it is 5:00 a.m., here is your five at 5:00. it is jobs friday. the latest read on the u.s. labor market due at 8:30 a.m. eastern time the biggest economic numbers. a run from risk. global government bond yields trading near record lows we'll tell you what that says about the economy around the world. a warning. samsung expecting a drop in profits and it's blaming the u.s./china trade dispute that's coming up shaken, a 6.4 magnitude

earthquake rattling california, the strongest quake in two decades. and trouble for big tech names out there. apple and facebook both experiencing outages over the fourth of july holiday it's friday, july 5th. "worldwide exchange" begins right now. ♪ good morning welcome to "worldwide exchange." i'm dominic chu. brian sullivan is off today. here is how your money and the global markets are setting up. stock futures now pointing to a slightly lower open. the dow will go down by 38 points if these futures losses hold into regular cash trading you can see the s&p off by 5 points the nasdaq down by 10. the bond market right now in focus ahead of that big jobs number in the united states. ten-year u.s. government note yields ticking slightly higher, just a hair below 1.97%.

1.78% for the two-year note yield. on the european side of things, worth noting what's going on with the european bonds especially the german ten-year government bund. you can see there that bund trading at negative 39 basis points negative yields, though slightly higher there the ten-year gilt in london 69 basis points joining me now is sven hendrick. we set up the global picture ahead of a huge jobs number coming up. what exactly is the market set up going into this do you expect any big market reaction out of today's jobs number >> the market obviously watches now the nfp report in regards to the federal reserve, because all eyes on the fed in july, whether they'll cut, how much are they going to cut, whether it's 25 basis points or 50 basis points. so depending on the reaction to that, we may see some up or down

princip i'm fascinated by reaching these new highs despite the complete collapse in global yields. the ten-year is down to 1.95, 1.97%, 40% below where it was in november no one had predicted this. all the economists were looking at 2.5 to 3.5% for 2019. it hasn't happened and so we areseeing basically kind of what we've seen in past cycles when cycles come to an end, we have low unemployment, we still see markets making new highs, all these warning signs are being ignored. dropping of yields, inversion of yield curves, growth slowing, all of these things which we're currently seeing not only globally but in the u.s. >> that all sounds negative, sven doesn't sound like you're positive does that mean yields globally could still go down more as people fly to the safety of government bonds in the face of what you call that slowing

environment? >> well, the thing is, we're not at new highs because of earnings growth or revenue growth, but it's because of the drop in yields and central banks are once again cutting rates and adding more stimulus that has to be concerning to everyone for ten years we've been promised growth to come. we have the longest expansion on record, but it's also the slowest expansion. it's come at a steep price debt to gdp increased from 65% to 105%. we hahave trillion dollar defict and growth is slowing. the fed promised inflation targets. the dotplot has turned into a fantasy plot it never worked out. the only thing they've been able to do is asset inflation

asset price inflation. not inflation in the real economy as they measure it none of the central banks have normalized so we're sitting at 225 basis points on the fed funds rate they're looking to cut again i'm sorry, but there's a big gap in narrative that is a problem. obviously at the end of the day we keep repeating the same cycle over and over, which is lower rates at the end of each fed rate hiking cycle. we're adding more debt and producing marginally less growth each time around we'll cut rates again. >> does that mean you fight the fed? you fight the ecb, you fight these easing authorities? they have a lot of fire power, and at this point markets keep making record highs. do you buy these highs because the momentum still goes higher or are you waiting for a pullback >> it's a very good question there's no doubt this must be fully acknowledged, federal

reserve and central banks have once again in 2019 demonstrated their power in markets they keep managing to come in whenever there is a pullback, you see speeches by central bankers such as jerome powell come in as he did at the beginning of june, markets were correcting, he came in with a speech and prices here back at new highs. so it's a very difficult environment to navigate. it's al none of these new highs have been confirmed on the indexes m stocks are not participating in this from a technical perspective i'm looking at the price range between 2990 to 3050 there's a lot of technical resistance ahead of us here. and if markets cannot sustain a move above that, then we're looking at what is called a broadening wedge pattern it's basically a megaphone if markets cannot cross above this trend line that i'm showing

on this chart and sustain a move above that, the technical pattern, if the fundamentals which are telling a different story bear out, we can target the lower trend line which is around 2100 to 2200. that's a different story it's basically confirming what the bond market is already saying the ten-year is now back to levels of the u.s. election in 2016 this is where those prices would be heading to. >> got you a critical time in the markets always appreciate it thank you for those thoughts another big company is talking about the impact of the u.s./china trade war today frank holland has news from samsung. >> good morning. samsung warning second quarter profits are expected to drop by 56%. this would be the third straight decline in quarterly profit. operating profit is forecasted to drop to 5$5.5 billion, it

still beat analyst estimates due to one-off gains from the display business the company says sluggish demand for memory chips is only being amplified by the ongoing u.s./china trade war analysts say a worldwide oversupply in smuemiconductors n tariffs on huawei have contributed to this. some analysts predict the chip sector will not recover until the second half of 2020. check out lg electronics, they fell 5% on disappointing results. sk hynix dropping 2% >> this is an interesting take only because it's the next step in another chip company warning about what's happening is there a broader theme that we should think about in regards to

whether smukte esemiconductors e that leadership for the market do they still provide the linchpin for everything working out to the upside overall? >> tech is not going anywhere, but this u.s./china trade war has a global ripple on all types of companies for samamsung, they are also facing tensions with japan consumer demand for products they go into, that has also declined >> thank you very much when we come back, we'll head to beijing and hear why china could stop buying goods from u.s. farms. wait, as we head to break, check out oil prices this morning. you can see ice brent crude futures just about flat. wti down 1%. still ahead when "worldwide exchange" comes back after this break, more on the market moves today.

with tough food, your dentures may slip and fall. fixodent ultra-max hold gives you the strongest hold ever to lock your dentures. so now you can eat tough food without worry. fixodent and forget it.

live shot of hong kong right there. they're closing down their day as we're getting ours started on "worldwide exchange." welcome back to the show good morning stock futures are coming back from the hol lay sligiday sligh. the dow could open down by 26 points that's an improvement. the s&p off by 4 points. the nasdaq down by 8 on the trefasury side of things

we're seeing the ten-year treasury note yield at 1.965%. the two-year treasury note yield at 1.78% in trade war news, an important china state media blog is warning if the u.s. flip-flops on the talks, beijing will hold off on buying more u.s. agricultural goods. eunice yoon has that story i thought this was a done deal here they were going to buy more stuff, especially on the farm side of things >> not necessarily this blog's anonymous author is believed to have special insight into beijing's strategy for negotiating on trade the author posted a commentary today saying if the u.s. flip-flops in the negotiations, the promises to buy american agricultural products will also be overturned. this piece comes after the hong kong newspaper had quoted

sources as saying that china was holding off on buying american agricultural products because it wanted to fest gauge what the white house's policy would be towards huawei exactly whether or not it's going to ease restrictions on the national tech champion the commerce ministry on thursday had flagged beijing's concerns that the u.s. might not make good on what the chinese see as president trump's promise. so the commerce ministry said u.s. companies should be allowed to sell to huawei right away in addition the ministry has been stressing the u.s. needs to make sure it lifts off the tariffs. this is one of the preconditions for the trade talks. the trade representatives office said the two sides are going to be arranging a phone conversation for the top negotiators as early as next week and for the chinese, it looks very much like the fate of huawei is quickly moving up to the top of the agenda.

dom? >> i thought huawei and trade were separate. how much is this going to be really centered on whether or not there can be just one sti sticking point in huawei resolve before anything goes forward with trade talks it used to be things like int le intellectual property and forced tech transfer. >> the u.s. has stressed before that huawei was going to be a separate issue from the trade talks. since the weekend it's become quite clear from the chinese side they believe huawei is front and center in the trade talks. i think that's probably going to make things a lot more complicated in the discussions if they do happen next week. >> eunice yoon, thank you very much for that update appreciate it. still on deck, not one but two major tech companies facing outages in recent days why facebook and apple left users wanting their photos back. "wlddexcngngyou are watchi

orwi ehae" on cnbc ♪ did you know you can save money by using dish soap to clean grease on more than dishes? try dawn ultra. dawn is for more than just dishes. with 3x more grease cleaning power per drop, it tackles tough grease on a variety of surfaces. try dawn ultra. it's how we care for our patients- like job. his team at ctca treated his cancer and side effects. so job can stay strong for his family. cancer treatment centers of america. appointments available now.

cancer treatment centers of america. (danny) after a long day of hard work... ...you have to do more work? every day you're nearly fried to a crisp, professionally! can someone turn on the ac?! no? oh right... ...'cause there isn't any. here- (vo) automatically sort your expenses and save over 40 hours a month. without you, we wouldn't have electricity. our hobby would be going to bed early. (vo) you earned it, we're here to make sure you get it. (danny) it's time to get yours! (vo) quickbooks. backing you.

live shot of our nation's capit capitol. the rotunda there lit up the s&p 500 technology sector hitting a record close heading into the fourth of july holiday. so what is in store for the industry as we kick off the second half of the year?

here is skrojosh lipton with yo second half playbook ♪ >> reporter: even with the looming threat of a trade war, tech is the top performing sector so far this year. here's what else to watch for in the rest of 2019 first, new iphones tim cook tells cnbc that the iphone xr has been his top seller, which is the least expensive of the phones launched last fall. that means this fall when the new lineup is introduced, he might focus on more mid tier phones two, jedi. the u.s. department of defense is deciding which company will win a big cloud computing contract called jedi, worth up to $10 billion. the winner could be announced as soon as august amazon and microsoft are in the running. the winner could use the deal as a selling point convincing companies and other data sensitive industries to entrust

it with their information too. three, regulation. state, federal and international regulators all have tech in their sights, including an's goi alphabet's google. that could be a challenge as the companies hunt for growth and one their chinese rivals don't face >> technology has been powering the gains in the s&p 500 this year in more tech news, apple's icloud experienced an outage yesterday. users reported ongoing issues with features including calendars, contacts, reminders customers noted the outage even impacted services at the physical apple retail stores it is the second widespread outage for apple this year apple was not the only company dealing with trouble facebook users were locked out of features on facebook, instagram and whatsapp for a large portion of the day wednesday. a spokesperson confirmed the

issues were resolved by wednesday evening. this followed a similar outage across platforms that happened back in march. more regulation could be coming for facebook, this time from france. french lawmakers approved a measure yesterday that would fine the social media giant if it fails to remove hate speech within a 24-hour period. the bill still needs to pass the french senate, but president emmanuel macron is in favor of the measure. shares currently down fractionally coming up, president trump delivered a salute to america yesterday, but the event was not without controversy. a live report from washington, d.c. when we come back after this break i have one kid in each branch of the military, but i'm command central. it's so important to us that verizon is supporting military families. when i have a child deployed, having a reliable network means everything. so, when i get a video chat, and i get to see their face, it's the best thing in the world. and i've earned every one of these gray hairs.

military moms, we serve too. (vo) the network more people rely on, gives you more. like military plans with a special price on unlimited, $100 per line, and big savings on our best phones when you switch. that's verizon.

in political news, president trump took the stage in front of the lincoln memorial yesterday delivering a fourth of july speech in the rain to celebrate the military and american history. craig boswell joins us from d.c. with that story. what exactly whauz tas the final takeaway it was fairly apolitical, right? >> that's right. now we have the president talking about sticking to the theme with a heavy focus on the military now the costs are being brought into focus and they're still being tallied today. flyovers, a rare sight in washington, d.c. a key part of president trump's

salute to america. as were tanks and troops speaking from behind rain-soaked bulletproof glass, the commander in chief focused on the military >> we celebrate our history, our people, the heroes who proudly defend our flag. the brave men and women of the united states military many noted the president stuck to the script. >> i wish that this was more about the people not about the person that is in the white house. ♪ >> reporter: adding up the cost to the taxpayer may take some time it's something the white house down played. today the "washington post" reporting the combined hourly cost of the two dozen aircraft in the flyovers at $450,000 an hour, that's using defense department reimbursement rates >> this will cost millions of dollars more to do this type of extravaganza, if you will.

could those resources be devoted it other situations that might make more sense? >> reporter: the celebrations on the mall not without pro tests the baby trump blimp making an appearance near the white house, a scuffle surrounding two people setting fire to the flag >> on this day, 243 years ago -- >> reporter: eyes turned to the skies after dark for an extended firework that fireworks show lasting more than 30 minutes, but the costs will continue to be debated. >> thank you very much for that. coming up, don't be fooled by the holiday week. it's still jobs friday we'll talk market expectations as we count down to the very big main event when "worldwide exchange" comes right back 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.

it is jobs friday. this employment report could be a game changer under the microscope why a major european regulator is looking at amazon's investment in food delivery. and joey chestnut for the win. the reigning na ining nathans h eating champ did not disappoint. the video everybody will be talking about today. it's friday, july 5th. you're watching "worldwide exchange" on cnbc.

♪ welcome back to "worldwide exchange." i'm dominic chu. brian broin hsullivan has the df today. we are halfway through the 5:00 a.m. hour. stock futures pointing to a slightly lower open. if the future losses hold, you can expect to see the dow jones open down by 22 points the s&p off by 4 points. the nasdaq down by 6 we are seeing an uptick in terms of bond yields across various parts of the u.s. yield curve. ten-year treasury note yields ticking higher to 1.97%. the two-year treasury note yield 1.78%. let's check right now on what happened overnight in the asian session. a bit of a mixed session the nikkei up fractionally

the hang seng just about flat. and the shanghai up by 0.2%. here is what's happening now in the early european trade some of that caution coming there as well. the cac in france off by 0.2%. the dax off by 0.1%. a similar percentage decline in the ftse 100 as everybody around the world waits for that big jobs report in the united states outside of the stock market, here's a global look at commodities and currencies oil trading at $56.48 for wti crude. euro, 1.1261 gold, 1,416.70 the last trade there. let's check in with phillip mena live with the headlines. good morning >> the west coast is still on edge southern california started off the fourth of july with the most

powerful earthquake that area has felt in two decades. the most significant damage was done in ridge crest near the epicenter of the 6.4 magnitude quake. the clock is ticking on the trump administration's efforts to add the controversial citizenship question to the census a federal judge gave government lawyers until today at 2:00 p.m. eastern for a legal basis for keeping the question. seven people died in a tragic helicopter crash. it happened in the waters off grand kay island in the bahamas. the crash killed everyone on board. officials say the aircraft was discovered overturned in 16 feet of water police recovered the bodies of four women and three men one of which is reportedly west virginia billionaire and coal tycoon chris klein klein's death was confirmed by west virginia's governor the cause of the crash is now under investigation. back to you, dom

>> thank you very much for those updates. joining me is rob morgan, chief investment officer from seffi financial. the jobs number today, we oftentimes say it's the most important jobs report since the last jobs report it might hold a little bit more water this time around because we priced in expectation that the fed could cut rates later on this month >> yeah. absolutely and, you know, the adp employment report which comes out two days prior, sometimes it's a harbinger of what the jobs report will be. it was disappointing since the economy is slowing, it wouldn't surprise me to see a disappointment today i think the expectation is 170,000 jobs it's the most important number until we get the july report >> our markets, do they have it

correct? are we expecting to see the data continue to soften to the point where the fed will cut interest rates this month and perhaps later on this year as well i think for a while, yes we will continue to see softening of data. i don't think the data will fall off a cliff. but i do think the fed has got it right i don't want them to pull the rate cut trigger too quickly maybe that's one area where i differ with the market the market is expecting a rate cut pretty soon. i would like to get more data in personally if i were on the fomc but basically the fed is following the game plan that the market seems to be telling them. >> the argument has been made, quite forcefully so, that the stock market and bond market rallied to the levels they're at

now on expectation that central bank action will come in to put more liquidity in the markets. what does that mean? where is the relative value? is it with ten-year u.s. government note yields at 1.97% or is it with the dow jones and s&p at record highs? >> you know, as the fed has pivoted over the last six months from a rate hike stance to a rate cut stance, a big part of that has been the dollar is probably going to weaken somewhat i think that's creating value. i think that will help big cap multi nationals. i would overweight large cap growth stocks. for u.s. investors, having an overweight in international investments makes sense. finally for bond investors, you know, having your bond portfoliosing slightly long inis

slightly larger. >> it wasn't that long ago you were with us saying you felt like the u.s. still represented the best value given all of the stuff that's been happening around the world we had the momentum. why has it shifted on your end to international being the better bargain versus the u.s. market >> a couple of reasons there i mentioned the dollar that could be weakening a bit also, too, i think that with the trade war that's going on, unless the talks break off completely, which i don't see happening, i think probably just about the worst has been baked into the equity markets with trade talks. given that, i don't think we'll

get a grand overriding agreement between the u.s. and china i think the issues on intellectual property -- there's a big gap there. but we'll be at least able to kick the can down the road, keep talks going. this could go on for quite awhile i think the worst has been baked into the stock market from that. >> rob morgan, appreciate it. bain capital and the carlyle group have agreed to buy osram for $4 billion they make l.e.d. lights and lights for stage and film sets and growing plants indoors in the u.s. it owns the sylvania brand. osram backs the buyout bid shares are higher today after jumping 13% on wednesday the uk's antitrust regulator is considering whether to launch a probe into amazon's investment in food delivery service

deliveroo. in may amazon said deliveroo would lead a 6$600 million funding round. uk investors have imposed an initial enforcement order which prevents businesses from pushing ahead with a tie-up. in a statement amazon says its investment would be positive for consumers. deliveroo uses 60,000 riders to deliver meals from 80,000 restaurants in 14 countries. general motors says sales in china fell 12% in the second quarter. the ate utomaker said they werei by slowing economies and increased competition for mid priced suvs. it's the fourth straight quarterly sales decline for gm in china there was a bright note. sales of gm's luxury brand

cadillac road by 36% from china to the u.s., what will the road look like ahead for the auto industry in the coming months? fill lebeau has your second half playbook in autos. >> reporter: for automakers and invests, the second half of this year is about tariffs, slowing sales and potential merger deals. on tariffs the big question is if the u.s. puts a tax on vehicles imported from europe. if that happens it could impact sales, which slowed slightly in the first half of the year don't be surprised if nissan, renault, fiat chrysler and other automakers revive the idea of potentially merging operations that could rev up auto stocks in the second half of this year coming up, did you overindulge in honor of independence day you are not alone. we'll tell you the jaw dropping

number of hot dogs that joey chestnut ate to win the annual coney island contest forget baseball. some fourth of july revelers participated in a very unseasonal activity yesterday. the patriotic pictures you will have to see when "worldwide exchange" comes back after this. no matter what i wore, i worried someone might see

my bladder leak underwear. so, i switched. to always discreet boutique. its shape-hugging threads smooth out the back. so it fits better than depend. and no one notices. always discreet.

welcome back to "worldwide exchange." thanks for being with us a quick check on futures a slight improvement the dow jones had opened down by 20 points if the futures losses held the s&p down by 4 points the nasdaq off by 6 to 7 points. finally some good news from the box office this summer according to comscore sony's spider-man far from home notched a record the flick took in $27 million during yesterday's holiday

earning $65 million in its first two days out you can call it the next reboot of the marvel cinematic universe a big expectation there for spider-man and the franchise. let's find out what else you will be talking about. time for the top trending stories. frank holland is back with those. we have to talk about joey chestnut how many calories? i don't even want to think about it >> i find this hard to watch reigning nathans hot dog eating champion joey chestnut held on to his crown yesterday he claimed his 12th victory at the annual fourth of july contest. he scarfed down 71 hot dogs. >> 71. >> with the buns in ten minutes. his closest competitor couldn't come close, eating just 50 hot dogs we don't want to overlook the female winner. she also defended her championship >> i find this hard to watch,

especially when they dip the hot dogs in water. >> there's a strategy these folks have to make the hot dogs easier to consume by wetting them down. dipping them in cups of water so they can break apart the bread, whatever else. this is just amazing to me >> when you look at the video, he's not enjoying it i get it's a contest, but i painful, gross >> i wonder if this is healthy long-term. >> i don't think so. luxury and lexus is going beyond vehicles. there is a man for a new yacht equipped with three state rooms, multiple lounges and new technology beautiful looking boat i was on a boat made by the company they partnered with to make this boat that yacht was beautiful i can't imagine what a lexus yacht would be this is considered their fourth flagship vehicle for the brand >> it wouldn't be out of the

realm of reason to say vanity is one of the things you could go through with a yacht like that from lexus >> i feel like this is a necessity. i need this. >> you cover the luxury side of the boating business >> i do. >> i can imagine you in one of those. >> me, too i can imagine myself in one. i don't know if i could finance myself in one. some people have a community softball game on the fourth of july or maybe a friendly game of tennis, in utah this year some americans did something more out of season. celebrating independence day out there on the slopes. snow bird resorts held its final skiing day of the season in july with skiers and snow boarders turning out in their red, white and blue best. >> because you can do that in snowbird >> amazing >> i remember growing up in northern california there were times you could get some summer skiing weather in places like lake tahoe it goes to show you, we have

these constructs for how we think we should celebrate the fourth of july, barbecues, beaches, picnics i applaud those guys on the slopes >> why not hit the slopes. enjoy yourself one south carolina town had an extra early fireworks show yesterday. a fireworks store in front of ft. mill caught fire before dawn yesterday and sent fireworks exploding in all directions. officials were able to contain the fire and said nobody was hurt but the visuals are stunning anybody who travels through south carolina knows there are quite a few of those fireworks shops down there some fun video there, but lucky nobody was hurt there. the u.s./china trade fight is impacting almost every industry should investors be betting on a deal here's contessa brewer with your second half playbook when it comes to casinos in the casino industry all

eyes are on u.s. relations with china. the first thing to watch is whether the united states and china make a deal on trade its impact on the economies of both nations translates into how much appetite there is for gaming if a deal goes bust it could effect the negotiations for concession renewal in macaw or negatively impact the number of chinese visitors coming to the united states to gamble. the most affected, wynn, sands and mgm. the second thing to watch is mergers and acquisitions casino m&a grabbing eldorado is wynn resorts looking to make a deal finding a partner and getting bigger is a global gaming trend. the third thing to watch is how lady luck lures in local lawmakers. watch for more states to expand casino gambling and to adopt sports betting regulations they're hoping to hit the

jackpot when it comes to tax revenues from gaming certain bitcoin investors out there, they're seeing a jackpot. bitcoin is trading higher. it is up about 200% so far this year and it's not just bitcoin's vault yew that h value that has been on the rise. a new study from the university of cambridge says the krimz c cryptocurrency consumes more energy than the entire nation of switzerland. it takes about 64 terrawatts per year to support the networks that support the bitcoin ecosystem. switzerland uses about 58 terawatts every year for everything it does so switzerland, bitcoin, francs, cryptocurrency, whatever you want to link them to, energy a huge deal for bitcoin. we are hours away from the monthly jobs report. our expert panel will break down what you should be watching. that's comingup next

i have one kid in each branch of the military, but i'm command central. it's so important to us that verizon is supporting military families. when i have a child deployed, having a reliable network means everything. so, when i get a video chat, and i get to see their face, it's the best thing in the world. and i've earned every one of these gray hairs. military moms, we serve too. (vo) the network more people rely on, gives you more. like military plans with a special price on unlimited, $100 per line, and big savings on our best phones when you switch. that's verizon.

the days are longer in new york city. it's already bright outside but a bit foggy out there as we head towards the 6:00 a.m. hour on the east coast of the united states it's time for your executive recap. univision reportedly exploring a sale that would end 12 years of private equity ownership the "wall street journal" says the board is reviewing strategic options following a fall in ratings and a failed venture into english language content. former uk chancellor george osbourne is considering putting his name forward to replace christine lagarde as head of the imf.

he would be the first english head of the imf. this could be a dramatic return to public life for osbourne after he was fired for chancellor following the brexit vote. and greece will hold its first elections since the height of its financial crisis this happens on sunday. opinion polls indicate that the center right and conservative party, new democracy, will come out on top, winning an outright majority in the parliament there. we are just about two and a half hours away from that big june jobs report xhis economists are looking for an increase of 165,000 jobs, a healthy rebound from 75,000 jobs in may joining me now to discuss jobs, the economy, market, david nelson david, the markets right now are in a spot where we keep making new record highs they're not booming, but they're

still there. are the markets correct or is the economic data showing signs of a slowdown correct? >> fading price momentum has been tough this year for myself, i go back to september. estimates have beeen falling almost every single week cowe say the market is stretched. it certainly is. we'll have a rate cut sometime this month and any type of security analysis the risk rate is an important dynamic. >> joe, you're an economist. is the economy in the u.s. in a situation where cutting interest rates is appropriate >> yeah. i think the rate of policy is too tight. the economy slowed around 1.3% growth during this quarter you'll see that reflected in the

top line i have 147,000 increase on the top line i'm worried about goods producing, manufacturing, leisure, hospitality trade and transport because of the trade conflict that is depressing overall economic activity. >> the jobs numbers we have been seeing have been showing slowdowns, but still growing is it a situation now where we can say that the u.s. economy is still in a healthy spotted and it kind of justifies the record highs that we are seeing >> the economy peaked last october. we're past the cyclical high we're decelerating at an increasing rate. when you watch the jobs report today, watch not only the top line, watch the household survey now, we've only added several thousand jobs in the household survey over the past few months. that suggests that the unemployment rate is bottom and it should increase over the next

several months when we talk about markets, bad news is good news here you get another sub 100,000 report you will see an aggressive pricing in of not just 25 basis point cuts later this month but probably 50 basis point cuts it's the fed driving markets, not earnings you wait until july 8th, july 9th, see how compressed earnings are. we'll have a different discussion in just over a week >> david, i thought we were beyond the good news is bad news and bad news is good news narrative in the markets joe makes it sound like we have gone back and now it's about expectations >> you have benign inlagflation. rates in germany are sub zero out to 15 years. we're focused on jobs. that's not the issue the issue largely lies offshore. 45% of s&p 500 revenue is offshore pmi data around the world is

weak in many parts of the world they're in economic contraction. i think the story in the united states is relatively good. with so much exposure to offshore revenue it has to hit large cap multinationals >> david, with so much exposure on the large cap multinational side, why is it that traders in stocks have not gotten that correct in your mind you are saying it would be correct to factor in more of a slowdown globally, purchasing managers, everything else. but stocks keep going higher >> they keep going higher. price momentum is important. right now stocks are saying some concerns that both joe and i have right now will be discounted and get better 6 to 9 months from now. i need some food on my plate we have earnings coming up the ceos have done a good job of lowering expectations for most of the year. i need some promises i need something i need to know some of these earnings estimates have to stabilize and start to get back on i-95 north.

we can't keep sustaining multiple expansion without earnings at least stabilizing and at least starting to catch up to valuations >> joe, david mentioned food on his plate. i would also say i need fuel in my car as well all of those components with regard to food and energy are still relatively benign what does that tell us what's happening with the u.s. consumer overall and the economy in the u.s. >> the u.s. consumer had a decent rebound here in the current quarter. when you look at that report today, ignore the noise month to month on average hourly earnings what i do, i calculate a three-month average annualized pace when you look at that, you've seen a deceleration in wage growth from 3.4 to 2.7%. in that case employment wages are a lagging indicator. we want to see should hiring

begin to flatten out, will that cause the consumer to pull back in the third quarter it's a critical three to four months on the economy. we want to see tensions ease in the middle east. we have a lot of event risk in front of us. david makes a good point we have 13 tri$13 trill kron of government securities yielding negative rates i got back from europe, there's a different economic discussion across the pond. >> david, given the setup you and joe talked about, is this a situation where people should be investing still in the stock market if you're going to follow the tape, try to avoid the next pullback, what will get you back into the market? down 10% down 20%

most investors should stay fully invested and have asset allocation that covers all the metrics. right now risk on and risk off assets are doing well. somebody in a balanced pflt d i is doing pretty good >> that does it for "worldwide exchange." "squawk box" picks things up. good morning it's jobs friday the latest read on the labor market is due at 8:30 a.m. eastern time you don't want to miss the moment and the predictions. and a new warning. samsung expecting a drop in profits. it's blaming the u.s./china trade war on it. and british royal marines have seized an iranian super tanker the iranians are demanding its release. it's friday, july 5, 2019, "squawk box" begins now.

live from new york where business never sleeps, this is "squawk box. good morning welcome to "squawk box" on cnbc. i'm melissa lee along with andrew ross sorkin joe and becky are off today. sitting in with us is ed lee, "new york times" media reporter and cnbc contributor thank you for waking up early. >> happy to do it. >> big show. don't let the futures fool you they're quiet at this hour ahead of the big jobs report dow looking to lose 31 at the open nasdaq down by 5 a lot can happen and a lot will happen between now and the opening bell in asia, quiet there as well in anticipation of the u.s. jobs data the nikkei up by 0.2%. the hang seng finished down slightly th