it is 5:00 a.m. at cnbc. here is the top five at 5:00 stocks kicking off the week on a sour note. history suggests that pull back could be short lived. blue chip make elon musk is pulling back on the deal to buy twitter. and china stocks sink as covid and crackdowns give investors reasons to worry president biden defending his decision to visit saudi arabia all this as oil stays above $100 later on, europe on the

edge key headlines you have to know about with the region's growing energy crisis growing. it is monday, july 11th. this is "worldwide exchange. well, good morning, good afternoon or good evening. welcome from wherever in the world you may be watching. i'm brian sullivan good monday morning. let's jump in on this busy day coming off one of the best weeks for stocks that we have seen in a long time. all the major averages did pop last week, but that is not following through this morning futures down dow down 1813. nasdaq off .7% with the move higher, you have another big firm cutting forecast today lowering the s&p 500 year end target to 4,200 and cutting the

index earnings forecast by $4.50. that may weigh on the market fair value is in the green a long way to go yields on the bond market at 3.05%. coming up in the rbi, by the way, we will show you what is a pretty crazy stat about the markets. here's a hint. we're on pace to do something that we have not done in at least 50 years, if ever. oil marketing waking up. still above $100 a barrel. physical inconvventory is tight later on this week, president biden will travel to the middle east and saudi arabia for the goal to mend fences with crown prince muhammad bin salman friday is the big day for that crypto has bitcoin and

ethereum lower right now bitcoin at $21,000 let's get a look at the headlines overseas with julianna tatelbaum in the london newsroom good morning, julianna >> brian, good morning we are off to a weak start to trade. dealing with the negative handover from asia that is weighing on sentiment here fresh concerns with the spread of covid in china are weighing on sentiment specifically. here is the picture. german market pulling back 0.9%. spanish and italian markets holding upper. swiss market holding up better. here in the uk, focus on the leadership race after boris johnson announces his intention to resign last week with a number of tory politicians throwing their name in the hat for that position.

ftse 100 down as investors are watching those developments. this is the split. utilities and health care out perf performing on the down side, basic resources down 1.4% given the concerns of covid. autos pulling back household goods and banks. brian, we are clearly keeping a close eye on everything stateside. >> julianna tatelbaum, i appreciate that. thank you very much. let's get a check on the top stories like julianna said including the latest in the strange saga of elon musk now trying to kill his deal to buy twitter. silvana henao has that >> brian, good morning elon musk is looking to terminate the deal to buy twitter. according to the letter sent by his legal team to the company on

friday among a host of issues, the letter alleges twitter breached the agreement claiming the document holds inaccurate representations specifically with bots on the platform. musk agreed to pay $1 billion if he backs out twitter is hoping to keep the deal alive with the chairman bret taylor threatening legal action shares of twitter are down 7% in pre-market. beijing slapping tech companies with fines over the weekend. including alibaba and tencent for failing to comply with antian anti-monopoly rules. and casino stocks getting slammed. macau is closing all of the businesses for one week starting today. this as authorities look to curb a covid outbreak in the biggest

gambling hub this came as they announced 71 cases this month more than 17,000 people are in quarantine, brian. >> amazing they shut entire cities for the number of cases. we will see if it works out. silvana henao, thank you back to the markets and your money. your first guest says they built the s&p and nasdaq are in important points with a break to either side telling us where we are headed matt malley is with us matt, i love having you on your notes are a must read on wall street. this is a key technical junction why? >> 3,900 level in the s&p is a key level. it is interesting. it was the low we saw in may and

bounced off that we broke below it in june and got slammed hard that support was new didn't br. the old support is new resistance it is close to the trend line going back to the march highs which is our first bear market rally. whether we break above -- again, 3,900. if we can get above 3,950, that is bullish if it fails and rolls back over, if it takes out the june lows, that is bearish. >> you know, whenever you are on, i have to be on my top game. this weekend, i was looking through market stats because that's what you do i'm not knocking the rally we've had. the stocks leading the market

are the beaten up low quality names. i have done this 26 years. it smells like a head fake bear market valley to trap you for the market to break again. >> i agree similar to what we saw in march. the thing is people are making the rally ignited by the fuel buy. the thought the fed is a much less hawkish that's fine. for the stock market to be -- i guess my point is if the fed is less hawkish, we are going back to what we saw before this year when the fed was wildly accommodat accommodating. the stock market is not going back to the overvaluation levels we saw because they are less haw hawkish. it will take the fed to be more

s stimulative. people are making that mistake as we move into the earnings season, we will see how well that plays out and see if the valuations are even accurate ones >> okay. let's talk about valuations. we know the "e" in price to earnings and i mentioned evicore and target by $4.50 over the weekend. there are other valuations and i'll quote matt back to matt like price to sales which are still near historic highs. as prices have come down, not all valuations have, correct >> exactly people can play with earnings. writeoffs session. it is something you have to be careful. all of the people who cite pe ratios it is not a really good one to

follow you can't fake sales unless you flat out lie right now, 2.2 for sales that is what we saw at the top at the top of the tech bubble back in 2000 it got up to over three times sales because of the liquidity provided by the fed. we can't maintain this level people are looking for valuations we are seeing valuations we see at tops. >> we got earnings set to roll out. matt, how critical are earnings and guidance numbers as second quarter earnings season is about to pop >> vitally important almost too many people are looking for them and disappointing for people for it to actually happen let's face it, the situation with peak inflation. who cares if we get peak inflation if it stabilizes high

prices it will happen because of supply driven guidance will have to come down. >> matt malley laying it out and setting us up. we appreciate it take care. >> thank you we have a lot to do on monday much more on elon musk's attempt to now back out of the deal to buy twitter. what it means for you and investors and what musk is tweeting this morning as twitter builds its own legal team. why markets are on pace to do something they have not done in at least 50 years it's truly a history making year and not in a good way. 'lte y autt en we come back.

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welcome back to "worldwide exchange." we want to bring you the latest headlines on the europe energy crisis here are a few key things that happened in the last 48 hours. electric prices across europe surged to new records. in france, it hit over $400 per megawatt hour. for comparison, boston is paying $40. wholesale electricity is ten times higher than us this is leading to calls to dim the lights leading french power executives calling for rationing to help alleviate the problem.

in germany, there are calls for a massive bailout because of this one of the largest companies in germany, uniper, calling for a bailout. and europe is getting into a burn anything in hand to keep the lights on phase. wow. they raised price for forecast coal for this year and next year coal, by the way, best performing commodity over the last 12 months how will this impact people and society? it could lead to civil or social unrest so warns one of the top officials in europe over the weekend. by the way, sri lanka's government toppled over its energy policy and the issue of debt people cannot afford to heat homes and grow food and that is a serious problem and risk

globely, far more people died from cold than heat. that wasn't enough there is this. this may be the most bizarre story of the weekend canada has just repaired a key turbine part for nord stream i pipeline and sending back to germany which will give it back to gazprem despite the sanctions, canada just fixed a part to help putin backed gazprem to get gas back to europe. canada trolled that move you can't make that up something else austria decided to reopen a coal plant that has been closed for the last two years those are a couple of key headlines that happened over the weekend and leading to the coverage of the story and we will continue to stay on it. the biggest global economic and humanitarian story in the world right now. on deck, we will switch

gears. target and best buy and amazon kickoff the deal days. will the american consumer actually step up stacey widlitz is here with the names to watch >> announcer: today's big number $1.4 trillion. that's how much total global clean energy investments will reach this year according to data by the international energy agency that's up 12% from last year, but about half of the increase in spending is due to rising prices rather than investment in new capacity

welcome back let's talk about you, the consumer, because it is a big week for shopping. target and amazon and others are trying to turn this into a big extra extravaganza it comes at a key time for all stores with the slowing consumer and rising prices and rising inventory. let's welcome in stacey widlitz. stacey, what happened? there used to be prime day and then prime two days and now it is online retail week. what happened? >> well, i think, as we all

know, the era of full price selling is over. the consumer has slowed down and anything to get that consumer moving and get attraction and, brian, to be fair, over the years, shopping holidays have gotten longer and longer everybody has piled on it is going to be more extreme this year. particularly as you said with the loaded inventory target guided down twice walmart has been across the board. certainly, i track 80 companies in the europe and u.s. there is no denying this has been going on for about six weeks now. >> okay. so is their loss our gain? is the fact they gorged on inventories going to mean better deals for the consumer >> absolutely. brian, we have talked about no discounts for the past two

years. for the first time, we're seeing the flashing discount signs. the consumer will respond particularly as a consumer knows inflation perhaps is here to stay if there is something will get e the deals you are seeing are focused on where the inventories are loaded home, outdoor furniture, consumer electrics if you go to the web sites, that's where they will lead. if you are in the market for those things, log on and check it out. >> it is hard to know what amazon does. they are so private. they have so many third party sellers on the platform, who knows? as you can make it out, stacey, how is amazon doing? >> well, i think there is no doubt that things have slowed. that's particularly due to increase in prices which we have seen on amazon and we have seen issues with delivery longer than

expected brian, i would say i have been covering the energy prices here so well and i have seen a slowdown somewhat in traffic people are being conservative as they see their money piled in their car. perhaps this is the holiday they sit back and say, yes, i'm going to reengage online after a period of slowdown >> yeah. not just their car, but probably their home this winter with heating. is there any company you are following and tracking all these companies that you do is looking like they are in better shape than others? >> so, i think the footwear sector has held upp better than most nike inventory is higher than you expect you are not seeing the promotions in footwear that you see across the board whether it is body care or home or consumer electronics.

you know, i think that is a sector that you can look atticly with nike as they are playing less and less with the inventory and pricing. those stories are harder to find the second half of the year. >> i don't know if you watched our show on friday, john rogers on the board of nike, had the biggest insider stock buy. $1 million of nike shares. >> that's where the margins are. in this particular environment, you want to look at those brands that are strong and have dtc and margin story >> there you go. maybe everybody is walking and need better shoes because they cannot afford to drive stacey widlitz paying $10 a gallon in the uk. let's check out the other key headlines and another

incredible winner for one of tennis' all-time greats. phillip mena has that from new york >> brian, the major development in the january 6th investigation. steve bannon, a key member of the trump circle, says he is willing to testify before the january 6th committee. the about-face comes after former president trump waved executive privilege saying bannon is now free to testify. the committee will focus on how the mob came together in an attempt to draw a line with extremist groups and mr. trump and allies. president biden is declaring a public health emergency for reproductive freedom this could free up resources to expand abortion access mr. biden asked his staff to see if the president has the authority and how effective such a move would be. novak djokovic has done it again at wimbledon the 35-year-old serbian won the

seventh men's singles title. he knocked off nick kyrgios to take home the 21st grand slam title. djokovic is just one championship away from rafa nadal's record and elena rybakina brought home the first ever victory for the country of kazakhstan. and the latest "thor" movie took in $143 million domestically in the opening weekend. bringing the global box office total to over $300 million back to you, brian >> we'll see if novak djokovic is allowed to play in the u.s. open right now, he won't because he is not vaccinated. phillip mena, thank you. coming up here on "worldwide exchange." why last week's win for stocks

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coffee inflation data, kickoff to the earnings and futures are down ahead of the open. elon musk pulling the plug on the bid to takeover twitter the company vowing legal action. and president biden highlighting his trip to saudi arabia after pledging to make the kingdom a quote piriah. this is "worldwide exchange. welcome or welcome back. good monday morning. just about 5:30 here on the east coast. let's jump in on the busy monday coming off the best week for stocks we have seen in a long time

all of the major averages popped we are not seeing a lot of follow through futures are down across the board. off .50 to .70 for nasdaq. this is random, but interesting. did you know that the first two weeks of july are historically the best two weeks of the year for stocks that data coming from our friend enrique abeyta that is for two weeks the best two weeks of the year. why? who knows? it seems to be playing out on the big run last week. see if it follows through this week bonds are holding steady at 3.05%. the real rbi in the show has a

good market stat oil and gas right now. oil prices are down from the close. they are still above $100 a barrel physical inventory is tight. later on this week, president biden will travel to the middle east and saudi arabia as a big part of the trip to talk about oil. oil is not officially on the agenda, but no doubt the overarching theme. by the way, natural gas. a fire at a facility at the oklahoma company i reached out to the company they are being tight lipped over how long it is offline or if it is offline natural gas is something to watch. in europe, natural gas prices continue to surge. the spot market for natural gas is back around 170 euro per megawatt hour. if you do the conversion, it is

about $55 u.s. contract. we are paying over $6 that gives you an idea how much higher prices are right now especially as we're heading into filling tanks to get ahead of winter. now to the top stories and as we mentioned, president biden defending his trip to saudi arabia this week in a washington post op-ed, the president making the case for resetting ties for leaders there and pressing them on human rights biden acknowledging critics of the trip, writing, as president, it is my job to keep our country strong and secure and counter russian aggression and put ourselves to be strong and out perform china and to do these things, we have to engage directly with countries that can impact the outcomes. saudi arabia is one of them.

end quote. also, starbucks announcing halting sales of the new chicken sandwich less than a week from the debut. the company citing a failure to meet quality standards for the move claims that the sandwich made a few people sick. just a few people complaining on social media starbucks saying the claim is false. some great news for new parents. abbott rehe started the baby fo plant in michigan. they were forced to shutdown after severe flooding. abbott previously shutdown the facility in february over bacterial contamination in baby formula which contributed to a nationwide formula good news. that plant is reopening. now to the top stock story and elon musk looking to

terminate the $44 billion deal to buy twitter that according to the letter from his legal team sent on friday among the issues twitter breached the merger deal because it allegedly contains material inaccurate representations especially with bot fake account activity on the platform under the terms of the deal, musk agreed to pay a $1 billion back-out fee of course, a tweet late friday, bret taylor said, twitter board is committed to closing the transaction on the price and terms agreed upon with mr. musk. we plan to enforce the agreement through legal action the plan to force musk to cooperate, twitter hired m&a legal team and firms attorneys

are bill savit and leo strine. he was the chancellor of the delaware court the same court where the case will be heard and the most important court in the united states for deals no official comment from elon musk on the planned termination. we are waking up to several meme tweets from the tesla ceo mocking twitter. joining us to wrap this up and figure out what to do is senior research analyst daniel flax there is a lot to wade through and a lot of noise a lot of twitter back and forth. do you have a view on how this plays out? >> brian, i think as this saga continues into the courtroom, the lawyers and court will decide how it plays out. we'll just have to see

if we look at the twitter business and what we remain focused on is whether this company is going to execute owned by elon musk or likely not. our focus is on the user experience and advertisers and platform and certainly given everything that happened, is the company going to be able to raise morale or push forward on the products and road maps that will matter most in my view over the next year and beyond. >> it seemed like twitter employees didn't want the musk deal now the twitter board seems like it is intent on forcing the musk deal the stock, by the way, at $34 and change right now in the pre-market trade how do you make out the seeming discrepancy between what the board now wants and maybe what the employees want >> the board, i think, will do

its very best given its responsibility to try to get some sort of deal done i think at this point, it is hopeful from the board situation that you might be able to get the $1 billion break-up fee. the market has, of course, for some time doubted this deal would get done and i think it is highly unlikely that it does get done what is more important if you are the board, if you need to demonstrate that you are trying your very best, certainly to get the $1 billion break-up fee. as far as employees, they will go to the best environment for them individually. of course, we will see how that plays out. >> you know, twitter is a platform, daniel, punches above its weight in the media. it is our direct distribution platform in many ways. it is a confusing platform let's be blunt worthless for regular folks out there. it is like 80% of people don't have a twitter account

the stock has been dead money for four years unless you time the trade. it's back to the same price it was in may of 2018 is there a stock recommendation here at all? >> brian, insofar as the stock, we prefer other names in the sector i say that to your point because the company has a role to play and certain users find it valuable what we are focused on is the company ability to innovate and expa expand we will see later this week amazon prime day as the economy is difficult the robust platform. they created amazon web services and a advertising business to contribute more meaningful over time google and youtube and while the near term pressures, we think it is an attractive platform. i would emphasize it is the companies' abilities to reinvent

and extend beyond the core market twitter had a difficult time to do that and it has a role to play >> no reason to buy the stock? >> we prefer other names in the space. >> that's wall street. we got it. daniel flax. what a drama get your legal hat on. it's a wild couple months for this deal. stock, by the way, $34.30. up next, the morning rbi and the market on pace to do something that we have not seen in at least 50 years if not longer plus, the great robert frank is here pulling back the curtain on the biggest market player you likely never heard of. the secret investment arms of the very wealthy at nt.th'sex

welcome back hope you are having a great start to your monday cnbc is launching a new series looking at the biggest market player you likely never heard about or don't know much about robert frank is joining us with the secretive investment arms of the family office. >> family offices, brian, by nature are secret. most don't have to disclose assets or who the executives

are. they have become as you mentioned one of the most powerful financial forces in the markets. analysts estimate there are over 10,000 family offices around the world. that is up tenfold from the early 2000s. they manage more than $6 trillion that's more than the estimated $4 trillion managed by hedge funds. most have more than $200 million in assets. they are increasingly taking the place of private equity firms and venture capital and corporates family offices is tied to michael dell's family office bought half of the firm west mo monroe they are financing a growing number of deals. in recent months, many family of offices are building cash and moving away from hedge funds and stocks family offices surveyed by ubs and one-third in equities.

private equity is by far their fastest growing segment. wall street firms chasing the gold mine of fees. morgan stanley created a new asset tracking platform for family offices they have $25 billion in assets on that platform look at the world's billionaires they gained over $5 trillion in worth over the pandemic. the assets and family offices, brian, will continue to grow a massive player in the space. as inequality grows, so will family offices >> okay. one thing we know about washington, robert, they want to control things when things like this that are big and powerful that are not controlled, congress tends to get jumpy. there are growing calls for regulation or any regulation for family offices outside of normal

s.e.c. rules >> this space is growing so fast and many say growing beyond the pace of regulation remember archegos which started with $1.5 billion and grew into $25 billion fund you know, it had a big impact on a lot of individual stocks before it imploded a lot of people look ed at archegos and saw family offices and said you should disclose and how big you are so we can tell if there is systemic risk. there are growing calls at least in congress for regulation so far, the s.e.c. has not come down with any proposal that could be coming in the future >> i'm sure it will be coming. congress has never met a multibillion dollar industry it hasn't wanted to regulate. thank you, robert. on deck, your morning rbi

and two parts may be making history this year and not in the good making history way. and greg branch is back on why he says we may finally be nearing a turning point for stocks dow futures are down we're back after this. it's ever. but for someone to be able to work from here, there has to be someone here making sure everything is safe. secure. consistent. so log in from here. or here. assured that someone is here ready to fix anything. anytime. anywhere. even here. that's because nobody... and i mean nobody... makes hybrid work, work better. want more from your vitamins? get more with nature's bounty. from the first-ever triple action sleep supplement. to daily digestive support. to more wellness solutions every day. get more with nature's bounty.

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welcome back i know it is summer, but a busy week on wall street. earnings season gets under way we start with pepsi tomorrow delta on wednesday things kick in high gear on thursday with earnings from morgan stanley and jpmorgan chase and then on friday the june retail sales and july c consec sentiment. time to get random, but interesting on the markets we think this is really

interesting. we may do something this year that has not happened in 50 years if ever. that is to have both stocks and government bonds go down in the same year. look at the data from charlie and compound capital going back to 1976, s&p dropped eight times. you can see that in those years when stocks fell the u.s. aggregate bond index has gone up that is a huge index fannie mae and bank debt which is widely bench marketed and followed and owned what this is saying is diversification is supposed to work bonds go down and stocks go up sometimes by double digits that mitigates the pain of the

stock drop that's the idea. not this year. the first time in 50 years or maybe ever, the s&p 500 and many big bonds are down that bond index is down 10%. one of the biggest drops ever. meaning there's been almost nowhere to hide anywhere in the market likely because the fed's actions with higher rates and trying to shrink money supply. it makes sense it is still truly stunning and depressing it is definitely random, but interesting. of course, a long way to go in the year when somebody says this year maybe historic for the markets, that's not just tv hyperbole we're on pace for it ugh. let's dive into the markets and sure to be another busy week out there and joining us now is greg branch with veritas. greg, what do you make of the

rbi? i ripped it off from charlie who does great work. both bonds and stocks down this year everything stinks >> yeah. i'm seeing the light at the end of the tunnel, brian you know i've been on the curb in terms of a pessimistic outlook for the year not surprised by both of those things necessarily at the beginning of the year and this gives me conviction at the beginning of the year, my p target for the s&p and we would enter a recession. both were alarmist at the time 3,500 is no longer alarmist. i revised down since at the beginning of the year, the wall street journal did a poll of a likely recession 18% said likely in january they did that poll last month. 44%. part of seeing the light at the

end of the tunnel is coming to a shared reality of where we are and where we're going. >> i kind of teased, greg, maybe you thought there was a turn coming or do you see more pain throughout the rest of the summer >> there's more pain to come don't get me wrong i see the turn after that. the pain is going to be caused by the turn. analysts estimates were way too high as we came into the second quarter. 20% of the s&p 500 actually forewarned they were too high and they were not going to meet estimates. we are at the beginning of the significant downward revision cycle which will keep pressure and head thewind on equities once we get that behind us, it is behind us i believe we will see peak fed

hawkishness this quarter we will likely get it this month. another 75 bips. that will be behind us we will get a downward draft on valuation. when that is behind us, we get to do the work and figure out what is a bargain and what does it look like going forward pain it to come. light at the end of the tunnel is there. >> that's good news. i hear you you have been warning for a while, greg. fear mongering we were in london in the fall and talking about this problem i'm probably going back soon i know i'm talking my editorial book because i'm hammering this story. this is a giant. it is not just an energy story, but economic story >> i do believe both things you are saying is true, brian. number one, it is more important

to understand. it certainly is under discussed. the weapon sization in europe wh the strikes in norway and germany to cause strikes in the commodity prices as well with the anvvailability decreased. what happens to some of the sovereign debt positions what happens with greece at 193% debt-to-gdp and portugal at 127% these are levels far above what greece experienced in the greek debt crisis. we had so much going on that the possibility of sovereign default or fear of sovereign stress, particularly with the ecb no longer a net buyer with central banks tightening and shrinking

their balance sheets, it warrants being on the radar. >> in 2009, i was in athens watching an angry population throw molotov cocktails at banks. you wonder if energy costs soar in the winter and how much the population will take they can't raise taxes i think it is an awesome and excellent point. i appreciate you saying it is under reported greg branch. >> other than you, brian >> well, listen, you were at the beginning of the year warning about the markets. you have been spot-on. tough talk greg branch. thank you very much. i appreciate that. that does it for us on "worldwide exchange. kicking off a long week. a lot going on i know it's summer don't sleep on it. earnings set to roll out as well see you same time tomorrow on "worldwide exchange.

"squawk" and the gang picking up the coverage next. have a great day and a great week

good morning futures are under pressure for monday as we prepare for a busy week in the markets. we get ready for inflation data and kickoff to earnings season we get insight into corporate america and how companies are doing. elon musk says he is terminating the deal to buy twitter, but the board wants to inn enforce the agreement. and president biden defending the decision to go to saudi arabia this week amid reports of a potential bargaining chip. it is monday, july 11th, 2022

and "squawk box" begins right now. good morning welcome to "squawk box" here on cnbc live from the nasdaq market site in times square. i'm andrew ross sorkin with kejoe ke kernen becky is off today let's show you futures at this hour dow off 160 points nasdaq looking to open lower as well off 104 points nasdaq or s&p 500 down 25 points treasury yields as we flip the screen around. 10-year treasury is 3.071, joe coming down a little bit >> not great >> big jump on friday. >> good number good job