it is 5 a.m. here at cnbc, 10 a.m. in london where president trump has just arrived for an official state visit. we will take you there live where he had some interesting words for the mayor of london. china blasting the united states on trade but at the same time signaling they would like to restart talks we are live in beijing with what's really going on. call it salsa inflation in fact chipotle raising the red flag on possible tariffs with mexico. more changes at 1600 where president trump's top economist says he's leaving the white house. apple is reportedly ready to

pull the plug on one of the most iconic programs. tune it up on monday, june 3rd because "worldwide exchange" begins right now ♪ ♪ good morning, good afternoon, good evening and welcome from wherever in the world you are. forget about american pie. maybe it's shepherd's pie. president trump just landed here at stanstead much more from across the pond including an interesting two tweets about the mayor of london let's get to this morning monday after the index stumbled 5% last month, it doesn't look like anything is going to happen in the new month. the way that june is going looks like the way june went out dow futures are down 128 points right now.

as bad as may was for stocks, keep in mind the biggest decline was not the equity markets it wasn't even oil, it was bond yields ten year fell 16%. coming in at 2.09% that, my friends, could be telling a very big story crude oil continuing its slide down more than 16% in may. off another .4 to 53.28. you have two things in play. number one, worries about a global slowdown as well as continued high output from russia let's check asia the hong kong hang seng, it fell 10% in may and right across the board everywhere but korea, japan down another 1%. let's get to the early trade in

euro europe as may went out, so comes in june red, red, red, red, red. all the major averages are down 1/2%. maybe there's a new tone on trade. china laying out in a white paper conditions that it needs to return to trade talks china does appear to be willing to return to the table they had some harsh words for the united states. let's get more for what is really going on. the latest with eunice yoon in beijing. eunice >> reporter: thanks so much, brian. well, china released its second policy paper on its trade conflict with the united states and the harsh tone suggests that the two sides are moving further apart. the so-called white paper criticized president trump's pledge of make america great again and how that applies to the trade war. it says america's economy as well as the company and people

will suffer and the company dismissed allegations that the company backtracked citing three examples of when the u.s. backtracked. it said that it put all of the blame for the failed talks on the united states and the paper said that china is open to further negotiations but the u.s. shouldn't cross beijing's red lines. it says it will continue to fight the trade war to the end we saw tariffs kick in on $60 billion. beijing ranked the priorities for its, quote, unreliable entities list. this is a black list of foreign companies as well as foreign individuals. and state media said that federal express is now under investigation for mishandling packages for huawei. just minutes ago china issued a warning for students and scholars to carefully considering the risks no

official comment over the weekend. tomorrow, eunice, i don't need to remind you, the 30th anniversary of tiananmen square. that plays out from what we've heard from the recent nationalistic tone we've had weaker data from china overnight. >> reporter: yes, that's right, we did you could say that it was a little bit of a bright spot because it's a private survey of the mvg sanufacturing sector. it showed patchiness as opposed to a downright contraction in this pmi it said that the private survey beat the estimates of 50.0. it was steady at 50.2. the higher exports were likely due to front loading on tariff fears. but, brian, i wanted to talk to you about the sensitivity of the 30th anniversary of the incident

that never happened here because just the fact that you mentioned the word blacked out our signal. so i don't think you guys are showing any pictures of tank man or anything like that, were you? because the fact that you just said it just cut out our significant flal oh, we're out again because i talked about it. >> if i say tiananmen square -- >> now i'm out we're out. we're out. >> is this literally somebody -- >> did you show pictures >> is this automated i'll give them credit, they're fast >> no, there's somebody watching us and they press a button. >> the incident that never happened eunice yoon, we can see you just fine joining us is david nelson you say tiananmen square and they shut off our signal. >> it's a closed society so not surprising. >> incredible. let's get back to the main tone of the markets which is of course -- negative

>> january was eye new month, new year, new tone for the markets. it doesn't look like we're getting that june is coming in the way may went out why? >> i think it went back to thursday, the announcement that they're going to escalate to 25% tariff on mexico that's a dangerous term because now tariffs are being used for political outcome, not just economic i understand the frustration on immigration. certainly congress has failed the american people. they keep hoping that the next group of politicians continue to fail nevertheless, it's fraught with peril. if we can slow down the influx of illegal immigration into this country, we just shook hands on a trade deal with mexico that's going to cause mexican officials, even leaders around the world, can we really trust the united states when we do

this >> my viewers are going to be cnbc viewers do you believe this is a head fake, b, the tariffs will come >> 57% said they believe it was a head fake. in other words, a scary negotiating tactic the market believes that. >> we could translate that and say with nato allies regarding defense spending for analysts and strategists, we have new numbers with china, we understand the dynamic. >> what i meant by bringing that up is these are investors. 57% believe it's some kind of a fakeout. what if it's not then what happens? what if tariffs come and they go up in july and august? >> we have to go through the same exercise that we went true

last month we had to go through our portfolios and find which has the most exposure. we came up with semiconductors now we have to do the same inspection with mexico that brings up all the usual suspects, autos, auto parts, refrigerators, some companies like sy. ultimately supply chains move and it's an unsettling atmosphere maybe we're going to disengage with china maybe that's the end game. in the meantime, the supply chains take time to move. >> sometimes you have to take the pain to solve a bigger problem. we forget there are companies having their i.p. stolen every single -- >> if we could end that, maybe they open their markets for real and you have a huge market

>> it's just earnings. how do you model future earnings >> very difficult. that's the problem equity markets are just valuations based on the future for cash flow. >> and earnings. >> and in the end it will follow earnings and cash flow the 12-month flow are still holding up 2019, not so much. we had estimates come down every month since september. we held up the market. that was a good move ceos set the bar lower you have the media out there calling this a block swan event. that's a big word. i don't think it is. ultimately stocks, economies, supply chains, we'll get through this. >> a lot to talk about

see you back soon. thank you very much. all right. a number of other headlines to get you on this morning including a new warning out of boeing frank holland joining us with more of the news you need? >> i'm going to start with this. the grouped 737 max models the issue does not pose an imminent hazard. boeing says it's working with the faa and it's urging them to inspect the parts in question. the department of justice is stepping up the inspection of google it's unclear what they're investigating and the inquiry is said to be in the very early stages google and the doj have declined a comment. president trump announcing yesterday kevin hassett is stepping down. the president praising has set on twitter before departing to

his trip to the u.k. we'll hear from kevin hassett coming up. it's a big deal in chip sector infineon is buying cypress for $10 billion. brian, that's the latest back over to you. >> thank you we'll see you in a bit. very busy hour still ahead on monday morning, when we come back, we will go live to london where president trump has just arrived he is due to meet the queen of england. plus, some interesting comments about the mayor of london. then, what happens to germany's biggest bank when the country's citizens have to pay to borrow money? the news still ahead, 5:12, futures down

110 and we're back after this. o) automatically sort your expenses and save over 40 hours a month. (danny) every day you're nearly fried to a crisp, professionally! (vo) you earned it, we're here to make sure you get it. quickbooks. backing you. the first survivor of ais out there.sease and the alzheimer's association is going to make it happen. but we won't get there without you. visit alz.org to join the fight.

we like drip coffee, layovers- -and waiting on hold. what we don't like is relying on fancy technology for help. snail mail! we were invited to a y2k party... uh, didn't that happen, like, 20 years ago? oh, look, karolyn, we've got a mathematician on our hands! check it out! now you can schedule a callback or reschedule an appointment, even on nights and weekends. today's xfinity service. simple. easy. awesome. i'd rather not. some of the tweets this morning, there might be a clash in london. good morning welcome back you are looking live at london where president trump just arrived for an official state visit. he has a lot on his docket including official engagement of the royal family and the outgoing prime minister, theresa may. let's get down to steve sedgwick

who is live at buckingham palace and some rather interesting tweets from our president, steve. >> reporter: yeah. what else did we expect, i guess, from the president. he has all guns blazing. let's talk about the tweets. the mayor of london was invited to the state basket. i'm not going. we should not be rolling out the red carpet to mr. trump. mr. trump straight back at him saying pretty nasty tweets bad job, terrible job in mr. trump's words of running london and should concentrate on crime rather than worrying about the president. these two got formed because he was the man who gave the final thumbs up approval to the trump baby blimp when the president was over last time around in 2018 he's done the same this time around this time a 20 foot baby blimp will be allowed to be flown in westminster for a couple of

hours. it's a state visit very important only two previous state visits the queen has met all sitting presidents apart from lyndon b. johnson in the 1960s since she became monarch in 1952 very important ceremonially, key day on wednesday this is down at portsmouth which is the day 75 years ago that allied troops left for normandy. a lot of different dimensions. >> how long do we have what's the time line on the visit? today and the next couple of days, steve. >> reporter: yeah, look, brian, today is the ceremonial.

>> reporter: the president will be flying in marine one. it will take him to the back of buckingham palace. all of the ceremonials going on there. there were security concerns there will be a private lunch and tea later with the prince of wales. then they'll go to prince minister abby with the queen's second son and lay a wreath in honor of the president. >> we don't need to go into exactly what the president said about the mayor of london. they weren't kind comments do we know why, steve, he went after? what i was trying to understand is what's his beef i don't understand where the conflict originated.

>> reporter: this goes back since he became the mayor of london guess who was the mayor of london before kahn boris johnson. he said i can see boris johnson will be an excellent prime minister sadik kahn was labor the president talked about no go zones in london, crime areas he says the mayor should be concentrating on that rather than criticizing the president i'd say the problem is the back of the blimp, mobile phone, it will be around and another one

is going up tomorrow sadik kahn is the man who gave permission for it to go up. >> steve sedgwick, we'd expect nothing less thank you, my friend. staying with europe. italy's biggest bank is down 18% in the past month. germany's biggest bank, deutsche bank, down 20% in a month. the yield on the german bond touching lose, 0.2%. we have donald here, cnbc contributor. all of the trade is getting the focus but banking looks like it's a disaster again. >> the lesson here is central bank, when they play with the yield curve, they're artificially changing the trade of capital

banks can't make money with a yield curve, almost the entire curve is negative. that's your first problem. your second problem is there is something lurking there in non-performing loans but it's been there for literally almost a decade it's been glensed quite a bit. as you go from 1% -- >> when you look at the benchmark 10 year, all of the headlines scream bond market being bought on global concerns. there is an element but if you're in europe and you're a sovereign wealth fund and you need to put your money somewhere, why would you buy european debt? you're going for the u.s. treasury market, are you not >> yeah, that's been the case for a while. the problem is it for most of the last year it's been more

expensive to buy the u.s in other words, you have a huge mob. we have 5 or $6 trillion of assets coming into the u.s we've had people buying passive atfs, treasuries everybody is hiding out in the u.s. this is a very dangerous trade the dollar, if the fed really saw it here, jpmorgan took their ten year yield down, the fed followed through on what the futures market is saying the dollar could collapse here because there's so many people hiding out in the u.s. >> is there any reason right now, larry, and i can't believe i'm saying it, to own gold >> absolutely. gold's been a horrible investment over the last five years. >> decade? >> but it's been a grade traiting vehicle and i think we

could have a 50, 60% growth in gold futures are pricing in almost three rate hikes in the next 12 to 18 months those two things, just on those two things alone gold should be at 14 or 1500 but the dollar has been suppressing gold. if the dollar gives way you're talking about a colossal move in gold. >> or colossal nail our. somebody wrote a book about that thank you for joining us. still on deck, what washington needs to do to get china back to the negotiating table. plus, after 18 years your apple music library may be dead. long live your apple music library. what apple may do today that ends nearly 20 years of music history.

library.

welcome back thanks for being with us on this monday morning stock futures are coming into june the way that may went out, weak dow futures just down under 100 points right now s&p and nasdaq futures are off the same will trade and trump's london visit snagging the head lines. that's not all you need to focus on monday that influences the

fed's thinking of rates. at 10:00, you get i.s.m. manufacturing and construction spending later in the day apple will drove off the conference many vehicle sails and a huge meeting takes place. full coverage here on the worldwide leader in business news. straight ahead, trade war triple threat. strong words for china china laying out its terms to return to the bargaining table american companies are responding one major consumer brand speaking out on exactly how much those proposed mexico tariffs could cost you the tradtrlee ip threat when "worldwide exchang

"worldwide exchange" comes back next ♪ ♪ ♪ ♪ ♪ ♪ ♪ applebee's new loaded fajitas. now that's eatin' good in the neighborhood. applebee's new loaded fajitas. the first survivor of ais out there.sease and the alzheimer's association is going to make it happen. but we won't get there without you. visit alz.org to join the fight.

a trade triple play topping your headlines china, mexico and chipotle we'll connect all the dots ahead. president trump touching down in london for a short time for an official state visit. and apple reportedly planning to pull the plug on one of the most iconic and game changing services. get your music library squared away as "worldwide exchange"

continues right now. welcome back thank you for being here with us on cnbc. we're happy to see u2. major indexes scoring more than 5% futures indicating a drop of 100 points if you thought it was a counter change, not the case right now i will say this, futures down 120 when we walked in the door they're down 8 the momentum may be coming your way. the biggest decline was in stocks and bond yields 2.09% buyers from around the world. more talk coming up in a moment. first, let's get you caught up in speed

nbc's frances rivera in new york. >> reporter: many city offices in virginia beach will be closed this morning after a weekend of emotional vigils before leaving for the u.k. the white house says president trump made an unannounced stop at a virginia church to pray for the community and the victims 167891 city employees who had served had combined 150 years many were colleagues of the gunman no word yesterday on the motive. a massive cruise ship slammed into a boat. this is an area visited by millions of tourists that peace was shattered in seconds. four tourists were injured rieg to run away including leafy breaches people are urging you to evacuate and a barrier also failed in

iowa causing them to rush into the city of burlington took about 20 minutes for the water to fill the streets. for monday morning, those are your headlines. >> thank you very much we have a trade triple play. china blasting the united states on trade in a white paper but at the same time signaling it would like to restart talks if a certain condition is met two, the white house wants to hit mexico with tariffs and three chipotle is sounding the alarm on the proposed tariffs. we have eunice yoon, kayla tausche and we have eunice yoon. >> reporter: china released the white paper on a trade with the united states. it listed three things it wants to see before it will come back to the negotiating paper t.

wants the u.s. to lift all of the tariffs. to be realistic about what nice text otherwise, the white paper was highly critical. in the meantime bay jung says it will fight there beijing rated its priorities of its, quote, unreline entis tis list state media said federal express is under investigation for mishandling packages for delivery to huawei, the chinese company under scrutiny by the united states government the vice commerce president

wouldn't say whether president xi was going to the meeting with president trump at the g-20. >> let's go to the white house giving more details on socking mexico with new tariffs of their own. let's get the latest from kayla tausche. >> reporter: good morning. we'll get an update on where negotiations with the u.s. stands the summit with the foreign minister and mike pompeo are set for wednesday. he expects good results from the meeting. in a twitter con very versy, they're saying mexico is a friend of the united states. wilbur ross says they'll meet today. president trump meeting with the two sides, i'm done talking for 25 years we want action, not talk mick mulvaney said the white

house has considered this move twice before when asked about the uncertainty it creates for business, mulvaney said because congress has been unwilling to act, the white house has no options. >> the purpose is not to create uncertainty. >> it is. >> it is, that is one of the consequences the purpose is to fix the situation on the southern border we've tried all the ordinary things. >> reporter: he said the president is deadly serious about tariffs and that he expected next week on the june 10th date for them to go into effect, brian. >> there was i guess not a peace offering from the mexican president but certainly some suggested comments that maybe they're willing to come to sources. how are people reading the mexico side of this story? >> reporter: i think it's unclear exactly what would be seen as a win for the white

house. what mexico could deliver. we heard mulvaney say it was his hope that tariffs wouldn't go into place they tweeted this policy and the active date of the tariffs he said that it was his expectation that these tariffs would go into effect clearly the president is digging in his heels on this issue we'll see exactly what mexico can offer him. it is notable that the white house hasn't stated what it wants. it wants mexico to substantially stop the flow offism my grants. kate rogers, what is chipotle saying?

>> reporter: they're speaking out saying if enacted it could negatively impact the company's costs by $50 million and reduce margins by 20 to 30 basis points this includes the starting percentage and increasing. jack hartung says if the tariffs become permanent, we would be passing it on through a modest price such as a nickell per burrito. it is aware that it could sool of the volatility by purchasing pre-mashed or processed avocadoes but the committee. late friday the company said it had been working to diversify

the produce. it does not break out what percentage of produce is imported from mexico chipotle does say beyond avoc o avocad avocados, it's limes, bell peppers, all before and offsetting a major chain restaurant booze down 11% down a week what other restaurants could be heard by that. customers do gravitate to that chile's holdings and then fee he is stay.

also, smaller chains much few jerp restaurants. >> you think about the mom and pops that don't have the buying power. >> they said this isn't a time for the smaller companies with the supply chain a lot of uncertainty here. not a lot of great things to say. >> it is a serious topic you can say don't touch my guacamole or my beer. >> 5 cents isn't a lot of money. >> we'll see, kate rogers, thank you very much. joining us to talk about all of this and the markets is chris campbell long time d.c. guy i hope you don't mind me saying

that that is a compliment this ultimately plays out. >> i think you see what china's doing now. they're going to both need to keep posturing china cannot afford to take the stocks they're publishing a white paper. it's a good sign they're signaling that they need to come to the table >> everybody can posture but somebody has to give a little bit. >> china will have access to the u.s. consumer. the u.s. will probably have to make some concessions as well. it's probably not directly related to trade talks there will be a day when it will come. >> two ways to look at the markets.

may was weak the dow follows 5% nasdaq 7% but all the major indexes are still higher issue is the market overly worried >> i'd buy now you know these players, but there's tough talk out there steven miller apparently has the president's ear. i don't want to call them hard liners but they have a perspective, this is the way to do it. do you think the president has any flexibility on this the way he's going to approach it? >> there are a ton of skeptics in the administration.

the president, as he always does, has people with strong opinions and they sit down and battle it out. at the end of the day, we're going to get there the president wants to find a deal >> okay. before i let you go. you're obviously optimistic. give us the main reason to be -- give us a little good news on this monday morning, dow futures down 11 points again. >> yeah. china has to -- the only way for china to continue growth is by having the u.s. consumers. the only way to do that is to lower the tariffs. if you back out, very soon, i believe,we're going to get there because china has to grow markets. >> have you ever seen that

seinfeld where george is talking about the upper hand, who has the upper hand do you believe we have the upper hand >> we have hand. >> we have it. i would bet the u.s. every day. >> it is monday. chris campbell, optimistic view. thank you very much. when we come back here on "worldwide exchange," your trade turmoil investing in play. one of steve jobs most iconic creations. your music library is dead we're back after this.

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(vo) send invoices and accept payments to get paid twice as fast. (danny) it's time to get yours! (vo) quickbooks. backing you. monday morning 5:46 here on the east coast. stock futures, they are down down 90 points on the dow. session lows, down a little bit more than 100. futures have backed off a bit but unfortunately june looks like it's coming in the way that may went out on deck, is it a june boom or a june swoon. what to expect from your money following a miserable man. later, why you may want to pull one out one ofpp ale's main topics your rbi coming this way it's a quick break

the first survivor of alzheimer's disease is out there. and the alzheimer's association is going to make it happen. but we won't get there without you. visit alz.org to join the fight.

well, it is the first trading day of june. definitely a may to forget for

most investors, but let's help remember for you some of the reasons why we say that. the s&p 500 alone lost 1.6 trillion in value in may apple lost over $110 billion alone. nasdaq fell nearly 8%. the dow down just under 7 and small caps dropped even more than that. 23 dow components fell last month with six of them dropping more than 10%. and if you thought you could hide your money out over seas, that would be a big niet asia was even worse. the u.k. down 3.5% italy, down 7% germany, down 5. france down 7. hong kong down 10 and china and the only section that did anything positive are greece which was up 7% and russia up

4% two economies, by the way, that have their problems that continue to get weaker but the markets didn't mind. greece and russia, your two standouts in may as we learn from december, a different month can bring a different perspective. let's bring in steve chevron we'll join you in a second we were hoping the turn of a calend calendar. >> we think lay us into the fall brian, the key issue for us is what happened last friday. >> you were positive i won't say overlyi bullish but you had pockets of strength.

>> we are. we've gotten the china trade rule we understand what it's about. but we have something that says, look, we could use tariffs that's a lot for the feel understand. >> over the weekend and they will be subject to duty or basically a take so it appears the trade war is spreading, not contracting. aluminum and steel coming out of australia. the issue with the china trade war, you have ai, robotics, you need to protect the intellectual property that's a worth while goal. we get that. you can't fight that, start

mexico markets. >> here, they have mown what are you doing im -- i think the first to do, something that's flexible. >> its a a af fund that can go to u.s., long/short strategies we think that in volatile times -- >> is that all equity? a little bond, a little cash >> all of that >> it can switch >> where are you now >> we were 5% over weight equities we'll take into account what's

going on can't disclose that. >> the markets are down which means people are selling. >> correct >> these are the big, diversified companies that have solid cash loads 10 year yields, that looks attractive. >> at some point bob pisani will talk about how about r there's been an investment and a shift saying we're a 2.5% shift looks pretty doggone good. >> i think it looks really good. the balance sheets are fine. they're still generating a lot of catch whnd when you -- will that destroy the u.s. economy >> think about it this way

it doesn't destroy the american economy. all of the mexican goods and chinese goods, that's 35% of imports. if you are a company, where do you want to ip be vest go pro on may 13th announced it was leaving china to avoid the trade issues other ceos will mexico there's goals there. if would had to hang out, there's strong, high paying games. >> if you are gb to be the best, they're paying you more. >> thank you see you soon. your music library is dead that's the subject of today's rbi because later today has the

worldwide developer's conference is expected to kill itunes it will be replaced by stand alone music, tv and apps it's bitter sweet to see it go i have a feeling i'm not the only one listening how who has the same question. what am i going to do with this? the ipod i still use and many of you do, too. more importantly, what's it going to take. give us some hope, apple, if itunes goes away save this. it starts at 1:00 eastern time full coverage of apple's conference all day on cnbc dow futures coming back in a good way off 85 as the month of june

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. it is monday, june 3rd,

2019, "squawk box" begins right now. live from new york where business never sleeps, this is "squawk box. squoo good morning, everybody. welcome to "squawk box" on cnbc. we are live from the nasdaq market in new york city. u.s. equities. this is the first trading day of june and as people who are bulls going to be happy to put the month of may behind us it was a rough one we are looking at the dow being down the last six weeks in a row. that's the first time that has happened in eight years. the s&p 500 and nasdaq have been down the last four weeks last week alone the dow was down by another 3%. this morning we are looking at red arrows these aren't severe declines but the dow futures are down by 83 points nasdaq off by