point. >> you should be the attraction. >> right. okay. final check on the markets. let's see where the futures are trading at this point. in the u.s. flat now. they've given back some of the gains. european equities part of that reason they've mod rated as well. >> okay. >> make sure you join us tomorrow. "squawk on the street" begins right now. good monday morning. welcome to "squawk on the street." carl quintanilla with jim cramer and david faber at the new york stock exchange. we set up for a pivotal week in politics and the markets. earnings season kicks into second gear. gop convention kicks off president the ecb meets and we watch baton rouge, nice and turkey as well. europe is mixed not reacting much to chinese housing data overnight. macro data back here going to take a back seat to corporate profits. road map begins with b of a beating the street this morning, but earnings overall expected to

lag last year's reports. what that means for the markets. >> softbank buying arm holdings for $32 billion in cash. we'll give you the details, some insight and context on this massive deal. >> republican national convention kicks off in cleveland. what's on the agenda and what surprises could be in store? but first up futures on the rise to kick off the week. the dow and s&p near all-time highs. markets largely shrugging off the attempted coup in turkey and on a busy week of earnings, b of a beating on the bottom line, 36 cents versus estimates of 33. deposits up 5.8. some of the metrics not matching those of its peers, jim. >> but still, this is a grind out quarter. return on equity, getting double digit. what i liked best about it, really, this is kind of interesting, this is a company that's well ahead in mobile and you have an amazing decline in branches from 6,000 to 4600. >> yeah. >> and that is because people are rapidly adopting mobile. interesting brick and mortar

story where you have still one more disruption via the absolutely terrific app that they have, also book value $16.68, well this will be important because what will happen is they can start buying back stock tomorrow. let's watch, you see jpmorgan started going up after they reported. this is this day they have to hold back and the day they can come in with guns blazing when you have a discount like that it's interesting. efficiency ratio 75 down to 66. i liked it. i liked the quarter. i've liked almost all the bank quarters. the journal said earnings are not so hot. i struggle with that. i just try to point out that the earnings aren't bad. >> they didn't quite get there. return on average, common equity 9.2%. i've got it. it's still -- >> tangible book -- >> they were at 6.5 on average. >> but i think that this was a quarter that was just a fine quarter. i mean, one of the problems that -- one of the things we

have to keep in perspective, weren't they supposed to have horrible quarters because the fed didn't raise? >> net interest margin. >> trading wasn't bad off brexit. >> trading was not bad. capital markets activity okay. >> trading up 12. vic up 22. the shares have lagged the peers this year. at b of a. stock down 19% this year. >> she didn't get about to buy -- they didn't get to buy back as much stock. plus 2% yield. i agree with you. look, is it like the greatest quarter ever? no. jpmorgan's quarter was a good quarter. >> expenses are coming down for all these banks. >> yes. that's important. >> including at bank of america where i think they were down $221 million. >> yeah. i mean that's just -- >> jpmorgan had a significant decline in expenses. >> expenses since '08 b of a. >> the bat mortgage coming down. decent quarter overall and that's how competitors will look at it. decent quarter overall. >> so where are we? we're through.

jpm, citi, wells, b of a, morgan stanley on wednesday. >> golden slacks which could be a problematic quarter. i love the fact everybody thinks it's a problematic quarter. people are saying maybe the trading won't be that good. maybe they dazzle us with trading. after what we saw with brexit there was a risk on, i usually don't use that term, people wanted to take a risk, get the things going. >> first they want to take it off and put it on. it's all good. >> that's just called we call that in the business stupidity. in the business. >> of the mix of earnings i mean we're going to get gm, travelers, ge. >> travelers will be good but watch. initially people miss it and then they peel through the numbers and you can't believe how good it is. >> met life last week, is this about people expecting rates to go up. morgan stanley said no rate increase until 2018. >> one of the things i love about travelers they buy the

highest quality munis. never any risk. >> what if you're in the business of selling annuities. what's going to happen to that? >> yeah. >> business has -- that has to be a terrible business and yet the stocks don't go down like they should. i mean the insured, chub is still on fire, travelers, but when you go over the charts, insurers look great but that's like -- i think that could reverse. people will start liking the banks a little more. >> you do? >> i do. the quarters aren't that bad. because they can start returning more capital. they do have a lot of capital. once they're in there as a bid underneath you will feel better about buying the stocks. you think that's fanciful? >> not necessarily. doesn't sound fanciful to me. >> how much -- we had harold ham on squawk arguing that the rally we've seen is due to the market celebrating trump. >> did you see how ambassadorial andrew was when he questioned that? >> is that the word you're using? >> yes. it was kind of like -- i think he would have said you're nuts. that's ridiculous.

but what he did was say, you know, with all due respect, came in with an all due respect attitude. >> use the all due respect. yeah. >> very surgical. >> and turkey, just as we continue to watch the fallout. >> i keep thinking about the committee to protect journalists a great organization. >> first thing i think of too. the worst. number one in terms of jailed journalists in turkey. it's great a victory for journalism but i think about the first amendment. >> he's tried to shut down souch social media and has to use a face time app to communicate. >> geez, face time, apple, like -- >> and didn't use twitter. >> well that's -- >> shut it down. >> yeah. >> but apple, there's -- we're getting good numbers out of india. i thought there was a good piece this weekend i read, india is i think we're going to talk more about india, domino's having a great run in india. india will be the next big frontier for apple but i think

it was pretty amazing to hear that and then the lear was down big and came back. and one day i thought i was doing great in the lear, just getting better and better, 1988, they devalued and did a reverse split. i said i'm losing fortunes. big portion in arsalec supposed to be the whirlpool. >> turkish lira. the italian lira hasn't come back yet. >> they got rid of it. >> they did. >> don't you think we're going to see it again one day. >> beautiful currency. >> you never know. never know when those can come back. >> let's talk yen and -- >> the -- >> yen and the british pound here. of course this hugeeal this morning. >> whoa. >> japan's softbank will acquire chip company arm holdings $32 billion in cash, arm is based in the uk. designs chips for many smartphones including the iphone that represents more than 40% prooem that price, 43% over where the stock closed.

fascinating deal here, of course. a huge bold bet from massa son who runs softbank who made a series through the years most good, couple not so good, the investment in alibaba, perhaps the greatest single investment ever made. he bought that huge stake for virtually nothing 15 plus years ago, monetizing some of it, sold $10 billion recently. jim and carl, the arm holdings deal, $32 billion, 60 times earnings at least, 20 times revenues, 33.6 times ebitda, the multiples on all fronts quite high. annuity stream. not about the iphone or about cell phones. it's about the internet of things and the believe on the part of mr. massa son that this is the future, this is where he needs to be, and with arm he will be there representing essentially an annuity dream store all of the -- stream for all of the devices that will be connected mobilely to the internet. not your phone, but everything. >> it always surprises me intel

didn't buy these guys. just a bunch of cambridge professors came out with probably the finest intellectual property of the year because it doesn't burn a lot of bat fof t. their stuff is a light battery user. with nintendo go when you play it it's like a battery hog. >> i have not played it and will not play it. >> i am not playing that game. >> hasn't found charm -- hasn't found anybody. >> did you know it's 28% cheaper than if they did it a year ago because of the brexit and the pound and yen. >> although most of their earnings are in dollars. >> true. >> so therefore you have terms like that. i'm saying it was -- brexit not unlike 1987 when we put on a lot of -- a sale on our companies, and the japanese came in and bought it it was a one time only with the stock market, david, remember when the canadians blocked potash as a national treasure. >> yes. >> this is the best tech company in britain. >> in the uk. >> will someone block it --

>> that is very much -- would be atypical for them to do something like that. >> such free traders. >> yeah. that's hard to imagine. in fact on the regulatory front this deal could close as soon as the end of august. >> come on. >> it could close in six weeks. no regulatory here. not talking about one strategic buying another which is interesting, of course, because you would expect perhaps there would be interest from other strategics, the likes of an intel, although their regulatory could be an issue or apple or samsung or qualcomm. probably not. i can't say that i've surveyed the market at this point and neither has arm because really while massa son was thinking about this for months i am told, the approach was really made very recently and at that price they were willing to say okay, sold to you. you have a lot of companies that earn their money overseas so it's -- it's dollars at 66 cents on the dollar, in other words you can save the tax because they use overseas earnings. the chance of an interloper here seems to be low given the incredible multiple he's willing

to pay here. >> do you think [ inaudible ] didn't like this? >> i don't think that cash -- i don't know what role he had, if any. >> amazing deal. >> massa son saying this is my next big bet, big it is and i'm going to be here a long time to come. >> apple is often linked with them because of this battery life issue and these guys have the better technology. intel a competitor. i think intel is coming on. we will hear from intel this week. a couple of quick -- couple shares on alibaba, pressured people from softbank, and alibaba position. they are locked up for at least six or nine months as a result of the deal they did in selling that $10 billion. split because clearly they're not putting more money in there. they're spending $32 billion on this. and they are still in the process of trying to deleverage even though they're adding debt as a result of the debt that will be taken on in the form of a bridge loan for a trillion yen.

>> what's interesting the tower stocks have been red hot. american tower, crown castle, sba communications. i was thinking because sprint is sped spending money to build out the network. [ inaudible ] but i do think that there is absolutely a belief that the tower stocks are moving because of sprint. wonder where that -- wouldn't that be something. american tower -- >> it's on fire. >> a lot more numbers tonight including ya loo after the bell. we want to turn our attention to the developing story in baton rouge over the weekend. three police officers killed. more injured. nbc's jay gray is on the ground with more. jay, good morning. >> hey, carl, good morning to you. look, the shoot-out it happened right here, police tells us, really a rolling gun battle. across this car wash, into the parking lot of the convenience store just behind it. what we've been told by police is that it didn't last long, but as we all now know three

officers killed, three more injured, and an update on the most serious, still in critical condition, and officers tell us he is fighting for his life. look, the suspect here gavin eugene long, investigators have said he was the lone shooter but they still want to figure out if he had any help planning or carrying out this attack. that's why they continue the physical evidence retrieval here on the ground and at his home in kansas city, missouri. another facet is the digital footprint that he apparently left behind, several websites and social media lines that have really captured the attention of investigators. one, just hours before the attack, he apparently posted a cryptic note saying, just because you wake up every morning, does not mean that you're living. and just because you shed your physical body, doesn't mean that you're dead. again, that posted just hours before the attack which happened on his 29th birthday. investigators here from both the

federal, government and local and state police, say this is just the beginning of what's going to be a long and obviously very difficult investigation here. carl? >> jay gray in baton rouge, thank you for that. the new york stock exchange will hold a moment of silence for those fallen officers at 9:20 eastern time. when we come back exxon mobil making a nat gas bid overseas. we will fill you in on that. the ceo of game stop paul raines and the future of gaming after po comongo. dow going for seven straight gains. haven't done that since march. more "squawk on the street" from post nine in a moment. hey gary, what'd you got here? this bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go!

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exxon mobil entering the bidding for an oil and gas business. agreed to an offer from australia's oil search total, exxon coming in with a higher bid last night worth$.2 billion. oil search and total have until july 21st to submit a revised offer. interested in what exxon is putting together? >> a lot of the americans oil and gas companies have come down so much. new guinea is not a stable

situation. they're already there. this is a great producer maybe if oil were augmented by exxon mobil's technology and discipline there would be more there. we've been waiting for big oil to step up to the plate and buy some of the companies. and this is what they buy? this is very disciplined company which has one of the hottest stocks in the market in 2016. >> although i can remember there was takeover spec in this name when it was 60, 70, 80 four years ago. >> rumored names. >> a rumor but finally happened. >> and outbidding someone. this is not exxon. it's -- so not exxon to the point i kept thinking i read the two sources in exxon three sources, finally was acknowledged by ex. but this is not going and buying, you know, a depressed cimarex or ka re, so or a pioneer. >> or anadarko. >> anadarko. often rumored. >> yes.

>> often rumored. oil has come down. we're going for inner oil. kind of interesting and contrary. >> turkey is necessarily a oil giant, but certainly the geopolitics hasn't done anything to spike the price of crude. >> but so interesting they just did a big deal with israel for noble energy and it was rather remarkable. the noble energy deal was all about this gigantic feel off the mediterranean so they can run a pipe through turkey through israel and hit western europe so hostage to russia and happened a couple weeks ago. i think there's a lot -- >> a natural gas sealed in gigantic. some think the largest. everyone is claiming they have the largest. marcellus is supposed to be the largest. turned out to be the largest natural gas field in the country. >> about to have a moment of silence for fallen police officers in baton rouge. their names matthew gerald, aged 41, montrell jackson, aged 32, the father of a 4 month old son

and brad garafola, 45 years old. of course the tragedies in baton rouge coming days after the assault on police in dallas. the president over the weekend denouncing the attacks on law enforcement in this country. here's that moment of silence.

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i don't know about you but i'm excited. first mad dash of the week. >> there's a stock called twlo the first really great tech ipo we've had and it doubled and then tripled. david, the analysts have come out and spoken they're going newt on it. this is a company that participates in the upside of a

lot of businesses including uber. >> right. >> and i just have to tell you, airbnb, a great company, don't know if you've used it, a great company, as this thing comes down because they're mutual, they're anxious to recommend it if it comes down at all and you should be a buyer if it comes down at all. >> i've heard about pricing an ipo at a level where investors will be pleased but maybe they could have come in here. >> we talk about that a lot and the answer is absolutely but the bankers, no one was going to -- this is -- >> the first one out of the chute we had in a long time and bantsds to make sure it -- wanted to make sure it worked. >> exactly right like the old days where they know they have to get you back in. they lost you so much money with the ipos. this was the bargain. there's plenty of stock behind it so they can always do the secondary after, you know, obviously after the lockup. stock up almost 200%. >> you did it right, should have been here but they didn't do that. remember, linkedin was great.

this was great. >> what did we get last week, the japanese line, so they priced that okay and then -- >> right. >> the one on friday was also priced farely well. >> yeah. so what we're seeing is trying to get the unicorns off too. this was a classic unicorn. if you had been like -- like arm holdings got a bid this would have been a great bid for a software company better than buying linkedin but they didn't want to be sold. lot of chatter in tech. >> when you asked last week, about a semi deal, so we did get -- >> arm holdings. that was a shocker. >> massa says everybody per person 1,000 chips per person is coming. in other words, the internet of things is going to explode to the extent that there's going to be manufacturing that equals each of us will represent 1,000 chips being made because of all the things we have connected. >> buy brunswick. >> no. >> not good. not my boston whaler or -- >> no. >> he didn't mean that. bigger than me. >> yes. >> i am a small thinker.

he is a big thinker. >> he is. >> we're going to take a look at arm and the other stocks associated with that deal. of course a lot of other things. see toll brothers ringing the opening bell a few minutes away. you're her

you're watching cnbc's "squawk on the street." live from the financial capital of the world. the opening bell in about 60 seconds. stocks are up for three straight weeks. already we're halfway through july. we've got the best month since march going although two equals march gains we have to maintain this pace of what july has already done. >> i keep coming back to redemption monday, that day after brexit, the monday where the most money, one of the most moneys had been pulled out, one of the top ten days that people left the market. isn't that telling. that was when you had to buy. sad. >> meanwhile the week's got it all, earnings, the gop convention kicking off tonight in cleveland, ecb, obviously our share of geopolitics as we keep

an eye on turkey already istanbul down about 5%, as you said the lira has rebounded somewhat. >> i find when i look at who's going to report even today, and this yahoo! quarter we haven't talked about yahoo! that much. >> we will. >> oh, yeah. >> the faber report. >> just around the bell in a little bit. >> but i just think this is an important day. out of nowhere. this day is going to have ibm, up ten points. the bell ringing at the nyse. toll brothers celebrating its 30th listing anniversary. at the nasdaq, viveve focused on women's health. what are you looking forward to tonight? >> netflix. i think it's interesting netflix has still not been able to crack into the movie business. you know what they've got this i don't know if you've seen it,

this new war machine movie coming out, brad pitt. >> they do. >> $60 million. spent a lot of money. they did not get -- they've been not able to grab some of the big movies that people have been saying they -- they lost out to be able to have a couple of guys -- a movie the fox, just because people just felt like they don't want to -- don't necessarily want to deal with netflix. remember, it's really been absolutely fabulous for serial tv but for the birth of the nation they bid 20 million versus fox 17.5 million and fox went with them. we need to see them be able to break out war machine done by the same guy as big short which was the movie that i loved and thought was clever. i think you have to watch to see what they're doing in movies. the adam sandler, did quite poorly. they are a tv, long form tv that needs to crack into movies to go to the next level. that's what i want to hear about. >> you're talking feature releases that don't go to

theaters. >> that's where they've been very, very weak. you don't hear any success about those. and i think that's what you need. you need to hear they are more than just a long form series. >> really? so that's going to get the people who haven't signed up yet to say okay, i might do that? >> that's the word, yes. >> people who disconnect their netflix at this point. >> no. >> not a lot of people unhappy with the service. >> you have to go to the next level and the next level might be this. >> understood. >> i'm going from the street that we have a fellow calling movies better than anybody i've seen and this guy is saying that's pao what people are waiting for, full length. maybe "war machine". >> why not create a streaming bundle around your brand, in other words, we'll give you all of these things and then in addition, we'll give you this other programming. >> what a great idea. >> sports or other things like that. and netflix led bundle is what you will buy if you are not connected to a cable provider. >> you came up with or is

that -- >> i just came up with that right out of the blue. i don't know, popped into my head and now i'm going to leave and go pursue it. >> let me ask you did you just come up with it? that is a great idea? >> you think so. >> i bet he addresses it tonight. >> no. >> listen, i don't know. but when you look at what hulu is trying to do, hulu is trying to do that, trying to create a streaming bundle around them as the key entertainment hub. >> it makes a ton of sense. >> with other programming added in, so that that's it. because they got to figure out price points in terms of the streaming bundles so they can represent a price point that is competitive with, obviously, and at a discount to what you're paying for your bundle programming. >> you have to offer headline movies that really catch people's attention and they have not succeeded to date. >> hbo has done that you think? >> not as much as you would think, i guess. >> they get more of the big movies running on hbo once they've been out. >> they do. but i just think that this is

where netflix has fallen, has not succeeded and the last quarter was not that good. you would like to think maybe people would subscribe and want to see "war machine" and brad pitt which i do. >> me too. >> that could be the movie, a break outmovie and the adam sandler has declined at the box office. netflix made him a -- >> not the draw he once was. that's fair to say. one thing we know about movies they sell a lot of toys. hasbro, beats by 2 cents. partner brand revenue up 15 on "star wars" and "frozen," inventory growth was a concern for some. that's why -- >> i will ask the ceo tonight when i have him, the stock down badly, you got to -- this has been one of the great runs for the first half of the year. and they've got -- it has been very disney. you always when you look at it think, okay, it's the way to play disney, hasbro, because they've got "frozen" and disney princesses. nerf and maydo double digit. the throwback. but these people are worried about espn. people playing this.

i don't think this stock goes down that much longer. take a look at matel, very weak quarter and the stock came back. now, obviously, are they pokemon go? no. but they certainly have been around for a long time. done a pretty good job. the stock gets hit badly you might want to go for it. i have to check the inventory market. >> between hasbro and matel, matel larger after hasbro eclipsed it quite significantly. >> matel does a lot of work well. >> salesforce.com to figure out what the consumer wants. hasbro has great technology. this is just -- they don't -- they have become far more organized about what people want. used to be seat of the pants. nothing seat of the pants about hasbro. they're brilliant guys and if that stock gets hit you pull the trigger. >> after the bell hear earnings from yahoo! a sense to the performance of the core business there. that being the key part of it in terms of the operations of the company. but not the value of the

company. of course that is its stake in alibaba which i want to check the shares of as well. if you're looking for an update on and/or some answers to who the potential bidders are for that core business, don't expect to hear anything on the call today. those bids are not due until after the call even will take place. as for that auction of the core business looks like they will receive at least four bids, perhaps as many as five, and then it will be a bit of time until they determine that is the people advising yahoo! and its board of directors that's running the process for the sale of the core business, will be you would imagine few days, a week, if not more for them to determine the best bid. maybe even go back and forth if they get some competitive bids. remember it's not just the core business, it's also potentially the real estate associated with it, patents, and contracts will also be very important here. so it does take some time to make sure that the contract is what you want it to be.

there are financial sponsors in the running here. any number of things have to go on after they receive the bids which will still be after the earnings call. don't expect to hear anything about it. >> geez. that's disappointing. i thought that we would get a little this is going to be a nothing quarter then. >> you'll get to see how the performance of the business is, what's going on with the mavens. >> the may vens. >> yes. >> yeah. mobile and -- >> advertising. rev. >> coach is broken out its high for the year. bear ups it to an outperform on what they're calling stronger sales prospects. remember when this name was truly troubled lastle. >> they have resurrected. been very good management changes there, and victor louise has done a fantastic job. i watched ralph lauren they did good changes. some of the fashion companies are trying to come back and the winners this has been a very -- this accessory business, it seems to have been putting in a

bottom, except for fossil, no bottom, no bottom. >> strength in a lot of retailers ross stores, tjx, dollar tree, hog, which has had a series of very rough days. >> true. dollar tree data in general i was looking at the charts they had stalled. maybe this is the next level. it's interesting to see what semiconductor stocks are going up on takeover talk. hock is not about to sell broadcom. you're buying broadcom, that's foolish. broadcom is a big partner with arm holdings so maybe people are doing a read through like that, and apple going up on a similar read through. >> arm holdings by the way is up 42%. of course it was a 43% premium that's being paid by softbank in the $32 billion all cash deal under which softbank will acquire arm holdings. masa son who created softbank who runs it and made the big bet to buy the huge stake in alibaba many years ago, that has turned out to be one of the greatest investments of all time, bought

vodafone's wireless company and turned it into a leader in japan, after it was a lag gerred but a slip on sprint has decided this is his next big bet. he says today is the most historical day in softbank's history on the conference call that began for u.s. investors. i'm not interested in the multiple i'm paying 36 times ebitda, he goes on to say we announce the owner of the chip design company that is absolutely number one i invest at the beginning of every paradigm shift, in the internet of things, it's going to explode. thousand devices per population what i was trying to explain will be connected and it's not just going to be things people carry around. everything will be connected. >> he's right. visionary. would have bought the stock lower but given the fact that you've got that yen/pound, it is just -- didn't take long for someone to say, you know what i'm going to take advantage of

this pound going down. strike when the iron is hot. >> hope they have good security is built in when everything is connected to everything. >> i know. i know that the harmon guys were telling me you don't want your car hacked while driving. >> your entire world could be hacked when your everything is connected. >> how often have you been hacked? >> not that often. >> check your mail. >> i'm on top of it. that fbi guy years ago when doing the cyber stuff said don't connect to the internet with your bank. don't do it. it's like well -- >> difficult. >> at least i use one computer for only that. >> that's smart. >> never go to any other websites. >> that's smart. >> all right. >> dow down about 8 points on that note let's get to courtney regan watching more on the floor. >> after a record week last week for stocks, so far everything is kind of been taken in stride especially as we've seen domestic and global events. investors could possibly be distracted by. we do see the dow jones industrial average down by 13

but the s&p down ever so slightly. the market still taking in stride the fall in oil prices. looks like for crude we're sitting around $45 and falling a little bit there. it feels appropriate also to take a look at global markets after the attempted coup in turkey as well as the softbank bid for arm. european markets slightly mixed there. japan nikkei a little higher. we believe it was closed for a holiday, hang sang higher, shanghai lower. there's a lot in focus today when it comes to financials because the earnings reports do continue to come out. bank of america this morning putting up a strong report for both the bottom and top line beating profit though still falling because of the continually low interest rates having that impact on the bottom line. charles schwab shares are higher after posting better than expected revenue and in line earnings. some deal news moving stocks this morning. take a look, first at lending club. this company naming blackrock's patrick dunn as chief capital

officer part of some of the financial names we're seeing move. to the deals, exxon mobil bidding $2.2 billion for papua new guinea's interoil corp saying exxon mobil has the superior oil bid after beating out an offer from oil shares limited. take a look at specialty chemical maker farrow, after reports say the company turned down acquisition officers offers because the offers were too low. the stock taking a sharp leg down again today. and i need to wrap it up with retail names. burlington actually coming out with guidance upping its guidance for both same-store sales and earnings. saying its earnings expected to be 28 and 30 cents from its prior 20 to 30 estimate. that also beats analyst expectations for 24 cents. crable sales for burlington between 4.2 and 4.5%. so that is better for them. hasbro under a little pressure after putting up a pretty good

earnings report for both sales and profit. thanks in part to disney princess "frozen" and "star wars" and groupon getting an upgrade today. haven't heard that name in a while. overweight -- to overweight from neutral. piper jaffray says they're getting better at focusing the deals for the products as well as the geographic regions. carl, back to you. >> thank you very much. courtney regan. a check on the energy complex as well. jackie deangelis at the nymex. >> good morning to you, carl. as courtney mentioned oil prices are in their sweet spot right now opening the week lower, hanging out around $45 a barrel. very interesting because we had a choppy week last week, big moves in eat he direction but ended up relatively flat. and traders are saying to expect much of the same. now the fundamental story is still intact, too much supply, not enough demand including with the summer driving season to churn and work through it. the recounts here in the united states have gone up for three weeks in a row. some people taking that as a sign drillers are more willing at the higher price on a

relative basis to drill that will push prices lower. the dollar watchers are saying that dollar index is pretty steady, looking around 96 at this point, not really impacting the trade the way it has over the last few weeks or last few months. finally those tracking gas prices $2.21 is the national average according to aaa. this is higher yes, but still under the $2.76 that we saw at this time last year and, of course, events in turkey not impacting the oil flow there. so oil prices could continue to see downward pressure. bang over to you. >> when we come back a lot more on the attempted coup in turkey and market impact of what is a tense geopolitical situation. also season two of "binge" is streaming. bryan cranston, walter white, on cnbc.com, hulu, apple tv, also "house of cards" producer, dana brunetti coming tomorrow. dow down 23 points to start the week. back after a break.

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. i follow the well written word wherever it takes me. that is the one thing that i know unequivocally it's the place to go. it's never failed me. when i follow my instinct and moved by a piece of material, whether it's a play or screenplay for a film or tv sew or whatever, it doesn't matter. it's all about how well written is this text that supports this great story and without those two things first in place, the character doesn't mean much. >> bryan cranston of "breaking bad" and movie "the infiltrator" when he chooses a product he assigns a numerical value to story, script, director, cast, time away from home, and we asked him if distribution gets a line. not yet. >> no. >> doesn't care whether it goes to amazon or hbo.

>> because it's distribution of crystal meth in "breaking bad" was extraordinary. he's a great man. i don't know if anyone saw lbj. i got to meet him. this i great you got him. i think he's the most intelligent about his profession. this guy real deal. wow. >> done it all. >> it's interesting he's not as focused on like how it gets out there, as opposed to just making sure it's quality. >> opposite of my netflix wrap. >> you have to imagine he's going to bend a little bit eventually once these studios and platforms go after talent like that. aggressively. >> right. he was extremely nice. did you find that? >> he's a gentleman. >> you've seen his trump impression. he did a trump impression on the "today" show last week unbelievable said it was a character he would like to play. yeah. briyan cranston. >> great man. >> cnbc.com/binge and also on hulu and apple tv. when we come back stop trading

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time for cramer and stop trading. >> couple powerhouse downgrades. bonnie herzog comes out and says buy the munster beverage. it could be soft in the u.s. the stock has been red hot. the problem in europe. be careful there. herzog is very, very strong. an then piper came out with a downgrade of 3d systems and stratasys because hpq. that's right. hp ink has finally started to get -- this was the year they're going to come in 3d systems. i have seen and been critical about hp and it's remarkable. be aware this is the 3d stories. >> that's why these are getting hit badly because -- >> hp ink the printing. >> yes. >> company. >> they have a very corporate, that's not personal at home hobbyist but absolutely

fantastic corporate 3d printer and i'm going to give them credit because i've been critical of them. this is something they do very well. don't go speculating on a 3d or statty sus to make a comeback quickly. hp is for real. my hat off to them and i've been critical. >> high-profile analyst calls today. merck is one. >> downgrade. >> finally starting to get traction and take it off the list. that was interesting. by the way j&j coming up. very good read through. look, the stock has been so red hot. >> tomorrow morning. >> zimmer bio, and striker, raised the price. the orthopedic business, very important business for j&j, kind of not done that much, this could be -- if they get that right and pharma right. >> wow. >> back to one of our leads, masa son, who runs softbank, continues on his conference call saying interesting things. sprint shares have been down. you may have saw. he said it's turning around we're helping them with the spectrum, financing becoming self-sufficient now and gives me room to consider my next big move the purchase of arm holdings, sprint becoming free

cash flow positive and goes on to say guys, that yoda says in "star wars" listen to the force. if you listen to the force. >> the force. >> masa son says this being softbank is the best company to invest in our debt. no other company is better than softbank if you are a debt investor because we have virtually no net debt and a great crew upon. >> what's the p/e on 2037, the breakout year? >> he has a 500 year plan. he can borrow for 500 years in japan. >> 2835. a good year. >> great year. >> yeah. >> i don't know how many of us will be there to see it. >> i don't know about that. >> but i wouldn't buy it on that year's -- the fact he paid a lot of match-up foney for a company liked but that stretched the bounce of how much you can pay for a tech company. >> it's a lot. >> a lot of years. >> what's on mad tonight? >> hasbro down 5. we're going to have to spend time on that.

>> you know it's like valiant or something. >> valiant -- >> makeobreakout day for valian >> brian golder in, listen to him, a company not only has not lost its way, but a multibig think powerhouse in toys. not all polk mon go. although pokemon go is so much fun. >> rolling out 26 new countries. now he can share it with the rest of planet earth. >> it's something. when in italy last week couldn't play. there's nobody there. and said david cameron the foreign prime minister couldn't play. i said he would play but london wasn't rolled out. now he has a lot of time on his hands. >> his diary is light as he said. >> his diary is light. >> we'll see you tonight on "mad money" 6:00 p.m. eastern time. when we come back, bank of america beating earnings. we'll talk about that and more on the market and geopolitics

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good monday morning. welcome back to "squawk on the street." i'm carl quintanilla with sara eisen, simon hobbs and david faber. stocks tiptoeing into a busy week. earnings season under way. big tech will start to roll in after the bell. we're watching baton rouge, turkey and the gop convention kicking off tonight. the national association of home builders has its monthly sentiment index out. let's get to diana olick for the numbers. hey, diana. >> hey, carl. builder confidence in the single family housing market drops 1 point to 59. that's a miss. the street looking for unchanged at 60. anything above 50, though, on the national association of home builders sentiment index is considered positive territory. we were at 60 one year ago in july. the builders continue to say they're having trouble with land and labor cup straints but cite consumer confidence given global economic problems and the looming presidential election here in the u.s.

of the three components of this index, though, current sales and buyer traffic both fell 1 point to 63 and 45 respectively. sales expectations over the next six months, though, dropped 3 points to 66. regionally unchanged in the northeast, midwest and south, but the west did see a pop-up in confidence, 1 point to 69. the west where we're seeing most of the land constraints but builders are also seeing very high demand, though, given the low amount of supply for sale. but again home builder confidence overall nationally down 1 point in july to 59. back to you guys. >> diana, thank you very much. let's turn to the broader markets as carl mentioned not a whole lot of action but importantly the dow is holding on to the record-breaking gains we have seen earnings season roaring on with bank of america, yahoo! and netflix reporting today. so how much higher can stocks go from here? joining us to discuss it is richard turnill, the global chief investment strategist at black rock. good morning. good to see you.

>> good morning. >> what stands out in this market action, actually is the resilience in the face of many geopolitical surprise, first brexit, and now a failed turkish coup, who do you attribute that to? >> lack of contagion has been one of the key themes we've seen for some time in markets. a number of individual shocks, but markets have continued to go higher. i think a lot of that has to do with central bank policy, effectively backstopping financial markets here. low interest rates around the world. the prospect for low interest rates for long periods of time to come and investors are looking for return and income and that is continuing to drive flows into some of the riskier assets we're seeing. >> the next test surely to be earnings. we'll get some consumer names and industrials starting this week. what's your expectations for those cyclical sectors, those that are most economically sensitive to the u.s.? >> well, we're hoping to see

some signs of an an inflection point. four quarters of negative earnings for some of the cyclicals, second quarter is likely to be another negative quarter for earnings, but we're really looking for is any evidence that this stabilization and commodity prices, the stabilization in the dollar, removing some of those headwinds, starting to see guidance forward looking guidance, indicating something of a turning point we think we will see that but quite cautious. >> enough to justify the valuations. your ceo told "squawk box" last week he doesn't see the stom valuations at this point. we would have to see better earnings to take a leg higher. it sounds like you are expecting that later this year? >> i think we'll see modestly better earnings later this is is year but there's a lot in the price. when you look at the valuations of the equity market and valuations of bond markets, credit markets we're priced for very low returns going forward. we see that most evidently in fixed income markets, 30% of

yields across fixed income are negative territory, 60% below 1%. but if you look at the stock market, most stock markets globally trade at or above the long-term averages. that's most evident in the u.s. we are trading at forward looking multiples above 17 times earnings. there's not a significant amount of upside to those valuations. going forward, returns have got to be driven by growth, got to be driven by future earnings, driven by ongoing payment of dividends. we think we'll see those but likely to result in a lower profile going forward than the last six or seven years. >> couple questions, richard. the first is you mentioned the move to riskier assets in the search for yields. as far as turkey is concerned, we saw record inflows into emerging markets bonds last week as people chase that yield. does turkey change that in any way and an indication of what happens when auto breaks down? >> what turkey highlights if you

invested in emerging markets, risky assets you're absolutely investing in an asset class that has volatility. what you've seen over the last few days is actually relatively muted response from financial markets, both in direct turkish assets themselves but what you're seeing today is relatively little contagion to broader emerging markets. so emerging markets debt looks one of the most attractive sources for yield globally today. three of the big headwinds for emerging markets debt potentially turning into tailwind. the fed which has been a headwind for some time looks like it's on hold. commodity prices, drew a big headwind until the beginning of this year, looked like they stabilized particularly the oil price, holding around 45 to $50 and then china which still remains a terror risk absolutely looks like it's going to grow to stable paths, 6.7% growth last year. put that together and yields still in mid to high single digits across the emd. we think there's potential for

emerging markets debt to go further. >> let me ask you about the huge deal that has come through for arm holdings in the uk, the chip designer, $32 billion from softbank in japan. obviously that's been this huge bounce back after all the brexit concerns. does this deal change things, the realization that perhaps you've had the 30% move of the uk pound against the yen. i mean does that type of implication move us forward to more deals of that nature, do you think? >> well, i view this as very much a one off deal. what it does indicate is that many international investors are now looking at the uk as a source of value. you see significant declines in the pound, long-term source of investment in the uk reigns very attractive, the economy faces significant headwinds, over the next year or two, but as a source of investment the uk remains one of the most attractive places globally. so i view this deal as an indicati

indication, potentially, the uk market further to run. >> you guys expecting a recession there? in the uk? >> we're expecting a -- yes, we're expecting a recession in the uk over the next 12 months. that recession is likely to be led by investment spending, particularly areas like real estate where we're already seeing some signs of a draw down. that recession although will be cushioned by interest rates which are going to be lower for longer and importantly a weaker pound. so the exporting areas of the market, you know, potentially some of the most attractive areas, which where the uk stock market has significant exposure could benefit. uk recession does not necessarily mean a bear market for uk stocks. >> richard, thank you. good to see you this monday morning. richard is the chief investment strategist globally for black rock. >> leadership of turkey saying a deadly military coup has failed in the country. thousands rounded up and arrested as alleged co-conspirat co-conspirators. more than 250 people were killed through sunday.

michele caruso-cabrera has the details at headquarters. >> the apparent of the coup may have helped the currency this morning. start with the stock market in istanbul. simon, we saw very sharp decline in the turkish stock market as a result of what happened on friday night. see a decline of more than 8%. take a look at that, though, over the last month, it's still positive however. the lira where you want to be focused. turkey's currency. we're showing the opposite of what we normally do. 2.97. at one point you could have bought more than three turkish lira for the dollar. it has improved. turkey is extremely reliant on inflows of foreign capital. far less wonky way of saying they have a current account deficit. one of the fragile fives that got really torn up when it looked like the u.s. was going to start raising interest rates. you have to be worried about whether or not they will be capital outflows as a result of instability there because it could bring on a currency crisis. in the meantime on the political front, there is a massive crackdown under way by president erdogan as a result of the coup,

290 people were killed, 1400 injured, and in response, 30 governors have been removed, 50 civil servants removed, they have arrested thousands of people within the military. so many, in fact, that there have been criticisms from a number of foreign policy watchers who say that erdogan the leader of turkey has gone too far and could be using the situation to cement his power even further. nearly 9,000 officers removed in the turkish ministry of the interior, for example. we spoke with a deputy prime minister this morning who was the former finance minister and he defended the level of the arrests. >> turkey is a rule of law country. they have to face the full force of the justice. so judicially we'll decide what happens next. >> he said there wouldn't be intervention into the currency markets they were going to let the markets decide. sara, that can always change if things get worse. >> michele, thank you very much for the update. at the same time we're

following the developing story over the weekend out of louisia louisiana. three police officers are dead and three others wounded in a shooting in baton rouge. nbc's jay gray joins us now with the latest. jay? >> hey, sara. just got an update from baton rouge police who say their initial press conference today scheduled for 1:00 eastern pushed back two hours to 3:00. this is where it all unfolded yesterday. in this car wash moving gun battle according to investigators that spilled into the parking lot of the convenience store behind us here. federal agents, police, they continue to search for evidence and answers while we are learning more now about the victims and the man that police say is responsible for this attack, they say that gavin eugene long was the lone gunman here, but they want to find out if he had help in planning and carrying out this attack. they're taking a closer look now at what was an extensive digital

footprint. he's left behind on social media, including a post hours before the attack that reads, just because you wake up every morning doesn't mean that you're living. and just because you shed your physical body doesn't mean that you're dead. that part again of a two-pronged effort to find a motive and if anyone else may have been involved and to understand more about that motive through postings on social media. that's the latest live here in baton rouge, carl, back to you. >> jay, thank you very much. jay gray. when we come back, softbank buying mobile chip designer al arm holdings in the cash deal for $32 billion. we will break that down. that beat for bank of america the results making us the thirds u.s. financial institution that has topped second-quarter profit. goldman sachs and morgan stanley on deck this week. stay with us. can an established bank move like a start-up? it's a question we get from some of our largest banking clients.

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softbank making its next big bet under its founder and ceo masa son buying arm holdings in a deal $32 million in cash. the deal took place fairly quickly while masa son, people tell me, has been thinking about and plotting doing something along these lines for months, the approach was only made weeks ago. and the price being paid is a

significant one representing about 33, almost 34 years worth of the current ebitda at the company, 20 years worth of its current revenues and 60 times its current earnings. arm holdings, though, masa son, believes is going to be a key in what he said is going to be the incredible growth of the internet of things. that is why he's chosen to make it the next big bet at softbank. which owns still a large stake in alibaba, one of the best bets he's ever made in addition to the leading mobile phone provider in the country of japan. also, of course, significant owner, 80%, of sprint. that has not gone as well but the hope and expectation is that in this case, it will. 30 years from now, masa son saying on a conference call a thousand devices per population will be connected. it's not just going to be things people carry around. everything will be connected and with that he believes arm holdings will be a huge beneficiary, simon. >> of course as things stand at

the moment still most smartphones in the world have chips designed. the perceived independence is important to keep customers like apple and qualcomm on board. if there was a takeover that could achieve that arguably softbank fulfills that position. the other problem arm has it needs to invest heavily to shift the smartphone market when you have a stagnation within the volumes. that requires a lot of investment that arguably can be mores easily made if owned by somebody else. of course the ceo of arm holdings was here six or seven weeks ago and spoke to the program exclusively about the investments in the internet of all things and the type of technologies that they hope they will be able to master. for example, cameras that can see when a toddler is moving towards a heat eed oven, that a other ideas. >> i think it's technology we're going to see in lots ofp application areas. certainly in cars, if cars want to be self-driving, want

self-driving cars, being able to understand the scene and work out what's going on and what might happen next is crucially important. in smartphones, people looking for ever more sophisticated cameras to again detect what is going on. in security applications. in drones flying around. there are many applications where cameras will need to get smarter and we're looking at the technology that will create that. >> bank of america releasing its quarterly results this morning, earnings and revenue both beating analyst expectations. kayla tausche is engaged with this as the other big banks. >> good morning. following a trend for other big banks as well, bank of america reporting a lot of similar themes that we did see across wall street. the quarter marked by a big boost in fixed income trading, up 22% due to the volatility around brexit and it was a bright spot, but low interest rate environment continues to pinch margins compressed by 2 basis points and net income declined across every business

unit at the bank and at the company as a whole came in at about 9.3 4 4 billion, the street looking for over $10 billion. executives told reporters and analysts that the outlook for the company's growth was more positive beyond this year because of a return to growth and perhaps that rise in interest rates but ceo brian moynihan threw some cold water on the idea that the company's business model would keep getting hit by low rates in the near term. >> the question can we grow earnings without rates improving we believe we surely can and do that by continued success on things like expense management, keeping an eye stable to growing, stable and growing fees and continue to manage risk well and hold down our credit costs. >> to that end moynihan gave analysts a new expense target for 2018, $53 billion for the entire company and compares to a little over $56 billion for the previous four quarters up until now. it does highlight the company's commitment to keep the business lean as growth remains slow.

analyst steven called the quarter a noisy one but there were positive surprises efficiency expense cuts among those. lower for longer rates will continue to hurt. it's priced into the stock, though, he believes down 17% year to date, the stock is still trading below the book value for the company's shares and certainly a lot of this has been expected, it's been talked about for these banks, but ha they're really having to come out and address it now. >> indeed. stay with us. let's bring in more analysis on what is happening. brendan hawking joins us banking analyst at ubs. what did you think they had to say today? >> yeah. i think that the expense point that was brought up in kayla's story was totally fair and probably the biggest news. just to give a little pretext, right before they reported earnings they came out and announced they are going to no longer be reporting their legacy asset business as a separate item.

had some investors worried there might not be as much momentum on the expense front. it was important to give the $53 billion target which gave encouragement they will continue to work through this expense story. >> nonetheless, this is an extremely large fran chisz and those that think there should be bigger cuts to the branch network and head count there. just talk us through, how do you feel about that? is that likely? how transformative potentially could that be for profitability here? >> well, we've seen branches continue to decline and that's not just at b of a but across all of the large banks. and that's as the channel shifts to more digital, transactions shift to nonbank venues and so not -- very thematic across blanking. when people think about the expense front and the tie logs i have with -- dialogs with investors centered around the institutional businesses, global markets and banking as b of a puts it, trading the bigger

revenue surprise versus low expectations. i think we've seen about a 30% cut in head count in fic over the last several years and most books say we're not done, we're in the later innings, but still more to come. so i would expect a lot of movement on that front as we digitize there too. >> this is a company, though, that has been front and center of this cost-cutting movement before it was in vogue for other banks like citigroup to do this too and i wonder if you think we're getting to a point where the companies are cutting muscle and not just fat, not redundancies. >> right. i'm not so sure that i would be completely in agreement on the characterization they were ahead of citi as citi broke out citi holdings years before companies started to do that but regardless of splitting hairs, i'm with you that there needs to be a lot more work on the expense front. i think that you're at a point where you are hurting revenue but realistically that was unavoidable given the new

regulations. vul car hurt revenue and the bassle rules make holding capital against the trading businesses so onerous that you're going to see less revenue opportunities iies in those tra businesses. interest rates are so low that nii is just weak, we've -- we saw core nim compressed seven basis points at b of a this quarter. jp and citi compressed but less in the 5 or so basis points level. it's -- they're feeling the pinch of the low rate environment. >> kayla mentioned the underperformance of b of a. it's at the bottom of a group that's at the bottom of the s&p 500 this year, down almost 18%. at what point are there questions about brian moynihan's leadership. always been the story as he inherited a mess when it comes to countrywide and all those problems. when does that story begin to shift and the question about his strategy come to fruition? >> well, i think we would have a brighter light on that question as it relates specifically to

moynihan if b of a was down but the whole group was doing better. the idea he has so much company probably provides some insulation because the b of a versus its biggest peers really not significantly setting them apart on the negative side. with that being said you're correct that the big banks have had a terrible year. i think that the volatility we've seen around rates and in the markets has people worried. separately we're starting to get more and more concerns about how late we are in the business cycle starting to see concerns and warnings that you could see credit costs ticking up not only in commercial and oil and gas the way we have seen but to include consumer. if we start to see that you will get earnings pinched and investors don't want to pay large multiples at this stage. >> one quick one, what is the best bet at the moment in your space? what do you like the most and how rapidly could it gain? >> in an environment like this

in my view you want to hold on to the best franchises. that would be jpmorgan, goldman sachs. goldman is probably trading at a lower premium. there had been a lot of concern around its ino business coming into its results tomorrow. i think there's a good chance they could surprise to the upside as well keep this trend going for this quarter. >> another busy day for you in the banks. thank you for joining us, brennan hawken from ubs. >> thanks to kayla as well. up next, our exclusive interview with the ceo of gamestop, paul raines, how his company is cashing in on the pokemon craze. the dow up 17 points. this just got interesting. why pause to take a pill? or stop to find a bathroom?

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the pokemon go phenomenon sweeps the nation being named on the campaign trail and pushing nintendo shares higher and retailers hoping to cash in on the frenzy. joining us is the ceo of one of the retailers, gamestop ceo paul raines. welcome back to the program. >> good to be with you on this pokemon go morning. >> yes, indeed. how are you cashing in here? >> well, we're doing, you know, it's really great to see pokemon

and nintendo reinvesting in that ipo. we've known them a long time. it's great to see it transitioning over into the mobile space. i'll tell you an interesting data point, we surveyed our stores and had 462 stores this past weekend that are pokemon stops or gems so we did family events and our sales up 100% in those stores and, of course, our pokemon merchandise up significantly across the board. so we're very happy to see all this excitement around pokemon in what is traditionally a slower time of the year for video gaming. >> mcquarry recently started coverage of your stock and said it's not for the faint hearted if you don't believe in paul raines and his team don't buy it. they believe you can execute. in an ideal world how would you integrate what is going on with pokemon and the business? presumably you would like to be in the game. >> of course. >> that's got to be the holy grail here. >> of course. and yeah, we do believe in our strategy and believe in the management team, of course. but i think we've pointed out in

our investor day recently that our strategy is to continue driving dominance in the physical gaming, emerging growth categories like digital gaming collectibles and our technology brand segment our at&t partnership and if we can do that we think that's positive for the shares. >> if anybody can do that you can. >> what does that take. you must have investigated it? >> why aren't we in the pokemon mobile game? >> can't you pay to have the products and locations and the -- we had a pizza guy on the other day and his sales have roktsds as a result of it. >> our sales are rocketing on pokemon as well, simon. we have over 100% growth in our pokemon collectibles. we're one of the oldest licensees, largest distributor of pokemon video games and collectibles in the world. so i would argue we are in the game, launching in november pokemon sun and moon. we're very much in the game and taking advantage of it now. why aren't we more in the mobile game this has been a secretive

launch and so forth but we think any investment in pokemon is an investment in that ip. it's good for us. >> your stock is down, if we took a 12 month track the stock down 40%. a horrible full, but still standing and still, of course, generating the free cash flow in the legacy business. i imagine it's the launch of the virtual reality headsets, particularly with playstation, that is a bigger deal for you. i think you had a preorder that ran out at the beginning of the month, is that correct. >> last year our shares did tumble due to market data and anything else. we had a net income record year of 403 million dollars of net income. our shares and performance don't necessarily trade together and that creates opportunities, but yeah, we do believe we're going to have a good fall launch. we're in the midst of launching several titles one of our indy titles song of the deep is one i'm playing now which is an

exciting title. our free cash flow will be strong. we've guided to some pretty strong numbers to the year. >> on the upgrades and hardware i have a note here from telsey that says you captured on the playstation launch 40 to 50% of the market. >> we did. >> as far as the virtual reality headset launch is concerned slated for october. >> yeah. >> how much stock are you guaranteed by sony here? are your friends coming through and guaranteeing you a great? that's what i'm driving at. >> we will have the dominant allocation of sony vr products. this is something we've tried to communicate to the market, virtual reality by any external measure will be a very large market in the billions of dollars and we will dominate the sony vr part of that launch. we're involved with htc live and discussions with oculus riff but for a lot of reasons title launches convenience, install base think sony vr will be the dominant. we are getting a strong allocation and sold out everything that we've been given

on reserves now and we're very bullish on it but we have to wait and see. we know for many hardware launches it takes time to build that base. but we're very bullish on what sony vr could mean for us. it's exciting. >> at the same time people will be aware that the industry software data is horrible for june down 30% overall. in addition, what else do we get to the holiday period. a nintendo launch and hardware upgrade. >> nintendo launch in march of 2017 but two form factors. ps 4 neo and an xbox 1 slim version. so there will be some activity and upgrades along with the vr. so it's not a doom's day scenario. physical gaming, of course, is cyclically down but digital gaming up. our first quarter numbers, digital gaming was up i want to say 17, 16%. so, you know, there is a movement around physical and digital gaming and we're participating in both. >> good to see you, paul.

come back soon. paul raines joining us the ceo of gamestop. thank you. >> up next on the show, the republican national convention. kicking off in ohio this week. we'll be joined by sara fangen, the senior aide to george w. bush and jared bern stein, their tick on the white house as we look ahead toward cleveland. after a failed coup attempt the faa prohibiting u.s. aircraft from flying into or out of any airports in turkey. we'll hear from the former president and chairman of american airlines bob crandall on the impact. stay with us. you're watching "squawk on the street."

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russian whistleblower claim that

there was government ordered cheating at the 2014 sochi olympics. the findings could have serious implications on whether russia can compete in rio. france holding a moment of silence for the nice victims. thousands of people gathering today including french president hollande on the waterfront promenade where 84 were killed by a truck rampage and 300 injured many children. the attack happened during a celebration last thursday. the leaders of black lives matters movement plan to meet today with atlanta mayor reed. they've been demonstrating in atlanta for the past several fights in connection with the police shootings in louisiana and minnesota. and an unusual occurrence in florida. a 3.7 magnitude earthquake striking 100 miles off the coast of daytona beach. so far no reports of any damage however. that's the news update. you are up to date at the this hour. carl, i'll send it downtown to you. >> thank you so much. sue herera. the republican national convention kicks off in cleveland, ohio, tonight.

our john harwood is there. joins us with what we can expect on day one. hey, john. >> carl, as you can hear behind me expect music tonight. but there's concern among republicans now that they are beginning their convention because their candidate is behind. look at the numbers from the nbc/"wall street journal" poll, hillary clinton with 46%, donald trump with 41%. he has to figure out how to reverse that gap. the convention kicks off at 1:00s this afternoon. the attempt to do that. the theme tonight donald trump is running on make america great again. the theme for tonight, is make america safe again. donald trump's hoping to capitalize on his reputation for strength at a time of unrest at home and turbulence abroad including the attempted coup in turkey to make the argument that he can better protect the country that hillary clinton can. his speakers tonight will include people like rudy giuliani former mayor of new york city, rick perry, governor of texas, tom knts from arkansas

but also milelania trump the candidate's wife, celebrities like willy robertson of "duck dynasty." donald trump has said we may see him tonight as he intros deuces melania trump. don't have that publicly confirmed. that's one thing that will be different about the convention seeing donald trump more and earlier than in the past. one bit of discord to focus on, the governor of ohio, john kasich who ran against donald trump in the primaries not speaking at the convention. trump campaign chairman paul manafort said that john kasich was embarrassing his home state of ohio. just a few minutes ago on twitter, john weaver, the political strategist for ohio governor kasich shot back that paul manafort has been working for dictators too long and doesn't recognize values. paul manafort used to advise the ukrainian ruler victor yan covick. >> nice owe quicken loans arena. thanks for that. for more we're joined by

contributors jared bernstein former adviser to vice president biden and sara fangen, former political director to president bush. good morning to you both. >> good morning. >> sara, john made the point about your old boss along with kasich, romney, mccain not going. how does that change the color of the convention? >> well, i think that it does add to the disunity that we see among some republicans. there are a lot of old-line republicans who look at the party today and say it's a different party under donald trump and they're not quite sure where they fit in. having said that, there are a lot of rising republican stars including joanie ernst who will speak tonight. i hope the trump campaign will highlight the deep and conservative bench we have as a party. >> jared, you worked for a veep, i'm wondering what you think pence brings to the table and

does it soothe out some of the never trump supporters who some argue are going to make their last stand tonight? >> i don't think so. i think what mike pence might bring to the table is some koch money and that's important, but i think what he takes away from the table is a critically important opportunity for donald trump to re-set in this convention and i don't think he will be able to do that in part because of the absence of establishment republicans. i can't remember a convention where a president of the party for that convention didn't speak. i doubt sara can either, at least in modern history. >> but that's not -- >> hold on. let me finish. innin i think that's a big omission. in terms of mike pence one of the problems there is that he's very hard right on social issues, so those people are either already with trump or they are relatively small part of the base, and he's completely different from trump on so many key issues including trade and

immigration, muslim ban, the wall. so to me, it's kind of this typical politician thing that they do that really i don't associate with donald trump so much. i think he's kind of messing up his brand there. >> i think mike pence does bring a lot to the ticket and i think jared's assessment is a little off in that conservatives, social conservatives are behind donald trump. that's been a problem for donald trump. and i think the selection of mike pence is very helpful in that regard. it will help unify the base and give people who are concerned about donald trump, they will look at him differently and probably support him whereas beforehand they're still up in the air. having said that -- having said that, jared is right in the sense that, you know, having selected somebody that could go directly at donald trump's weaknesses with women, with minorities, probably would have been a better longer term play. >> that's exactly my point. so there's where i think the problem comes.

if they don't come -- if republicans don't come out of this convention they may get a bounce but don't come out of the convention with a lot more support from what i call the median voter, someone not to the far right, mike pence is to the far right, i don't think they're going to win in november. >> so -- >> well -- >> sara, what is a reasonable expectation, john mentioned the polls a few moments ago, of a classic convention bump for trump/pence. >> a typical nominee, you know, would like to see about a 5 to 7 point bump out of convention and, you know, so that would -- we would in that case see donald trump and hillary clinton tied. but i think the biggest problem for donald trump isn't in the top line numbers, the head-to-head ballot it's in two numbers, in his share of the white vote and his share of the hispanic vote. in that nbc poll, john harwood cited, donald trump is getting 50% of the white vote and 17% of the hispanic vote.

ifs those numbers held which they are far below where mortgage rate was, he would get crushed. -- myth romney was, he would lose by 12 points. he's got a lot of work to do as a nominee. >> there's a lot of ground that will get covered starting tonight over the next four nights. sara, nice work in a loud room. sara fangen, and jared bernstein. >> sara knows how to raise her voice when she has to. >> thanks, guys. >> thank you. >> when we return the faa are prohibiting all u.s. aircraft commercial or private flying into or out of any airport in turkey. the former president and chairman of american airlines, bob crandall will be with us next on cnbc.

the leadership of turkey saying that deadly military coup attempt in turkey has failed, meantime thousands have been rounded up and arrested as alleged co-conspirators and more

than 250 people have been killed through sunday. eamon moya dean joins us from istanbul with the latest. >> the country's prime minister saying life is returning back to normal this as families and relatives of those victims continue to bury some of the dead. as you mentioned the number of those killed about 140 or so victims, that were people killed opposing this coup in addition to 40 or so that were killed on the coup side or those participating in the coup. the country's president is very angry demanding the united states hand over a religious figure they accuse of being of mastermind behind this coup. in addition to that the country continues what some are calling an aggressive crackdown on conpiror tos, participates or plotters partaking in this military coup that includes thousands of judges and prosecutors that were dismissed and about 6,000 members of the country's military that have either now been detained or being questioned for their involvement in it.

a very dire situation in terms of how this coup played out, but the president said he's got the support of his people and says he's willing to entertain bringing back the death penalty for those that were involved in this coup and many are saying it is an ominous sign of him trying to shore up his grip on the country's power. thousands of his supporters continue to take to the streets saying they are fighting for democracy, fighting for the attempt to buy the military or a fkion within the military to oust the democratically elected president erdogan. sara? >> thank you. reporting live from istanbul. the faa showing a notice prohibiting all u.s. commercial and private aircraft from operating into or out of any airport in turkey after that failed coup attempt in the country. are we likely to see more restrictions as the situation evolves. joining us by phone, bob crandall, american airlines former american airlines president and chairman. bob, thank you for calling in. >> no problem. how can i help? >> so on this faa decision, just give us a little more context,

how unusual is it, what sort of factors go into the decision and how long do you expect it to last? >> well, of course all those questions are quite unknown. it's not unusual for the u.s. government to in effect advise the airlines. the airlines, obviously, are interested in safeguarding their equipment, their people and their passengers. so they're going to rely on the u.s. government to understand the political situation and provide some guidance and in this case they have and so i do not think it's unusual. i would have expected the u.s. government to provide some guidelines for airline service. >> we saw over the weekend a number of european airlines, british airways, lufthansa, cancel flights to turkey. what about running a big, global airline? how do you make that kind of call? take us inside those kind of deliberations, especially as they were already just dealing with that terrorism tragedy in

nice a few days before. >> well, of course, that's right. once again, the principle focus of any airline trying to decide on it is going to say what can i do to do -- i need to dodo? i need to do all that i can do to be sure that i don't put my equipment, my people and my passengers at risk. and the consequence is when you've got a circumstance where there's violence around, where there's lots of people, lots of guns and an unknown circumstance, airlines, for the most part, will err on the side of caution and not fly. >> and i mention what happened in nice. the geopolitical uncertainty is high right now, bob. there have been acts of global terrorism, the brexit result. how would you characterize this sort of operating environment? delta on the call last week said it remains challenging. how would you describe it? in all your years you've seen challenging periods of macro

economics and just political uncertainty. >> certainly the environment that we have today, i think, i think everybody would agree is a good deal more uncertain. a good deal more violent than has been characteristic of the last 40, 50 years. i mean, there are always trouble spots. but the perception that trouble is widespread and can pop up at any moment is a greater problem today than it has been for many years. >> bob, just to come back to the central ban here, as you point out, it's about american airlines and people not being able to fly to turkey but equally important, the united states is saying no airline can fly from turkey to the united states. and that may have a devastating effect on turkish airlines because of the structure and the routes that it's deliberately chosen were those direct flights.

why do they say that? just spell it out for us if you would. is it because of concerns the engineering checks may not be up to standard before those flights leave, or is it because they think that maybe the security ring has been punctured, and, therefore, the threat of a 9/11-type event here? why be so forceful and so complete in the ban? >> well, i think, you know there's a lot of conversation around each one of these cases. could it have been prevented? i think there's a public attitude, if you will, that says, look, in any and all uncertain circumstances, it is better to err on the side of caution. i don't know what's motivating the faa to do it. the department of transportation to do what they're doing. but there are certainly suggestions in all of the things that you mentioned. who knows whether the airlines are being properly serviced. who knows what's on the airplane. who knows who is on, either a passenger or in the cargo

compartments. and given all of those risks, i suspect that, at least in the very short term, everyone is going to err on the side of caution. >> bob, thanks for your insight. bob crandall, the former american airlines president and chairman. much more "squawk on the street" ahead on cnbc. stay with us.

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let's show you where we are on stocks. coming up, three weeks of gains and it looks like the gains are continuing, althoughmodestly in the early action. the nasdaq up the most of the three up about 0.5%. in terms of the groups, technology is in the lead. this ahead of some key earnings reports out of the bell. netflix, yahoo! and ibm energy is the worst performing sector. if the dow finishes high i e ess seven days in a row. let's send it over to john. good morning, john.

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good morning. it's 8:00 a.m. at netflix headquarters out west. 11:00 a.m. on wall street and "squawk alley" is live. ♪

♪ welcome to "squawk alley" for a monday morning. john ford, kayla tausche and refugee evangelist guy kawasaki. our top story of the day is a major deal. softbank agreeing to buy uk chip designer arm holdings for just over $32 billion in an all-cash deal. shares of arm surging on that news. this is the largest takeover of a british company since last month's brexit vote. and, dan, if we weren't already awash in global news, we'd be talking more about how this is potentially game changing. >> it's pretty