live from london, i'm brian sullivan another very busy global day for news and for your money. there is red all over your screens. the markets are selling off. president trump threatens a new, larger round of tariffs against china. that has global investors looking for any safe harbor they can. coming up, reaction and analysis from the jim o'neill and jim

mellon >> good morning. it's 10:00 a.m. here live in london 5:00 a.m. in new york. so much to get to on a busy tuesday. we begin with the global market selloff. dow futures indicating a drop of nearly 400 points right now. president trump threatening a new 2$200 billion round of tariffs against china we're seeing dow futures off 368 the s&p and the nasdaq are also implied down as well remember, we are in the middle of a five-day losing streak for the big multinationals, the dow jones index, and today could be six. that contagion is spreading overseas in asia, let's go now to the asia boards. we are seeing all the major asian markets are down japan and china also lower the big story coming from the

hang seng and shanghai, down nearly 4% on the shanghai. hong kong losing nearly 3% look at the tech-heavy shenzhen. this is not an index you hear much about but you need to pay attention to it today. it's not only filled with technology companies but also relying on trade the shenzhen down nearly 6%. shenzhen is the third busiest port in the world. the dax is off more than 1.5%. all the major indexes here are in the red with the ftse 100 down 0.6%. oil, another big story oil is lower right now, despite some output cuts from libya because of fighting in an oil region in that country we'll get more on that concern over global growth taking its toll as well as the possibility that opec may dial back on its planned production

increase more than expected. the opec seminar starting tomorrow the formal meeting and production decision will come on friday there is talk that maybe opec will dial back on those cuts a little less than expected. there is your setup. now to the news that is moving the markets. late yesterday president trump dropping the hammer threatening china with a newer, larger round of tariffs let's get to eunice yoon live in beijing with more. >> thank you very much china accused president trump of initiating a trade war and going back on his word the commerce ministry said today such a practice of extreme pressure and blackmailing deviates from the consensus reached on both sides on multiple occasions as of late week the chinese believed they had an agreement with the u.s. in order to buy tens of billions of dollars worth of goods to help narrow the trade deficit. but at the same time that would only be the case if the u.s. did not impose tariffs

now that deal is off the table now china said it would fight back firmly and consider qualitative and quantitative measures the fears of a full blown trade war hit the stock markets out here today as brian was talking about. the shanghai dropped by 5% at one point. the shenzhen fell by 6%. hong kong lost 3%, part of that was because it was weighed down by a plunge in the shares of the embattled chinese telecoms company, zte, down by 20% today. the words qualitative and quantitative got a lot of attention here in the american business community today that's because the fact of the matter is that china really cannot match the u.s. tariffs on 2$200 billion worth of goods. why? china doesn't buy that much. it only buys 1$130 billion worth of goods from the united states. so a lot of business people i've

been speaking to say they fear other types of retribution on the american companies operating here they say stricter safety inspections, possible consumer boycotts brian? >> eunice yoon, we'll see you again all day on cnbc. thank you very much. joining us on set is jim o'neill from chatham house, the man who coined the term brick nations. perfect day to have you on >> good day. >> it is a good day in some ways, not for stock investors, the dow futures are down nearly 400 points are you surprised president trump has upped the ante in the way he has >> the only surprise with this guy is that, you know, the next surprise really. i don't really understand where he and his advisers are coming

from it's sort of seeming like a policy that may have had some relevance 25, 30 years ago but he's doing it at a time where the chinese have dropped from 10% of gdp a decade ago to barely 1%. china shifted its economic policy priorities post the '08 crash. so he's playing to the gallery of course in that sense you can see what he's doing more and more here with his core voters >> eunice hit on it at the end this is key. he's gone to a number, 200 billion, just talk, but he's gone to a number the chinese can't match. they don't import that much from the united states. do you think that's just part of the threat strategy and because of the threat it will not be enacted? >> i hope so i assume so it's all in the context of how he looks at the art of the deal.

let me respond to what is the context, the most important marginal thing in the world is the chinese economy. so far china alone is contributing just less than 50% of all the change in global gdp. >> half the world's gdp. >> nearly half in what time frame >> since 2010. >> in the last eight years, according to your numbers, china contributed half of global gdp >> u.s. and china together, 85% and more and more of what's coming from the chinese is the consumer i say to people that apple, in three years it has sold more iphones to china than the u.s. ultimately if the u.s. takes this stance, it's going to be the u.s.'s best growing

companies that will suffer just today in a prominent newspaper, one of the most famous u.s.-based iconic tech investors was writing about how much they and others invest in chinese tech >> that's why we're seeing the shenzhen index, which we don't talk about much, the third index, but basically the nasdaq of china that's a fair way to say t down nearly 6% what is the -- let's do the best and the worst case outcomes the worst case outcomes for global gdp is what >> if this is for real -- as i said, since the start of the decade 85% of gdp comes from these places if this carries on, the markets -- i tend to be an optimist, but if this has more legs, the markets are right to be concerned >> i think for u.s. investors,

they're trying to piece together what these trade tariffs may mean for the u.s. economy. through this all the small cap, the domestic u.s. stock indexes in america have done well. they're on a winning streak. up 10% since trump first tweeted about trade wars do you think the u.s. is in any way insulated or isolated from this >> not really. another thing you could look at here is rather worrying in the past month that the second attempt for u.s. bond yields, ten-year yields to go above 3% failed yield curve flattening yes. some near-term momentum and small cap stocks look like it will be good this is feeling that the u.s. is in ens la insulated, but the u.s. is an economy that is dominated by the

absolute level of its consumer for the u.s. to do well, rest of this decade and beyond, it has got to connect more to the rest of the world so if the u.s. is going to go attacking more and more important places in the world in terms of trade fights, there's no way u.s. big multinationals can grow >> right now this is mostly talk we have some stuff on the margins, the big numbers there have not been implemented yet. >> yeah. >> do you think there's an outcome where the president gets what he wants, some concessions on trade from our -- meaning the u.s. -- global partners, that they maybe pay more or open up their borders more and that we come out of this ultimately unscathed globally all negotiations are tough you know that. >> of course i'll give you two crumbs of hope i'm an optimist. >> the hansel and gretel take. >> a large part of my thinks the

big chinese reformers sitting behind president xi won't be overly upset with some aspects of this because they want to do further changes, possibly more substancive than ten years ago when that shock told them we can't afford to have 10% of our gdp in exports to the u.s. i suspect this will lead to domestic reforms in china, which are good for the world the second thing i would say is that it seems clear to me that there are some rational people around somewhere in washington and, you know, there will be some point where trump either backs off because he gets some token gesture that he can sell to his domestic voters, or they knows there a danger where it lend up causing a lot of damage, and self-inflict problems not only for the economy but for himself. >> do you believe our fed or the

ecb or both or neither have to adjust their thinking and their rate or qe framework based on this type of talk? >> it's clear the ecb is already adjusting theirs this is happening on top of evidence that many parts of the world economy that have had a great 2017 and started off 2018 well have suddenly for reasons that are not entirely clear for me, but including europe have slowed china is also showing signs of slowing. this la has to be factored no policy thinking. i think you can see the u.s. is not showing that yet, but if this gets further, it will >> we're seeing yields below 2.9% 2 2.8% on the ten-year great to see you >> thank you for having me now to some news that has

shocked the tesla community. elon musk accusing one of his employees of sabotage. courtney regan has more. >> good morning. cnbc obtaining an e-mail that musk sent to all tesla employees. the subject line reads some concerning news. in it musk says he is dismayed to learn about a tesla employee who conducted extensive and damaging sabotage. musk claims the employee tweaked code on products and sent company data to third parties without authorization. the e-mail says there may be considerably more to this situation than meets the eye we need to figure out if he was acting alone or with others at tesla and if he was working with outside organization all of this comes as tesla ramps up production to meet the goal of pumping out 5,000 model 3 vehicles by the end of the month. cnbc reached out to tesla for comment on the e-mail, tesla declined right now shares are moving lower in the pre market by 2%.

the full e-mail is available on cnbc.com it's an interesting e-mail and strong wording from elon musk. >> courtney regan, thank you so much more to come on this busy tuesday a billionaire's take on trump, trade and the selloff. you will hear from jim mellon, and plus the one ceo that may have gotten a hall pass in any trade war with china we'll be back. dow futures down 360 points. no one else but you. by it is... the cloud. the ibm cloud. the cloud that's built for all your apps. ai ready. secure to the core. the ibm cloud is the cloud for smarter business.

secure to the core. jimmy's gotten used to his whole yup, he's gone noseblind. odors. he thinks it smells fine, but his mom smells this... luckily for all your hard-to-wash fabrics... ...there's febreze fabric refresher. febreze doesn't just mask, it eliminates odors you've... ...gone noseblind to. and try febreze unstopables for fabric. with up to twice the fresh scent power, you'll want to try it... ...again and again and maybe just one more time. indulge in irresistible freshness. febreze unstopables. breathe happy.

welcome back to "worldwide exchange." we are live from london. a global selloff is topping your news in the states the dow futures indicated down by 340 points. we have strengthened a bit we were down about 400 at one point. still a lot of red on the screen the dow also in the middle of a five-day losing streak the s&p 500 and the nasdaq also indicated down 81-point drop on the nasdaq. let's check currencies the u.s. dollar getting stronger through all of this. now below 1.16 against the euro. the dollar doing well against the european currencies. let's check oil ahead of the opec seminar which begins tomorrow and the opec meeting

and decision on friday you have a couple big factors sending oil prices down more than 1% now. global concern over trade. the president's tough talk on trade has some concern that global growth could slow down. if growth slows, the demand for petroleum products may slow. we're seeing wti trading at 65 stateside. also questions about opec and how much they may agree to cut production last year they agreed to cut production to 1.2 million barrels a day, that has gone up to 1.8 barrels, now the talk is how much will they dial back on that deal? joining us now is the global head of foreign exchange strategy at societe generae gene why do you think the u.s. dollar

has been so strong through all of this, kit, even with the tough talk on trade by our president? >> i think it's because other things are weak. >> currency markets are unlike any others because you have two sides to every corner. >> they are sounding more dovish, pushing back the first rate hike, mario draghi this morning sounded dovish from the first headlines i've seen. i think this is a response to the weakness in the european economy that there's probably no major economy more vulnerable to a chinese economic slowdown than germany. >> the dax has been harder hit the last few days. >> so the europeans are responding the difficult bit for a currency strategist on the dollar side is this may be gr for tood for ther

on the short run, this may raise prices in the u.s., import prices will go up if this second bigger round of tariffs go through. it's bad in the long run for the dollar >> it is bad you would be bearish on the dollar >> it's good for the dollar in the short run, bad in the long run. the difficult bit is working out when is short, when is long. >> when is good long dollar? >> i think it's good for the dollar certainly for the rest of the summer it may be good for the dollar against the emerging market currencies, the trade sensitive currencies through the end of this year. but this brings the next u.s. economic slowdown closer this will not reduce the u.s. trade deficit and won't help over time. so it's going to be a challenge for the dollar in the longer run. but the longer run for day-to-day foreign exchange trader, someone making decisions about money over the whole, they

won't mind >> a bit of the irony is the president, our president would like to reduce that trade deficit. if the u.s. dollar continues to strengthen, it will probably accomplish the opposite. >> in the short run. it won't have a huge impact. the problem with the u.s. deficit in a sense is that there are two ways of reducing it in the long run so in the long run, either the u.s. has to import less and the u.s. current account deficit is a function is the u.s. spending less, that's a decision based on u.s. policies and behavior in some economies the other side of that is if i want to produce more in the united states, is it effective to be going into a trade war or is it more effective to be promoting investment in plant, equipment to try to rebuild

america's manufacturing base through investment, education, training these are long-term, unsexy measures, but that's how you make more to sell. >> kit juckes, good to have you on thank you very much. hope to see you again. on deck, why it is game on for gamestop and major changes coming to wells fargo's wealth management unit. and we are all over this early morning selloff. what you should be doing with your money on a day where the dow futures are down 350 points as the risk of a trade talk and trade war rises. u' watching "worldwide exchange."

your brain is an amazing thing. but as you get older, it naturally begins to change, causing a lack of sharpness, or even trouble with recall. thankfully, the breakthrough in prevagen helps your brain and actually improves memory. the secret is an ingredient originally discovered... in jellyfish. in clinical trials, prevagen has been shown to improve short-term memory. prevagen. the name to remember.

welcome back that graphic says market selloff for good reason. the dow futures are indicating a drop at the open of 342 points the s&p indicated down 31, the nasdaq down 81 we are also in the middle of a five-day losing streak for the dow. today would be six today would be the biggest drop of those five days if this continued. also likely pushing the dow negative for the year. aside from the trade talks that are sending an sending the dow futures down, the other big story is around immigration and the trump

administration defending its immigration policy despite growing outrage. tracie potts has more. it's growing from democrats, republicans, all sides here. two more former first ladies, michelle obama and hillary clinton expressing concern about how this zero tolerance policy is playing out sounds of anguish from behind a chain link fence migrant children sleeping on floors, wailing for their parents, mocked by a border patrol agent >> the audio provided by a civil rights attorney not verified by nbc, is sparking outrage >> they need to end this policy. it is unconscionable, it's immoral, it's wrong. it's unnecessary >> this is government sanctioned child abuse. >> reporter: a strong defense from the trump administration. >> we have to do our job we will not apologize for doing our job.

>> reporter: president trump blames democrats for a law that does exist separating children from their parents >> the united states will not be a migrant camp and it will not be a refugee holding facility. >> reporter: the government is caring for more than 11,000 migrant children president trump will likely be confronted about it when he meets with republicans on capitol hill tonight that number is expected to jump to 20,000 sometime this summer >> tracie potts live in d.c. on a tuesday morning, thank you very much. all right. still ahead on "worldwide exchange," it is shaping up to be a rough day for your money and your stock investments dow futures down more than 350 points coming up, we'll hear from billionaire investor jim melon and is there a trade war win some say there's one part of the market that will go gang busters

despite the trade war talk we'll tell you what that is when "worldwide exchange" returns overwhelming air fresheners can send you running... so try febreze one. with no aerosols and no heavy perfumes. so you can spray and stay. febreze one.

welcome back global markets in selloff mode the u.s. threatening a new larger round of tariffs against china. that has stocks tumbling at the open apple getting a pass what president trump told tim cook about potential china tariffs that could be a big win for the company. and oil taking another leg

lower ahead of the big opec meeting. we're diving into all of these stories as the london edition of "worldwide exchange" rolls on. thank you very much for being with us on this tuesday. we're live from london today let's check what's leading cnbc.com right now courtney regan has more on the top stories. president trump threatening tariffs on another 2$200 billion of chinese imports the new policies will go into effect if china refuses to change its practices and also if it insists on going forward with new tariffs it has announced beijing pledged to fight back if trump goes ahead with the new tariffs. shares of zte sinking 25% this morning this comes after the u.s. senate passed a 7$716 billion military spending deal striking down an

earlier deal allowing zte to resume doing business with u.s. companies. and tesla's ceo, elon musk, is accusing one of its employees of sabotage. musk sending an e-mail with the subject line reading some concerning news. he says he is dismayed to learn about a tesla employee who conducted extensive sabotage he says the employee tweaked code on internal products and sent data to third parties without authorization. back over to you >> thank you very much could be a very tough day for your stock market money and your investments a new 2$200 billion potential round of tariff threats against china from president trump has investors looking for safe harbors anywhere they can find them the dow indicated down 336 points at the open we are already in the middle of a five-day losing streak for the dow. a drop like this today, if it

held, would push the dow negative for the year. you have to watch small caps as well the russell 2000 or the iwm etf so far small caps have held up against the turmoil, but today could be a different story as they flee stocks, investors are holing up in u.s. bonds. the yield in the ten-year is 2.87%. as buyers come in. yields are down in bonds in the uk and in germany as well. president trump's comments are hitting both sides of the trade war. chinese stocks are perhaps the story for equitiy ies overseas the shanghai down nearly 4%. hong kong losing nearly 3% the biggest story of all may be the shenzhen index that we don't

talk about a whole lot, but maybe we should. that index in one of the fastest growing major cities in the united states or in china, a very export-reliant market the shenzhen index down nearly 6% shenzhen is the third busiest port in the world. all that red taking its toll in europe the dax is off by more than 1.5% you can see all the major markets are down keep an eye on oil there is some output cuts coming from libya because of fighting in that country in an oil region crude oil is down as well. a lot of talk about what opec will do when they announce their decision on friday cnbc will be there joining us now to talk about all of this and everything going on is jim mellon. pleasure to have you on. i guess a good day not a good day for investors

overseas, but a good day to get your insight the question right now is how much do you think the president means what he says or that these talks of 200 billion in tariffs are just threats from the negotiating table? >> i think they're posturing threats. i hope he doesn't go through with them. a trade war is not good for anyone that having been said, china exports five times more to the u.s. than the u.s. exports to china. there is an imbalance that needs to be addressed there. i think his threats are loud at the moment they're having an effect on the market more importantly the market is reacting because it's far too expensive. the u.s. is selling at 32 times pe ratio, an all-time high and surely it's time for a correction >> if i'm hearing you right, you're saying this is an excuse for sellers who may have been

looking to already sell to sell? >> exactly there's been far too much complacency, far too much buy backs by corporations of the stock which supported the market far too much concentration of ownership of the tech stocks in the united states, and it's time for a correction we've seen in the last few days the dow has gone down. there's been isideways moves this is the beginning of a serious correction, i think. if we stay like this throughout the day -- this is a president who has frequently referenced the u.s. stock market as a report card on his job in a way. especially last year when markets were soaring he would point it out any chance he got if we close today the way the futures are indicating we will be lower on the year do you think to that's a measure

of the president's thinking and could that force him to change the way he thinks about things >> he -- i think we are not going to be engaging in a trade war. i don't think there will be a universal trade war. globalization has been so good for everyone, including in the united states. i'm sure president trump knows that and has good advisers telling him that but he's also a good negotiator. he has shown that to be the case i'm impressed by what he's done. he may force the chinese to do something about this ridiculous trade imbalance. >> we looked at this potential of a trade war through the eyes of the equity market when the market goes down, you sort of gauge, okay, this is negative stocks are negative, therefore the trade war may be negative. you referenced in your first answer that maybe there's some

kind of positive to this if you were taking the positives out of all this tough talk on trade, what would they be? >> china has been trying to use the renminbi increasingly. oil transactions and contracts >> as a hammer >> as a hammer and to substitute it for the u.s. dollar it's important for the u.s. that the u.s. dollar remains the dominant currency in the world, because it allows it to finance deficits of all kinds. this may be a reason for the chinese to retreated on that move to a universalized renminbi that would be a win for president trump and for the united states. we will see that in the price of gold if the price of gold goes down, the u.s. is winning on the dollar renminbi rates. if the price of gold goes up, the u.s. is losing >> the price of gold has gone up the last couple of days, but two or three days does not a trend make >> we need gold to go above 136

1365 >> why does that number matter >> it's the technical limit beyond which gold has not gone the past two years if it breaches that, then we're off to the races in gold and silver but it would indicate that the u.s. is losing the war on the dollar >> china has a potential hammer to us. we have a larger economy, therefore people say that we have a negotiating edge. there's something that china has that they could drop, and some hege funds suggested they might. a massive devaluation of the renminbi do you think that's possible >> i don't think so. it's not in their interest to do that they have the ability to sell u.s. treasury bonds in large quantities >> they haven't yet. we're seeing buyers come in. >> that's the safe haven status of the u.s. treasury bonds u.s. interest rates are going up the u.s. economy is running hot. interest rates need to normalize so we can expect u.s. long rates to go up further

china could exacerbate the move upwards in interest rates by selling treasury bonds they have plenty of them >> we see it, and it's interesting. the president meets with president xi of china, they shake hands, smile, talk about friendship then we see 2$250 billion threats. at the end of the day do you remain optimistic that the worst-case scenario for trade and thus a global economic slowdown will not happen >> i don't think it will happen. it would be bad for u.s. consumers and bad for u.s. business the u.s. sells lots of airplanes to china and has the capacity to sell more. if the chinese stopped that, that would be disastrous for boeing and other aerospace manufacturers in the united states there's talk about apple you mentioned it in your preamble this morning. it's not good for apple because the chinese could stop the sale of apple phones in china, cha would be a disaster for the apple company. >> want to wrap it up with this. you made your fortune by

thinking outside the box give viewers and listeners in the u.s. and around the world an out of the box idea right now that you got given everything that's going on we're focused on trade and everything give us an out of the box idea >> in 20 or 30 years time the average human life expect santi will be 110 or 120, and people will no longer be frail in old age, they'll be welderly instead of elderly that will change many markets and many things in the structure of our lives that's got to be great news for us all >> investing in aging. jim mellon, appreciate your insights great day to have you here don't be a stranger. >> thank you. still ahead on a busy "worldwide exchange," tech stocks and your money. we'll break down some of the best bets to make right now even with everything else going on in the tech sector. dow futures down 350

we're back after this.

happy anniversary dinner, darlin'. can this much love be cleaned by a little bit of dawn ultra? oh yeah one bottle has the grease cleaning power of three bottles of this other liquid. a drop of dawn and grease is gone. welcome back it's a global market selloff you're facing on your tuesday. good morning if you're in the united states. we're live in london today stock futures are indicating that your markets and your money will post a big drop at the open a few hours to go until the u.s.

opens, but dow futures have shown no signs of turning around we're down 340 president trump threatening a new larger round of potential trade tariffs and the dow could be down for a sixth straight session. if we end like we're looking now, the dow will be negative for the year "squawk box" is coming up. let's go down to becky quick trade, tariffs, and a stock tumble got to be leading "squawk box" today >> they are. we will be all over this story we have not seen downward arrows like this in quite awhile. all the news overnight we heard about additional tariffs that president trump may be raising on china has people up in arms from the markets angle we will be joined by gabrielle santos from jpmorgan funds. she will be with us for an hour along with a loest of othhost o market experts

we will talk about the political angle on this with senator mike rounds he's a republican from south dakota who has supported president trump, but he does have concerns about what's been happening with the trade picture because of the impact it's having on his state and the farmers in his state with the agricultural community in particular being hit hard by this he says he understands president trump would like a better deal, but the farmers in his state are suffering. we'll talk about what all of this means also we'll talk about the opec meeting tomorrow in vienna with harold hamm of continental resources. you know him well. he can tell us what he sees happening not only with oil but with natural gas and all of these things happening all of these are things we'll be focusing on on "squawk box." >> look forward to harold's view on oil becky quick and a big "squawk

box" up ahead. still ahead on "worldwide exchange," we'll talk technology obviously trade is still front and center this morning, but guess what, you're always looking for ideas. you're supposed to buy low, right? not buy high and sell low. we'll tell you why one tech ceo might get a hall pass from the president's proposed tariffs plus your top tech bets, all the best places for your money in what could be a down market today when we tu rrernight after this ♪

tired of wrestling with seemingly impossible cleaning tasks? using wipes in the kitchen, and sprays in the bathroom can be ineffective. try mr. clean magic eraser with durafoam. simply add water, and use in your kitchen for burnt on food, in your bathroom to remove soap scum, and on walls to remove scuffs and marks. it erases 4x more permanent marker per swipe. for tough kitchen and bath messes, use mr. clean magic eraser with durafoam. brand power. helping you buy better. - anncr: as you grow older, -your brain naturally

begins to change which may cause trouble with recall. - learning from him is great... when i can keep up! - anncr: thankfully, prevagen helps your brain and improves memory. - dad's got all the answers. - anncr: prevagen is now the number-one-selling brain health supplement in drug stores nationwide. - she outsmarts me every single time. - checkmate! you wanna play again? - anncr: prevagen. healthier brain. better life. trade is your top story on this tuesday with the dow futures down 340 points. get this, president trump reportedly telling tim cook that iphones would be spared from any potential china tariffs. this is a big story for the markets and for apple investments. arjun kharpal has more

>> for me apple is the biggest u.s. tech company at risk here because they make about 20% of revenue from china in the last fiscal year. that was about $44 billion of revenue from china the iphone and tim cook has repeatedly said that china key market that was an important point if you think about perhaps google or facebook. a lot of these services are blocked in china they have less to lose from the trade war. >> zte, big technology company in china they ban zte from business, the stock tanks. then trump says after talks, let's reinstate zte. now the u.s. senate issuing another smackdown to zte and that stock is taking a hit >> i think this will make china look inward and say we see xeens li companies like zte are still relying on u.s. technology, but what can we do now

this will spur thought on how china spurs its own semiconductor business and chip activity chips for 5g technology will speed up because of this >> arjun, stick around i want to bring in cyrus you have some great ideas on a market day like today where we have to roll with it and talk about trade. you said something as you sat down which is, brian, trade, trump, tariffs equals semiconductors what did you mean by that? >> this trade war between the u.s. and china, it's all about the made in china 2025 program, it's about china moving high-tech. one area where china is weak is semiconductors that's the one area where america is strong and one area where the american administration is concerned that it could lose out to china >> what's the play then?

you would invest in u.s. semiconductor companies because of this or do they say you want to do this, we'll do after that market >> we think the focus of the action from today's tariff is semiconductors we see a number of things happening. around the world semiconductor ecosystems will develop. just as we had internet ecosystems, and software ecosystems in the u.s. you will get intel and nvidia buying up lots of semiconductor stocks china is pumping billions into its own semiconductor industry that means smaller u.s. chip stocks we think that will consolidate. >> what does that mean in terms of companies that will be winners in the chinese market. some companies have come to market with their own chips. where do you see the winners will it be brand-new companies making semiconductors or some big existing firms in china? >> we know china will invest

loads of money in the chip market that means that around the world the chip market is still fragmented you get makers of cp ushgs, -- cpus the mid-sized chipmakers in the u.s. will consolidate. that's the safe haven. >> overall, cyrus, and why we asked you to come on before all this stuff broke, you have big picture stuff. you're supposed to buy low, sell high if the markets continued to slide on this talk, where do you see the opportunities? >> the biggest opportunity that we've been seeing for a long time is ibm. >> ibm >> if you combine a strong company with good valuation, ibm is where you want to be. what makes ibm so attractive is it watson machine learning ai something more fundamental about

their consulting business? >> ibm's assets are good assets in cybersecurity, ai, cloud, a number of other technologies execution has been particularly poor if they can get execution right, then i think they're a turnaround >> when you look at ibm's business and then the newer companies, the amazons of this world, investing in things like blockchain, machine learning -- >> we are positive on amazon and on microsoft less positive on facebook and google because of regulatory concerns ibm is where we see the most value. >> let's talk about that here we are in london. facebook and google. european regulators, and microsoft found this out about 15 years ago european regulators have always been tougher and dropped the hammer more than the u.s. counterports facebook and google under juteny do you think the regulatory environment and the scrutiny we're seeing more here will seep into the united states and

ultimately maybe hurt facebook and google >> without question. the u.s. will have no option many companies have broken the law and been ignored now the europeans are coming down hard on gdpr. >> are they breaking the law in europe >> many people are saying the eu is ahead on data privacy, that gdpr once ridiculed is exactly the way to go. >> i think as a user, i've been bombarded with a lot of these e-mails about opting out, on facebook, the privacy concerns i don't know the impact yet. i opted out of a lot of these services it would be interesting to see if many consumers will follow suit and whether the eu says you can't take this cherry picking approach >> i like your point, arjun. you make the point which is this all the negative headlines, do you believe, have you seen research of your own or outside

that shows anybody because of all this will delete -- you get #deletefacebook, the data shows people are not doing this. they're not leaving google or facebook in the states they talk but they don't act >> first of all, we have not seen this full quarter's number. when those numbers come, we'll see how much they leave. the key question is the compliance cost of social media companies will go up because of this regulation. cyrus, pleasure to see you arjun, see you soon. thank you very much. so we'll wrap it up with this obviously the global markets, a big red screen in front of you dow futures down 350 oil is in focus. we are hitting the road. the opec seminar and meeting tomorrow cnbc will be live from vienna with everything you need from opec will the trade talk, will the weak global markets change opec's thinking on output and potential output cuts or an increase in production what about venezuela

what about iran? harold hamm coming up on "squawk x. thank you for being with us from london "squawk box" and the team is nexthave in a center. it is... the ibm cloud private. the cloud that's built for all your apps. ai ready. secure to the core. the ibm cloud is the cloud for smarter business.

good morning we are looking at a global market selloff with red arroes around the world the big reason trade fears president trump threatening beijing on new tariffs they'll probably do something back to us we may do something back to them it's almost like a war it's wednesday, june 19, 2018, "squawk box" begins right now. live from new york where business never sleeps, this is

"squawk box. good morning welcome to "squawk box" here on cnbc we are live from the nasdaq market site in times square. i'm becky quick along with joe kernen, andrew ross sorkin is reporting live from cannes, france today's top story, that global market selloff we've been watching u.s. equity futures at this hour are indicating if we were opening here, we would be down 340 points s&p futures are off by 30. the nasdaq down by 80 points at these levels, if we were to open here, the dow would be going negative for all of 2018 at the open. the dow and the s&p 500 are on track to give up the majority of june gains as well probably worth noting as recently as yesterday that june was on track to be the best month for the market since january. we'll look at all of this and see how things are adding up it's