A gain of 115 points expected if we were to open here s p is indicated up by 8 points. The nasdaq up by 31 points overnight in asia, youll see that the market theres also ended higher with the nikkei up a third of a percentage point. The hang seng up 0. 8 . The shanghai up 0. 59 . And the kospi up 0. 84 in europe this morning, you will see similar moves. Gains across the board there the dax is up by 0. 55 so is the cac. Ftse up by 0. 8 . If you check out wti, crude oil, 50. 27 wti for july broke a fourmonth losing streak. Had its best month since april 2016 look at the dollar index, the dollar index saw its worst month since 2016 dollar is stronger against the euro and yen trading at 1. 1813 and the dollar yen at 110. 34 fifth negative month in a row. Lets get you through some big stories. The s p 500 will start excluding companies that have multiple classes of shares. The move bars snap from the index. The Company Offering new investors a class of common stock with no Voting Rights. This is a big deal everyone will get kicked out . That are already members heres the important part. If youre already a member of the s p 500, you will not be affected that includes alphabet and burke slir hurricane matth Berkshire Hathaway this is more of a move to try to tell new companies were not doing this anymore so, if youre going to pursue an ipo, this may change the dynamics of Silicon Valley you waare left out of indexe. Theres all the money in indexes. If youre not in an endex, prin, youre playing on another level. Hbo says hackers stolen upcoming programming according to Entertainment Weekly the theft includes a script for an unaired ep today episode of game of thrones. Ew says the hackers have posted episodes of ballers. We get a trio of economic reports. June personal income and spending is out at 8 30 eastern. Followed by the july ism Manufacturing Index and june construction spending, both out at 10 00 a. M as for earnings, look for results from pfizer, phillips 66, sprint, a lot of people focusing on sprint after talks with charter, tmobile, under armour and xerox thats before the bell after the close, we will hear from apple thifrnlg thifrnlg can we make a pact here . Its august 1st, lets slow down a bit. Lets enjoy every day of august. I would like that lets not look back and say its labor day how do you do that . I dont know. I dont think its possible. Im just going to take a deep breath and hold it august 1 st august is a great month. Summer is great. I dont want to have to go through another winter my choices are not great for not doing that can you just good luck with that easy. August are you meditating . I havent can i use that as an august. That could be your mantra. We will go to kayla you know, were not breathless, kayla. Our top political story, anthony scare moochie smoochg scaramucci is out. The name can be worked a bunch of different ways. When it was all said and done, i will tell you it made sense to me, given watching all the general kelly commentary about how strict the chain of command was going to be, it seemed like scaramucci could survive, but looking back at the unbelievability intervieunbeliee interview, it was inevitable that it would happen we talked about general kelly being this new person, a new force within the white house where the buck would stop going forward. People talk about the New York Post cover, the survivor title is outdated by two people. The start date was moved up to july 26th, because there was a worry within the west wing that people who are not fans of scaramuccis would try to sabotage his hiring. This is the third west wing departure in less than three weeks. The statement regarding scaramuccis resignation echoed a desire for a clean slate, but this time for general john kelly, the new chief of staff. Press secretary Sarah Huckabee sanders said the new yorker article also played a role in this i think the president felt the comments were inappropriate. Scaramucci has been silent. Sanders says he does not have a role in the administration at this time. Skybridge declining to comment on whether he will rejoin the company which he founded and is selling in order to comply with ethics rules to join the administration the buyer of his business, hna, has told reuters the shuffle does not affect the sale itself. The administration trying to regroup after a healthcare loss and ahead of a tax reform push not to mention a continued stream of stories about the russian investigation. Last night the Washington Post reporting that it was the president himself who dictated don jr. s original statement claiming that the meeting with a russian attorney was to discuss adoption policy. Thats not the case. There is the parlor game about who could potentially take this job. When scaramucci was hired before, part of it was the president s frustration that the press office took so long to fill that role of Communications Director, which had gone untilled for about two months time so sean spicer i thought was still around until august 15th so they he is he was at the west wing yesterday. Hes in the press office thats why i thought scaramucci wasnt starting until the 15th so they started him right away and spicer stays any way yes but Sarah Sanders was asked on whether scaramucci had taken the oath office. He was in office, and serving as Communications Director, but not all the books were checked i have questions around the sale of hna. Hna says they will continue trying to complete this deal do you think that changes at all. Weve seen news around hna and the ability for them to get money, bank of america and others not wanting to do business with them what are the Tax Implications for scaramucci will it affect how a transaction like that will be taxed . Unemployment insurance . On the hna part specifically, i had a conversation last week with a person familiar with the transaction who noted the sky bridge purchase is a small one for hna. They are paying cash for it, they dont need to borrow. The banks they we s were havin about this, even though they were paying out of their own pockets. There was a piece in the f. T. Where executives from skybridge were talking about the fact that if Anthony Scaramucci was at the white house, he wouldnt be touching investors money, that was to put at ease the transaction going through. In terms of the tax treatment, normally i dont know about this specific case, because its going to come down to the nuance here, whether he was granted that favorable tax treatment in the first place, a lot of these jobs require a minimum number of days on the job, call it a year f youre selling stock or assets thats why he wanted to keep the xm bank. He may still. A lot more to talk about. Kayla, thank you very much we will continue this conversation joining sus sarus is sarah faga. A cnbc contributor sar sarah, was there any other choice i dont think so. If you think about general kelly, the way he conducted himself throughout his professional life, you think about the way every member of the military conducts him or herself, i didnt see how Anthony Scaramucci could report to general kelly or report around him one of the things thats been fascinating about this particular white house is that the relationship, the longterm relationship to some degree, the loyalty of figures in the white house and the president matter they matter deeply to some degree Anthony Scaramucci had that. Unclear whether kelly does, at least now. I think thats a great point. Donald trump has a lock history of people exiting and reentering his orbit. Roger stone, famous political consultant, exiled for a while but nothing would surprise me relative to the way trump order the his staff. Just because Anthony Scaramucci is gone today. I dont think hell come back to the west wing, but he may be back in a prominent role in government at some point down the road how do you think the west wing will change over the next several weeks, if it does at all . I think yesterdays move, while probably the right one for the staff and kelly, it was an opportunity for the new chief of staff to say im in charge there are new guardrails around how this west wing will operate, and you will operate within those guardrails there was a point that Jarrett Kushner and ivanka trump will report through general kelly, at least through their official capacity whether that happens, how long that lasts, that remains to be seen already buried in a new york sometimes story, a sentence that suggests that these guardrails that general kelly may be putting on may be too constricting for the president what will happen when the president is tweeting and general kelly is waking up and reading it i thinks that an open question general kelly certainly knows that donald trump conducts himself in a certain way, and it works for donald trump at least it has through most of his career to some degree a leopard doesnt change its spots but can he create a structure that at least stops the infighting produces a more productive staff. Everybody marching in one direction, which has been the biggest challenge for President Trump. President trump clearly recognizing this isnt working for him so he made the move. Is this a pivot or have we seen this movie before clearly its a pivot this week the president recognized over the past 10, 12 days, this wasnt working this was unsustainable his administration is being talked about with the likes of nixon and carter he doesnt wanted that he had to pivot. The question is will he remain disciplined and allow general kelly to put together structure that works, and get President Trump out the small things of running the white house. We heard him making this person an assistant to the president , demanding this person be hired in the office. He has much bigger fish to fry certainly. The other question of the morning we lates to what kayla was reporting or rereporting from the Washington Post. These allegations, i guess, that the president was responsible for the original statement that went out from donald jr. Will general kelly be able to prevent that hopefully general kelly needs to prevent those things from happening if this white house is to rally around tax reform and truly turn the corner, not just on the staffing but on the policy making, too. Which is as important. The president should not be writing statements, certainly they should be approving them, but oftentimes they dont need to approve them. That should be left for the staff. The president should be worried about policy regarding north korea, tax reform through congress, giving his speeches and what hes saying relative to the important policy matters of the day. Writing a statement from his son, maybe being dishonest about it what that does for the special counsel, gives him another line of inquiry, all of that is why this west wing and president is in the situation hes in today. Sara fagen, thank you when we return, an earnings beat by an oil giant driving the stock higher that stops our list of stocks to watch. Later apple reports after the closing bell well tell you why the iphone Sales Numbers could mean more to analysts than the top line or bottom line numbers. At fidelity, trades are now just 4. 95. 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. You are loved who knew that phones would starentertaining us,ng . Getting us back on track and finding us dates. Phones really have changed. So why hasnt the way we pay for them . Introducing Xfinity Mobile. You only pay for data and can easily switch between pay per gig and unlimited. No one else lets you do that. See how much you can save when you choose by the gig or unlimited. Call or go to xfinitymobile. Com. Xfinity mobile. Its a new kind of network, designed to save you money. Welcome back to squawk box. We have some stocks to watch bp topping expectations despite a drop in Second Quarter profits. The company says oil and gas output increased by 10 as it started production in a large oil field in the north sea sonys operating profit jumped three fold in the Fourth Quarter on strong sales of image sensors. That business recovering from earthquake damage is suffered a year ago sony shares up 35 this year, but they are lower today honda reporting a better than expected First Quarter profit as strong sales in asia offset weakness in north america. The automaker is raising its fullyear forecast that stock is up 0. 6 . 5 the u. S. Equity computer chor features. Dow looks to open up about 112 points higher. Nasdaq set eight new records in the month of july. It was responsible for 59 of the dows advances for the going all the way back to may. The greatest our greatest manufacturer is doing so well. The market cap is almost a third of facebooks now. I mean, its really coming into its own. Look at that. I know you cant use boeing to look at somebody elses vacation pictures or anything Strong Demand for airplanes how you are going to get to places to take your stupid facebook shots, if you cant fly there. Yeah. If you cant fly there can we get our priorities straight jason pride joining us now and covering the economic angle is Michael Gapen from barclays who is used to being called on first, because hes 68 its like look at that guy im not doing that were all the same height here the chairs are just adjustable he says this is not fair. And were not playing basketball you know what you spoke to me. Your notes, your notes spoke to me are equities too expensive here . Listen to this valuations are a challenge becoming a larger challenge. Evaluations now sit at the top level historically historically these levels hold back returns limiting gains, restricting further appreciation and rising values as a result we expect equity markets to continue climbing quite inspiring, right no. Youre right youre right about all those things, valuations usually are not enough to stop something from happening we actually have done the historical analysis on this, we looked through the data. We found when youre at the line between top and Second Quarter valuations that generally returns are limited. You get 1 to 2 less per year, but they dont go negative you have to get to the upper end of that, the top 10 , you have to get to 23, 24 times earnings before you start seeing a high probability of negative returns coming to the market on valuation basis. Markets, theyve passed two cycles we got to this level and they basically rode this level for five years in both cycles. We can get here and stay here and the markets can climb with the underpinning of Earnings Growth six months ago if you made this point, people would have benefitted from listening to what youre saying it would have been another 20 tacked on in an already expensive market well see if it continues. Maybe youll stay too long at the party, but this is the right attitude to have for the last couple years the one counter balance, it does make you vulnerable to corrections. The corrections can be bigger when they do come. They may not still last, but they can come and those overpriced equities are vulnerable to that michael, does the is the disconnect between the market and the economy, is it closing or widening . Actually, i dont think theres a tremendous disconnect. So the economy is justifying whats happening i do. I think its more than the u. S. Economy. As we were discussing prior to coming on, the real improvement has been outside the u. S these are multinational corporations weve got growth in europe, that will be on par with the u. S. Improvement has been globally and synchronized, a lot of the global risk back drop that come away all of this in an environment where inflation is going nowhere. Any Central Bank Normalization will be slow its the u. S. And global back drop support these the fed is going up, but from low levels inflation is not a problem, at least in the pleimmediate future you have great employment numbers, the prospect for rising wages, they might not be inflationa inflationary you look at it all, why am i looking so hard to find a flaw the valuation argument is the one that should make you nervous. We agree its a position where a ri riskon portfolio will do weight, overweight equities should do well forward looking returns are pem tered by these v tempered by these. You can take a nuanced position the International Equities and International Space is where were seeing more improvement and driving growth at this point in time. They catch up to the u. S. In terms of Economic Activity the earnings are doing the same way. Weaker dollar will hurt that. Valuations are cheaper. But the weaker dollar could hurt that. Weaker dollar could hurt that, but the dollar is i need to know. I wish i would 68. I do i dont think i would be better at basketball. Hard to buy suits is it cool looking around and thinking look at me. Or do you stand near a wall because you feel like you stick out . Which is the more frequent feeling you have in new york, its better to be this tall, when youre packed on a train, you have more freedom. Do you ever foeel awkward . Yeah, constantly. Yeah im envious i would take it. I want it. Its not going happen for me. Shg doors are 67, so some downside im sorry ill get something for you next time okay. Coming up, earnings alert. Pfizer expected to report in the next 20 minutes. Well bring u osyothe results and reaction from wall street. Squawk returns in a moment hi. Im the one clocking in. When youre clocking out. Sensing your every move and automatically adjusting to help you stay effortlessly comfortable. There. I can even warm these to help you fall asleep faster. Does your bed do that . Oh. I dont actually talk. Though im smart enough to. Im the new sleep number 360 smart bed. Lets meet at a sleep number store. Welcome back you