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 by 30 the nasdaq up by 128 and this is

all coming after the markets are coming off a very strong month of june. for the dow, it was the best june performance in over 80 years. you have to go back to 1938 for the month. the dow was up by 7.2% s&p was up by 6.9% for the month that is its best performance since 1955 and the nasdaq was up by 6.9% and that's its best performance since the year 2000. taking a look at what happened overnight in asia, hong kong was closed for a public holiday but those markets that were open also up very sharply on again, this idea that trade talks are back on. the nikkei was up by 2.1%. shanghai composite up by 2.25% europe this morning where early trading is taking place, you're going to see green arrows across the board there as well. biggest gainer looks like the dx ax up by 1.25% finally check out u.s. treasury yields on friday we actually fell below 2% for the ten-year

briefly. i think we closed right at 2.0%. ten year is yielding 2.01%. getting to all the weekend news president trump returning home from that eventful three days in asia easing some political tensions, making history, little bit of controversy, and giving the bull run of bull market, another leg at least it looks that way kayla joins us this morning. she is in washington, back from the trip itself. good morning. >> good morning, andrew. it was a day taunt on two fronts a last-minute meeting with kim jong-un lasting one hour and resulting in an agreement to restart negotiations that abruptly ended in hanoi in february after a handshake, mr. trump became the first sitting president to set foot in north korea. >> the relationship that we developed has meant so much to

so many people it's an honor to be with you i was proud to step over the line i thought you might do that. i wasn't sure, but i was ready to do it i want to thank you. it's been great. it's been great. very good start. >> reporter: china's president xi jinping visited chairman kim earlier in the week before sitting down with trump at the g-20, a meeting itself that produced its own temporary cease fire on trade. >> we will be continuing to negotiate and i promised that for at least the time being we're not going to be lifting tariffs on china we're going to work with china on where we left off to see if we can make a deal. >> as part of this truce, china will buy more farm products from the u.s. and washington will grant huawei licenses to do business in the u.s. no new tariffs will come on but all tariffs that are currently in place will stay commerce secretary wilbur ross

told me the huawei licenses will be approved very soon and that the truce will last for as long as talks are going well. president trump, andrew, says he is not rushed on china and also says that north korea negotiations could restart in the next two to three weeks. >> kayla, let's talk about the huawei situation because it affects so many different u.s. suppliers to huawei, big tech companies, of course, micron, qualcomms and chip makers of the world and the googles of the world providing android operating system to it obviously for many, many months now the president said it is a national security threat, appears to no longer be a security threat. did that change? is there something else to this? larry kidlow said all the specifics hadn't been disclosed or worked snout is there something else we'll learn >> the administration is trying

to talk ability in a temporary way, andrew. we're not going to deal with huawei until the very end of these negotiations and seems these licenses are a way to sort of have their cake and eat it too. they can allow huawei to do business and offer that to china as a sign of good faith in these negotiations while still reserving the right to keep these restrictions on huawei long term. it will stay on the blacklist. they are running into opposition from capitol hill. senator marco rubio tweeted yesterday that congress would put new restrictions on companies like huawei and zte if the the administration is going to roll them back. he says the senate has a veto proof majority on this and will see whether any of those efforts come to fruition in the meantime >> i think part of it also has to do with the different branchs of huawei, is there a way to kind of split the difference and say, okay, you can continue to do things when it's for consumers, when it's for hand sets for mobile phones. >> right. >> but it may be a different situation when you're talking about more of the sophisticated

telecom equipment that's used to put together 5g networks and thing. >> even on that front, becky, there has been some concern within the administration some rural networks in wyoming and the pacific northwest have already made purchases of these huawei parts for their broadband networks and want to make sure that rural america can get access to this internet using the affordable parts they have already bought so i know that there's some hand ringing over that as well and maybe there's a way to solve this where you say any business that's been done in the past can still go forward, anything from here on out cannot but again, a lot of those details we're still waiting to here. >> something worth paying attention to in the markets today because the different chip makers manufacture for different parts of this. qualcomm is a big chip maker for the consumer hand sets you have other companies that make some of these other parts it will be something to watch in the markets as it plays out today, too. walk us through a little bit of callender now how these negotiations can play out, how does this work

what are the permutations? >> well, the president says he's in no rush and we don't know exactly when this next round of negotiations will take place we know this truce is open ended. that was something that his top trade official robert lighthizer had been pushing for he didn't want to be ham strung by artificial deadlines here the expectation when talks broke down before was that the u.s. delegation would be traveling to beijing next china places a lot of significance on these talks being equitable, the same number of negotiations on either side so, the ball is in the u.s.'s court to go to beijing to hold the next round of negotiations we don't know exactly when that would take place, but that's the next thing we're watching for. >> kayla, welcome back. >> thank you. >> great reporting thank you. opec ministers meanwhile are in vienna gathering again. for everybody, pretty good gig, you know what i mean >> nice place. >> not meeting in siberia or something. crude oil prices have been ticking higher on expectations

that production cuts will be extended today's meeting will be followed tomorrow by a meeting with non-opec states and brian sullivan, he loves it there, will always have vienna, brian and i. he will join us later this hour. we met up there. >> i was going to say that's where you had drinks didn't you meet in london with him, too >> no. >> that was ross westgate we met with >> i remember a picture of you and brian. that was in vienna. >> yes >> will has been my social coordinator for london this time around we're going soon my daughter is there any way. she went to stonehenge. >> did she really? >> yeah. >> said it was very metaphysical and she went to be an anthropologie major there. andrew, it's interesting listen talk to me socially let's go, come on, gid we're a team we're a morning team. elsewhere, violent clashes erupted in hong con on the 22nd

anniversary of the former colonies handover from britain to china we have to actually tell eunice about this since she's not being able to see it on one side of town, young protesters surrounded the legislative council fighting with riot police using a metal card and a rod as a battering ram to smash a glass window. elsewhere, peaceful demonstrators marched against the controversial china extradition bill calling for greater democracy. >> that's weeks in the making we have continued to watch these protests. >> did you check boeing? i haven't checked to see what's -- >> take a look this morning, dow is indicated up by 271 points. obviously trade deal would be good for boeing, too but at the same time, there are more problems for the company. the justice department was already probing the development and certification of the 737 max. now reports say federal prosecutors have subpoenae records related to the company's 787 dreamliner we'll talk much more about the extended probe a little later this hour with phil lebeau also

with the boeing analyst and can see boeing shares are up about .5%. >> trade stuff and facebook is going to start banning ads that discourage people from voting. this ahead of the 2020 presidential election. this was announced as part of facebook's second annual civil rights audit company says the new don't vote policy will only likely apply in the u.s. 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 polling places i find this one kind of weird. i think the ones that say don't vote -- someone is saying -- i don't know i want everybody to vote if possible, right? you would want to encourage voting the idea if i put up a post that says, you know what, i don't like any of the candidates i'm not voting and neither should you. >> it's just ads, right in they're not going to accept money from advertisements saying

this is out there. i don't think they're going to silence people from expressing their opinions. >> what if you were -- you have a first amendment right technically. they don't have to accept your ad if they say, hey, you have one candidate on one side i don't like and don't like the other candidate, i'm not voting and neither should you. >> i think you're okay saying that it's just a question of running it as an ad and target very specific individuals to maybe target areas and types of voters that you would like to keep from voting that's my understanding, at least. >> that's interesting. okay coming up when we return, the first half of the year it is officially in the books and it was a strong one thanks to a big june of course for the bulls we'll get you ready for the second half. we have a play book right here for you as we head to a break. here is a look at the biggest pre-market winners and losers in the dow.

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♪ first half of the year is officially now in the books and

the bulls are off to a strong start. the s&p has now gained more than 17% so far in 2019, best first half in more than 20 years the dow logging 7% rise in june. that is its best june gain since 1938 intto talk more about the potential market drivers in the second of the year for our play book joining us right now is gene goldman chief investment officer and also steven whiting is here. the china trade talks are now back on. i assume that's going to give us a little bit of a leg, at least it looks like this morning it's going to how does that change the dynamic for you? >> well, look, resisting export bans was the incremental news beyond restarting the talks with china. i assume that we're going to have friction again probably with the european union, which will bring this stuff all back again. but i think most importantly

this was set up to be a good year, a do-over year because we have the very sharp valuation contraction last year. and the federal reserve is in a completely different track than it was last year the economy is unfolding almost identical to their forecast last year, but instead of continuous tightening it looks like we're set at least for a modest easing. >> i want to get to the fed in one second on china, the one thing i can't understand about all this is i imagine we will have a nice little bounce today, if not longer than that but at some point if you think that these talks are back on, that means that we're going to have to talk again and we're going to have to negotiate again and do you remember when we used to talk about the fed kicking the can. we just kicked the can and we have to deal with the can at some point, i would think. no, gene >> i totally agree with you. i think if you -- if you look at our market -- our new market outlook talks about three things, calling it mixed signals. the markets and the economy are giving us a lot of mixed signals, whether it's china,

domestic economy number one, economic data is starting to cool but at the same time we're still very expansion nar. number two, earnings growth could weaken within the earnings recession this quarter and potentially next quarter and, three, you're seeing the bond market, i'm surprised it was a lack of follow through on bond yields today the bond market we have an inverted yield curve suggesting weaker growth down the road yet high yield markets are widening a little bit but pricing in really good news all of this is going to create a lot of market volatility especially to your question, andrew, especially with china, we get news out, china the devil is in the details. we told you many times on the show, we truly believe the u.s. will win this trade war with china. >> gene, here is the question i have, you think there's overconfidence about the fed and the potential for rate cuts this year >> definitely. especially for july. right now there's 100% chance the fed is going to cut rates on july 31st. think of how many data points we

have between now and then, payroll, ism, we have second quarter gdp on july 26th lots of data coming. we think a better case scenario is maybe september, 25 basis points then. it's all very, very data dependent and if the trade war does get resolved sooner rather than later, it could be a boost to the overall economy. >> by the way, if we get a true truce from china, the fed may not want to move as quickly. and therefore you have this sort of perverse is good news bad news, is bad news good news? >> sure. in the event the economy finds some strengthening here and our trade issues are put behind us and the federal reserve then does not cut, i would certainly take that. and i think that we will see corporate earnings in the united states in the quarter just past and the rest of the year rise some we could derail that if we had a serious worsening of trade issues around the world. if we don't, then i would take

that as a positive, right? so you know look, i think the market was in a much better position to buy earlier in the year than it was at this level, grant you that very much. >> but you think the fed is moving this next month >> it is very hard, i think, for the federal reserve to have this much of an expectation of easing in the market for powell to have encouraged that so much at the last meeting and not follow through. it will damage financial markets. >> how much has to do with the jobs market on friday? >> if the jobs is 300,000, some number that tells you 75 was absurd and you put all the other signs of a modest slow down behind you, then it's possible that markets will price in nothing and the fed does nothing, but that's -- it's improbable >> okay. we have to leave. >> we get a strong friday jobs report, the market may actually come down? >> i think if the number is very strong and you price out the fed, you'll have a very different competition of the market you'll see intersensitive stocks defensives really hit hard in that event.

>> okay. just so we're clear, you're calling for the rest of the year you think we're as high as we are going to be? >> i think that we'll make modest progress from here in shares. >> gene? >> my number one prediction my only guarantee for this year is volatility will increase lot of head winds in the market. lot of tail winds in the market. as investors grapple with, we'll see a lot of volatility. what pricing in the market after the dovish fed, after the trade war resolution as you mentioned earlier, best june since 1938. markets are looking for something going forward and what's coming up next? we're watching expect a big increase in volatility volatility will be big. >> gene, thanks for waking up early on the west coast. stephen, thank you for coming in this morning. >> my pleasure. when we return, a new read on how americans are spending their money. we have the results from our exclusive survey right after this break right now, though, take a look at the price of bitcoin climbing back near 11,000.

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lower carbs. ♪ lower calories. ♪ higher expectations. the light beer you've been waiting for has arrived. corona premier. ♪ cnbc and acorns are out with a new invest in you spending survey in partnership with survey monkey. so how americans spending? kate rogers is here to tell us more >> good morning. our invest in you survey finds that one third of americans say they've cut their monthly

spending in the past year while 45% say they've kept spending about the same and one fifth say they have increased their monthly spend in the past 12 months why are so americans cutting back take a look at this one. of the third who are spending less, 23% say they lost some form of alternative household income, 17% told us it's because they taken on new debt 16% say it's because they fear a recession or economic slow down and 15% say it's because they've lost their job now, there is an interesting split here between political parties when it comes to cutting back on spending just over 20% of democrats say they're cutting spending because they fear that economic slow down or recession. that's compared to 10% of republicans and 13% of independents here. bonus question for you, becky, who do you think is most likely to impulse buy when it comes to men or women. >> what's impulse buy, buying something you hadn't planned until the moment you spend the money? >> that's right a splurge buy, something you weren't necessarily planning for, men or women? >> these are people who admit

those impulse buys >> that's right. >> since you're asking me i'm going to say guys. >> so it's interesting it's actually tied just about 80% of both men and women say they were likely to make those impulse buys but men were more likely to spend $100 or more the last time they made that splurge which is interesting. fewer women were more likely to say this and younger people more likely to splurge than older people in our survey. >> i get that. you're stuck to a budget and know if you have a tight budget you have to stick to it. >> that's right. >> kate, thank you. >> thank you >> we appreciate it. see all of the survey results right now on cnbc.com slash investinyou. good news if you're planning a fourth of july barbecue, wholesale pork prices are at the lowest level for this time of year in a decade we actually talked about this a little bit last week when we had the ribs. >> montgomery. >> since we're not exporting necessarily as much to china, that there's more supply here. surplus of u.s. hogs supplies at its highest mark

since 1943 that's almost as long ago when we had a june in the stock market. >> that's your idea of nirvana. >> yeah, it is depends on what kind of pork >> bacon >> pork end trails i don't really -- pigs feet. >> you eat pork rinds. >> i tried for a while looking for a non-carb snack >> have you tried the dried bacon bits >> well, i can't imagine i wouldn't like those. they're not really snacks, though >> no, they now have snackable things, yeah >> i don't know if i can snack -- >> you're not into that kind of stuff? >> snack on pork. >> you can or jerky jerky is a big deal now, supposed to be very good for you or good for you relative to potato chips >> i'm doing okay. i'm doing okay i mean, if eggs give you high

cholesterol, i'm in trouble. >> eggs are good for you. >> they are. they're zero. >> zero on weight watchers just be clear what zero means. >> from the diabetic thing. >> i have in recent months my family can attest to that, i have perfected the perfect hard boiled egg, if any of you have it, can you do it? >> i can, yeah. >> oh, you can no green around the yellow and when you crack it, it's one thing, one peel. i mean, this was after i didn't do it as well and i would spend like i would be almost late for work. >> because you have to start with it in the water before it boils. >> nope. you get it boiling in a low boil and you lower them in cold and then 13 minutes later you take them out and put them into an ice bath. >> you can come over and instruct my chef. >> i do like a whole dozen of them i splurge and then they're there. any way, the u.s. -- we're back

to this the u.s./china trade wars kept a lot of that meat here at home and not only are there more pigs but they're fatter you fat pig. thanks to relatively cheap feed. what >> that came out of nowhere. >> if you see one you go, god, you're a fat pig the average hog weight this year is about 4 pounds above the ten-year average i wonder what that means >> that they're eating more. >> no. i wonder what's the number >> how many pounds >> yeah. >> that's a big animal those things are big all that meat, all that means that the price of pork at the grocery is lower pork chops are about 16% cheaper than five years ago and wholesale ribs are at their lowest price in years, but get in quick while it lasts. an african swine fever outbreak in china is expected to cut output there by 30%. that's expected actually to drive prices higher. so maybe you buy some futures here if you have a commodities

broker. coming up, 300,000 music deal that has two pop superstars openly feuding. >> this is amazing i don't know if you have been following this story you have to see this. >> taylor is really upset. >> we have the details straight ahead. later, we'll take you live to vienna, for the latest headlines from today's opec meeting, one of the all-time great cities in europe i can tell you that. crude prices this morning take a quick look voted most livable city. >> prices. 150 pounds per pig finished hanging weight >> you need to find out what the average hog weighs. >> 150 pounds. >> that can't be right. >> after it's hanging weight, after they've done everything to it. so probably strips out a lot. as we head to break, here is a look at friday's s&p winners and losers ♪ we're carvana, the company who invented

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♪ >> announcer: welcome back, you're watching "squawk box. live from the nasdaq market site in times square. ♪ good morning we are in even better shape we were futures wise last time we're heading towards 300, up 280 on the dow right now, s&p indicated up 33. will that be above -- not quite. we're almost to 3,000. we're about 2970 if we were to open, 2975 on the s&p. and nasdaq sharply higher, up 133 points this morning. >> it's time for the executive edge and talk taylor swift right now because a very big music deal happened over the weekend celebrity talent manager scooter braun reached a deal to acquire big machine label group that's the independent nashville base label home to artists including sheryl crow, rascal flats and

florida, is that how we do it? >> florida. >> we say florida georgia line. >> we're talking -- i'm thinking of florida sorry. separately scooter braun is long-time manager to justin bieber now, here's where it gets complicated or gets interesting. big machine also owns the rights to taylor swift six studio albums taylor said she was sad and grossed out by the transaction she accused braun of manipulative bullying, justin bieber responded to defending his manager and said swift's comments deface braun's character and crossed a line part of this is there's a long history and i didn't appreciate the history between scooter braun and taylor swift and apparently she's -- has been upset for a very long time about the fact that, a, she sold the rights to her early on in her career and the owner, because

she made a deal a couple years ago where she effectively left those behind knew how much she disliked and had this beef with scooter braun. so it's all kind of sad actually. >> she says she found out, woke up in the general news cycle and found it out scooter braun said he texted her the night before or something, but i think her biggest point is she was not given the opportunity to buy those. >> i think she wanted to buy it herself. it was that but also the fact that it went to scooter braun himself. i think scooter braun personally she had such an upset relationship with. >> gave her some kind of option for every new album that she recorded she would get one of her old ones back. it was a weird -- >> if she had stayed if she had stayed -- >> goes all the way up through the reputation album, which saw the -- at the reputation tour. i've been to three, i think. yes, i have. and i admit it i like her, but i don't go for

me i go for somebody else but i don't dread going. i like her she's good. >> good music. >> i think it's so sad >> you get sad about -- >> no, i don't >> i wish you weren't sad. at least you're not anxious. >> i'm sad for her because this is her doing it's her work. and now it's owned by somebody who she hates. it's like a stick in the eye. >> right >> like a stick in the eye >> right >> yeah. >> right and there's a lot of things, as you know, that are better than a sharp stick in the eye, a million things do you use that expression it is. you're saying this is -- >> this is a stick in the eye. >> true thing. >> worst case scenario. >> worst thing that could happen this would be like your nemesis getting the rights to the thing that is what you created. >> what's her beef with scooter? they didn't date or anything. >> no, no no. >> she didn't like the deal she cut with him. >> i never heard of the guy before. >> no, no, no. she believes scooter was then encouraging all the stuff that

happened with justin bieber with kim kardashian, with kanye west, you remember they made those videos of -- those videos that sort of were trying to slam her or be sarcastic act her. it's just terrible. >> kanye -- that was -- have i got that right he said you shouldn't have won at the gramnies, remember that, he came out to taylor. >> not really. >> you don't remember that, sorkin >> he tried to give it to somebody else. >> wasn't he is the one who was saying shouldn't have won. >> i think so. i forget who he was trying to say was. >> it was kind of funny watching us, too. >> beyonce. >> it's bad. >> i was trying to stay out of it completely. he's a biebs guy a bleeber. >> there was also the beef with the kardashians. >> beef is used a lot, right >> in musical there's a lot of beeves. >> twitter beeves, now instagram beeves >> did justin ever fight tom cruise with that beef? >> no, did not materialize he took it back. >> keep me updated

okay. >> we should start a segment called squawk beeves. >> i was watching the senior golf championship. i had no idea about this. coming up when we return, crude prices on the rise opec's meeting in vienna begins. brian sullivan is there on the ground he'll join us right after the break to give us a tllhe behind the scenes details ♪ through the at&t network, edge-to-edge intelligence gives you the power to see every corner of your growing business. from finding out what's selling best... to managing your fleet... to collaborating remotely with your teams. giving you a nice big edge over your competition. that's the power of edge-to-edge intelligence.

opec ministers gathering once again in vienna our own brian sullivan is there. he joins us now with an update we'll talk at the end, bri, because we will always have vienna, remember so let's talk about that at the end. >> yeah, we certainly will always have it what a wonderful memory, skroe thank you very much. listen, this meeting is very different than the ones we had the last couple years because every time we come here, twice a year, it's always about the number what are they going to cut what are they going to increase the output the market hinging on the final decision well, there's still some intrigue around that, guys, but it's widely expected that 1.2 million barrel a day cut will be extended they made last year the intrigue here is far more broad ranging, far more political, if you will first and foremost you heard over the weekend that russia and

saudi arabia effectively made the opec decision for the group. remember, russia is not a member of opec and it wasn't even their energy minister, it was nonother than vladimir putin, basically coming out and saying, yeah, we extended the agreement let's see if the other opec members like the fact that russia is stepping in. a lot of frustration here with the united states. u.s. output has doubled, guys, in the last five years opec is trying to keep price stability. they're trying to do what they used to do which is try to control the market but here is the u.s. just pumping and pumping and pumping and the shale growing and growing and growing and it makes the decisions that they make in this building here a little br difficult. also the overarching one, iran, obviously accused of tanker attacks a acues of drone attacks. the iranian minister, who by the way, is the longest-serving opec minister, this is his 48th meeting, very frustrated in fact, there is some talk that maybe iran will either quit or threaten to quit opec. remember, they're one of the

founding five who created opec in 1960. the meeting begins at 8:00 a.m. eastern time, 2:00 p.m. here in vienna, joe. i'll tell you what, i know you like this city we had a great time. it's about 98 degrees here i'm not wearing a tie because i don't feel like suffocating myself when you can't breathe already. >> i want you to go down to the danue and there's a beach there a bar called tel aviv beach. have you been down there yet there's graffiti but beach chairs and cool drinks and a great staff down on the banks of the danue. go down there. i'm serious. but let me ask you a serious question, president trump is always calling out opec, but is close to the saudis now. how much is the u.s. saudi relationship playing out this meeting? >> yeah. that's going to be a great question we had the saudi energy minister came in a short while ago. i mean, really they are -- they're the big one of opec.

saudi arabia is still a major deal, but here is the thing, there are many members of opec, joe, that want to increase production, namely nigeria, maybe a few others iraq basically said we're out of the market for 15 years. they want to pump more, but opec overall needs to cut, which means somebody has to take the pain and that somebody has been saudi arabia saudi production is below 10 million barrels at about 9.65 million barrels. russia is over 11. we're 12.5, probably going to 13 it remains to be seen how much more pain saudi arabia, joe, may be willing to take they have been taking the brunt of those cuts. remember, all these countries, they would like higher prices to meet their budgetary needs as far as the banks of the danube, sounds like an austrian country song we'll probably be on air until about 10 if the heat and tension continues and i keep tripping over wires i might jump in the danube any way, joe. >> will yo go to our spot for

drinks >> no. >> no time >> no because it's not the same without you. >> well, that's true that's true. i can't make it there. i'll be close, though, tomorrow, but not quite. actually by wednesday. but when are you coming back >> it's a mystery. where are you going? >> london and paris. >> zurich? >> london and paris. that's tmi so we won't be quite where you are. i can maybe take a train and stop by if you really need me to go there yeah >> maybe i'll meet you in paris. >> thank you, brian. keep up the good work. keep us updated. when we come back, more trouble ahead for boeing the d.o.j. reportedly opening an investigation into another of the company's flagship planes. we have the detail and reaction next. right now a quick check of what's been happening in the european markets this morning, up across the board, dax up by 1.25% and so is the ftse

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welcome back some more bad news part boeing federal prosecutors subpoenaed records related to the 787 dream liner expanding their initial probe. we have the detail this is morning. what can you tell us >> this story broke on friday night. it's unclear if it's an extension of the probe or a completely different one, but when the story first came out and we reached out to boeing they have declined to comment. here's what we understand according to a report in the seattle times on friday. the doj is subpoenaing or has

subpoenaed documents relating to the 878 dream liner production in particular what's been happening with production and if there's shotty techniques being employed at the plant b where the dream liner is built now this is separate from the 737 issues for some time, there has been a doj investigation regarding the 737. as that has gone on and has been for several months that we have reported that. others have reported that. there's a grand jury in washington looking into this the focus now has become 737 monthly production we're show iing this to you because it's been a 42 per month for several months now the question becomes you're not going to see this certified and deliveries begin until at least the end of the year. do they have to cut production further? that will be a focus of the

second half of this year sharing of boeing, this is a a stock that's been trade iing ine $367 area. a few times it's dipped down to the 350, high 348 areas. most believe it's going to stay in this area unless boeing at some point has to say we're going to cut production further because building 42 per month, we can park them in different places in the pacific northwest, but the question arises, how many are you going to build you're going to deliver you will deliver at some point, but is it wiser to build them at a lower rate >> joining us to talk about what's at stake for boeing is sethcap lance. seth, you say we're geting to the point there are some unexpected situations, things that are a bit more surprise as this has developed >> yeah, early on people that

were optimistic this was only a week long problem. but most of us thought by late summer we would be getting close to the planes back in service. and here we're at this point where who knows boeing has put itself in this situation where all kinds of things are being unearthed. nobody probably would have found in the first place hard to see the bottom at this point. everybody obviously, beoeing sh and all the airline customers were rooting for a quick and safe return to service >> as a share hoholder, has your confidence been shaken >> center certainly not our confidence in if long-term, but it did seem like it was going to be a week or month-long problem ask now it seems intermable. if they begin to look at cutting production, that's going to put a pal over the numbers

people will have to start rethinking how long an investor are they >> would you sell at that point if it looked like they were going to cut production? >> we have been in it for the long haul and expect to be beauing is a cash flow machine they have several other areas of revenue. they have a space business, defense business i don't think individual issues wouldshake us out. but it does shake your confidence a little bit. >> by the way, i think it's also important to think not just in terms of volume, but how many units you cranked out, but in terms of pricing, a lot of these issues were related to the fact that boeing was trying to produce an airplane where pilots could transition without a lot of extense without having to take out of time on expensive stimlaters if it turns out you need more pie loath training and airlines

assign less value because of the millions of dollars in extra training costs, that could put downward pressure on the plane forever. we're not there yet, but it's also yield and that's something else you want to get some >> quick thought >> you hear people all the time say don't worry about boeing invest in the long-term. it will be back some time. is is this dead money? if you were a money manager, are you better served saying to clients, look, you got a big chunk of change. you're going to get it back but lord knows when you're better served putting it somewhere else >> i think you could consider is is close to dead money really unless there's other surprise that happens with boeing or happens quicker. nothing has gone right for boeing i think what you start getting into is a concern that not only

are they producing 42 planes a month, but that's a certified level of production. as you change levels, you have to get faa clearance to do so. so the road back becomes longer and longer every week this goes on >> thank you, gentlemen. it's good to see you all >> thank you coming up, kevin rudd, the former prime minister of australia, joins us next to break down the important moments from the g-20 meeting. later we're going to take stock of a strong first half for ipos and what lessons investors can can learn for the rest of the year "squawk box" on cnbc as someone in witness protection,

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we have been watching the u.s. equity fumps this morning and they are up sharply after it looks like the trade talks are back on between china and the united states. that cease-fire so to speak, has the dow up by 260 points s&p would ep up by 30 points also been keeping an eye on what's been happening with the ten-year note. the yield is is back above 2.0%. also look at ail prices as opec meeting gets underway in vienna. and brent up 2.25% the dow at this morning it look liex the dollar is up slightly >> if you're watching, probably going to get blacked out again violent clashes erupted in hong

kong on the 22nd anniversary of the former handover from britain to china on one side of town, young protesters have surrounded the legislative council using a metal rod as a battering ram to smash a glass window tens of thousands of peaceful demonstrators march ed against the china extradition bill with a call at the same time for greater democracy. >> president trump and president xi hitting the reset button on trade talks. >> good morning. that trade cease-fire just one of the items notched by president trump he reopened talks on trade and with north korea on denuclearization. an agreement to restart negotiations there you remember they abruptly ended in february after a handshake president trump became the first

setting president to set foot in north korea. >> that we have developed has been so much to so many people and it's just an honor to be with you and it was an honor that you asked me to step over that line and proud to step over the line i wasn't sure, but i was ready to do it it's been great. it's been great. >> china's president visited the chairman earlier in the week before sitting down with trump at the g-20. a meeting that produced its own temporary cease-fire on trade. >> we will be continuing to negotiate, andi promise that for at least the time being we are not going to be lifting tariffs on china we're going to work with china on where we left off to see if we can make a deal >> as a truce, china will buy more farm products from the

united states and all tariffs currently in place will stay wilbur ross said licenses will be approved soon and the truce will last for as long as talks are going well joe? >> okay, thank you china expert here joining us, kevin rudd, former prime minister of australia. now the president of the asia society policy institute your thoughts on hearing the latest and you have also been on talking about where we have been in the past. are we making progress is it possible to come to some settlement in the next year with china? >> on the trade deal, yes. as we have been discussing on this program for awhile, the underlying economic logic in xi's mind and president trump's mind this thing has to be put to

bed or it wrecks markets completely the president has a reelect. those fundamentals haven't changed. there's a lot of political theater in terms of who is seen to become down and not back down a bold prediction would be that between now and thanksgiving we'll have some firestorm form of deal. there will be a critique about how substantial it is and all the rest of it, but the underlying interests are there >> both president trump and president xi have hard liners that they need to -- that are put iting pressure on them. >> the hard line is in both capitals they have the same attitude toward life. it's far easier. from a chinese perspective, and

i came from china yesterday back to new york, they are pretty happy with the outcome they expected to be a reboot of the negotiations a tick that was done what what they didn't expect was the other two gifts that the president delivered. one was the announcement that there would be no new tariffs for the fwoerkss and that would be a big factor in chinese domestic market acceptabilitiment. it seems like that's more complicated. >> explain this to me. the secretary of sate sat a month ago and said this is a national security thereto. he went to australia he went to all different cou countries in europe and said two officials there, do not do business with washington whyway. this is a danger to all of our western ally ps. this is a danger to our

security how, if that's true on one side, how can you use it as a pawn in the trade woar on the other side >> excellent question. my successor was a loyal of the united states. he said, okay, they said we shouldn't do business with huawei we won't if you were here this morning, you would be feel iing like a mg but go to the detail in explaining the bold language which was there's a reconsideration of the listing of huawei. it's bye-bye around other firms around the world the devil will lie in the

detail but from a mac perspective, they see a crack of light here. so this morning we're sitting around the table and they are saying, hey, high five >> did you believe we were going to put huawei out of business? it was going to be the nuances again and again. we then drived what they were. you saw what they were some components aren't involved in g 5 and will be allowed to do that but it's two countries that are in trench positions and there will be middle ground. being in australia for so long shs this is exhausting >> it's exhausting >> the u.s. government told one thing. >> there's no problem with huawei and it was your favorite company. now it is a big threat >> my view is it's either a big threat or it's not

it can't be both >> they were using us and lying on our set about it or it was something else >> the intelligence agencies have been doing their rounds of the allies the so the briefs that i haven't seen because i'm not in office have been clear cut that in their views as the u.s. intelligence agency ises that this requires action >> but this started a long time before the trade talks i remember hearing stup art this last year. >> it's been going on for quite awhile >> australia, as important as it is, it is important. did australia ever have a problem with china's trade practices and intellectual property theft or because it was

so important and it's the else tant in the room, you look the other way and us yo need them economically >> our view over a success of governments has been in line with president trump's critique. there are fundamental elements of china's trade practices and use of non-tariff barriers and other questions of intellectual property that need to change the question is a smaller economy than ours. what do you do about it? we sought to do with friends and allies with the world trade organization is collectively with the chinese that doesn't work. the president is now trying a different tragedy. i hope it does deliver an outcome. >> what's the probability? >> i think the chinese move only to the extent that it suits

their domestic economic agenda what's really interesting is take some of the liberalizations recently by the chinese on capital marketsing issuing of new licenses to operate more freely within chinese capital markets. you might say that's a good m e move but you need to understand the background of that is china faces in the nec several years the possibility of a current account deficit. net import, so they move to the the extent that it meshes with their case >> maybe that works for us where they have stuff to protect but in terms of what happened this weekend, you said two things the chinese didn't expect one was the huawei situation the other was to the not have additional tariffs while we continue these talks for now does that help or hinder things in the long-term in terms of what types of deal gets put in >> if i was being blunt about it, i think the chinese will see

the united states as having blinked a a bit in these discussions. >> even though we say tariffs are back on tomorrow >> given the president can do that and shown form on this, he can do it in the future. the chinese will take some comfort that the bottom line is that a deal can be had which won't undermine their interest the chinese have published three big red lines. they won't because it's been front page of the the newspapers these are big ticket items but the message will be we can get this and the president president trump really wants a deal. >> talking about foe ops kim jong-un, would you have have that meeting yourself and do you think that advances the cause or sets it back

>> i have been to north korea twice and escaped on both occasions. it's a very strange country. it's a remarkable photo. but what i fear is, and those of us who watched the north korean nuclear negotiation oefrs decades, where's the diplomatic strategy and again, this is a big concession kim jong-un in his domestic media delivers a presidential visit that's enhancing his internal credibility in the regime so i'm not sure it actually helps deliver the outcome. i hope it does there's something bigger going on behind the scenes, but it strikes me as a gift >> all right former prime minister kevin rudd people here get to keep their titles we're different

it's down to our convict origins. >> i could call you president now since you're president of the new asia society >> that make mess president of about 25 people. >> it's better than nothing. thank you. come iing up, the first halo 2019 officially in the books we'll talk markets in just a few minutes. stay tuned you're watching "squawk box" on cn cnbc a lot more to come the dow up 245 points in the futures. become in a moment moving is hard.

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welcome back we have a developing story more problems for beoeing. the justice department was probing the certification of the 737 max. now reports say a federal prosecutor have subpoenaed records related to the 787 dream liner. back in april the "new york times" reported that debris was left inside the aircraft including one instance where a ladder was left in a plane's tail shares are down marginally on that news. facebook will stop ads to discourage people from voting. this was announced as the civil rights audit the company says that the new don't vote policy will only likely apply in the united

states and won't include policing users' posts. last year facebook expanded policies against voter suppression. it banned posts that spread misnifgs coming up, democrats attacking the trump's economy during the debate. so with the economy running strong, what's the republic game plan for 2020? we'll talk about that. 2re are the futures at this houp50 points. coming right back. don't worry. my dutch is ok. 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.

a look at the morning's big market movers. >> good morning. many of the morning movers to the upside catching a tail wind because of the trade day talk between the skpus china. we have spoken about the semiconductor trade being a proxy for the china trade. you have shares of skywork solutions among those big in the buy around so far on very thin premarket volume the components are are used in smart phones to aviation controls to help monitoring devices. so watch those shares. heavy machinery a big focus. especially when it comes to asian demand cat pillar up.

the construction equipment giant is one of those proxy stocks for the chinese and economy as well. and the economic data out of china and elsewhere in the world has been showing a slowdown. but that stock gaining around 15% in june alone as optimism has improved and a big miner of copper and gold if the chinese economy gets some positivity, basic companies could get a bit as well. it's more of the health. so freeport, skyworks and the morning movers today we'll send back things back over to you >> nice backdrop >> i like it joining us right now to talk about what to watch as we head into the first trading day of the the quarter is head of technical strategy at jpmorgan and mike, we made it through the

first half a great june for the markets and the g-20 gave them a lot of what they were look iing for. >> now we're getting a little headline cover for the move the market has made it was prime to just relax if we get an as expected result. to me it's about which groups take over. is this going to be the handoff to more areas of the market. and we talk about what a great first half it was. i'm looking at a nine-month basis. the market is basically flat at a nice marginal high for nine months we have been going back and fort. >> the question now is this going to be the signal that the market can just look through what still is is a slowdown story globally and with earnings coming in maybe sloppy in the second quarter >> you say that there's something wrong with this rally.

what's wrong >> it was up until early last week a lot of what has been said is defenses that led the utilities and it was largely because the very front end of the treasury market priced 60 basis points. so our point was that if the rally is going to continue, the s&p is going it break out of the range and requires rotation to cyclical groups. you hadn't seen that until tuesday or wednesday of last week they start ed ed to go because there's individual news. even things like copper started to rally a little bit. we need to see more of that to get to continue to rally >> does that lessen your concern? >> you can see this is a trade story. so we need to repeat what we saw.

all those things point to improving pmi. we have to redo that story all over again to put a sol ud foundation underneath the rally. >> with trade off the front burner for now, we have the jobs report on friday, which tells us a little bit about the economy then we're going to think about later this month as the fed. >> it's interesting because the fed did not take any opportunities to push back against the markets pricing of the cut for july so at this point, you have to see what the jobs number gives us, but right now, the market is very confident it's going to get that at least the 25 basis points so that actually turns the question around to, wow, is is this market going to get everything it needs and want thes and what does that mean in terms of a sentiment reset i think people have been very cautious the numbers were showing a lot of caution because it didn't feel right and this goes back three years ago almost to the day. the story was stocks are at a new high the global economy is is not

showing us we're coming back 2016, the stock market was able to see through this industrial low. you had a worst downturn in terms of the economy than we have had now so maybe the market has to endure a little more of that static in terms of bad growth numbers >> let's talk more about the yields on the treasury market. for awhile on friday, the ten-year fell below 2% you say the technical level is 2.1% that's kind of a hard thing to imagine that given where we are right now with the markets right now, that we're looking at 2.1% as being a breakthrough level. >> it's come a long way in a short period of time if we look at the technicals, you're seeing overbought conditions in sentiment and momentum that can persist if we really in this rapidly evolving policy condition here where the feds can can use a couple times and starting about

recession and the fed going to seetzero those conditions can persist but you tend to get a meaner version. when you get the conditions you have now, you say the view can back up to 225 this could be a market >> great to see you. thank you. coming up, a rare look inside the koch brothers summit for elite political donors and talk trade and immigration and more and we're watching bitcoin this morning it's near 11,000 just under more on the move in just a bit "squawk box" is right back

still to come on "squawk box" the first half of the quarter in the books plus president trump agreeing with china to restart trade talks. more on what to expect in the future and will tel la hit production numbers we'll get a a preview of what it mean invests

welcome back shares of real real up again after a big ipo pop on frud. les lee picker has more. this was one to watch. >> the realreal making real money on friday with shares up

45% in their debut it's a second chance for the ceo, which essentially flopped on day one she say this is time the market ipo environment is all different. >> i can't speak for all ipos. we hit the timing right. we have secular trends behind us and i feel great about where we are. if we look at going public, that really is pets.com 2.0 they have had a really good outcome. timing is everything and the realreal has the wind in its back >> chewy up nearly 60% since its debut last month and wainright isn't the only one that thinks timing is right. they are hoarding the second half of the year as well pell ton, importaposhmark

deals can incentivize more to go public, but one head wind might be one of the lockups that will expire in the second half. that could pressure shares of companies like uber, lyft and pinterest by flooding the market with more supply of stock. >> when there will that start? >> the first deal we saw of that scale a big unicorn was lyft in march. it takes 180 days from the deal. so we're looking at october. >> that's a scary months >> especially going into theened of the year. and we do tend to see once people see a negative reaction from one of these events, it could pretend negativity for the other deals. >> thank you good interview on friday too > . >> let me ask you a question about this ipo success or potentially failure in that it's a small company

that left a lot of money on the table. >> i think it's a success. they are riding a wave you can see a lot more of these companies coming to market so overall the market is set up perfectly. you have a perfect con influence of events. if you can show good revenue growth in an addressable market that's huge. >> so explain why investors love that deal and hate uber and lyft still. >> i want to take the other side of uber and lyft because i think for me i think these companies are teed up at starting line pretty much. lyft came and did the ipo, that pulled it back but uber did the ipo with the market so i think at this point, uber is coming to the starting line lyft is around there but you always felt that was the

right price for lift so overall these companies are right. now they need to execute lyft did do a good job in terms of revenue growth. the losses are growing but they have a few years to prove that losses can be controlled but at this point it's about revenue growth and market share. and these two companies have time to prove themselves >> we have a couple big ones still coming we worked as probably the big fest you think they are coming and there are people who have questions even about that. airbnb after that. they have cash on the balance sheet. do they do a direct list iing? then you have the pell tons of the world. >> airbnb is is a good company we like it they have a good shot at doing a direct listing because they don't need the money they raised a lot of money and not used most of it. so i think they are well positioned they are in a good market. they are expanding also. they are not just staying with

the core market beyond that. pell ton have some issueoton ha. >> they have good relationships. >> i think the delivery business is going to come down to relationships in the end with the restaurants and other businesses, so i think these companies right now the market is big enough to take all of them so i think they will do well so i think delivery companies, payment companies come to market and they will do very well >> what's the story of what would cause them to pull back? >> there's the potential to be delayed. there's real question in terms of when and if they go public. this was a company that had a $40 billion evaluation that today is being valued at least in the private markets at $23 billion. >> think it they wait. it's going to get better >> if you go public at

evaluation, that's half. what happens to soft banks and investments. there's a view if you're going to have to do a public down round, maybe you do want to wait if you think you can afford to wait that's the other piece to say it's in a complicated position because they are burning through cash >> it has a lot of risks around it they haven't seen a bad market yet. interest rates have been low companies are doing well leasing has been easy. so i think in that sense, they haven't been tested. you can say that it's a good time to get out while the market is still good, but on the other hand, there's risk down the road there's a huge lease on the books. >> you think we'll see them as a public company >> i think you will. >> i think it's lower based on

my calculations. it's too high. >> what calculation would you put it at? >> $20 or $30 billion. >> they have become a global player they have like the global dynamics play into them. it's not just about u.s. you can make a case, but it's high risk. at that point, your priced for perfection and you execute that. >> this vintage if we have this conversation three or four years from now, you're going to look back at this and think great success, they are all doing well you'll look back and think we were in 1999 what are you going to think? >> this time it's different. the companies are good products. they are really changing lifestyl lifestyles they are changing our way of living so they are here to stay. >> thank you coming up, with the economy

still running strong as far as we know, what's the republican game plan b for 2020 we're going to talk taxes and more with jared bernstein. and later can tesla deliver on the production promises we're expecting numbers within the next couple days so ...how are you feeling? on a scale of one to five? one to five? it's more like five million. there's everything from happy to extremely happy. there's also angry. i'm really angry clive! actually, really angry. thank you. but what if your business could understand what your customers are feeling... and then do something about it. turn problems into opportunities. thanks drone. customers into fanatics change the whole experience. alright who wants to go again? i do! i do! i have a really good feeling about this.

time for a rare look inside the koch summit where the elite meet to discuss trade,

technology and the upcoming election >> i'm at this exclusive summit for wealthy donors and business leaders, who are part of the political network led by charles koch 450 people are here. security is really tight this is the first time they have allowed cameras to broadcast from a three-day strategy summit for change the koch network has been going through soul searching since president trump was elected they didn't support him in 2016 they are staying out of the election cycle this time as well and charles told donors he's willing to work across the political spectrum to advance specific causes. trade, immigration, the economy and free speech. >> just imagine what the count b try would be like if we had many, many more people with this philosophy if we had millions more who were

dedicated to ewe nighting with anybody to do right. >> today the network is announcing a six-figure campaign to end the export/import bank and lieliminate tax extenders. pz they spend $10 million to combat the backlash not only against big tech and new technology, but also against innovation fcc chairman will be speaking here >> let's welcome in grover nr quest. and jared bernstein, policy adviser to vice president biden. he's with the center for budget and policy priorities.

grover, jared, thank you for joining us i bet you wish you hadn't decent nonnews these brothers do you want these hydrocarbon kings on your side here? >> not really. i think one of the biggest problems we have in this country is that we have a collision of two problematic trends we have more wealth concentration in the kochs are exhibit a and we have more money in politics. so there's this barrier between wealth and money influencing politics much of it dark money. the kochs are at the heart of it i think that's a problem for democracy. >> grover, do you think they are getting old and figure no atheists in the fox hole maybe they are decide figure they want to get through the pearly gates they better change their ways

what's gotten into the cokoch brothe brothers they are touchy and feely to liberal causes >> no change there i have been working with the koch brothers for years now on criminal justice reform, which president trump has signed a good first step on they have always been opportunities for the principled right and left to work together. so have the koch brothers. >> good news is that we passed criminal justice reform across the country, it was in the republican states that came first. so wow the conservative support, there wouldn't have caught fire

and it did it was actually later in the more blue states, but that's okay there are principled folks on the right and left who want to accomplish certain things opposed to bang heads. criminal justice reform, transparency, term limits and the cokoch brothers are tried to decide how to reduce the cost size of military expenditure >> jared doesn't like that trump tax plan because it wasn't tr k trickled down enough that's how they are iz krit sizing it. >> that's the part that i like pz. >> i certainly wouldn't is have wasted all that revenue on tax cuts for high end folks already doing fine and by the way, the biggest

problems with the tax cut is it's completely failed to pay for itself i don't know if you or grover took that position perhaps you were smart enough not to, but many in the government supporting this argued that the tax cut would pay for itself if if you look at our fiscal accounts. you know that's complete nonsense and secondly, the idea was that the tax cut would stimulate longer term growth and in fact, if it you look at the investment numbers, there's a a mess there's nothing there in terms of that chanin of results. >> just let grover in. was it all not paid for and horrible >> total revenue is up >> total revenue is always up. it's the spend iing that's grown

too hard we don't have democrats ruling on that. with us we need to reign in the runaway expenditures we have on entitlements but we have two things going all the pro tvsment efforts with the tax cut. as long as we're having this with china and europe on trade, the concern is people wonder where to invest. what's steel going to cost as that gets settled and you're seeing this in the stock market's reaction, lessened tensions with china and not increased tariffs that we're going to see more growth there so bringing those trade wars to an end is a huge step forward. i think you'll see stronger growth largely because of the tax cuts, but also less tariffs. >> grover, i'll ask both of you about this there's reporting inside the white house there's an effort to

actually lower effectively capital gains, which is perhaps surprising given what's going on tieing it to inflation, which i understand the philosophical argument but would have the effect of lowering capital gains rates, which would have the effect of increasing what's left in the wallet effectively 85% of the benefit, if not more would go to the top wealthiest people in the country at a time where there's this conversation going on about inequality does that make sense >> it makes a great deal of sense. it's going to happen schumer of new york said it was wrong to tax inflation when you tax capital gains. this can be done by a definitional change. and this is all made possible by a supreme court decision in 2002

called verizon v.fcc where the supreme court, the preconservative supreme court, said yes, you can do this. >> before we go. >> it will cost the country $100 billion over ten years that's the cost when you talk about the debt that we have already on the books being too much and when you look at cap spending in this country, you would think we'd be doing better, no >> two things. what you want is effective investment and the $100 billion number is completely static modelling. what you're mising and what some folks have not paid attention to is people who bought land or a house or stocks, 20, 30, 40 years ago often don't sell those, even when it makes sense. corporations have $7 trillion in sticky capital

and that tax on inflation and you'dsay trillions of dollars of previously held assets move to higher and better use >> let me respond to this. >> first of all, i would strongly disagree with grover's assessment this is going to happen because it's legal. it's much fuzzier than he presented. and us heard nonpartisan folk who is have looked at this said this is not something you can do by executive order or rule change you need congress. congress won't do it but there's a long track record of nonpartisan, no thumb on the scale on the impact of capital gains tax cuts on investment the correlation and zero i couldn't disagree more that you tweak the capital gains cut and get a bump in invest mement

once again it wasn't capital fwabs. it was other high end incomes. that's exhibit a so it's going to cost the treasury $200 billion. i don't know what you're talking about in terms of some supply side score there you're not going to get that from any reputable model and secondly, you're going to kpexacerbate this problem we ha been talking about 31% of net worth quite recent fourth quarter of 2018 held by the top 1%, i sound like bernie throwing out numbers and all you're going to do is exacerbate wealth inequality rob the treasury with no investment bump and probably illegal any way. >> here's the good news for you. the spraem court says you're wrong. it is going to move forward. they get to decide so you have already lost this

debate >> that's nonsense >> i'd like to come back here with you and you'll either prove me wrong or you wrong it's an open question. >> when we reduce the tax on inflation, it's morally wrong for the government to cate inflation and then tax people on it on a bipartisan basis in '81, reagan and the democrats indexed capital gains for ordinary income schumer was on the floor of the senate we tweet out regularly his wonderful statement to eliminate the tax on inflation and capital gains. this has participate s s >> the math make it is hard. >> suppose we were to implement what we're talking about here, but make it revenue neutral by

inkrooesing the rate you might get some folks to talk about it around the table. >> we're not going to raise the rate we'll end the inflation. it's wrong to tax inflation. we recently had an interesting debate in new zealand. it's one of the few countries with no capital gains tax at all. the left wing government couldn't support that. >> we have to end it it's too confusing jared loves the koch brothers. grover loves schumer >> somehow retch people need more money >> stop with that. let's enjoy a good economy relax. better than the last eight

years. things are finally turning around be happy thank you. >> jared feel iing the bernstei. we'll see you again. you asked to be back together. >> it will >> come iing up when we return, johnny raponzi will join us after the break. when it comes to your customers' expectations,

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stocks poised to start the second half of the the year with a big pop. futures are way up this morning after a trade truce between the u.s. and china big questions on the trade front including huawei and what chip companies will be able to sell to it stepping up on taxes, the big loophole one democratic candidate is targeting and why the wealthy want it to stick around the final hour of "squawk box" begins right now live from the most powerful

city in the world, new york, this is "squawk box. good morning, welcome back to "squawk box" here on cnbc the futures right now are up 250 points with hovering around this level for the premarket session. s&p indicated up 31 and nasdaq indicated up 132 points so far treasuries are threatening that 2% level again but that's slightly above. >> we have a couple big stories talking about this morning returning to hong kong over laws that would allow extradition to china as the city marked 22 years from the return of rule. a small group of proit'sers smashed out a window the legislator hit them with pepper spray thousands marched through the

city demanding democracy defeat on the proposals has been susquehanna spe suspended indefinitely opec looks like it's ready to extend they have joined the policy supported by russia that aims to keep oil prices elevated he would support output cuts for an additional 6 to 9 months. looking at crude at $60.16 a potential new issue for boeing reports say federal prosecutors have subpoenaed company records not related to the 737 max, but this time related to the 787 dreamliner aircraft. and development of the 737 max which was involved in two fatal crashes just months apart. and here are are some other stories that we have been thinking about but i'm not sure we're going to talk about those because they seem to be the same stories as before.

>> we have new viewers >> we do it once an hour >> maybe we should do the headlines every five seconds >> a lot of people repeat things for emphasis any way >> well done >> thanks. >> boeing, hong kong, which one do you like. >> u.s. and china trade truce taking place in japan. but plenty of stumbling blocks remain in the way of a final deal kayla joins us with more on this it seems like we're finally back to just talking again, but you have that last mile and that could be the previous part >> that last 10% includes all of the thorniest issues the u.s. and china are reopening trade talks, but the expected next step will be a trip by trump administration officials with a trip to beijing >> we're making a deal with china or we're attempting.

if we don't, we'll go back into a tremendous ripe field of money that would be coming into the country. but i have a feeling that over a period of time and i'm not rushed it. i want to get the deal right i wouldn't even say complicated, but intricate. >> entry indicate indeed after the truce comes the hard part. getting china to agree to enforce the deal and appeasing washington's china hawks who are not happy the president is tiling back the ban. congress will have to get the restrictions put back in place through legislation and suggesting doing so would see a veto-proof majority. the people's bank of china telling reuters it will need no big stimulus unless the trade war picks up again

the president has been eyeing a rate cut by the fed, but ironically, perhaps this truce may put it on hold or may decrease it. >> if the president were to say the ban comes off if the commerce department removed it from the blacklist, but if that were to happen and congress passed veto-proof legislation putting it back on the band list, what does that do in terms of the trade talks >> it depends on what exactly the legislation says and whether there's a veto proof majority. i smoke with the commerce secretary on my flight coming home from the g-20 he said they are going to be granting these licenses to allow some business with huawei to go forward, but huawei will remain on the entity list,en opt the blacklist for the foreseeable future until negotiations reach

the end point where the president feels comfortable removing it. that's the big question. whether the two sides can get to that point there's a lot to do before then. >> thank you for more on the trade truce and what is next, let's bring in our guest. former babs to the u.n. and nege he served as deputy secretary of state. thank you for being here today >> thank you >> what do you think of where we stand right now in the china trade talks? >> better off than we were a few days ago better to move forward on these talks and try to find solutions to the problems. one of the things i liked about the president's remarks is he did mention that we're not in a hurry and i think he's acknowledging that some of these issues will take time to work through. they can't just be solved by spectacular moves and photo opportunities. issues like protection of intellectual property, forced

technology transfer ask so forth. some of the kinds of issues that bother us with huawei. but they can be dealt with if they are talked through in a thorough manner. i think that's what the president is signaling more time to deal with the issues and i think that was for the good >> i was gratified he's concerned about getting the right deal then fund back to what we were talking about four or five months ago and that was the idea of china kind of riding out the clock on this saying they didn't want to see changes happen until 2025, which would be after president trump's second term. and which is so far down the road you start to wonder if anything ever actually gets accomplished >> i don't think that's possible because this is not only a trump policy i think there's bipartisan support for taking a firmer line the chinese would be surprised

if they think it's trump and his administration, they have another thought coming i sense strong bipartisan support for some kind of action. another point i would make, but it's a complicating factor in which it make it is harder than it appears is that our economies have a certain level of integration. we have $600 billion worth of trade. dekubling the two economies would be a difficult thing to do this is a significant difference from the cold war and the soviet union where our economies were never integrated they were decoupled. so we're dealing with different situati situations and if we try to unscramble this egg, they are going to be economic complications for both sides >> adding to joe's list. >> toothpaste out of the tube.

unscramble an egg, it's impossible it can never, ever be done ever can you? thank you. >> thank you >> we're not done yet. >> just writing that down. >> let's talk about the security issues you have a unique perspective on this what about the huawei situation? obviously, it's pretty complex this administration has been going around for a long time telling other nations not to use some of this is there a fine line where we resume some sales of kpoenlts to huawei, but you still protect things on a national security area >> they have been saying some of these things you can buy off the shelf in the united states and you can export them under general license. i think he's suggesting that's the kind of stuff we'd allow to

go to china but build protections for higher level technology but again, this is the kind of stuff that has to be discussed ain considerable detail between the two. let's not forget huawei is a big company and it's actually got a fairly long history of using suppliers here in the united states >> but the complicated part is that some countries, some allies may feel like they were used in this larger trade negotiation in that what they were being told wasn't just don't sell certain components they were told don't do business with huawei at a ul. because it creates a national security issue not just with the united states but all of our western allies so the question becomes by making that case so forcefully, as the u.s. has done, as he

traveled the world over the past several months over this issue, ask then to change course, does that effect our ability to influence our allies in the future >> i don't know. i don't know how a significant a change in course this represe s represents we'll have to wait and see but it does suggest another point. which is that his initial shot across the bow about using huawei might prejudice intelligence relationships frags it as an issue it's something that's got to be discussed and hashed through not only with china, but between us and allies. the ideal would be for us to reach a common understanding with the allied countries. >> this does suggest a

multilateral kind of approach of some kind. >> the recent overtures and relationship with north korea, i don't like -- i think it gets politicized at times i don't know if it's fair. i guess it's the town, washington, but a lot of the criticism comes from quarters and people that had no success at all dealing with north korea. i almost hear that if obama or clinton or someone wanted to go to north korea, they would have, but they didn't want to give the dictators of that country, whether it's the current one or previous ones, they didn't want to give them the photo opt should we be heartened or insulted that we're rubbing elbows with a murder how to you view it

>> the receyeem is a fact of lie we don't like it, but they are there. they are the entity that has to be dealt with at this point in part-time. unless up to advocate regime change and i don't know of anybody advocating that at this particular moment in time. so they have the controls and we have to work with that secondly, not much else has worked in the past we have gone one step forward and two steps back they always end up acquiring greater capabilities whether it's missile technology or in the area of weaponry and so forth to the point b where they have a lot more weapons than they had before iran doesn't even have any weapons. so you're talking about the difference between those two countries. if that had been president obama, you think he would have gotten a second nobel peace prize?

let's get a a deal we have to think about triangulating between iran and north korea too. what i think has to happen over time is we have to improve the iran agreement to the point where it's something that could also serve as a model for dealing with north korea but persuading countries not go to nuclear is hard look at india and pakistan >> they are different. >> yes, i would have he's the president if that's what he wants to do and in his judgment thinks is the best approach, yes, sir. can't blame him. >> it was better than the missiles coming up -- >> he executed his own negotiator

>> i don't think that happened >> coming up, can tesla deliver? check out the shares q2 numbers are on the way. and a record is likely, says elon what's the case for tesla? we'll preview kewe fa y ekor the auto maker when "squawk box" returns.

welcome back to "squawk box. take a look at the future ace head of the market open. we're a little over an hour away the dow looks like it would open up much higher about 260 points higher. s&p 500 looking to open 32 points higher on the back of this trump/u.s./china trade truce. >> we're expecting second quarter numbers from tesla this week analysts are watching closely to see what the data says about demand

>> elon musk has indicated in company e-mails and in other comments that tesla is real close to hit iting the perhaps s for the second quarter the estimate on the street is for tesla just over 90,000 vehicles total but the number we are focused on is model 3 deliveries. if tesla comes close to that or exceeds that, it will be a record if you look at quarterly deliveries, that 50, 900 threw a lot of people for a loop tesla says there were a number of factors behind the fact they had slower deliveries in the first quarter compared to fourth quarter. looking at shares, we should point out if you listen to the analysts, all of them say the same thing they may dlifr deliver the vehicles, but the focus is on profit margins and how much

those are going to be eaten away at further as they report q2 earnings later this month. that's the expectation it might be early in august. but that's the number that people will be focused on. the delivery number most are saying they are probably going to come in close to 90,000 maybe a little above 90,000 in terms of total deliveries and on the model 3. >> stick around, phil. we want to bring in the managing trerkt and senior analyst jeff ost born he has the lowest price target for tesla at this very moment. what is it >> we're at 140. so based off of multiple earnings power >> and what do you think is going to have to happen wean now and then for that number to be realized >> in terms of the price target, i think it's the prosperity of the cars phil touched on it in his hit there. but right now they are wrapping dollar bills on every car they are sending out and not

investing in the brnd. there's a whole host of problems i don't dispute the quarter will be solid in terms of the delivery estimates there's been a lot of leaks during the quarter so estimates have been raising throughout the quarter, which is nice to see, but it's a mad scramble here to hit the estimates. >> what's going to happen in the second half that's going to get you to the $140 number there's been a lot of people who have been bearish about this stock. ask there's been a lot of volatility that you can look at that chart and so to get to the price you're talking about, i think it takes a real sort of sea change in the psychology of investors around elon musk >> exactly i think it's going to be margin pressure, they have been discounting the car. people are going to see that now that the pent up demand period is gone for the model 3, we have had a two-year waiting period. q3 will be a litmus test for the

true run rate of demand. there's no long r a pent up backlog. there's no new car to be sold. the tax credit in america gets cut in half. a whole host of issues you have a big debt payment due in november. and next year you have to pay off the loan for the chinese factory as well 37 a bunch of cash is going out the door margins continue to be under pressure people will see what the true long-term demand is. it's not a million vehicles a year like they claim it's nowhere near the gross margin they also claim >> i think maybe ten years auto, but there's a host of legal issues, city planning issues, insurance issues, a lot of false promises in that sector. it's going take some time. >> phil was in chicago jump in. >> i have a question regard iin the federal tax credit starting today it's been cut to

$1,870, 50% drop to the first half of the year how much does that weigh on demand and sales in the second half of this year? >> i think it certainly will hurt the higher end cars some of the fires were aggressive in trying to lock that in. you have seen subsidy cuts so i think it did pull in some demand in the q2, but i think it's less of an impact to tesla's naturalized demand, but more of a marketing tool that other oems can use as they launch their cars. other than general motors are exposed to the cuts. >> what manufacturer do you think is going to take over the role in the spaces somebody else that you think is going to do so much better than tesla? the bullish argument on tesla has been there's no genuine

competitor yet >> certainly, the high end the competition is fiercely coming mainly from the european oems. as you look at the 30,000 market, the point is spot on volkswagen has been aggressive bmw pulled forward their launch by two years in terms of them hitting their stride so the competitive environment is intensifying now at the high end. certainly the lower end will be more in the early 2020s. so you're a few years out. but volkswagen would be the one to keep my eyes on >> did you feel any pressure either from the company directly or just internally about making a call like this the reason i say a this is so many of the analysts, specifically around tesla are either bullish or flat very rarely are they negative. in part there's an anxiety in

the analyst community if you're short, you're going to look access or a credibility issue with the company, et cetera. >> the access with tesla has been relative to my 20 other companies under coverage more on the limited side to begin with i don't think that has anything to do with the rating. i think it's due to the analysts that cover it and the personality and his positioning there. but surgeonly no pressure internally as to whether the rating is neutral, positive or negative we tend to take a long-term view with our coverage and value things off what it can look like a few years out in the future. >> is where things are dire. >> thank you for that. phil, appreciate it as well. >> are you a jeffrey ost born fan? just out of curiosity? >> i get asked to sing it all

the time >> that's all we have. i wanted "stay with me." >> so you are aware. >> security line at the airport. it happens all the time. >> you wish. you wish let me see rock star or analyst i don't though >> he has to hand over his license. thank you, sir >> thank you when we come back, targeting tax loopholes on the campaign trail. presidential hopefuls are laying out how they'd make the economy more efficient and tweaking the tax code is near the top of the list joe biden has had his sights on one rule in particular we'll tell you ha that is, why the wealthy love it and why biden and others want to wipe it out. when "squawk box" comes right back

welcome back to "squawk box. futures are at the high end of the range we have seen today up 270 on the dow 140 on the nasdaq. s&p up 33. coming up in a moment, stepping up on taxes what is the step up in basis rule and why is joe biden so interested in it here's a hint.

11 figures worth potential tax reeves knew. we'll explain the rule and speak with the former governor on what getting rid of it means for taxpayers and tax collections. stay tedun you're watching "squawk box.

welcome back to "squawk box. we're live at the nasdaq market square a couple things investors are watching today wyoming being acquired for $112 per share. facebook will start banning ads that discourage people from voting ahead of the 2020 presidential election. this was announced as part of facebook's second annual civil rights audit the new don't vote policy will only likely apply in the u.s. and won't include policing users' posts so uk say it on your own page.

and your feed. a big milestone in the gambling world. new jersey taking in more sports bet than nevada. they led in the sports gaming category new jersey saw about $319 million worth of bets. while nevada had a little more than $317 million. democratic candidates for president are taking aim at income inequality and abuses they see in the tax code robert frank has a look at what could be one of the biggest targets. >> good morning. it is one of the favorite tax breaks of the wealthy and democrats say it's a costly give away to the rich that needs to be eliminated. it's stepped up basis. basically allows taxpayers to inherit businesses without ever paying tax on the appreciation during the owners' lifetime. joe biden has made getting rid of it a center piece of his tax plan and maryland senator crist

van holland is about to propose legislation killing it calling it a major loophole investors use. so here's how it works say an investor bought $2,000 of apple stock in 1999 if the investor sells it today they pay capital gain on that $198,000 so that's around a $40,000 capital gains tax. if that holds on to the stock until he dies and passes it to his family or anyone else, they never pay any tax on the gain. the tax basis for the stock would be $200,000. the same value at the time it was transferred. and the heirs would only pay gain above $200,000 if they ever sell it. so you have businesses, stock, real estate can all soar in value for decades without ever being taxed. if it's given to charity, it's never taxed at all experts say the step up basis cost the government between $30

and $60 billion a year and it also discourages the sale of stock of assets during their lifetime because there's no incentive to sell. >> people take loans against it. that's the other piece of this >> so you're effectively using your money without being taxed on it. >> exactly interestingly, not only do people do it in this instance. but we have talked about people from wall street or lots of businesses leave their classic private sector and go into the public sector work iing at the white house or wherever and they effectively don't pay taxes on that period. because you're forced to sell the stokt. but you're supposed to pay the tax off those assets but what most people do, especially people who can afford to do it, they never sell the treasuries and they just take loans against that and pass them on to heirs and the tax is never

paid so it's just another example >> still a high cost if you think about it, there's discussions of gary cohen. let's say you made half a billion in stock you sell the stock, which normally you lose $250 million you get to keep all $500 million and take loans against it and then don't pay any tax on it later. we're talking about $250 million payment. that's not government work >> it was assumed the estate tax would be a double tax if you tax any gain during lifetime that's the first thing and that goes back to 1916 >> that's legit though >> the other reason is it's hard to determine often times after someone dies what the cost was to them of an asset when they bought it. finding the paperwork.

>> not anymore >> that's the argument that used to be enforced they tried to repeal this in 1976. it didn't work wauz they said finding documentation is too hard most of them are now financial assets that it's easy to figure out your basis when you bought it >>s how much is exempt initially? >> it's $11 million per person now. $22 million per couple >> very few people >> 1900 people are pay iing the estate tax >> a lot of stepped up stuff that's never been taxed. what's the rational? >> when there was a real estate tax that made sense. but now there's no estate tax. >> stay with us for more let's bring in evan bile is this something that makes sense to you

>> it does, mbut with one cavea. i think we should tax appreciated assets on capital gains just as we go do tax people when they sell things when they are living i have been in favor of eliminating the estate tax but when you get north of 50% or right at 50% in the income taxes and tax people's estates in addition to that once they have passed, you compound that out and it gets to be 70%. >> that is double taxation so you'd get rid of estate tax and tax the stepped up stuff when people die? >> yeah, i think that's the way they do it in some other countries. one of your colleagues mentioned. really the estate tax these days is a tax on the unprepared people looking for accountants and lawyers and find ways around th this and so it doesn't apply to that many people. >> how about some of the other proposals that we're seeing?

did you watch both nights of the debate strapped in a chair and your eyes were big. did you see both of those? >> i watched a fair amount, but i'm going to wait until the field is whittled a little bit to watch the wall to wall coverage >> every single person said we should give free health care to illegal immigrants, right? >> yeah, and that's a particular position may come back to haunt them in the general election it's nice to be able to promise some of these things, but they have to be realistic and remember the bis of the party, which tends to dominate the nominating process, may thot be the part that decides the general election outcome i'm afraid president trump may have been filed that footage away >> what do you think would happen, and i'm not sure where senator harris stands, i'm so confused about whether we get rid of private insurance or not. i have no idea where she stands. but what would that do

is that workable in any way? >> probably not, but she did back up her position on that to make it clear she was for medicare for all plus private insurance as an add on, to be fair to her. people are allowed to refine their positions and thang their minds from time to time. my concern about that is if you look at the polling ata, most folks are happy with their insurance. they don't like the insurance companies. they think they pay too much they like their doctors and coverage they have if you have a proposal that just takes that away, plus if you reimburse hospitals at medicare rate, that's going to put a lot of hospitals out of business >> if we had a sound track, i would have hit the boo button three or four times on you already. >> let me put it in a way that the base might appreciate and

embrace. barack obama did a good job expanding coverage and trying to get costs under control. we should build on that and extend on that rather than throwing everything out. the first election after obama care was passed republicans were swept in and that started an eight-year effort to repeal medicaid and all the things done to help less fortunate people. >> there's a fabulous article. viewers should read this from the last weekend about the fact that the center, centrists don't exist anymore. we have this idea of what we think of as the center do you marie that the center is gone i should also note there were a number of columns over the weekend on the liberal side of the world saying actually that things have gone too far a lot of people looking at what took place on wednesday and thursday of last week and saying this party has just moved to a

place that is too far left >> they were moderate republicans saying democrats, i don't like president trump don't drive me away. to your point, that's the karl rove theory of politics. there's no moderates or center it's about polarization and energize iing the base there are a couple problems with that i do think there are some moderates and undependents who may not decide primaries, but are pretty important in general elections. you can look at the house this last time. the seats we picked up were with people who served in the military and were more moderate in their views so therey are still out there en if they are not me tom nant in primaries. it makes it hard to govern >> he did go off >> steve had a line. did you see that

you're going to end up as a socialist or sociopath >> if you demonize the opposition, it makes it hard to work with them after the election and in a system of checks and balances working together is what you have to do so get things done >> thank you is she still trying to get her to run >> you're funny. coming up, the biggest morning stock movers on the day when futures are up big. we'll show you what's going on there was a big first half of the year gaining 15% since january 1st. we have a warning for you. when that's happened in the past, the undex kept only 50% of the time by the end of the year. we'll talk thursday and fourth quarter markets when "squawk box" returns after the break air traffic control. it's gotta let new data integrate with data from our existing systems.

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welcome back top "squawk box. we have been watching the futures this morning and they have been hanging right around this level all morning long. dow futures up by 250 points after there's a truce when it comes to the trade talks with china. the talks back on again. the s&p 500 indicated by 32 and the nasdaq up 136. this also follows some very sharp gains that we saw in asian market joefrs night as well with many of the the markets up by 2% >>. >> under an hour, opening bell

on wall street some of biggest stock movers 37. >> whef a lot of movement. we highlighted in the last hour some of the trade talks. we talked about sky works and construction equipment like katter pillar. but they are not the only ones counting easing trade tensions let's take a look at apple shares a lot of business from the greater chi fra region shares of the iphone up 3% at this stage on 400,000 shares it will be a positive contributor to the dow jones average trading today. shares with bigger exposure to the market get iting gains they arguably being driven more by the latest report on gaming revenues but easing trade tensions with

china certainly are hurting matters there. so watch those shares. and fedex is up premarket as well the shipping company up by 2% at this stage over 10,000 shares premarket. you may recall just last week it reported earnings inside the trade tensions as a head wind for its results in the future. so some may be using fedex as a proxy for those trade talks. those shares up 2.5% as well >> thank you it's the first day of the quarter. the second half of the year. joining us to talk markets and what to expect it the next six months >> i think that the risk still remain on the upside i think we'll have a pretty decent second half there was a couple things that happened in the last few weeks

that really force the issue on et ging to a trade one was the chinese added two weeks ago was weaker than expected but the composition was really disturbing for investment was o heavy industry state-owned enterprises. they cut individual tax rates, trying to spur credit to go to sme, small and medium enterprises, having no success with that whatsoever that pmi that came out over the weekend showed orders for small and medium businesses are close to 45, just showing no signs of bouncing so china needs the deal to provide the cover to reform the economy. i think that data strengthened the hands of the reformers so that was a big step and on our side of the ledger, last week, there were two sort of very disturbing developments first of all, business confidence measures are capital spending plan measures had held up quite well in may, which i was a bit shocked by, given that the trade negotiations fell

apart in early may they fell really sharply in june additionally, the biggest dynamic that is important for the labor market is how much it turns over not just that net job creation which is kind of a statistical nothing. and the jobs -- jobs hard to get component of the conference board, consumer confidence survey was decidedly weak. it was off a two cycle high. but that would indicate that you could have really hit business confidence in investment and capital and labor in june. the pmi overnight confirmed that, terrible in asia so we needed to get this deal back on track. provided i'm correct that the strength of the -- the hand of the reformers was strengthened in china and we do move towards some sort of a deal, then you get that rebound in business confidence and the mix of growth continues to be towards investment and software, research and development, which is growth without inflation. in which case, earningings earn

market is is already six months ahead, just like it picked up on the deceleration a year ago, so with that in mind, i think as we get into the third and fourth quarter, unless the trade war really escalates again, i think we'll find ourselves considerably higher. >> a lot of it is writing on the trade talks at this point, just took -- >> absolutely. to me, that has been the clear and present danger through that business confidence channel for quite some time. and, you know, if we can continue on and get a deal wheat good some sort of a deal with china undoubtedly, i thought the former prime minister of australia's comments were really interesting this morning. that was a good interview. we will get a deal the question is how soon president trump then moves on to germany and the whole pushback on global central banks which he's correct about there was an op-ed in the

journal this weekend about judy shelton and her criticism of the ecb and boj. no doubt that currency is what those policies are all about. >> would you tell people to buy here or not? we're 1% off the highs on the dow? >> yes, i would. i think we're going to go through 3,000, i think earnings season is going to be pretty good, it is going to start out with financials and financials have moved to a new level of profitability. and i think those results will be quite good. and then i think we push on from there. there will undoubtedly be a few episodes where the trade talks run into snags those are your buying opportunities. >> barry, thank you. good to see you. >> all right >> down to the new york stock exchange, jim cramer joins us now. what are you telling me, that kiante classico is having a good year >> you read that very well, joe. last year was weak this year we had perfect rain and now perfect sun. it looks like the year you have to put them away i think that while i like what barry said about stocks, i think

the kiante represents a better buy. >> did you -- you were just in tuscany, that -- i could go -- i could just go, period. i don't even mean go -- i would go and maybe not come back. >> it is very hard to come back because here is the shocker, they love us still, and i'll go further, joe, guess what president they think is doing a great job? this is the north, speaking northern italian, i don't know about the south. >> the big cities, not so much, right? >> well, not even -- look, there is a belief that the president wants a separate security that they believe that the president would prefer the lira and a lot of this is motivated that they believe the president is not in favor of merkel and merkel's policies have hurt italy. >> did you go anywhere near banfee castle?

what part of tuscany just for me. >> 20, 30 minutes south of florence, more antinori. >> you've been there before? >> yes, yes. more rafino. and, look, i urge everybody, if you want a place where americans are loved, i mean, loved, go to milan and go to florence there is -- you are -- you're hugged by everybody. it is just -- say you're an american and they love you >> and monticcino, they have this city that you can't believe it exists, it is on a mountaintop, it can't even be real and people are just walking around they don't even look where they are, they're just like, yeah, this is -- it is like so sick >> the one thing -- between 2:00 and 4:00, you couldn't even go to a drugstore in an emergency 2:00 and 4:00, the country is enforced a level of sleep that is outstanding >> so awesome. the gelato places, food, anyway.

it is so great you're right >> i got to lose five pounds quickly. i put on five, i'll take them off. >> you any whaknow what, jim, ia big week, we'll live without you, but when you need to do it -- >> five stars means in things to many people. >> jim, thanks we'll see you in a couple of minutes. don't miss "marty mucci on "mad money" tonight could there be another around the corner? or could it turn out differently? i wanted to help protect myself. my doctor recommended eliquis. eliquis is proven to treat and help prevent another dvt or pe blood clot... almost 98 percent of patients on eliquis didn't experience another. ...and eliquis has significantly less major bleeding than the standard treatment. eliquis is fda approved and has both. don't stop eliquis unless your doctor tells you to.

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quick final check on the markets. half hour away from the open things are much higher on the back of the trade news over the weekend with china at least a truce is at hand for now. dow jones looks like it would open up about 258 points higher. s&p 500 looks like it would open up about 32 points higher. the nasdaq looking to open about 134 points higher. also show you the oil boards, we had brian in vienna, crude at $60.09 a big gain, close to 3%.

>> it is a good gig. >> anyway, joe's getting closer to vacation. make sure you join us tomorrow you'll still be here, though. >> i'll be here tomorrow for three hours. >> final day "squawk on the street" begins right now. ♪ brooklyn, brooklyn take me in ♪ ♪ are you waraware the shape i'm in ♪ >> did you hear that "brooklyn, brooklyn," that was my request i'm david faber with jim cramer who is a brooklyn nets fan live from the new york stock exchange carl quintanilla has the day off. futures, half hour from now get started with trading a lot of news to digest over the weekend for investors. you can see we are looking for a sharply higher open, perhaps even some new records, we'll see. let's get to our road