It all, the dax, the ftse and frances cac, all up this morning as you can see britain not, perhaps, with the uk, at least for now the uk. Maybe not that much longer. The 10year, there it is, 1. 57. Only a few weeks ago we were below 1. 4. I know. We have moved up. Oil at 44. Didnt think we would take it at 45. Inventory at 10 30 today. Lets get to the rest of our road map this morning and it start with more fireworks from the Republican National convention as we kick off day three in cleveland and carl, of course, as we said is there live. Shares of Morgan Stanley up in the premarket on earnings. We will dig into the numbers. Also ill be speaking to Ceo James Gorman later in the show this morning. And roger aisles future at fox is in question. It appears he will be leaving the network he founded after the Sexual Harassment claims. Were going to give you the latest details and what does it mean for 21st century fox, the company. But first, lets get to carl in cleveland. Carl . Hey, good morning, david. We have made our way to the floor of the republican convention. Im standing somewhere between where the georgia and the massachusetts delegations sit. Not bad seats but nowhere near as good as what new york and california. Its quiet but you mentioned the fireworks from last night. The headline clearly, donald trump is the official republican nominee no longer presumptive. The night was supposed to be centered around the economy, but it very quickly turned into an indictment of Hillary Clinton. For instance, governor Chris Christie using a very effective call and response speech arguing her culpability he argued as secretary of state. Take a listen. Tonight, as a former federal prosecutor, i welcome the opportunity to hold Hillary Rodham clinton accountable for her character. [ inaudible ]. Chants of lock her up on the floor. Very effective again speech for a line that got a applause all night long. The other mission is to develop a personality around donald trump and his family. That was done with another effective speech by his son donald trump jr. In some ways more political than some expected. Take a listen to that. Were still americans, were still one country, and were going to get it all back. Were going to get it back better than ever before. I know well get it back because i know my father. I know that when people tell him it cant be done, that guarantees that he gets it done. So tonight, guys, on night three, all of this is going to fill up, obviously, once again with the very big line of speakers, harold hamm, the Oil Executive is going to speak, Governor Scott walker, senator ted cruz, former speaker gingrich and then governor mike pence. Of course the Vice President ial nominee. As we get ready for Donald Trumps appearance and his acceptance speech tomorrow night. So day three, obviously day one set aside, this is going to be a big night for republicans, guys . All right. Carl, well be watching and carl with us the entire show or most of it reporting from there. Lot of business. Yeah. Anything resonate with you in terms of the markets and the election and this convention . Of course next week the democrats . I think, carl, we had howard hamm on and, you know, howard hamm talking about a trump rally which i thought was interesting. I get a sense, carl, Business People, this is a republican party. Hes like the First Business person ive heard from, other than from the trump family. There is kind of a dissew dense between what i thought i would hear a triumph for American Business with trump and instead just a triumph of for trump. Clearly last night the theme of the night was make america work again and we did get some discussion of, for instance, stagnant wages, paul ryan talked about that, middle income inequality, middleclass income inequality but to a large degree, the one thing people in this room can agree on is they do not want Hillary Clinton to be president. So i think theres a Natural Inclination to leverage that commonalty in a day where people say the party is not unified, theyre trying to do that and thats one big step toward that end. Well see tonight if we get any more Energy Policy discussion, of course, from harold hamm as you said, credited a lot of the recent stock market rally with the idea he said that the market is getting comfortable with donald trump as president. Yeah. All right. Carl, well, were going to move on to Morgan Stanley which is also rising and perhaps will help the financials this morning, speaking of the stock market. Its up in the premarket, this after ms posted Second Quarter operating profit of 75 cents a share, ahead of street estimates at 59 cents. The results helped by lower expenses and higher revenue, particularly fixed income, currency, commodities, trading. Later on squawk on the street we will have a live and exclusive interview with chairman and ceo there he is james gorman. Could be a breakout quarter. I will be going to the headquarters to talk to him. Two quarters that were different from the previous quarters. Microsoft and Morgan Stanley. Both of them bouncebacks and i think its one of the great things the late andy grove talked about the 90day period and what can happen in 90 days. Take a look at what gorman and na dell did and this is a reasonable period. Fixed income has proved to be a good area for this quarter for the Financial Institutions that reported earnings and weve heard from all of the big guys at least. Theyve cut 25 of their staff earlier this year at Morgan Stanley. People may forget, they had a significant layoff there. Part of, of course, cutting expenses. Theyre still focused on cutting another 1 billion by 2017. I know. I didnt think it was to me it says they were fatter than i thought. In expenses. Whats most interesting, david, ive been on these devgss, work on the fixed income desk and looks like theres way too many people and then a big chunk of business that comes in and it wasnt like they had to turn it away. They didnt have enough people. They were overstaffed. I think this is remarkable. I want to know and maybe you can get this from james when you speak with him, they always had they were ahead of the government. They recognized the Justice Department is powerful. So they quickly got out of a lot of businesses that were controversial. Is the era where youre spending so much money in compliance coming to an end . Thats a great question. Theyre dead weight. Worked at goldman, compliance, dead weight. Everybody has increased their compliance. Thats not going away. How many the expenses for litigation and things of that nature and having to deal with particular settlements, that those lawyers are expensive. I dont think people realize. It hasnt just been fromming cutting how much mail youre sending out, significantly from litigation expense and the like. But, you know, jim, Wealth Management is a part of this company and they had a pretty good quarter, referring to ubs report this morning, pretax margin according to them above their estimates, 22. 1 estimate likely due to lower than expected expenses. So there they seem to have done fairly well. Again they have transformed the last few years. They are different than some of their what we still think of and as their competitors. Theres no longer plain vanilla. Morgan stanley decided to make a big bet on wealthy individuals, when they doubled down, smith barney, and initially, i wasnt sure about it but then that was like the kind of what the Justice Department didnt go after. They were fine with that. And then gorman slips last quarter. Makes it back this quarter. Stock down significantly. Nice dividend, buyback. So it does seem to me that this is the last of the financials i was concerned about and they were good. When wells fargo is your weakest player isnt that something. Speaking of Wealth Management, on the call saying they havent seen the pickup in retail engagement but the continues to thrive stability in an uncertain backdrop. 3. 8 billion in revenues. Cant wait to hear your interview. I think gormans is an articulate man about the industry. Brexit continues to be a question mark, not just for Financial Institutions like Morgan Stanley but for every company. Yes. Trying to understand and figure out what it is theyre going to do with a lot of the employees they have over there and being uncertain as to whats going to happen because you dont know. You dont know what the treaty is going to be that eventually is negotiated between the uk and the eu and what thats going to mean for your business whether a Morgan Stanley or hewlettpackard or utx or go on and on. I think that one of the things this is a huge win for paris. You just have to put people there. Because i dont think the eu is going to want to do business with companies that are headquartered in london. Its like you dont like us, we dont like you. These are parochial institutions in the end and revenge oriented no lets move on to the story that is occupied a lot of front pages today. Microsoft . No. We will talk about microsoft, dont worry. We will get to it. Roger ailes, a man you and i know, having worked for him as well, the very same time, but, of course, it was what he did after that became so significant in terms of launching the Fox News Network which has become such an incredible Profit Center and important part of the engine at 21st century fox and a key part of their offering to the cable providers, not just from the revenues it creates on its own but allows others to do i think youre making it a business story. Im trying to think if zucker cnn are they a winner i remember that. I did a piece on him years ago. Really . Yeah. A lot of revenue up for grabs if they miss their its interesting what were talking about is many reported i did late yesterday mr. Ailes will depart as the chairman of fox news. Unclear who will replace him. You have to see it as the imprint of lockland murdoch the companys chairman and ceo james player dock, the brothers and sons of Rupert Murdoch the founder. You have to see it as them really putting their imprint on the company. They have for the most part been hands off when it comes to fox news. It is a very important asset and what the future will be like after mr. Ailes expected departure whether within a few weeks or longer its happening. Do you take other parts of the ailes portion of the empire if youre a cable empire if ailes isnt there to pressure you. Right. Thats the issuissue. July 17th, when susan, when you see a major executive have his own counsel youre outside the tent. Susan was one of my professors. Hard left wing. Kind of funny. Great irony in the story. I know. It is. By the way shes talking to everybody. Ferocious left. Never seen Something Like that giving interviews discussing things. It is does appear they are in the midst of negotiating an exit package. Investigations continue into the claims made but does appear his exit will take place prior to the lease of the findings of the paul weiss investigation. Very odd. The paul weiss investigation they were brought in for brady and the bullying incident. Theyre considered to be unable to be bought. Finally back to the stock. Because thats what we like to talk about. I talked to a number of my sources who own fox, who are well aware of it, none seem concerned about the potential departure of the man who has single handedly created it. Thats stupid. You think so . Yeah. They just dont seem hes 76 years old as it is. Not as though we expected him to live on as the ceo and chairman for the next 10, 15 years. When i worked for him and i was in there at the meeting, this is a man who decided what america watched. So you decide that he leaves, and that he is such a power when it comes to the carriage, the karnlgs, to be able to say youre taking fox business. You want fox news take fox wise fx. Taking fx. The idea that they blindly think that this man can leave this is the most personally run empire in the News Business. This is not a News Business that can slot a new guy in. There is no other ailes. Name me another guy there. I can name you some names. Im saying an executive. Look, you blindly decide that this doesnt matter, then youre underestimating this man and what hes accomplished. Thats all im saying. Foxs stock for its part has not been hurt at all which has bubbled up over the last few days. Not hurt at all. No. I get that. Its a big empire. I think when i sit here and think about espn whether they made or downgraded espn today and they have any growth at all and therefore offsets entirely star wars then i say how can i not think about this more Important News on 21st century fox saying theyre suge charter saying we want the time warp warner cable rates not what charter wants to charge us. Put the others in the bottle. I know. Fios say roger hes not there. Skinny bundles. All right. Coming up we will talk microsoft. It is also looking to open sharply higher on the companys latest results. Hear what Satya Nadella had to say. Morgan stanley Ceo James Gorman live and exclusive not just one but both, jim. Really . Yes. Doubleheader. Doubleheader. Another look at futures. Were back right after this. Youve wished upon it all year, and now its finally here. The mercedesbenz summer event is back, with incredible offers on the mercedesbenz youve always longed for. But hurry, these shooting stars fly by fast. Lease the gle350 for 579 a month at your local mercedesbenz dealer. Mercedesbenz. The best or nothing. The first stock index musicwas createdughout over 100 years ago as a benchmark for average. Yet many people still build portfolios with strategies that just track the benchmarks. But investing isnt about achieving average. Its about achieving goals. And invesco believes doing that today requires the art and expertise of highconviction investing. Translation . Its time to bench the benchmarks. Ailes. Microsoft looking up as much as 5 this morning, this adding perhaps to a dows nineday winning streak and record closing high for a seventh consecutive session on the broader markets. The Company Microsoft posted better than expected Quarterly Results helped by growth in its Cloud Computing business. Satya nadella spoke about the cloud on last nights Conference Call. Overall the microsoft cloud is winning significant consumer support with more than 12 billion in commercial cloud annualized revenue run rate we are on track to achieve our goal of 20 billion in fiscal year 18. Also nearly 60 of the fortune 500 companies have at least three of our cloud offerings. Cloud cloud cloud cloud cloud. Thats actually the wrong way to look at it and thats the way everyone is playing it. Cloud was good up 100 . But a bond that was dropped in the middle of the Conference Call by amy hood who i thought was subdude in previous quarters not subdude this time. Pc growth she said its back. She said the cfo of microsoft said pc growth is back. Better than expected pc growth. A read that the economy is better. Bing better, xbox, i dont know how people found time to play xbox. Funny when amy hood says it was better than expected. Why is that important . Confirms what seagate said when they said things were better and intel reports tonight. Maybe an interesting read through. Back over the cloud people felt to make that number you have to buy salesforce. Com. Linkedin barely mentioned in the Conference Call but not consolidated yet, a great quarter. Congratulations quarter. What should the takeaway be in terms of the growth of cloud. We see it at ibm, know the influence of amazon web services. Here at microsoft we see it. Many others. We continually talk about it, but is everybody a winner because its growing so fast . Yes. And i think that amazon is being challenged. You want microsoft is becoming a challenger to amazon, serious challenger and a lot of internet of things. These guys talked about industrial companies, ge, boeing, going on the cloud. Theres a huge amount of Business Done by kroshgs the regular renewal business. They have a gigantic amount of regular business that comes to them simply because they have recurring revenues, munster amount. It was a very, very good amount. Incredible what you can do in 90 days. The previous quarter if you go through the arc of the Conference Call, the questions were like how did you come back so fast. It was very interesting. I did notice the tax rate, gap and nongap was 7 and 15 . They actually spent some time on the tax rate explaining at the top. I felt okay about it. You did. I did. Another thing thats interesting, two interesting read through, one that economy is better. Couldnt get that kind of numbers in surface and pc unless it was, japan is better by the way, europe be better. And this is a company that is very much different from the balmer microsoft. And thats just important. This guy did not take long to make this into a different company. He really hasnt. He deemphasized windows, said forget about mobile phone, get out of im not interested. That was a writeoff day one. And hes focussed on the things were talking about here and with apparent success at least thus far. Im sorry that quote from amy our pc market was a little better than we thought and follows up with developed markets it was better. I dont want t