it is 5:00 a.m. at cnbc global headquarters. here is the top five at 5:00 reaching a deal on global tax reform infrastructure ahead the white house making a deal this week. with or without colleagues. too hot to handle? key data point due out this week enough to move the needle on tightening at the fed. speaking of rising prices. cathie wood has the approach to

take the heat off consumers. we will explain. and pulling the plug elon musk scrapping plans for the souped up model s. it is monday, june 7th, 2021 you are watching "worldwide exchange" on cnbc. good morning i'm seema mody here is how the money and global markets are setting up the day stock futures are lower. stocks ended the week in the green. nasdaq and nas ddaq 100 are comg off a three-week winning streak. to the bond market we will look at the 10-year treasury 1.57%. the energy market is grabbing the attention of investors crude at the highest level since october of 2018.

right now, we are lower in negative territory wti crude is below $70 the morning crypto check bitcoin all over the place facing pressure on news of the crackdown in china we are looking at bitcoin at $36,131. up 1%. the meme stocks which got a lot of attention last week we are monitoring those names like amc which is up 5.6% in extended trade gamestop up 1.3% still seeing a lot of the names getting a lot of attention around the world, stocks in asia india at a record high shanghai closing at 2.1% japanese nikkei is up as well. in india, the stocks are rising

as the covid cases are easing off. bombay is up .50%. europe is getting started with trading. stocks trading in record high territory the last couple days in the green. to the morning top story the g7, uk, germany, japan and jud u.s. are backing the 15% minimum corporate tax rate joumanna bercetche has more from london >> that is right the finance ministers backed a global minimum tax of 15%. it allows for companies to be taxed on sales, not just where they have a physical presence. that will have a huge implication for the big tech companies and multinationals

facebook's vice president of global affairs said the proposal is a significant first step. in a statement to cnbc, a google spokesman said the company hoped for a balanced and durable agreement. the uk chancellor welcomed the deal saying it would lead to modernization of the global tax system >> after years of discussion, g7 reached historic agreement to reform the global tax system to make it fit for the global digital age and make sure it is fair so the right companies pay the right tax in the right places >> worth noting here the g7 was held in london. that is why we heard those comments a milestone as far as the g7 is concerned. next is the g20 summit in italy in july. the bigger hope from the finance ministers is the broader tax corporation tax will be taken up

not by just the g7 or g20, the u.s. is pushing for the proposal for digital tax. it remains to be seen how it plays out. a big development from the tax persp perspective. it will have huge implications, seema. >> certainly if countries agree to a 15% tax rate, joumanna, i expect france will lift the digital service tax imposing on the digital tech companies here in the u.s. >> exactly that is what the u.s. is pushing for. the 15% number is actually lower than many of the advanced nations already have cnbc.com has an article on global corporation tax rates one country is ireland the corporation tax rate there is 12.5% we know ireland has the headquarters of many of the

global tech multinational companies head quartered there the announcement was met with a lukewarm response over the weekend. wil willing to look at the proposal. the country could stand to lose 2 billion euro per year. the big question is if this will be adopted by broader countries, not just the g7. >> joumanna, thank you for the latest joumanna bercetche back home here in the u.s. futures are sliding at had hour. wall street's favorite target cathie wood weighing in from the oil market and real estate and crypto and equity. wood says bitcoin is well in the correction despite the indigestion in the market.

the bull market is alive and well cyclicals are due for a pull back with inflation, wood says it is not a problem in the u.s internationally could become more of a problem. joining me now is hightower strategist >> good morning. >> inflation is the big data point that investors are focused on this week we saw the move in april every economist and goldman sachs saying this is the number one data point to watch. what are you expecting >> it is a great question. it is top of mind. inflation is out there i think that some is sttransitoy you have seen a pull back which is healthy i think that is transitory

on the wage side, if you look a unit labor costs at 1.7% and the ism prices paid index. the second highest on record we had the non-farm payroll numbers last week and the last two months with a definite rise. .7% in april listen to what companies are saying they can't find people when they find people, they have to pay this is something that is top of mind i do not think this part of the inflation is transitory. this is something the fed is watching they will taper. it is a matter of timing they should at this point. >> speaking of labor, one-third of your investments cited the labor shortage as an issue it looks like the may jobs report was weak enough to push

back the taper talks from the fed. is that your interpretation as well >> it was a solid number it was a great number. it is encouraging and what i think is the new theme in the marketplace. we have seen the renaissance in manufacturing. you know that. we have seen the pmi and durable goods and cap x spending we got record ism manufacturing. i think we are on the cusp, seema, the shift of service. that will take off i don't think it reflected positively yet we have seen reopening i think that is pointed to move higher the reason it is encouraging is services is a lot bigger piece of the economy we are rooting for services to do well. we have data ism services hit a record.

adp number had services driven in jobs. to the non foreign payroll, it was a solid report 290,000 jobs created in services alone. i think it was strong, but the number one item for the fed is inflation and watching what is happening on the wage front. >> we have retail sales on friday as well if you look at year to date, tech tors which are standout, energy it was a headache the last couple of years. oil prices have peaked we have brent crude back over $70. i wonder if you think the trade has run out of steam is it too late to buy the oil giants >> i think the cyclicals and sensitive sectors which energy is included in that remain very

attractive i think the operating leverage is substantial people did get burned in energy. myself included. i'm taking a bar bbell approach. i have a hidden gem in technology 13% of total revenue headed up to 25% in the future you ccan pick your spots within energy i like industrials i'm not abandoning secular growth i'm particular because they are not cheap. >> what do rising oil prices mean for ge which has seen the stock double in recent months and diversifying the portfolio and leaning into renewable energy >> i think that larry is doing a great job in transforming that company. shrinking the company to grow. he is focusing on health care and aviation

they have exposure on the energy side i like he is focusing on growth going forward. i think he has done a very good job. he is making small acquisitions to beef up the areas we had the airbus news about increasing production and demanded that is positive ge is one of two engine suppliers to airbus. the restructuring is taking hold i think there is more they can do >> investors think to like it. shares up 28% this year at $14 a share. stephanie, great to see you. thank you you for bringing us your market insight. stephanie link to the top stories now the house will start the markup of the infrastructure bill as early as wednesday speaking with cnbc yesterday,

jennifer granholm says they will move forward with or without a deal doppler el salvador is looking to introduce adoption of bitcoin as legal tender the conference in miami, the el salvador president plans to partner the digital wallet company to build out the new infrastructure he hopes to pass the bill into law next week. tesla cancelling plans to cancel the plaid plus. the most expensive version of the model. in a series of tweets, elon mus is pulling the plug because the

standard is so good. it will go from 0 to 60 in less than two seconds. when we come back, it is back to high seas for one cruise line after a more than 14-month shutdown apple kicking off the latest software event this week what investors can expect. and why it is not just reddit data traders riding the stocks, but your 401(k) could get busy because of it it is a very busy hour here on "worldwide exchange. don't go away. at fits the way yt to live in retirement. a plan that can help grow and protect your money - now or in the future. with an annuity in your plan to help cover essential expenses, you'll have the freedom to live the retirement you want. this is what an annuity can do. find the right financial professional to show you how. learn more at protectedincome.org.

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entrepreneurs and looked at their finances it addressed topics from emergency savings to business plans to post covid confidence ei kate rogers has more >> reporter: good morning. we surveyed 2,300 lgbtq enterprises on a number of topics first up, we asked about the equality act a bill to protect lgbt people from discrimination in housing and education and health care and more prbz president biden called on congress to pass the bill for people we also asked about the discrimination nearly 60% of owners did not believe their sexual orientation would cost a contract with a new client 80% said they did not believe

they were denied goods or services due to sexual orientation or gender identity three quarters of the lgbtq owners said they are expecting a full recovery for the business in 2022 and beyond 40% said government stimulus would be a key factor most important in helping them recover. we will have more on this important topic coming up in "squawk box" in the 7:00 a.m. hour tune in to that. back to you. thank you, kate. let's get a check on the top headlines. phillip mena >> benjamin netanyahu's 12-year run as prime minister could come to an end. his replacement is his former chief of staff if the government is confirmed and sworn in, he will serve for two years and turn it over

netanyahu called the coalition as the greatest election fraud in the history of democracy. announcement making waves around the world harry and meghan sharing news of their little girl. lilibet diadiana. another record setting performance for simone biles she struck gold at the u.s. gymnastics championships winning the all-around title for the seventh time she is now tied for the record by any american gymnast. next up for biles? the olympic trials in two weeks. seema, after that, olympic games in tokyo next month. >> i cannot wait simone is so talented. phillip, thank you

still to come on "worldwide exchange." the g7 tax agreement in the works. we speak with the global tax head kate barton. if you haven't already, subscribe to our podcast on spotify or other podcast apps. we'll be right back. (it's a skirt... and shorts) the world is going hybrid. so, why not your cloud? a hybrid cloud with ibm helps bring all your clouds together. that means you can access all your data, modernize without rebuilding, and help keep things both open and secure. that's why businesses from retail to banking are going hybrid with the technology and expertise of ibm.

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the s&p sees fuel to get back to record highs markets digesting the deal over global tax reform. we have what it could mean for multinationals and the political dog fight awaiting the tax plan. bitcoin looking to bounce back after the one-two punch of the crackdown in china it is monday, june 7th, 2021 you are watching "worldwide exchange" on cnbc. hope you are having a great start. i'm seema mody we are halfway through the 5:00 a.m. hour in new york. stocks are lower s&p 500 down 15 points when we

started. now down eight nasdaq lower by 65 we are watching the non-farm payrolls at $559,000 that did miss investor expectation. it also raised less concern of the fed tapering on deck this week, the latest read on consumer prices with cpi, hourly earnings and claims are key data points to get investor attention to the top stories treasury secretary janet yellen making the case for higher interest rates in an interview on bloomberg, yellen says the president should push forward with the proposal even if it triggers inflation that persists into next year yellen says policymakers have been fighting inflation and

interest rates which have been too low for a decade adding a call for a normal interest rate environment. bitcoin is looking to bounce back after worries of crackdowns by china the chinese social media company banning several cryptocurrency accounts it is the latest move amid beijing's pledge to crackdown on bitcoin mining and trading. a note from goldman sachs on the survey from 25 chief investment officers showing little love for the cryptocurrency ranking bitcoin as the least favorite investment. california giving green light to the autonomous vehicl. it may not charge a fee for a ride and the company will have to submit quarterly reports about the vehicle as well as a passenger safety plan.

cruise starts to plan the driverless shuttles in 2023. big news overnight g7 reaching a deal over the global minimum tax rate. backing the biden administration plan to set the minimum tax rate of 15% if agreed upon, it could mean big changes for big tech the sector associated with seeking out low tax havens around the world for more on how this impacts countries and corporations, we have kate and anna with us kate, questions around the tax rate is agreed upon if it continues to get more backing from other countries and how it is implemented what are the conversations right now with ceos at major tech companies? >> it was news this weekend. the headlines of the g7 decided

it wanted a global minimum tax of 15% they want removal of the digital services tax put on the books in many countries around the world. they also want to reallocate more profit to marketing intangibles within the countries. that is big news everybody has been be talking about dit over the weekend. the devil is in the details. there is a huge ask to get the rules written. >> anna, how is this news received in washington >> very mixed response one of the one things that republicans really agree upon is raising taxes. it is not a good thing it depends how this is implemented. if trade agreements have to be rewritten because of the tax rates, that, i think, you will find a lot of real people being against it for republicans, we have heard that

kevin brady, house republican of texas or chair or ranking member of the committee he said he is not in favor of this it will not necessarily be easy for the biden administration >> kate, we focus on the biggest companies in the u.s apple keeps a lot of cash overseas because of the lower tax rate they are offered in countries like ireland other countries impacted by the global tax rate of 15% >> this will effect all multinationals whether u.s. or german multinationals swiss multinationals it really is all sectors around the world. i think that is something that is often missed. people focus on the tech companies. everybody has operations overseas this will cause countries to have to lift tax rates from where they are right now the global ramifications of this are big. on the trade side that anna just

mentioned, there are a lot of tariffs implemented that would get eliminated that is part of the arrangement as well. part of the communique >> anna, think about the countries negatively impacted by this ireland is top of mind tax rate of 12.5%. i used to be based in london we would have resources in ireland because of the taxes. how will other parts of the world deal with the new tax rate >> it is super interesting to see with president biden going on his first foreign trip when you look at the news coming out of it. how does ireland, which is the best example, which is skeptical over what this means for the tax rates and if they would support it or not.

certainly joe biden will shore up support among the g7 and bring it to fruition it would be a big deal for him for a win ain foreign policy. >> this has attracted 700 u.s. firms in the last few years. 160,000 workers. >> yes it has been part of the tax policy for a long time they tax the wage earners as opposed to the corporation they tax the corporation, but at a lower rate to attract business this is all about international competitiveness. companies want to go where it is competitive to set operations and employ people. >> one strategy countries have used, anna, is the implementation of the digital services tax france among some. is the expectation if the tax rate is implemented, france will remove the signifidigital servix

>> a lot of it is the devil is in the details you see signs from companies like facebook saying they were supportive of this they thought certainty in the marketplace would be good. you see the other countries where they do business that might be more prefer rential for help. >> kate, what will this mean as the bottom line? >> i think companies understand paying a single level tax on income where it gets difficult is if they have to pay double tax. the question is how do you implement the guidelines each country has to enact the law. this is still a long road ahead. it is groundbreaking

>> anna, next meme that could provide details on the tax rate? >> i think it is going to be happening right now. you will start to see what happens with joe biden and what any details come up from the conversations he has and also what happens in terms of how the countries start to implement this and think through what the i implications are for my perspective in washington, you will see the companies and what they are doing and saying publicly. are they trying to get changes on the margins of the deal and where do the tax writing panels go with this it will be contentious >> you have the white house, anna, trying to raise the domestic corporate tax rate. >> absolutely. >> we will leave the conversation there thank you, ladies.

kate and anna. i appreciate it. coming up on "worldwide exchange." investors zeroed in on the meme stocks dominating on the conversation again how you may be part of the reddit rally without knowing it. before we head to break, leading up to the big boxing match up to floyd mayweather and logan paul showtime service was down for tv and streaming services after 8:00 p.m scaring up big returns at the box office with "conjuring." the film pulling in over $24 million in its debut last week's winner, "a quiet place 2" coming in second place. and tinder adding block contacts features. they won't show up as matches

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sofi social 50 which has more than 12% last week and amc accounts for a quarter of the fund from the original allocation of 5% amc and gamestop are in a number of value oriented etfs the ishares russell 2000 fund. now among the biggest component of that etf. let's talk more about this social media driven stocks with larry mcdonald larry, good to see you your thoughts on amc and gamestop and the effect it is having on the etfs >> you make a great point. we saw this in january and february ert, the largest retail went from 1% holding in the stocks to almost 20% holding it is distorting the passive

when you have market capitalization that grows quickly, etfs cannot recalibrate. you have a massive, massive distortion it's a great point >> do you expect the etfs to rebound? could that happen this time around >> we saw you some time of rebound with the xrt i'm sure if you are on the board, you have to make a move if you look at amc and the credit market versus the equity market which shows you the dist distortion in 2019, bonds trading at 96% of power. the stock was $9 last week, the bonds were down 80 cents on the dollar 12% yield. the stock was 40 to 50 to 60 it shows you if you are running

one of these passive etfs and you see that type of distortion where the credit markets are saying this is trouble and the equity markets are in speculative la la land, you have to do something. >> nteresting. last week, the stock was up 100% despite a number of stock sales. the 11.5 million shares sold to the public market for 587 million. some of the money they raised through the stock sales will be used to bring down its debt. that should improve its credit position >> it's weird. my career, the credit markets led equity when you see what credit markets are saying one thing, that is typically a leading indicator. in recent years, when the fed is not allowing the business cycle

to function over longer periods of time, the cleansing process of the business cycle and credit markets get somewhat eliminated. normally the cleansing process would correct in a bad company and take out the bad ones and the strong survive when you don't allow the business cycle to function over longer periods of time and that is what we have been doing the last three or four years, you are right. all of a sudden, a company that should have gone bankrupt can raise capital and the credit environment improves >> right you know, to ceo adam aron's credit, he is riding the momentum and enthusiasm around the stock. with all of that, wall street is cautious $10 is the price target. amc trading at $48 a share

i wonder where you think this stock should trade at. >> we saw this in january and february where credit markets are saying one thing and these stocks were up in the heavens. they had a 70% drawdown. for investors watching us now, the credit markets were right in january and february they were telling you there was a drawdown coming and we had a 70% drawdown they are back up if i'm a young eer investor and you want to ride the wave, go ahead. if you want to take half the gains off the table to reduce your down side, then you should not be in the plays. you can get wiped out overnight. if you have to, make sure you are managing risk the best you can. >> understood. quick word on broader markets, larry. what it means for the broader averages >> what is weird is since the

last six months we had the s softbank blow up and archegos blowup and then the incidence which transformed the market into a deleveraging. ark stocks down 40% or 50% tesla. a stealthy leveraging going on. this meme is bringing that out of the system. i don't think it is sustainable. we are in a strange part of the year sell in may and go away. i would be cautious. i them ink commodities will mov into value names and

commodities. reduce exposure to the equity side >> larry, thank you for joining us today larry mcdonald i appreciate your time >> thank you, seema. on deck, stocks on a holding pattern. lays out what investors need to be watching this trading week. if you haven't already, subscribe to our podcast check us out on all major podcast platforms. june is pride month. we are spotlighting business leaders and cnbc anchors and producers. here is cnbc's patrick manning >> i credit a lot of my success to the fact i'm lgbtq. once i came out, i felt a tremendous weight lifted off my shoulders and i started to notice that's when i started to

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worth is knowing why. ♪ ♪ principal. for all it's worth. welcome back upgrades and downgrades. piper sandler expects visa to benefit from a vaccine driven u.s. recovery than mastercard. piper is raising visa from $260 to $234 a share. loop with peloton at a price target over the recalls. it expects the impact to be limited. and morgan stanley says people are driving again at pre-covid levels that means more accidents are

putting the price target at $83 a share. futures are lower right now. the nasdaq is lower by 63 points we talked about a retail sales number out this friday consumer inflation prices set to be released on thursday. for more and what to expect on this is david kass david, pleasure to have you on this morning whether you look at oil or the price of lumber, inflation is showing. it hasn't showed up in the broader markets. we have seen intraday swings in the market at the end of the day, the s&p 500 is trading in record high territory. i guess the question is are these inflation concerns justified or do you think it will show up in the market >> the near term, it is justified. we think inflation is ticking up

more than people expect. we think more likely than not it will be transitory and the market will be able to roll through you it we think short-term you will have volatility. there will be another bad inflation number and the market might selloff. we think inflation will start to drift lower and the fed will maintain its current stance for a while. >> we are expecting movement on infrastructure this week as the white house pushing forward with the infrastructure bill. still questions how it will be paid for your thoughts on the increase spending on infrastructure and how that to change the inflation story. >> we think it will feed on the inflation story. a bigger deficit more borrowing more spending. bad for pricing. there will be a trend in inflation over the next few years. we think it will be manageable we think the positives over the economy with the interest rates low outweigh the concerns.

>> interesting you do have a diversified portfolio. technology or industrials. based on what we get from the white house on infrastructure this week, would you be a buyer or seller based on the construction equipment companies which priced in the aspect of the stinfrastructure bill? >> they already priced in. we would take a step back and look at companies on the fundamental and valuation basis. don't get caught up in the trend of the day what you have seen is a lot of things that didn't participate in the 2020 rally and are participating this year. value is looking meaningful. financials have been doing well. they will continue energy has been doing well that will continue there are certain groups which have not done anything yet that is the next one drug companies and medical

products will do better. media companies have done poorly that will pick up. we make it less than a top-down look let's buy those stocks look at companies on fundamental basis. if you buy a good company at 14 times earnings, you are likely not going to do well with that there are lots of businesses that have not got caught up in the mania that we think is the best place to put new money. >> i hear you on financials and health care. cathie wood talked about the bull market being alive and well she says to invest in the companies making innovation a central part of the strat diff strategy tesla is scrapping the plaid plus i wonder if tesla is a stock you want to invest in now given the selloff we have seen in the last three months >> tesla is a great company. the stock sold off in the last

three months, but it is up huge over the last year we think it is a rich valuation. today's announcement is a setback, but normal part of business it should not change your outlook on tesla we think the stock is valued they are going from little competition to everybody competing in the electric cars it is still a great growth company. >> interesting the financial times top stories this morning invest areors cash in on divide stocks >> dividend stocks were miserable last year. down 2%. s&p up 18% a lot of catch up. they started to do better. we think it has another 12 to 24 months if you are getting zero in a money market right now you and less than 1% on bonds, we think 3% to 3.5% dividend stocks is a great place to put money

>> we leave it there david, thank you for the latest thoughts david katz nasdaq down 67 points. that does it for us on "worldwide exchange. thank you for joining me i'm seema mody "squawk box" is next and all their devices. or it could be the day there's a cyberthreat. get ready for it all with an advanced network and managed services from comcast business. and get cybersecurity solutions that let you see everything on your network. plus an expert team looking ahead 24/7 to help prevent threats. every day in business is a big day. we'll keep you ready for what's next. comcast business powering possibilities.

good morning g7 nations reaching a deal on global tax reform. in the meantime, president biden is planning a infrastructure push with or without lawmakers. and elon musk pulling the plans for the plaid plus it is monday, june 7th,

2021 "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc we are live in times square. i'm becky quick along with joe kernen and andrew ross sorkin. there are modest declines. dow futures indicated down by two points this comes after the dow was up on friday. six positive sectssions in a ro. s&p is closer. this morning, indicated down by 9 points on friday, it closed within 3 points of the record close nasdaq off by 67 points this morning. it down more than 2% from the all-time high. the dow and s&p right within