Transcripts For CNBC Squawk Alley 20160624

Administration, the u. S. Government regards britain as a likeminded partner. They are trying to ensure that the European Union maintains a transatlantic outlook in the open and free trading world to the world, so the diminution voice of britain in the European Union is going to be upset to the people of the u. S. And now, whether putin in russia would be celebrating this by the british people, and he said that he suspected that the kremlin would be calculating and less likely to maintain the robust sanctions against russia, and he was essentially explaining the point of view, because the u. S. , and the uk share the similar view s ts on foreign policy, it is important for the u. S. That the uk projects that view across europe and the geopolitical stage will be alter and something that we will have to the watch as the things develop. It is interesting as we caught up with Philip Hammond and moments before Prime Minister David Cameron announced the resignation, and Philip Hammond is one of the names on the list of who could be the next person to succeed him, and not quite as strong a favorite as Boris Johnson is at the moment, but as we have said this morning, i am not sure that the betting markets are anything to believe at the moment following last nights surprise note. On that regard, back to you. And wilfred frost in london. Thank you very much. If you are just joining us, a glow are ball selloff is under way as the uk votes to leave the European Union, and the dow is down 2. 5 , and not quite the lows of the session, and we were down currently 430 points, but obviously, the s p is coming off of the worst open in 30 years going back to 1986, and the investors are pulling a lot of money out of of the stocks and moving to the u. S. Treasuries and gold. Looking at the action on gold up 54, and bob pisani is here with jon fortt and myself. And bob, your reactions on what we have seen so far. Well shgs, we are essentiallk to where we have been for ages 2050 the Pivotal Point of the s p 500, and we have been there for more than a years, and we were at 2300 two weeks ago and on the brexit concerns dropped to 2050 and then the brexit concerns going back and then go to 2100 and now back to the 2150 range are, and we have been there before, and we are not going anywhere right now and i dont know from here, but we are not dropping any technically important levels. And secondly, the russell reconstitution today, and i think it is important, but it is interacting with the market in ways that we cant figure out right now, so i am not sure that today is a good day to make broad pronunciations of where the market is. And finally in terms of the winners and the losers, i dont know if you have the full screen ready, but the telecoms and the reits are continuinging to do well today on the prospects of the lower rates and continuing to see the banks on the prospect of lower rates to perform poorly, and defensive sectors outperform like the Consumer Staples for example, but it is a complicated situation, because many of the Consumer Staples have exposure to europe like Procter Gamble so we cant say buy consumers or defensive stocks on that point. And with material, the key point is that the Dollar Strength impacting the commodities overall is weighing on the energy and materials and weighing on the industrials and many of whom of course export rather dramatically and remember, they have significant exposure over in europe, and is so it is is complicate and john, you and i were talk about the fact that many of the Technology Stocks have exposure to europe as well. Indeed. Priceline which is one of the stocks with the biggest expose su exposure to some of the stocks such as ebay down 6 , and some of the ads placing an ad with a Global Company on the phone, and he said, not huge and wait a few days to see really if there is a big impact on how m a and all of those things play out. Plenty of time to start to evaluate the effects of this momentous decision. We talked to former fed chair Alan Greenspan moments ago and we asked him about the vote and the period we are in and how it compare compares to other periods of trouble that he has seen in his time, and take a listen. This is the worst period i recall since i have been in public service. Nothing like it, including the crisis of remember october 19th, 1987, when the dow went down by a record amount 23 . They thought was the bottom of all potential problems, and this is a corrosive effect that is not easy to go away. Strong words from the former fed chair, and meanwhile, simon has a special guest from the floor. Yes, on the phone is Peter Moscovici who is the director of economic affair and taxation, and the former finance minister of france, and Senior Member of the french establishment, and commissioner, thank you for joining ushs and many people are concerned that this is the beginning of the unraveling of the european project, and what would you say to those concerns . I would say, no, it is not the case. It is certainly a new start for the Great Britain because the uk chose another future than being in the eu, and we will have to define a special relationship with the uk, and the strong relationship, we have to negotiate the brexit, and the way it happens, and it is also a fresh start, and new start for the eu at 27, and at 27 members, they will stay together. It is also a new start for the eurozone with 19 members which shows that we will have to build a stronger integration between them. So it is of course a very sad moment for those who love eur e europe, but it is also a moment in which we must reinvent our common projkt. And commissioner, with your permission, id like the play you a clip of one man who is clearly claiming victory, and that is the head of the Uk Independence Party nigel fa raj, and i think that the definition of why he thinks that he won is very important for people who believe that the eurozone may split apart, and take a listen, sir, if you would. The one image that i will remember throughout the rest of my life is the moment in belgium, a woman grabbing my hands with tears in her eyes saying why doesnt David Cameron or the government come to see what they have done to my community, and what they have done to the prospects to my kids. People here dont understand that they are too wealthy, and they dont get what open door Mass Immigration as a result of the eu membership has done to peoples wage, to peoples availability of getting the gp appointment appointments or the kids into the local schools. This is the issue ultimately that won this election. Commissioner, do you believe that immigration is the reason that the vote went the way it is, and if it is, what does that mean for the eurozone and the project with the massive migration crisis that you have through so many kcountries now . It is might be one of the reasons why the leave campaign won, because they put the campaign on immigration, and neglecting the fact that we are first of all are an economy social project. As sad as it is, the relationship between the eu and the Member States is not the same for the 27 other Member States than for Great Britain. Great britain is not a part of the Free Movement of the personal agreements and Great Britain is not a member of the eurozone, and the uk always asks for some rebate on its budget, so it is always something that was less effective, less loved in the mind of the british people. But we must need to fight the populous and not accept to be on their ground. With we have to fight them to fight them with results and to fight them with the project which is popular. This is why we must really insist on the security and how the protect the people and borders and we must inis cyst on the defense and inventing for the future of the young people who voted in favor of the remain, and we must also for those who share the euro their currency to see how effective this tool can become, and yes sh, we need to oppose results and reality with jegeography and results. And with David Cameron going to be the Prime Minister for the next three months, and how in a practical sense do you engage with the uk to determine how it leaves and the new deal that presumably it will seek to strike with everybody else . There is a view that you would require a punishment of the uk in order to deter other people to leave the European Union and would you seek to worsen the uk trade position that they currently have with the eu . No, it is not about punishment. We are not in that spirit. The uk is a member of the European Union until the moment that it leaves and it has to open first of all, negotiation, and we have a very clear procedure which is set by article 50 of the eu treaty, and the uk has to notify the council of the intention to leave and then at the moment, negotiations, and also to redefine our relationship with the uk which is and will be a very strategy partner. Tomorrow, the uk wont be a member of the eu, but it will be a european country, and so, no, l lets not talk about punishment, but lets not lose too much time and pronounce uncertain the ti uncertainty in the ne groesh gosch yating process. And so that is one of the messages by the 27 to the uk in the next European Council next tuesday. A busy day for you, sir, and we appreciate your time, pierre moscovici, eu commissioner. Thank you, simon, and an important interview. And global stocks are selling off, and the vix is a touch higher back to 21 and we will watch that, and the s p is down 13 points for the week. We are back after a break. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Great time for a shiny floor wax, no . Not if you just put the finishing touches on your latest masterpiece. Timings important. Comcast business knows that. Thats why you can schedule an installation at a time that works for you. Even late at night, or on the weekend, if thats what you need. Because you have enough to worry about. I did not see that coming. Dont deal with disruptions. Get Better Internet installed on your schedule. Comcast business. Built for business. Welcome back, and breaking news as a global selloff is under way as the uk votes the leave the European Union and this is how the stocks are trading in europe right now. The dax selling off, and the dow back at home about four points off of the low at 2059 and coming off of the worst open on a gap open basis since 1986. We continue to watch the 10year, and gold as the investors are pulling a lot of money out of the stocks and back into the safe havens. And now, over to the Kayla Tausche who has the hecb chairman. Hey, carl, that is right, we have michael gaygan with us here in london who is the chief Group Executive at hcbc. And you ran a bank in the financial crisis of 2006 to 2010 and some doom sayers leading up to today saying that the market effect would be like 2008. What went differently this time . Well, i think it is totally different, and the capitalization of banks both in the United States, the uk and europe are far bigger, and the restructuring of the Banking System in the last eight years has been significant, and so, as you have saw, the market dipped very fast and came back, and in fact, the currency, the sterling, u. S. Dollar is down 3. 5 for the week which is less than in january when there was a global blip again. So i am confident that the Banking System, and the Great British Banking System is going to to get through this, and the effects are not going to be what the markets are projecting initially. And some say that we dont yet know exactly where the costs exactly will rise for the uk banks as they continue to try to do business in Continental Europe, and the banks based in Continental Europe doing business here, and there could be potentially more headwinds, and very, very high headwinds over the next couple of years. For the positive approach, and two years to work tout relationship with the europe and the eu, and the other thing is the mid of two is coming in, and we have exporting allowed, but the mid2 coming in, and that will allow more flexibility of trade through borders and there is a lot to be done there, and also, we need to look at the background, because m a across the world has been quite soft over the last 12 months or, so and so we are looking at the overcapacity here in the city, and so there are are going to be some adjustments and anything that you will see that when the markets get down to people looking at the annual operating plan, and taubing to the boards of directors, and it is going to be more realistic. And the Prime Minister said he would step down in three months, and how do you expect the Financial Sector to react and when does that happen first . Well, your own candidate donald trump was saying today that he thought it was a good mo for britain to leave the eu, and if he selected president , he would want to have a trade deal with the uk which europe failed to do with the u. S. For nearly ten years, so i think that there are pluses and minuses of this, and we could all stay very, very calm, and think this through and plan in a sensible way, and as your former guest, or the previous guest said with respect for each other, and we will get through it, and we will continue to trade. This is the fifth largest economy in the world, and it is not going to close the doors and nor is europe not going to trade with it. And one in every five cars made from mercedesbenz comes to the uk, and we will continue to do that and continue to have trade and continue to have trade with more countries, and we do more trade outside of the eu today, 65 of the trade goes outside of the eu, so i am not here tonight to say that everything is doom and gloom, and not at all. And you have been a vocal proponent of the leave campaign, and you mentioned trade, and the United States is the biggest trading partner with the European Union and how does that relationship trade with the uk bowing out . I dont think it is going to with be changing that much. The u. S. And the uk have had a very, very close relationship, and going back to what you said about my role is. My only role in this is to give advice in regard to the financial services, and what scared the electorate last night was this word harm niization, and europe was on a journey of harm niization, and not just a financial services, but Everything Else that it could possibly do, and that scared the small business, and the other thing that upset the british who are very democratic, and they did not like to be told what to do and how to vote by foreign leaders, by heads of the imf, and by ceos of Public Companies who would not be there to make the comment, but did make the comments, and the reaction was hard and sharp, and lot of that happened today to fall on the shoulders of the ceos and others who decided to get in politic, and they should stay out of the politics. So for former chair greenspan who says it is the worst period in all of of his years of public service, and crow zi decisions that will last for a long time, what would you say . Like myself, we are not in oppositions anymore and we are retired and we can have our opinion, but so can everybody else, and i think that we should just let it calm down, and make no statements like that, and just make sure that we are staying focused for the british people to go through the next two years, and the markets will come back, and the equity markets are already back, and rolls royce and the share price up today, and the currency is coming up, and it is up to you reporters also to give the full story, because i have seen the headlines are from other agencies crashing the sterling, but not saying it recovered afterwards and very important. But it did hit a sixmonth high before a 30year e low and the volatility is undeniable. Not undeniable, but the fact is not to be running the the country on the volatility and the longprojection of the country and not 24 hours. We ap preepreciate your perspective this morning, michael geoghan, and thank you for joining us. Yes, my pleasure. Back to you in new york. Thank you, kayla, for that important interview, and less than ten minutes away from the european close. And major indices drifting back to the near lows of the session after rebound iing earlier, and the dow is down 2. 6 , and the s p 500 is down 2 , and nasdaq 3 3 , and also, more coverage from the ground when squawk alley continues. Floo welcome back and selloff across the board as the uk is voting the leave the European Union after more than 40 years of membership, and the s p 500 at session lows and the dow is not there, and down about 530 points which is about 40 points from now, and the vix is trading near some fourmonth highs and we have our eyes on that for sure, and gold is back to 1320 which has been an amazing run over the past 18 hours or so is, and bob pisani is here at post nine and what to Pay Attention to as we are five minutes away from the european close. Well, that is a little bit of the issue, because we will see the selling going in on heavy volume days and 2054 is the old low, and now, looking at the sectors, you will see that it is playing out the way we thought, and Interest Rate intensive groups like utilities and telecom, and the reits in particular which would benefit from the continuing low rates are continuing to do well throughout the day, and a number of the big reits and the office reits were in positive territory, and the banks, the opposite situation, and that is indeed the case, and most of the big banks are down 3 to 4 as continuing low Interest Rates will weigh on them, and that is a group that has not rallied, and the yir which is the etf for Real Estate Investment funds or the reits as we call them have rallied nicely almost into positive territory, and the banks ha banks have been down across the board, and most of the big banks are down 3 or 4 , and the obvious thing is to go into the defensive groups and go into Something Like Consumer Staples or the health care stocks, and the problem with that and in theory, it is a good idea, and the problem is that most of them have significant exposure to europe as well, and the Procter Gambles and the heinzs and the mollsons and the pepsis and all of them have significant exposure to europe are so you have to look at the fact that they are theoretically defensive when they have significant exposure to europe, and currency as well, and the strong dollar was a major problem as we spoke to many of the consumer staple groups in converting the money back into the United States, and of course, they made over in europe. So it is a very complicated situation with a lot of the moving parts. In theory, you should have certain groups doing better here, but the world is now truly global and it is very, very difficult to sort of sort the threads out, and that is part of the problem with the interconnected world that we live in today, and you cant build the walls, and it is impossible economically to do that. And speaking of the threads, and even our own threads, russell rebalancing today. Yes. Is that making the situation look better than it would be ordinarily or worse . Well, it is greatly complicating it and we dont knowt better or worse, and it is a once of the year rebalancing of the russell and typically the biggest volume day of the year, and most of it happens in the close at the last few minutes, and so we will have enormous volumes of buy orders and sell orders and interacting with the people on the close of the brex brexit, and it is going to be a volatile mess. Thank you, bob. Moments away from the european close. And simon hobbs will have the breakdown. Breakdown. Professional at inves. Its a great first step toward protecting your money. Before you invest, investor. Gov. Europe closed 20 seconds ago, and simon at post nine. It is an incredibly important close, and it is the biggest shock to the european markets, and look at how the uk is affected down 3 , and the bigger fall, 7 , and 12 , and 13 that you are getting in the eurozone markets itself. The uk as i said to you before, it is a defensive index in nature and onethird is big tobacco and big pharma and big o oil, and the rest of europe because they fear that the eurozone project will unravel and it is hitting to a far greater extent. And sterling was the focus of night, and we have bid up to 11. 50 in advance and then plunged lower as you can see to the end at 1. 36, and that is a big movement there. And there are pockets of the london market that have been devastated, and notably the builder builders and the the property stocks. There is clearly a fear that there is going to be a slowdown in the Property Market in london and the uk house biuilders have been affected because of that and you can see it slow down in advance of the vote, and you is seen it today, and that is going to be hugely helpful if we could have that, and the commercial property sector has been hit badly today off of the concerns that many of the big banks will relocate out of london and to other parts of the eurozone, and of course, the uk banks are badly affect and the bank of england saying it has 355 billion of liquidity, and there is no suggestion of the liquidity at the moment, and there is a concern of where we would go moving forward and part of the flight to safety, and you have seen a lot of the bonds rip higher, and the sovereign bonds dip up, and yields down and that means that you crash the yield on the benchmark german year which had gone up in positive territory, and now down at a fresh record low, and other parts of europe, and the Banking Sector badly want and the Spanish Banks are down, and the italian banks are down, and you have a general election in spain sunday, and we dont believe it is an immediate problem, but more of the gridlock is situation in youd like. But in italy, the prospect that the Prime Minister could lose a confidence vote in october on the senate reform, and there of course you will have the second largest par i calling today of a referendum of their own in italy to leave the eurozone. So i wanted to show you that whilst the rest of europe is having a flight to safety in bonds, it is not true in italy and spain where the bond yields are spiking. Up 12 points in italy and 16 basis points in spain. Back to you. Thank you, simon. And now we go the Courtney Reagan for a news update. Hey sh hey, court . Here are is the news update. Fire crews in california is battling a fire that has burned 80 homes to the ground and another 1,000 homes are in immediate danger and under evacuation, and powerlines and phone lines are down for 30,000 residents. Residents in dallas have been treated for burns after the motivational speaker encouraged them to walk on hot coals. Five people were taken to the hospital, and the hot coals were spread outside as part of the seminar reach the power within. And there are searchers going through the rubble to look for survivors after a tornado hit 500 miles south of beijing. Pope francis is landing in armenia to mark the slaughter of armenians that francis himself has called a genocide. That is the cnbc update at this hour. John, back to you. All right. Thank you, courtney. And now, stocks in the u. S. Are continuing to struggle, and former fed chair al Alan Greenspan joined us last hour, and he issued a strong warning for the Global Markets. Take a listen. This is the worst period i are recall since 1986, and including the crisis of october 19th, 1987 when the dow went by a record of about 23 . They thought was bottom of all potential problems. This has a corrosive effect which is not easy to go away. And greenspan there talking specifically about the debt levels and sfwit elements. And here is joseph lupton, the senior e global economists at jpmorgan, and lee from International Strategies at j janos capital, and gentlemen, first, are you feeling a relief that the Global Reaction has bn been reacting and it is not worse or are you in the greenspan camp that things could get a lot worse from here . Well, i think that i am cautious and a lot of concern over this. The brexit risk is something that we knew was a possibility and concern is not so much the direct macro read through, but it is the impact that it has on market sentiment, and in particular Business Sentiment so we need to wait to see how is it going to build on itself. The Financial Markets are going the be moving quickly, and the r risk off sale is understandable, and whether that comes back, i dont know, but i would be looking at the business sector to to see how they respond to this and particularly in the environment where corporate profitability is weak, and cap x is weak, and the payroll report is disappointing, so is that a catalyst to something a little bit more damaging . So right now, i would say that we are pretty cautious. I would not say that i as grim as former chairman greenspan has been, because that sounded extreme, and i would not go that far, but it is something that we have to watch here, and there is going to be a big tail risk for us. And george, what are the next things that youll be looking forward to the see what direction you expect the today is odd day, not only because we are digesting the brexit news, but also because of the russell rebalancing, but next week, what are the benchmarks that you will be looking on to trade are on . Well, that sis a great question. Several issues the teal with, and one is the political uncertainty, and not only the spanish election this bookend, but you have to deal with what is going to be happening in the united kingdom, and who is going to be taking cob troll,n contro Prime Ministers role, and the perspectives of the geopolitical perspective, and what does the eu do the respond . You have seen calls for reforms in netherlands and france and italy, and so on of the key things that we will be looking at is geopolitically is the European Union likely to hold . And what are you seeing are from the business perspective . Is the business cofi dense going to be dented as result of the geopolitical unsern certainty. And joe, it is bob pisani here, and i wondered if you could touch on the impact of the earnings potentially, and we have talked about the four consecutive quarters of slow earnings, and is that going to go into the european sales and the dollar might see an adverse impact . Well, that is part of the forecast to look for the weak period of profits to maybe recover a little bit as we are looking for the Global Growth to pick up maybe a half a percentage point moving into the second half, and the commodity price collapse that we saw last year, that was going to fade, and a big underlyinging theme that we are all looking for is some recovery in productivity to help the the margins a little bit to absorb as we are starting to increase here in the u. S. That is you know, it is called into question a little bit, and again, we are not changing the mode of views here, and we are lowering, certain ly the uk on the order of 1, 1. 5 Percentage Points around and the euro 1. 5 Percentage Points and so globally, this is going to be one percentage point abouts there. And so how it feeds back into the profit story, it is going to be taking the steam off of that, and this is where we are concerned with the Business Sentiment, and the business eyeing the profits, and wondering if the hiring they have been doing needs to be scaled back a little bit. Right. And right now, we are not too, you know, pushing that through in term s of ts of the deterioration, but it is certainly going to take some steam out of it. And certainly, the language on the guidance and the hearing calls coming up, and thank you. Markets overseas may be closed, but Kayla Tausche is stand standing by. Kayla, we have been watching the european banks all day long, and of course, getting hit the hardest on the brexit vote, and your take on that . Well, carl, a once in a generation vote, and followed by a once in a generation trading for that sector in particular, and the worst open for the european banks since 1987. Some like lloyds were down as much as 20 , and of course, some of the contagion was felt even sharper across europe. Of course, the big u. S. Banks open or the trading are seeing the followon trade, and not nearly as bad, and those banks are going to be reassessing the operations in europe, and how they need to react to the ref ren democrat, and the brexit vote overnight, and whether they are g are going to be sending 11 that are employed here in the city of london in the Financial Sector back to their eu countries where they are citizens, and what to do, but the primary focus is to make the markets for the clients in a heavy volume day in certain markets of liquidity like Foreign Exchange is hard to come by. We have seen heavy volume in onedirectional trade like the bank stocks are plummeting, and everybody is in that trade, and safe havens soaring, but the spreads are widening which is leading to concerns over credit, and some of the companies are funding themselves. To that end, i spoke to Jpmorgan Investment bank about the contagious, and what is going on behind the scene, and he said that they are trading with all counter parties in europe normally, and they are not seeing the liquidity issues for the banks, but just the equities selling off the bonds are doing fine, and part of that is because the Central Banks have been pledging assistance in the case that the liquidity is so bad that they have to put up some of the first line of defense funds for the companies, and pinto told me that he sees no evidence of the boe or the ecb having to intervene thus far, but it is a relief of the markets to know that they are there to backstop. So that is the scene here in london, and for now, guys, we will send it back to you. Really good stuff with the former hsbc ceo a moment ago trying to remind the world of the possibilities of the uk going on their own, and lot more from Kayla Tausche later on in the morning, and when we come back, more market coverage on post nine, as we are seeing the dow down, and the s p 500 just a touch below the intraday lows. Keep it right here. Approaching medicare eligibility . You may think you can put off checking out your Medicare Options until youre sixtyfive, but now is a good time to get the ball rolling. Keep in mind, medicare only covers about eighty percent of part b medical costs. The rest is up to you. Thats where aarp Medicare Supplement insurance plans insured by Unitedhealthcare Insurance Company come in. Like all standardized Medicare Supplement insurance plans, they could help pay some of what medicare doesnt, saving you in outofpocket medical costs. Youve learned that taking informed steps along the way really makes a difference later. 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Go long™. Coming up on the Halftime Report the continuing coverage of the historic brexit vote continue continues. We will be speaking with Portfolio Manager Eddie Perkins who is overseaing 90 billion clrz in assets and plus the financials are working hard today, and the top analysts will be breaking down which banks will see the biggest impact in t the coming months and gold hitting the twoyear high, and can the rally continue . That and more ahead on the Halftime Report guys, at the top of the hour. Back to you. Thank you, simon. And over fr to the cme group wi Rick Santelli for the santelli report. Good morning, carl. Sometimes weird things happen at weird times. Last night i was at a concert in chicago by a beautiful la lakefront, and the legendary bad boy joe walsh, and im a big joe walsh band, and the next company was bad company, and bad company was playing right at the news of brexit and you cant make that up. And this is all about the trade, and so the title is trading in globalization tradein. What do you mean . You trade in the car every now and again, and we need to the trade in globalization as in trading in your car for a new model. Global freetrade, but like back to the future. That is where it all started out. That is where it started out, okay. Imagine, you, the viewer, the listener, you are country a and im country b and we need free trade and that is a good thing, but that is not what happened, because like all of the power, it is sucked up in a vacuum, and what became free trade turned into globalization where the politics was more important than the trade, and this is what the brits did for us. Okay. How many santelli exchanges have we talked about the truth to power . And how many santelli exchanges have we talked about it . I didnt think that brexit could pass, because most just didnt understand like any polling, there is a certain form of comfort zone in how people respondb to the the polls, and this is important, because the message is what started a long time ago, and this thread that has now gone global, and in many ways, it could be the tea party start, and it morphed, but the dynamic is the same, because it is tea time in the uk, because ultimately, the people have a sayso. A and they have a sayso in who takes the political reins of their country. And the globalization reverse into this new globalization is not going to be easy. Now, the equity markets with a big bounce, and the Interest Rates are not doing what most of the experts predict and the real issue of Interest Rate ares is that maybe the Interest Rates will get a life, and their own life, and cautionary point here, and central bankers, we should be listening to the brexit vote, and keeping the powder dry, and remember that a lot of what mario draghi, and what the central bankers have done worked, because many traders were condition ed ed to front r the policy, and now look at the credit spreads of italy and sprain a italy and spain, and the weaker economies of the boon, and you think that fwig bigger institut are not noticing this . Well, tread softly, because they are taking back their role, and that is why the betting web sites did not work out well, and just like the polls in the u. S. Politic, because in the end, what you tell somebody poll iin you have not necessarily the action, and especially if it s and i will tell you this if it is politically incorrect. Back to you. And that is the lesson that a lot of people have learned today, Rick Santelli. Hope you enjoyed the concert. When we come back, more on the brexit vote, and the markets reaction with the dow down 59. Down 59. Hi baby hi daddy gain the freedom to fumble with the new water and shatter resistant Samsung Galaxy s7 active. Buy one now and get the samsung gear s2 for free. Exclusively at at t. Of fixodent plus adhesives. They help your denture hold strong more like natural teeth. And you can eat even tough food. Fixodent. Strong more like natural teeth. Fixodent and forget it. Thank you. Ordering chinese food is a very predictable experience. I order b14. I get b14. No surprises. Buying business internet, on the other hand, can be a roller coaster White Knuckle thrill ride. Youre promised one speed. But do you consistently get it . You do with comcast business. Its reliable. Just like kung pao fish. Thank you, ping. Reliably fast internet starts at 59. 95 a month. Comcast business. Built for business. Amid the selloff today and this is a smaller stock, and the finish line is up 20 after the sports retailers report of Quarter Sales and profits beat the analysts due to the newer stores and they did a good job fighting a retail challenging environment, and they also comped shares up, but still, carl, not that many stocks up on the green, but one of the stocks, finish line is doing bet er. Back over to you, carl. Thank you, dominic chu. And we are hearing the brexit regret many in london and i want ted to play you a tape. I would go back to vote to stay, because the regrets are kicking in that a majorative ous voted to leave, we are regretting it today. Trying to listen to all of the points of view, and meantime, the u. S. Stocks are off of the low, and the riskoff feeling is at the nyse, and the ben willis, and kenny ocarry, and so did the cavalry show at 9 45 or not, ekene . Sgll well, we opened up and found the stability and rallied back and holding back at 2050 and the sense is that the market wants to rally into the bell, and not positive, but better from here, and im getting the sense that there is not the panict at all or the concern that maybe so many people were, that we were afraid of this morning, and the sentiment as completely dissipated and so i am hopeful. Ben . I dont think it is the cavalry as much as the forced selling dope on the opening, and that selling is dissipating, and so you have a little lift, but the problem for me is that the we got the lift too early. Coming into the close of europe, we saw the down pressures of the risk off or the pressured selling of the reevaluation portfolios to lighten up, and gain more with selling here, and i agree with kenny here, which is rare. Yes. Andt at the end of the day, the e opening is the lows and we should be higher from where we are right now, but keep an eye on the russell in particular for that indication. And one thing that people have to realize, it is an event and not a trend. And it is the event that happened in one kay, and not like a trend that is going to continue, and it is out now. And provided that well, yes, but i am talking about the uk at the moment. This is their trend, and it is this event and not this trend, and so therefore i think that the markets are going to be playing out, and by monday, cooler heads will prevail. I hate to say it is not this easy. What about the effect on the ea earnings, and we were talking about this all hour, and the effect of the scorned dollar on energy and materials that is why you have to keep an eye on the russell. That is the least affected by the the buy of the stronger dollar, and surprising today that it is the laggard and u would have expected it to be the leader based on the currency translation, and part of it is the russell we weighting or the rebalancing that we are putting in, and so it has to be in stride. And also, you are assuming that the dollar is going to be continuing to get stronger and hurt the multi nationals and i think that the dollar is going to be backing off, and certainly, the multi nationals will struggle against the dollar, but overall, we are safe haven place. And i talk ted to the an executive this morning who said it is a political event and not economic event and compared to arab spring perhaps, and it has followon effects that we have been feeling since. Well, those are two very different situations, the arab spring, and this brexit vote are both political but one is so much more, so much more damag g damaging. The arab spring was just mind boggling for so many people, and it was a change of culture. And the politics has to be admitted in the Economic Situations, michael, as much as we would like to think that the fomc is politically indifferent, but it is not the case. And that is why they are looking forward for the concern of the Broader Market and the Global Market of stocks is what is going to be happening now as the domino effect. Is it italy next . Who is going to be next . The eu and will they thrive and survive and two years from now, the eu, and germany left holding the bag or germany the next one out . And talking to the Central Banks, is the market craving a rate cut here in the states, the boe in july, and how much cushion do we need . Well, i dont believe that the u. S. Market is going to do that, and i think that janet yellen made it clear, they are not going the go anywhere and certainly after the event, there is no talk of the rates going up. They need their heads examined. Through the year, nothing at all, at all, and it is not going to happen at all. And i take the other side of the trade absolute ly, and agai, this is the effect of the political and not an economic, and the rates are changing are n in fact part of the Economic Situation of the United States, and the United States has to face the fact that we have led the Global Economy through the knees eight or nine years ago and leading it out, and with the leading it out, the rates are the first one up. And that is true, the first ones up, but when does it happen in 2017 or 2018. July. Not july at all. Does all of the turmoil make the u. S. Election more interesting and the impact of the market . Yes, because i think that what we saw is the massive level of angst and frustration from the citizens that finally got the speak their voice and finally got to say it, and it is going to be creating a change not only in the u. S. , but elections happening all over the world, and greece, and germany and spains this weekend, and look at what is going to be happening there. And the average participant in the Global Participant is angry, and that is why donald trump has had success and will have success. Than you, kenny. And the dow is down 64, and the half is coming up after the break. The break. Theres a lot of places you never want to see 7. 95. [ beep ] but youll be glad to see it here. Fidelity where smarter investors will always be. If only the signs were as obvious when you trade. Fidelitys active trader pro can help you find smarter entry and exit points and can help protect your potential profits. Fidelity where smarter investors will always be. Before the band separated over unknown creative differences. [ crash ] and reunited three decades later for a tour that sold out in three minutes. And your cisco hybrid cloud handled millions of ticket orders without breaking a sweat. Before all of this, [ crash ] the experts at cdw orchestrated a cisco hybrid cloud solution. Scalability by cisco. Orchestration by cdw. Welcome to the Halftime Report im simon hobbs in nor scott wapner. Reacting historically to britain vote to leave the European Union, and how the markets are reacting. In fairness to the open of the s p 500, and we were down 3. 5 , and so we have come back no nonetheless, and it is a pounding across the board, and lets look at where we are on the fixed income market, and there is a flight to quality and sterling however has been under