the ten-year put under pressure yesterday. the dollar which was higher yesterday it looks like now the dollar is against the euro it's up against the yen and down against the pound. brian, thank you for being with us. >> thank you. >> nice to see you. >> i'll see you tomorrow make sure you join us. "squawk on the street" begins now. ♪ welcome to "squawk on the street." i'm david faber with jim cramer. we're live from the new york stock exchange carl quintanilla is in california a look at futures this morning of course, coming off a bad day, at least a yearlong. the stock market you can see we're set up for what appears to

be a higher open last i looked, france cac was down but everything else was up. we'll see if it remains the case it does. 1.5%. >> yes big deal gains. >> ten year note yield well below 3% wow. remember that. >> yeah. >> remember those days remember those great days above 3% 2.84. >> bad that it's over three and bad that it's under three. it's tails the bears win. >> there you see it. and brent, as well we'll get to the road map this morning. it starts with the markets they appear set to rebound you saw the futures pointing to a higher open amid easing fears of that italian ripple effect. plus, the fox shareholders set to vote in the disney deal it's going to be 10th of july.

we're waiting to see what we get from comcast about a month before that date and the roseanne abc cancelling the show after the racist twitter rant from the star what does it mean for disney virtually nothing. how about advertising? some more interesting conversation to stocks this morning they'ri they're looking to rebound here in the u.s., from adp shows the private sector added 178,000 jobs in may. that was slightly below forecast it comes ahead of the government's monthly jobs report we'll get that on friday as we have a change in the calendar. >> that's right. if we have a week from adp, allegedly, then we'll go to 2.75 and the people freaking out when we went to three are going to

freak out. those are people that freak out. they should get out of business. >> wow. >> you don't like them >> no. they don't know jack they insult us. >> we we didn't spend that much time talking about the new tariffs on china and i wonder whether you thought at the end of yesterday, as you sort of wrapping up the day with mad money that had an impact, as well. >> it did. and i watched nxpi and you noticed nxpi, of course, is trying to close the deal with qualcomm the stock reversed in the last half hour. people knew. the 337 alert that the journal sent out to your cell phone, i mean, honestly the $50 billion is not a way we expect to conduct things i was with a major ceo last

night and we both agreed we're kind of in your insanity. >> you get weird headlines and this is all we got from the "wall street journal" at 8:41. china is set to seek to line up countries against u.s. >> yeah. what is that and, you know, 16 minutes ago, president trump tweets there's a lot of good lawyers in the country. he could have picked somebody else i wish he did. this is alluding, obviously, to something or other, you know -- >> alluding to sessions there. >> right but i try to relate the president's view to the stock market but it changes sooften decided it's not relevant. >> okay. what is relevant >> what is relevant is the unbelievable salesforce.com earnings mark said that businesses are amazingly strong and that's not going to be stopped by italy or our president. by the way, most interesting benny not usually thought of

republican caucuses. he wins the va account and the department of agriculture. i think that's kind of the streak of businesses so incredible. >> got it. okay you know, i want to get back to italy, though. for that we want to get back to michelle continued political uncertainty there. things seem to be easing a bit when it comes to the markets, michelle >> reporter: for sure. two things happened in the last 12 hours that lead to the yeedsing of concerns first, there was a key italian politician who said, actually, maybe we won't hold another election in july so that would be easing of uncertainty there. whether they have to go through that again the italian government borrowed money this morning the auction went off okay. let's see the impact on the markets which have been tremendous this morning. there's been a strong rally in italian debt take a look. here is the italian two year you see the price up there

that's a gain in the green of more than one point on the two year that pushed the yield back below 2% a huge move. if you take a look at what is happening with the ten year, you've seen a significant point gain there you see a gain of more than a point. that's in the green and the yield is back below 3% so that is good news and we've seen effects in spanish yields and portugal yields you'll see the same pattern there. the yields are falling as people are less concerned the euro has improved a couple of days ago. a dollar would have bought you one year today it buys you 1.16 a penny doesn't sound like a lot but in the currency markets a one-penny move is a big deal germany and france were the safe havens yesterday we see them selling off today so the yields are rising. i mentioned the automobile accident -- auction the italian government had to borrow money today and roll over debt the good news, investors bought it they had no issue with it.

why did they buy it? because they're getting paid a lot more in interest than they were just back in april. five year bond the yield today 2.3% what was it in april .5%. the ten year date yield at 3%. back in april italy had to pay 1.7% so there has been some pretty permanent damage to italy's fiscal picture, at this point. every time they roll over debt, guys, they have to pay more in interest rates they have a lot of wiggle room and if the political prices calm down, they'll be fine. it that's what we're watching for. what ask going to happen with italian yields and will it spread you can see the effect it has on european bonds what does it mean for banks and the ripple effect, as we saw yesterday, can happen over here. jim, i want to remind you of something. 2011 i saw you call the peak in italian yields twice it was amazing i thought it was a ballsy move at the time. you were spot on >>well, actually, it was my

nephew, cliff maison who came up with the plan that an drag gi did. you have to buy the italian all in he came up with a 20-page why paper about why italy is peaking. it made me look like a genius. >> it did. >> so, thank you >> thank you, michelle we'll check in with you. bunds the are amazing. the moves themselves. >> don't forget on july 25th, 2011 our yield was at 3% when the s&p chose to say that we weren't solvent, okay we dropped right to 2.2. i mean, you get that was in a month time you get sudden moves as soon as solvent si is involved it's interesting that the quality of treasuries when they're downgraded. >> yeah. and to some degree, italy is

quality when they're downgraded. but remember it is very hard to buy a government's bonds when you have no government and they have no functioning government and i think people are very worried there was no functioning government right before moouse - mussolini came in. that's been the concern. >> that would be bad. >> yeah, it would. let's move on to news this morning involving, of course, the potential fight between our parent company comcast and disney for the large part of fox that disney currently has a deal to buy shareholders of fox we've been informed this morning by that company will be voting at a special meeting on the 10 of july you may recall, this last week,

i think, when i reported we would soon hear from fox setting a date it was likely to be early to mid july you've got it. july 10th. why is that important? well, it does give us some time period in which we can assume comcast will come with what will be a higher bid than the disney bid and also a bid with more in the way of deal protections in terms of trying to address anti-trust scrutiny. that will come most likely soon after we hear from judge leon and the at&t time warner case. that's scheduled for june 12th hence a relatively short time line potentially in which the fox board will have to make decisions about the likelihood that comcast bid should have come, and whatever it is, could lead to a proposal that is higher than what they currently have from disney carl is in california, and i

know you heard from james murdoch, of course, of the murdoch family along with that board at fox that said, hey, we like this disney deal. that's why they went with it in the first place. >> indeed, david we are at one of the preimminent tech and media conferences this year the headlines were flying last night. talking about immigration and lessons of anti-trust. snap chat about the redesign and life as a public company but one of the headline was james murdoch. he was asked about disney, fox, and comcast. take a listen. >> essentially we had an agreement with disney and we have an agreement with disney which we find attractive for the shareholders all stock agreement. we think from a regulatory perspective, and we thought in december that you have a higher certainty of close

you weigh up the factors that's what we thought was the right thing to do. whether or not the board is asked to consider is a different offer from somebody else, in the future we'll deal with that. >> we'll hear more from murdoch later on this morning. he covered a wide range of topics including the firing of roseanne at abc, sexual harassment, and so forth the other big theme is taking jabs at facebook murdoch questioned the social ad model overall. evan spiegel did say he wished they copied more of their privacy protections than social ideas. in the end sheryl sandburg took the stage. >> it's a platform where so many people share they do the goods and the bad. it's not that we're going to prevent all of it. we'll never say that, but we can get better we can be more transparent

we can put a lot more resources and a lot more technology and automation and people. we're working on being more transparent. we think that is a huge part of the answer. >> so that kicked off last night. it's another big day today randall stephenson we'll hear from on stage today. alibaba, uber, spotify and as the topics are plenty to talk about regarding social, innovation, and tech, obviously. roseanne is a hot topic here and m & a. it brings a new personality every year we're getting a sense of what this is going to be. >> carl, last night the ceo of salesforce told me what mattered was customer and truth and he did intimate he felt that facebook believed that truth is just a by-product.

and given it's a by-product therefore it's not front and center is there still below back about whether facebook treats the customers the correct way versus just by-product? >> talking about snapchat or spotify? >> facebook. he was critical of facebook last night. mark saying that he feels facebook did not represent the truth. >> oh, yeah. he's used the tobacco analog for awhile now. >> yeah. >> he's been almost setting the pace for criticism of facebook it's coming from all angles, i think. whether it's lack of original ideas, as spiegel might argue at snap facebook keeps calling back on the human nature you take the good with the bad. and gdpr and we'll hear more about regulation today are there constructs and frameworks you can put in place

to real strict the worst of human impulses we'll see. >> yeah. it's really big still. >> sure. >> we may not use it wefrd the stock price. but silicon valley doesn't like it. >> carl, we'll check in with you in a little bit. carl quintanilla, of course, in californ california. >> let's get this show on the road by the way, speaking of this show, when we return the fall out from abc's cancellation of rosanne barr's sitcom because of her racist tweet what it means for advertisers. also, let's give you another look at futures here of course, last time we looked we were set up for a higher open that's the case. we have more "squawk on the street" live when we come back finally. hey ron! they're finally taking down

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roseanne barr is apologizing for a racist tweet which resulted in her sitcom being cancelled by abc last night she tweeted "don't feel sorry for me, guys. i want to apologize to the hundreds of people and wonderful

writers and talented actors who lost their job on my show due to my stupid tweet. barr issued a statement which was a apology to valerie jarret, who was the subject of that racist tweet there's no impact here on disney in other words, that we would talk about in a financial sense. you're talking about 45 million in ad revenues yesterday, it was yes, it was a hit show abc is minimal to the performance of disney. "roseanne" wasn't that important but not credibly important to abc. some people wanted to point to the decline of disney because of this that's not the way it works. >> tell me how it works. periodically there's a huge hit show and, therefore, a network has momentum momentum attracts up-front dollars. >> cbs you want to do that. >> yeah. that's where i was going.

>> comcast and nbc hit show. how much is it moving the needle certainly helpful. better than not. but at abc what are we talking about when it comes to disney time and time again? >> espn. >> of course and now the fox deal and the ott products and the movie studio do we ever really talk about abc? >> no. but there was a time when cap cities merged that's all i cared about. >> remember when they had that show "who wants to be a millionaire." remember that? >> yeah. that was a needle mover. >> yeah. then they went to basically having it on every hour. >> do you have a lifeline. were you one >> no. you were you show up at everything. i did speak to bob iger yesterday. >> really? did you have a daily call with

him? >> he said it was a no brainer i'm paraphrasing what he did say is there's no debate you have do the morally right thing here there's no doubt in his mind where it was going from the minute he heard it. >> it's good to know interesting with the starbucks teaching for their employees on that same day and you see disney make this move no tolerance. >> when i read these articles that said it was for show that starbucks did that i think that -- i don't think they understand that when you close your chain, okay that's not for show. >> right. >> that's an attempt anhonest attempt to try to change whatever behavior may be wrong. >> yeah. a mad dash ready >> yeah. >> work on it. opening bell about eight and a

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that was the last look at futures but this is before the opening bell maybe it's not we'll do it again after the mad dash i don't know stay tuned to find out we have a mad dash cominupg

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printers had growth. they took a lot of share business is 4.6% and i've got to tell you, david. average selling price for pc is up they're developing a 3-d business that is being used by forecast 3-d this company turned out to be the one you wanted not hp it's not a decent year but i guess they're saying since the split itself. >> yeah. it's remarkable. cathy is retiring as ceo. >> yeah. >> top five cfo. >> yeah. interesting because she was in tandem with meg whitman you don't often see which is two women running a company. >> we ought to salute them on the call everyone was complimentary. she's been the force the whole way. >> yes. >> i got the privilege of meeting her the last time i was

out and just congratulations to her for a very, very substantiative career. >> any read through for hpq given the strength >> for the whole company >> and/or other in the industry? >> yes i think there's a definitive read through to intel. >> okay. >> and intel is much -- 54% pc exposure brian continues, david, to be right place. right time whether it's the amazing acquisition which, by the way, jerusalem is self-driving cars all over the place or data center where he's a real force. the only thing he's not a force in is gaming and advanced mikcro. >> yes all right. we hear the applause as we count

down the opening bell. anything in terms of key to this market, jim? >> dick's sporting goods. >> no? >> yes >> dick's sporting goods >> yes [ opening bell ] >> under armour, david sporting goods in general, david. inventories at dick's. the stock should be up $7. >> let me tell everybody who rang the opening bell. an independent exploration company. at the nasdaq ca technologies. >> they were on "squawkbox." >> can't get things by us. the key to the market is dick's sporting goods said mr. cramer i have no idea why that stock is looking higher, right? >> look, i have to tell you that

this is another one of those fickle nature. for instance, i liked target very much. and target was universally but it added to bank of america merrill lynch's list target's quarter was fabulous. they hated target. dick's barely great. they loved dick's. kohls they hated kohls and then they loved kohls. >> okay. >> david, the market is -- >> there's a theme they hate walmart. >> the theme is they don't know what the heck they're doing. >> i see. >> tjx was at 86 then 84 and then 88. all in the same day. the only consistency is jeff ganette and macy's they said the 7% dividend wasn't

safe and he was buying back debt and making the stores better he has swat teams of fashion my daughter has a friend on one of the s.w.a.t. teams of fashion. people don't understand what he's doing the analysts never realized that, you know, maybe they ought to go to the stores. stop looking at the darn spread sheet and start going to the score -- stores. i rest my case. >> okay. retail you've wanted to talk a lot about retail lately. >> they reported if this was industrials, i would talk about industrials. >> dick's that move up in dick's stock price is pretty extraordinary. >> a big short position. people feel they screw it up again. watch under armour remember how much people hated kevin because my wife challenged him at the super bowl and said if you're that good, come on my husband's show. >> she gets the booking on that

one. >> yeah. she doesn't do the morning show, she didn't book him this is whe she takes the dog for a walk the dog's name is invidia. >> you were discussing the fact they're not engaging it leads you to think about invidia and amd. >> they're both so good. amd is breaking out definitively she has chips that come out that are unbelievable for gaming and data center chips. she's making amd into the company that i always thought it could be one day she's unherald except for here it went to 14 and back to 10. >> you didn't do a mad dash on

micron you like to do that. >> yeah. >> it is on a bit of a tear. >> thanks for nothing. >> you're welcome. >> seven times earnings. we put it easily at 74.4 it's going in a straight line. >> why >> okay. if you were on the hp call last night. >> yes >> you heard, that of course it's going up. it's a matter. d rams so we know, far more intellectual fire power than they used to be. you can't easily put up a plant like it's corrugated paper anymore. >> more engineering that goes into it. >> yeah. >> i asked for you for a rethrow on hpq you gave me intel. >> yeah. sister -- it's straight line to 73. >> could have bought it a week ago. >> i mention it every day. that's my favorite of the group. watch the cloud kings, david the cloud kings.

surface down new real lick wlic is on mad mo tonight. these are companies that are to the cloud. >> yeah. >> if it weren't caught up in the dell thing. >> and it is. >> it might be the best. and adobe mark is going up against adobe with the acquisition they are butting heads the world is colliding they're not just talking about emanu emanuel. >> or "seinfeld" when george's world was colliding. i want to take a look at sales force. it's up over 4%. he was on with you last night on "mad money." >> do you have a clip? we do. he was talking about the broader economy. take a listen. >> really see what is happening to the market today as a huge investment by our customers. the economy is really ripping and you can see that customers

are going through this massive digital transformation, and every digital transformation starts and ends with the customer. >> he's, you know, he keeps talking about the records they're setting in terms of the revenues i did take a look through the transcript of the conference call. >> you liked it? >> yeah. >> you liked it all the way. >> $8 i remember when his mom said you were on it the whole way. and i said, well, because your son is a smart guy she basically admitted i was smarter. >> than mark >> yeah. basically. if he was more like me, you know, he could have done well. just like my father said if you're more like bennieoff think about what you would have. now, david, here is what you need to know this was a quarter that had big federal business. >> okay. >> the va.

9 million lives in the va health system the agricultural department, david, that's $180 billion department the u.s. government feels they have to get more in touch with their customers so they bring in the mighty sales force. >> right. >> and, of course, all the high-end retail. >> does it seem to be pointing -- and i don't want to put words in his mouth, i just heard that bite. he seemed to be saying capital spending is going up across the board. >> synchronized global economic expansion. he just come back from japan and europe, and business in both of these places is incredibly strong it flies right in the face of all this down beat stuff that i'm faced with every day every day i'm faced with it. and he was a ray of light. >> a bright shining light. >> a ray of light. and the sales force tower, it's meant to do going with one one one. he's giving away a lot of money.

>> yes. >> once i met a golden state warrior, i won't mention it, i said what do you think about him? he gives away a lot of money that should be legacy. gives away a lot of money. >> we'll get to the broader market of course, we have the s&p up .6% certainly a reversal seema moddy has more >> reporter: we might be on the verge of a relief rally today. markets rebounding after yesterday's steep sell-off with the dow up about 162 points. now keep in mind asia did close lower but europe opening higher. encouraging news out of italy. the two populace parties are avoiding a fresh election. because of the recent political uncertainty in italy and a string of soft data out of europe in the past couple of weeks, jpmorgan pushed back the ecb rate hike expectations from march of 2019 to june of 2019.

there you go the banks higher today the other big discussion on the floor is the course of a u.s. ten-year yield a recent dip caught many traders by surprise. it's allowed rate sensitive sectors like real estate to outperform a lot of people are saying if the data on inflation and jobs over the next two days is strong, you could see the yield back above 3% on the ten-year note let's talk technology it continues to farewell in the face of these global risks worth noting that microsoft unseated alphabet as the third most valuable company. $749 in market cap putting it behind apple and amazon. google first passed microsoft six years ago. microsoft making a nice comeback up 40% in the past 12 months lastly dick's sporting goods sharply higher today the ceo saying strength in private brands and a leaner product assortment lead to a healthier business that stock up more than 20%. big picture here the dow is

still lower for the year, jim. but just one more day in may major averages on pace for their best monthly performances since january. david, back to you. >> okay. thank you. >> it's a lovely month of may. >> it is still may a lot of people thought they were lightweights. i'm not going there. >> you like learner. >> yeah. it was hammerstein that is a lightweight. >> that's not true. >> you're right. a faber report this morning. >> what? >> yeah. why not. in honor of you. allergon. >> they're supposed to talk about something big. >> brent saunder is addressing something big. people familiar with the situation, jim, tell me they're going to announce the conclusion of that strategic review of course there's been a lot of speculation among the analyst population what they would choose to do i can tell you from what i understand, these are going to be the announcements that will be forthcoming from mr. saunders

shortly, which is company is going to put the women's health business up for sale and the infectious disease business up for sale and refocus or continue to focus on four key areas. medicals medical, gastro will continue to be the focus there had been some talk among the analyst community, perhaps the company would consider putting up for sale the g.i. business it won't be the case. >> that's disappointing. i knew about the women's health ahead of time. >> yeah. i was looking back at a piece recently they said women's health could be valued as high as $4 billion. infectious diseases even though it does $350 million in revenue. somehow they got to a $2 million number just to give you a sense, they are moving towards a sale process. in fact, my understanding is data rooms have been opened for

perspective buyers all though you don't necessarily expect to see something in the nearest term one of them, in women's health, they do have a new drug for treating uterine fiberoids proceeds most likely going to be the used to pay down some debt and buy backs to offset possible dilution i don't know how they got to the number. >> it's a little surprise. >> i know. $340 million in sales. could secure $2 billion given the assets this was a report from about month ago. i'm curious to your thoughts they had a potentially life changing drug for depression in phase three that could be the immediate treatment for suicide, for example. they're waiting on that. that's expected out. phase three, i think later this

year. >> on the cover of time magazine last year and it's for real. >> yep. >>well, also they have a remarkable ctrp pill that could be stop migraines after five hours. there's 12 million people that suffer from migraines. it could be a monster big thing. the depression drug is the first new course for depression. >> it's a new class of drugs. >> yeah. >> it treats something else. >> johnson & johnson has a drug coming out which is anti-suicide designed remember alex korski focussed on returning vets sop there so there's a lot of great work being done on suicide. particularly as it deals with post-traumatic stress. >> i'm so glad it's a bad disease but no one

talks about it. >> we'll hear from mr. saunders about 20 or so minutes from now. >> that was really good. >> thank you. >> stocks not doing much of anything. >> all right let's forget about stocks for a minute and talk about bonds and head to rick santelli in chicago. rick >> reporter: good morning, david. it's a bit of a landscape today in the entire global rate. it seems rates reversed. at least some of them in different directions if you look at our two day of tens, we're coming back off yesterday's low yields open the chart up to april, it was a pretty good ride remember our markets responded by yields moving lower as did the next market the two-day of bunds the high quality sovereign curve the german curve and the european union and on the two-day you can clearly see that a benchmark ten year for the european union, one of the world's largest economies had a range of 18 to 35 yesterday. that should make anybody

perspire a little bit. all the transpi if you look at tens minus bunds starting on may 1st, you can see that here it sits under 250 basis points, which itself is wide yesterday and today it traded around 263 basis points in difference our high close is 259. even though it has settled back, it reminds us that our policy and our markets, to some extent, are subservient and how it affects the policies in the eu if you look at the two year for a two-day chart on the italian two, they had an auction today it didn't go too badly you can see we're down to around 1.70 as bad as it may have been yesterday with the two year,

open the chart up to five years, you see in november of 2011, this thing was close to 7.68 the flight to safety currency easing back a bit. david and jim, back to you. >> thank you, rick santelli. tomorrow on "squawk on the street," we'll have an exclusive with dara khosrowshahi. >> that's great. it's going to be a great interview. >> looking forward to hearing from him we'll be right back.

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i'm carl quintanilla we heard from a lot of ceos on day one of the conference last night including snapchat who talked about going public. the ongoing battle with facebook and the app redesign which was the source of so much frustration for some investors and criticism. take a listen. >> after our q4 earnings our stock was up like 50% in one day. they could not comprehend why we'd totally change our product and redesign the service after that amazing blockbuster earnings so, for me, that was a really great lesson because, to me, it teaches the importance of having that long-term conviction, even though it's going to surprise people, even though it will make people feel uncomfortable, despite trying to prepare our community but also the investor community and our team for the disruption that we thought would come with the redesign it's steal really had an impact. >> jim and david, it just takes us right back to the ongoing conversation we had about the frustrations that some ceos have

with public life, whether it's ron shake or elon musk and the degree to which that changes your calculus on long-term vision versus short-term results. that was one of the headlines from last night. it's going to be another very busy day senator mark warner will be at the conference talking about tech regulation. and the annual state of the internet presentation with hundreds of slides of ongoing trends brian chesskey of airbnb, spotify and tomorrow we'll hear from dara khosrowshahi the ongoing atle to expand in the uk self-driving tests in arizona and their new valuation which got some eyebrows lifted earlier in the week, guys. >> what a lineup, carl >> uber and airbnb alone >> you can never get them on tv. it's going to be monster

the fact that spiegel doesn't have real shareholders, right? didn't even matter he still felt bad about it >> they don't vote -- i wonder if you can vote whether they throw him out. >> he's got all the votes. >> i wonder if that changes the way you do business. even though you have incredibly horrible failures like he just had. >> it's absolutely true. and, i mean, the other big story, of course, under lying all of that is the degree to which he has managed to change the culture. remember the conversations we were having about uber a year ago? much different tone and we'll talk about sort of the challenge of how do you do that? where do you begin where do you start given all the negative publicity they've had over the past couple of years. >> all right, carl rlntn.be paying close atteio ca kwints nquintanilla. up next, stop trading with jim.

what did you have in mind? i don't know. $4.95 per trade? uhhh and i was wondering if your brokerage offers some sort of guarantee? guarantee? where we can get our fees and commissions back if we're not happy. so can you offer me what schwab is offering? what's with all the questions? ask your broker if they're offering $4.95 online equity trades and a satisfaction guarantee. if you don't like their answer, ask again at schwab. when it might be time to buy or sell? with fidelity's real-time analytics, you'll get clear, actionable alerts about potential investment opportunities in real time. fidelity. open an account today.

let's get to stop trading with jim >> lost in the shuffle of all the cloud kings moving up, a remarkably good semiconductor

company should be up much more reported a great quarter once again, this confluence, drams, internet of things, cloud. just unstoppable people are saying, maybe this is still bigger than we thought maybe it's an important clue in the broad puzzle >> what do we have on "mad" tonight? >> we have new relic they make sure your site works stock up 71% new relic is an anogram of lew cirne. it's going to be a terrific holiday season pbh, tommy hilfiger, just a monster, monster good and, by the way, remember -- >> i do. >> calvin klein. i have some calvin kleins on

now. they're very expensive if i showed you them, you'd probably wonder why i paid so much >> yeah, i would i felt like they changed the composition of those i don't know the good cotton. >> same as always, david >> have a good day >> yeah. >> well, you, too. something we didn't talk about, cbs and -- >> no, we didn't a day without cbs. >> when am i going to say we're staying. >> it never ends we've got to go. italy's political drama. what is at stake for the markets, despite what's been a rebound f isoarn the first half hour of trading. keep it here is as easy as dates, deals, done! simply enter your destination and dates... and see all the hotels for your stay! tripadvisor searches over 200 booking sites... to show you the lowest prices... so you can get the best deal on the right hotel for you. dates, deals, done!

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♪ good morning and welcome back to "squawk on the street. i'm sara eisen here with david faber live at post 9 from the new york stock exchange. carl quintanilla is with us from the code conference in rancho pallose verdes, california we are seeing a nice bounceback. the dow up 109 points. not enough to make up for yesterday's slide but a sigh of

relief after the big sell-off we saw. s&p up 0.5%. russell 2000 back at a record high strength in the small caps continues. and financials and energy which got slammed yesterday are coming back strong. our road map begins with the market steadying after yesterday's rough ride the drama in italy is far from over we'll bring you up to speed at the latest and where to put your money to work. >> fox sets a date shareholders know when they'll vote on that deal with disney. will our parent company comcast make it an interesting vote because of another offer and the biggest names in tech speaking out at the code conference hitting everything from facebook's transparency, data protection and a lot more we've got the latest >> we'll see you in a moment, carl first, the political turmoil in italy sparking a global sell-off yesterday. today, stabilization but the situation there far from resolved michelle caruso-cabrera joining us with the latest on what we

need to know >> we've seen a sharp reversal in italian bonds, sara one example, the two-year, for example, has seen a price gain of more than one point you can see it in the green. that's pushed the yield back below 2% for the italian two-year what's happened in the last 12 hours? two key things an important italian politician said maybe there will not be another election in july that brought a lot of pressure and a lot of uncertainty out of the market the italian government borrowed money this morning and it went off just fine, albeit at higher interest rates that helped calm the markets and may be a reflection of what was politically happening. maybe there won't be an election we talk about the higher yields, it's significant because when italy borrowed money this morning, their yields were much higher than just a few months ago. 2.3% versus 0.5% yields were at -- back in april,

1.7% that's a permanent increase in the borrowing costs they have to face for all the money they borrowed today and when you say the situation is far from over, that's exactly where we have to look every time what's going to happen with italian bonds? investors all over the world are worried about what's going to happen with the political crisis in italy and they are charging italy much more interest for their borrowing. and if this doesn't get cleared up soon, we could see that rate keep increasing. the worst moments in 2011 went to 7%, 8% or it could fall back again into a more -- i won't say normal but from where it is right now. back to you. >> we want to have a bigger conversation about some of the market risks investors need to pay attention to wilford frost has been following this story and the question is, what now? they are trying to cobble together a government but what's far from a certainty >> that's really down to the president if he wants that to be

happening. he's realized what he did over the weekend has made markets very nervous and is trying to decide whether he can dial that back the prospect of potentially having another round of elections and with that, would it mean the two populist parties would do even better and, therefore, possibly form a coalition with a majority between themselves why have we seen things ease a little bit over the last 12 to 24 hours because of that risk of an election -- second election falling a little bit in the polls, the populist parties are doing better than they were in march march was an unprecedented success for them if we do manage to peg together a government without elections it means the populist governments won't make extra gains than what they did in march. >> there are some important key similarities and differences between greece, which were, of course, all having flashbacks to and what's happening in italy. for instance, you worry about things like bank runs. no evidence of that. you worry about things like getting locked out of the market

and the bond auction not happening at the moment. what else have you been looking at on that front >> what we have to ask ultimately, sara, is, whoever ends up running the italian government, how do they want to run it do they want to keep fiscal plans in place do they want to make sure that they're not spending too much money so that they freak out the markets? the key question is all of these italian politicians that saw what happened in the last 48 hours, what are they thinking right now? are they thinking screw the bond markets, or are they thinking, oh, my gosh, i have to control myself because if we don't, then we'll have some kind drof dramai sell-off you think of james carville saying, i have to worry about these bond vigilantes? in greece the finance minister there didn't care and he made clear to the world he didn't care i don't know what these italian politicians think right now based on what they've seen

they have been temporarily constrained by the bond markets. will they be permanently contrained by the bond markets or are they going to try to, you know, do some kind of face-off here >> i would say this situation is far more similar to a brexit risk than a greece risk for markets. certainly the moves we've seen in the last week sore so we're not talking about whether italy is going to honor its interest rate payments which was a big fear around greece once we had the election results, there were some fears about this government coming together being less fiscally disciplined than perhaps the previous government, but the big leg up we saw over the weekend was based on the possibility of more elections with two populists come to power and the possibility of an anti-euro finance minister which brings in a more similar comparison to the brexit fear of whether it would bring down a single currency no one's base case for that leg up we saw on monday, tuesday, in terms of riskiness of italian bonds is more based on that risk

than not honoring -- >> i would concur except there was talk of telling the ecb, those $250 billion in bonds of ours you own, we want you to forgirlfriend this for fo forgive those for us there was talk of getting out of the debt the ecb holds >> on that note, i was -- we are getting closer to the end of qe. that is coming -- >> that was potentially coming that was one of the big factors. whether you're talking about in europe or in the u.s., the rate hikes for all these central banks may well be pushed back. that's particularly a factor in europe if you're looking at the leg up in bonds which we have seen in the likes of greece, portugal. nothing like what we saw in italy. does that mean the ecb can no longer move ahead with its tightening plans even more pronounced than need for the interest rate hikes so

profitable at the moment and that's why you see unicredit drop 10% yesterday because people are thinking, we're really kicking the can down the credit for when they'll make decent returns >> certainly that may be good news for the markets which are addicted to qe and love the stimulus but there's a difference between the -- the ecb is fairly limited on what it can do in terms of extra tools if this crisis does flare up it's already been buying boatloads of italian debt. >> the percentage of total issuance that the ecb has bought in its qe process is far higher than for japan and for the u.s so they don't have any tools left to reignite something like this if they need to i don't think there's the political will in germany. merkel doesn't have the power to hold back the afd or freedom party who are more right leaning and don't want the bailouts. she doesn't have the power to do that if we got to disaster scenario, the disaster would be severe we're not there yet. >> thank you

michelle, see you a bit later. joining us, former institute of international finance ceo charles delara, chairman of the americas at the partners group you'll recall he was the lead negotiator for the banks and the private creditors during the greek debt restructuring you must be having deja vu here as well. >> i am, sara. this does take me back to the summer and fall of 2011 when both italy and greece were under tremendous pressure from the markets. and both, interestingly enough, ended up with technocratic governments for a while. the monte government in italy. both help stabilize the environment but clearly what we're seeing now again is an even more serious set of pressures on the underlying structural integrity of the eurozone i mean, let's look at what -- >> when you say even more serious, are you referring to the sheer size of italy's economy and its bond market and

the stresses that the economy faces as a result of being inside the euro? >> i am, but i'm also referring to the fact that the euro, we're 20 years into the euro or almost 20 years january of 1999 it was launched. and now there's a fundamental question that wasn't quite as evident in 2008 when we had the global financial crisis, nor in 2011 when greece got into serious trouble. can the euro be a functional currency for countries such as italy and greece what has happened in the last decade italy's economy has shrunk 5% over the entire decade rather than grown no recovery in effect. no net recovery in effect from the global financial crisis. greece's economy has shrunk 25%. unemployment in italy is still around 11% which is higher than the peak of unemployment in the united states during the crisis which was around 10%

so what i guess i'm saying is that the fundamental fault line of europe and the eurozone is much more evidence today than it was during the greek crisis or during the global financial crisis >> having said that, charles, you're talking about really big picture things that europe is going to have to reconcile and what could happen as it happened with greece is the germans can come in and impose their discipline and sort of take charge and the ecb can as well and for the markets, things will be stable. instead of something acute like a potential restructuring. is that basically what's going to happen here >> well, it certainly is possible but ultimately germany has to answer one fundamental question regarding the eurozone in my view, sara they have an 8% account surplus. unemployment in germany is around 4%. are they willing to ever consider sharing their credit worthiness, sharing the stability of their balance sheet with the rest of europe? are the countries are the north,

netherlands and others as well willing to contemplate it? if they don't, eventually it seems italy and greece have to face a very difficult choice of whether or not they are willing to continue in this world where growth seems never around the corner for them. and where unemployment has reached extraordinary levels and is only receding very, very slowly youth unemployment at 40%. greece has lost 10% -- >> these were always the problems, charles. >> greece has lost 10% of its population over the last decade. i guess what i'm saying is i think these problems are more acute. no, i don't see a reckoning at the moment, but i think that unless there is an awakening in northern europe that the reckoning now seems much more likely than ever before and we'll continue to see whether or not this current government between the -- or the current

prospect of a government coalition comes together or not. these problems are not going away populism is much stronger than it was a decade ago. the forces, i think, of discontent are much greater. when you combine this with the immigration problems which didn't exist in force so powerfully during the global financial crisis, i think you have got an extraordinarily difficult situation facing europe for the next number of years. >> well, we've been hearing that for a long time, charles certainly in 2011 those cries were loud and strong and here we are seven years later. what is an awakening look like in your opinion? what does it actually mean everybody suddenly wakes up with fiscal rectitude on their mind >> no, i think an awakening is what you're seeing simulated by macron an awakening of northern europe has to be a recognition that in the end, the euro only works if it works for the full range of

countries part of the eurozone it simply will not work as a common currency. no matter the arguments for it no matter the price stability it has achieved it simply will not work for the full range of euro countries if it only economically benefits the north. >> if the political will is there, they can get through it i think now that's a big question mark with what's happening in places like italy charg charles, thank you for weighing in always good to have you voice, especially on euro debt crises charles dallara. shares of microsoft are trading at all-time highs. this goes back to the company's initial public offering in 1986. brad smith taking the stage at the code conference last night that's where we find carl quintanilla. >> hey, david, yeah. microsoft up 5% for the month. best month since january and we talked about the ceos we heard from last night.

james murdoch and sheryl sandberg but he made comments about the market the progress in cloud they're making immigration and the degree to which they'll help champion that, at least in technology in this country and then lessons learned from past chapters in antitrust and specifically the things that get lost in the daily operation of a company when you're trying to fight against regulatory pressure take a listen to this. >> you get a lot of different perspectives on where did we succeed? where did we fail and why in the wake of the antitrust issues my own personal view having been in the middle of it for so long was the single greatest cost was the distraction. having a bill gates, a steve ballmer, great engineering leaders at our company spending so much time figuring out how to prepare for a deposition how to defend themselves on the witness stand.

how to implement this, that or the other thing. and you look at the early 2000s. we missed search >> kara gave him a hard time for missing mobile phones. we're going to hear a lot more about antitrust today when randall stevenson of at&t takes the stage along with airbnb and we'll bring you all that during the course of the day and the sound, highlights of tomorrow morning. but i thought a candid assessment of microsoft's past and the things that got lost in the mix while they were fighting that >> yeah, i agree and so many things now righted under mr. nadella with the focus on cloud carl, thank you. we'll check in with carl from

ranchos palos verde. it immediately invokes -- makes me feel good when we come back, oil prices have been hitting the pause button this after what was a big drop yesterday. but, of course, what has been a significant rise overall in oil prices over the last few months. we'll talk to a former top executive at saudi aramco. he'll weigh in withous the big swings plus, dick's sporting goods on pace for its second best day ever that's right since it went public >> big short squeeze >> 22% we'll have a round-up of the retailers as well. this is on earnings here you see it there and a molot re squawk on the street right after this. ♪ ♪ don't skip that office meeting for a board meeting without it. don't keep it real... keep it going... or simply keep it in the family without it. and don't turn that business trip, into an overdue family trip without it. ♪ ♪

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brent losing 6% since the end of the last week jackie deangelis joins us with more of what's going on. >> prices are rebounding a little today this morning with wti back over 67 part of the conversation yesterday amongst traders was, is this a buying opportunity, and perhaps it is. the factors worrying the market is the loss of iran's barrels and problems in venezuela. those are not immediate problems opec is going to address them but not until later next month so in terms of supply and demand right now, not that much has changed to see these big swings in prices. tomorrow we'll hear from the eia on u.s. inventories. that report is delayed because of the holiday the forecast for tomorrow

unchanged but typically at this time of the year you see substantial draws that will support prices and draw them up. closer to 11 million barrels a day. exports are rising, too. the other factor bearish in this trade and perhaps a factor last week, the dollar almost a 3% increase in the last month or so. it wasn't having a bearish impact at first but as it gains more momentum, definitely much bigger factor. now trading above 94 for the dollar index with today's movement, crowd down more than 6% in a week. 2% on the month but still up 9% in the last three months, guys >> okay, thank you, jackie for a closer look in oil, let's bring in sadad al husseini former saudi aramco executive vp for gulfstream operations. we're heading into saturday, i believe, where the energy ministers from saudi arabia, the uae and kuwait are going to be meeting to discuss matters

related to opec. any expectations that we'll get any further news from that meeting coming up this weekend >> well, good morning. i don't expect they'll make any important announcements here they are discussing the outlook, and they have many other partners to discuss with of course, the russians and others nvd trying to arrive at a common ground that's good for the producers and the consumers. clearly $80 a barrel was way too high and was going much higher on the other hand, they don't want to lose the floor dropping below 70 would be clearly too low. so they're trying to coordinate their strategies ahead of the opec meeting on june 22nd. >> do you expect there to be a production increase at that meeting at the end of june >> the physical markets right

now are pretty well balanced, and there's no urgency to do anything, frankly. we have to see how the sanctions play out with iran we also have to see what happens with venezuelan production it's been coming down kind of severe severely those two factors will require more oil on the other hand, the u.s. is adding significant amounts canada has announced that by the end of this year they'll have added 400,000. 450,000 barrels of oil brazil is adding with the offshore project about 200,000 barrels. so there are losses on one hand but also gains on the other. and the role of the ministers will be to track these very closely and to make sure that the physical market stays in balance. the financial markets, of course, are driven by speculation. futures and options. the transactions on a daily basis are in the billions of

barrels, paper barrels whereas the only market itself is only 100 million barrels. the prices are being driven more by the financial markets than by the physical markets >> the saudis and russians are seen as the swing production here the u.s. as much as 11 million barrels seems to be topped out, particularly given bottlenecks in terms of transportation in the southern part of the country. do you agree with that andhow do you manage 70 being too low and 80 being too high? >> that is the challenge, isn't it you can't balance in the short term, speculation on a daily, weekly basis you can't balance that with the actual barrels but i think in the long term when the markets perceive a stability there is

capacity opec can, if necessary, add production if that gets called if i'm sure the ministers will do that they just don't want to get ahead of themselves because right now there isn't an issue the u.s. at 11 million may have popped up for now but next year there will be quite a bit more production coming out of the u.s. and they are debottle necking the pipeline times they'll get more oil into the market the big difrential between wti and brent, for example, is driving more exports out of the u.s. at lower margins. it will balance out. >> i wanted to ask you, the friendship with saudi arabia under president trump, the fact that saudi was in favor of the u.s. abandoning the iran deal but also doesn't want to be blamed for leading to higher gas prices here in the u.s. during a

midterm election year. how does saudi interpret all of that and what do they do, if anything, about that >> to understand the situation you have to break it down into component pieces the sanctions in iran are a security issue iran developing ballistic missiles, having nuclear aspirations just doesn't make sense. what are they trying to do subverting neighboring countries and so on, financingterrorism in yemen and elsewhere so that's a security issue and we need to set that aside. and then look at the economics economics, of course, the global economy runs on energy and oil is an important component of that saudi arabia is a member of the g20 and sees many advantages to maintaining a healthy growing global economy the u.s. has the same position working closely to try to

anticipate and manage volatility is a joint interest. and that's why i think they're working closely with president trump. >> thank you for your time appreciate it. >> pleasure. >> as brent rises 1.5% and energy stocks lead the s&p as we head to a quick break, don't miss an interview tomorrow an exclusive with uber's ceo carl will be speak with him from the code conference. "squawk on the street" will be back with the dow up 124 at&t provides edge-to-edge intelligence, covering virtually every part of your retail business. so that if your customer needs shoes, & he's got wide feet. & with edge-to-edge intelligence you've got near real time inventory updates. & he'll find the same shoes in your store that he found online he'll be one happy, very forgetful wide footed customer. at&t provides edge to edge intelligence.

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hello. i'm sue herera here's your cnbc news update at this hour. the islamic state group has claimed responsibility for a suicide bombing in kabul that targeted the interior ministry building the bomber struck outside the ministry allowing several gunmen to pass through a gate where they were eventually kills by security forces. in belgium, a moment of silence was observed for the

victim of t victims. the u.s. geological survey releasing these images of fissure number eight caused by hawaii's kilauea volcano molten lava shooting up as high as 200 feet in the air so far that volcano has destroyed some 71 homes. 20 in just the last two days and a las vegas jury finding illusionist david copperfield neggent but not financially responsible for a british tourist's injury in 2013 the jury did not feel the negligence caused the injuries to the tourist who claimed he suffered a traumatic brain injury after participating in copperfield's show you are up to date that's the news update back downtown to you guys. >> sue, thank you. sue herera it is time for our etf spotlight where mike santoli is looking at the dramatic moves in

the bond market. the u.s. made quite the move >> sharp, sudden move in treasury yields. related to italy but it was impress fif you look at the velocity of it and also important to look in the context of the longer term trend in treasuries the tlt is the ishares treasury etf that owns long-term treasuries that's 20 years and beyond not a lot of people concentrate their bond holdings in this area look at a two-year look at this, though you can actually see yesterday's moves are the latest moves on this chart but really not really doing a whole lot to change the overall trend which is down. if you looked at it you'd say if that was a stock, maybe you'd actually think about the trend being still in place so i do think you want to keep that in mind tpt is the inverse it's the mirror image of the tlp. short these bonds. it's not been a huge home run trade. you'd think that yields are up

so much. shorting them has been a no-brain are it's been about flat year to date or a little down. it's one of those deals where you have to keep it in context know why you own bonds you don't own bonds because you want to make an outright bet >> people use these as hedges, i would think, of course >> yeah, you'd own the individual bonds you like against treasuries and use these to short -- to modulate your exposures. >> you have to think positioning plays a role here. it was becoming quite the crowded trade to bet against bonds. >> totally >> to bet against bonds and to bet in favor of oil. those two things are related oil cracked when bonds got a bid because when oil was going up every day it was hard because of the inflation story to actually get bullish on bonds that flipped around from the last week or so. >> all right we'll keep an eye on those bond etfs mike santoli, thank you. "squawk on the street" will be right back with the dow moving higher here up 51

only losers right now are actually ge and apple. we'll be right back.

welcome back to "squawk on the street." i'm sara eisen here with david faber. carl quintanilla with us from the code conference in california the euro once again the focus of markets around the world it's bouncing back today, about 0.5% from a ten-month low. italy's attempt to form a government and selling more than $6 billion worth of bonds today giving the markets some relief but this currency still down about 4% for the month that's huge when it comes to currency land moves. analysts say there's more pain for the euro the euro won't fully recover until the threat of italy leaving the single currency is

removed and confidence is restored that's a quote from a note this morning. it could be spun into a vote in or out of the euro at least they could campaign that way you may remember when everyone and their mother was betting against the euro, especially hedge funds during the height of the european debt crisis, 2010 through 2012 actually right now the market is betting on the euro. check out the positioning we got as of last week. hedge funds and big speculators are long the euro expecting it to get stronger. more bullish on the euro what does that tell us this isn't greece. this is not a euro crisis. and there's not a lot of love for the u.s. dollar because president trump has been slapping new tariffs on china, chinese imports and all sorts of questions about how long this u.s. recovery can last and a lot of hate out there for the u.s. dollar even with italy becoming sort of a political mess

thought that was interesting to highlight. >> but in the land of the blind, the man with one eye is king >> therefore, there's been a bid for the dollar and why you've seen it reach almost a one-year high >> everyone and their mother i know mine is feverishly been trading that euro. how about yours? >> she doesn't trade the euro. >> what do you have her in >> does follow it. >> just interesting to note how crowded and how hated it was during the crisis and how different things are >> as you point out, a 4% down move over a month is a very big move for a currency. >> it's going to help their stock market and earnings and hurt ours, which is why everyone is watching it joining us to talk about public policies and political risks, evercore's terry haynes and barclays sean golhar sean, i capped it off with the hated dollar on some of the years about the trade war which apparently this week is back on. can you bring us back up to speed on where we stand with

china? >> i think we have been talking quite a bit about this we see this more as a trade skirmish, not a trade war. this is positioning by the triumph administrationleverage a with china the president coming out with his tariffs and other protectionist measures are part of this larger story something clients ask, is there a deadline to this when do we expect to see an end to this? there's no deadline to this. this is something that could continue on quite a bit. >> you know, terry, what are your expectations there in terms of how long it continues? and we get this back and forth zte may full apart we're coming to its aid. we'll put tariffs on >> i don't think it does i've been telling markets since the beginning of the year there's not going to be any trade war or trade peace and you can expect this kind of

volatility as negotiations come along. markets take it and do things with it but that was a signal to the chinese in my estimation that the united states expects continued progress on the trade negotiations or the united states will certainly be prepared to take more aggressive action they took a ministerial move, the idea that they were going to have to put up proposals on a number of different things, something that's been -- we've all been waiting for 2 1/2 months for and just put dates on them and use that as a negotiating tactic more than anything else. this goes on all summer into the fall and you do well to have a president to president level agreement on this in the fall so september, october and then you -- -- what i expect

is the chinese staffs will hammer out details before you finalize things. political time goes much slower than market time and markets need to understand that and be prepared for these ups and downs for months to come, i think. >> we're also sort of wondering about the squirmish between the u.s. and europe when it comes to trade. the european officials have been meeting -- they're trying to stave off steel and aluminum tariffs. decision should be meed by the end of this week on that front is that a potential concern with reports like the journal that china is trying to convince our allies, including europe to go against the u.s. on trade. >> absolutely. that's a bit of a concern. you are seeing some fiery rhetoric between the u.s. and european negotiators on trade. the europeans are trying to get a longer term exemption. and the administration still playing hardball on this issue they're also putting other items into play. issues of nato spending in terms

of their budget. issues of immigration. there's been a lot of other items at play in terms of thinking about it. the trump administration, one of the important items is keeping in mind that president trump wants to see a decrease in the bilateral trade deficit. he keeps pushing those numbers out to the public. one last thing on china, while you see some pushback on the administration in terms of how they deal with other trade policies, the tough, aggressive nature with china, i see a lot of bipartisan support, especially on issues of i.t. theft and forced technology transfer >> there's nothing the chinese need more than our technology. case in point is zte which basically collapsed when they were no longer able to get the components what do you pick up there in terms of what is going to really happen to zte because it is very important to the chinese and clearly a point of contention between perhaps the administration and congress. >> there are two sorts of issues

with zte and people, i think, need to understand that. one kind of issue is an enforcement action issue can you modify the punishment in a way that remains meaningful. and i think the administration has been clear on that the other problem, and one where they'll have a -- a real sell job to do in congress and i don't know how that's going to come out yet is letting zte sell its products into the united states, some sort of national security concern the national security establishment clearly thinks it is otherwise the trump administration would not have reached its initial decision so that is something that's going to have to be parsed through very carefully if the administration wants to change that in any way. and i think we're just starting to learn about that now. >> i still don't understand why higher prices for american

consumers is a smart plolicy which is ultimately what the tariffs do thank you for weighing in. terry haynes and shawn golhar. when we come back -- setting a date fox schedules a special meeting of its shareholders to vote on the deal with disney we'll give you details there plus, an exclusive with the ceo of uber. that's going to be tomorrow from the code conference. and i know you'll not want to miss that. "squawk on the street" is right back

yale's bob schiller says the president's pro-business strategies are keeping this market alive and well. catch your interview atitrationiatitration i tradingnation.cnbc.com

time to get to the cme group in chicago and join rick

santelli who joins us with the santelli exchange. rick >> thank you david i'd like to welcome doug thank you for joining me this morning. >> my pleasure >> sometimes we all get involved in all the minor details of any given move that we really forget to take a step back. you know, in a 24-hour period, wee hours of the morning monday to tuesday, bund yields moved from 46 to 18 basis points we saw italian tens move from 27 to 284 we saw euro currency move from 1728 to 115.10 beyond the general notion of what's going on with the politics of italy specifically and the eurozone jennerically, it isn't good to see benchmarks have this kind of 24-hour movement your thoughts? >> no, it's evidence that the markets are trying to price

policy risk. that's one more piece that if you can take off the table it would be better. its final market's job to transit the signals to the real economy and the ultimate test is going to be whether this hampers economic growth in the u.s. and around the globe >> now as evidence to that can we look at the dollar's strength, not including today, and make a statement that it was soft in 2017, it's strong in 2018, and maybe it's the canary in the coal mine for just a good macro barometer of eurozone investor sentiment in that part of the world your thought >> so i always think of the exchange rate as a pricing the economy and real exchange rate to pricing the real economy. that's always relative to the rest of the world. what the market is saying is u.s. outlook is good real growth prospects are good a revised gdp report today consistent with that strong nonresidential investment that's what the market sees and

what the prices are telling you. >> now yesterday's aftermath, many are asking me in the conversation at the water cooler, will this continue, this type of volatility, and if not, is that all there is what's your thought? >> well, i don't think that we've settled the outlook in europe and so you're going to have to price the economic fallout of the political uncertainty in europe and that won't go away. i think that's a real concern that people are going to have to keep their eye on. it is the case that -- >> now with respect -- >> we should have good global growth and that's the right time to have these kinds of problems when growing strongly, not in the middle some of recession or weak growth. >> now, real quickly, we're almost out of time, doug, doesn't the real global growth that you've talked about, the synchronized global growth, wasn't a big part of that built on a foundation of europe that the central banking policy was going to make some major changes in the fall of '18 and maybe in 2019, doesn't all that get

called into question considering the threat of discontent that gets larger and larger every cycle in europe? your final thought >> yeah. i think that's dead on the money. the future of the ecb policy is heavily influenced by how this whole italian situation plays out and we don't get synchronized global growth without having europe on board that's a risk worth keeping a close eye on >> excellent always interesting talking to you, doug. thank you. sara, back to you. >> thank you >> rick santelli, thanks. now send it over to jon fortt who is at the code conference in rancho palace ver des, california. a look at what's coming up on "squawk alley. this is already in full swing but we're getting ready for the full day of the conference, we've had james murdoch talking competition and data l atf mi uonsqwk alley.

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welcome back to "squawk on the street." i'm dominic chu. stocks holding on to the fractional gains the best performing is energy, oil heads higher all among the leaders. watching those closely

david, back over to you guys. >> thank you, dom. 21st century fox says scheduled a july 10th special meeting for shareholders to vote on the deal to sell many assets to disney. the company's board is recommending shareholders approve the deal nbc universal parent company comcast is considering and preparing an offer for the fox businesses that fox has agreed to sell to disney. in its release, fox says it may postpone or adjourn the special meeting if comcast does make a formal offer which seems likely but pending the decision of judge leon in the doj versus at&t/time warner case. if the judge does as many expect and affirms the company's ability to consummate that deal, comcast is highly likely to come forward with a new proposal that also includes not just a higher all cash price, but significant deal protections guarding against the anti-trust risk of said deal and then it will be up to the fox board to make a decision as to whether, in fact, that could lead to potentially higher offer and then white have

to go back to disney prior to that and see if it could get a higher offer from disney to match that potential offer from comcast. it's going to be a busy month starting let's call it june 13th to july 10th >> when is the judge leon decision >> june 12th. >> got it. >> let's check in on some of the big retail movers right now. dick's sporting goods on pace for the second best day ever shares soaring up more than 20% after beating on the top and bottom line. really the outlook and guidance that investors loved comp store sales fell more than expected interesting story there which i will hit in a moment michael kors, it is falling, earnings forecast fell below consensus estimates did beat on earnings revenue and comp store sales, showed positive comps for the first time in years. on dick's, the story the first quarter after the stricter gun rules. dick's has the sporting offshoot and made it that people under the age of 21 can't buy guns,

stopped selling assault rifles a lot of concern that would hit traffic. the ceo warned about that. >> it was a heavily shorted stock. >> yes. >> that's helping. up a quarter of its value created today is amazing. >> it is amazing it's been a winner pretty much all year long. so keeping an eye on that surge in dick's. a lot more from code coming up on "power lunch" today the ceo of hulu and ripple, cryptocurrencies will be joining us. >> good. i look forward to that "squawk alley" is up next, though don't go anywhere. whoooo.

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good morning it is 11:00 a.m. on wall street, 8:00 at the code conference in california, and "squawk alley" is live. ♪