Extremism. The citys third terror attack in as many months. President sending a message of his own. John harwood is back in washington watching that. Reporter its a message that gives you a glimpse into this president s state of mind and does not appear to be particularly calm this morning. He started tweeting in the 6 00 a. M. Hour saying that contrary to what his aides and lawyers have said as they try to advance his travel ban he put in all caps that its a travel ban and said thats what his strategy ought to be. He criticized his own Justice Department for watering down the initial travel ban. He said the courts are slow and political. And then finally later in the morning he tweeted that the london mayor had made a pathetic excuse for his statement that londoners should not be alarmed which, of course, the mayor said in the context of noting the heightened Police Presence on the street. This agitated president clearly off his balance in the wake of this terrorist attack led Kellyanne Conway who is on the today show today to say all of us in the press should not pay so much attention to the president s tweets. This obsession with covering everything he says on twitter and very little of what he does. Thats his preferred method of communication. Thats not true. Reporter the week is only going to get worse for the president even though hes attempting to lay out his infrastructure plan this week, james comey, the fired fbi director will be testifying on the hill and going to be reiterating from everything that we know his assertion that the president asked him to pull back on the russia investigation. The president is agitate this morning and promises to be more so later in the week. John, thank you for setting up the week from washington. John harwood. Meantime stocks continue to shrug off these geopolitical red flags. Nasdaq hits another record high. Google finally breaks above 1,000 or all if a bet we should say joining the likes of amazon. Com. Joining us to talk markets. Steve, youve been cautious on the markets. I remember last time you were on a few weeks ago you said time to take some profits. In the meantime stocks have made new record highs. Do you still have confidence in that call . I think so. When we take a broader, longer term perspective and looking globally as well in a multiasset space and not just the u. S. When we look at valuations in this range they are something that give us a pause. And i think these valuations given where we are with the fundamentals the economy is showing softness. We call it mediocrity. We think there will be two rate hikes this year. With the fundamentals being good and slightly improving, these valuations getting more and more stretched provides an opportunity for an investor to be disciplined, to be balanced, multiasset and global and rebalance globally and if you do that over extended periods of time you tend to provide to portfolio. What a volatile morning on twitter. Markets used to be more sensitive to tweets and political risks. Can you talk about how investors view these type of statements. They are not directly related to the economy. Everybody is watching that comey testimony on thursday. Sure. Thats one part of the equation whether its the tweets or political developments. The other part of it is whats going on in the economy and thats where we continues to see signs, if we smooth out kind of the monovolatility, if you look at the trend we saw nonmanufacturing this morning, again some of these numbers are missing consensus expectations so you see some of the supplies indices tick down. If you look at them yearoveryear they are almost all showing steady improvement. If you got an economy thats improving, Profit Growth reasserting itself, q1 was a pretty good quarter. A lot of people are focusing on those fundamentals. I hear you say rebalance globally. For an investor that had his or her retirement portfolio up 17. 5 . Pretty good. Where do you put it . Europe. Pacific rim. Precious metal . You have the kwekt markets and the bond market. When in doubt pay more attention to the bond market. If you look at whats been happening in europe over the last couple of quarters the improvement there has been marked relative the u. S. Markets. Right now the year ozone not the eu but the year ozone is growing faster than the United States. Coupled that with more attractive valuations, more accommodating europe smank. So five years down the line thats an opportunity, i would look also emerging asia, japan, also looking at emerging markets not just in equity space but looking in the debt space. Doing a lot of hard work in credit space really running the numbers, being very methodical and i think looking for a more diverse portfolio. This has been an eight plus year strong run in the u. S. Nothing to sneeze at. Use it as an opportunity to do the basics. All good points steve makes. On the other hand, well see whether the ecb remains as accommodating starting on thursday. We had economists come on in the last couple of days and say the bond market is actually forecasting low inflation which historically is good for equities coupled with earnings you talk about. I wonder whether steves argument that valuations is feeling rich is early. Valuation is a very blunt instrument. If youre looking at five or ten years valuation can play an Important Role in terms of trying to time the allocations. Youre looking at a shorter time frame you have to keep it much more in perspective. Valuations relative to what . Were used to a ten year treasury that yields something above the rate of inflation. Inflation is high ones and low twos. Youre not getting paid in the bond market either. Again keep valuations in perspective. They are all relative. If you look at the s p, a yield very similar to ten year. We think its a good time to be invested but dont ignore the equity allocation. Talk about relative valuation, got to talk tech. Its a driver of this market. Best performing sector again today. How are you looking at tech . You value it against the 2000. Thats what the Research Notes are doing. Seems like a very different time with different leadership. We would agree. The only thing that gives us some pause is how big a part of the index it is. Its not that expensive. Trades close to market multiples. So, again, were not so much worried about valuations were worried most people if youre buying the s p 500 you already own a lot of tech. We like the drivers going on within this space. A lot of industries are turning to technology to crank out profitability at the margin. Given that, steve, what in particular in tech represents value. Is it Software Platforms . Is it companies that have a big advantage in advertising . Well, i think right now i dont do a lot of sector work per se but youre looking at valuations. And the way i would interpret that question is the construction of u. S. Earnings and s p 500 earnings being led by technology. When you back out a couple Dozen Companies you really are getting earns there. Then also if i go back to the International Argument if i may youre looking at the international constituent elements of earnings really acdriver as well. I think, again, this is not a short u. S. Call, not a bearish call in the u. S. Just a really great opportunity to look at the composition of earnings, the drivers of earnings married with valuations and when you look over medium period of time, Global Rebalancing we think is in order. That includes tech. Thank you for joining us on this market. When we come back Apple Holding its worldwide developing conference. Well get a live report. President kicks off infrastructure week with an event at the white house. Well bring that to you live when squawk alley continues. F any company. But yes is here. Youre saying the new app will go live monday . Yeah. With help from hpe, we can finally work the way we want to. With the right mix of hybrid it, everything computes. Did you know slow internet can actually hold your business back . Say goodbye to slow downloads, slow backups, slow everything. Comcast business offers blazing fast and reliable internet thats over 6 times faster than slow internet from the phone company. Say hello to internet speeds up to 250 mbps. And add phone and tv for only 34. 90 more a month. Call today. Comcast business. Built for business. Apple is kicking off its Worldwide Developers conference. Josh lipton is covering it all. Reporter when apple ceo tim cook takes the stage here in just about two hours hell be looking to excite more than 5,000 developers who are going to be right behind me here today. Cook wants those programmers creating apps for his products and services not the competition so hes likely today to unveil new versions of i had operating systems including a new version for ios. That mobile operating system is a distant second to android when it comes to market share. But Developers Care about the money they can make. Apple said developers have earned more than 70 billion since the app store launch in 2008 and downloads have grown over 70 administers. Gene munster is looking about the new iphone, signs of new features. Excitement about that new iphone is whats helped drive apple stock up almost 30 this year. There are skeptics. Apple was just downgraded arguing upside for iphone 8 is priced in. In terms of software well look for hardware updates, updates to that laptop lineup as well as a smart speaker. Apple will take on amazon and google. Apple would bring advantages to that fight including a Huge Global Installed base nearly 500 Retail Stores all around the world and of course one Big Marketing budget. Guys, back to you. Absolutely. Josh, thank you for that. For more on this lets bring in executive editor Karen Swisher and an early apple employee. Guys, good morning to you. Were going into this conference, coming out of the code conference last week. I wonder if you feel that apple was not the talk of code the way it has been in years past and whether or not this conference might change that . Well, you know, they were not the talk. We did invite them. The problem they have is timing. A lot of their stuff is being kmunsed the week after code. Were hoping to get them back next year but its always an issue because wwc is a week after code. It was interesting that not a lot of people did mention them on the stage. It wasnt part of the topic. More political. Had some other stuff going on. I think it will be exciting the stuff they are announcing, Software Updates getting ready for the new iphone will be interesting whether they come out with a new assistant, you know, to compete with amazon, alexa and google device. There will be a lot of meat to chew on. Bruce, im of the opinion that this is the most important day of the year for apple investors especially as apple pivots towards focusing on growth in services. Thats a lot of what this conference is going to be about. What is your take particularly on this area of voice and voice assistance where apple is perceived to be behind or i shoult point out nobodys Voice Assistant is making them any per septemb amount of money at this point. What investors need to understand about apples strategy theres an easy way and difficult way to do ai. Others have done the easy way. Thats to amazz personal identifiable information centrally that their computer can crunch on. Apple is doing a much more difficult route which is to not have personally identifiable information. This technology came later. Apple has been snapping up the leading companies in the world on this. So i think youre going to see a real growth curve in series capabilities, but its probably not going to happen today, its going to happen over the next year or so. But it will change things remarkably. Carra, do you think its important for apple to introduce new hardware today or more important for them to make the case versus the likes of google and amazon that have been pushing so hard on this artificial intelligence. A lot of people in the market feel they are late. If they come within a fantastic device thats better than anybody else great thats terrific. Theres the perception siri has been left behind, left behind with these devices both google and amazon are advertising heavily, getting people used to the devices. Might be harder to get into the market. If they come out with an astonishing amazing leap thats the story but in this area both google, amend and facebook are investing heavily in ai. So its a really competitive area. Not something that necessarily apple can come and sweep up the way they have in the past on other things. Well see. Well have to see. I think most people are anticipating a device or some sort of device and because its apple its got to be a device that fits in with their eco system. Well see what they turn out and then they will obviously do updates of all the various operating systems that they are working on and that will be interesting to see how they will iterate the app based interface that theyve had for so many years. Its also a good time just to take stock of apples winning ways. Its been one of the best performers on the dow so far this year. Theres always a bears case and bull case. Most analysts are bullish. Where do you fall down . There was a lot of talk that 250 billion in cash would be good if we get repatriation. Buying back stock and they still are dominating the premium smartphone category ahead of the big 8 launch and then the bears saying its priced in, expectations are too high. You know the argument. Their ai and chasing amazon. Where do you fall down. Apple is clearly the world leader in making beautiful products that people want to buy. Where they have slipped since the death of steve jobs is in making products that are beautiful to use and that are efficient and powerful. Weve seen tim cook wake up to this and Start Talking about turning out a mac prothats useful. They have consistently been stripping important capabilities out of their operating system to make i want appear simpler. Theyve gotten the feedback on the mac prothat pros want, profeatures not cutesy features. Theyve gone to making everything so openly thin you have one port and you walk around with a satchel of hubs and wires and when the whole thing is set up it looks completely ugly not like that beautiful thing they bought in the showroom. Im going to be watching to see whether apple has caught on to this, going back to the twin focus of both beautiful to sell as well as beautiful to use. An excellent point. Finally on the phone, you know, we did have a discussion, john and i myself with some guests about essential, and what it says that someone can come within a couple hundred engineers, create this phone, if the u. S. Is in for our own, if thats what the layer of innovation can come on top of apples bed of innovation if thats true what does it say about apple . I think they are talking about the creator of android so he does have a little leg up on these kinds of things. He does have a reputation and history. Not everybody is a creator of android. Yeah. Of course. It will be interesting to see where phones go if they become these disposable devices or if anybody can just get into it and create one. You know its going to be an interesting time for phones because you wonder and i think several people discuss this if thats the interface the next 20 years and you can think of all kinds of interfaces Going Forward in glasses, in all kinds of ways and well see where it heads. But the phones are probably peak phone right now and then well wonder what the device likes as you move forward whether its in the ear or eye or whatever. Just a few hours until some of these headlines start popping. Guys thanks for helping us set it up. Good to see you as always. Straight ahead were awaiting President Trumps comments from the white house on his 1 trillion investment plan. Well bring that to you live. Squawk alley will be back in a moment. Dow has been in a 10 point range really for about an hour. Well see if that changes. Down day for europe in stocks. But we are kicking off a very busy week on the other side of the atlantic. A number of smashts are closed today for a Public Holiday including germany which hit a record closing high on friday. Keep in mind blackrock put out a very interesting note saying going along european stocks has quickly become a consensus trade but they still see there being more room to run for european equities. The firm expecting a dovish tone at thursdays europes smacentr bank. Morgan stanley calling the bank to go higher by 2019 what it calls political stability. Staying on top of the currencies uk pound up 1. 29 recouping losses in the wake of the london terror attacks and with Parliament Elections just three days away. Lastly heres the stock on our radar. The spanish bank, Banco Popular stocks continue to tumble. Down 16 today. Down almost 50 over the past one week. Ouch. A reminder there are still some problems. Thank you. Lets sends it out to sue herrera. Reporter heres whats happening. Five people have been killed following a work lays shooting this morning in an Industrial Area near orlando, florida. The gunman then killed himself. The orlando sheriff says the gunman was a disgruntsled former employee of an rv accessory company. Theres no indication he had any terror ties. British Prime Minister theresa may discussing the London Attack today after chairing a special cabinet emergency meeting. The police have identified all three of the attackers and when progress in the investigation end well release the names. 11 individuals are being held in police custody. Reporter the Supreme Court agreeing to hear a major case on privacy rights in the digital age. It will determine whether Police Officers need warrants to access past cell phone Location Information kept by the wireless carriers. Thats the news update at this hour. Back downtown to you, sara. One to watch. Straight ahead, were awaiting comments from President