I am brian sullivan. And we come into the month on a sixmonth win streak for the dow. But thats not how this month is starting. Heres a look at how your money looks right now. The dow down a lot, not a lot 47 points, given what is going on with oil, tyler, it is no surprise that chevron and exxon are two worst performers in the dow. Much more coming up. Oil a big story today, brian, as you point out. Welcome everybody. Im tyler mathisen. Heres what else is happening this hour in your financial world. Crude oil falling below 40 a barrel for the First Time Since april. Oversupply and economic worries continue to pressure crude. Its down more than 20 from junes 2016 highs. And the gaming slump continues in macau. The chinese territory reported its 26th consecutive month of declining gambling revenue in july. The slide has impacted u. S. Companies that operate over in macau, like las vegas sans and wynn resorts. And googles next goal, searching for cures for disease. Googles parent alphabet teaming up with glaxo, they have formed a new 70 Million Company which focuses on bioelectronics seeks to cure diseases by electrical impulses in the body. We will get our exclusive interview with jamie dimon moments from now. But first, to the falling price of crude oil dropping below 40 a barrel for the First Time Since april. Jackie deangelis live at the nymex for us. Good afternoon, tyler. Whats special about this move and rare is the fact it happened so early within the season. Of course we see that summer driving season come on, you expect demand to increase. Weve got the refiners making more product. But what happened this year is we have a glut, not only in crude inventories but also in that gasoline. And i will say demand has been very strong but just not Strong Enough to work through the product that we have. Thats what took us up to about 50. And now were back down to 40. Remember what we saw last year. Look at the chart. Up to 60 in june, then we came under 40 in late august. Then we went all the way back down to 26 in february. Now, were not necessarily saying that will be the case again, but again, the timeline here seems to be a little bit accelerated. And thats because of the inventory glut that people are concerned about. Another thing people have been warning for some time is the fact that when prices go a little higher, producers get ahead of themselves. They get excited about pumping again. Rig counts go up. And that in and of itself could take prices down, which could be part of the problem here. Now, there is some good news for consumers. Gas prices have come down sharply. And, again, very early in the season. 2. 13 according to aaa. Some saying we could see 2 gas as the average by labor day. And one trader telling me he thinks gas prices could go to 1. 50 by around christmas time. So a lot of significant moves here. That second half rebalance doesnt seem like its happening on the timeline many were expecting. Back to you. Jackie, thank you very much. Lets get right away to our big newsmaker of the day, cnbcs wilfred frost live now with j. P. Morgan chairman and ceo jamie dimon. Wilfred. Guys, how are you . Tyler, thank you very much. And a very good afternoon to all our viewers on the east coast from irvine, california. But a very good morning to my guest, the ceo and chairman of j. P. Morgan, jamie dimon. Great to be with you, jamie. Pleasure to be here. Thank you. Of course on your bustle, your annual bustle, this year its in california and you get to go and see employees, visit brunches at source. Whats that for . Is it a bit of a morale booster . Weve been doing road trips forever. The bus was a new idea, kind of visit operating centers and see different types of customers. Weve done it in the midwest, detroit, florida, texas, where they always say texas what america used to be, and it is the like you said, customers, employees, all types of customers. Theyre entrepreneurs, hightech, small tech, big companies. You also invite your employees on to the bus with you. Yeah. You give them immunity and they can tell you anything that they want. Im interested to see how that goes because id be terrified doing the same thing with my own ceo. Are they a bit scared of you . They totally opened up. We say we give them a beer and immunity and we ask what can we do better. Its an amazing thing. If you ask your employees good for any business out there what can you do better, theyll give you a long list. On the first bus trip we had 1,000 things and we make it fun for them. Were trying to do a better job for our customers, our employees. And just now i just got a couple ideas. Like we dont have mandarin websites yet. Its a little thing, but big thing for people that speak mandarin. A little thing but complicated to translate. Were here in california as well. Youre growing fast in california or chase is growing fast in california. Albeit from a small base. Does it annoy you that youre not number one here . And can you catch wells fargo . Theyre a long ways ahead. The important thing is we bought wamu. I think you had 600 branches, virtually no Small Businesses and no middle market. And now we have 7 million consumer customers in california, 700,000 businesses which is like 400,000 Small Business, a huge private bank, a very good investment bank. And so were doing great in california. We love the state. The states been very, very good to us. And so were going to go and expand. You saw the enthusiasm last night for j. P. Morgan chase, all the things we can do. On the bus i was just with one of the ladies been here for two years, shes immigrant from china. She brought her parents here. Shes among our top personal bankers like in a retail branch. And if you saw her, youd be amazed at what this country still offers to people in terms of opportunity. And that all three of them pretty much started at a teller and now middle market manager, one of our best Branch Managers in the country. Its unbelievable stuff. And so the consumer part of the business growing fast in california. Its growing very fast across the board. We saw that in the recent q2 earnings for j. P. Morgan. And its highlighted as well from some of the other banks. If we look at the gdp number last week, there was a clear lack of investment from businesses. What does that tell you about the fundamental strength of the u. S. Economy right now . Is it late cycle . I think i dont believe that. What we see is a strong consumer, asset prices are up, 13 million more people working, wages are going up, Household Spending is up. A lot of businesses Capital Expenditures is when they see books grow and need to build a new plan. It is a little disappointing, but they have the money, they have the wherewithal, profits are down, huge capability, markets are open, i wouldnt react to shortterm data. Im not sure the gdp data is actually that accurate anymore. What we see is more household formation, more people buying homes, more people with jobs, those things are good and hopefully keep the economy growing, wish it was faster, but around 2 . Oil price falling. It makes no difference to me. We look at we build for the long run. Were in california forever. Were in 100 countries. Were going to be there forever. Wobbles in prices to me are not a reason we would do something different. Obviously have customers in the oil business it effects them and they would like to see a more stable oil price, i wouldnt overreact to shortterm pricing. What about the yield curve . Because as you know all too well its very low. Its very flat. Does that suggest that there are concerns ahead for the u. S. Economy . If peoples expectations suddenly shift to being inflationary, could it move very quickly . I mean, is the bond market somewhat of a bubble at the moment . Look, im not a buyer of tenyear bonds. I would be a little worried about drastic actions in the tenyear bond. The more important thing, and the fed talks about it is are we if we have proper growth in the United States, it will start to normalize interest rates. Think of the short end, 25 basis points doesnt matter that much, but the fact is if we start to normalize, i personally think its a good thing. If that happens, my view you start to see the tenyear go up to a more normal price. We dont look at todays prices in normal price. Its a very low price for a whole bunch of Different Reasons wont get into right now. If we think more broadly about the stock market itself, weve hit record alltime highs, but if you look at almost any timeframe since the financial crisis, ten years, five years, this year, banks have been left behind yet loan growth is good, youre positive on the economy. Is this a once in a lifetime buying opportunity for bank stocks in the United States . Look, the American Banking systems in great shape. Tons of capital. Tons of liquidity. Theyre starting to expand again. And a healthy Financial Market is kind of part of the Spinning Wheel that makes the country grow. Still legal and regulatory pressure on banks, and bank stocks may not do great, but i think it will be good for everyone if it happens, but i dont count on that. What we try to do is build the company, serve the clients. You can see behind me, right now you may not know this, we have 100,000 people screens around the world, philippines, hong kong, london, china, all around the United States who are watching this and i want them to have them proud of them because they do a great job serving their clients every single day. And our clients are happy. Thats what i worry about. Build the company today and the stock price will take care of itself tomorrow. If we think about one of the big themes in q1 and q2 for banks this year, its been cost cutting. And youve done very well in that and did it well in the last set of earnings. Im not so interested to hear about cost cutting plans if you can save an extra billion here or there over the next year or two. What about in five years time . Could j. P. Morgan be operating on 30 less costs . No. So ive always separate waste cutting, getting rid of bad stuff from good expenses like building systems, technology, mobile applications. We dont cost cut just to cost cut. If we can find a good place to open a branch, well open a branch. If we can find a new good application to serve you, a trader, around the world, we build it. Im not interested in saying the cost has to be 56 billion down to 55. We find good market opportunities, were going to spend the money. So we look at it as a full business. Weve always been finding ways, usually technology and automation to reduce costs. Meanwhile you always find ways to invest it too. So to me its an ongoing, it will never stop, i call that capitalism. That is the way of business. Lets talk a little bit about the political situation. Were coming to the end of the obama administration. On economics itself alone, rate his performance out of ten for us . Look, he inherited a terrible thing. So i think the American Government before president bush, president obama, paulson, geithner, bernanke, i think they did a lot to stabilize it. I wish wed been growing a lot faster since then. Its been moderate. What i would worry about more is the next president , whoever it is, focuses on the right things. I think we can go to 4 . And those right things are proper immigration reform, proper Infrastructure Spending. Democrats say spend a lot of money, i kind of agree with that, republicans say it shouldnt be bridges to nowhere and no pork barrel. I agree with that too. So proper Infrastructure Spending on roads, infrastructures, schools, airports would be great for the United States. You know, we need Corporate Tax reform. I would also expand things like the earned income tax credit to help the lower pay. So i think there are a lot of ways, education, that we can make this country boom. And i think thats what we should be focusing on and not just pointing fingers at each other and getting mad all the time. You mentioned immigration reform. Is there an immigration problem in the United States at the moment . There is Chuck Schumer and john mccain had a bill, which i believe passed the senate that dealt with proper security at the border, proper pathway to legalizing undocumented citizen immigrants who by the way most of them have jobs, most are doing fine and its at the back like 13 or 15 years and allowing all these kids from around the world who get advanced degrees here, our best universities in the world, science, technology, and we send them home. Let them stay and let them build companies. A lot of these companies were built by immigrants. Three of my grandparents are born overseas. I was just on a bus with people and they were all born overseas and theyre fabulous americans. We talk about the candidates and, you know, donald trump and Hillary Clinton, theyre miles apart on certain issues. But theres one area that they seem to be uniting on and thats pretty tough rhetoric against the banks including both have mentioned they might bring back glass st glass steagall, does that surprise you . Its kind of innocuous on the past. I assume regulators, politicians do what were doing every day, lend to small corporations, Small Businesses, lend to individuals, move their money safely, build cyber security, and we do it in 150 countries around the world. We bank with countries we Bank California for gods sake, we hem edhelped them in the mid the crisis. Isnt that our job . Were doing it quite well. I think we should focus on that. I know theres nothing we can do about the past other than look behind me and look at what these people do. They serve 7 Million Consumers every day and they do a great job at it. I want to thank you all personally. I wish i could come see every one of you every year. I know i cant, but if i could, i would. You talked about lending, thats your job, to keep lending. Have you ever lent to donald trump or any of his businesses . I cant speak about individuals when it comes to Something Like that. Okay. Fair enough. Lets move on in terms of what should be on the top of the agenda. You talked a little bit about tax reform. Weve also heard both sides of the political debate talk a little bit about antifree trade rhetoric, and this is something thats very close to my heart having seen the same issues come up in the united kingdom. In your opinion would it be a mistake for the next president to restrict free trade . Yes. I think there are legitimate issues around what we call fair trade. Proper protection of the workers, proper protection of the environment, nontrade, nontariffed barriers. They talk about making fair, i understand that. But, you know, china is going to trade with the world whether we like it or not. Either were going to set the terms of that trade or theyre going to set it. So trade and technology have been generally wonderful things for the world. I do understand that every now and then they cause pain and suffering in very specific place. What we need and i think its in the bill by the way is better trade assistance. If people are hurt by Something Like trade, we should have relocation, reeducation, income assistance, all those things which help the people get hurt by it but still get huge broad benefit. With that in mind, do you think the decision that the british people recently took to vote for brexit, was that a step backwards . Its hard to say, if you speak to the british people, you know better than me, some voted for brexit because they wanted cokind of put up a wall. But a lot of them immediately came to the United States and went around the world and said this is so britain can be open season free trade and not constrained. So you can actually argue either point. We just dont know how its going to turn out because there are many parties involved. That to me is the uncertainty around it. We have to wait and see. When you did your prebrexit vote contingency planning, did you ever expect that in the instance of an exit vote as we had that markets would have shrugged it off so easily . I mean, other than some uk centeric assets, weve moved on and hitting new highs. Yeah, because we always knew the effect of brexit wasnt really what the markets might do in the short run. What is the ultimate outcome, and we simply dont know. And were probably not going to know for years. So that uncertainty will have an effect and youre going to read everyday about different people saying, you know, not going to have trade in the eu without immigration or free moving of people around. So, look, we have to be prepared for whatever the outcomes are. Since we dont know, well work on it. I dont think its going to happen tomorrow. Well look at it. Its not up to j. P. Morgan chase. I read every now and then people say j. P. Morgan is threatening were not threatening anything. Whatever the laws of the land are is what we follow. Various scenarios youve looked at longer term, five years in advance, are there any scenarios where you consider the breakdown of the eurozone . You know, unfortunately that could be one of the fat tail outcomes of a brexit. Because when you go to europe, and i was in italy recently, netherlands going to have a vote, italy has a very important referendum, germanys going to have a vote, new leadership in britain, those things cause a lot of uncertainty about what do people want. Netherlands have referendum like brexit. Thats to me is one of those things out there that could possibly happen. It may take more than five years, but it may very well happen. On your investor call the cfo mary ann lake specifically referring to brexit said, were not going to be at a competitive disadvantage, if anything we feel like were in a position of strength. So this uncertainty in europe, is it an opportunity for j. P. Morgan to take market share . I think what shes referring to is that whatever the competitive situation, it will be equal for everyone. That were in a pretty good position. And well have to just adapt to new roles. Its unlikely the new rules will hurt us like many people, is what she may have meant. May cause more money and cause more strain on clients, we want to be there for c