Macro data, the president at the g7. Europes on pace for a down day. Ten year, 2. 23. Durables are down for first time in four months. And oil still below 49. Our road map begins with quote very, very bad. The president s comments on germany and trade are in the spotlight. Plus amazon is near 1,000 a share. Will that run continue . And the surprise gdp revision, higher for the First Quarter. First up though the germans are bad, very bad, thats the what the president reportedly said in brussels. According to the german publication der spiegel. He voiced displeasure over the trade surplus. See the millions of cars theyre selling to the u. S. , terrible. We will stop this. A lot of discussion about what was lost in translation with the germans. Gary cohn trying to clarify what the president meant on russian sanctions, but not the first time that he has been critical of the trade and german out makers as well. Cohn said he was saying that the automakers are very, very bad. Not germany, the country. The truth is if you look at some of these german automakers, bmw chief among them, they said the largest plant is actually in spartanburg, south carolina, which is one of the biggest exporters of cars in the United States. Its invested billions of dollars in expanded capacity in this plant for years. Mercedes and volkswagen also have plants in the u. S. So President Trump is going to have a fight if he continues on this. Yes. This rhetoric is more familiar to us from the very early beginning of his presidency. Not that we afrnt at are not at the beginning of the presidency. Its been quieter about concern about trade war. Dont you think . Its been a little quieter. But you have the for first time the president attending g7. Its a major spotlight internationally. There are four new leaders at the g7 meetings in sicily, italy. Its President Trump, its the leaders of italy, the uk and france. All their first time meeting. Theyre not there to talk about trade. Theyre there to talk about cooperation on International Issues like Climate Change which could also get testy. And terrorism and security, but clearly this remains a focus for this president. Its a bit of a new generation. Theres some pictures circulating of macron and trudeau Walking Around the gorgeous vistas of sicily. And then theres der spiegel, sara, you pointed out an oped in germany. Its where they are when it comes to our president. This is one of the most scathing Opinion Pieces on trump and its interesting it comes from one of the biggest german papers. Maybe not a surprise but after the comments saying trump must go. Its an editorial of course, but this is his first shot on the world stage. Its very different than the beginning of his trip in saudi arabia and in israel. And at the vatican. I thought i i saw a funny line on twitter that i have been talking about. He was beloved over there in the middle east because hes the antiobama and now theyre skeptical, the europeans about him. Because hes the antiobama. Indeed. The president is gathering with his counterparts at the summit meeting in sicily. We have all the latest. Good morning. Good morning, guys. Yeah, they started the conversations and they have been focused on Foreign Policy and clearly trade will be a big part of the conversation over the next couple of days and its something that some people at this table really disagree about. President trump being criticized by the germans for some of his comments as you were talking about there. But there was a bit of a laying down of the gauntlet by european leaders. Jeanclaude juncker wanted to talk about the unity amongst the leaders. Lets listen to what he had to say. We stand up here as we are always doing for our shared values of freedom, democracy, and rule of law and respect for human rights. We do believe as europeans in open societies and we are always seeking multilateral solutions. We want to build widgets, not walls. That seems to echo a criticism from Angela Merkel in brussels. She talked about isolation and building walls being bad news. Not what makes the societies in places like europe successful. Its more about staying open. Obviously thats something that means a lot to european leaders here. And another issue that matters to them of course is russia. And they have repeatedly over the last year or so since the last g7 said they wanted to keep the sanctions of the European Community and the community has on russia. However, gary cohn talked to reporters saying that the president didnt have a position on those russian sanctions. Willem marks, thank you for the updates from gorgeous sicily at g7. Were approaching the end of another historic week for stocks. Yesterday marked the s ps 19th record close of the year. Already more than last years total of 18 record closes. For more, lets bring in peter ja keymy from Cantor Fitzgerald and a chief international economist. We got a new batch of the data. First quarter in the Rearview Mirror looks better. But what about the Second Quarter . There were some residuals from the First Quarter and that colored both the regional feds and that should result in the gdp growth being substantially higher than in q1. We are pleased to see the upgrade today. That it was half a percentage point higher than we previously thought. It was not a great quarter but the rebound should come in q2. A rebound in q2 still not as good as expected. Cnbc did a tracking update with moodys, it declined to 0. 1 from the previous reading. The economic surprises have been coming in negative. Absolutely. Thats been one of the surprises that the market has done so well, its surprising to see the various measures they all measure the same thing and the Economic Data didnt do so well in q2. But were very optimistic. Thats what the fed has been saying this week that, you know what, just look through this. The minutes said look through this. Just see if things will continue to improve Going Forward. Is that why the market has remained resilient in the face of some weaker Economic Data . I think the market is disconnected from fundamentals. The last time i was with you guys i talked about the ecb and monitoring how aggressive both the boj and the ecb were going to be coming into this year. In fact, between the two of them, theres 1. 2 trillion of Balance Sheet expansion. Lets not forget theyre not just acting on benchmark rates. The boj is buying equities and the ecb buys Investment Grade. In particular ecb buys Something LikeInvestment Grade it affect risk premium globally. If you cant get yield in europe, you migrate down into em. Youre still saying were high on opium to some degree . We need to look at the other global central banks. When do you expect them to turn or do you . Its interesting, there isnt a real reason for them to turn. Except for pmi is running at the six year high. Fair enough. I think what ecb in particular is concerned about is the german election. And the maintenance of stability into the german election. Mr. Draghi wont do anything until around or after the election. I think theyll talk about taper over the summer to test the markets. A lot of people are pinning the rally to better earnings and especially if you look at the growth names Like Technology thats in the lead. The nasdaq is up another 2 this week. Attribution is wonderful and when we talk about the previous comps very easy comps across the board. What do you make of this new range were in about 2400, and yet the ten years the curve is telling us something quite different. I know, as peter just said thats been driven very dramatically by the money printing abroad. But the good news for the market look at nominal gdp growth as sara mentioned real growth will be around 3. 5, 4. If you add 2 inflation to that you should get an Earnings Growth thats rising with gdp significantly. Its probably going to be around 5er o 5 or 6 . So youre optimistic. Carl mentioned the global pmis at multiyear highs. Do you think theyre peaked . I think its looking good. The Market Conditions in both europe and the u. S. And globally are doing quite well. We have some issues in china, the system is starting to work here and there. But generally thinking its steady as it goes in the europe and your area. The chief economist made some comments this morning, peter, that japan and europe obviously performing better than some thought. That our own hiccup does not change our overall trajectory, and if theres a worry spot its china. I think torsten and agree i agree. China is worrisome, but theyre doing everything they can do to control the yuan volatility. China is the biggest risk for this year. Aside from policy error perhaps in europe. Feels like thats the biggest risk for every year. Peter, thank you so much from Cantor Fitzgerald and torsten of Deutsche Bank. When we come back, the road ahead for amazon. The stock within 4 bucks or so of 1,000 a share. Well look at the premarket. Yesterdays was the 19th record close of the year for the s p. Surpassing the 18 we got in all of 2016. Back in a minute. Hey ron theyre finally taking down that schwab billboard. Oh, not so fast, carl. Oh no. Schwab, again . Index investing for that low . Thats three times less than fidelity. And four times less than vanguard. Whats next, no minimums . No minimums. Schwab has lowered the cost of investing again. Introducing the lowest cost index funds in the industry with no minimums. I bet theyre calling about the schwab news. Schwab. A modern approach to wealth management. The power of the nasdaq market. The power of 100 of the worlds top companies. The power of an etf. The power of qqq. The thinking we put in, clients get out. Power your clients portfolio at powershares. Com qqq. Before investing, consider the Funds Investment objectives, risks, charges and expenses. Call 8009830903 for the prospectus containing this information. Read it carefully. Distributed by invesco distributors inc. Watching shares of amazon again close to breaking 1,000 mark. The stock is up over 32 so far this year as it continues to dominate retail. The Cloud Business and the expanding content business. Weighing in on the way forward for amazon and bezos is jeffrey munser. Hi, hello. We love the big round numbers and people like to dispute, well, just for splits maybe going at got there first, but how important is this . Its a trophy. Its going to be a nice feather in the hat for jeff bezos who is behind a lot of the other large Cap Companies. You know, the stock has had a phenomenal performance. 2014 investors really didnt believe that this company would be profitable. I think missed the true punch line of amazon which is the opportunity ahead of it. Which we can talk about here. But its just a nice trophy for him. Yeah. Do you believe theres some risk in whether or not they can grow margins in the back half of the year . No, not in the back half of the year because the comps get really easy. You recall in the beginning of 2016, they spent a ton of money on investing and so essentially it creates some easy comps. I think theyll grow through the comps in the back half of the year. I think the margins longer term is an issue for the company. I think that investors shouldnt be worried about that. And heres the real stat that i want to leave with people today. Is that 8 of what is bought globally is bought online. I think most people would think that number is a lot higher. This gets back to the margin question. But ultimately we think that that number could go to 55 . So when you think about these depressed margins, i think investors should be reminded about just how nascent online is today and its the right thing to invest in the business. Gene, i mean, the stock has been so positive recently. I would love to hear from you you seem to be disputing even the larger risk of margins staying fairly compressed. What is a risk then from your perspective . You know, conceivably for a company thats dominating Online Retail as you say. Has a profit machine in awes, has logistics figured out how to get stuff to us within hours and making great inroads in home entertainment. Yeah. I think obviously somebody buying the stock at 1,000 theyre hoping it goes to 2,000 so i think the opportunity again is the market share in online, thats an increase and it would put amazon at 1 trillion in revenue if they get to that. Thats assuming they maintain their market share. Another piece theyre changing how retailers are approaching it. Theyve gone up to 47 prime cities in the last year alone. And so i think when you put those together i think the opportunity here is still the fundamentally change how consumers think about retail. But david asked specifically about what could stand in the way, gene, and is aws one thing, the fact that its been so competitive that maybe youll see lower prices across cloud, google wants in a very aggressive way. Is that one of the key factors that could get in the way . Yep. David, i apologize, i missed that. But the risk is aws. Obviously theres a lot of hope from investors that that could be a huge segment. Its 9 of revenue to date. The specific reason is azure from microsoft is gaining share, and google is making a big push within that. So thats an area that amazon had an early lead on but is not maintaining the same market share they had in retail. Thats the risk to the story. Well, yeah, specifically to the profit component overall. I mean, aws given the much higher margins than the rest of the business has a even though the revenue number may not be as large, gene, the contribution is far larger. Thats not an insignificant risk that increased competition from microsoft and google. It is a measurable risk, when you put it in the context of the other forces we talk about its a risk. Would there be other favorites on the spectrum above amazon . There would. Tesla, a controversial story. People dont understand what this companys Mission Statement is. Their Mission Statement is to accelerate the globes transformation to renewable energy. When you start thinking about that you can see them grabbing market cap from Energy Companies which are some of the largest market Cap Companies and so i would pun intended here buckle up. This is going to be a bumpy but positive ride for tesla in the years to come. How much is contingent are on whether the Capital Markets are accommodating for elon . Well, that is i would say its a third of needs to be they need to be supportive. This vision is so big, that it will take a lot of capital to get there. I think they have structured reasons why others cant get there. Ill give you one quick example, this race for batteries, theres a problem about just the elements of the copper and the nickel to build the batteries and they have procured some of that. If someone wants to build the batteries, they need financing to get there. I think the markets will give him that leverage to build this future. Gene, interesting connection there between your at least thesis on tesla and amazons early days when people saw it as a bookseller and it had really nothing to do with books the ultimate vision. Is there a connection between the two and the future they both hold in terms of the way that investors viewed them earlier on and what they have as their true ambition . Definitely. I mean, thats also a big connection to where apple was ten years ago. In terms of a visionary leader, in terms of a story that is still i think misunderstood by investors. Like you said the amazon story, apple at its time was about the ipod. And in this case, with tesla its about the cars. So i think when you have these visionary leaderships with capital and some angles where the competition really cant maneuver fast enough, think about traditional automotive and their ability to transform their labor force. I mean, some structural challenges that these competitors have. I think its similar to what amazon went through too. There have been some very concrete examples of that in the past week. Jeep, good to see you. Have a good long weekend. Gene munster. Thank you, have a good day. Still to come, Pulitzer Prize winning columnist jim stewart with his perspective on the stock market and where the quote, trump effect fits into the picture. Look at futures, still lower for the dow, down 10. The nasdaq is positive. It would be a seventh day in the row if we do see gains for stocks. Much more squawk on the street straight ahead. t become a guitad just by playing air guitar. The babys room wont build itself. And her paw wont heal on its own. Were all working forward to something. Synchrony financial can help your customers make it happen sooner. So she can plug into her dreams. And theyll have a new addition for their new addition. Whatever youre working forward to, even if its chasing squirrels, Synchrony Financial can help you get there. 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