Talks on china and slacking off another red hot startup about to make its market debut. Its all happening on this thursday, june 20th as Worldwide Exchange begins right now. All right. Good morning, good afternoon, good evening wherever in the world you are. Im Brian Sullivan thank you very much for joining us here on Worldwide Exchange. This, my friends, is the chart of the day bonds getting bought the yield on the tenyear note exactly at 2 , but earlier this morning it actually fell below 2 that is the First Time SincePresident Trump was elected that we have seen a sub2 yield. This should drive down borrowing costs. If youre looking for a home, it could make mortgages more affordable well have much more on this coming up. First we have to get to our breaking news. U. S. Officials confirming to nbc that a u. S. Drone has been shot done over the strait of hormuz iran claiming responsibility the Iranian Revolutionary guard says the drone was shot down after it entered iranian airspa airspace the u. S. Says the drone was flying in International Airspace the u. S. Is calling this an unprovoked attack. Oil is popping on the news we are seeing a spike. Its come down a bit, were up about 2. 5 that drone attack comes less than a week since two tackers were attacked in oman. Iran for its part has denied any responsibility joining us now is the chief oil analyst at energy aspects. We have to stop meeting like this youre as good as anybody out there to analyze what happens when we have these events, the tankers, and now this. Are you surprised maybe that oil is not reacting more strongly . Well, weve seen this over the course of the last few weeks. Weve had a series of attacks, particularly the tanker one in which in some ways is far more direct when it comes to oil market imbalances. I still think, you know, the focus of the market is on demand and recession. The g20 meeting coming up, whether trump and xi will meet thats very much the forefront thats why youre not getting the reaction imagine a few years ago, a headline like this, wed be up 5, 10. If demand fears were to recede, the market will care more about these geopolitical events. Clearly theres been an es ka laying the u. S. Inventories are near record highs are we seeing enough oil to counter these types of headlines . Not at all. The u. S. Has built over april and may, if you look at the pricing signals from the coast, it shows draws are happening because of maintenance. And in china weve been drawing oil, and there is no floating storage around globally weve drawn down stocks its just that the visible inventories are high, and now with demand fears people are expecting we wont get the draws. Thats whats driving prices if this is iran behind it, as the United States has said, iran denied responsibility, the tanker attacks, now this, it seems to be heating up rather than cooling off more headlines you think, will they ultimately drive prices higher, despite the concern about a Global Economic slowdown i do think so look, neither side wants war clearly things are escalating. Chances of miscalculation now are rising we have seen a shift within iran its no longer the focusing on talks, but much more the irgc are in the driving seat now. Clearly there will be escalation i think the g20 will be important if we get some stability and receding of the fear that we will not get into a global recession, i think prices can go up very quickly thank you very much for joining us seeyou soon. Will today be the day that we hit new alltime highs for stocks dow futures are up 215 right now. All this as jay powell offered some new dovish signals to investors saying the central bank is ready to act to keep u. S. Growth on target. Since the beginning of the year weve judged that our current policy stance was broadly ppropriate in light of increased uncertificateties and muted inflation pressures we emphasize that the committee will monitor the implications of information for the Economic Outlook and will act as appropriate to sustain the expansion. It is not just equities that are being bought were also seeing strong buying on bonds we are at exactly 2 on the tenyear yield but a couple hours ago we saw the yield drop to as low as 1. 97 . That is the First Time Since trump was elected that the yield was below 2 a surprise to nearly everybody if you watched this network a year, year and a half ago, most people were calling for yields of 3 , 3. 5 by this time this could be a candidate for surprise of the year gold continuing its terrific year up another 2. 5 to 1,383 thats golds highest level in more than five years lets figure out what has been going on and what may happen in what has been a topsyturvy yeear joining us is danielle eddimartn booth. What is going on we are having a Recession Party in the markets when you look at past fed easing cycles, financial conditions are very loose going in. So theres a misperception about, oh, my gosh, theyll cut because markets are so tight opposite they tend to be loose when rate cutting cycles begin then the news that the reason theyre cutting rates sets in with investors, theyre like, oh, i better sell the news eventually they do as you may know, theres twoways that parties can end. Everybody has a polite goodbye, shakes hands, goes on their way, wakes up the next morning and goes for the run or the night ends really badly with billy having to be poured into the back of the taxicab and having a bad morning then he comes on sit here theres no billy. I made that up how does this Recession Party end . Theres a lot of people operating under the assumption that the fed will be able to walk this tight line, thread the needle, whatever cliche you want to throw at it, and engineer a soft landing if youre seeing stocks push to new alltime highs in the face of we had Mortgage Applications out yesterday morning, they were down. Mortgage applications shouldnt be down when but they did double the week before mostly refinancing there has to be homes to buy as well. Theres not a housing supply issue in many cities i cant quit counting the for sale signs especially in new jersey and other thats a tax issue. The inventory of homes is going up dont worry about this look at this. The dow futures are up 215 its possible today and you might hear this a few times we are that close to alltime highs or maybe even hit them well watch jim and the gang at 9 00 a. M. And wait until the market pops open if the market and fed are concerned about a recession, explain that the market is much more preoccupied with liquidity what does that mean they see there is a 100 probability, not a lot of gray area there, 100 probability of a rate cut this year theres a 24 probability of a 50 basis point rate cut in july, on july 31st were weeks away from that if we get there that quickly, if we get to the zero bound that quickly, because the fed tends to lower Interest Rates i dont care what the dot plot said yesterday dont like saying dot plot, it sounds confusing. Powell doesnt like it either he talked the dot plot down hymn himself. He said it is not something up for debate dot plot, everybody on the fed is asked where they see rates to go. They put the number in a thing so you can look at all these dots its just their expectation of where they see Interest Rates a year out, two years out. When we look at that dp, the fed lite brite, it shows a hike. In 2021 the only thing the dot plot showed yesterday which is why the market extraordinarily priced in alltime highs today, is the elimination of the word patient. You had one person saying there wouldnt be a rate cut this year so you didnt even have a unanimous view that there was going to be a rate cut in 2019 and all that its saying its going to do is reverse the december policy error. In 2021 well get back on the rate hike path really seriously, people. I dont know what theyre thinking how big of a mistake was it last year, the stock market tanked thats a fair word it was the worst december since 1928 it was all those things Stanley Fischer was on the wires over the weekend, he gave an interview and said december may or may not have been the fed moving to spite the white house. Showing the white house if youre going to strong arm us and bully us publicly on your twitter feed, well hike rates fed is not supposed to make policy in spite of anybody theyre supposed to be independent, apolitical and make policy based on the economy. The fed has changed, at least according to your book you strike me as a guns and roses fan. All we need is just a little patience we have news on the trade front, maybe good news tensions appear to be cooling off between america and china. Robert lighthizer telling congress he will be speaking with a top chinese official in the next day and a half. All this ahead of President Trumps facetoface meeting with xi jinping later this month. At the same time ceos from some Big American Companies are heading to china this week where they will meet with top trade officials there. Those companies are names like dow, upz, f. P. S. , honeywell the Mexican Senate voted overwhelmingly to ratify the u. S. Mca, yesterday, the new nafta. Justin trudeau isset to meet with trump and congressional leaders today to lobby for quick ratification our congress has not even yet set a date to vote on the deal when we come back, much more on the attack on a u. S. Military drone near iran. The news sending oil spiking a live report coming up. And could the Permian Oil Boom turn into a boost if the wells run dry . Some in opec think so. Well have comments from the ceo of a major u. S. Oil company on that ahead. And its a term youll hear a lot of today, direct listing what the heck does it mean get readfoy r a thursday picker upper as we lay that out in laymans terms higher expectations. The light beer youve been waiting for has arrived. Corona premier. Futures up 220 points right now s p and nasdaq green the yield on the benchmark tenyear note fell below 2 for the First Time Since november of 2016 get ready for Mortgage Rates to fall again messaging service slack set to begin public trading today on the New York Stock Exchange. It is the latest company to choose a socalled direct listing instead of a traditional ipo. The company will trade under the Ticker Symbol work the Reference Price is 26 a share. That is not an opening price or an offering price. Instead that number will ultimately be determined by the designated market maker at the nyse you will hear that term direct listing a lot on this network today. How does that work whats a Reference Price leslie picker explains a directingi differs in three major ways one no underwriters. In an ipo underwriters will market shares, set a price based on demand. Direct listings involve Financial Advisers, usually from the same wall street firms these bankers provide advice about the process and help with the discovery of the opening price. Financial advisers cost less than underwriters. Two, no cash instead of raising money, the primary purpose of a direct listing is to create a Public Market for a stock by allowing early invest and employees to sell and newer investors to buy. Three, no road show. Traditional ipos require executives to spend two weeks on the road visiting with investors to pitch the deal and drum up demand direct listings require one day, just a few hours for executives to webcast the pitch for any investor who wants to tune in. Well have much more live with leslie picker coming up later on in the show. Still on deck, the latest on the attack that brought down a u. S. Military drone in the middle east. Oil is popping on the news plus the ceo of one of americas biggest oil and Gas Companies comments saying opec is wrong that the Permian Oil Boom will run into a bust sooner than expected dow tufures up 223 see you in two minutes everyones favorite. Theres just one thing hurting us more than Student LoansCredit Card Debt. Sure, dad, call us irresponsible. Were only dealing with insane living costs and housing costs. Its just not right. But with a personal loan from sofi, you can consolidate your Credit Card Debt into one monthly payment. And get your future right. Get your money right with sofi. The first survivor of ais out there. Sease and the Alzheimers Association is going to make it happen. But we wont get there without you. Visit alz. Org to join the fight. Applebees new loaded chicken fajitas. Now only 10. 99. Welcome back in case you are just joining us, breaking news. Oil is surging 2. 5 as a u. S. Official confirms to nbc news that iran shot down a u. S. Military drone over the strait of hormuz, thats the narrow stretch of the water connecting the persian gulf to the arabian sea. About 20 to 30 of the worlds daily oil flow flows through it. The official said a surfacetoair missile hit the drone. The u. S. Is calling this an unprovoked attack. Well have much more as the story develops there is a school of thought among some in opec that the u. S. Shale oil boom will turn into a bust sooner than later because fracking sucks such a huge amount of oil out of the ground that volumes are about to fall many in opec are counting on it. We spoke to the ceo of devon energy, and he says that thought is wrong this entire revolution has taken place with horizontal drilling, hydraulic fracturing, it has a great deal of sustainability to it i mentioned that we have at least a 15year inventory of higher return projects thats without assuming any additional technological improvements in the future which will i ef tababinevitably happe. This is great for the economy, great for our national security. Were producing a commodity that is fundamentally important to the lifestyle of all americans were proud of what were doing. Were proud of the revolution we generated here to help the fundamental economy of the United States. You can see that full interview on our website check it out on deck, a major decontamination effort is under way in nevada. Well find out why ahead. And the number of the day is 12. 5 triiolln. Stay tuned to find out why t 20. T 20. And also be able to use apps to book superpersonalized trips on shiny new phones from the future. Plus, i need freedom to move my workloads wherever, whenever but manage it all from right here. And thats the cloud i want. Simple, right . Expect more from your cloud. Ibm cloud. Here are your Morning Headlines from nbc news. A major decontamination effort is under way in nevada after a Train Derailment shut down a 60 mile stretch of a major interstate the train was carrying Hazardous Materials when more than 20 cars overturned spilling diesel fuel. No injuries were reported. A dangerous storm is moving across the southern United States more than 100,000 people across arkansas lost power overnight. In texas people reported hail as large as four inches along with heavy rain and powerful wind gusts. There have been no reports of injuries after a possible tornado tore the roof off this Church Sanctuary in greenville, techs. A shocking turn of events in the david ortiz shooting dominican authorities are saying it was a case of mistaken identity claiming the hit was for another guy sitting at ortizs table. In the days after the shooting, 11 people were arrested including the alleged gunman authorities are still looking for the person who funded atth hit. More Worldwide Exchange right after this clients voice remember that degree you got in taxation . danny of course you dont because you didnt your job isnt doing hard work. Its making them do hard work. And getting paid for it. vo snap and sort your expenses to save over 4,600 at tax time. Quickbooks. Backing you. The first survivor of ais out there. Sease and the Alzheimers Association is going to make it happen. But we wont get there without you. Visit alz. Org to join the fight. Iran downing a drone near the persian gulf the u. S. Calling it an unprovoked attack. This just a week after iran sabotaged two oil tankers. Oil is surging. Running out of patience. Why one word by the fed may have added billions to the market listen up slackers another red hot startup about to go public. But how its doing it may have wall street bankers seeing red its thursday, june 20th youre watching Worldwide Exchange right here on cnbc welcome back in. Good thursday morning. Thank you very much for being with us on cnbc. Im Brian Sullivan stock futures are higher, much higher in fact, something really interesting is happening right now. This, my friends, is why you get up so early to watch us on Worldwide Exchange. The s p 500 is 0. 94 from a new record high. Right now s p 500 futures are up 0. 93 . That is how close we are from a record high if the market opened up now the yield on the tenyear note fell below 2 earlier this mo morning. Rear at 2. 00 right now. Buyers have come into stocks and bonds. 12. 5 trillion, thats your number of the day. Well show you what it means and why it may be impacting our bond market and maybe impacting Mortgage Rates as well we have to get to that big breaking news out of the middle east oil prices up 2. 5 after an american drone was shot down over the strait of hormuz. U. S. Calling it an unprovoked