both wti and brent crude futures gaining more than a percent so far. you have stocks like hess, marathon, conocophillips and transocean among the best performers energy trying to climb back from being the worst performing sector in the first half of the year that does it for "squa"squawk oe street." let's go to the start of "squawk alley. back to you. >> thank you very much good morning it is 8:00 a.m at tesla headquarters. it's 11:00 a.m. on wall street and "squawk alley is live. ♪ ♪

good monday morning. welcome to "squawk alley." we're at post nine john fort is live at one market in san francisco what a morning, guys, for the first day of the second half of the year not only is the dow set a record high, transports setting the first record high since the beginning of march but you have the ten year at 234, above levels that they said were critical. what does this say >> the dow, the transports, financials, it's coming to some degree at the expense of the big cap techs. seems like a first of the month effect june if you remember, june 1st, market was up .75% you have the 2430 in the s&p 500. you closed june below. that it seems like a rush of money. people looking for that rotation to continue into july. >> does it count on a shortened session? >> i it this prices count do we have a majority i don't know exaggerated on some level in

term of the magnitude of the lift especially after the open >> certainly got our attention we'll see if we get any follow-through after the holiday. joining us this morning from palo alto, co-founder roger mcnamy and kate mitchell on the phone. we'll start on our topic roger, you're still in the market second half does your playbook change at all because we crossed into july >> no. carl, i got to believe that this is a time where investors need to make sure they own the stocks they're prepared to own in a correction because i do think that the environment that we're in has so much uncertainty it in and, you know, not kind of little uncertainty but things that could go really wrong and really dramatically change the way we perceive market valuations you know, i don't know when that starts i don't know when it comes i think you want to use the market strength to just make sure that you've got the right

portfolio mix just in case things are not so good going forward. >> you are referring to tech specifically i'm looking at going toll dashgs $924. >> yeah. for me, tech is where i live so i think it's particularly important in tech. ways so incredibly strong through the first six months of the year and at the same time, i think this is really a market wide issue. >> yeah, you know, it's interesting, roger tech at least the big stocks like f.a.n.g. are going down similar to the way they went up which is all as a group and seemingly not because of individual headlines this seems like a flow story where money is moving to and from >> i think that's true and to be clear, i think that we're in an environment where traders dominate and, you know, that means there's no way to tell where the top is and from where i sit, you know, the news flow could have scared the bejesus out of the market any time over the last three -- well, let's say over the last

five months. and the market's been remarkably resilient. the quality of the scary news coming out just getting more intense all the time the market may decide i don't want any more of this for a while. the report you just had about restricting laptops on transatlantic flights, that is sort of thing is just part and parcel to larger program going on that seems designed to restrict our interaction with the rest of the world, our trade with the rest of the world and the market in the long run is going to have to reprice downward if there is less global trade. >> yeah. kate, i wonlder if you go that far. roger calls some of the headlines scary and indeed for every alphabet-eu headline, i mean there are things to worry b on the other hand, i mean, you're looking at microsoft today, for instance, is going to reorganize the sales organization to take more

advantage of cloud do you consider the headlines we got scary? >> well, i think they are in that, you know, technology companies are the leaders when it comes to globalization because our products are ultimately all digital i think some of the concerns we have both with potentially sort of putting up areas from a trade perspective, some of the animosity around the world, i think some of those geopolitical things that are going on i think -- and the questioning of the united states leadership in the conversations, i think filters its way back through some of the tech companies and we've been talking about the f.a.n.g.s for a while. i think san overdue correction i think it is amplified by the general certainty geopolitically and then moving back into what we're seeing happen in the markets. i think it's a retrenchment. i think they'll find footing they are more likely overpriced at the peak. i think they have to find the trough >> that's interesting perspective, guys. we're going to watch the trades obviously as the week goes on.

switching gears a bit. silicon valley's culture is under attack again another investor apologizes for inappropriate behavior towards women. dave mcclure writes in a blog post this weekend, "while i'd like to believe i'm not a bad or evil person, regardless, it's clear that some of my past actions have hurt or offended several women. and i probably deserve to be called a creep." kate, where does this end? when did the episodes end? >> well, that's the right question to x the revelation starting with uber, the story with bianary and now there is a cascade of individuals cominging forward, women susan fowler starting with uber, three women with respect to the venture firm binary and now women standing up and talking about their experience with dave mcclure. unfortunately, one would expect being part of the industry that these things are isolated and

they're not. i think it speaks to -- this just good governance all public companies and large investors out there expect companies to be well governed, well managed, and not be reckless in behavior this is just unacceptable overall. so increasing levels of conversation the conversation started probably two or three years ago within the industry. remember, we have roles within our firms. we also sit on private boards. and as the ceo of box erin leafy said when i put my firm together, i made it diverse because i didn't want to have to remodel my locker room later we need to follow the lead of people like erin and make sure as men and women that we don't let that, you know, become out of control again, that is not good for the health of these companies. it's not the kind of behavior that leads to good growth and solid, you know, opportunities going forward for employees and for shareholders in these companies. so it's quite a conversation there is a lot of solution discussion going on right now between limited partners, venture capitalists and

entrepreneurs. i think you'll see a lot come out in the next week or two. >> roger, it's john fort here in san francisco. how do you kind of impose a culture change in venture capital, an industry that has no central authority? where does accountability come to bear? if somebody at your firm god forbid of the five leaders were engaged in some sort of harassment, how would the others know and how would accountability be brought to bear >> john, the first point i want to make here is that as a man in silicon valley, i'm not the perfect person to, you know, be opining. kate has really got this issue totally nailed and from where i sit, i think an enormous amount of responsibility has to fall on the investors in funds i think they have allowed this behavior to develop. in the early days, massage any

was so prevalent that there weren't very many women. it is only in the last 15 years that women have become numerous enough in the population so that the kind of horrible behavior we're hearing about right now could even happen. there weren't enough women in the old days for the horrible stuff. >> i remember talking to carol barts who has been in the industry for decades about the sort of treatment that she got within the enterprise sales force and then as an executive i mean, this behavior has been around for quite a while >> oh, no, amen. i'm not saying it didn't occur i'm saying the reason you're seeing so much of it now is women have made some progress in silicon valley there are enough of them now that you can get a person up there and get three, four, five people responding. okay, you say to yourself, is that a one off no it turns out as kate said, there is a tremendous amount of this going around i think it search worse today than it was ten years ago. there are a lot more women in the workforce.

and the men are behaving horribly i just think there has not been good governance inside the companies. look at uber it's not like we didn't know this stuff was going on at uber. we've known that stuff is going on practically from the beginning. and it just -- this stuff drives me crazy because i do think that there is this, you know, unwritten rule that people don't talk about stuff like this and women have been victimized by this. i think people of color have been disadvantaged by analogous kinds of problems. it's to my mind silicon valley is -- it has a cultural problem right now that is so severe that almost needs a reset i think it starts with the people who have the money. they just have to say, look, i'm not going to tall rate this i'm going to force withdraw of my money and force the funds to shut down the notion can you take a lesser roll and lody move on, i don't think that cuts it i don't think that will change the behavior more than a $2.7 billion fine on google is going to change the business

practices. this is really deep and screwed up and drives me crazy >> the tragedy of it all, kate and roger, but i'll direct this to kate, the fact it's happening in an area that has been for so long considered to be the sweet spot of our economy when it comes to job growth and innovation and just moving america into the next century of progress >> no, it's pretty -- it's surprising and disappointing and humiliating i think for all of us at the same time. but i again think needs to be called out i think you hit the nail on the head there is an element of cottage industry we're not ge and we're not ibm and we're not intel. we don't have a leader in the venture community. but i will say that the national venture capital association which i've been chair of previously and i helped co-chair a -- or co-found a task force inclusion diversity three years

ago. they did a blog on no harassment really standing up quickly and forcefully this is not tolerated. i joke and roger is right. there are few women in the industry and he said, you know, in terms of an industry i never have to stand in line for the bathroom, what i do even in the military and almost all of wall street has even better numbers, it's 7% to 10% of the investing partners are women as we know from a study harvard josh learner came out with a study that said the owners of those firms are less than 2% women and, of course, all those numbers are a lot more than minority representation. so we have a way to go you wouldn't expect this in where we live. we should ab plbe applying innovations to this problem. i think with investors, roger is right about. that and with all the constituents out there and certainly as many entrepreneurs who are also infuriated about. this we need to put our heads

together and put this behind us. >> john, if i can stick -- if i could just stick one thought in about this issue. we just elected a guy last november who entire campaign was based on abusive behavior towards women and abusive behavior towards almost all people who are out of power. and i think this is a now a national issue i think silicon valley is in the hot seat for really, really good reasons. but it is a national will issue. >> fair point. next guys in what would be the biggest tech ipo since snapchat, drop box looking to hire underwriters mike, interesting. we just came off another big couple of ipos >> certainly one of the maybe half dozen that's been eagerly awaited out. there i guess i wonder exactly how the company will position itself strategically in terms of what the long term place is right here

is cloud storage, you know, enough of a commodity that it's going to be hard to stand out? and what is the business model going to look like down the road it will be interesting to seat financials >> john fort, you have to be looking forward to that one. >> i am. so interesting box, we were just talking about, erin levy went public quite a while ago now and so all the comparisons are going to be between dropbox and box. we have that $10 billion valuation that dropbox got pegged at some years ago i guess it has been now. the question is online storage commoditized as it has been a hot commodity enough i know both of the companies try to pivot and say they're platforms now but to what extent are investors going to believe that we just saw what happened with blue apron sometimes, you know, the stretched embellished story of what a company is really about doesn't get the degree of belief that an ipo needs. >> yeah. roger, kate, thanks for covering

a lot of ground with us to day good to see you as always. kate mitchell and roger mcnamee. to d.c., a top trump adviser pushing to hike taxes on the rich steve bannon is telling colleagues he wants the top income bracket to have a four in front of it. joining us this morning, the national political reporter jonathan swan broke that story jonathan, great to have you on the program at long last welcome. >> thank you >> walk us through if you can a little more of what bannon is thinking may be pivoting around. >> so steve bannon has long believed that the richest income bracket they should be paying for taxes. 40% or higher. he believes that should pay for middle and working class tax cuts this fits into a larger philosophy that steve bannon has which is the future of the republican party is down scale working class middle class voters, naem would have voted for democrats. he sees that as the future of

party. he's very hostile to what he calls the elite davos crowd. he sees the chamber of commerce, republican leadership wing of the party as the past not the future >> jonathan, there are a couple of at least davos crowd in the white house in the form of some economic advisors such as carry cohen. so what do you think is the reception of this idea how is it actually playing within the sort of policy at the white house? >> oh, it's playing terribly it's got, i would put the odds of this happening vanishingly small. he's been pushing this for weeks and weeks and weeks. i got a text message from a senior administration official who said we killed this thing two months ago turns out you didn't because he's still pushing it.

gary cone and steve mnuchin are not going for. this the president is inclined to raising tax onz the rich. he said this publicly. one thing the president does say privately and publicly is that he's always going to look after my people. and by that he means his base. one of his biggest problems with the first round of the health care bill was that it wasn't good for his people. now i think if you are going to bet on this proposal, it's just about as close to dead on arrival as you can possibly be you never know with steve bannon he does still walk into the oval and talk to donald trump you can never be quite certain in terms of predictions with this administration. >> jonathan, is this a reflection of where the influence of steve bannon is relative to others the administration and we mentioned cohen, mnuchin

and what does that say >> i'm not sure it says a whole lot. bannon sees his role in the white house very much as provocative is not the right word that trivializes it. he sees his role as pushing extreme unpopular position that's quite often he knows he's going to lose those fights he sees himself as the torch carrier for the nationalist pop list movement that propelled donald trump into the white house. he is staking out the most hard line position knowing it's going to be overwhelmed by people like gary cohen and steve mnuchin i will .1 thing out. last week we reported this there was a big meeting in the roosevelt room at the white house on monday over steel tariffs. very hot, contentious meeting. now donald trump's entire cabinet with the exception of wilbur ross, the commerce

secretary, think that's it is not a good idea to have impose steel tariffs imports. but donald trump himself is very much inclined to do. this unless something changes, you would say he's poised based on our conversations with sources inside the room that he's poised to put tariffs somewhere in the 20% range on steel. now that is a minority position push by steve bannon, wilbur ross, peter navarro and stephen sm miller you do see that minority get some wins. we saw them get a big win on withdrawing from the paris climate accord so i think it's deaf nuttily based on the issue i don't think you can make sweeping generalizations about the influence of any one staffer in the white house >> all right one last thing, jonathan how serious should we take your note about cohen considering resigning if he concludes the tax reform is dead >> well, i should be very clear

about this these are people who know cohen and speak to him and this is very speculative but they are firmly of the view that once gary cohen realize that's he cannot pass tax reform, he's out of there. that's the only reason he came to washington. he wanted to pass tax reform he doesn't want to pass timid milk toast tax cuts. he wants big transformational tax reform he wants 1986 reagan historic tax reform he doesn't want a little tax cut. that's not why he came to washington >> jonathan, thank you so much good intelligence. jonathan swan. when we come back, the new teslas are set to roll off the line let's see what is on deck for that company dow remains up 187 as companies work to recover from last week's major cyber attack a new report says nuclear plants in the u.s. were targeted unus is s-- unsuccessfully.

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welcome back tesla's first mass market vehicle will set to go into production this friday, two weeks earlier than expected. joining us now on the phone, oppenheimer managing director and senior tesla analyst collin rush collin, good morning >> thanks for having me. >> so the expectations for how quickly production can going to ramp on this model three pretty eye popping.

elan musk saying going from 100 to 1500 and then in december perhaps producing 20,000 per month. now if my math is correct thashgsz going to be three times the rate pretty much that tesla has ever produced a car before how much should investors be concerned about what happens to the stock if they don't hit the targets? >> so i think expectations on the buy side are that will be two to three quarters delayed on those sorts of numbers the fact that company is out putting those numbers in the public realm now just as they begin to start the ramp i think is a level of confidence that we haven't seen from them and quite some time on a ramp like this. so, you know, we have to see how things shake out and how things ramp there is always a surprise with this sort of thing but i think this is a very good day for tesla that they're starting early and feeling confident. >> now the past colin, wall

street is forgiving when they have note met the targets. do you expect that to continue >> yeah. i don't see any reason why it wouldn't continue at this point. company has been making very judicious and aggressive technology investments we think this is about the potential for the vehicles over time and their position in that market and we think they have a great position at thatmarket in this point. there's a lot of work to be done still in technology development. but i think that's what is really driving the stock here is the future of transportation and mobility and tesla's leadership in that transformation >> colin, at what point does -- sorry john do you think it's the long term future of autonomous vehicles that is driving the story? we have elan musk trying to maintain all this short term buzz and he kind of has the showbiz thing of i'm going to let you know on sunday and really it was an as expected month that they were going to start production but maybe it's a little early. so i guess my point, is you

know, it's very big picture stuff. but on the other hand, he keeps trying to keep the balls in the air and keep the stock going meanwhile, it's not today. >> there's been a lot of enthusiasm around the stock. and i think the press management and the public discourse manage. has been around showing progress, not necessarily hitting all of the bench marks but continuing down the road to those this wide open, very different future for transportation and i think that's what, you know, one of the core competent competencies of this organization they really do that well and keep front and sent we are a lot of folks in termsof where the nations are running. >> all right we'll see how quickly they're able to makt cars and pump them out of the assembly line colin rusch from oppenheimer, thank you for joining us companies working to recover from last week's global ransomware attack. plus, a new report confirms that nuclear facilities were targeted

by hackers unsuccessfully. joining us now, steve boyer, chief technology cyber analyst we have the chief executive officer with us from sixtera technologies gentlemen, welcome to both of you. stephen, are we out of the woods yet when it comes to this attack and are we any closer to understanding exactly what the motives were behind it >> well, the motives are very difficult to completely understand i think that for the most part organizations have stabilized. reports are coming in that organizations have really had material impact, a fedex subsit sid airy out of europe caused the halting of trading for a little while under the share for fedex. but for the most part, i think organizations stabilized i think we're going to still understand what the impact is

from a business disruption stand point, from a loss of interlekt you'll property and reputation but i think you have broader issues which is how can these things happen and what can companies do to respond? >> and leo, back at the aspen ideas festival at the end of last week we had somebody from wpp who was trying to clean up after this attack. they were still sweating then. what are the lessons that we've got? what you are telling clients that want to make sure they don't get hit by this sort of thing in the future? what can they do now to better prepare? >> well, that's a common problem for organizations, deciding what technologies to deploy we've seen that legacy cybersecurity tools just aren't getting the job done we have legacy fire walls, legacy network access controls, those are very hard to configure. they're expensive. and they take enormous numbers of people to manage. what we need say leapfrog technology and our advice to companies is software defined

perimeter. we think that is the solution to prevent the type of penetration and to prevent the type of lateral movement that ransomware takes advantage of >> leo, tell me, when you look at what to expect next in this rollout of various challenge that's we've seen, some of them coming from the nsa leaks. is there any expectation of whether we expect this to continue or some level of kaes la escalation >> yeah, i think there very little doubt there is going to get worse. the adversary is getting more sophisticated, more intelligent and more automated if you start with a base of a piece of malware developed by a government agency as well resourced as the nsa, you have a good starting point to develop a tool that is hard to defend against. so i don't think we've seen the last of it this just one skirmish in the

long war in cybersecurity. and we need as i've said earlier and said to you john and several forums, a leapfrog technology. the old stuff isn't working. it b it has been developed for legacy fran structure we need cybersecurity to catch up >> all right stephen -- >> it is also important to note that -- >> go ahead. >> it's important to note that a lot of the vulnerabilities were well understood. these were well understood vulnerability that's had fixes for them organizations could have prevented a lot of the spread and damage by adopting best practices an putting some of the patches or fixes in place. i think one other thing that is interesting here is the initial mallware infection came through a supply chain partner, a ukrainian software vendor where the malware was able to be dropped on the systems which demonstrates a lot of the exposure that comes through the third parties or vendors that needs a lot of scrutiny what is our risk that comes through third parties and what does that mean for us and how do

we manage it >> all right gentlemen, thank you for the insights stephen boyer and leo tedayo. >> let's get over to semma mody with a look at the european close. >> hi, mike. strong gains in europe to start the second half of the year. we're up 1% in france and germany. this after a negative month for europe in june take a look at the euro stock 600 losing as much as 3% on the economic front in europe, euro-zone manufacturing, the purchasing index came in at a 74-month high at 57.4. perhaps that is helping stocks today. the rally in european currencies taking a breathe we are the euro trading at 113 against the u.s. dollar incest jurors trying to parse throughout comments from the ecb president last week. we also have fed meeting minutes on tap this wednesday which could change the direction of the dollar and, therefore, have an impact on the euro-zone currency as well as we talk about currency, take a look at the pound. it's up about 5% against the

green back so far this year as those brexit negotiations continue and taking a look at the first half performance of major european markets, spain leading the bath a 13% gain fueled sbhi m & a in the troubled banking sector. germany and italy outpags the gain as you can see in the uk and france but europe's broader market taking a step back ain terms of relative performancest united states it's up 11% which up is around 8% now here's an interesting story we have been following m & a activity around the world. europe continues to be an attractive place for deal making with m & a activity up 33% compared to the same period last year european targets acting for 28% of worldwide m & a during the first half of 2017 that's the highest percentage since 2014 and one stock story to leave you with, france's total investing $1 billion in iran to develop off shore gas fields in the

gulf making it total's biggest foreign deal since sanctions were lifted on the country shares up about 2% on the day. back to you. >> all right se seema, thank you. >> good morning, everyone. here's what's happening at this hour security is being stepped autopsy this year's wimbledon tennis tournament after the recent terrorist attack in london in addition to searching bag ands using bomb-sniffing dogs, they'll be increasing the number of officers around security lines and they've installed vehicle barriers as well french president mckrone use aid high profile speech before parliament today to order a review of how that country's military responds to evolving threats macron said we need a strong are europe. more americans are taking a step in the right direction. a new government study shows the number after dults who say they are walking as a way to exercise increased between 2005 and 2015. during that time, women who walk

went from 57 to 65% and the number of men walking rose from 54% to 63% and from stepping up to splashing around take a second to say awe at this adorable little baby dolphin. the little girl making her public debut swim ago long side mom at a european aquarium that's the news update this hour back downtown to "squawk alley." mike, back to you. >> all right sue, thank you very much tech stocks coming off a strong first half. but what's on tap for the next x nths we'll get the outlook for the seconder right after the break

quick market check the dow up is 200. you seat nasdaq is negative. it's a real split market right now. you have the old economy cyclicals and financials working very well. and the money is coming out of the tech and the nasdaq. >> i wond whert last time we had this level of disparity between the dow and -- >> the dow up is almost 1%. >> we'll watch that meantime, national focus sont federal budget, some states are facing major financial pressure new jersey currently under a partial shutdown that will have a major impact on fourth of july celebrations kate rogers is at liberty park in new jersey where it has been a busy "newsday" all day hey, kate. >> hey, carl that's right if you're looking to hit a state park or beach this holiday fourth weekend, you're out of luck that's because more than 50

state parks, beaches, historical sites and recreational areas are all currently closed down to the public this after the new jersey state government shutdown at midnight on friday after republican governor chris christie and the democratic led new jersey state assembly failed to strike a budget agreement despite parks being closed though, governor chris christie did find himself on a beach this holiday weekend. that's because the governor has access to a residence at island state park despite the fact it was actually closed down to the public here in new jersey, agencies including new jersey state police, hospitals, new jersey trans it, lottery, casinos and race tracks, they will all remain open. new jersey though is not the only state currently facing a budget crisis. last week at cnbc we did bring you over to illinois they've been struggling. but late last night, house makers proposed a budget they sent that over to the senate the state's first buget in two years. and it included $5 billion worth of tax increases that's been making a lot of news

today. we've got one more shutdown on the horizon for new maine. this came on saturday late at night after governor and lawmakers from both political parties in that state failed to strike yet another agreement so some states services including the main state library and the public lottery system are also shut down all of this drama, what it is going to mean for cnbc's business scott cohen will bring us all that news and action on tuesday july 11th. i'm looking forward to seeing how this plays out john, back to you. look on the bright site, new jersey, at least the bridges are still open this time i can say that because i live in new jersey meanwhile, tech finishing up a strong first half of the year. what's ahead for the next half our josh lipton is here at one market with that story josh >> john, even after that dip in mid june the tech sector was still best performer in the s&p 500. up 16% in the first half apple, facebook, alphabet and amazon all up double digits.

burnstein says bulls do have history on their side. since 2003, tech outperformed in the second half. 11 out of 14 times and every time but one when the sector had outperformed in the first half of the year now the opposite side of that trade sam stoval said that teches valuation as well as expected earnings growth are basically in line with the market as for tech events in the back half, i know something you guys are going to cover very heavily, that apple event which tim cook takes the stage on unveil the new iphone apple stock already up 25% so far this year. helping lead that tech rally in the f.a.n.g. stocks. an apple bull estimates there will soon be more than 300 moilon active iphone that's are two years old. he's betting a the love the iphone fans are going to upgrade to that new device a super cycle that investors are watching from the world's largest public company to the highly valued start-up, ub we are a search

will continue for the new ceo after travis kalaneck resigned following sexual harassment allegations. uber not only searching for a ceo but also a cmo, cfo, coo and general counsel. so they have their handsful there with that executive search it's also in the midst of an ugly legal battle with wamo. a former employee stole secrets related to a autonomous vehicle technology guys, back to you. >> all right, josh, thank you. tech starting the second half in the hole here. down .3% we'll see if that is how the quarter goes as we get going cnbc iq 100 undergoing the rebalance today. outpacing the s&p 500 year to date let's get down to bob pisani for a closer look. >> thanks very much. that's right remind viewers the cnbc is a measure and grouping of companies best leveraging the pro pry takery innovation for

profit several major tech makes it, names, of course, are leading that charge including oracle and microsoft. let's bring in the man behind the index, david martin joining us from melbourne, awe stral gentleman. david, thank you for joining us. the cnbc iq 100. the goal sin ovation i guess the question is how exactly do you measure that? >> well, bob, listen, the core measure is not just what companies are spending money on either an acquiring technology or building in house technology. it's really the companies who are anticipating forward market opportunities and then making sure they have the pro propriet rights anticipation is super pofrnlt you're seeing the index continues find the companies that are actually leading each one of their sectors and more importantly reaching across sectors to make huge market impacts. >> and several tech names of course right at the top, oracle

is essentially tied with number one. what is it about oracle that makes it innovative and tops the iq 100 list? >> we've talked about this a few times now. oracle is doing something that microsoft also really anticipated and that is that it's really realizing the time has come for the cloud to be a usable interactive and highly secure environment so what you have in oracle is a focus on cloud accessibility, interoperable and more importantly security and the more we hear about cybersecurity, the more we hear about those internal issues around how people are managing and interactsing with data, the more oracle is going to be in a very compelling position going forward. and they're right up at the top of the index right now >> and microsoft, microsoft we know is always great intellectual property. that's what they're b but it's a little bit more than that.

they're also right at the very top. >> yeah, microsoft has been, as you know, a major component of how we have seen this innovation index as it's unfolded this year and the fact is that they continue to be responsive and acquire and also build internally the technology that's are addressing business needs. what you're going to see as we've seen the last growth in cybersecurity awareness is that companies that are managing cloud are also understanding that customer, client and the internal data of companies and their client data just really super critical >> okay. david martin, founder of emcam, thank you very much. for more on the iq 100, visit our website. carl, back to you. >> thank you very much stocks rallying on this first trading day of the second half at least if you're in the dow. up 199 nasdaq remains in the red. is this a sign of what's to come [pony neighing]

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tom mcclellan has turned very bullish he says get ready for an explosion hire in the equity market it will explain what he's talking about. plus, former spirit airlines ceo

on the new airport security screenings and he has some great advice on what you should and should not bring to the airport when you're getting on an airplane i love this part of the story. coming up at the top of the hour during our final hour of today's trading. >> all right about g. to see nuthouse rare that we're all together we'll see new a minute watching the markets here. we mentioned the dow up 195. the nasdaq is red. jpm and goldman sachs are leading here in terms of the index. we're really -- jpm a few cents shy of another record. >> yeah. i mean the stock -- the financials are flying. you have treasury yields getting an extra lift today. obviously covering for the last two or three weeks we've been seeing the market test thought idea of a rotation from the winners into the losers, big cap growth stocks into cyclicals and financials you got a little bit of a help on that story line today with the ism. it was all happening in the absence of any kind of evidence of the actual u.s. economy accelerating a little bit again. so now you have. that i think that was an excuse

for yields to go up again. and here you go. you have the kind of merry go round apg. a lot of the losers at the top of the performance list today for energy, gap, retail, stuff like that so we'll see if it's more of a reflex kind of spinning of the script here. >> wednesday is going to be fascinating to watch >> in the meantime, let's get to the cme group and the santelli exchange good morning again, rick >> good morning, carl. there's a real rates race going on anybody not paying attention is missing a huge dynamic that's affecting all markets. first of all, let's get this out of the way everybody should pretty much realize after all these years post crisis watching markets that equity markets and the fixed income markets globally are all copying each other they're all moving pretty much the same they don't have the same yields. they don't have the same interspread relationships necessarily. but they're all moving the same. if we consider to date dow up is a little less than 1%, yes,

rotation, nasdaq is not doing all that w ft-se is up 1% as well the cac up is 1.5% the dax is up 1.25%, italian stock market on fire are there dynamicors economic underpinnings that strong? let's look at some some chartsl we look at an intraday of tens. we clicked off 135 let's look at the two-day boons. this is really important basically today, we came within a whisker, literally, a half, a third of a basis point of 50 basis points it's backed away a little bit. if you look at year-to-date chart, something should jump out at you we haven't settled basically above 48 basis points all year and if you open the chart to the last time we did end the ten-year boon settle above 50 basis points, it was virtually the very beginning of 2016. that was a long time ago let's think about this we had ira harris on today if your hypothesis, as ira's is, that we'll never see a balance

sheet reduction of anytime soon out of mario draghi, then you really do want to stay with stocks and you really do want to notice how rates are going up and yes, it's good for the financials you heard carl talking about jpmorgan listen, when the short end in the u.s. goes up because of the fed, a lot of things float that these banks do now they don't mind. when the entire curve moves up, they're going to throw a party when will it end i can't tell you when it will end. but everyone's going to keep pointing you to europe, because they have the wave mario draghi is in control of the wave machine but no matter what market you're in, they're all going to move aggressively carl and the gang, back to you >> rick, good context on the global nature of this movie. appreciate it. >>cong u wll> mip,e' have more on what's driving this rally "squawk alley" will be right back whoooo.

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kicking off the quarter, stocks rally in this holiday-short tnd trading session, with the markets set to close at 1:00 p.m. eastern time. dow hits an intraday high today, setting their first record since march 1st. we'll see, though, how long this dynamic lasts. it is striking >> it is striking. it seems, you know, it's a little bit forced, obviously people are going to be lacking for what's the next slate of winners, not what's already done well for the first six months. i did point out, march 1st, we had a big burst higher that one day. didn't follow through. same thing with june 1st trailed off after that one-day rally. but i will say, the dow up 90

basis points, almost 1%. normally, you're going to see better than three to one positive breadth so clearly, it's definitely more rotational than it is everything going up the total market share is up half a percent certainly nothing to sneeze at, but the dow is exaggerating that it's interesting, it's all people wanting to say, okay, cyclical financial stocks are the things that maybe have some catch-up to do and oil potentially up for an eighth straight day. >> since the end of '09. >> mark, it's kind of interesting. of the tech stocks, not many are doing much and granted, short trading day, right before a holiday, but the ones that are doing better than average are enterprise stocks that are sometimes harder to get excited about. hp enterprise, hp ink. some of those data center names, all of those up better than half a percent. >> you're basically talking about value stocks here. those are the tech value names, not the kind of high-flying

consumer growth. >> oracle, of course, had nice bounce on earnings not too long ago, giving back a little bit today. interestingly, june was the best month since november for financials and the worst month for tech since november. so in a way, today's a bit of a continuation of what the last few weeks -- >> totally is. and very strong relationship lately, when treasury yields go up, in other words, when bonds sell off, the nasdaq gets sold i joke about the big nasdaq stocks being bond-like stocks, but they've been treated that way by these troiding relationships. >> finally, bespoke has a nice chart of the 13 names that have been up in july. 90% of the time, for the last decade and they include some wynn resorts, amazon, celgene, ibm, tjx. >> july is not often a strong month, it can definitely be mixed. >> yeah, john, you're at one market all week long >> i am all week long. and we're certainly going to be having a lot of discussions about culture out here

this is typically a week where some companies take some time off around the holiday, but good conversations to be had as people reflect, carl >> yeah, well, everybody, enjoy the fourth let's all take gratitude that we live in the best country in the world. let's get over to the "closing bell," which starts now. ♪ baby, you're a firework ♪ come on, show 'em what you're worth ♪ make 'em go, oh, oh, oh ♪ >> we had to >> you have to understand, i listen to tunes. i don't listen to words. so of course, i recognize that song >> this is katy perry singing "firework. happy fourth of july, everybody. well, a day early. don't adjust your televisions. this is the "closing bell" at noon on this monday. because we are going to close in an hour here at the new york stock exchange >> i'm bill griffeth see, this is what it would be like if we anchored "closing bell" on the west coast, right we're three hours earlier. pay attention here, stay with