♪ good morning. breaking overnight -- saudi arabia and several other gulf states cutting ties with qatar. oil prices are moving on the news. we're live in dubai for you straight ahead. terror strikes again. police raids continue after the third attack on british soil in less than three months. a live report from london on the investigation coming up. plus, markets now. the global reaction to this weekend's events as u.s. stocks are at all-time high. it's monday, june 5th, 2017. and "worldwide exchange" begins right now. good monday morning. welcome to "worldwide exchange" here on cnbc.

i'm sara eisen along with michael santoli who is generously sitting in with wilfred frost who is also with us this morning, reporting live from london. covering this weekend's terror attack. we'll have more from him in just a moment. first, let's check in on the global markets this morning. after u.s. stocks made another move yesterday. they got a 1% gain or so for the week on stp. 1.5% 0 for the nasdaq. we start in the red just barrel. dow futures down 6, nasdaq down 2.5. s&p futures down 1.5 points. i want to show you crude oil prices which are rising still higher after saudi arabia, bahrain and the united arab emirates along with yemen all cut ties with qatar. those countries are accusing qatar of meddling in their internal affairs and backing terrorism, increasing concerns about supply disruptions. we're now seeing 0.8 move higher on wti surpassing $48 a barrel.

the stock index dropping sharply, 7.5%. we'll take you to dubai for an explanation and more on the market reaction in just a moment. >> elsewhere overseas, let's check on the markets in asia, china services pmi came in stronger than expects at 52.8 showing growth on the inspectser expanding at the quickest pace. you see really not too much action in the asian equity market. japan modestly lower. hang seng down 025%. not too much of a response from that quick data. over in europe this morning. germany is closed today. the uk may services pmi, though, coming in short of forecast. meantime, euro done's pmi slightly better than expected and europe's pmi matched targs. you see definitely a cautious tone across europe. but definitely not dramatic moves in response to the weekend news. >> as for the broader market picture, i show you the ten-year

treasury note which got as low as the november low on friday, after it was a pretty disappointing read on the u.s. labor market. both on the headline number on the wage number and labor market addition. right now we're seeing the ten-year note 2.17, that's watching the lows of the year. we will watch that closely. as for the dollar, following that over the weekend on friday, the dollar is a bit stronger than the euro this morning and the yen at 1.1048. the british found which was weaker overnight after news of the terror attacks on the weekend has now climbed back. and is about unchanged at 1.2882. gold prices, let's just show you, they did get a little pop from that weaker job report on friday are higher again this morning. geopolitical news and risks front and center up 0.3%.

let's get straight to london where wilfred is there after the deadly terror attacks. wilfred, stuff tore. i'm glad you're there for this. give us the latest. >> reporter: good morning, sara and mike, seven people killed, 48 injured when three attackers in a white van mowed down pedestrians on london bridge. they then exited the van and attacked people in borough market with knives. the three suspects were shot den at the scene within eight minutes of police being called. they shot 50 rounds in total. 12 people were arrested yesterday. some further people detained this morning. the police do now know the identity of all three attackers and the metropolitan police chief confirming that they had a, quote, domestic center of gravity and not directly from overseas. now, this is the third attack on the uk by terrorists in just 73 days. therefore, theresa may's response yesterday, firmer than two weeks ago. she said they were not directly linked, these recent attacks but, quote, were bound by the

single even ideology of islamist extremism. she added enough is enough. and there's far too much tolerance of extremism in our country. now, she also confirmed that the election was going to go ahead as planned on thursday. campaigning picking up in earnest this morning. teresa may will go off of jeremy corbyn's perceived and including the police cuts that did take place when theresa may was home secretary from 2010 to 2016. these arguments sadly have been used already over the last two weeks in light of the manchester attack. what does it all mean? well, the polls have one clear thing over the last couple of weeks which is momentum for jeremy corbyn, albeit, theresa may still in the lead. that lead before yesterday's polls taken before the attack varies from 1 to 12 points

depending on which you look. the pound stands flat from over the weekend. >> wilfred, what can you sell us about the prime minister's strategy? it does feel like she's gotten a little tougher. i mean, it's hard to believe how the frequency of these attacks leading up to this election in such a short period of time with that manchester concert happening just over the weekend. is she changing her strategy? is she changing her tune? is it just rhetoric? what can you tell us about that? >> reporter: well, she's definitely changing her tune. after the manchester attack that was a more severe attack. her rhetoric was more restrained. she didn't go out specifically after extreme. and while she said these attacks were not directly linked she also revealed there have been five thwarted attacks since march since that westminster/london attack. there was a sense that two successful attacks could have

been a coincidence. but there's a growing trend and that is what led her to say enough is enough. she did suggest there could be a deeper terrorism review and stronger laws passed if she wins the election. and as many people noticed she did cite the internet having to clamp down the availability of extremist material on the internet as one of the things. clearly was a six, seven-minute speech. we haven't gotten policies but with theresa may, we will have tougher laws on anti-terrorism moving forward. >> in the wake of that terror attack, the threat was raised and then backed off to just severe. is there any talk right now over there whether that might be a more permanent approach to have that very high alert level? >> reporter: yeah, well, that's a good point. and we should point out that although it was elevated, and as you said, brought back down from critical to severe, that means critical means an attack is

expected to be imminent. severe means that it is highly likely. but criticism is not being thrown directly for theresa may for lowering that level, because the level is decided by jtac, the joint terrorism analysis center, not by the prime minister herself. as for going forward, i think it's important to note we haven't seen an increase in the terror threat again, albeit, she did mention the higher level of thwarted attacks in recent days and weeks. so, at the moment, it remains as you say, at severe, signaturugg an attack is highly likely as opposed to imminent. >> i remember, wilfred, i have been there on vacation during the attack on parliament, what struck me how back to normal, the city of london was just around that surrounding area. everything else is functioning. it's monday morning there, what's it like? is there a sense of heightened alarm or concern? or business as usual? >> reporter: no i would say very much business as usual. you cited sadly, the march

westminster attack, of course, i was in paris ahead of the french elections where we had a terrorist attack two or three days before polling. against, a sense of solidarity, a sense that people won't let this necessarily influence their decision. in paris, it didn't lead to a change in results. perhaps it would have favored le pen. this election was meant to be about brexit. and on brexit, theresa may is received as having the strongest, most stable position on negotiating both because of the recent attacks and separately because of her own policy and subject. u-turn, the focus has not been on brexit and that is one or the number of reasons why she's seen her lead slip in the polls but in london, very much a sense of resilience, solidarity and business as usual, sara. >> wilfred, we'll see you in a few moments you're going to be reporting all week on the mood

of the country. british prime minister theresa may did call for stricter internet, saying we cannot provide extremists with, quote, safe spaces online. several tech companies responded, facebook saying quote, we do not allow groups or people that engage in terrorist activity or posts that express support for terrorism. we don't want payment to be an environment for hostile environments. and google also weighing in saying they're working with industry colleagues to crack down on its abuse on its platforms. let's get back to oil prices which are moving higher after several gulf states cut diplomatic ties with qatar, hadley gamble is on the nbc news lines with the latest. good morning, hadley. >> reporter: good morning, oil from qatar and saudi arabia as well, implications from the dynamics of the region -- the

keel question, of course, how the private sector is going to fare, given the uncertainty and voluatility volatility. the bigger question, we heard from secretary of state rex tillerson that the u.s. is open to some sort of conciliatory agreement between the countries that comes offer the back of several weeks ago, we saw the president having a very successful trip to saudi arabia with u.s. foreign policy, with the gcc gulf area policies. sand then between qatar and saudi arabia and bahrain, the uae causing a major, may have dysfunction. the question going forward will be can they come to some sort of -- because saudi arabia, uae, egypt, bahrain, all of them are accusing qatar of supporting

terrorism. we've seen them with the muslim brotherhood and hamas. a lot of questions whether or not we're able to find common ground. >> hadley, do we know what it means for the u.s. yet? you mentioned rex tillerson, doesn't the u.s. have a big military base in cqatar? >> reporter: you got it, we have an army base as well as a base in qatar. if these guys aren't talking that has major implications for us. >> hadley gamble on the rift with the gulf states. thank you very much, hadley. now, the u.s. politics, the president will kick off the week today with a rose garden speech. he's as invited airline executives to unveil the plan to privatize air traffic controls. wednesday, he'll travel to improve inland waterways and on

friday, he'll advocate for shorter review times for railways and other structures. >> i think he's going to cincinnati? >> for which one? waterways? >> i don't know, we don't have many waterways there. ohio river. as for the week on wall street, it's been a lot lighter. look for the ism services and factory orders, wednesday, consumer credit, thursday jobless claims friday, wholesale numbers. just a few earnings to find out, results from rbi, dave & buster's. and vail resorts. >> apple will host its annual conference, tim cook will give the keynote address at 1:00 p.m. from the sector weight to overasset, it's limited to upside current expectations. with the two-month pairing value

of apple shares at 1.45 which is low the current price. coming up this morning stocks to watch, including herbalife. the company consulting sales. check out the commodities overnight from four key arab toa bounce. we're monitoring that four. as well as the move lower and futures. we'll be right back on "worldwide exchange." and it's also a story about people. people who rely on us every day to deliver their dreams they're handing us more than mail they're handing us their business and while we make more e-commerce deliveries to homes than anyone else in the country, we never forget... that your business is our business the united states postal service. priority: you ♪

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welcome back to "worldwide exchange," if you're just waking up, let's get you back to speed with the markets u.s. equity futures looking at extremely modest declines after closing friday on fresh all-time highs across the board. s&p down just a point. basically, very fractional giveback if any, if this holds toward the open. take a look at oil prices this morning. there was a little bit of news overnight where saudi arabia-led coalition severing ties with qatar, we did see a bump in world oil prices. a little more than 0.5% in u.s. crude and brent holding about a 05% gain, too. take a look at treasuries as well become we did see a rally in treasuries, the decline in the yields. ten-year note yielding 2.17, just at the very bottom range, a lot of people concerned about that narrowing yield curve.

but so far, u.s. equity markets are okay with the setup for now. sara. >> mixed messages continue. stocks to watch today, herbalife is raising its second quarter profit forecast and says it exceeded a key threshold under its agreement with the fdz fd federal trade commission. herbalife does expect lower revenue citing weakness in mexico. astrazeneca shows lagts-stage of a drug slows the spread of breast cancer in young women. throws are 42% likely to see the cancer spread than those given chemotherapy. and gig amon reporting a possible sale. the stock hitting a 2% bop in the free market. more stocks to watch this

morning. toyota said it sold its entire stake in tesla by the end of the last year after chancing its tie for the company to develop electric cars. toyota had bought a 3% stake in tesla some years ago. no word on exactly how much money toyota made on that. boeing meantime has delayed the delivery of the 737 max jet set for this week for norwegian airline due to a technical issue. the move comes after boeing had to delay last month. coca-cola has joined the political battle against the u.s. sugar industry ahead of the deadline to settle a trade dispute with mexico. coke, adm and cargo made at the white house warning of potential fallout if the u.s. and mexico don't have a deal with large duties on exports.

coming up, russian president vladimir putin is accusing the u.s. of interfering in elections around the world. we'll head to that next. but first, here's today's weather forecast with nbc's bill karins. good morning, mike and sara, what a murky report. we'll see numerous areas with showers. it's not going to be any one location. it will be the hit and miss variety. look how balance in boston. i apologize for that, 56. that's jacket weather. if year getting isolated storms to severe storms mostly in the midatlantic. then in the gulf coast more typical afternoon storms we'll be dodging. here's the forecast, the blue is one, the pink is three, mostly in the hudson valley, the best chance of heavy rain. even going into the forecast monday into tuesday, we're still going to deal with wet weather there in areas of the northeast. that's your business travel forecast. more "worldwide exchange" when

we come back.

welcome back to "worldwide exchange." i'm mike santoli along with sara eisen. in washington this week, former fbi director james comey is schedule dodd testify at a senate hearing. nbc's tracie potts joins us with more, good morning, tracie. >> hi, mike and sara, this is the first time since we heard from comey since fired by president trump and we're allergy lawmakers grill him on conversations he had privately

with the russian president. and did the president try to pressure the fbi director into backing off that investigation. it will be the first time he's addressed that publicly. also, this week, we expect to hear from the head of the national security agency and the director of national intelligence. same questions from them. what were the conversations with president trump? did he get the impression that he wanted him to back offer the investigation? of course, this is all part of the bigger look that congress is doing on whether russia tried to influence our election. russian president vladimir putin says no, he also with an exclusive interview with nbc's megyn kelly talked about that dinner, that widely publicized photo, the dinner that he had with former nsa, national security adviser mike flynn. listen. >> translator: i made my speech. then we talked about some other stuff. and i got up and left. then, afterwards, i was told, you know there was an american gentleman he was involved in some things.

he used to be in the security services. that's it. i didn't even really talk to him. that's the extent of my acquaintance with mr. flynn. >> putin also denied that russia tried to hack or influence our election. and actually sort of turn the tables, mike and sara, saying that it's the united states that seemed to have its hands in a lot of other country's elections around the world. >> beyond comey this week, i guess, tracie, we'll be watching for fall jot over what happened in the uk over the weekend. >> yeah. >> president trump responding in a series of tweets i know this was a lot of the talk on the sunday shows yesterday. i'll just read one for an example talking about how it does argue in favor of his travel ban. we need to be smart, vigilant and tough. we need the courts to give us back our rights. we need the travel ban as an extra level of safety explanation. he also went after the london mayor sadik khan and talked about gun control. is there a lot of backlash to

the president's sort of politicizing about this event? >> yeah, a lot of questions whether the president went with this, he started out saying the u.s. stands and will do whatever he can to help. and then criticizing london's mayor for saying there's no reason to be alarmed. looking at the whole thing in context, the mayor was telling people in london that there's no reason to be alarmed when seeing extra people on the streets that they're putting them out. we'll see a larger police presence as they try to track down where it came from. president trump saying, really no reason to be alarmed and seven people have been killed. and he went on to talk about gun control and his travel ban. and not being politically correct when it comes to security. so, he really did seem to be going after london's mayor in a comment that perhaps was taken a little out of context when the mayor was talking about police on the street. >> thank you. ariana grande hosted a

star-studded concert for the victims of the suicide bombing. top stars justin beeb esche, katy perry miley cyrus and coldplay joined graensd on stage. tell raised more than $3 become during the benefit show. bringing the total amount for we love manchester fund to nearly $13 million. when we come back, a roundup of this morning's top stories and developing action. from attack in london to the overnight move in crude prices. we'll get you the details you need to know. you're watching "worldwide exchange" on cnbc. n it comes to, looking from a fresh perspective can make all the difference. it can provide what we call an unlock: a realization that often reveals a better path forward. at wells fargo, it's our expertise in finding this kind of insight that has lead us to become one of the largest investment and wealth management firms in the country.

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good morning, breaking overnight -- saudi arabia and four other gulf states cut diplomatic ties with qatar. oil is moving on the news. we've got the latest straight ahead. a massive terrorism investigation widen in the uk following the attacks. we're live on the ground, coming up. a risks to bigger rally. could it threaten the run on wall street? it's monday june 5th, 2017. you're watching "worldwide exchange" on cnbc. good morning, welcome back to "worldwide exchange." on cnbc. i'm sara eisen here with michael santoli. wilfred frost is reporting live from london this morning, covering this weekend's terror attack. more from him in just a moment. but first, we are following a

developing story out of the middle east where five gulf states have cut diplomatic ties with qatar, saudi arabia, egypt, united arab emirates and bahrain, all citing it supports terrorism. with the dispute over car tar's support over muslim brotherhood. doha's stock exchange sharply lower on the news. down 7%. the oil also reacting to increased tensions in that part of the oil-producing world. crude oil is up by more than 1%. you now up 0.5%. brent also up 0.4%. and 5017. nat gas popping at 1.3%. saudi is the big procedure there. >> if you add the geopolitical premium in there although it's not lynn nra, nobody thinks

consults are coming. >> they already have come in a sense with production cuts. >> exactly. a check on global equities markets this morning, we see u.s. equity futures coming off record he's on friday, once again, looking to give back minimal amounts, the implied open on the dow is now for a slight positive. and the nasdaq which, of course, has been the leader, also at this point, firming up, looking like flat to slightly higher. one feature, of course, of the u.s. market has been shirking off all kinds of concerns, whether it's low bond yields. whether geopolitical issues. all of the rest of dimmer views from policy out of washington. and, of course, the weaker jobs report on the economic picture. over in asia, as we look at those equity markets, also a bit of a mix to lower picture there as well. you does have a decent services pmi number coming outside of china, but the shanghai down 0.5. and hang seng down a quarter of

a percentage point. over in europe, following the weekend news and terror attacks in london, just again, very modest losses. we see italy a deeper backoff there. almost 1%. but in general, it's just slight movement and downsize. >> as for the broader markets, the treasury ten-year hovering around lows of the year. at the lowest points in november, buying on treasuries. the friday weaker jobs report was the catalyst. as for the dollar, it was weaker friday getting stronger against the euro at 112.63, up a little more than 0.1 percent. a tiny bit up against the yen. and the pound has been interesting, weaker overnight following the terrorist attacks. it's now come back completely and firmer crossing back 1.2904. gold price were a little bit higher on the back of these increased go eopolitical risks d

the comey testimony on thursday, we'll following that part of the rowland. and thank you piece shack who is our in-house market watcher of statistics, 17 closes for the dow in 2017. the s&p has had 22. the nasdaq has had 37 record closers for the year. >> yeah. the nasdaq is really a momentum story. a lot of people finding out how much higher it is relative to the small cap. >> what's your take on the resilience of the round? >> first of all, i think low and slow. like low rates and slow growth have basically accompanied the entire bull market. the market knows how to translate that into growth stock outperformance which is what's going on. it can't go on forever but now it's okay. every time you have a pullback and bad headlines, you get that wall built up and people get nervous. for now, i think it's a momentum story and a fact that, you know, the u.s. market continues to be

where you can find mega cap companies that are still growing. >> climbing the wall of worry. the nasdaq just positive here in the early session. we're continuing to follow a developing story out of london where seven people were killed. many more injured saturday night in the third terrorist attack in the uk in three months. let's get back to wilfred who is near the scene of the attack in london for the latest political reaction. wilfred. >> reporter: hey, sarsara, yes, indeed, as this was the third successful attack in just over 73 days establishing a trend here in the uk it led to a stern response to prime minister theresa may where just after two weeks of the manchester attacks where she said enough is enough. and she said if she wins the election they could establish anti-terror paths including relating to the internet. >> we cannot allow this ideology the safe space it needs to

breathe. yet that is precisely what the internet and the big economies that provide internet-based services provide. we need to work with allies democratic governments to reach international agreements that regulate cyberspace. to prevent the spread of extremist and terrorism planning. and we need to do everything we can at home, to reduce the rinks risks of extremism on line. >> reporter: internet companies sponsdzi i responding that they, quote, want facebook to be a hostile environment for terrorists. we've had the likes from twitter and google as well. if she wins the election, what could it mean in terms of political policies. we should note, just a couple weeks ago, the g7 meeting in italy, theresa may did push for social media and providers and companies to remove extremist material from the internet. and i'd add this home secretary

amber rudd particularly singled out end-to-end encryption of messages. she doesn't mention any companies in particular, but a company like whatsapp does use that end-to-end encryption. perhaps that is something on the chopping block if conservatives are reelected. now with the labor leader jeremy corbyn that discussed with tracie, corbyn described that attack showing that president trump had a lack of sense or grace. one conclusion, perhaps, if we did see a labor victory, a jeremy corbyn victory would be tougher relations with the u.s. he's been critical of president trump, particularly on the idea of the immigration band in the past. guys. >> you can talk about that, wilfred. i know you went there this week to report on the british election on thursday. you were telling us, that last time after the manchester

attack, it really wasn't the real driver of the change we've seen in the polls. what about now? what will you be watching between now and thursday to see which way this election goes? >> well, we'll definitely wait for the first polls to come out since this attack. but as we said and mentioned, the attack itself didn't seem to alter the main point that was going son, which was momentum slowly shifting towards jeremy corbyn, while teresa may and the cont teserve sifatives are seei shift. first and foremost, she had a simple error on policy, social error policy that was received badly by pensioners cohort. and then almost immediately after announcing a policy she backed -- u-turned and turned her strong and stable. and jeremy corbyn has captured the imagination of the left, the young and the female vote more

than people expected. if that momentum continues perhaps he could eradicate theresa may's lead but betting companies feel a strong victory for theresa may, that's what markets expect. if we didn't get it, we could be voiced. we will see you for the "must hd reads." general jack jacobs, kernel jacobs, thank you for calling in again. unfortunately, we keep talking to you about these horrific events. based on what we know so far, what you can tell us about what you're deducing on this terrorist attack, whether it's different and whether it's an escalation, and what we need to be taking away? >> well, the whole concept spreads and is fragmented and as a result is difficult to stop. this attack is very much different than the last one which used explosives, had much better planning. this although isis has claimed

responsibility for both, it's not entirely clear that the latest attack was anything other than -- not to minimize it -- but anything other than three sympathizers who decided not on a whim, necessarily, but with far less planning to aspire to be members of isis. so, these two attacks were very much different. what the british government has to do is, among other things to make it extremely difficult for terrorists, not just to operate, but to operate in the way which permits them to acquire weapons and explosives. and therefore, to minimize the results of any future attacks. you reported earlier about the implication that the prime minister was going to work after

the election to ensure that there's a control of information, so that they can intercede before an attack is going to occur, so that they can supervise, surveil conversations between or among potential attackers. this is extremely difficult to do in a free society. and what they're going -- no matter what happens as a result of the election, and what efforts that the government takes in order to intercede, it's still going to be difficult to dwathwart all of the attacks. and i think the british government understands that. >> yeah, especially with the slow coordination and all of the rest. not too many footprints to detect ahead of this one. colonel jack jacobs, thank you for your time. >> you're very welcome. coming up, why riley summer

says after 75 years of progress america just took a giant step backwards. your "must reads" coming up. and the futures, we did just see nasdaq go positive for the session. we're looking at minor declines and futures coming up and major closes for advocates and another strong week for stocks. "worldwide exchange" will be right back. got it. rumor confirmed. they're playing. -what? -we gotta go. -where? -san francisco. -when? -friday. we gotta go. [ tires screech ] any airline. any hotel. any time.

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welcome back to "worldwide exchange." let's get you caught up on the market action. we're going to pick a few movers in the early session.

but first, futures with very long change this morning. dow futures down 1 point after lows of the sex, down 6 a half hour ago. s&p down 1, futures down less than a point. closing on friday -- you're watching the gap this morning? >> i'm watching the gap. i think it's a good focal point for this big question. this market has not really been narrow and dragged by stocks but it's have and have nots. it's been physical and consumer mall retail one of the weakest points out there. gapp is down from 27 a week ago. oppenheimer -- i think it represents a conundrum that consumers have been flush. and unemployment at 3.4%. where is the spending going and exactly how do you play that in the stokck market? it goes to say maybe the

retailers have gotten too cheap and applies to banks as well. >> we're waiting the final results of the gubernatorial election yesterday in the largest state of mexico. for enrique pena ineto. >> last week a hinge in history, the former treasury secretary essentially saying that the president's pullback, not just from the paris accord but basically lukewarm support for nato is obviously a gesture of saying, look, the post-war, kind of western-led coalition of global community has been broken. he writes it is essential that leaders in the u.s. society signal clearly their disapproval of the course the administration is taking. history will judge poorly business leaders who retain positions on trump administration advisory boards.

i think it will be said that this white house will be disappointed if larry summers was not upset with its stance on it. certainly, it's very much in tune with what president trump ran on but it shows you people are very much concerned with the idea that gary kohn last week saying it's not a global community. it's basically a zero gain among nations. >> summers has become one of the top critics of the administration from an economic perspective. goes after them without having any economists add vising them. >> sure. >> or the back pony of their policies, whether geopolitical or economic tax reform. >> this administration is against establishment experts and larry summers is probably the epitome of establishment experts. >> you look at obama administration they had plenty of ammunition to fight back. let's bring in wilfred. how is this terror attack playing out in the british papers this morning? >> reporter: yes, i picked out a couple, with a head line that

says massacre and the people laying on the floor, the location of borough market is behind me where this played out. and london bridge. in the "times," an op-ed, and this sums up what most of the other papers are going for "enough is enough." jumping on that, elevation in severity of rhetoric from prime minister theresa may compared to after the manchester attack two weeks ago. and the right wing paper saying we back our prime minister insisting things have to change. the question is, does her elevation in terms of the strength of what she's saying play out in the polls in the next couple of days, in the way it didn't two weeks ago after manchester, as we said already with the election campaign going on today. thursday's vote, theresa may holds a lead.

jeremy corbyn certainly got the momentum behind it, guys. we are approaching the top of the hour, that means the team is getting ready for "squawk box." andrew ross sorkin is in new york with a look at what is coming on this busy morning. >> it is a busy morning. we're getting back to wilfred and talking about the terror and impact. and here's what we have on tap, walter haase is going to join us, trying to make sense of what, of course, has been a senseless situation over the weekend. and arne sorenson is going to join us, spending a little time trying to understand what this means to the hotel world. of course, there's one of the few places where there can be sometimes a real economic impact, and also another hotel company, jonathan tisch is going to be spending time with us and a conversation with andrew puzd puzder, that's what's going on. what to make of it, in the short

term, but, of course, the long-term is the big gain. >> andrew, thanks very much. still ahead -- a wildcard for the record rally. the one thing keeping jpmorgan's jay camperty up at night. i love you, couch.

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exchange," i'm sara eisen with michael santoli. wilfred frost is in london. call it a market trifecta, the s&p and nasdaq hitting highs on friday. do the rallies continue this week? joining us jack caffery from jpmorgan bank. jack, good morning. >> good morning, sara. >> just when we think we have morale eye wille rallies, we ma london terrorist attacks, ahead of the comey attacks, the lack of momentum on the trump gaenag

yet, futures are unchanged. does the resilience surprise you? >> i really don't think so. if you look through, we continue to have a modestly growing economy. we continue to have companies extracting earnings off of that modest growth and high in the equity market, i think it's reasonable that you might get returns on fixed income. while absolute interest rates are low. credit convictions seem to indicate there's not a massive worry about the corporate sector's ability to continue to pay. so, i think you should look through and find reasons for that resiliency within. >> yeah, jack, that certainly explains how we've gotten to this point. i guess you wonder about valuations, looking at the higher side but that's not been critical, as long as all of that other stuff was supported. what are those wildcards that could interrupt the picture. we know that potentially the future of fed policy is on it?

>> sure. it's not only where will the fed go and will the fed continue down the path of gradually tightening. we think there's two rate hikes over the course to come. we step back and think not the support term, not the next three weeks or months but expect what do we get you out of the fed for years? what does that membership of the fed's board look like over the next six months, nine months, 12 months, who can get approved. and what will their policies look like. and will that be a change from the dovish policies we've had for over a decade now. >> what about the returns, jack, do you think there were returns announced with able to go with two more hikes as planned? >> i think if you look within the details of the jobs report, you saw okay gains. on thursday, with the jobs creation numbers you continued to see a fairly low pace in job separations. at a point we're going to have a shift in the conversation of

where are the workers. and perhaps we have a lack of employment gains just because you struggle to find people who are qualified. people who can actually take the jobs they're looking for. and do you have to pay more or do you have to actually invest in turning. with the shift in the dow, rather than you created 250,000s jobs or 100,000 jobs. >> what's what the decision making process looking like. what about the idea that the markets if they continue on this path could themselves get overconfident could share heavy risk taking that the fed is going to want to tamp down. do you think we're anywhere close to something like that? >> i'm not sure i'd say we're close to it. i think if you look through the measures. you look at the vix, i think the vix is certainly an indicator of markets perceptions of liquidity. i mean, that seems massive massive amounts of put buying. you are seeing more debt. but these are issues of people

tracking earnings, earnings have been better options markets and it's been supplanted. you're going to have one-day, one-month shops under way. certainly summer is a time for a reminder there's political risks. and we start off the conversation with political risk. it's not just new york, or washington, it's a global issue. and it comes back to are earnings growing? and if earnings are growing, businesses are more active over time. >> we'll leave it there, jack. thank you for joining us on this monday morning. jam caffery of jpmorgan bank. what will you be watching? >> i think the treasury. actually crowded in the bond market. >> jack was talking about political risk. geopolitical risk is dominant. gold is at an all-time high. see if there's any buying -- not seeing it really. >> gold hack the flip side.

that does it for us on "worldwide exchange." have a great week, "squawk box" is next. mom gets breakfast in bed... you get to do the dishes. bring 'em on. dawn ultra has 3 times more grease-cleaning power. a drop of dawn and grease is gone.

good morning, terror in the uk again. seven people are dead, dozens more injured in saturday's naek london. just days before the parliamentary election. we get a live report from london, straight ahead. breaking overnight, arab states breaking ties with ties to terror. we'll bring you the reaction in the crude market. and apple shares trading low down by analysts. that's rare. and ahead, the developers conference, monday, june 5th, 2017. and "squawk box" begins right

now. >> announcer: live from new york, where business never sleeps, this is "squawk box." good morning, everybody. and welcome to "squawk box" here on cnbc. we are live from the nasdaq market site in times square. i'm becky quick along with joe kernin and andrew ross sorkin. and let's take a check of the markets on this monday morning, u.s. equity futures are flat. dow futures down by a percentage. so are nasdaq. s&p futures down by 1. it was an up week for the markets last week. dow was up by 126 points. nasdaq was up by 1.5%. if you take a look at what happened overnight in asia, you'll see that the nikkei was flat was well. not much activity in the hang seng or shanghai composite. the shanghai was down the most by half a percentage point. in europe today, germany is closed for a public holiday. but you can see the cac is down by half a percentage point. the ftse in london