♪ good morning and welcome to "worldwide exchange. here is your five at 5 stocks surge, global equities are rallying after president trump and chinese president xi jinping strike a trade truce. historic weekend, president trump steps into north korea holding an impromptu summit with kim jong-un with the two sides agreeing do restart nuclear talks. opec ministers are meeting here in vienna and it looks like they're ready to extend production curves. we'll take you there investigation into boeing could be expanding federal prosecutors are

reportedly subpoenaing records related to the 787 dreamliner. and megadeal making in the sports world kevin durant, irving, deandre jordan all look ready to take their talents to the brooklyn nets it's monday, july 1st and "worldwide exchange" begins right now. ♪ ♪ the greatest, the greatest good morning, everyone i'm con tessa brewer here at world headquarters for cnbc. brian sullivan is in vienna this morning. good morning, brian. >> we took our talents to vienna, austria, the scene of an opec meeting we'll get to what is expected in just a minute, but we have to check stock futures because it alongs like the markets are going to surge today they surged in asia overnight, stock futures we could hit a new record on the dow. remember, we hit records on the s&p 500. will today be the day the dow 30 does it? stock futures are up more than 200 points a the moment as well.

on that trade optimism that you referenced at the top, the asian markets up over 2% in hong kong and the nikkei in japan and the european -- this is going to be -- >> okay. brian, you're breaking up there just a little bit, but we're seeing there how the implied open looks this morning. it's going to be a big day on wall street. let's get you caught up to date on some of our top headlines president trump and chinese president xi jing pig agreed to hold off on any new tariffs on goods. the two leaders met on the sidelines of the g-20 summit in japan. president trump said they would ease restrictions on u.s. companies selling products to huawei after leaving japan, mr. president became the first sitting president to cross the border into north korea. the two leaders agreed to restart stalled negotiations over north korea's nuclear program, but trump says the

sanctions will remain in place for now. more from washington in just a bit. in corporate news, watch boeing today federal prosecutors reportedly have subpoenaed records relating to the company's dreamliner. the justice department was already probing the 737 max and how the aircraft was developed and certified, but the request for documents related to the dreamliner now expands that investigation. and let's go back to brian in vienna now. brian? >> all right we're joined now by somebody who is well known to our viewers here on cnbc it's so hot here, i think the wires might melt it's literally a record heat outside and might indeed be a record heat inside as well because despite everything else that's gone on, iran remains the big story. heli helima croft, it's a scorcher.

how hot is it inside that everybody is in agreement except for one of the founding nation iran how hot are they >> the rollover is essentially set. every country has a revenue imperative they all want higher prices so the rollover of the agreement is done with the exception of six or nine months it's a very fraught political backdrop opec is one of the few places where countries have very, very severe differences have to all come face to face. so will the iranians raise a lot of issues is why was an opec agreement made in osaka instead of here. >> so this is one of the key story lines and this is really fascinating. russia is not a member of opec this is a 59-year old organization over the weekend at g-20, the russians and the saudis together effectively said what opec is going to do but it was not even the russian energy minister, it was vladimir putin himself who did it how frustrated must the other

opec members be that russia is big footing the rest of the group? >> this is a big issue vladimir putin essentially came out and said i'm the decider for the sovereign producer >> king of oil. >> russia's cut has been not that large compared to saudi arabia so the question is some members might be saying quietly because i don't think anyone is challenging them publicly why is russia getting the top seat at the table. >> answer your own question. russia is the guest that moved into your house, moves the furniture around and leaves twice 00 year. >> they decided in 2016 getting russia in the organization was essential, a shotgun marriage driven by shale looks like a relationship made to last. >> it is widely expected to get 1.2 million barrel per day cut extended either six or nine months u.s. oil production has doubled in the last five years the russians, they're over 11

million barrels a day. the price of crude oil in the high 50s, wti little higher on the brent side how frustrated do you think opec is with the u.s. shale boom because they may have to cut deeper and deeper when they need the cash flow? >> if they were a member of opec, they would be the third largest. for opec and saudi arabia, how long do they want to continue adjustment on their backs alone? they keep cutting and the u.s. keeps rising so, i don't think it's a discussion for this meeting, but if we're in the current price environment 12 months out, 18 months out will there be ary assessment they do want higher prices in the middle east, two thirds of the population is usually under the age of 30. they have a youth demographic they have to answer to. >> yeah. there's a lot more intrigue there as well. helima, thank you. we'll see you later on we have to go cool off here. those are the three main story

lines. how frus ratsed is opec with the fact that russia and the saudis basically made the decision for them how frustrated is opec with the u.s. shale boom as well? what about iran? do they stick around we'll see if iran sticks around. that meeting is set to begin in three hours time here in vienna austria. after the break, more on these markets. stock futures look like they're set to surge could be a day of new records. record heat here, record hot u.s. markets a lot more to do you're watching "worldwide exchange" and we're right back ♪ho bakhis srtre ♪ just ok? (in dutch) tell him we need this merger. (in dutch) it's happening..! just ok is not ok. especially when it comes to your network. at&t is america's best wireless network according to america's biggest test. now with 5g evolution. the first step to 5g. more for your thing. that's our thing.

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welcome back to "worldwide exchange" on monday morning i'm brian sullivan live in vienna, austria. dow futures are soaring up 268 points on hopes of a breakthrough at the g-20 between china and president trump as well as that historic footstep into north korea by the president. either way, it is july 1st the markets had a red hot year economically the u.s. on sure footing but what can we expect from the second half of the year it's all about what you have did for us lately. here is steve liesman with your second half play book. >> for the second half of the year the federal reserve will be focussed on when to make a move on rates and how big a move to make here is what to watch. first, the economy ahead of the meeting in july unless the strength is measurably from the 2% growth forecast cut interest rates. second, how much to cut?

perhaps a you are the kwaer point with a few more in the months ahead, or perhaps more muscular 50 basis point cut. the fed could pause for a few months while taking pause of the outlook for growth and especially for inflation ahead 2% target. third, when to stop. the fed will be reluctant to do more than a few cuts the fed will want to avoid another long spell and won't want another quantitative easing unless it really has so look for some near-term rate cuts from the federal reserve but they'll be limited unless the economy gets measurably worse. that was steve liesman with your kekd half economics play book what does the economic setup going to mean to the investments you may have after what was a very solid first half to the year let's welcome in now mark of penn mutual asset management mark, listen, it's july 1st,

it's a new quarter, it's a new month and dow futures are soaring. does the market have a right to seem or be this optimistic given the headlines over the weekend >> well, i would say that given the outlook for the fed, you know, six months ago the outlook was for more rate cuts, so clearly those tables have turned and with the expectation for rate cuts now looking ahead as opposed to rate hikes, i would say that the outlook is pretty favorable, 2% ten years is not a great alternative relative to equity, so if you look at the valuation for today's equity market at 17, 18 times earnings, that looks pretty reasonable to me in light of a 2% ten year i think the rally we have seen to date has been justified >> you know, in math you -- i'm going back to high school here you multiple two negatives and get a positive i do wonder is two positives a negative what i mean by that is if we get this trade deal, if we get this breakthrough, do we still need

then the rate cuts that the market is not only expecting but basically begging for? >> well, you know, the markets i would say bullied the fed to turn nuch more driven by the equity markets in the fourth quarter and this year i would say the bond market is trying to bully the fed by inverting the curve, pushing ten-year yields i think the bond market is trying to push the fed around at this point, but the history for this federal reserve since the financial crisis is it never really disappoints in terms of investor expectations for a rate move, so i would be very surprised if the consensus is so high for a rate cut in july that they don't move by 25 bases points >> you think they're almost backed -- the fed is backed into a corner now, mark >> i think they have and i do think it's likely now that the trump administration is probably going to delay any type of a big trade agreement with china beyond the july meeting date for the fomc, basically to

have his cake and eat it too i think he would expect a rate cut by the fed in july if a trade deal is not done then if he does a trade deal after july, that would basically be two positives for the economy heading into next year and heading into the election. >> all right listen, we have fourth of july, it's a big holiday week, holiday shortened week where does penn mutual see good places to invest this week, where is there still value >> well, we focus really on the fixed income markets and even though clearly with ten-year treasuries at 2% i would say the opportunity set is somewhat diminished relative to where we were seven or eight months ago, however, we still do see opportunities in certain parts of the structured security markets, commercial mortgage backed securities, certainly highly rated collateral loan obligations we view as relatively attractive here we think they are opportunities to add value in fixed income in light of where treasury yield sit today.

>> uh-huh. mark heppenstall, we have to leave it there we appreciate your insight have a great holiday eek thank you very much. dow futures up big, 268 points, europe up as well but it's not all green on the screen or good news deutsche bank melee off as many as 20,000 more employees we'll give you more on that, more on trade, more on these markets when "worldwide exchange" returns live from vienna austria right after this. here's another cleaning tip from mr. clean. cleaning tough bathroom and kitchen messes with sprays and wipes can be a struggle. there's an easier way.

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♪ happy monday and welcome to "worldwide exchange. let's get a check now on some of the stocks on the move today brookfield asset management has struck a deal to buy geesee in wyoming for $110 a share sources say an announcement is expected as early as today genesee owns or leases 100 freight railroads in the u.s., canada and there you see k see stock on the move. deutsche bank supervisory board is expected to meet july 7th to discuss a major restructuring reportedly resulting in 20,000 job cuts deutsche bank ceo flagged the overhaul last month when he promised investors tough cutbacks ahead of the 2020 presidential election, facebook will start banning ads that discourage people from voting. it was announced as part of

facebook's second annual civil rights audit the company says the new don't vote policy likely will only apply in the united states and won't include policing user's posts. last year facebook expanded its policies against voter suppression and banned posts that spread misinformation on election dates, times and on polling places coming up, forget about wall street m&a, we have some major deal making in the sports world to tell you about. that's next. but as we head to break, check out the best performing sectors in the first half. ♪ stay tuned, this is "worldwide exchange" on cnbc. you should be mad at forced camaraderie. and you should be mad at tech that makes things worse. but you're not mad, because you have e*trade, who's tech makes life easier by automatically adding technical patterns on charts

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and good monday morning and welcome back to "worldwide exchange" i'm brian sullivan live at opec headquarters in vienna, austria. huge two-day meeting, by the way, a huge bump in the futures this morning as well dow futures if you're just joining us look like the dow could hit a new record high. trade optimism over the weekend has equity futures up about 250 points above fair value. oil, by the way, speaking of opec, is also up more than 2%. it is likely the group here will extend their 1.2 million barrel per day production cut either six or nine months, but that does not tell the opec story and we'll be here live all day with record heat outside and maybe some record heat inside as well. but for now, let's talk more about what is happening in d.c. which is contributing to your equity gains this morning and find out what the major

headlines are in washington with tracie potts tracie, good morning. >> reporter: brian, good morning. the big nudes is the fallout from president trump stepping 20 steps into north korea, the first sitting american president to ever do so, raising the question whether this was just symbolic or if it could lead to disarming one of the world's most dangerous nuclear powers. >> i never expected to meet you at this place. >> reporter: president trump stepping into history. >> stepping across that line was a great honor. >> reporter: the first american president to stand on north korean soil, shaking hands with north korea's leader, kim jong-un. >> this is an expression of his willingness to eliminate all and open a new future. >> reporter: it's historic, but is this just symbolic? could it actually lead to north korea giving up nuclear eapons >> the next two or three weeks the teams are going to start working to see whether or not they can do something. >> it's a tall order to convince

the north koreans to give up these things. >> reporter: north korea wants relief from economic sanctions, the u.s. wants to end their nuclear program. two summits have produced little progress the u.s. is going for a third led by special envoy steven bagan. >> i want to see them stop testing nuclear weapons. we want to make sure that japan is safe. >> reporter: president trump is down playing recent tests as small missiles, not long range with nuclear warheads. >> it's not just feasible to imagine kim jong-un dismantling his entire nuclear and missile arsenals just on the promise of economic sanctions relief. >> reporter: skepticism about the small step forward, the impact unknown now, the president has said that he's in no hurry to work this out. brian, we may actually see chairman kim in washington that would be historic, too, if he visits the white house. president trump said he extended the invitation >> reporter: tracie potts in

washington thank you very much. check on this morning's other top world and national headlines go to phillip mena in new york good morning, phillip. >> hey, brian. good morning important first for the u.s. armed forces major general laura yeager is now the first woman to lead a u.s. army infinity division. yeager took over this weekend during a ceremony at the training base in california. she began her active duty career in 1986 and flew black hawk helicopters in iraq. yeager will now lead 10,000 soldiers. it's a whole new world in the nba this morning as the league's free actsy period kicked off with some major moves. so far brooklyn is the big winner, two-time mvp kevin durant announcing via instagram he plans to sign a max $164 million deal with the nets the former golden state star is coming off an achilles tear and expected to miss the upcoming season the nets also reportedly getting all-star guard kyrie irving as well. if you have the monday blues, thanks to nezly, drown your sorrows in a pint of edible

cookie dough currently only available at pub plix but toll house plans to roll it out to walmart stores pretty soon. it comes in two flavors, chocolate ship and peanut butter chip it will only be available through july brian, back to you >> phillip, thank you very much. all right, coming up after the break here on "worldwide exchange," how exactly did the xi/trump breakthrough happen we're going to take you inside the g-20 and where some of the glad handling actually occurred. we are seeing dow futures up 250 points right now oil is up. asia up more than 2% a lot of green on the screen on this monday, the first day of july and "worldwide exchange"etns ghafr is rur

♪ welcome back to "worldwide exchange" i'm brian sullivan we are live in vienna, austria, at the opec headquarters where we're at the beginning of a two-day meeting, a very important meeting as well and it's not just because of production normally when we're here we'll talk about what kind of an output deal or cut or increase that opec is going to make that is not the main storyline today, although it is one. the group is widely expected to continue on with its current pace of 1.2 million barrel a day output cut agreement for either 6 or 9 months. that is the primary storyline.

oil is up about 2% this morning. but that is not the intrigue around this meeting. instead, there are other more macro and in some cases much more important storylines to so play number one, russia vladimir putin with the saudi crown prince announcing the deal ahead of opec at the g-20. does that frustrate the group? we'll find out secondly, how frustrated is opec with continued increase in u.s. oil? opec is trying to keep a floor on prices, but the u.s. is now pumping 12.5 to nearly 13 million barrels a day. that is altering the calculus greatly. i know there is some frustration among ministers that we have spoken with about u.s. also. iran back in may threatening to quit a group that it helped co-found nearly 60 years ago the iranian minister is said to be very, very upset with the group. so a lot of story lines here the production cut just one of them we'll be here all day for you on

cnbc in the meantime, lot of drama at g-20. the markets are rising on that a rare behind the scenes look at exactly how the entire weekend played out with somebody who was there and that is kayla back in d.c. and joins us now. what a weekend, kayla. >> yes, it was incredibly busy and dramatic a cease fire between the u.s. and china now confirmed after an 80-minute meeting between president trump and president xi of china that produced a deal to see new tariffs suspend and beijing purchased undetermined amount of u.s. agricultural products here is president trump describing the deal at his closing press conference in osaka. >> with respect to china, basically we agreed today that we were going to continue the negotiation, which i ended a while back and we're going to continue the negotiation. we agreed that i would not be putting tariffs on the $325

billion that i would have the ability to put on if i wanted. we're fairly advanced depending on where you want to look at and where you want to start. >> this truce to be determined commerce secretary wilbur ross tells me the truce will last for, quote, as long as talks are going well huawei in the meantime will remain on a business blacklist secretary ross said but the department will soon grant licenses to u.s. companies to do business with the company. and cease fire is a welcome development for businesses that have been lobbying the administration for more than a year to pursue accountability with china but by means other than tariffs but the huawei news brought unease to lawmakers like senator marco rubio who tweeted that congress will have to get those restrictions, put back in place through legislation and suggesting doing so would see a veto proof majority in a republic can senate. the president said he would deal with huawei at the very end of the process. it's unclear exactly when that would be or how temporary this

salve is for the markets brian, back to you >> well, kayla, looks like we have a bit of a thaw, obviously the market reacting strongly this morning, but what is the next in the timeline for trade are the two scheduled to meet again any time soon? >> ell, there's nothing on the schedule right now back when talks broke down in early may, the assumption was that the u.s. delegation would go back to beijing that was the next suggested event in this time frame of course, talks broke down. there was no such meetings scheduled. now it would appear that it is time for the ugs delegation to return to beijing because the chinese place a lot of importance on these things having some sort of equity between them and the number of visits is very significant to them so that is what we would expect and we are still awaiting the dates for that visit >> kayla, live in washington kayla, great trip over the weekend. thank you very much for joining us early this morning on a

monday let's talk about the trade talks. joining us is chris. i'm here in vienna, austria. good to chat with you again. >> good morning, brian. >> the dow is up 250 points. a lot of optimism off of the weekend. do you think the market reaction is merited do you feel like there was that much of a breakthrough that justifies this kind of gains we are likely to see today? >> look, obviously the conversation with the two presidents went well enough for the president trump to be able to back down or at least feel he could back down from the position of new tariffs on the u.s. side, which is a good sign, it's a very good sign. i think the markets should bake that in and has. but i will say that this administration has proven time and time again that if talks slow, he will impose new tariffs. so the only cautionary note i would say would be that. but i think that the bob lighthizer and secretary mnuchin, i think will get back to work quickly and i think

we're all optimistic it will get to a deal very quickly >> i know, chris, in your d.c. days which weren't that long ago you're very close to people at very high administration, do you believe there's a difference perhaps between in-person trump trade man, we saw the impromptu meeting at the border versus white house, twitter tariff man, in other words, could we see now that he returns to the u.s. a return to the sort of frustration, the tweets that we don't get the in-person glad handling, we sort of get more back to what he was before which is the tough stance? >> i think he'll keep the pressure on china. i think rightfully so. i think china has really good track record of talking a good talk but when it comes to putting up the money, they just aren't putting the money where their mouth is they're really bad at doing that i certainly think he will keep the pressure on. obviously the president uses tweets quite liberally i think he will use that to keep the pressure on.

we'll see where talks go, but i do know that the team around the president and the president himself are very, very dedicated to making sure that there is a deal that we get with china that's meaningful to the united states >> should the equity markets be as giddy, chris, as they are right now? >> i'm optimistic. i'm optimistic when i last saw you i said i would buy and i would still say the same thing i think that the chinese have to come to a deal they have to for their economy it's good for us to have the chinese come to a deal as well i think at the end of the day there will be a deal resolution that will come to some sort of a deal we'll see how comprehensive it is i believe and expect there is a deal sometime in the first term of the administration. >> chris campbell, always great to get your insight. thank you very much. up to speed on this monday

morning other headlines. >> brian, thank you. china's stock market may have surged today on the back of the trade truce struck by president trump and chinese president xi jinping. but fresh data shows china's economy continues to feel the impact of the trade war. factory activity unexpectedly shrank in june according to a private sector business survey the readings suggest china is still slowing despite a rush of stimulus support over the past year shares of samsung and lg display are lower today as you can see lg off by nearly 2% because thursday japan will impose stricter controls on exports to south korea of several chemicals used in chip and smart phone production it's part of the fallout following a court decision in south korea because the country ordered japanese companies to compensate people forced into labor during world war ii.

japan says that that was all resolved when they resumed relations diplomatically a group of protesters tried to break into the legislature building in hong kong today. thousands of people have been marching today on the 22nd anniversary of the handover of the former british colony to china. protesters have taken to the streets the past month to oppose attempts by the hong kong government to change extradition laws coming up, a new report this morning says central banks can no longer be the main engine of economic growth. former bank of mexico governor will tell us why that's next. for your heart... your joints...

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a continuation of the old mood but there could be new records on wall street today dow futures they are up big on a monday morning, up about 256 points it's all on optimism that maybe, just maybe some kind of a breakthrough is made in the trade fight between trump and president xi in china over the weekend. it's not just the u.s. futures that are up this morning the asia markets doing very well overnight with the hong kong, the shanghai and the japanese markets all rising early trade in europe where we are right now in vienna, austria, a similar story, a lot of green on the screen as the follow through what happened on g-20 does carry over, not a move in bond. this kind of move in equities, you might expect a sell in bonds, but that certainly has not been the case this year. in fact the benchmark ten-year sitting at 2.02% over the weekend, the bank of international settlements the switzerland based organization that oversees and helps understand many of the world banking systems out with its

annual economic report we had a chance to do an exclusive interview with the head of the b.i.s. and i began by asking just how the trade tensions played out in analyzing the global economy right now >> well, i think we have to look into the medium term i think it is very difficult to judge the events from blow to blow, but i think that through time there has been progress and i think we're very close to ratification i'm very hopeful we will get it. more than anything because both countries, mexico and the u.s. need each other. obviously canada is so, so very important in north america it's essential but needless to say, the u.s. is the main trading partner of mexico and mexico is one or the second main trading partner of the u.s.

so, i think that it's a win-win situation for both countries to get that out of the way. >> do you believe it will get resolved in a favorable manner for all three parties? >> i think so. the mexican senate has already ratified it, so we're moving ahead. certainly the u.s. is what motivates it, but again i hope that common sense would prevail and everybody would realize that this is essential for sustainable, rapid economic growth on both sides of the border. >> let's combine the two topics, trade and your annual report is there any way to quantify or effectively measure a drag on global economies from the u.s./china trade fight >> yes

well, more than anything quantitatively will take some time to see all the consequences, but needless to say, this uncertainty surrounding the trade talks have postponed important investment decisions. it has also affected exports it has affected, the volume of trade. volume of trade is again at relatively low, low, low level speaking historically and more than anything it has been spreading around the world one of the features now or characteristics of trade in modern times is it depends on global value chains where a lot of production takes place in different parts of the world and therefore it's spreading now you see the impact on southeastern asia. you see the impact on japan, even you see the impact on

germany. so countries that are not directly related to the dispute are feeling the consequences. >> do you foresee a recession globally or with the united states in the next 12 to 18 months >> at this stage i would say that it has a very low probability, but economic growth has been slowing down and downside certainly the trade disputes can flare up and could have additional impact on the volume of trade on investment on the other hand, services and consumption from held up well but that is not very -- it's not often to see that a sector like services holds up so well when other sectors like manufacturing is doing weak. therefore at some point both sectors will harmonize each other and that might be another

reason why we might see more slow, slow growth in the future. so i think here more than anything is the prospects are not that good as we move forward, but it would be too much to say that we're heading towards a recession. >> low probability of a global recession, so says the head of the bank of international settlements. you can catch the rest of our interview if you go to cnbc.com. we did more in our exclusive with him. coming up after the break, it was a best june for the stock market since all the way back in 1938 it was a very solid first half but this is a what have you done for me lately market coming up after the break, more on your second half play book. what can you expect from the markets and your money we're going to find out. dow futures are up big we're here at opec in vienna, and there's much more "worldwide exchange" right after this ♪

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♪ welcome back to "worldwide exchange." we are live in vienna, awe stree yarks outside of opec headquarters wow, what a start to the month it looks like it's going to be maybe a thawing over the weekend at g-20 has the markets ready to soar on this monday. remember, we're coming off the best june since all the way back in 1938 and dow futures right now they are up 250. but there's a lot more left to do this holiday shortened week, particularly from this building right behind us in vienna, austria, the headquarters of opec where they're beginning to meet today and have another meeting tomorrow and there is a lot at stake not just whether or not they will extend the 1.2 million

barrel per day production cut deal they made back in december. a very hard-fought victory, but a lot more macro issues, maybe a bit of an existential crisis for opec as well but first and foremost, tensions with iran are center stage and last night the head oil minister for the united arab emirates also the president of opec and the operating president here we caught him coming into a hotel and our colleagues asked him what they feel about the twin tanker attacks in the gulf of oman. >> any threat to the ship movements anywhere in the world is a threat to all of us and we are not i think opec and all of the countries are interested in the safe journey of the oil everywhere it goes. but, we're coming here not as politicians, we're coming here to discuss a decision that balanced the market, therefore

whether it's an extension, how long is that, that i think was going to be discussed here in this meeting >> all right so there you can hear it any threat to shipments around the world is a threat to opec. but keep in mind, iran is here and they have been very, very tough with the rest of the group, frustrated as they have said about what they perceive as a lack of support from the rest of the organization, especially with russia taking more prominent role despite not being a member of opec in fact, iran actually threatened to quit opec. it was a founding member all the way back in 1960 so there's a lot more to do as the meeting really has yet even to begin here in vienna, austria. the other question is what is the long-term outlook for opec cnbc has an exclusive survey on a number of topics around oil and opec we polled a bunch and asked them five years out, what is the likelihood and the relevance of opec 53% of those we surveyed said that opec is likely to be less

relevant in the global markets about 23% said the same but look at that little sliver up there at 4%, they believe that opec might not even exist five years from now, unlikely but still most of the market out there feels that this organization, given the ascension of u.s. shale and the u.s. permian boom is less likely to be relevant in five years than it is right now. lot more intrigue all day at the u.s. headquarters. let's get a check with my good friend contessa brewer in cnbc headquarte headquarters. >> brookfield asset management struck a deal to buy genesee for $9 billion $110 a share an announcement is expected as early as today genesee owns or leases more than 100 freight railroads in the

u.s., europe and in canada deutsche bank supervisory board expected to meet july 7th to discuss a major restructuring reportedly this could result in as many as 20,000 job cuts deutsche bank ceo flagged the overhaul last monthwhen he promised investors tough cutbacks and we want to check out the chip stocks right now in the pre-market it looks like the semiconductors are making some big moves. micron solutions up. intel up 3%. a lot has to do with the news coming out of the g-20 when president trump said he would lift some of the restrictions on some of the u.s. companies supplying huawei and the resumption of negotiations between the chinese president and president trump they say they will get back to the trade talks and have agreed, at least for now, no new tariffs. one more tech story we want

to bring you ahead of the 2020 presidential election, facebook will start banning ads that discourage people from voting. it was announced as part of facebook's second annual civil rights audit the company says the new don't vote policy likely will only apply in the united states and it will not include policing users posts. last year, of course, facebook expanded its policies against voter suppression. it banned posts that spread misinformation on election dates, times and polling places. and now let's get back to brian sullivan who is in vienna for the big opec meeting very hot there, too, brian, right? >> yeah. it's hot outside could be record heat it was over 115 in france yesterday, i believe but also could be very hot inside this building and of course we're going to be live here all day with the intrigue around the opec meeting as well. for now, let's talk about the macro economy and the trade talks because they certainly go

together and welcome in chief economist at natixis i know you believe the economy has down shifted a little bit. we had positive news on the fringes outs of the g-20 dow futures reflecting that up 250 points do you think we should ratchet up given the outcomes over the weekend? >> not yet, brian. the economy based on production, the ism figures what probably is a slower pace of employment, suggests the economy is not growing at 3 but something 2% or possibly less. if the trade negotiations continue and there's not a full imposition of tariffs. this is more important, brian, in the fed cuts interest rates the back half of the year will look better, a lot depends on the fed and what most investors missed brian is the fact that the fed has raised interest rates in the cycle significantly more than what many believe and that is really in the midst of the slowing the economy, much less about the trade

>> yeah, but i wonder, joe, does what happened over the weekend does the potential resolution of a g-20 with a trade fight does that change the fed's thinking or as we talked about earlier in the show, is the fed so deep in that hole that it's not going to be able to change what it wants, whatever the data happens and whatever the outcome of the trade talks may be >> deep in the hole, brian, in the sense that they're definitely doing 25 bases points this truce, if you will, perhaps takes the probability of 50 bases points out, lowers that probability. however, if the data over the next few weeks turns out to be much weaker than expected and there is much trade rumbling, i mean, this trade issue is not settled by any means, then the fed will move more aggressively. so the trade helps but really depends on what the fed does proof of that, brian, is if you look at the housing market, that's the softest part of the economy. that's a reflection of the significant rise in rates that occurred over last year which now rates have fallen so re-fi

activity in housing is looking better but for that to continue the fed needs to validate market expectations in terms of rate trajectory, i see the fed cutting 75 bases points and don't believe the trade truce if you will, the trade thaw is going to change that >> maybe we're overstating that as well because i know it gets all the headlines, president has a way of doing that, joe 74 whatever percent of the economy is simply consumer spending ma and pa deciding to buy a house, buy a car, buy a piece of furniture do you believe they are being impacted by the headlines that they see or are they simply going on with their lives? we still have low unemployment, we have some wage growth and the u.s. economy will continue to do well, at least not make a recession in the next 12 to 18 months >> brian, they're probably more impacted by what's happening with oil and gas prices in that philadelphia refinery going down i don't really believe the american people are that focussed at all on the trade

the impact has been very minor at this point. it's more fear of what happens to global supply chains and will be a worst case scenario of all-out trade war which i would say the probability of that is extraordinarily low. so it comes back to employment as you highlighted, gas prices, this is the driving season people are on the road a lot they want to pay lower prices. consumer confidence is high and the job market still looks very good, of course it's lag so the consumer will do okay, brian. it's really more about exports global economy and what happens with u.s. cap x which has been soft >> very quickly, what could be your surprise shock in the second half of the year? >> surprise shock at this point would be faster than expected growth and more than expected fed easing sort of a combination of two outliar scenarios. more from the fed but then growth turns out to be faster and the fed is sitting here next year not knowing what to do in an election year >> joe, always a pleasure to get your views

have a great holiday-shortened week. >> stay cool, brian. >> thank you very much it's impossible here it's hot outside and will be hot inside we're live at the opec meeting all day. dow futures are up big, 250 points bond yeel 2.02% and oil up 2% as well a lot resting on what happens inside this building where we will be all day here today and tomorrow for you on cnbc that's it for "worldwide exchange." "squawk box" begins right now. pretty sweet gig vienna good morning it was a busy weekend for president trump from a trade truce with china to that historic visit to north korea. we'll show you how the markets are responding you can see right there actually don't need us to show you. opec ministers have gathered in vienna where production cuts are expected to be extended. crude prices jumping over night. we'll take you to the meeting live plus, news you can use, ahead of your independence barbecue wholesale pork prices dipping

sharply on a supply glut of u.s. hogs what's behind the trend and why it may not last? it's monday, july 1st, 2019, and 'squawk box" beginning right now. ♪ >> announcer: live from new york where business never sleeps this is "squawk box." good morning, everybody, welcome to "squawk box" here on cnbc we're live from the nasdaq market site in times square. i'm becky quick along with joe kernen and andrew ross sorkin. the u.s. equity futures at this hour as joe mentioned they are up sharply after the news that china and the u.s. have laid off on the trade war for now, there is some sort of a truce as we wait to see what happens next with those talks no new tariffs will be put on. china will be buying more products as a result you can see the dow futures indicated up by 265 points s&p futures up