it's 5:00 a.m. here, 11:00 a.m. in germany. europe breathing a sigh of relief as its biggest bank reports better than expected results. facebook's top lawyer calling it quits. president trump striking a downbeat town ahead of a crucial meeting with the e ushg today. millions across the east under a flood watch, record highs temperatures scorch the southwest. and we have a winner one lucky person likely to be calling out sick today they hit the 5$522 mill roion ma millions jackpot

it's wednesday, july 25th, "worldwide exchange" begins right now. good morning welcome from wherever in the world you'll be watching 522 million. take the lump, 350 half that to uncle sam 175 million, that sounds pretty good sounds good to me. if you're not that lottery winner, you probably care about this, how the markets are looking on this wednesday morning. stock futures are flat, down 12. we'll see if that changes throughout the day not a move right now the dow already up 4% this month. bond yields also little changed. on the ten overside, the yield is 2.93. short-term lending costs have

gone up as the federal reserve has raised rates outside of interest rates the big news today will likely come around trade. it's been the story or so for the last month despite the tough talk and concern about a full on trade war, something rather interesting has happened stocks in the united states have gone up. let's bring in art hogan from b. riley fbr. you guys put out a spectacular note the other day where you highlighted some moves on the back of the trade war and effectively saying -- noting how small cap stocks have gone up more than 10% since the president really began talking about it why do you think that stocks have shown this kind of resilience even with all the fear and loathing in the headlines? >> well, i think there's three concepts here. thanks for the intro the biggest concept is we believe something will work. we'll find an exit ramp to this trade tariff concern that we have and it's going to be something

that takes us to a better place. i think the president, the administration is using a strong economy right now to get more global trade and i think the markets are looking at this saying there's an end game here unfortunately we don't see it yet. we may have glimmers of hope today in the white house the market is paying attention the russell is up, the s&p 500 is up. the same is true for the small and mid caps so we're seeing differentiated trading, and the multinationals have been hurt the most since this conversation began. it's interesting today is a pivotal day you get jean-claude juncker heading to the white house, hopefully getting to a point where they can say we found a process to talk about tariffs so we can avoid the next leg in this war the second piece of that is china has the ability to approve this qualcomm deal today both of those things happening

at the same time it could be a pivotal day. we'll find out how that turns. both of these could look like olive branches, and what is otherwise a cold war for trade >> at the end of the show every day we do this rbi, random but interesting, we could have wbo, wonky but important. you bring up important stuff, this china nxp ruling and jean-claude juncker. i don't know if more headlines will focus around someone from luxembourg coming to the white house. what if the egos win out and we can't solve the trade issue and we get that 2$200 billion tarif on european auto imports >> that would clearly be a negative that's not priced into the market, especially looking at automakers you know, you're a car guy, you know this better than anybody. this is a complex supply chain

for autos. a lot of international and foreign carmaker the produce autos in the united states and export them. i think they're motivated to get something done i don't think juncker is here to say no tariffs on anything but i think he can introduce the process. he can say here's how we negotiate this and get to a better place that would be a step in the right direction. it appears now there's no negotiation going on i think we heard kudlow talk about this last week, we're not at the negotiation table with china. that's where we need to get. my guess is this plays out until at or around the election time then we'll get more good news. that's the way this is being choreographed. is trade and the possibility of an increase in trade tensions the biggest risk or interest rates or something else? >> i think to a certain extent

we start to get concerned about what the offshoot of trade will be what it does to the dollar, when you hear companies talking about the strong dollar and how that affected their sales i think the second thing related to monetary policy is the shape of the yield curve i think when we think about that, you know, we have more control over that. there are things we can do to steepen that curve we can have a fed that slows down a bit and perhaps only goes three times this year. we can have a treasury that issues more new debt at the longer end or the belly end of the curve. the 5s and the 10s ver versus te front end of the curve we can have a fed that lets more of the long end roll off we could see things happen to broaden that shape of the curve. but right now trade globally and certainly domestically is the number one concern we've heard about that the most in conference calls during the earnings call season more than anything else. >> that rbi we do at the end of

every show, today it's a data point from your note check it out at 5:58 take care. >> thank you very much outside of trade, one of the biggest concerns for the global markets is the fate of deutsche bank the troubled german bank lost nearly 40% of its value this year, all on concerns about its balance sheet. today maybe a bit of that fear may be relieved. deutsche bank's net profit did fall from a year ago but it topped expectations. deutsche bank also giving an update on headcount. the bank trimming 2,000 jobs so far this year as it undergoes a massive turnaround plan. shares are not necessarily being relieved today still better than expected the market not rewarding it. that stock down 1.5% so far in the german trade lg, the key apple supplier slashing its investment plans for the year the company reporting its second

straight quarterly loss. sagging prices for lcd panels. last week another apple supplier also trimmed its spending forecast for the year. at&t, you might have heard of them, they're reporting a mixed quarter. the company missing second quarter revenue estimates but added more wireless customers than expected. at&t's numbers include two weeks of results from its merger with time warner. and shares of irobot are soaring. they make the popular roomba vacuum cleaner for people who lazy to vacuum their own floors. they praised the outlook for the year irobot shares are up nearly 20%. nothing wrong with robot vacuums. there is another high level departure to tell you about at facebook landon dowdy joins us with more on this story. >> facebook's top lawyer who handled the company's investigation into russian meddling in the 2016 u.s. election is stepping down at the

end of the year. colin stretch has worked at facebook since 2010. his departure comes as the social media giant is the subject of probes by several u.s. regulators over the mishandling of users data. he played a key role in crafting a response to the cambridge analytica standacandal in a post yesterday he says as facebook embraces the broader responsibility, ceo mark zuckerberg has discussed this in recent months, i concluded that the company and leadership team needs sustained leadership in menlo park facebook's top policy executive last month said he was also stepping down. facebook will have results after the close. shares are up just slightly. >> landon, we'll see you in a

bit. in other news, lululemon reporting calvin mcdonald as the new ceo. mcdonald will take the helm next month. john malone retiring from the board of charter communications malone says he wants to cut back on travel and focus on fewer board positions. he's got a lot to do he's the biggest private land owner in the united states and the head of amazon's film division is also leaving the company. amazon is not specifying why he is leaving, but he will remain at company for a few months during a transition period we're just getting started on a busy monday morning on deck, more on the crypto comeback bitcoin's big move this week we'll find out what is driving that higher and why gold has been losing its shine, it's in a correction an expert's take on the big drop and what to do if you own or are thinking about owning gold your brain is an amazing thing.

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>> gold still in a correction, down more than 10% from its peak in january why haven't investors taken to gold's allure as a safe haven? we bring in our precious metals expert great to see you in person it's a good question usually gold, when there's fear, people rush and buy it it's a haven a safe haven not this time. how come >> there are a number of factors in play. gold has been tracking the dollar closely we've seen gold relationship with yields break down since the start of the year. the dollar is the key driver secondly and perhaps what is most important now, we are in a season slope not only are we not seeing investor confidence, but there's a softness in prices

>> currencies and interest rates are also related, they're cousins. how much of this move has been because of the dollar? how much has been because of interest rates how much has been a combination of those two things? >> if we look at how gold performed since the fed started hiking rates, each time we had that hike gold was rusing. the market was becoming more and more comfortable that the hikes would not be as steep or as fast as the market had feared so the market wasn't initially jolted considerably by the interest rates rising. of course gold does not bear interest rates >> and it costs money to store it, if you own it physically it has a negative yelled ield ie ways if you own it physically. >> we have started to see outflows as well, at the start of the year we saw inflows >> here's the bullion dollar question -- excuse that.

has gold bottomed out? do you think gold will rise from here >> i think it's premature to start calling the bottom just yet, but we're closing in on those levels given the market where we are seeing signs of the physical market just wanting to lower prices, the fact we're seeing short positions at record highs, suggests an extreme. also one aspect i've been concerned about in the market was u.s. retail demand that started to pick up gold coin sales in the u.s. have picked up in may, june and july. >> so maybe we are seeing that fear i'm hearing the commercials. are you worried? buy gold coins we're starting to see that pick up >> there's a difference between what investors are moment. at the moment gold does not have a broad position from the investor side. >> when you see a bottom, come back and tell us, please >> thank you

coming up on "worldwide exchange," we are talking big money in bad weather floods, droughts, fires, rain. all across america we'll look at the economic impact later on, greece on high alert. more fast moving wildfires spreading. there the latest on that vepi srydelongto from the u.s. and europe coming up ♪ call on me brother ♪ when you need a hand ♪ lean on me, when you're not strong ♪

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welcome back to "worldwide exchange."

a lot of families on the east coast have seen their summer vacations at the beach get slammed with this rain elsewhere you have droughts and record heat waves. >> reporter: good wednesday morning to you we continue with this flood threat in the east one more day of heavy rain in the mid-atlantic, then it shifts to new england going through thursday flash flood warnings continue in southern new york and also central pennsylvania we have roughly 30 million people under flash flood watches. the heavy rain overnight was in pennsylvania, now into new york. a little band going through new york city. additional heavy rain in areas of eastern north carolina that will plague the outer banks, virginia beach and norfolk areas. out west, this is the story. fatalities because of the heat still under excessive heat warnings for l.a. and tucson triple digit heat continues today. we could be as hot as 120 in palm springs l.a. near 100, near record highs once again for phoenix to

tucson it doesn't cool off until saturday in the southwest. back to you. >> 120 degrees in tucson wow. bill karins, thank you very much this weather is more than just annoying, it's dangerous. but it is also expensive joining us now is evan gold from plananalytics. when you get a certain age, you think weather is unusual, every year there is unusual weather. right now about 50 million americans are experiencing some kind of extreme weather event. are they not >> they are. it's good to be back with you. volatility is the name of the game, whether east coast with the flooding where i am in philly, west coast in the heat there's something going on everywhere in the country. it's having a significant impact in terms of how consumers are purchasing and how businesses are dealing with it. >> i was up in northern wisconsin a couple weeks ago, it normally gets cool there at

night. it did not went out to buy a cheap air conditioner, everything was sold out. how is this impacting retailers? demand for air conditioning is super high it will never stop raining here, you have the economic cost of the flooding as well >> yeah. as consumers, you know, we buy to need, especially for products that have to deal with things like flooding in the east. so they rely on major retailers to stock those items and have them available when they come in right now in the east it's rain related items, which are up. in the west, it's items to stay cool then service providers can see a lift in times like this. so people that are taking care of lawns, servicing air conditioning units that has an impact then again, it impacts what we buy. so things like ice cream other items as well as just where we go you talked about people rained out at the shore it has an impact on how we're allocating dollars during our summer vacation. >> i was thinking about how sad

that is, you have a family going to the beach for their big week vacation for the year, and basically on the east coast it's rained every day you have all kinds of weird storms in florida as well. there's going to be -- every quarter we see retailers and consumer companies come out and blame the weather. this quarter for next quarter's earnings numbers, they will have a reason they will have a valid excuse this time. >> we like to say that weather should never be an excuse, but it can be a reason for performance. for some it will be a negative impact for others, it may be a positive we are just now starting the back to school shopping season national retail federation estimates $80 billion will be pumped into the economy over the next several weeks, about 7 $00 per household. while the east coast is getting the rain, the west coast has the extreme heat, a lot of us will go to the malls and get an early start on that back to college shopping season. >> if you're in the mid-atlantic

region, philadelphia, d.c., thinking this seems like a wet summer or wet july, you are not crazy. this is on pace or maybe it's already hit the wettest and rainiest july ever recorded in washington, d.c. >> washington, baltimore, yeah those areas. they have been deluged the interesting thing about it, it's not that it's record wet, it's how quickly it's come on. a lot of this has just come over the last several weeks through this heavy torrential rain and downpour which leads to flooding ultimately that loads to people adjusting vacations. some of the amusement parks here were closed. it has a big impact. as consumers we have to deal with it. so instead of going to the park, maybe we go indoors to a movie theater, or a bowling alley or some other way to entertain ourselves and our families >> in the southwest, maybe movie theaters are the only respite.

thank you very much. appreciate it. >> thank you. let's check on the other top headlines. phillip mena is in new york with more >> good morning. bombshell tape revealing a secretly recorded conversation between then presidential candidate donald trump and his long-time lawyer michael cohen in it the two discuss buying the rites to a playboy model's story about her alleged year-long affair with mr. trump. cohen recorded the conversation surrounding karen mcdoigoogle's story. it is not confirmed whether the recording is edited or altered >> i need to open up a company for the transfer of all of that info regarding our friend david.

so i'll do that right away i've spoken to allen about how to set the whole thing up with -- >> what are we going to do >> and it's all the stuff -- all the stuff. because you never know where that company will be i'm all over that. i spoke to allen about it, when it comes time for the financing -- >> what financing? >> we'll have to pay -- i got this >> cohen is under federal investigation for his alleged role in paying women to stay silent in this case there's no evidence a payment was ever made. at least 74 people are dead after fast-moving wildfires turned a small resort town near athens greece into a raging inferno. coast guard ships rescued 700 people who made it to the shoreline and pulled another 19 out of the sea. a close call during the 16th stage of the tour de france.

while riding down a steep mountain at around 50 miles per hour, this rider flipped over a stonewall and left his damaged bike behind in the wake. his team later confirmed that he fractured his kneecap. his tour is now over >> scary situation there the best to all your family in el paso. i know they're cooking out there. >> thank you, sir. still ahead, a high stakes sitdown. president trump hosting the head of the european commission at the white house today. we'll tell you what they're looking to get done. coming soon to a theater near you, why a broadway favorite, the biggest of all time, may be heading to the big screen, it's sparkina g big bidding war.

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futures taking a breather. this morning the market awaiting the fate of trade talk. president trump getting ready to host the head of the european commission. and we have a winner 522 million reasons why one lucky person in california is probably still up and probably not going to work today. the details as "worldwide exchange" rolls on right now ♪ welcome back thanks for being with us on

cnbc there's a lot to get to today, first let's get to landon dowdy who has a recap of your big money headlines. >> here's what's happening deutsche bank reporting better than expected results. the german lender announcing a net profit of 4$468 million las quarter, down 14% from a year ago. deutsche bank shares are down slightly. facebook's top lawyer is calling it quits colin stretch has worked at facebook since 2010. he is leaving the company at the end of the year. and at&t's q2 revenue missing estimates, still the company added more wireless customers than expected. the numbers included about two weeks of results from its $85 billion merger from time warner. shares are down about 1% in early trading. back over to you >> see you in a bit. stock futures are not giving you help about what direction the market may be going in today they're effectively flat

the nasdaq maybe fractionally higher futures are up 2 points right now. either way it's been a good month for stocks the dow is up 4% so far in july. small cap stocks, as art hogan noted earlier today, more than doubled their return the last couple of months people like the domestic smaller cap names. switching gears to politics, president trump is set to meet with jean-claude juncker at the white house today. are the two sides on the same page on a trade deal eamon javers has more on what we can expect from that meeting today. >> good morning. it would not seem the two sides are on the same side going into the meeting. tariffs are in the air, so is talk of mitigating the damage from tariffs the president and the administration yesterday announcing some farm aid effectively. about $12 billion worth of aid to farmers it's $12 billion in total

funding. this is done to mitigate the damage of retaliation to the president's tariffs in farm country. countries knowing where the political pressure points are, putting those retaliatory tariffs on, so the u.s. saying they will do direct purchase to farmers, purchase surplus crops. all the disbursements will be due by labor day today the president gets set to meet with jean-claude juncker at the white house later on this afternoon. yesterday out on the campaign style rally the president talked about his skepticism about the eu here's has what he said >> what the european union is doing to us. incredible how bad. they made $151 billion last year, our trade deficit with the european union they sound nice, but they're rough. they're all coming in to see me tomorrow they're all coming to the white house. >> they sound nice but they're

rough. the president issued a tweet late yesterday here's what the president wrote as part of a proposal here for this meeting he said the european union is coming to washington tomorrow to negotiate a deal on trade. i have an idea for them. both the u.s. and the eu drop all tariffs, barriers and subsidies, that would finally be called free market and fair trade. hope they do it. we're ready. but they won't so that's where we stand going into the meeting today on the official white house asked doull, th schedule, this session between trump and juncker is scheduled to be 15 minutes before they go into an expanded bilateral session with a larger group of aides present. >> never has so much attention been paid to an eu commission head's meeting at the white house. >> yes for more, let's bring in peter spiegel of "the financial times. do you think the two sides are on the same page the president wants to make a deal european politics, you know it

better than i do doesjuncker have the power to make a deal? >> actually on trade he does this is the one thing about the european commission, all the 28 member states have delegated responsibility for trade in particular to the european commission so it is in his brief to strike a deal on this you have to remember, the rhetoric from brussels since the trade war started is we will not drop our guard with a gun to our head they feel their ally, their country they had done trade deals with for generations has basically put a gun to our head and said stop or i'll shoot. they don't want to negotiate on those terms. that said, juncker is coming with some things he wants to sell to trump. i don't think -- you're asking if they're on the same page, i don't think they're on the same page this is what juncker is coming to town with he's worried about cars. germany is the big export engine of europe. it's one of the biggest car manufacturers in the world trump threatened tariffs on the

auto industry. what juncker will come with is a plural lateral deal. several car producing countries, japan, south korea, eu, u.s. getting together and dropping all tariffs on cars. this is something if this was a normal american president or the tradition we've had prior to trump that could be acceptable but trump does not like multilateralism. he said he likes to do bilateral deals. i don't think he will be open to another newfangled version of multilateralism that he's already rejected juncker thinks he has something in his back pocket i don't think it will be acceptable to trump. trump thinks he has a secret plan he will propose to juncker, i think it's mars and venus here, don't think they'll come to a conclusion at this meeting. >> there is optimism here, peter, behind the scenes

some say the two sides will get a deal done. there's no way 100 billion or 2$200 billion in tariffs on auts will happen. do you guys sense that as well there's a sort of under the cover optimism that something will indeed happen >> i'm not so sure to be honest with you there was optimism with china also look what happened with the chinese/u.s. trade war the chinese dug their heels in there's no political support to give in to the u.s the french are clearly not there. though germany is the economic engine, the most powerful country in the eu, they don't do things without the french on board. macron sees a political advantage going to war with the u.s. on trade. i don't think we'll see peace blaking oe in breaking out on this one juncker calling the u.s. a foe, this is not a sign of a man who

is in a place to deal right now. i don't think you will get european politics cowing to this rhetoric they can't sell this at home because it makes them look weak domestically i don't think they can concede to the president on this type of issue right now. >> peter spiegel, thank you very much see you soon. still ahead, the five big earnings that need to be on your rad radar, i'll walk you through the names and expectation. warner brothers making a billion dollar bet on a park in abu dhabi. who do you have? >> we have daffy duck and bugs bunny. more to come this billion dollar investment by warner brothers ab but du dh, all of that coming up next

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. welcome back breaking news from europe and some sad news from the auto industry reuters and a press release coming from the new chairman of fiat chrysler have said that sergio marchionne has died it was reported last week that he was in the hospital due to complications from shoulder surgery. there were reports that he possibly suffered a stroke and was in a coma. according to reuters and the company and the italian news site, sergio marchionne has died

this morning our thoughts going out to him and his family as well we'll take a short break we'll try to get phil lebeau on the line as well fiat chrysler's architect, one of the leading businessmen and auto executives in the world has passed away. we're back after this. why did i want a crest 3d white smile?

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what's it worth to talk to your mom? what's the value of a walk in the woods? the value of capital is to create, not just wealth, but things that matter. morgan stanley want to update you on that breaking news we brought you before the break, which is that fiat chrysler former chairman and ceo, one of the leading businessmen in the world, sergio marchionne has died. phil lebeau joins us by phone. i understand the company just put out a statement. >> yes, brian. john elkin, the chairman of fiat chrysler and really he has been working side by side with sergio marchionne for more than a decade, as sergio marchionne

first saved fiat and then added chrysler to the company in 2009, he put out a statement saying that unfortunately sergio marchionne has passed away this was feared by everybody within the company once we started hearing that he was suffering from health issues late last week, and then you know the board of both fiat chrysler and ferrari made the decision on saturday during emergency board meetings to replace sergio marchionne. sad news comes on a day when fiat chrysler in a couple of hours will be reporting second quarter earnings and that will be the first time that we will hear from new ceo mike manley as he takes the reins at that company. no doubt a tough day in which to talk with analysts, talk with reporters. but we'll hear from mike manley in a couple of hours when fiat

chrysler reports second quarter earnings >> yes it certainly is. we'll get to that in a minute. on the personal side, i don't know what details you have i knows there a lot of speculation out there about what might have happened following that shoulder surgery. there's talk that perhaps he suffered a stroke or he was in a coma do we know more about his medical condition heading into this >> we don't. i have to caution you, for every one of those reports where you say it was believed he may have suffered a stroke following surgery, and as a result he went into a deep coma, for every one of those reports i've seen counter reports in the italian media. i would be very cautious to buy into anything. to be honest with you, fiat chrysler as a company is to a certain extent, they're reeling. this is the man who put the company together and they're being cautious about how much they are releasing in

terms of details >> 2009, chrysler filing for bankruptcy fiat coming in with a 20% stake. they installed mr. macrhionne as ceo. >> within the last two decades you would put him within the top three of auto executives who left a huge imprint on the industry overall you could argue that along with carlos ghogn of nissan/renault, sergio marchionne is one of the few executives who has been able to take a company that was down and out, and he did it twice in 2004 fiat was a dog with fleas on the verge of collapsing he not only saved fiat, but then

in 2009 he orchestrated the acquisition of chrysler at a time when a lot of people in the obama administration had pretty much thrown in the towel and said let it die. let it go away sergio marchionne came in and as a shrewd businessman would, got the company for a very, very discounted rate. and said don't let it die. i think it can be a valuable part of a combination with fiat. since 2009 we know what's happened this is a company no longer losing billions of dollars they're on the verge of finally finishing paying off their industrial debt. they're a true global automaker now. they have been wildly successful on most fronts over the last decade since the combination was put together by sergio marchionne >> i believe you're driving, i'm guessing you coming in to the chicago studio early because of this news. let me read you the statement

that just crossed. you referenced it. i won't ask you to read it while you're driving here's the statement that has just come from one of the scions of the family that created fiat. it's with the deepest sadness that we have learned of the passing of sergio marchionne unfortunately what he would feared has come to past. friend, man is gone. i believe the best way to honor his memory is build on the legacy he left us, continuing to develop the human values of responsibility and openness of which was the most ardent champion my family and i will be forever grateful for what he has done. our thoughts are with his family i would ask everyone to respect the privacy of sergio's family as well. i think that it's a heart-felt statement from the family, one of the leading families in terms of european manufacturing. the family has deep respect for mr. marchionne, because in some

ways not only did he rescue chrysler but he may have also saved fiat >> he did save fiat. think back to 2001, 2002, there was a time when general motors had taken a stake in fiat. general motors, which was not exactly doing well at the time, looked at fiat and said what are we doing why are we taking a stake in these guys sergio marchionne was brought in and remember, he's not from the auto industry. he did not come into that job from the auto industry he came in and said let's get back to the basics of being a manufacturer he got out of that relationship with general motors, nursed them back to health starting in 2004. to the point that by 2009 they were relatively strong in most

of europe, certainly in southern europe as well as latin america, brazil where fiat has a big presence and to a certain extent in china where fiat, the brand, can be seen and has been seen for a number of years. he did he saved fiat before putting together fiat chryslerment. >> four years ago today fiat chrysler was a $5 stock. today it's over 15 dollars you have more than a 200% return for that company's stock the shareholders, the employees all benefiting from this sergio marchionne was 66 we knew he was not going to continue forever in that role. there was talk about the transition in 2019 this all occurred suddenly you have talked about mike manley's history and his own experience is there a sense from your reporting, i'm sorry if i'm putting you on the spot, that the company, while maybe not prepared for this quick of a change, did indeed at least begin prior to this to have a

succession olympiplan in place? >> there was a succession plan, whether it came down to mike manley or perhaps a couple other executives who might have been able to take over the position who were in consideration, richard palmer, the cfo, was one of those executives. there was a plan here. sergio marchionne himself said, look, our next ceo would be coming from within the company so this is not a case where they looked around and said, yeah, nobody here for the job. you want to take the job they knew what they were doing mike manley, can't stress this enough, highly regarded within the company. as much of a workaholic as responsible as sergio marchionne was. not uncommon to hear from executives that mike manley would be holding meetings or sending memos or reaching out to executives on the weekend. so this is somebody who had been preparing for this job

certainly did not want to come into it in these circumstances but this is somebody who he's ready for this job by all accounts by everybody that you talk to within fiat chrysler as well as outside of the company that deals with them. >> yeah. in that time -- phil, lebeau, thank you for joining us over the last four years, chrysler fiat stock up ford down. gm shares up about 20% the testament to mr. sergio marchionne's leadership as well as his vision for that company the success of the jeep brand as phil laid out. but there's the headline it's a sad one for the world of business sergio marchionne passed away, 66 years old thoughts to his wife and to his two sons as well back now to the markets. let's bring in joe lavorgne.

let's move on to the markets it's quietly occurred that the ten-year yield -- excuse me, the two-year yield over ten years is another t at the highest level at what point do we see this yield curve invert where the two-year goes above the ten-year yield? >> if the fed -- good morning. if the fed hikes rates in september, which is largely expected, mostly expected, 90% chance, 95% chance and they reiterate their desire to hike again in december, and three more times next year and one more time in 2020, if that forecast is reinforced in september, my guess is the two to ten-year spread will be negative, possibly as early as october but certainly by year end. the answer is soon the reason the two-year note moved as much as it's moved, and why it's at a ten-year high is because the fed is relative to the rest of the world

normalizing rates aggressively and the two-year note is the most sensitive along the treasury curve in responding to those fed expectations >> and will that signal a recession in 2019 or 2020? that's all the talk now, inverted yield curves can often but not always predict a recession or at least a major economic slowdown. >> i would say the yield curve with one exception, 1966, twos, tens, has basically predicted every recession. if the curve inverts let's say in october, history would say the earliest you would have a recession is next summer, next august and the latest would be august of 2020. it's possible that this time is different and the curve might be sending a bit different signal because long rates are relatively low having said all that, if the curve inverts, i think you have to be on the lookout for recession risk in late 2019, maybe early 2020 maybe things have been extended

a bit. i think it's a warning sign. at that point, you do need to look for other signs that the economy might be topping out what happens at economic peaks, everything looks good until it doesn't. >> gdp revision normally fairly boring friday you say that revision could rewrite economic history >> right because what the bureau of economic analysis does every five years is a comprehensive revision the last several years the growth rates could meaningfully change growth could be revised up or down what we've seen, doesn't happen often, you do see economic history change, sometimes quite a bit. so i alerted people to the that, yes, the second quarter looks solid, but the economy actually performed better. let's say it did, that makes the fed more aggressive and it's interest rate hikes come back to what we were talking about regarding the yield curve. >> joe, awesome stuff. thank you.

>> sergio marchionne has passed away, "squawk box" will continue the coverage of the passing of the automotive leade o or,nef the greatest businessmen we've seen in the past couple of decades. see you tomorrow are you ready to take your wifi to the next level?

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good morning it is a crucial day for trade. president trump hosting a meeting with top eu officials and preparing $12 billion to farm aid to ease the pain of a trade war. deutsche bank has lost nearly 40% of its value this year on concerns about its balance sheet, overnight the company reporting better-than-expected earnings. and sad news breaking. fiat chrysler says its former ceo, sergio marchionne has died. it's wednesday, july 25, 201 "squawk box" begins right now.

♪ live from new york where business never sleeps, this is "squawk box. good morning welcome to"squawk box" on cnbc we're live at the nasdaq market site in times square i'm melissa lee along with andrew ross sorkin and joe santoli. let's check in on u.s. equity futures. the dow lookingto lose right now 8 points at the open the dow yesterday broke a three-day winning streak we should note notable levels on the nasdaq which is poised to open higher by 6 points. the nasdaq yesterday with a fresh all-time intraday high in asia, sefsh watchieverybody that the shanghai brushed a one-month high to close slightly lower there. the nikkei is up by a half