Transcripts For CNBC Squawk On The Street 20170626

Plus moving in the free market. And the Prime Minister of india meeting with President Trump today as major ceos make their way to the capital we kick off the final trading week the first half of the year after a week where the dow and s p did hit the highs. The fifth straight week of losses for the First Time Since august of 2015 well talk more about it later on but it puts into perspective how spoiled we have been for the First Six Months of 17. Stocks up about 10 year to date total return you had bonds up as well so you didnt have to give up anything on the bond side. Theres been so little down side volatility along the way so all of those things together has been this unusually quite rally and look at what happens there theres a risk that this numbing effect is taking place i dont know if you really see that, though if you look at the data, quite rallies in the first half dont fall apart all at once and in fact you have better than average second half upside and a little bit less down side but more than you had. Thats the key. You look at some figures and you look at years that treat you this well in the first half rarely hit you in the face the second half. Right. Things start to get ragged and you have more volatility i will say one of those years that was like this one was 2015 so in 2015 at the end of summer it did fall apart. You had a 15 correction high to low back then so you can have obviously some shots but right now the way conditions are holding in and all the other things you were looking for to be Early Warning systems youre not seeing a reason to right now be overly concerned. Over the weekend the column that you noel says the flip flop, the leadership on Energy Financials the market cant seem to make up his mind, they argue that it needs to decide on something. So remains the same. Yeah, you would think that at some point they have to v either were going to have a verdict on whether we have an economic acceleration whether the data is going to come through and the stocks and financials take you to the next point or are you going to stay in this mode of low rates, disinflationary technological boom and then the Growth Stocks working there. So i think theres a pushpull look at the bright side though and the market has managed to support itself by handing off leadership on a very shortterm basis and not really having those deeper pull backs. Well watch that with more data. Move on to nestle here taken that 3. 5 million stake in the Largest Food Company it represents one and a quarter of nestles shares pushing them to improve margins and buy backs and stocks theyre calling it the biggest bet ever. Its a very large bet dollar wise not that hes not one of the largest players in activism as we know. One tool that they use not necessary through only one at third point that does plenty of investing outside of the arena so to speak but interesting in the approach. Similar in a way that he communicates with a letter to his own shareholder instead of a letter released sent to the company. Thats not the case here but i want to make a couple of important points that have been able to at least learn which is there is more urgency here im told by people familiar with the situation than for honey twell the last activist situation in which he was not currently engaged. Honeywell is engaged in its own view of its businesses whether a spin might be appropriate. Something that he has been behind but when it comes to nestle a focus on the loreal ownership position whether that is strategic or should be sold he thinks it should. On margins or capital structure overall. Taking leverage up with the company is something that he is saying they should do and what i am toney told is the tone is some what different. There have been a series of meetings im also told this has been going on for awhile how long not quite sure. But it didnt just bubble up over the last couple of weeks. The meetings have been respectful they have a new ceo who i am told he is quite happy with at this point that is made clear in the letter that he sent to his own shareholders explaining the reasons behind this. So well see how things develop here its interesting from the perspective i think he is positive im told on the macro europe trade and in and of itself and you see this a lot with the largest activists taking a sizable stake though small percentage wise in the company in a highly liquid security that wouldnt seem to have that much down side and that seems to braps the case here and yet if you get what you want if youre lobe well it certainly is brand building. It certainly helps in terms of your overall marketing and ability to attract assets under management and even if it doesnt work toward what youre going after you may have the wind at your back regardless. The entire trade doesnt depend on a very specific set of actions being taken. I was struck by his comment in regard to nestle that its rare to see a company of such high quality have these opportunities for perhaps getting margins up and its a concession that you dont find broken companies of this size. The market isnt cheep but you might have some leverage you might. Be curious to see if this thing does tend toward a more adversari larks relationship overtime and its not now. How that plays out or what tools he has to be able to try to get what he wants. I remember sony from a few years back it is another Foreign Company where he was pushing for them to get rid of Sony Pictures didnt get what he wanted there. In terms of the business profile, some what like activists in this similar vain lots of brands, maybe the margins have lagged and maybe they juan to increase their metabolism of management somehow to unlock value. I also do believe theres a couple of the largest activist funds with these very large positions where they are almost trying to make themselves seem as though they are somebody that puts a stamp of approval on the strategy being employed by the company they have chosen to invest in. Sort of a different approach and i know lobe hes a very competitive guy and sees himself as being one of the giants and wants to get bigger. Perhaps this is another opportunity to do that i never overlook the branding opportunity that comes from talk about him and one of the Largest Companies in the world but it will be interesting to see theres not the consolidation that some believe needs to take place in terms of food in europe and we know theres plenty of potential u. S. Based or other acquirers for certain brands nestle would be an inquirer but remember its not that long agatha kraft heinz went after it briefly. So you have to also interestingly i think look at it through that lenses. People are talking about the pressure on packaged food. Is it more active now food, packaged goods and semiconductors. Well watch that closely after meeting with the top ceos over the within the indian Prime Minister is set to meet with the president today. Seema is covering that for us today. Good morning, Prime Minister modhi and President Trump will meet at the white house but ahead of this meeting he met with a powerful group of ceos including jeff besos from amazon and apples tim cook that left with a smile on his face. Can we ask you how the meeting went it was fantastic. Jamie dimon also said he was receptive and a strong leader. Now in todays first face to face meeting between modi and trump the key will be Relationship Building and establishing trust for years they enjoyed a strong relationship with india seen as a strategic ally and economic and defense partner and also a way to countier balance the role china has been playing in the region but in trumps presidency india hahn been part of the Foreign Policy discussion dominated by china, russia and mexico im being told by a senior Indian Government official that modi will be prepared to have that discussion around the trade deficit and the visa program and defense but he is coming in to learn more about how trump views india and whether he will prioritize this relationship Going Forwards prior to coming to washington modi has been engaging with leaders across europe and he also has talk with Vladimir Putin and russia if modi doesnt get that confidence from trump in todays meeting he could look elsewhere. Thats why this meeting is so important. Busy day for you as we watch that meeting interesting, india, so many stock specific stories regarding that country, amazon, clearly tim cook. Apple, yeah, glad he said it was fantastic. Its very true plus of course all of tech cares so much about the imfwrags issue. Its a very tough country to do business in, very difficult i think. I remember the experience of vodaphone just trying to get things done is hard. Right number of languages, dialects. Modi tried to change that but a lot of government regulations, competition regs not to mention graft. Its a huge issue there. The level Playing Field when it comes to these bilateral trading agreements india is a lot of what is brought up what a company has to do there. Fascinating story we dont cover enough when we come back, moving lower in the free market shares of Royal Caribbean up what has been working for the cruise operator. Dow down 4 still riding a five week win streak a lot more from post 9 in a minute its been over 100 years since the first stock index was created, as a benchmark for average. Yet a lot of people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Why invest in average . Welcome to holiday inn whether for big meetings or little getaways, there are always smiles ahead at holiday inn. We cut the price of trades to give investors even more value. And at 4. 95, you can trade with a clear advantage. Fidelity, where smarter investors will always be. And at 4. 95, you can trade with a clear advantage. The future isnt silver suits anits right now. S, think about it. We can push buttons and make cars appear out of thin air. Find love anywhere. Hes cute. And buy things from, well, everywhere. How . Because our phones have evolved. So isnt it time our networks did too . Introducing americas largest, most reliable 4g lte combined with the most wifi hotspots. Its a new kind of network. Xfinity mobile. Just about 15 minutes until the opening bell lets bring in our director of floor operations that joins us here happy monday to you. Happy monday back to you. Whats your thoughts as were nearing the midpoint of the year its been a reasonably successful first half. Everybody is still hopeful that the socalled trump agenda has some life left in it that will be critical as we go into the second half the other thing that will remain important is oil it looks like its trying to get some stability here around the 43 level if that holds that will give us a little bit better underpinning were coming in this morning with a lot of help out of europe the ifo is good. The Italian Bank Bailout looked good things are looking slightly better in the british political sense. And the nestle deal theyre going to get involved and thats going to help stocks generally in europe. Markets have been very tolerant of this rollover in the u. S. Economic data hasnt been awful but below expectations pretty consistently today as well. Stocks kind of hover here. Looks like the bond market is farmer than the fomc so well see how that continues going down the line. I do think that things are slowing and we got this kind of wildcard remark out of the bank. In their report they encourage the Central Banks to continue with this normalizing of whats going on yet they raise the possibility that the markets should be becoming potentially vulnerable i would prefer not to see it. What do you mean . Thats what they said they said that they senseit. Is there something that comes to mind . Not offhand i mean, its amazing its at record lows and staying there. Below 10 again today well talk to you soon we do want to check in down sharply this morning. Morgan is at hq with details. Good morning, theyre tumbling premarket it is down significantly right now and that move that the medals manufacturer knowingly supplied to a distributor to be used despite the fact that it has warned that those panels were a fire risk for highrise buildings. Now the report cites emails from a Sales Manager that raises questions about why it supplied this type of product reuters saying panels would be used but that it was not up to the company to decide what is or isnt compliant with local building regulations now youll recall that deadly fire which is londons worst fire in decades with 79 people dead started with a refrigerator but it quickly spread to insulation and up the building sides. Now at least 11 others use combustible cladding that is similar in nature and theyre testing hundreds more buildings for similar safety risks this comes amid a risk they stepped down in april and happened until the midst of activist pressure from Elliott Management which is the companys top shareholder. I reached out to arconic and others for response. Ill bring all of that your way once i hear back meantime shares are down almost 7 premarket back to you. Thank you for that. Well see what the opening trade looks like in about ten minutes. When we come back facebooks push into hollywood. The social network said to be looking to produce original television Quality Content take a look at the futures more squawk on the street still to come. Dont go away. Welcome to holiday inn thank you wait, i have something for you making every stay a special stay. Holiday inn, smiles ahead. Whether for big meetings or little getaways, member always save more at holidayinn. Com facebook is in talks about producing original tv programming. Theyre willing to spend up to 3 million per episode. The aim is to launch it by next summer theyre considering sports to comedy to reality. Going after late teenagers into the 30 year age range and then willing to look at shows that other networks might have passed on. It feels as if everybody with a platform feels like anybody with money can bid for the same projects out there why not have a direct pipeline and do it. Its not as if you have to build a whole apparatus but its interesting. Every Disruptive Company seems to be edging toward what they were competing against originally this is not a huge move. They dont pay anything for their content. People give them their stuff they have to adapt. Thats a lot of what the company is built on. Without a doubt. Having a billion people participate but it is what a time for content providers facebook isnt going to spend near the almost 7 billion that netflix will spend this year and amazon not far behind in terms of what its willing to spend not to mention all the old line Media Companies as we describe them interesting they would be willing to consider other peoples cast offs. Yes apparently as well looking to release an episode at a time wouldnt necessarily be bingable content but this story out of london that theyre threatening to pull ads from facebook and google because of what they say are fraudulent clicks. Julia spent the past few days there and its more nuisanced than that but the issue keeps coming up. Its the issue of measurement and verifying that the video views occurred and essentially very difficult cull. I almost people like the market is telling you theres a lot of slippage in that because the cost keeps going down but its a thorny thing and i dont think any company feels like they have the integrity around the numbers. Not that its fraud but we simply dont know. Meanwhile, as far as google goes we might get a final decision on this eu fine out of brussels possibly by wednesday. Of course discussions have been going on for months about whether or not they abuse their dominance and search as ramifications not just for the company but eu white house relations. How would the white house respond to a fine that large well watch that. Its interesting. Isnt the rule like the cases are aggressive and they go on forever but the actual dollar ams while big not big for the payer. So google is what . A billion dollars. Wasnt that the microsoft story too . It was. What does that mean for Business Practices later on . We dont talk about any antitrust action in this country anymore but there was a time whether it was at t or ibm, there is a history here. Were going to see if it starts again with Companies Getting big enough well get to the onipeng bell in fyffe minutes. Dont go away. Hey gary, what are you doing . Oh hey john, im connecting our brains so we can share our amazing trading knowledge. Thats a great idea, but why dont you just go to thinkorswims chat rooms where you can share strategies, ideas, even actual trades with market professionals and thousands of other traders . I know. Your brain told my brain before you told my face. Mmm, blueberry . Tap into the knowledge of other traders on thinkorswim. Only at td ameritrade. We kick off the final week of the quarter. Q2 will be busy with macro hdaa already got fed speak already. Williams is out saying that gradual heights are key to extending this period of growth. That certainly is the line although he was also pointing though to robust financial conditions and as one precondition for more hikes so in other words the new york fed has to be the one with the eye on our markets getting too happy or pricing in a little bit too much of a positive scenario and everyone is looking at the credit markets for that. I dont think it was redder especially in light of the new data. Few futures look good and its a nice close for europe so far. We have that nestle news and another round of that where you have this drama free kind of folding in and failing banks into a bigger one and the market rally so the mark likes the idea at least for european banks. Dont you feel like something is going to happen the second half of this year. The government says just a general saying he has never seen the six month period if you look at the data it takes you back to the 1995 which was one of these types of years and before that i think youre looking at 1960s so yeah. Often. The markets have been sitting at all time highs. Lets get to the opening bell and get a look at the s p at the bottom of your screen. Celebrating the launch of two new Exchange Traded funds. The mazz dak and starbucks celebrating its 20 25th anniversary. People dont remember that was one of the great Growth Stocks of the entire 90s and reaccelerated after that. Speaking of places that are in the food business we continue to watch shares of whole foods reuters over the weekend said that walmart not actively considering a bid. Said whole foods has not received a rival bid at all as of friday but we continue to see it trade above 42. Late friday we saw that walmart was not considered to make a bid its as if theyre leaving the place holder possibility out there that there is a rival bid that would get amazon to raise its level i dont think anybody looks at 42 a share and says thats maximum value the world could pay for whole foods but on the other hand who wants a bidding war with amazon. You think strategically it may make sense youre only going to move forward if you want tone the company. Sure. This argument that others made well it could make it more expensive for amazon, thats not a reason other Companies Get into a nasty fight with an overbid for another one. You dont do that. The advisers will say thats not right. You have to make sure that you can pay the highest price. Walmart doesnt, cant imagine paying 2 million more is going to change amazons longterm strategic profile. Its not clear what walmart brings to the table that would enable them to pay the price and justify it over what amazon has been paying but it has been interesting in the week or so that we watch the stocks fill trait above. Its an option in case you do get some sort of highly unlikely but unlikely bidding war. Meanwhile, the parlor game continues. Bloomberg story today looking at the degree to which amazon would automate, where they would automa automate where the robots would take over the first bloomberg argues would be managing inventory. They could go up and down the aisle and alert employees when items are running low. Its not clear that amazon itself sorted that out but i do know that one of the cases that was made by some of the investors in whole foods that were not happy with management is that their controls and operations they really didnt have a centralized way of doing a lot of things. A lot of managing a merchandising operation. They werent there so you would think that would be the area. Whats been fast nate as good that amazon doesnt give you any rational or explanation as to why theyre buying this and then everybody comes up with them meanwhile we get to really understand from amazon the reasoning behind the deal itself not that they need help but now they have all sorts of things they can choose from with so many people writing these analysis. There was an opportunistic element of amazon doing this deal they didnt have this written down saying that whole foods is a quasi Restaurant Operator as well with all of that stuff that you want there with delivery and the whole blue apron type business if you care to get into that. Right arguments were made that disruptors are subsidizing the cost increasingly of grocery for years they have been subsidizing the cost of Digital Music and we do have a pandora story today. Its recode saying hes preparing to leave as the ceo. Thats not a surprise. And step back years later. The question here is who is going to be the chairman because they have the right to appoint the chairman most likely going to be the ceo of liberty and already a board member onion how Many Companies and chairman or the man that runs sirius so i dont think thats been decided yet. But it does appear he will be stepping out stocks come back its funny this was the 6, 6. 50 range a couple of weeks ago. Big move back but nowhere near recent levels. So the market suggesting here with this potential move that an overall pass there. On the daily operations that accompany to the extent that because they like free maybe they start pulling back on the Subscription Service that they have been rolling out and make other decisions different than twuns they have done and maybe they could get themselves back to a level of profitability. Pacific crest ups them today to sector weight from under weight got some guidance out of mirkcrn earnings expected. They raise physical 17 gap to 355. Rating remains out performed target goes from 32 to 40 so the bullishness and the cyclical supply chain dynamics remains. Just the slightest wobble in these stocks if you look at a longterm chart it doesnt look like anything but then you did have a stutter step and a lot just love the general industry, you know derks hand story for years to come so well see if that and its always about the direction and pricing. Keep an eye on that but thats lifting a lot. Its the topper former today. I have been looking for a goldman note that cut cans utilities and some are look at phone shlly a vote that were heading for a rising rate environment. Its tough. Utilities have been the surprise out performer for a long time. If you look at the analyst ratings utilities is the least recommended sector so its a bond market call right now and the idea that we have got sboon the bottom end of the yield range maybe thats going to be the thing that makes the difference there. Keep an eye on biotechs what a week they had last week as it appears the threat of pricing regulation out of washington might be disapating some what. Well watch along with the jury selection in the federal securities fraud trial that happens today meg is watching that but for awhile there the biotech had one of the best weeks. You had a lot of people excited about the fact that the etf did break out. You have technical folks saying finally a group in health care thats been a leadership area might start to participate and this is like we were talking about the market keeps going back to what hasnt worked and says okay maybe its your turn and bio tech fell into that category last week. What about financials do they fall into that category . Its been a little while on a one day basis now and then but its been tough. Obviously still so much focus but now we have a stress test coming out how much is in price. How much return of capital happens soon. 2. 13 on the ten year. Its not where people expected it would be at this point in the year there was an expectation that we would be talking about something with a three in front of it. That would be higher than it might otherwise be. Swoer looking at about 80 bases points as the 2 versus 10 year ands been sitting there for awhile its not telling you anything scary about the economy but its not helping the facts. What does that say . 2. Is it 12 youre still above where you are before the election. Finally fang is performing well apple is the best dow component and the chatter about pulling out from facebook, facebook had an all time high today lets get to bob. Happy monday everybody. Great start so we had a great start over in china up 1 , italy up 1 . European banks are all up nicely here the Italian Government bailed out two failing banks and theres a full state backstop essentially so if you look at some of the european banks, Deutsche Bank all the usual suspects are trading to the upside over there. Elsewhere the food stocks are all up taking a 1 stake in nestle. Theyre all on the upside. Theyre also trading on the upside as well here. Here in the u. S. It looks like every day this year semiconductors are leading. Thats the first one there Consumer Discretionary have been strong and Energy Stocks are lagging and this is every day and were ending the first half of the year later this week and it looks like that so if you take a look here an amazing run up about 20 overall with Semiconductors Leading and health care has been strong and Consumer Discretionary and energy down 14 . Tech had a great rally last week up about 3 on a number of different moves here so a lot of the tech Exchange Traded funds had strong volume in the month of june. Internet, software, you can buy all of these in different sectors in the tech sector through Exchange Traded funds now. The big Market Leader have been flat throughout the month because they had one or two down days in the early part of june but overall tech is a clear Market Leader. Bio tech had a huge rally last week up almost 10 in just five days. So we had Health Care Reform but we havent been rallying at all in the energy group and we talk about the fact that the numbers will be coming down aggressively we had cuts last week and the ratings. The Big Energy Companies out with an interesting note about the Production Companies saying no Company Wants to be the first to cut production but few of them are financially positioned to wait out a multiyear stretch of sub 50 lower for longer and theyre seeing production cuts coming down the road. The streets are way ahead of all of the analysts. We have seen most of the companies down dramatically. Theyre not down as much but the Smaller Companies like continental, oasis, all of these guys in the 2 billion to 10 or 12 billion Market Capital sa s capitalization down this year vmt not clear how much theyll drop notable ipo, blue apron will be here on wednesday. The concern here is the announcement from amazon about buying into whole foods and potential competition there. Meal services kit. Theyre going to try to raise about 480 million thatses a good sized ipo. And also secondary offering. One of the most successful ipos this year. Remember canada goose. The company that does the outer ware in canada they had a great ipo they priced around 12 back in march. So you see 20 now theyll float another 12. 5 million shares in addition to what they already floated they tend to be small. The story these days is float a very small amount. On thursday we had a company float 8 of its Market Capitalization its very common now to see 15 and do follow on offerings if theyre successful and thats what canada goose is doing now dow is up 92 points. Back to you. Thank you for that. Lets get to the bond pitts as well check in with Rick Santelli in chicago. Good morning rick. Good morning, carl. If you look at the global he equities in europe theyre up. We talked about Bank Bailouts and how many rules and regulations were made across the globe not to put tax pay yes, sir on the line but in italy bond holders were spared whats going on in fixed income i can tell you quickly two are unchanged. Tens are just down two theyre now down one 3rd years are down four. Sounds like flattening it is. Steady as she impose feds continue to remove the combination reflected there. You see were dropping off were dabbling with it now pretty much the same pattern of course if the government is going to orchestrate bailouts the market is accommodating even on the switched income side. I talked about the flattening curve. Lets look at it hovering and 78. Going back to september of 2016. 30s minus 5s now hovering around 94 this is the lowest, flattest its been in ten years as you see on the chart starting in 07. Finally the dollar index june was going to be the month of the dollar index. Look what it did today and granted the preliminary durable goods for the month of may were not good i broke that number out at 8 30. You can see were headed to 98 carl, back to you. Rick, thank you very much i want to check in on crude as well jackie at the energy desk. Oil prices are higher kicking off the week with about a 13 cent increase here some people crediting the weaker dollars. Others citing storms brewing in the south and others calling this by the dip. Consensus continues to be that even if we go higher first well probably still go lower over a prolonged period of time average for a gallon of regular is down 11 cents from a month ago. For those worried that oil is going to drag the market down theres a decoupling occurring and oil can go down while stocks can continue to rally. Lower prices are good for consumers and good for companies that use oil as an input there not as bad as they once were roughly 6 now so weakness in the sector carries a little bit less weight. Back to you. Thank you for that. A court date for controversial former ceo shkreli dow up 100 points to start the day. S p almost 2450 again. Were back in a moment baby crying minutes old. A babys skin is never more delicate. What do hospitals use to wash and protect it . Johnsons® the number 1 choices in hospitals. Jury selection begins today in the fraud trial. Good morning. Its the first day of his fraud trial here in brooklyn he arrived along with his attorney hes the former controversial pharmaceuticals executive. He was arrested in december of 2015 and charged with 8 counts of securities fraud, conspiracy to commit security fraud and wire fraud jury selection is is just getting going here at the Brooklyn Federal court all of these charges have nothing to do with what made him famous that was when he raised the price of a drug when he was ceo of a company all of these stem from former hedge funds he ran and Biotech Company he founded essentially the government is accusing him of using it as a piggy bank to pay back investors they allege he defrauded in the hedge funds. Thats what the trial is going to be about. Its going to be interesting because he is such a public person he made himself that way doing things like buying the album for 2 million refusing to testify on capitol hill, taking the fifth but then calling all of the congressmen out on twitter well be here inside the trial and well bring you any updates. He has really become the poster child for pricing controversies. Back to you. Well come back to that getting some headlines the Supreme Court today, Hampton Pearson has that for us. Were getting word on what is going to be heard during the next term. Specifically one of the cases that the court has decided it will take up is the question of some of the scope of the whistleblower protections that were part of the dodd frank law. Specifically theyre going to take up a case this is Digital Realty trust essentially they had a Lower Court Ruling they were appealing a Lower Court Ruling about alleged misconduct by a supervisor that was never reported the case hinges on whether or not the whistleblower protection rule required by dodd frank are lawful so again its the first news we have got of the day of future cases being granted we of course are standing by for possible news on the fate of the trump travel ban Going Forward and this is the last full day of this term. There are six major decisions that we are awaiting word on as well back to you. Thanks for what. When we come back a happy development for a member of the president s cabinet. Squawk on the street has that in a moment the president and the first lady were among the guests its the third marriage for mnuchin. Steve roth apparently in attendance along with some of the others that mnuchin knows from his days in the private sector. A lot of cross over between the hollywood wall street political world. A lot of secrecy. Now hes married. I dont know if that changed his approach to the job. I doubt it will. Seems busy. She was right there. Yes she was a scene steeler when he was being vetted and confirmed theres the commerce secretary from over the weekend. When we come back, this morning, a lot to come. The president is gearing up for his first ever meeting with the indian Prime Minister. Atema modhi is watching th we kick off the final week of q2. Back in a minute good monday morning. Welcome back to squawk on the street sarah is off today a pretty good opening trade on a monday 110 on the dow oil pretty steady after the rough last couple of weeks. Thats where our road map begin with the markets the dow up for the first time in five days. Health care, tech, energy, all fron and center as wall street kicks off the final week of the quarter. We have you covered. A big bet of nestle we have details. And just crossing the tape right now dbmw announcing new jobs for its plans in South Carolina well hear from their chairman straight ahead a person we rarely hear from in the industry here. First up straight to the markets its the final trading week of the month and stocks are set for a record run as investors look ahead to potential Corporate Tax reform and deregulation out of washington joining sus the senior Global Equity strategist. Good morning to you both. Good morning. Scott, wrapping up the quarter here would you argue that as we head into earnings season the next couple of weeks that preannouncements were light . I think there has been. I think its been light and really carl the markets looking beyond these earnings seasons, you know, its important to see, you want to see whats happening. The First Quarter was obviously better than expected thats going to be the best of the year they get tougher as you go through. Were looking at 8 of Earnings Growth for the full calendar year t. Market is paying attention but paying a lot more attention to whats going on down the road or anticipating whats going on down the road. Youre getting positive reactions to worse than expected Economic News like this capital goods order number this morning so the market is saying hey Economic Data hasnt been great lately that might cause the fed to back off the Interest Rate hike path and we like that in equities thats the story today i think. At the same time when the Economic Data comes in soft when you start to see oil do what its doing lately for example the yield curve is flattening out. Is that signaling that this expansion is getting long in the tooth and at some Point Equities react to that . Well, just the calendar will tell you it is long in the tooth but the oil problem seems to be more of a supply issue than a demand issue and thats by looking at the other indicators that are out there industrial prices broadly not much of a problem there although the price action is flattened when you look at where the spreads are in terms of corporate spreads. So i think the fading of the expectation for the faster inflation picture i think that that has given some leeway on hikes and with most of the data coming in okay thats a good cocktail for the markets. Remind me if the s p has blown through your year end target. It is and right now worried about 9 and change on our 127 number we came in and set our target last september 2230 to 2330. Our story then and story continues to be we thought wed see the high around the middle of the year and it would be at but not too far above the range. So we have been spending time above that were not all that far above that and our analysis still tells us were going to see it here in the second half. Yeah. Sparked by what . Well i think you got a couple of things going on one is valuations that i just mentioned. Another is lack of physical progress in washington we havent been expecting much this year. You might get tax cuts we hope so also fed, were in a fed rate hike cycle that tends to be a head wind for multiples and the things that we have been talking about the most since we set our target last september was that we think the market is going to start to be concerned about wage increases and the negative effect on corporate margins as we move through late 2017 and theyre going to be concerned about 2018 so we have no productive growth. We have high margins if wages go up at all which theyre starting to climb up. So im confused if the fed going to back off or not . You talk about all the other issues for reasons why the fed might back off but that sounds like a reason why they would step in. Thats one reason why were calling for the market to be lower is because i dont think the fed is going to back off this six hikes in two years story. The ten year yield is telling me that. Riding above your year end . Yeah. We were look for a 6 gain for the year and thats what we have gotten its a moving target and theres more of a range than a target that we think in terms of and the thing we would focus on is the momentum in the data and what we saw is pretty good momentum its flattened out but still positive were going to see a very good gdp print for the Second Quarter and if you have a longer term perspective youre not going to worry so much about the target as much as the health of the economy so for us were happy to see an economy thats making progress and if that began to rollover that would be more concerning to us given where we are today and the other investments that are available out there. Cash is still not yielding very much and bonds are not either. Scott, today goldman cuts utilities. They say low Interest Rates lead to inflated utility multiples. Are you saying that that for example is a precursor to rates starting to steal some of the thunder from equities . They most of the thund their we anticipate we are underweight utilities. I think no recession this year no recession in 2018 but unless we get physical help from washington to push this economy ahead theres always another recession on the horizon and if we dont get physical help from washington rates are going to stay down and, you know, that recession moves in closer than what a lot of people would like to think. Guys, well see what happens in the next week and in the next six months good to see you both thanks, carl. President trump getting ready to meet with indian Prime Minister modi for the first time in washington. Seema is at the white house with more. Prior to the arrival at the white house the Prime Minister will meet with secretary of state Rex Tillerson where the conversation will stem to around defense and military cooperation. India has been a big buyer of u. S. Arms. Were hearing the Indian Government may express interest in buying hightech drones to better patrol the indian ocean where china has been elevating its presence. Now in todays meeting with trump, the first face to face meeting between the Prime Minister and the u. S. President modi is looking to create a special bond they have a lot in common. Probusiness nationalist leaders and big users of social media. Trump with 32 million followers on twitter and modi in second place. But theres a topic they dont see eye to eye on and thats immigration. The hotly contested via program that was one of the points that was discussed between leaders that attended the ceo round table yesterday including some of the biggest Silicon Valley tech ceos like jeff besos, tim cook, among others but the attendee list was not limited to tech walmarts Doug Mcmillan were all there to discuss the challenges and the opportunities in investing in india one of the other attendees was jamie dimon and once he exited that meeting it was interesting to see he had lunch with a special guest and that was the former ceo of uber im not sure what they discussed. There was a lot of security around them but makes for a good caption contest. Guys. Your tweet over the weekend got a lot of attention thats for sure. Seema covering that in washington today lets get over to dominic and get a quick market here. Shares up by about 17 on heavier average volume in the Early Morning hours of trading this on bloomberg headlines saying avis and alphabet entered into an agreement for a selfdriving car Fleet Management system. We are in the process of reaching out for come men but for right now the market move is intense. 17 right now to the upside. Back over to you thats a big move. And also even a move or two your Business Traveller now goes and kept saying no, no, no but we watched what happened. Im trying to think of what a structure this deal would be to help avis. Youre going to do what with alphabet to bring in more revenue . You have an enormous group of customers right. Yeah. Which you can bring to bear for the future Google Service that would be brought. And so those people would instead of getting an uber when they get off the plane or using an uber to go around town would rent a selfdriving avis car who knows we dont know where this is all going to evolve in terms of the Subscription Service that is national where ever you go or different tiers. I can imagine lots of things i want my car any time, anywhere im willing to pay 1,000 a month for it or i occasionally need a car. Selfdriving car on retainer. Its lots of Different Things. Investors are pleased theyre thinking about it. Or conceding. Speaking of the car business when we come back bmw making a big announcement on jobs and an investment in its largest plant in the world right here in the United States. Phil talked to the chairman. He will join us next plus facebook might be getting into the tv content business. Well get to details on that later on, 60 in 12 months whats going right for the cruise operator when we continue rays always been different. Last year, he said he was going to dig a hole to china. At t is working with farmers to improve irrigation techniques. Remote moisture sensors use a Reliable Network to tell them when and where to water. So that farmers like ray can compete in big ways. China. Oh. He got there. Thats the power of and. Investing into its production plant in South Carolina phil spoke with bmws chairman and has more on the story. Phil. David this is a significant investment considering this is the largest plant in the world for bmw. Again, lets recap what this investment is. 600 million will be invested between now and 2021 another 1,000 jobs will be added. More than 10,000 workers at this plant here the capacity at this plant is 450,000 vehicles last year they built 411,000 vehicles this investment will go into retooling, a few other things here at the plant will allow them to up that production just a little bit and get closer to the capacity of 450,000. When i had a chance to talk with the chairman of bmw he made it clear that this is investment that they planned before donald trump was elected president but i still asked him are you worried about the threats that have been coming from the president reapproximate guarding a possible tariff on all imported vehicles . Heres what he had to say. No im not worried. We explained when i was in washington and we had the opportunity to talk about our business here in spartanburg i could explain and the president acknowledged clearly how successful our operation is here in South Carolina. That we created around about 9,000 jobs now 10,000 we are 70,000 employees. This is where all of the bmw cross over into suvs are built not only that supply here in the United States but they get shipped around the world but in terms of what is built in the u. S. And sold in the u. S. In terms of total sales about a third of bmw vehicles are built here in the u. S. Just under 30 built here in the u. S. And sold here the remainder are imported from germany, from south africa and the other locations and guys remember bmw is building a plant in mexico thats scheduled to open in 2019 i asked Harold Krueger is there any sense of whether or not they might change those plans given the possibility of a change in nafta and he said no, were still building it. Back to you. Phil, thank you so much Congressional Budget Office set to release its score for the Senate Health care bill possibly as soon as today. The two Big Questions are the bills impact on the number of uninsured and on premium costs particularly for older americans. Remember under the house version 23 million more people would be uninsured a decade from now compared to current law. Premiums would also go up for those over the age of 65 President Trump said he wants the senate bill to have more heart and this morning he put blame on democrats tweeting that they are obstructionists and saying all they do is delay and complain but actually several republicans want to delay the senate vote on the bill to give themselves more time to reach a deal five senators are opposed to this bill and nbc puts at least nine on the fence. That includes rob portman that was on cnbc earlier this morning. My concern lies more in this area of low income americans ensuring they can have access to health care. Particularly with the Opioid Crisis we have so much of that is paid for by medicaid. Senate Majority Leader Mitch Mcconnell wants a decision before law makers leave at the end of the week but the senator is saying the real deadline isnt until august 1st. Never mind whats in the content. Thanks joining us is the president of the committee for responsible federal budget good to have you here. Thank you for having me. So your goal is to approve the status of the federal budget, reduce the deficit, balance budges et cetera do you take a philosophical position on health care and Health Insurance because the way you solve the issue with the deficit and spending really depends on your philosophical viewpoint about how health care should be enacted at all in this country. Thats a Perfect Question because a agree with you that your take on the obamacare and replacement, so much reflects varying points of view on the role of government theres those that want Health Insurance to be subsidized more for more people and provide more coverage theres those on the right, those on the left, those on the right that prefer to have more freedom, lower taxes and less coverage as a result of that if your primary goal is to reduce the deficit and federal spending, eliminate government from as much as possible. Your question gets at the core because theres a whole other perspective which is Health Care Cost growth is the biggest driver of our National Debt at record levels right now. Putting pressure into the budget so much of this discussion run away from the big trade offs for that reason the policies have in many ways reflected the politics of this discussion. We havent talked about critical things like medicare reform which is is the Biggest Program of course. Not part of this at all. The tax breaks that subsidize insurance and drive up costs and does bring down cost to consumers and takes that pressure off of the budget as we go hurdling toward unprecedented levels of debt. So i interrupted you earlier when you were just about to say from my perspective. Well, yeah, my perspective is that you cant ignore the overall effects on the budget and this is kind of, so much of our debate is these days this is everybody pretending we can have everything for free and theres so many things that we want to be willing to cover but if its going to cover a variety of Different Things for people we have to pay for that in taxes. It doesnt make Health Care Cheaper just to promise people something. Somebody has to pay for that in taxes. One of the problems that i would say that exists in this current bill is they do scale back a lot of the Health Care Benefits but the savings go for massive tax cuts and if we want to do savings in health care the republican budget relied on savings of 2 trillion from repealing obamacare. Now theyre going to get about 2 billion thats a massive scaling back of your ambitions and how are they going to fill in that gap when it comes to their overall budget. Slightly removed. Has the committee taken a stance on ultra long bond structures and whether or not youd be in favor of that . We havent taken a stance on that but we have looked into that and basically just like with so many other areas of policy theres no free lunch so if we expand and start issuing say 100 year vehicles that might make sense but it also has effect on liquidity of the markets and my guess is those in treasury that study this and are always working to maximize our borrowing structure if there were massive savings to be found we would have already done it. So as usual i dont tend to believe its the answers that sound easy really provide as much as were going to need. We have to make policy choices on taxes, entighttlements and nobody wants to talk about policy choices. Explain your concerns about liquidity when it comes to a 50 or 100 year bond. If your turning over your treasuries less often so there maybe higher demand. This something i assume the experts weighed the cost and benefits of length and cost and demand and figured out what the right structure is. We have a treasury secretary that used to trade them. Thats true. Thanks maya. Thank you so much. Getting an update on that avisgoogle story. More from san francisco. Good morning. Hey, good morning guys and yes we can confirm that alphabets selfdriving car unit waymo entered a partnership to manage its fleet of aon the mou autonomous vehicles. It will support the selfdriving cars in phoenix arizona. Remember there are many m partnerships in this space they recently announced its adding hundreds of Chrysler Pacifica minivans. Also interesting to note they own zip car. Over many of them in large urban centers and Avis Budget Group the stock jumping nearly 13 guys. Well keep our eye on that. When we return facebook might be getting into producing scripting tv Quality Content in the latest season of our digital binge series we spoke to frank rich about the competitiveness in the content space. How do you do Creative Work in entertainment in general at a time when people have so many options and can watch anything they want at any given moment. All of these things we used to talk about is all gone so this whole culture is being reshaped. Its possible there will be a third way thats not hbo or netflix model that we have emerge we dont know what over the longterm snapchat means for things we do. Whether its facebook or apple. So its all up in the air its a very scary time in some ways but its also very exciting time you can catch the new season of binge on cnbc. Com binge also apple tv youtube and hulu. Well be right back. A babys skin is never more delicate. What do hospitals use to wash and protect it . Johnsons® the number 1 choices in hospitals. Theres nothing more important than your health. So if youre on medicare or will be soon, you may want more than parts a and b heres why. Medicare only covers about 80 of your part b medical expenses. The rest is up to you. 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Youll be able to choose any doctor or hospital that accepts medicare patients. Whether youre on medicare now or turning 65 soon, its a good time to get your ducks in a row. Duck quack call to request your free decision guide now. Because the time to think about tomorrow is today. The 40 million share stake represents one and a quarter per cent of overall shares its having a very positive impact on the stock today in a letter to his own holders, that is the investors in his fund he lays out a case that he believes is a positive one for nestle and one the company has yet to focus on implementing. I am told by people familiar with the situation that the two, that lobe and management at nestle had a series of meetings over the last few weeks if not perhaps months since he has built this position and that it is more pointed perhaps than has been the negotiations or conversations that have taken place in another targeted company being honeywell. None of this is to say that it is hostile in anyway recently hes been more friendly in his approach and thats to at least a certain extent part of the case here. He is asking or discussing the view that nestle could unrealize potential or has unrealized potential for margin improvement and should be focused there. And could add more debit to the company and therefore optimize its capital truck stur reshaping of Portfolio Products and perhaps most importantly but certainly among other things hes talking about sell that 23 stake in loreal which is quite significant. Well see where this goes at this point lobe himself im told has a generally positive view on the macro story. Theres the things were just talking about that he is focused on for them. He has a generally macro view of europe so given the highly liquid position at an enormous company he thinks europe is moving in the right direction michelle you would imagine theres not that much down side for him here and also as i pointed out previously it does always help in the brand building some of the activists like to do. Its a big company. I wonder how much we achieve. We have seen this often times. Bill ackman previously as well it does sometimes move the needle. Yeah. Meanwhile getting headlines on the Supreme Court and white house travel ban lets get to hampton pierce is on in washington. The u. S. Supreme court has agreed to hear the appeals of rulings blocking the travel ban on six muslim majority nations now we dont have a date as to when that hearing will take place. They also say barring enforcement we grant the governments applications to stay those injunctions to the extent that the injunctions prevent enforcement with respect to foreign nationals that lack any bone identified relationship with a person or by sbientity o the United States. We leave those with respect to respontaneous ten respondents and those situated in the opinion the Supreme Court will take up the trump challenges to enforcement of the travel ban. Well keep digging for a little more information and obviously update and get back to you shortly. Hampton, thank you for very you much for that. The Supreme Court will hear arguments for the ban in october and is lifting the injunction, most of the injunction until then he joins us to talk about what is already considered to be a big week or final week for the court before they go into their recess look at headlines that there were partial decents on the move what else can you tell snus we dont have any reaction from the Trump White House but well get that as soon as they offer it to us but the Supreme Court is granting trump emergency request allowing parts of the refugee ban to go into effect so that would be seen here as at least a partial victory. This white house has been ham strung during the course of the year by rulings from lower courts that looked at the president s rhetoric on the campaign trail about a muslim ban saying that rhetoric can be used as part of the analysis of whether this ban is constitutional or not. Well see whether the Supreme Court in the months to come whenever they do make the final ruling looks at it the same way. This is a white house thats been frustrated by the court well see what their official reaction is and they may see this as a partial victory that theyll get their day in court. Theyre certainly going to declare some kind of victory at this point the question is how quickly do we see enforcement going goodbyes into place now that the Supreme Court has said until they actually hear the case they could allow for a limited part to start taking place. Does it happen overnight at airports well see to the extent to which the executive branch is ready to pounce on this and where the court draws the line of cha pieces theyre able to enforce or not well get more detail as we get more aal justice of this ruling but at some point the federal government is going to be able to take some steps whether they can take those today or not i dont know the answer to that. Always important to point out as well that the initial travel ban was instituted with the idea of allowing a time frame for Homeland Security to revamp or revisit our visa policies as regards certain countries and come up with a new plan. Of course six months now passed. No word at all on that plan which apparently they were still going to be going ahead with in terms of formulating but may not have been able to as a result of the ban not being able to take place. Never been made clear. The point youre making the original idea was it was a temporary ban until they came up with a new set of structures to think about it. Thats right. Finally thank you. If we do get a Health Care Vote this week theres speculation about whether or not Justice Kennedy would announce a retirement this week could be consequential week for the white house. You dont need 60 votes no anymore which means you can get a much more conservative person on the bench now you only need 51. Absolutely. When we come back, the chairman and ceo of Royal Caribbean is with us on set. Companstk y ocis up 36 this year squawk on the street will be right back at crowne plaza we know Business Travel isnt just business. Theres this. a bit of this. Why not . Your hotel should make it easy to do all the things you do. Which is what we do. Crowne plaza. Were all business, mostly. The power of a low volatility investing approach. The power of smart beta. Power your clients portfolio with powershares. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. British conservatives signed a deal to back teresa mays government this after she lost her majority in the house of commons. Ilene foster confirming the agreement. We have reached an agreement with the conservative party on support for government in parliament this agreement will operate to deliver a stable government in the United Kingdoms National interest at this vital time. Japanese air bag maker takata filed for bankruptcy protection overwhelmed by lawsuits and recall costs related to its air bag inflators new video this morning of the near fatal fall at six flags Amusement Park in upstate new york that occurred over the weekend abystander capturing a 14yearold girl dangling more than 20 feet above ground but a crowd bathered below her and she fell into their arms she is in stable condition at a local hospital well keep you posted and see how she does thats the news update ill send it back to you. Thank you very much Royal Caribbean cruises the stock has been surging up more than 36 this year susan good to have you. Good to be here richard lets get Quick Reaction to the Supreme Court willing to hear parts of the travel ban do you think that impacts Visitor Sentiment . I just heard it as i was walking into the booth but no i think for our business its been booming anyhow and so we dont expect that to have much of an im of course in the travel business you dont like any travel ban. One of our tag line is sailing beyond boarders. Has been for a long time so for us a travel ban is not a good thing but we havent seen any impact. Talk of a travel ban and then terrorism events in Northern Europe where a lot of your itineraries originate. Im wondering if you think youve seen impact so far . Fortunately as terrible as it is people understand these things are isolated events and cruise ships have really Good Opportunity to be a little more protected from some of them so no we have not felt any significant you havent seen bookings go down on the contrary were experiencing the best year as long as i can remember. Bookings volumes is up booking pricing sis up. People are seeing the value our cruises have and theyre flocking to us. When i see the changes or lack of them under the Trump Administration when it comes to cuba policy it seemed the new policy would almost help your company because its going to be tougher to get on a plane and go but still easy to get on a cruise and go to cuba. Certainty is better than none cuba has been good for us and change versus no negative effect i would much rather understand exactly what theyre doing and that would help us but as interesting as cuba is in the longterm its really a trivial part of our business today. You fought so hard for it all the Tourist Companies fought so hard for it why . We do see cuba as being a wonderful destination for americans. A lot of people will want to go there and over time lit grow but its still small and likely to remain small for awhile. So much attention on the bells and whistles where are we on ship innovation. Can much more be done in terms of bringing activities and things to the upper deck or below . We just had tremendous things that brings on that question and my experience is we just started. As much as change has been as spectacular as the new ships are and as exciting are the innovations we have so much more to come. We have symphony of the seas coming out which will be the Worlds Largest crew ship and will blow everybody away and then we have celebrity edge coming and we have already started to reveal those features and its that that everybody is talking about. Its amazing to see the innovation our people have. Susan pointed out many times the actual very low penetration rate of americans going on cruises. There seems to be a lot of Growth Potential whats the hurdle to getting people to get on a cruise for the first time is it this idea of why want to be stuck on a boat with all of these other people its funny because that this has been the question for 30 years. Its growing and continued to fwroe and done well in the states whats really growing is our foreign cruisers europeans are taking cruises at a third of the rate of u. S. People and thats growing even more kbquickly. In china were growing quickly. But reduction in china in the last quarter and this year so maybe china isnt the great hope for cruising as some had expected. No i think china is terrific for us its been growing at 30, 40, 50 so for one year we have a little bit of a slow down carnival surprised the market and disappointed the market by forecasting lower revenue yields for the final three months of this year. What does that say for the broader cruising sector . Were looking at a terrific year and terrific Fourth Quarter. We had the best Fourth Quarter in our history and were looking to do better this year so were not seeing any signs of a problem. Whats really happened is were doing so much of a better job with our branding and our performance, our crew, our satisfaction rates have never been is high from our employees and thats driven tremendous ratings from our guests and toward our double double program. How much of a tail wind after the first half we had this year . Terrific. You know, now were very proud of our ability to cut back on our Energy Consumption we worked hard at that but the price of oil helps us. Its a boom to the bottom line its been more than offset by Foreign Exchange losses. You have to take the good and bad. We say our job is to perform come what the gives us. Were not in the oil business or bankers were going to hedge our bets and do it strategically so we hedge whether the price of oil seems high or low and thats served us well. Does that mean you hedged so fully you cant capitalize on the decline in price are you paying 50 instead of where its gone to so our hedge is 50 rolling forward. And the result is we get benefits Going Forward if it goes down we protect ourselves and we bring it to an area that we can afford to work with we have to get all of these guys on a cruise. We need to get you to take our cruise everybody that does it loves it and thats why were doing so well. Thank you nice to see you. Meet you at the port of call. Thank you, susan. When we come back take a quick look at stocks as we go to break. Dow has come off significantly squawk on the street continues in a moment. Id like to welcome my first guest of the week. Thank you for taking the time. Thank you, rick good to be with you. All right you know, this weekend the big news of course is a couple of italian banks getting bailed out. Not going through the ecb procedures for liquidation so brings me to the point, order ri Liquidation Authority right now is under review. House Financial Services committee, the chairman representative wants to get rid of it and just throw it in normal bankruptcy. Do you think thats a good idea bill rick, i think that would be a very, very serious mistake the i didnt like almost anything about dodd frank but the improvements that dodd frank made in big banks supervision and the handling of potential failures of wig banbig banks in the liquidation and recovery plans when youre sick those are the biggest improvements in Bank Regulation in the last 50 years in my opinion. And i really wanted those authorities when i was at the fdic and im so glad they have them now. Now when i consider some of the issues, i know that elizabeth warren, senator warren feels very strongly about. This one of the issues is the living wills do you think these institutions have done a good job to put us in a place where we can really decide if this is the right way to see it certainly seems to me that the whole issue of designating a bank systemically important has some flaws to it, does it not . Well, i think there are some flaws, perhaps, in regarding institutions as systemically important and labelling them that publicly. But i do think that the living will process has been a huge improvement in Bank Supervision. And, you know, you just when i was at the fdic, i handled the failure of continental illinois. That was the seventh largest bank at the time and we knew absolutely nothing about it. And so it was almost impossible to hand will couldnt nentinent orderly way. We had to devise our own ways on the run. And there just no way to conduct Bank Supervision and its no way to handle failures you really to know whats going on ive been urging processes like the living will ever since continental illinois i realize what we didnt have and what we needed im really happy they got. That i hope they dont give it up. So funny you mentioned that, the chicago america an tile exchange in the early 80s had a cd contract. En that contract died because of continental banks issues i was trading that contract at the time a very good point. There is always two sides over to issue bill, thank you for your thoughts david faber, back to you okay. Thank you very much, mr. Santelli lets send it over to jon fort who gives us a great look at what is coming up on squawk alley. Today we have big news in the cloud. Oracle specifically. Youre going to hear it first on cnbc also, a bombshell on the vc world. Story of harassment, a resignation, well have the report and information who bkero that thats coming up on squawk alley. It starts a chain reaction. Thats heard throughout the connected business world. At t Network Security helps protect business, from the largest Financial Markets to the smallest transactions, by sensing cyberattacks in near real time and automatically deploying countermeasures. Keeping the world of business connected and protected. Thats the power of and. I put everything into my business. And i had all these points from my chase ink card. So i bought ingredients, utensils, even made custom donut cutters. Wow all with points. Thats how i created the ripple the doughnut in a doughnut in a doughnut. Suddenly its everywhere. I mean, it really took off. What will you create with your points . Learn more about the ink business preferred card. What b by crying ate with your points . Minutes old. A babys skin is never more delicate. What do hospitals use to wash and protect it . Johnsons® the number 1 choices in hospitals. Pharma bro, meg terrell is outside the courthouse and joins us with all the excitement that is yet to come meg . Hey, david. Jury selection is just starting here in the trial of martin stkreli. The judge telling jurors its okay in a case to have Media Attention around them to have opinions about the case as long as the opinions dont mean they cant decide fairly about the charges here in the case when she asked the prospective jurors to raise their hand if they were worried they couldnt be fair, nine out of 40 raised their hand said they worry they might not be tibl be fair. This is sort of a unique case for that reason. Lets recap. Martin skreli arrived here this morning. Hes facing eight charges of securities fraud, conspiracy to commit wire fraud. He has pleaded not guilty to all of those charges hes, of course, stemmed from the prior hedge funds and prior Biotechnology Company that he founded called renter fin. The government is alleging he used that Biotech Company as a piggy bank to pay back investors. They allege he froauded in those funds. He really came to fame in the summer of 2015 when he raised the price of an antipair sidic drug by 1,000 that depressed biotech stocks as Hillary Clinton started tweeting specifically about martin skhkreli well be here all day to bring you any more news. Back to you. Yeah, a trial with ate Love Interest behind it, thank you, meg. When we come back, more on the Supreme Courts decision to review trumps travel ban. Li rorfr t wteou straight ahead [vo] when it comes to investing, looking from a fresh perspective can make all the difference. It can provide what we call an unlock a realization that often reveals a better path forward. At wells fargo, its our expertise in finding this kind of insight that has lead us to become one of the largest investment and Wealth Management firms in the country. Discover how we can help find your unlock. Welcome back to squawk on the street. Stocks have significantly paired the earlier gains after a stronger start securities and telecom the best performing sectors financials also in the green bank stocks in particular higher after least in part the Italian Government reaching a deal that was involving two regional banks. The banks feeling the mini ripple he vekts. The big banks have been underperformers so far this year that does it for this hour of squawk on the street. Lets send it back downtown for start of squawk alley. Thank you very much good monday morning. 8 00 a. M. At facebook headquarters in california 11 00 a. M. On wall street. Squawk alley is live