i've never seen our industry stronger than it is today in the united states. >> good to see you sir. thank you for your time. have a great weekend. gordon there on cnbc. >> as we go to break, look at the dow. up a mild 27 points. 18534 and s&p hitting a high earlier today, 2166. back in a minute. lways been more than an apparel company. we've always been an innovation company.

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stock of nintendo leaping 70% in one week. 90% over the past two weeks, this is after the success of pokemon go. the virtual augmented game downloaded on apps, top on apple and google. they launch it in the uk this week after the u.s. and australia continue to expand. developed by the pokemon company 32% owned by nintendo. let's go to rick santelli with the santelli exchange. hi again, rick. >> thank you, sara. if it's earnings season, it's time for rebecka. tell us what corporal does. >> we interview and manage upwards of $2 trillion. >> the title in many ways is, hmm, the hmm factor. why would some of the data you

collected so different than you'd expected? >> if we take a step back ahead of brexit, more than 50% of institutional investors say the markets were overvalued. 46% took off the table and they're largely expecting 80% inline to worsen expectations. the thing that makes me go hmm is that their description of management tone is much different. management tone is more bullish, more optimistic. >> if i'm hearing you correct, we have a depressed investment community in terms of where they put their money and we have management being the kind of savior turning less into more. is that accurate? >> absolutely. these teams have been operating in a low growth environment for a long time. >> you've deemed slow growth. >> absolutely. they are more agile. their operational effectiveness is honed. we saw what is going to be a continued theme.

>> i can understand how management has to make more out of less. but when i look at the stock market response post-brexit, it's been a moon shot. so what other factors? management steady eddy but what explains the big volatility? >> nowhere else to park your money. >> tina factor on steroids. >> and buy backs. >> he's been talking about this for years. just less stock out there. it's smaller and smaller, when you put it all together. >> bigger movements. >> what about sectors and regions? >> sure, we saw an overrotation into defensive plays. so consumer staples took down technology as the number one bullish sector. utilities saw the biggest bullish increase. >> in terms of regions, whether the top three, it has something that rhymes with north america. >> we continue to see a lot.

there's a lot of positive momentum out of it. u.s. and canada. >> finally, we've had the handoff from brexit to november. u.s. politics. and this is fairly interesting what's going on, isn't it? >> i think when you look at the polls and then we poll institutional investors, there's a clear winner and loser in terms of how they're thinking about equity markets. >> i don't think this is shocking. when it comes to hillary, when does the survey say? >> the survey says 80% view donald trump as negative to very negative for equity markets. it's a vote for hillary. >> it may be a vote for hillary. we're almost out of time, but it sounds pretty synonymous with how people felt about how markets and the world would react if there was a brexit. >> sure. >> and it didn't turn out right. there's an interesting dynamic we need to pay attention to. finally in the final analysis, do you think investors are going to continue to move into areas like corporate securities to get more income or do you think

they're going to dig down and hold on to their stocks as their biggest investment? >> i think they'll continue to hold on to stocks. it's a great yield. >> rebec brebecca. always a pleasure. we continue to monitor action on cnbc. simon hobbs, back to you. >> thank you, rick santelli in chicago. up next, jim stewart. more on donald trump's relationship with business. after the break.

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if that's what you need. because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. welcome back to squawk on the street. i want to call your attention to bio tech up over 1% nearing the highs of the session. pacing for its best day in more than a week and also on pace for 3 consecutive weeks of gains. today it's the large cap names leading the index higher and celgene is up over 3% despite recent gains. the index is still in bare market territory down about 31% from its recent highs. we'll have to see if earnings changes that picture. >> thank you very much. in political news today donald

trump was expected to choose indiana governor mike pence to be his running mate but in the wake of the tragedy of france the campaign has delayed any official announcement and republicans are set to gather in cleveland for their nominating convention next week and the trump candidacy is still facing resistance from business leaders and traditional republican base and joining us here at post 9, new york columnist jim stewart good to see you as always sir. >> nice to be here. >> you might think that donald trump who is a business man himself would get more support from big business but that's not what you found. >> definitely not. this is really historic in a way. you have to go back before my lifetime to find a situation where the republican candidate has in some ways moved further away from the business agenda than the democratic nominee and by the way, hillary clinton pushed to the left by bernie sanders and never theless trump in some ways had to leapfrog

right over her. especially on immigration and trade and policies that are to major business leaders not only looking at the economy. this is for shareholders as well. these policies are not going to be good for stocks. >> you are referring to the business round table which is a group comprised of many influential multinational ceos and i wonder how much of it has to do with the trade aspect. >> a lot of it. they are advocates of free trade. they're not unique in that regard. economists are rarely unanimous about anything but as close as you can find is a free trade on balance benefits, especially consumers inevitably certain groups are going to be disadvantaged but overall we do so much better. the economy does so much better without trade restrictions so that's number one. they're also very strong proponents of immigration. especially for the most talented people. we bring in the smartest kids around the world and train them

at ivy league schools and then kick them out to compete against us. >> donald trump has just tweeted that governor pence is his pick as vice president on the ticket. he had a midday deadline in order for pence to with draw locally from the re-election campaign there. what is your reaction to pence? a more middle of the road candidate. >> definitely and pence is particularly interesting. he is a free trade advocate. he supported the transpacific partnership which trump said he would rip up. how the two of them are going to reconcile on that i don't know but if he can somehow moderate trump a little bit on some of this it will be reassuring to the business establishment. >> much of the economy is centered around the lack of contact and there's a invitation for september which he might take up. would you imagine now that pence coming in and standing on his right hand side here changies that contact and brings some of

that's these other interested parties into the fray or does he have to put the business elites up there as well. >> on the face of it, that will be reassuring to these people. on the other hand it's the antielite thing. i mean, certainly on immigration, free trade, he has really staked out very bright lines here and he is against it. i don't know that he can move that much without alienating his core supporters. >> jim, hang on if you would. we want to bring in john harang gets -- harwood. he has tweeted and confirmed he is picking governor pence. >> all morning long everybody is trying to figure out is donald trump wavering on his decision? was he simply postponing in deference to the attacks in nice. i had a tweet or message from a trump advisor that said he's

sticking with pence and now he has done so. ended the mystery. he needed to do it by noon because mike pence that's running for re-election as governor of indiana had to file papers with drawing from that race if the republicans were going to put up another candidate. so trump is now calming the frenzy and uncertainty. republicans will welcome this. this is a popular pick. and served in the house and significant amount of time. paul ryan praised him yesterday and said he would be pleased by that pick. now he's got it. this was the pick that trump political advisors wanted. they wanted somebody that wouldn't make waves but could help unite the party and now donald trump affirmed that and will announce it tomorrow at 11:00 after 24 hours later than they originally plan to.

>> john harwood thank you very much. jim stewart, final thought to you. what does trump and the trump pence ticket need to do to win over the business community? and we didn't get to the fact that he had individual spats with jeff besos and facebook. >> mark zuckerberg. he has a lot of mending to do. putting technology aside he can bring around the mainstream leaders. he is heading in their direction on taxes. in some ways he has gone too far. that's probably the one area where he is most closely aligned. he could probably pick up some support there but at some point he has to moderate these extreme views on immigration and free trade. >> thank you for joining us and baring with the breaking news. jim stewart of the new york times. >> okay. let's take a break. more on the breaking news on squawk alley which follows next on cnbc.

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ones that transcend channels and locations, anticipate expectations... creating new ways to engage at every imaginable touch-point. it's a new day in retail, and together, we're building the store of the future. digital works for retail. let's talk about how digital works for your business. >> good friday morning and welcome to squawk alley. a busy day on the markets and of course politically and geopolitically the tragedy in nice among our top stories more than 80 dead including two americans after a truck driver crashes into the crowd in the south of france. michelle has the latest at hq. >> we are awaiting a news

conference from the french prosecutor. it is expected to start any morning. the french president addressed his country the last hour and said the 84 people that were killed, many of them were young children and also foreigners. he said 50 people are between life and telth. earlier he visited one of the hospitals where victims are taken. the spokesperson told nbc they received 30 teens and young children. the youngest of whom was six months old. two of those children have died. the children were crushed by the truck suffering multiple broken bones and that the hospital staff had been trained for mass causalities because they were expecting an attack at some point in nice. we're learning more about the attack and reporting to the may mayor's office. he's 31-year-old living in nice. the attackers believed to have moved to france in 2005 after