good friday morning. it is 5:00 a.m. at cnbc. here is your top five at 5:00. ceos blasting the trade fight. more than 600 companies urging the president to stop the tariffs. we have shocking new video to show you this morning. no bone to pick here online pet product retailer chewy shocking as the ipo rush rolls on a real estate rate shock, why tumbling rates could have a huge impact on the average american single biggest purchase of their lives. and congratulations toronto. the raptors winning the first

ever nba title, no city has waited longer in basketball. we'll tell you why we say that on this friday, june 14th, as "worldwide exchange" begins right now. ♪ how could we not play a little toronto based rush this morning. welcome from wherever you may be watching the city of toronto is still rocking. jurassic park, their fan area, going absolutely bonkers last night. they win the first ever nba -- that could be right now. who knows. congratulations toronto. we'll give you moran that game in a minute. first, let's get down to business new this morning, call it a trade war triple threat. walmart, target and more than 600 u.s. companies are urging president trump to resolve the trade issues with china. they claim that tariffs hurt business and consumers this as broadcom slashes the

expectations for the year, blaming the united states' ban on huawei. broadcom down 8.5% now broadcom is not alone in warning investors. micron saying the ban on doing business with huawei brings, quote, uncertainty and disturbance to the entire semiconductor industry and micron stock down just under 3%. that is not all. there was also more disappointing data out of china this morning with two key readings slowing to the lowest level in years let's tie this all together with eunice eun corporate america and the chinese economy starting to feel some pain? >> absolutely. there is definitely more evidence of pain of the property sales here dropping by the b biggest amount since october 2017 a fixed asset investment cooled down

retail sales raising 6.8%, compared to april's 16-year low. so analysts say that the better figures are probably because of higher inflation also government incentives to try to boost consumption, but probably not recovery that we're seeing in consumer confidence. now, the weak readings are raising expectations that policymakers were probably going to roll out more stimulus measures, but there is a lot of concern now about the second half of the year today, chinese officials were saying that the big uncertainty for the second half is the trade conflict i spoke with a finance minister who advises the government on trade and he said that the chinese still believe that the u.s. has to move first on tariffs to lift them before the chinese would go to the negotiating table. this is what he said >> chinese very clear, the imports the tariffs must be

removed. >> as you know there is still so much uncertainty as to whether or not president trump and president xi are going to sit down at the g-20 for a bilateral to try to work out in the best case scenario a truce. >> what are you hearing is the latest are the two going to meet? will trump and xi have some sort of dialogue at g-20 in japan on june 28th? >> i think that's the hope from a lot of investors that i talked to here. still, the chinese are not confirming that president xi jinping is going to end up meeting with president trump in a bilateral. so the official that i spoke to had said that it is confirmed that president xi will go to the g-20 but his argument is that the working level teams need to be enhanced he said the communication really hasn't been good on a variety of levels and that needs to be

improved before the chinese get what he said full information and make their decision as to whether or not president xi is going to meet with president trump. >> all right, eunice, thank you very much. despite the semiconductor stocks we showed you getting hit today, futures overall not faring that badly, dow futures down 40 points but overall, we're still higher on the weak. the nasdaq is up more than 1% for the week coming into today should we be surprised that we actually have been strong this week given all that is going on? joining us is dory wiley, ceo of commerce street capital, trade fight, the twin tanker attacks a lot that is happening out there, the market doesn't seem to care. why? >> i think the market cares very much >> higher this week, you would think lower given all that. >> i think we're very fortunate it has been this strong this week i think it will flop around a little next week and in toward the end of the month if he doesn't show, he's

probably not going to give on the tariffs much by the summit and also said he's going to raise tariffs on another $300 billion. that's an opposite direction from where the chinese are coming we'll see continued volatility. >> volatility in a -- volatility can go both ways we always talk about when the market goes down, it is volatile when it goes up, we don't talk about it the market has seesawing the last six months. >> that's what i think it will do it will go up and down there is still a lot of good things going on in the economy the market is looking for a quick end to this. every time he gets a hint of positive good news, it is going to rally and then gets discoura discouraged, going down. we'll see that this summer and this fall. >> the problem is this has already dragged on and you heard eunice, there is not a plan to meet they're not close at this point to some kind of a trade deal. >> i think a lot of people were naive about this this is a big deal

we focused -- we tend in business to focus on the business aspect. you have all the companies out here saying, we need to end this, this is hurting us they need to stop back a little bit and go, hey, i got supply lines in a communist country that has spying issues, security issues, and human rights issues. how smart is that as a ceo >> we saw restoration hardware, not asking you to recommend restoration hard way, but the furniture company, they said we're diversifying our supply chain. jim cramer talked about this is it worth from an investor's perspective, short-term pain here, maybe even a year or two, to get things better and more secure for the next 25 years >> it is not just worth it, it is -- we have no choice. we come it a crossroads, given the security issues and started with huawei. they have expected us to just stand pat while they stole all this forced technology transfer, all this spying. it is over the genie is out of the bottle

they need to move the supply lines and diversify. >> on friday, as we like to leave our viewers, a little investor optimism, idea generation heading into the weekend. we talked about -- we have a series in week called the rate shock. regional banks, you also believe that many of these small and midsized banks in america are under valued right now. >> absolutely. all the way up the line. b of a and wells fargo -- >> the biggest of the big boys. >> i trade those, don't buy them for a lot of long-term holdings. all the way down to pac west and california, 1.8% return on assets, much higher than your average bank, great management team, 60/60 yield, growth equity play, there is great value out there in banks. >> seems panicky or worried about falling interest rates. >> well, there is two things, falling interest rates and

recession, right well, it is fully priced in. it is fully priced in. these stocks are very, very cheap right now. and we could have a nice full recession and still have a good deal as far as falling interest rates, there is more pressure on them if they have falling interest rates but banks are very adept at adjusting the net interest margin and very stable over the last 15 years. they raise rates and lower rates and they're all on the short end of the curve a lot of people worry about them being on the long end of the curve. >> dory, like some of the banks out there, even the big boys, we appreciate you coming on this morning. safe travels take care. when we come back, shocking new video for those twin tanker attacks in the gulf of oman, the u.s. squarely placing the blame right on iran, a live report from the region is next. then the ipo that could be maybe the next stock to own. later, the other debt threat

that nobody seems to be talking about. nobody but us, that is we're backig aerhi rhtft ts. be good while i'm gone.

[ laughing ] woo hoo. ♪ welcome to my house mmm, mmm, mmmmm. ball. ball. ball. awww, who's a good boy? it's me. me, me, me. yuck, that's gross. you got to get that under control. [ dogs howling ] seriously? embrace the mischief. say "get pets tickets" into your x1 voice remote to see it in theaters. good morning welcome back it is 5:12 getting up at the hours we do, it is tough. but the moon, did anybody else out there in new jersey see the moon this morning? it was, like, felt like it was going to hit the earth it was that big.

and that beautiful but thankfully the sun is coming up everything is okay secretary of state michael pompeo blaming iran for yesterday's twin tanker attacks in the gulf of oman in what the u.s. calls a, quote, blatant assault on navigation and clear threat to international peace and security hadley joins us now. >> i'm basically where i am standing is 70 miles from where the incidents took place yesterday around 6:00 and 7:00 a.m. local time. as you say, it took less than no time really for the blame game to start u.s. secretary of state mike pompeo essentially blaming tehran for what we saw, the attack on two tankers yesterday in the gulf of oman. this is one of the busiest shipping lanes in the world. it is interesting to note that when you take a step back here and look at the u.s. allies in

this region, saudi arabia and the uae, they remained pretty mute and iran kicking back a short while ago saying this is sabotage diplomacy i want to update you on a couple of things that happened over the last several hours u.s. central command released new video they say shows an iranian revolutionary guard vessel close to one of the tankers and to be removing what looks like a device above the water line folks i've spoken to saying to me that those attacks that took place off the coast a month ago on four vessels, two saudi, had similar properties to what we saw over the last 24 hours one of which is that the vessels weren't sunk, they were just disabled as if whoever was doing this, iran or potentially another state actor or nonstate actor, don't know yet, they weren't trying to sink the ships, weren't trying to escalate the situation. they are trying to show, hey,

we're posturing, we can do this. it is interesting to watch the reactions not just here in the gcc and also more broadly, washington and more globally because the amount of conspiracy theorists we're seeing whether on social media or elsewhere is pretty intense there is also the other element here, which no one seems to be talking about, but you know very well, which is the idea that the united states now being able to use oil very much as a weapon, as a result of u.s. shale production and how much that is really changing the game in terms of giving them leeway to be as tough on iran as they want to be >> i've seen video floating around hard to know what's true and what not -- what may not be accurate a lot of video out there want to be clear we have vetted everything before we show it but there does appear to be some evidence out there that we can point our finger at iran is there not >> absolutely. this was video released by u.s. central command. the flip side of this, what makes it rather amusing when it

comes to what would you say reading the tea leaves coming out of tehran, they're using the same video on iranian state tv, but clipping the top of it where it shows the iranian revolutionary guard crew fiddling with the side of a ship when we talk about what happened to these two tankers in the last 24 hours, what we know is they're on their way to this port, docking here probably to see -- to have more investigations and more intelligence being shared with us later in the day, in the coming hours, as to what happened to them it seems as if this video released by u.s. central command shows iranians meddling with the side of those ships. >> hadley, thank you very much we're showing that video right now. what it appears to show and what the u.s. is saying it is is effectively an iranian small naval ship removing an unexploded mine from the water because they believe that at least one or both ships was hit with what they call a limpet

mine it shows the ship coming toward one of the tankers and then moving away very quickly after removing something from the water. thank you very much. on deck, big investors taking aim at one of the world's biggest consumer products companies. why they're going after sony then the chips are down. why some ceos are starting to get upset about the trade fight and what they're asking trump to xt about it. ne unpredictable crohn's symptoms following you?

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all right, welcome back. good morning here are your big three stock stories of the day broadcom shares getting blasted this morning, they're down 8.5%. the company slashing the sales forecast for the year. it blames the trade war and huawei ban. dan lobe taking aim at sony. his hedge fund third point is calling on the company to spin off its chip business and sell off stakes in sony financial and other units. he wants sony to just focus on entertainment. that stock is up 3% in japanese trading. the ipo market, you know this, has been red hot this week shares of fiber, they're getting a ten from investors they're up another 9% right now after the company soared 90% in its debut yesterday. now 131 ipos this year and have jumped more than 50% on their first day of trading we could have yet another one today. chewy.com is pricing its ipo at

$22 per share, above the expected range of $19 to $21 22 bucks, the offering is expected to raise just over $1 billion. and would give the pet retailer a valuation of about 8.8 million. the stock will list on the new york stock exchange under the ticker chwy. chewy. still to come, the real estate rate shock. maybe a red flag for perspective borrowers or a huge opportunity for you to refinance your home elizabeth warren wasting no time rolling out her plan to eliminate student loan debt for at least some people and there could be, though, another ticking debt bomb that nobody else is talking about we'll tell you what that is when "worldwide exchange" returns

welcome back 5:24 on a friday morning futures are down let's get a check on the morning's top headlines, to philip mena in new york. >> good morning. white house press secretary sarah huckabee sanders is resigning. the president tweeting, quote, after three and a half years, our wonderful sarah huckabee sanders will be leaving the white house at the end of the month and going home to the great state of arkansas. the president also saying he hopes she runs for governor of arkansas a replacement has not yet been

named. officials are cracking down on the measles. governor cuomo signing legislation eliminating religious exemptions for vaccines new york has become the epicenter of the measles outbreak with more than 800 people sickened. cuomo called the outbreaks in brooklyn and rockland county a public health emergency. the law will require schoolchildren to be vaccinated despite their parents' objections going into effect immediately. the new harry potter themed roller coaster opened yesterday, some waited in line for as long as ten hours to ride it. fans who wanted to be the first to experience haggard's magical creatures motorbike adventure, the ride has a record-breaking number of launches and the second coaster in the nation to feature a 17 foot vertical drop. back to you. >> have a great weekend. thank you very much, appreciate that. coming up, crude reality

sinking in as the u.s. calls out iran for yesterday's twin tanker attacks. we have got new video from the wreckage and oil's reaction. plus, it was lights out at last night's angels/rays baseball game literally. the video you got to see when "wlddexcng rur orwi ehae"etns the ai i need? it's gotta scale across my business. starting here, in procurement, helping us find the right suppliers. then here in logistic, to avoid disruptions! here in sales. even here! i'm talking about ai we can build to work... here, predicting trends. and here, wherever our data lives! and here, working with all our other ai! i think we're done here. expect more from ai. ibm watson.

aas a guy withe! his own catchphrase, i appreciate that after 75 years smokey's only said... smokey bear: only you can prevent wildfires. al: but, i'm filling in because there's a lot more to report! like when there are parched or windy conditions out there, you gotta be extra careful with things like burning yard waste. after all, wildfires can start anywhere, even in your neck of the woods. go to smokeybear.com to learn more about wildfire prevention. we're coming up at 5:30 a.m. at cnbc global headquarters. good friday morning. here are the five things that need to be on your radar before

you head out the door. the chips are down semiconductor stocks tumbling in the premarket, new fears, new concerns out of china, two big names getting hit hard this morning. we'll show you pointing fingers, the u.s. blasting iran over yesterday's twin tanker attacks in the gulf of oman. new video from the scene that is raising eyebrows this morning. hey, chew on this, chewy.com raising more than a billion dollars in its ipo company starting trading today on the new york stock exchange a housing alert. how tumbling interest rates could impact your single biggest investment of your life. we'll round out our week long rate shock series. and no doubt a lot of bleary eyes all across canada this morning as the toronto raptors take home their first nba title. oh, yeah it is friday, june 14th, you're watching "worldwide exchange" on cnbc ♪ i've been taking care of business every day ♪ ♪ taking care of business

every way ♪ ♪ i've been taking care of business ♪ >> good morning or good evening, maybe you're still awake in toronto and welcome from wherever in the world you may be watching i'm brian sullivan the toronto raptors did take care of business last night. bringing home their first ever nba title. if you went to bed early and missed the game, don't worry we have highlights we spoil it. there is your end result look at that we know that backman turner overdrive was from winnipeg, not toronto. first more serious business. we follow the developing story out of the middle east, new video to the cnbc newsroom this morning from the united states military as you can see, it is black and white, grainy. but it appears to show the iranian navy removing what looks like an unexploded mine that was attached to the hull of one of those two tankers in the gulf of oman yesterday secretary of state michael pompeo blaming iran for yesterday's attacks. we'll have more on this coming

up later in the show with rbc's haleema kroft. that video, you can see those naval guys on the boat reaching in, taking something off the side of the boat, in the cover of darkness, and then running away for fleeing on their boat very rapidly well, despite what happened yesterday and the continued trade fight and all the global risks that are out there, futures are down a bit the dow is on pace to post its first back-to-back weekly gains in two months. joining us now is jack caffrey great to see you again welcome back to "worldwide exchange." why do you think the market and investors and stocks have been simply able to shrug off everything in the world that seems like it would be a negative on equitys? >> iny there a think there are f reasons. first, we still have a positive earnings story it is not maybe as robust, but we got through first quarter, we were going to see negative

earnings growth, looking forward we continue to see some acceleration in the earnings game with interest rates having fallen, the hurdle rate you want to start thinking about stepping out remains a compelling trade on a relative basis. equities are able to look to the prospect of earnings and lower hurdle rates >> when do these things, if at all, begin to hurt earnings? >> i think you look at risks that come out of the trade complex. the risk that most people have looked to has been the idea of what happens to margins. last night we did hear the thought that uncertainty is turning itself into fears with sales. you're hearing some date why coming out of some of the transportation sector that you're seeing somewhat slower volumes falling as companies were working their way through their inventories. there is uncertainty out there we have to be cognizant of that. at the same time, i think it

still comes back to companies are doing a good job of trying to manage their costs, trying to control what they can control. and that gives us this uncertainty which creates opportunities in the market. >> you think there is opportunities in the railroads >> yeah. you come back to the railroads and they can be a beneficiary of an ultimate trade deal we think about the united states, what we would like to be selling more of to japan, these are going to -- sorry, china, these are going to be bulk commodities. talk about the president's manufacture to try to work through some issues with mexico, the idea of selling more agricultural product, these are products that move by rail not an idea that today or this month, but over the next two to three years, the rhaails are we positioned >> when we got that mexico tariff tweet, you saw kansas

city southern, they have come back a bit, is this really a trade related headline, trade, though, on the rails, jack >> i think it is the immediate catalyst is around trade you look at this business, and it has been much more capital efficient, it certainly is making steps to actually improve their efficiency ratios by embracing precision rails, and i think that makes for the longer term story a positive trade deal would be a nice kicker. >> jack caffrey, always a pleasure, jack have a great weekend thank you very much. >> thank you, brian. pleasure. time for the top trending stories. friday, nobody wants to work, rahel solomon, what are we talking about as we pretend to work today >> this is trending, the music you love, t-swift. know who that is >> taylor swift, reading, pennsylvania's, own. i have a 15-year-old daughter. do you see the video of me

dancing to swift >> taylor swift dropping a new single take a listen. ♪ snakes and stones never broke my bones ♪ ♪ calm down >> yes the song is called "you need to calm down. yes. it is part of swift's new album "lover" released august 23rd the song has been out for five hours, has more than 1 million views on youtube >> a big deal. >> she is always a big deal. you know what, i feel like now her songs have a theme, shake it off, you have to calm down, good mottos for life. >> it really is. >> very metaphysical elizabeth warren introducing new legislation to tackle the student debt crisis. warren planning to introduce a bill that would eliminate up to $50,000 in student loan debt for 42 million americans

it would be funded with a 2% annual tax on net growth exceeding $50 million. she is partnering with james clay burn on t clyburn on the proposed bill >> if youed paid off your studt loans, how do you feel about this if you paid your student loans off and now people get wiped out if it passes -- >> people are struggling to pay their student loans. >> where did you go to college >> st. johns and northwestern. >> they're great schools but not cheap. the average public tuition, average tuition was $2100 a year >> $2100 21,000 >> no, 2100. $7,000 adjusted for inflation today. maybe a little more conversation about why college is so expensive than how to pay for it. >> couple of problems, i agree >> on to lighter news. >> i'm an angels fan >> okay. lights out at last night's

angels/rays game the power went out inside tampa bay's tropicana field. happened in the middle of the fourth inning. those are fans whipping up their cell phone lights to try to power it on. it was restored after 30 minutes, game play resumed and the angels went on to win >> looks like the start of a t-swift concert. >> that's what some of the players said, looked like a t-swift concert, a music concert. >> the angels would s won the e >> sticking with sports. the toronto raptors, you know this, bringing home the first nba title in franchise history they did keep it close until the end. a single point behind with ten seconds left steph curry missed a three-point attempt. how often do you say that? final nail in the coffin for the warriors raptors won 114-110. it is the first nba title since joining the league in 1995 and they're going to be talking

about this for years to come i'm from philly. we're still talking about the eagles super bowl win a few years ago. >> i know he first since 1995, technically true, but the first ever nba game was the knicks versus the toronto huskies in 1948. they technically are the oldest nba town along with new york this is the first championship since 1948 if you go back to toronto. >> you are just a wealth of good information. >> or just making it all up. >> random facts. >> i say it like it's true and that's all that matters. rahel, thank you. >> you're welcome. coming up, housing alert, why now may be your last chance to lock into an ultra low mortgage we're rounding out our week long series on the rate shock ahead forget about student loans is there another major death threat out there, just as big as nobody else seems to be talking about. we'll talk about it.

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.

all right, and welcome back. good friday morning. time to wrap up our special week long series, all week talking about the rate shock, the impact of the dramatically falling rates over the last couple of weeks and months today, the biggest story of all, the home front falling rates they create new opportunities into the housing market and diana olick is here to explain why >> reporter: mortgage rates loosely follow the yield on the ten year treasury. they have taken a deep dive. the average rate on the 30 year fixed over 5% last november, now solidly below 4% that's already juicing refinance demand, up 97% this week compared with a year ago according to the mortgage bankers association. but there is still room to grow. the rate drop over the past month added an additional 3 million borrowers to the pool of those that could benefit from a refinance, according to black

night. 7 million people could now benefit. as for buyers, no question lower rates helped make the math work on a monthly payment the drop from 5% to 4% on the 30 year saves the borrower about 200 bucks a month on a $300,000 mortgage you have to consider the reason rates are so low is because of economic uncertainty and concerns about the economy and that makes buyers slightly skiddish because for most a home is the single largest investment >> more about this and what may be the single biggest largest purchase you'll ever make in your life, with the chief economist at lending tree. this is such a big deal. do people buy homes based on the price of the home or do they buy homes based on the monthly payment? >> they buy based on the monthly payment. what this rate decline means is, for example, for a thousand dollar monthly payment, now you can afford to buy $25,000 more in house for each thousand dollars,

because of the rate decline of one point since november, you have an extra $25,000 in your pocket to buy a house. >> is that kind of a risk, though, in some ways it is good, but do people -- if people maximize every dime they can borrow, does that drive home prices up artificially >> is it does put upward pressure on home prices, i don't know i say artificially. the interest rate is part of the affordability calculation. there is a home price, interest rate, there is the incomes the challenges that home prices since 2012 have increased at three times the rate of income, so really the rate of increase in home prices i think is getting somewhat unsustainable, we need it to cool off >> we talked about beyond meat, how it is soaring, one of the reasons we pointed to is there is not a lot of stock available to buy a lot of people trying to buy a small pool of assets is that the same story with

housing? there are so few homes for sale. the ones that get bought get bid up. >> there is a lack of inventory pretty much across the board but mostly at the lower end of the price point, which pushes prices up at the lower end which rec sh ricochets through the entire market most buyers, we found two-thirds of buyers saying the biggest challenge was finding an affordable home to buy. >> any sign that is changing at all? >> they have been slight increases in inventory to start this year. part of it was because sales had started to slow down a little bit. but with the decline in rates, we'll probably get a recovery in sales and we'll be back to the inventory challenges again. >> thank you for joining us. big thanks to the worldwide exchange team for putting the series together all week, coming in at 2:00 in the morning, good job. on deck, fingers pointing, the u.s. blaming iran for twin tanker attacks in the gulf of

oman haleema croft is here. and why jay powell could have an impact on oil. two big oil stories for you this morning and we have both of them for you coming up. be good while i'm gone.

[ laughing ] woo hoo. ♪ welcome to my house mmm, mmm, mmmmm. ball. ball. ball. awww, who's a good boy? it's me. me, me, me. yuck, that's gross. you got to get that under control. [ dogs howling ] seriously? embrace the mischief. say "get pets tickets" into your x1 voice remote to see it in theaters.

good morning good evening in chicago. some people on rush street may be just coming out we are approaching the top of the hour if you're just waking up, the top headlines, more than 600 u.s. companies sending a letter to president trump urging him to resolve, to fix, to end the

trade fight with china walmart, target, macy's, costco among the companies signing the letter broadcom slashing guidance and micron warning of uncertainty over the u.s. ban on huawei. both stocks deepen the red broadcom off 8.5% now. a big ipo to watch, chewy.com. ipo at $22 a share, valuing the company at over $1 billion expected to start trading today under chwy and the raptors beating the golden state warriors in game six of the nba finals. it is toronto's first title since joining the league in 1995 they played in the first nba game in 1948 then known as the toronto huskies. you're welcome we continue to follow a major developing story out of the middle east. secretary of state michael pompeo blaming iran for the

tanker attacks in the gulf of oman, saying it was a blatant assault and clear threat to international security check out this video coming into cnbc this morning. this comes from u.s. central command, the u.s. navy it appears to show a small iranian boat removing what looks to be an unexploded mine from one of the two tankers in the gulf of oman yesterday joining us now is helima croft if that is accurate, that puts the attention squarely on iran, but what does that mean for geopolitics in. >> the question what is the united states going to do? for the last month, had president trump saying don't want a war, i don't want regime change, prime minister abe in iran trying to get a diplomatic off ramp and then a japanese tanker struck. >> bad look. >> bad look. the question is, if you're president trump, are you going to escalate sanctions or going to have to deploy more military forces to the region, more carriers going to the gulf those are the type of things we have to think about.

>> we had this, it is early, the years escape me, what year was it, late mid'90s, we had u.s. navy ships escorting oil tankers. >> we had -- are we going to be back again where u.s. destroye is going to have to basically lead a fleet of supertankers through the straits of hormuz. >> you had hundreds of ships targeted during the iran/iraq war. we had six tankers struck in a one-month period that is pretty extraordinary the oil market is shrugging it off. if this continues, that is what the fifth fleet is going to have to do, secure the sea lanes. >> is there something to be said about the fact that these two attacks yesterday were far worse than the four ships you referenced a month ago >> i think that's showing escalation what we have not seen yet is any tanker sunk. if you read the after action review of what happened a month ago, a sense that the iranians opted not to sink the tankers,

but to send a warning to the region the question is what is next do they sink a tanker next >> what they're saying is a month ago, okay, we just dinged them, you didn't pay attention, you didn't seem to care, now you're going to pay attention, if we still don't pay attention, then what's next >> that's what's next. >> that's when they sink one >> assuming it is iran iran has -- we got to be fair, iran denied it. >> iran denied it. you had the iranian foreign minister early in the week saying, look, we're not going to be the only ones paying a price for economic warfare the united states won't get off scott free even when the iranian foreign minister, now they're denying it, the question is, do we think the saudis did it. what happened the day before >> why would they blow up a ship that is not theirs one of the ships had naptha from

saudi arabia >> we're in the focusing on what happened the day before. that's when you had a missile strike a saudi airport i'm actually very concerned about actually having a major infrastructure hit in saudi arabia those are the type of things that take you very close to the precipice. >> oil spike got -- led every show on cnbc yesterday as it should have. what is maybe now we have to talk about is that, a, there are captains of ships right now in port we talked to brokers that aren't leaving, they're scared, sitting fullen laden with oil an saying i'm in the going because i don't want to die. also, the cost of shipping is going to spike the insurance rates and the ship owners are saying we could get sunk it is going to -- that's a back end cost forget about the spike in oil. there is other costs >> also the thing to watch, we keep saying to clients, the date we think you need to watch now is july 7th. that is a deadline that the iranians have given the europeans, saying if we can't

sell our oil or do banking transactions, we're going to really restart our nuclear program. the director general of the iea was out warning this week. i think that is the type of move that also further escalates tensions in the region. >> got to circle july 7th and a rising hard-line in iran these economic sanctions are enabling the hard right to ascend in iran. >> their view is economic warfare aimed at regime change they're not going to sit back and let that happen. >> can you stick around? >> i can. >> helima croft. we'll talk about oil you may not buy a barrel of oil, i'm guessing you drive a car another story to the side of oil as well, that's interest rates roberto friedlander, couple of days ago, putting out an interesting note that talked about oil and interest rates and we talk about iran and tankers and supply, but you have shown there is connection between interest rates and oil what is it >> yes, sir. good morning

happy flag day i think the comparison between the economic conditions now and late '98 are astonishing we were which an economic expansion more than 90 month longer in the tooth than we are now, about 60 plus we had the asian financial crisis then. now global anxiety over trade war. fed went into a series of interest rate cuts and cut a total of three times for 75 basis points of all of this very similar. unemployment was lower, lower now than it was then 46 now about 36, 38 now cpi in line. the fed went through the late cycle monetary easing and cut rates and what happens was the s&p because of late cycle expansion was up over 50%. crude, brent crude from condition of normal to backward. the energy market, the energy tape alone went up 40%, but the

oil service index and which now a lot of those components really highly shorted, that was up over 100% between late '98 to 2000. >> so what is your outlook for oil right now in current conditions >> say again. >> what is your outlook right now for current conditions >> i would say crude right now, and we're probably oversold still at these levels. i think crude is the range gets above 55, 56, nice gap to the upside there we can go to mid, high 50s to low 60s. especially as the rate cuts start coming in july and probably continue through september and the end of the year. >> it is fascinating to think about the interest rate shock, series we have been doing all week, haven't talked about oil as well. are you surprised that oil didn't move more than 3% yesterday on the headlines would have been a time that it should have gone up 7% or 10%. >> yeah, exactly yeah i was a little surprised you had

crude down 5%, 6%, maybe traced half of that loss. just been a total malaise with the energy sector as a whole that carries over to the physical i think that is still understated. as helima alluded to, the tensions won't get easier, they'll get a lot harder and more escalation, i think and so many u.s. assets in the area in the persian gulf, around the area, and small proximity with iranian fast boats, they call their navy. only tanks one other kind of simple thing to happen >> i think one thing we think about as well, the market being held down so much by trade war concerns, if we get a better look on the trade war story, better optic out of the g-20, i think that could be a real catalyst for oil to move higher. >> higher? >> yeah. if we have -- >> because global growth slowdown concerns will be eased? >> right now oil cannot get a real bid we have such high demand fears

this is really weighing on the market because of the trade war. if we get any off ramping on the trade war story, the geopolitics story is important. >> the tanker attacks aside, the iran sanctions were put in, you talk about removing a million, million and a half barrels a day from the global export market, and the global oil market yawned is that because wear going to go 13.5 million barrels a day in the united states? >> we're on the trajectory of going 13 million barrels a day you're getting a buildup in inventory globally because of imo 2020 coming on next year as refineries continue to boost up utilization rates into imo, you'll see more product get pulled through the system. a lot of inventory levels are maybe a little abnormally high than what they look to be on paper. >> very, very high roberto, interesting stuff, comparing interest rates to oil. helima croft, always on the geopolitical

puts a lot of attention on the upcoming opec meeting. >> when it happens >> i love that you brought your son in at 5:00 gunner, come over here real quick. helima croft, superstar oil analyst, global traveler, great mom with three little vikings. congratulations on the graduation of middle school. are you excited? >> yeah. >> he'll be watching wax before he gets up every day. >> except for saturday and sunday let him sleep in congratulations. thank you. your rbi is about a debt crisis brewing in america, could stifle growth and spending for years to come. a total debt outstanding, more than a trillion dollars. the average loan is 30,000 bucks. when we talk about student loans, no, we're talking about auto debt. the debate about college debt heats up, we forget the car loan market is basically the same size as the total amount of

student loans with interest rates around 7% to 10% and, by the way, for an asset, that collapses in price, ten minutes after you buy it that's the next debt crisis politicians will be talking about. thanks for watching us on "worldwide exchange. have a spectacular weekend "squawk box" begins right now. >> good morning. breaking overnight, markets in china are under pressure new data shows the industrial output grew at the lowest race in 17 years. tip stocks selling of in the u.s. and abroad after broadcom lowered its guidance and warned about the impact of the trade war with china and congratulations to toronto, the raptors defeated golden state to win canada's first nba title. we'll be playing canadian music this hour in their honor congratulations. drake, o'leary, mr. wonderful,

noah blackstein, anyone else lorne michaels "squawk box" begins right now. ♪ nothing is wrong just as long as you know some day i will ♪ >> live from new york, where business never sleeps this is "squawk box. >> good morning, everybody welcome to "squawk box" on cnbc. we are live from the nasdaq market site in times square. i'm becky quick with joe kernen, andrew is out today. our guest host is peter bookfarb, a cnbc contributor thank you for coming in. good to see you. >> thank you. >> let's get a look at the u.s. equity futures, you're seeing red arrows yesterday, the dow closed up by 100 points and it was this smallest gainer of the three major averages when you look at percentage terms the dow and s&p 50