We break the rules. Didnt make them stay in the guest house . Well just joking. He really sounds rich, doesnt he . I dont know how you created this whole sort of you were born with a silver spoon, im sorry, in your mouth. So great to be back from vacation. It is past 6 01. You said that before 6 01. Lets start with the markets on first trading day of august. July was the best month for stocks since january. The s p has now turned in 8 positive months out of the last 9, going back to november. As for the fear level in the markets, volatility actually dropped more than 20 in july, so people got pretty complacent. You can see the vix at this hour trading just about 13. 5. The best performing sectors last month were health care, industrials and materials and yesterday the markets barely budged. Pretty active trading day. Watching at one point, the dow was sitting at a new intraday high in the middle of the day. Traded all the way up to triple digits before closing down by less than a point. You can see those strong gains are back in the futures. Futures up by triple digits, up 108 points. S p up by just over 12. 5 points. The nasdaq up by 22. We have a number of key tests for the markets today. On the economic front, weekly jobless claims coming in. Manufacturing pmi, ism manufacturing, Construction Spending and monthly auto sales coming in throughout the day. Overseas, the bank of england set to announce Interest Rate decisions. The boe is due at 7 00 eastern time and the ecb about 45 minutes later. As for earnings, dozens of companies are set to post Quarterly Results before the bell. We have big names out there including exxonmobil, procter gamb gamble, conocophillips, kellogg and clorox and then aig, linkedin, kraft foods and others. Andrew, this is you thought you may have been coming back at the end of the earnings season, we have a lot of names to go. August 1st. You would think that earnings would be in july. It is the quarter ends in june, right . Why does it take so long . They should be able to if they cant get it done i dont think we should did any of these. If they cant get it done in month after the quarter ends, what are they doing . Are they doing something with the numbers they cant get it done in july . Maybe you want to wait until after the big crush has come through so your earnings get a little more attention. Comcast reported yesterday. They got right you can do it in july, you take your time, get it done, but get it done by the july 31st deadline. Stock was up. Other news out of china. Economic data out of china overnight also getting attention this morning. Chinas factory activity was slightly stronger than expected. A private survey of smaller firms suggesting that manufacturing remains under pressure. Chinese economy has slowed in nine of the past ten quarters at major asian markets. All up. Shanghai composite up almost 2 . Someone sitting right here said that instead of measuring output in china, if you measure the consumption thats the better measure. Came up with minus 4 . Yes. And so any numbers coming out of china are just like fantasy. Who knows. We report on this like it is news, and the chess master. It was the chess master. Was it maybe it was the chess master, someone sitting with us, i dont know. Anyone remember . Bob bavera with the chess master. Thats down 4 , forget about it. Back here in the united states, a little more news on speculating swirling about the new fed chair. A meeting with House Democrats on capitol hill, get this, yesterday. President obama defended Larry Summers saying that critics arent giving the former clinton era treasury secretary a fair shake. The white house says the defense wasnt an endorsement of the fed post and the president wont announce bernankes replacement until the fall. Summers and yellen the most talked about names. On the hill, obama also reportedly mentioned former fed vice chairman don kohn and taking shots at our good friend i dont know if he was taking shots at Arianna Huffington directly but the Huffington Post and really the push against Larry Summers is coming from what he thinks is sort of a really sort of Progressive Left leaning side that has come you think . Telling you what the report says. Yeah, it is obvious. I saw one this morning on the Huffington Post, i dont know who this guy is, it is great. I thought, where do they find these people . And what he does for a living. Let me just go down and see who this guy is. But the title of his piece today is so obnoxious. I dont know you have to know the i have to read this stuff. His name is robert shear. Editor of truth dig. Com. Hes got the beard and the glasses. And hes author of the Great American stickup. And they title this as gag me with Larry Summers. The idea that barack obama would still consider appointing Lawrence Summers mocks the president s claim that hes concerned about the disappearing middle class. It is just just about every single article here, thats all it is about, just blah, blah, blah, blah. And it is so annoying, but your paper the other day with an unequivocal janet yellen, anything you any idea that it would be Larry Summers. I read that. The wrap on summers is he might know bankers. Hes not totally opposed to the entire Banking Sector and doesnt vilify them to the extent he would like to put them all out of business or nationalize them. You dont start at the baseline of being elizabeth warren. Youre right. Youre right. Right. And either you start with her, and then you get as close to the center as chuck schumer. You dont go any further past there. Oh, no. I think you start at go left. Who is left of her . I dont think you got to go off shore to when is funny is yellen isnt. Yellen is probably much more centered. I want to know whether is the president just making it seem like hes considering all the and then he does yellen. He never says anything good about her, he assumes it is going to be her, so he wants to show sticking up for the underdog. Where did donald kohn come from . I read the Administration May be a little frustrated with this push that if they dont name a woman, to introduce gender into the entire thing without considering yellens consideration her own qualifications, i think theyre really ticked off at the entire gender card has been dropped in. It is less. This is me coming back from vacation, it is less what is happ happening in washington and more about what the media speculation that is every day, somehow theyre sitting around every single day. For markets, a little slow news. Ive been interested. Were not waking it up. We know at first it was Larry Summers must be floating his own name. Thats bs. Coming straight from the white house and the president did bring it up and did defend him. You saw who the bane backer is. Gene sperling. Geithner. We know who he hasnt gotten along with. Thats what is a little bit surprising. I dont think he got along with valerie, but i dont know. Well see. But obama rewards hes loyal. I think summers has been summers was in a much more centrist administration and, you know, clinton. Clinton had a good record. I feel bad over the whole debate. I think it minimized and belittelled both yellens and summers qualifications. And twisted them into almost clic cliches. Ridiculous. Caricatures of who they are. Right. I think both of them are incredibly qualified. I think both of them would do a very good job. I think summers has gotten a bum rap. He has people attacking him from all sides. Ben white wrote the committee to save the world from Larry Summers, that cover story of the committee to save the world. And the people in the center and right are saying the idea that one is less keynesian than the other is not larry will be plenty accommodative. Hes been much more publicly outspoken. About qe, not other ways to spend money. Infrastructure, right. Not going to sit there and say, wow, we need hes not an austerity guy. Thats for sure. Well see. Hes just more fun to cover than, you know, i want to when he gets mad, you saw what he did to the wifnklevoss. We loved it too. Thats why i want him to get it, just to follow that three or four years. I never heard yellen say anything other than as we mentioned earlier, the ecb meeting today. I know. I know. Relax. People are yelling. Jeff joins us from the hideous sculpture with the latest. Joe, it is more exciting than youre presenting it as. I have to tell you. Mr. Draghi here really threw a goblet to the market at the last meeting when he embraced this whole idea of Forward Guidance. And talking to the market like mr. Bernanke does. Unfortunately, he didnt tell us how long an extended period actually means as far as keeping rates low here at the ecb. Were hoping to get a bit more finessing on the message. Is it 12 months, 18 months, 24 months, does it depend on Unemployment Rate, does it depend on cpi rate . Thats what were hoping for. Little more guidance on the Forward Guidance. Plus, they also have thrown in this idea, joe, that were going to start seeing how individual members voted. There are 17 members on this governing council. And at the moment, to spare their blasses, theyre not going to release the results of the voting patents for 30 years. Now they say maybe we need to be more transparent with the market and start showing them how individual members voted. Thats whats been suggested. Well come up with the meeting. Well look out for that. As far as rates are concerned here, the key rate is, what,. 5, no one is expecting there to be a change here. We had better manufacturing pmis out of the core european members, about an hour or so ago. Thats possibly given mr. Draghi a little bit of breathing room here. He is moving the market, though. You only have to look at what happened since the last meeting, the dax put on 5 . The german index. The euro is up 1. 7 against the dollar. And then if you go back 12 months and you look at the last big splash that draghi made when he said we will do whatever it ta takes, phenomenal, 35 up side on the ibex, the spanish index. 26 on the german dax. And the euro is up nearly 7. 5 here, joe. So mr. Draghi is able to move the markets as we run into this slower summer here in europe, just remains to be seen whether he feels the need to communicate any more deeply with the market today. All right, well listen. You got you piqued my interest. Well see. Well see if he says anything earth shattering. Are all of the stars still on . Look behind you. How does that yellow and blue. It is ugly. The symbol of the euro is pretty ugly. Yeah, yeah. Joe, let me show you something here. And my german cameraman, im not sure how good our communication skills will be at this point, but he can pan in a little bit to this big euro. I dont know if youll notice, but there are a number of holes in the few of the stars. If you can see here, it is a little bit tarnished and it is a little bit dented and it is a metaphor used on more than one occasion to show that the euros have quite a tough time over the last four or five years. How did that happen . Do you see the holes . Yeah, punched holes in it. Damage and they havent fixed it . Yeah, well, you know, you have those protesters too, i think, who were hanging out in some of the parks in new york and other places. We have those protesters here. Germany sees them quite often outside the European Central bank. As they hang out here and they make their views known about how the crisis has gone, some of them just get a bit carried away put stones through the stars. It is a bit rough actually, personally, but even below the stars there. Looks a little roughed up. Yeah. Free trade. Which is remarkable. Which is remarkable, joe. Whats that . Most people think of germany as a clean, orderly country. Society runs smoothly here. I hate to say it, but the trains run on time, all that kind of stuff. You come here and you actually see how beaten up the euro symbol is, it somewhat sits at odds with that idea that germany is smooth, efficient, and things get fixed quickly. Yeah. I do have that opinion to some extent, but, you know, a lot of times if you construe it as being serious, the wild side is wilder. The demonstrations there and i hear berlin too, the night life and things that go on, those germans, that cool exterior, there is a furnace, you know. Still european, right . Well, let me let you into another secret here. I dont know if you spent any time here in frankfurt, joe, but just a block away from the ecb headquarters is a very notorious red light district that sits i havent been to germany. The huge banks, you know am i giving you a reason to come . No, as a tourist, i mean, i do, im interested in the seemier side. Im not spitzer. Im not going to hang out there, but i would like to maybe, you know, i wouldnt roll the windows down. I would keep my hands inside. Like lion country safari, i dont want to get involved with any wildlife, but i might look. Like you. Like you. It is fascinating because frankfurt, i mean, germany is the way it is. Frankfurt is the business headquarters, berlin is the political headquarters. You go around the country in different regions do different things. Here in frankfurt, it is full of banks. And bankers and strangely, as i say, right next to all the banks and bankers, youve got this red light district. Yeah, yeah, yeah. You need yeah, let off some steam with all that money that theyre i got it. We are planning a trip there, the family. I think actually thats my home land, i found out, late in life. Anyway, jeff, thank you. We appreciate it. He was ready to talk, ready to give us a the lay of land so to speak. Almost a tour. I learned a lot there. Even berlin. Youve been to frankfurt . Ive been to frankfurt, yeah, years go. When vodafone was buying manis. Thats why you were there . Thats why i was there. Reporting on that. Youre kidding. Yeah. I report from here. Think you can do it from here . Back then you go because you tried to stay at the hotels where the bankers would stay and try to figure out what was happening. All right, guys. The futures again this morning are up triple digits. Dow futures up by 100 points and the yield on the tenyear has come back down. Yesterday, 2. 7 . Looks like it is around. 6 now and that is bringing you a little bit of the green arrows back into the market. When we come back, mixed news on the chinese Manufacturing Sector overnight. We will ask if the countrys economy is on the verge of a turn around. First, as we head to break, a look at the best and worst performing s p stocks in the month of july. Welcome back. Take a look. The dow futures up by 105 points. Yesterday, the dow was sitting at a new intraday high, up by triple digits. Then after the fed, things came back down particularly with the yield on the tenyear up around 2. 7 . Today, the tenyear yield around 2. 6 . The dow futures back up by triple digits. Tenyear note, 2. 6 . Other headlines, cigna earning 1. 78 for the Second Quarter. 18 cents better than the street expected. Also raised its outlook citing strong sales growth and favorable trends in medical costs and operating expenses. There was Economic Data out of china overnight. Better than expected. Pretty much expectation was for it to go down. It went the opposite way. Gordon chang, the author of the coming collapse of china and columnist at forbes. Im expecting you to say the numbers are fake and we shouldnt believe them. The hsbc purchasing Managers Index was true. That fell from 48. 2 to 47. 7. But the pmi number the thing that people look at i dont know if theyre supposed to look at it or not, but that went up and was supposed to go down. Everyone expected it to fall from 50. 1 down to 49 point something, going from expansion to contraction. Instead it went up. It is not consistent with what we know about the chinese economy. So, yeah, i think it is fitting. As the economy deteriorates, the gap between what the government tells us and what is really going on, i think is widening. I wasnt hear when this conversation apparently happened. Joe was referring to the past 15 minutes, the idea of what you should be focusing on, what guest was it what we should be doing is looking at consumption as the statistic as opposed to output. Imports are important because it shows domestic demand. It shows what manufacturers are really doing and shows what chinese consumers are doing. Imports, of course, they fell in june. This is really important. I think that it presages a trend. Were starting to see a deterioration in trade numbers. Thats going to show up in manufacturing. Just a couple of days ago, you had the ministry of industry and Information Technology order the closure of, you know, 1400 companies, excess manufacturing production of 1400 enterprises in 19 sectors. This is going to hit manufacturing towards the end of the year when it is supposed to take effect. You have a lot invested in the coming collapse of china as you have a book with that title. What would change things for you . I think what were what would surprise things for you . I think the important thing, you see the Politburo Standing Committee really have structural economic reform. Do things that are really important that no one thinks that they would do. So, for instance, allow deposit rates to go up, allow manufacturers to do all sorts of things they havent in the past. Stop this campaign against foreign companies, allow workers to bargain collectively. All of these things would help consumption. Theyre not doing them. The fact that theyre not doing them tells us that, yes, they will say theyre trying to increase consumption, but really theyre not doing that because they will not go to these reforms. And from a credibility standpoint what would have to happen for you to believe the numbers. I think they would have to be in line with all of the numbers. Essentially what were seeing are data sets, there are some numbers going up, some numbers going down, the more reliable ones, the ones beyond the control of the chinese Central Government are the ones that are really the most worrying. We would like to see all of the numbers going in the same direction and be consistent. Gordon chang, thank you for joining us. Appreci