commerzbank. good morning. the names to watch, coming up. the fed in focus. two-day meeting in washington starting today. we'll talk expectations straight ahead. plus the race for the white house. bernie sanders takes the stage at dnc and urgers supporters to back hillary clinton, but so-called bernie or bust elements aren't going quietly. "world wide exchange" begins

now. s. >> let's check on the groebl markets this morning. show you the action after stocks fell yesterday in the u.s. for the second day in three sessions. looks like dow futures under a bit of pressure. not a whole lot of action. s&p futures down two as well. nasdaq futures down five. we've got a boat load of earnings, including several key dow components including mcdonald's and apple coming your way later. fed kick off a two-day meeting. we've got the 10-year treasury note yield a bit lower this morning. 1.54 so some buying off of a selloff particularly in japan overnight. >> those stock mashlgts we just saw in the u.s., yes we've seen them sell off a bit yesterday, but the dow and s&p over 3% month to date.

nasdaq over 5%. similar kind of moves in europe and asia so far this month so we have seen a bit of profit taking over the last couple of days. the ftse and cac are up 3%. the dax is up over 5% month to date. the fact we're seeing a little bit of selling across the screens. >> most part, holding the gains. >> exactly right. however we did see a bit more of a pronounced selloff today in japan. that driven by the yen, which went higher. the nikkei went lower to the tune of 1.4%. rest of asia holding up pretty well despite that move. >> as for the broader market picture right now t dollar maz been creeping higher over recent weeks. taking a pause. v at least today. the euro stronger at 1.1013. the japanese yen is stronger on diminished expectations for

fiscal and monetary stimulus passage. gets your attention this morning. the pound at a two-week low. more expectations of easing. different opinions on when and how that should happen. >> we have more data out of the uk today. uk business lending falling for the first time this year. that data for june predominantly saying the leadup is coming. >> both on services and manufacturing. >> yes, that's what really cemented people's expectations to the easing we didn't see in july. we will see at the next meeting coming up. let's look at oil. oil is down 4% in the last few sessions. we just broke the low on wti. the selling continues. the momentum continues to the downside this morning. down .3%.

brent 44.54. energy and gas playners europe are the worst performers right now. bp profit outlook missed expectations and the pain is continuing. >> month to date wti is down 10%. makes the gains we've seen all the more impressive particularly when the dollar has gained as well. those two factors, weak dollar and stronger oil. they don't apply anymore and u.s. stocks all be it small declines yesterday, are holding on. >> resilience in the face of the oil decline. you wonder how long that could continue. the slump in oil could have to do with the stronger dollar. you still have cause out there that the global glut is there. there's just too much oil. we'll see if we can stabilize in the $40 a barrel region. quickly let's show you gold. gold has had a pretty strong

year. higher again. little more than $3. want to tell you act a developing story out of japan this morning. 19 people killed, 25 injured in an attack by an knife wielding man at a facility for the disabled. it happened about 25 miles southwest of tokyo. japanese media reporting a 26-year-old former employee at the facility has now been arrested. police are investigating possible motives. >> it was a lively night in philadelphia. democratic national convention as the party looked to show unit, former rival bernie sanders endorsing hillary clinton for president. despite that e-mail leak showing the dnc worked to undermine his campaign. >> any objective observer will conclude that based on her ideas and her leadership, hillary clinton must become the next

president of the united states. also speaking in prime time, mitchel obama. >> in this election and every election is about who will have the power to shape our children for the next or eight years of lives. there is only one person who i trust with that responsibility, only one person who i believe is truly qualified to be president of the united states. and that is our friend, hillary clinton. >> much more from john harwood at the dnc in philadelphia in just a few minutes. >> the big question there is did those progressive notably sanders and warn manage to quell the peace of the party that has broken out. the sanders sparked revolution. he's had trouble now convincing to get behind hillary clinton.

a few rallies yesterday where they booed him when he asked them to back here. >> we knew the republican convention was going to be divided and volatile, but i suppose given that bernie sanders pulled out a while ago and suggested he would back hillary clinton, we didn't expect to it be quite as divided. >> so many no tpp signs. did you see that. the trans-pacific trade partnership erupting as a hot butt issue in this election. i think it was because sanders was against it. didn't get it into the democratic party platform. >> the one person who everyone use versely adored was the first lady. she could be a huge asset. >> more on my must read later this morning, but first let's tell you about wall street's agenda today. the s&p price out at 9:00 a.m. followed by new home sales is at

10:00 a.m. both expected to confirm the steady momentum building in the housing market. the fed kick off a two-day policy meeting today. that decision out tomorrow 2:00 p.m. eastern time. here are the earnings to watch. 3 m, caterpillar, due ponte, mcdonald's, united technologies and verizon all reporting before the opening bell and after the close, the two bigs to watch will be apple and twitter. i would say low expectations for both. >> apple as well yesterday the big move on s&p downgraded it was down 1.4% yesterday. had a bit -- lowered expectations before. have to wait and see. on that note, of course, apple's earnings coming out after the bell, three things to watch. >> the street is looking for apple to report earnings of 1.39 a share on revenue of $42 billion, but beyond the numbers here are three things to watch. first, the sales. apple posted first quarterly

revenue decline in 13 years. a lag in hardware continues to be an issue for apple as iphone sell haves slowed. the stock shares of apple are down 22% in the past year. the sales decline has been factored into the stock price. the stock recovers after any summer selloff in the lead off no a new iphone launch. the iphone 7 is expected to be released in september, but fewer customers will likely upgrade to the knew device and apple will continue to suffer from a slowing smartphone market. cut the rating on apple to sell and lowered price target to $85 from $110. >> that's why that forecast for guidance in the next quarter is going to be so key.

landen, thank you very much. gilead lowers guidance. sharings are down 4% premarket. las vegas stands disappointing on the bottom and top line. earnings falling 30% in declines. makau declines still the stock bounced. >> shares is of cell gene taking a hit. a late stage study of the drug disappointed. weak refining markets. missed profit expectations and cuts in 2016 bijt investment. shares disappointing to the tune of 2% in london trade. express scripts narrowed annual

guidance on a dip in prescriptions. it is up.5% this morning. >> also getting a lot of attention, nike ceo nearly tripling to $46 million for fiscal year 2016. this according to a regulatory filing. the increase can be acontribute r tributed to a giant increase in stock awards. since becoming ceo back in 2006, parker has helped the company take in more than 32 billion in sales. more than double the level when he took over. vowed to increase nike's earnings to 50 billion by 2020. also i would point out comes on a year where phil night, the founder has stepped down as chairman recommending that parker take over that role. this is a play for mark parker to stay on board. >> gave unone exclusive intervi. >> he was very comfortable.

>> right. amazon saying its entered into a partnership with british government to explore drone deliveries. working with britain's aviation regulator. the tests are an important sign in confidence in britain after the vote to leave the jureurope union. >> the fed is preparing action against goldman sachs and a former employee. confidential regulatory material was leaked to goldman sachs employee by one of his former colleagues. that action expected to bring a penalty of little less than $50 million. >> still to come on "world wide exchange," japanese stocks sells off. but first as we head to break, here's a look at this day back in history. 1775, the office that would later become the u.s. postal system was created by the second

continental congress, benjamin franklin was appointed the first post office general. how about that. >> good. so took 200 years to become a government agent. >> "world wide exchange" will be right back. ...coach gilman d his cash rewards credit card from bank of america to earn 1% cash back everywhere, every time. at places like the batting cages. ♪ [ crowd cheers ] 2% back at grocery stores and now at wholesale clubs. and 3% back on gas. which helped him give his players something extra. the cash rewards credit card from bank of america. more cash back for the things you buy most. the cash rewards credit card from bank of america. new luminous lightshows andhydrating lotiont? pearl-optics science fades the look of dark spots evens tone and hydrates skin for instant illumination. olay luminous ageless.

we are basically flat as you

can see. slight declines. decline in apple stock. they report after the bell today. yesterday there was a downgrade from one leading analyst, that's why it moved lower. let's look at europe. we've bounced back a little bit in the last hour or so. germany and the ftse 100 up, france still down a bit. we found some momentum off lows earlier in the today's trade and europe and u.s. showing decedent gains. we do see little bits of red on the screen like this, we are up 3 to 5% over the last month. oil prices down sharply. extending losses below the $43 level today. >> the nikkei japanese stock market selling off overnight. we need to know the yen and nintendo. >> good morning. >> yes, that's exactly it. you mailed in it.

i know you'll like this. it's really down to the japanese yen which has been appreciating against the u.s. dollar. what that tells me is the markets, currency markets are trying to brace for some disappointment associated with fiscal policy or monetary policy. bank of japan does meet this week and expectations really are all over the place. hsbc really mailed in it when they said bank of japan will deliver a little bit of everything, but not the big baa zoo ka that some may be hoping for. that disappoint is expressing itself through the prism of stronger currency: broader market gets hit as well. down 1.4%. two-week low for japanese equities. >> thank you very much for that update from singapore, and, of course, the nikkei has been a big far terrctor for all of asi

the rest of asia stllugging tha off today. >> if you look, you were mentioning some of the month to date stats on stocks, japan has been stronger in terms of rebound in taupes of fiscal and monetary passage there. also that crazy move to nintendo. i know results are coming up later this beak. pokemon is everywhere and every thing. it's paired some gains and up sharply. bank of japan and also on friday on the european bank stress test results. might have cal jordan gets political. why the basketball legend can't stay silent. good morning, sara and wilfred. what a day yesterday for the start of the convention in p philadelphia. we saw over an inch natural of

rainfall. that was a record. we also had a high of 97 degrees. a stifling day across the northeast. flooding rain in pennsylvania even across new jersey. we had all kind of airport delays. today looks better. it's still going to be hot though. we'll see chance firefighter scattered thunder storms throughout the ohio valley. stretching all the way back to oklahoma. where some storms could turn severe the organized area is going to be with this system across the northern and central planes otherwise a good looking day for you. inland from there, very hot for the fire fight that does continue. that's a look at your national forecast. ind a new way to keep up with the data from over 30 billion connected devices. just 30 billion? so, a bold group of researchers and computer scientists in silicon valley had a breakthrough they called... the machine.

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welcome back and good morning. let's get you up-to-date. s&p futures down one. nasdaq down 3 awaiting many earnings and even some economic data points including home prices and new home sales at 10:00 a.m. let's just show you a dow board. we are expecting some key members to report. just before the opening bell we'll get word from 3 m. caterpill caterpillar, mcdonald's will be key and after the bell, the fun doesn't end because twitter results and apple are coming later. >> sara, the fun never ends, but you're right.

apple will be a big one. right, switching focus, michael jordan is speaking out from the growing racial unrest in the united states. in a post on espn on the undefeated website says i can no longer stay silent condemning violence against african-american and police officers. he's making a 2 million donation to the defense fund and the institute for community police relations. the nba hall of famer and owner of the charlotte hornets has long been scrutinized for avoiding public statements on politics and civil rights. >> he has been cautious to weigh in on these kind of issues so it is notable that will he is doing so. an that shall is clearly near and deer to him, his father was a victim of this brutality, but also i think, in a very sort of politically correct way, he's giving money to each side and the statement if you read it, it's strong and i wonder if it's going be the beginning of more

we're going to see from him out front on this issue. this issue doesn't have a phase that it can relate to. he commended police officers more widely for protecting for risking their lives to protect people every day. let's hope it gets significant traction. >> absolutely. switching gears to players on the field we have a great catch to show you from last night. a game between the cubs and the white sox. sending a drive deep to left field. white sox outfielder tracks the ball tall way to the wall. times his jump, leaps and steels a home run away. >> has a little rest afterwards. >> very appreciative of his catch. go onto beat cross town rivals five to four. >> reminiscent of my cricket day. >> steve: that's is nothing like cricket. >> but you have to catch. it's the closest sport. >> are you a cricket player. >> i used to play.

not very well, but i tried. >> i would love to see some video of that. >> everything must go at the one time power lunchbox for the new york elite. up for auction today. shut doors earlier this month. it had been in business since 1959. items being sold includes pots and pans copies of which are in the museum of collection. also up for election famous barcelona chairs and tulip chairs in the ladies lounge. it's a great restaurant, i've been lucky enough to go a few times, but i would not be interested in buying from a restaurant. >> i agree with you. >> when we come back, this morning's top stories including a lineup of earnings reports. plus we'll head to the dnc where

bill clinton is getting ready to address delegates today.

good morning. here comes the earnings parade. seven dow components set to post quarterly results today. your money, your vote. michelle obama and bernie sanders light up the crowd at the dnc, but the party isn't without problems. a live report from philadelphia straight ahead. plus, check this out, an historic similar flight travels

around the world. details on the epic journey, coming up. it's tuesday, july 2016, you're watching "world wide exchange" on cnbc. good morning and welcome back to "world wide exchange" on cnbc. good morning to you from me as well. let's check in on the markets this morning. futures are basically flat. in the premarket right now. as you can see the dow. >> fractionally doing very little which essentially concludes they are flat. >> correct. >> we got that. thank you for pointing that out making sure every viewer picked up on my mistake. >> at least there are no zeros in there. >> there we go. futures markets little bit of a decline yesterday. we are flat. let's look at the 10-year as well. marginal bond buying.

1.55 the yield on the 10-year treasury note. europe has been lower. it is more mixed now. higher for the dax and ftse, but only slightly. germany and france is down a little bit. those markets really seeing a bit of profit taking and treading water following decedent gains month to date and earnings flicking through in europe as well. asia as we look at things rights now, surprisingly most markets holding on to gains despite the big decline for the nikkei you can see. japan down 1.4%. >> just one note here a group to watch in the s&p today would be consumer discretion narl was the only group managed to close higher in the trade. under armour which reports today. really starting to get bid into results so we'll see if that continues. as for the broader markets. energy was the biggest loser in the market yesterday and continues to be under pressure. wti breaking below $43 a barrel.

we have moved south here in the last few weeks. brent down half a percent at 44.50. gnat gas under pressure as well. part of that has been a strengthening u.s. dollar. that taking a pause today. currency board very quickly as well. the british pound continues to be under pressure down to a two-week low there. 1.3127. the japanese yen is strong that has certainly weighed on japanese stocks and the you are even getting a bit of a bid today above 1 .10 against the u.s. dollar. a bit of selling pressure. it is a little bit higher this morning. up about 2 bucks. >> right. switching focus. a developing story out of japan this morning. 19 people killed and 25 injured in an attack by a knife wielding man at a facility for the disabled. it happened about 25 miles southwest of tokyo. japanese media report a

26-year-old former employee at the facility has been arrested. police are investigating possible motives. >> let's switch gears now toll u.s. politics. today democratic delegates will officially vote to in a moment hillary clinton as their presidential nominee. john harwood joins us from philadelphia and the question is will the entire party bernie sanders fanatics included be on board with that. >> reporter: well, no. some of them clearly won't be on board with that although they are going to have a roll call. they'll be able to express their dissent as they did yesterday. there's clearry discourt here. bulz the democratic national chair was forced out of her job. there was some disruption and booing in the morning session. in the evening yesterday democrats deployed the biggest tools they had to tamp it down. first was elizabeth warn who tried to make the case against donald trump. >> trump thinks he can win votes

by fanning the flames of fear and hatred. by turning neighbor against neighbor, but persuading you the real problem in america is your fellow americans. people who don't look like you or don't talk like you or don't worship like you. >> reporter: bernie sanders who was the cleanup speaker for the evening made the argument to his supporters that ultimately it comes down to a choice that's very clear. >> any objective observerological conclude tham based on her ideas and her leadership, hillary clinton must become the next president of the united states. >> but the emotional center of the evening was the speech by michelle obama which led off the 10:00 p.m. hour. nonpartisan figure as first lady. she delivered an extremely effective political speech. didn't mention donald trump's name, but sketched the contrast democrats wanted to hear.

>> in this election and every election, is about who will have the power to shape our children for the next four or eight years of their lives. there is only one person who i trust with that responsibility. only one person who i believe is truly qualified to be president of the united states. and that is our friend, hillary clinton. >> now, tonight bill clinton will address the crowd. of course bill clinton has been coming to democratic conventions for 30 years. we will see whether he can top that michelle obama speech with very quickly was being rated as one of the better speeches of any democratic convention, guys. >> amazing set of speakers last night. michelle obama getting the best reaction to her as a managing unite a message that she delivered, but of course with bernie sanders there was even booing of him when he was suggesting that people should back hillary clinton.

how rare is it that we still haven't seen that unity in the party this late on in the game and to allow the democratic candidate to tack to the right a little bit and do we think hillary clinton will be able to do that at some point. >> yes, i think. it depends how you define tack to the right. there is dissent within the party. you have loud voices. if you look at the numbers, you've got hillary clinton getting support in the mid 80s from democrats. that's not exactly where she wants to be. she wants to be higher than that. it's close to where she wants to be. i think with the active encouragement of bernie sanders and elizabeth warn, they'll do as well they can do. clearly there are going to be people holding out who are just like the people who voted for ralph nader in 2000, people who are not going to get on board. will that make the difference in

the election? we'll find out. >> who, john, at this point is more ununified, disunified, the republicans or the democrats. >> it's not even close. the republicans. look, here's the contrast, you have democrats with every leading figure in their party working together to try to tamp down dissent and minimize dissent with a few vocal holdouts. where the republicans you have a split right down the middle of the party. every former president of the republican matter didn't show up, the last two republican nominees dnts show up at the convention. you had ted cruz coming on the floor doing the opposite of what bernie sanders did. bernie sanders trying to you night, ted cruz was planting his flag and saying vote your conscious. his people were cheering him dp the trump people were booing ted cruz. that is a different thing than we saw on the floor. >> i guess the question bottom line is whether the voters care. whether it comes down to the

voters and whether they need this sort of traditional party structure to elect the next president. >> they do. look, to win the presidential election in our particularized system, you have to have near unanimous support within your party. so it will be a contest of the two parties as we watch the campaign unfold to see who is going to do better, forget the luring people from the other party. that's a very small number of people who cross over, but when you look at how well you can do among your own paertd and independents usually align with their party, that's the test. >> john, thank you very much. great stuff from the democratic convention. looking forward to a president. >> yes, it was almost difficult for us in our early bedtimes to go to bed because these skon vengss have been so action packed. what happens on the floor and the part-time time speeches. no sleep for us. >> none for mr. harwood who is doing a great job. on the wall street agenda today,

followed by new home sales at 10. both expected to show momentum building in the housing market. the fed kicks off a two-day policy meeting with the decision tomorrow 2:00 eastern time. in earnings we have lots of names. do ponte, mcdonald's, verizon before the bell. after the we'll hear from apple and twitter. >> apple is the biggest. expected to post earnings of 1.39 a trade. shares dropping yesterday on a drown grade calling the stock o to sell. got a lot of attention with an $85 price target. >> the other tech name likely to get attention this afternoon is twitter. landon joins us tw three things to watch in twitter's earnings. >> twitter is expect ds to report revenue. beyond the numbers here are things to watch.

first user growth. it's been a year since ceo came back to turn around twitter and those users numbers are very much in focus. analyst expect monthly users to take up to 312 medical, just 2 medical more than the first quarter. second the stock has dragged down dwirt shares over the past year. the stock is about 47% over that period although it has rebounded in the past month. the third thing to watch updates twitter has made multiple attempts at product updates. such as live streaming partnerships in hopes of boosting user growth numbers. hasn't really wowed anyone. >> which is why those user numbers are still going to be in focus. thank you. some stocks to watch today. ab inbev. inbev will now pay 45 pounds per share. valuing the share at $104

billion. san mina reporting results. due to lower demand for imbedded computing and storage products. shares of texas instruments rallying after results. the firm also offering a strong outlook on increase. more stocks to watch, moody's is changesing outlook on microsoft. moody's says the change reflects the nature of the deal even though the transaction could be beneficial to microsoft cloud business. no move in stock price this morning. lux cot ka is cutti inting outlook. reportedi inin inin ining a dro >> caterpillar says global

retail machinery fell 12% in the quarter. slow down in construction and mining. caterpillar reports full second quarter results before the opening bell today. down about half a percent. doug onner held man will be on "squawk box." >> time for top trending to ini stories. a devoted sanders supporters, spoke alongside clinton supporters, senator all franken to tried to build the unity. after announcing her support fwr clinton, dnc crowd booed her then she had a strong message for the bernie or bust crowd. >> unity. unity. can i just say to the bebernie t people, you're being ridiculous.

>> it's a strong message. strong message. given she was such a big bernie supporters. >> amazing to still see the booing. good to see how much more united the democrats are tlan the republicans. >> so the democrats really bring out the celebrities. traditionally always hollywood backs them and the dmeed yen co >> the first around the world similar powered flight taking more than a year to complete and spanning over 25,000 miles. boy, what an accomplishment. the pilot tweeting it's a first in the history of energy, social impulse is only the beginning. our feature is clean. >> congratulations to them. great achievement. coming up today's must reads. first as we head to break, check

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french police have

neutralized two men with blades. one hostage was killed with a blade. included a priest, none, and two worshippe worshippers. attackers cut the throat of the police. french president holland is on the way to the sight of the attack now. >> we'll keep you posted as we learn more. >> must read stories. it is michelle obama's speech last night at the dnc that has really stood out to the reviewers. have a listen. >> this november when we go to the polls, that is what we're deciding. not democratic or republican, not left or right. no in this election and every election is about who will have the power to shape our children for the next four or eight years of their lives. >> and she continued with the

children theme the entire speech. i mean really talked about her girls growing up in the white house and sort of who would make the best future for them, talked about the historical significance of potentially having a first female president in this country. it's worth a read if you didn't stay up for it of the transcript this morning. >> she's an impressive speaker. i wonder how big an asset she could be to clinton during the campaign because you know we discussed this often. in fact not that many women like hillary clinton and maybe the first lady can bring them altogether. >> true. >> anyway my pick is from "the wall street journal" titled mr. clinton versus hillary clinton. he would sign the north american free trade agreement and in his 1996 state of the union address, he would declare the heir of big

government as over. hillary clinton has chucked all this over board embracing a plethora of new spending. opposes the tpp, the heir of big government is back. it is an interesting article. the nuances where it's not so stark trk differences, but how hillary clinton is very different with her agenda. >> i wonder if it's the sanders affect. she hasn't been able to tack to the center because mr. sanders still has a huge chunk of support out there. >> which we saw last night. >> we are approaching the top of the hour. the team is getting ready for "squawk box." joe kernen in new york with a look at what's coming up. between elizabeth warren and bernie sanders, it's all your favorite people. >> very big week. looking forward to the drama. i'm talking about the pga out after ball tus. fourth major of the year, last

one. we've had some great drama already. so it has been a big week. i understand yeah i guess there is something else happening also. i was thinking about what my children -- what i want them to think about for the next four or eight years because in the last eight years, it actually watched socialism become a viable alternative to capitalism. so it is important, the kind of people that we elect to office to where a mainstream party, a mainstream u.s. party is now grappling and pining for the socialist candidate. at least half of the people at the convention pining for the socialist candidate to be the guy that's elected because we're not sure anymore. even any kids, is it capitalism, socialism, which works better. it does matter to our children who we elect. i worry about oil. because it hasn't been -- brexit we shook off no problem, but

suddenlily the market seems to take pause when we go back below. if we get another three handle, that's not just a supply issue and people start questioning global growth again. i think that's part of what we saw yesterday. compared to the losses going to the close, but we're down again. i think we're 42 and change. that seems to be which is amazing the market would have more anxiety about crude than brexit. we're in the middle of earnings. with the backdrop of the convention. i love to see comedians. seems appropriate for this convention, actually. back to you. >> thanks very much. we look forward to "squawk box" in ten minutes time. still to come on "world wide exchange," center banks on center stage. policy from the fed and boj in the coming days. stay tuned. e for the first time...

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welcome back to "world wide exchange." the federal reserve begins a two-day policy meeting today. we'll get the decision out tomorrow. joining us joe from deutsche bank, cnbc contributor. good to see you. >> good to see you. >> since the fed last met, we did see britain vote surprisingly to leave the eu, but we also saw markets around the world remain remarkably resilient in the face of that. how cautious does the fed need to be. >> everything broke faifrl bli for the fed. the brexit vote cost really very little market dislocation at least until this point. markets, equities, credit spreads performed admirably and the data has been better as well. retail sales, all those things improved to the upside. i believe it's temporary, but for the fed, they're going to take a real deep sigh of relief. and i don't think they're going

to foreshadow a september rate hike at this meeting, but they will certainly leave the door open to such a move and my guess is in three weeks when they get the minutes from this week's meeting, they'll talk more about the possibility of a september hike. >> the dollar has been strong in the last month or so more because of safe haven trades than anything else. will it continue to be strong for the rest of the year, but because of the fed expectations. >> it's possible. we've seen the futures market really elevate its expectations of fed hikes to where it was a month ago. part of it might be if the market things the fed can move again. other central banks it's possible the dollar rallies more strongly or rerallies and that might be a reason oil prices weaken further. it seems to me the fed is in a box. the economy we're talking about is okay. recession risks seems to have moderated, but hardly a situation where growth is really

good. if it was, i don't think both candidates in the u.s. election would be getting any sort of traction. if things actually were really on the cusp of a breakout. >> you said earlier in the interview that you don't expect the good news on the economy to last. why not and what changes things? >> the reason sara we're in the eighth year of the business cycle. that's old in terms of years, but more importantly when we look at corporate fundamentals, profit growth, profit margins, those series have been weakening and they've always been excellent leading indicators of the economy. the same thing with the yield curve. seeing that global yield curve flatten in a bullish fashion. historically these are signs that suggest growth is waning. we might get a pop in second quarter growth. i would argue if you look at the trends in the size of the academy as measured by gdp, we've just seen a lot of these series top out. you mooigt get a bounce and

stabilize temporarily, but it's hard to see growth accelerating so late. >> joe, if we look at sector perspectives, tech has been on a good run. financial still suffering. where are your strongest c convicti convictions. >> look at the financial service sector, it's hard to have a healthy economy if credit and lend reasonable degree nare not on the corporate side companies have spent a tremendous amount of time and effort buying back stock and doing mna. that's partly a function of hoe rates which have hurt growth. in terms of sector, housing has some room to run. that's probably the best area, but overall the capital spending outlook has not been robust in this cycle. >> joe, thank you. we have to leave it there. chief economist at deutsche bank with eye on oil. >> lots of opening coming up before the bell. oil prices down a bit and down

sharply this month. that's it for "world wide exchange." "squawk box" is coming next.

may the force be with toy sells. how the star warz saga is saving that industry. it's july 26, 2016 and "squawk box" begins right now.

good morning. welcome to "squawk box." joe kern than. becky is off. we have a big morning of earnings report. the fed two-day meeting kicking off today as well. let's take a look at the market action before we equity things kicked off here. u.s. equity futures at this hour looking down. dough looking off about points and the nasdaq down about 7 in well 7.5 points. overnight in asia looking at a mixed picture. down almost a percentage and a half. we fly over quick to europe, you're going to be seeing again mostly down arrows there where the exception of what's taking place in the england today and finally a quick look at crude. wti now down to .8