Transcripts For CNBC Worldwide Exchange 20160711

Good morning. Welcome to Worldwide Exchange. Im sara eisen. Im wilfred frost. Sara, im disappointed. We just got back from the uk and you bought where is phil lebeau reporting from . Farnborough. Maybe phil will pick it up. Farnborough. Thats what i get for mocking you on almost every pronunciation. Shes been mocking me before the show went live. Lets check in on the markets this morning. Futures after a fantastic day on friday, the jobs number coming in much better than expected. Markets in line with the Economic Data as opposed to reacting to the rate hikes were basically fat in the premarket. The dow expected to open 12 points higher. The s p just below fair value and the nasdaq expected to open up about 7 points. We gained about 1. 5 all three of the major indices on friday. Last week, we hit a record alltime low. 1. 375 right now. After that big rally on friday from wall street, youre seeing the overseas International Markets respond. Lets show you the early trade over in europe. Green at least for the german dax. Up about half a percent. For france and for the ftse 100 as well. Italy and spain under selling pressure. Italy especially down 1 as theres more noise and more research, i thought a lot of research about the italian banks and whats going to happen. Whether they receive a bailout. Well get to that in a moment. Lets show you the action in the currency market as well. You saw a bit of Dollar Strength on the back of a jobs report. Seeing that Dollar Strength continuing this morning. Nothing sharp but its gaining by a weaker euro, stronger u. S. Dollar. In asia, big move here. Shinzo abe, his Ruling Coalition winning a landslide victory in upper house elections yesterday. Likely making it easier for abe to push through his economic agenda, ie, perhaps more fiscal stimulus, even monetary stimulus. The newspaper saying they will issue construction bonds for the first time in four years to fund that stimulus spending. We did see the nikkei react sharply. Best move since february. What has helped that moof . The japanese yen weakening after that election. That is some relief for the embattled Japanese Monetary maker, shinzo abe and his team, kuroda. Such a big move there. If you look at the fundamental data, its not like abes stimulus is really working. The fact it wont be easier for him to do more. Should markets rally so hard . Im not so hard. We did get data on the money supply front from japan. Broad money is not responding to what theyre doing on the narrow ends. Yes, theres lots of monetary easing. Well have to see whether get more fiscal stimulus going. Its been lagging behind. The policy at this point has been weakening the yen. The developments politically this weekend mean he has a more powerful bow to shoot his arrows. Absolutely. In other news out of asia to tell you about. New data showing the Consumer Price index rose 1. 9 in june from a year earlier. Thats notably under the official target of 3 this yeerg. Still we saw gains 1. 5 for hong kong, shanghai ending the first backtoback gain since april. Up about. 3 . Commodities, lets have a look at the action there. Saudi arabias Energy Minister says the oil market is more balanced and prices stabilizing. The minister was attending a climate meeting in berlin. Prices of oil are 1. 5 . 44. 7 for wti. They were down last week. Im not sure if thats stabilizing. Its falling certainly sharply last week and again today. 44. 7. Gold prices, of course, theyve been gaining in the opposite direction over the last couple of weeks. They are just above flat this morning. 13. 60 the price of gold at the moment. This week is full of Economic Data. Earnings season gets under way as well. Theres no specific Economic Data today. Look for may wholesale trade tomorrow. Followed by june import prices. The june Producer Price index on thursday. Also on thursday, Pay Attention to the bank of englands policy meeting. On friday, we get june retail sales. Cpi and the first look at Consumer Sentiment for july. In earnings, our current reports earnings after the close today. Csx and the report on wednesday, black rock out on thursday. Marking the start of earnings season. Well hear from citi, wells fargo, u. S. Bank corp. And Pnc Financial on friday and theres a meeting on thursday. The back half of the week will be fascinating. Many expecting a rate cut from the uk. After carney pretty much strongly hinted at why wait, this is his opportunity to start the easing. Whats interesting in terms of his rhetoric, the week before when i was in london covering that other meeting frngs he was suggesting that august that the rate cut would come. Well have to see. I think there will be a rate cut this summer. Possibly, people will be surprised if its in august rather than july. Britain dealing with aftereffects of the brex it vote. The Global Aviation Group is in farnborough, they come to announce big orders while other Companies Showcase their latest technology. Phil lebeau is there for us and joins us with the ceo of boeing. Phil . Reporter thank you very much. I am joined by Dennis Muhlenberg the chairman and ceo of boeing. Should explain to people, were not usually on the tarmac but were in front of the poseidon. Explain why were here with David Cameron coming in a few minutes. Were excited by todays news that the uk will be buying nine. Providing new product to the armed forces here and ramping up our supply chain. Reporter no better time than this to talk about the impact of brexit. Is it too early for you to have a true sense of what the impact will be for boeing and for other companies over the next couple of years . It really is too early. We dont see a Significant Impact right now. We have longer term perspective in our business. Weve doubled our presence here in the uk over the last five years. Were going to continue to invest here. We dont really see our plans changing. Reporter in regard to this show, its a little different than past years. The huge orders that weve seen over the last five or six years, were not expecting that to the degree this year. The focus is on the backlog. What do you say to investors who are concerned that the backlog is so great that the execution may suffer . We feel very positive about our backlog. We have 5700 commercial airplanes in our backlog today. We expect to build as steady orders flow, not as great as previous years, stronger in narrow bodies than wide bodies. This is about execution and successfully delivering on that backlog. Reporter that means the 737. Youve laid out an aggressive production schedule up to 57 per month in a couple of years from now. Do you look out and see a day where we could see 60, 65 . Where is the limit on that monthly production for the 737 . Right now were focused on ramping the 57 a month. Were after the 42 a month. Over a step wise period over the next three years, well ramp up to 57 a month. We see that as sustainable. Were disciplined how we do the ramp ups. While we do that, well introduce the new 737 max. The elon orthopedic. I know its not an order, its a memorandum of understanding that could eventually lead to an order for 80 aircraft word 25 billion. A huge order for you guys. Last week the house of representatives passes two amendments as part of a bill that would block that sale. How confident are you that ultimately you get this done . Its a significant opportunity for us. Its important that we continue to follow the government process step by step as we have done. Its important that as we go through the licensing process that everybody is treated equitably in this process. Were still hopeful that this gets done. Well follow the u. S. Governments lead. This is an important part of being a Global Business in the long run. Youre saying if we cant do this, suppliers shouldnt be allowed as well. Is your feeling, youve got to open this up, you cant pick and choose which deals go through. This has to be equal treatment for everybody involved. If we cant get licensed to sell the airplane airplanes, nobody should. We think this is an opportunity opportunity and we want to follow that government process. A year into the job for you. Whats the Biggest Surprise in the last year since taking over . I tell you what, one thing ive noticed is things like the xm Bank Reauthorization of. The fact that it was last year supported and approved by the senate and house, yet a year later were still waiting for a full board quorum so that the bank can fully function. When you look around a show like this, its clearly a globally competitive environment. So things like xm bank that help us compete on april global stage, that needs to be reauthorized with a full quorum for the board. Weve heard that for a while. Is that hurting orders . Can you look at this and say its hurting our business. Were not getting orders we think otherwise we would get. It is. Weve lost three major satellite deals because of an xm bank thats fully functioning. Hesitancy in certain others. We need to get the xm bank fully functioning again. Chairman and ceo of boeing joining us from the tarmac as you wait for uk Prime Minister David Cameron here at the farnborough air show. Well see you in a little bit. Phil lebeau reporting live from the boeing ceo. In the meantime, other stocks to watch today. Shares of nintendo on a tear thanks to pokemon go. It features augmented reality allowing players to catch creatures called pokemon using their smartphones. People all over new york city have been doing it. I have not played it yet. Thats why you stayed in the city this weekend. Look at the reaction for nintendo stock. Pokemon go doing so well, its about to surpass twitter in daily active users on Android Devices alone. Seeking to hire an Investment Bank to explore Strategic Options after pressure from the Hedge Fund Elliott management. Tomorrow is amazons prime day and walmart isnt sitting idle. They will offer free shipping, no minimum purchase on online orders for five days to battle against amazons big shopping event. More stocks to watch. Kinder morgan sell to Utility Southern Company for 1. 5 billion. Deutsche bosses considering lowering the approval threshold for the merger with London Stock Exchange group. A little bit of a move in the share price for lse, up onethird of 1 . Welker health plans and senn teen corp. Made competing offers for the aetna assets and looking to shed insurance plans to win approval for merger with humana. Summer travel getting a relief at the gas puchl. Prices dropping . 07. A gallon averages 2. 29. The lowest prices can be found in charleston, south carolina, an average of 1. 91 a gallon. When we come back, it has been a decade since elon musk unveiled the socalled master plan to make tesla into a powerhouse. Now hes hinting theres a part 2 and it is coming this week amid whats been somewhat of a difficult time for elon musk and tesla. Well talk about that speculation next. Today kicks off another earnings season. Brings us to our facebook and twichter question today. Will earnings recession end in q 2 . Much more still to come. Were back in a couple much minutes. [annouer] ist a force of nature . Or a sales event . The mmerf audi sales event is here. Get up ta 5,000 bonus on select audi models. You can flacross weome totown in minutes, or across globin under an. Whole commities are living on maransolar satellites in less than a century, boei took the world from seaplanes space planes, across the univse and beyond. An you thought thatas amazing, you just wait. An update on the brexit fallout. President obama saying at the end of the nato summit, he expects britt app to go through with leaving the european union. He also said its most important that neither side harden their positions in ways that will ultimately do damage to harm their economies, especially as the World Economy is so wobbly. On that note, treasury secretary jack lieu is kicking off a visit to europe today. Hell travel to london, paris, berlin and brussels to meet with counterparts and discuss the need to promote stability and growth following they will discuss the state of the global economy. British finance minister will meet with wall streets biggest investors today in new york. In a statement, osborne is saying that now is the time to make the uk the most attractive place in the world to do business. Also making the case in an oped which is my must read of the day. In the wall street journal, not the financial times. I went to the financial times, naturally. Switching gears to corporate tease. Elon musk took to twitter to let his followers know about his p intention to publish part 2 of the tesla plan. This follows a difficult week after two fatal crashes of tesla cars and all sorts of questions about how he plans to combine solar city and teslas stock price. And actually produce enough cars to meet the demand. Thats the biggest question for tesla shareholders. A knockout punch, ufc reporting selling itself for 4 billion. The details of that coming up. First, as we head to break, heres the National Weather forecast from reynolds wolf. Wilfred, sara, good morning to you. Your forecast around the country will be a jumbled mess. We do have a chance of severe storms today across the Northern Plains moving into the midwest. Chicago, a muggy and warm day for you. 91 degrees. New york with 83. A chance of thunder boomers in the afternoon. That would be good, we need the rain in the south. Miami with partly cloudy skies and 90 dallas. Oppressive heat thats been relentless. That will continue for a couple of days. 79 in los angeles. Seattle with 72 degrees. High up in parts of the central rockies including the tetons, maybe a touch of snowfall. 1 to 2 inches. On the other side of the break, more Worldwide Exchange. Sit tight. You geuse to pet odors your car. You thk it smes fine, but your passengers smell is. {ding÷ elinate odors youve ge nose blo, fw, it smells gd in here. E febreze car vent clip. So you a youpassengers can breathe happy. You wont see the folks they have businesses to run. They have passions to p psue. W do they avoid trips the post office . Stamps. Com ma letters, ship packages, get 4 week trial, pl 100 in extras right on your computer. Including postage and a digital scale. Go to stamps. Com tv like having somethingourhomen o . Fit u, jusrighagain. Every stitchnd seam of your home iurce,andall. Tailed to fit yoand your budget. With unique features, li claim free rewards. Ohh customized Home Protection extra features ohh all atn affordablerice im gointo live in this. In means gettingore from yourhoe with an expert allstate agent. Its good to be in, good hands. Welcome back to Worldwide Exchange. Lets get you up to speed with the market. A blowout session in asia. In part, responding to strong gains in wall street on friday. But also some Election Results in japan adding more power to shinzo abes position. Were looking at the nikkei up some 4 . The yen fell over 1 . Which has helped that move. Gains also for hong kong and shanghai. That is carrying through a little bit to the wall street session in the futures market. As you can see, only slight gains expected after we closed high on friday to the tune of 1. 5 . Sara. Inching towards records for u. S. Stocks. A news outside the world of business, president obama returning to the white house one day early from his overseas trip and tomorrow he will travel to an Interfaith Memorial Service in texas for the victims of the dallas shootings. Nbcs Edward Lawrence joins us now with more than. Good morning, edward. Reporter good morning, sara. A lot of healing that has to go on. The president wakes up in the white house. He will get a briefing this morning about the dallas investigation where five Police Officers were killed. President obama is back in washington after spending the weekend in europe. He now turns his attention to healing the nation. While balancing the call for justice from the black lives matter protesters. I think that the overwhelming majority of people who are involved in the black lives matter movement, what they really want to see is a better relationship between the police and the community. Reporter he will travel tuesday to an Interfaith Memorial Service for the victims of the dallas shootings. The Dallas Police chief says the gunman, micah johnson, had sinister motives for his spree. Based on evidence of bomb making materials and april journal that this suspect had been practicing explosive detonations and that the materials were such that it was large enough to have devastating effects throughout our city. Reporter brown also mentioned the suspects wrote the letters rb on the his own blood on the parking garage where s. W. A. T. Teams cornered him. Protests erupted in states recently affected by police shootings, louisiana and minnesota. And cities protesting this solidarity from the east coast to the west coast over the killings of africanamericans at the hands of police. The president still facing questions about the feeling among Law Enforcement that he sides more with activists than police. Wilfred, sara. Edward, thank you very much. In other political news, the rnc Platform Committee starts a twodoor meeting in cleveland today talking about key issues expected, abortion, and trade. The Rnc Convention a week from today. Cbs called it the trumpiest show on earth. At no, sir much focus as we feared a month ago. Looks like trump has it locked up. Lets move to sports in the final of the euro championships last night pitting portugal against host france. Portugal played most of the game without cristianory nald owe who left with a knee injuriment on to extra time. In the 108th minute, he broke through with this strike. Portugal won 10 pulling off the stunner over france. Its the countrys first ever Major International title and throws Cristiano Rinaldo with all the greats. That was a surprise, right . Big time. To another tournament on the grass this weekend. The wimbledon mens final at the all england club on sunday with andy murray facing milos roo nick. The second ranked player winning in straight sets to capture a third grand slam title. The second british man to win multiple tight ms Prince William and his wife were there. David cameron, i think, was also there with murray. Gave a nod to him. The duke of duchess william and kate. Moving on, ufc the most recognizable name in mixed martial arts is coming under new management. The New York Times says it sold itself to a group led by talent giant wme img for 4 billion. There are other the primary owners, frank and lorenzo fehr it rita will stay on. Its shown in 150 countries and 2,000 hours of material for tv, payperview and streaming service each year. That sport has grown fast. A new contender. Secret life of pets pulled in 300 million in the u. S. And canada. The movie from universal and elimination entertainment the maker of despicable me follows your pets when youre not home. It is the sixth biggest opening for any animated film and the best ever for any original movie, animated and otherwise. Pixar ses finding dore i falling to third. It has made 422 million, making it the top grossing movie this week. When does the bourne film come out . I dont know. Mind less blockbuster better than kids movies. Market action, plus we head to the farnborough air show. Shows off the late wares and signs deals. Marlin hughson is coming up p good morning. Stocks rising around the world. Will earnings season derail the rally . A cnbc exclusive. The farnborough air show taking off. Big planes and bigger deals. The ceo of Lockheed Martin joins us live. Plus, todays top trending stories. Pokemon taking the gaming world by storm and this is no childs play. Its monday, july 11, 2016. Youre watching Worldwide Exchange on cnbc. Good morning. Welcome back to Worldwide Exchange on cnbc. Im sara eisen. Im wilfred frost. How was my pronunciation. I must support it. If i criticize correct. Very nice. Lets check in on markets this good morning. Green across the screen for the u. S. Futures. Not to the extent we saw on friday. Strong gains on friday of 1. 5 . All ten s p were in positive sector. Seeing gains this morning as well. Ohm about 44 points for the dow. The tenyear note which last week had an alltime low 3. 21 is at 1. 376 this morning. Were seeing gains in europe. But a little bit more muted than in asia. Europe up around 2 3 to 1 , if we look at asia, youll see blowout gains, in particular for japan where we saw upper house Election Results go in favor of the ruling government under abe which could add fire to his reform programs. In particular, possibility of delivering their constitutional reform which has been much needed for him to push through the sort of supply side reform that he hasnt been able to pass thus far. 4 gains for the nikkei as the yen sells off. The hong kong up 1. 5 . As for the Broader Market picture, lets show you the dollar building on strength that we saw after the better jobs report on friday. 11026 is the euro. The dollar is rising against the japanese yen. Thats great news for japanese stocks. Part of the reason we saw a 4 rise there. Its moving there. The british pound under pressure, which is something were used to seeing these days. Its down about. 6 of a percent. 128. 73. Keeps getting weaker and weaker. M im going back to london. Means ill be able to buy more stuff for you. Quickly show you oil. Its under pressure that could be a cautionary sign for the market. Wti crude down 1. 2 . Its now below 45 a barrel. 44. 86. Brent, International Benchmark above the 46 level. Weve got to focus on that. Thats a crazy big move. As you rightly say, were below 45. Somewhere from the 50 stability we thought we were in for quite some time. It was rallying but then the steam was taken out of oils gains. Gold also which has been on a roll post brexit and all year long, continues to climb. Gold and silver have been standouts recently. The bid for safehaven assets, the idea of global easing going into another cycle helping out. This week, the focus is turning to earnings. Alcoa after the bell, the banks later in the week, thats going to be what were watching. Theres another decline predicted in profit. Well see. Usually they come in on the bottom line. Well see if we can get out of the earnings recession or get better guidance to show its coming in the next quarter. Focus on the banks of england. We did see a blowout jobs number on friday. Markets responded positively to that. As if to say were still not getting tightening. The tootening is key because the bond market barely moved. Youre noft seeing the jump you normally would. We werent heading into a recession. If you remember, the may number before that, it was revised even lower, down to 11,000 jobs. There was a strange contrast month to month on jobs that economists were trying to figure out. You usually dont see that kind of volatility. The easing and the talk of easing following brexit puts the brakes on the u. S. Being able to tighten as well. Goldilocks. People liked it. Good day with no recession but no monetary tightening. The fcc stocks at a record high. Stocks tend to do better when the weather gets warmer. Landon dowdy tracking that for us all week. She joins us with more. Welcome back. Sara, good to be back. All finally together. Summer is officially in full swing while some investors follow the proverb sell in may. Looking back over the summer since 2010, there are five s p 500 sectors at that heat up as the weather gets warmer. Well call them summer siz letters. The top five sectors, telecom at number 5. Here are the stocks who have outperformed. Frontier communications, 8 return on average with when you think of frontier, you think of internet and phone services. But it provides solar energy. Verizon heats up with an nfrj return of 1. 3 . Trades 50 of the time during the summer. Sara, will, tune in tomorrow for the number 4 spot of the ligs of summer sizzlers. I like it very much. Lets get on to the top trending stories. Pokemon go taking the gaming world by storm. The wildly wop f popular app using augmented reality for them to catch pokemon using their smartphones for the app. It may have turned out to be more than gamers bargained for. Reports surfaced of criminals using the app to target victims and rob them. In missouri, police stating that suspects lured players to an isolated location, later robbing around 8 or 9 people. Still, social media responds to the game has been overwhe overwhelmingly positive. Getting people Walking Around and making real life friends. Martin shkreli getting in on t if you see any pokemon near 42nd and on the east side, move along. They are mine. I will find out of and sue you. Go somewhere else. Thank you very much. Despite the side stories tot its led to a surge in nintendo prices. Its almost the most used app downloaded app. You should try it. A magz. Have you tried it . I have not. Ive seen others. We should try it together. Okay. Now back to the small uk town much farns borrow. No s. Farnborough. Aircraft makers coming to the air show to announce big orders and our phil lebeau is there with the interviews. He joins us with the ceo of Lockheed Martin. Good to see you. Let my bring in the ceo of Lockheed Martin marillyn hewson. Were hoping the rain holds off. The f35 is flying later this afternoon here. A huge milestone for this program and for this jet. It is. Were very excited about the f35. Were going to have a debut here at farnborough. In fact, the f35b. Its going to have a vertical landing. The public will have a great show, have a chance to see the capabilities. Reporter this is a long time coming. But you know the critics are saying the cost of this program, its prohibitive. They question whether the u. S. Government as well as others buying this airplane, if its a wise purchase given the cost overruns. What do you say to that . Id say were excited where the program is. We have 180 aircraft flying today. Were bringing that cost down dramatically from the very first aircraft, which on a Development Program is going to cost more obviously. With that many aircraft delivered, were down 57 from the first aircraft that was delivered and were on a path to be down to the price of an 85 million jet by 2019, which is comparable to a war generation aircraft. Reporter when you look at the contracts, the next phase, youre in the process of negotiating that now. Where do those talks stand . Were on the way to initial production, nine and ten. That discussion is going well. Of course, we continue to see other countries around the world make their decisions. Denmark just agreed to buy 27 jets. We continue to move toward that as well. Reporter a big part of the theme here at the show andry add last week is defense m and a. You are no stranger to that. Certainly with sikorski last year. Do you see that continuing for the Defense Sector . Were excited about the acquisitions. Were showing our blackhawk helicopter here at the show. Thats an armed helicopter. An opportunity for us to continue to produce that aircraft forearm is around the world. In terms of m and a, in terms of the mergers and acquisitions capability, well continue to see that happen in the industry. Reporter does that cycle pick up . It depends on supply and demand as you know. To the extent that cops come together, well owe open Companies Come together, well watch that. It will happen at the second and third tiers in the business. Reporter final question. So much focus on uncertainty starting here in europe, you go to the middle east, the far east. Those uncertainties have people saying these defense budgets, were at the beginning of a cycle for an increase in spending. How far out do you see that cycle continuing . What i see today is the Global Security challenges are not diminishing. Theres a lot of threats around the world and countries are looking at where they spend their important budgets on. They continue to focus on defense. So youll see a lot of Countries Increasing their defense spending because they need to address the threats that are out there. Were going to be standing ready with our broad portfolio of technologies and capabilities to support them. And we look forward to being there for them as they protect our citizens. Reporter marillyn hewson. Weather holds up, i think it will, well see the f35 flying here later on today. Back to you. Well see you later on c nx. Phil lebeau thank you will very much for a great interview. George osbornes lessons for dont miss an interview with sat i cant that della at a conference later today at 10 30 a. M. Eastern time. Well be right back on Worldwide Exchange. Ths also truof a od car company. Buwe saw an opportunity in sharing cs. So we moved fast and launched car2go i29 all ound the world. Doing at requidozens data centers, desied for speed and pemance. We built our business on t ibm cloud. Cause thats what the m cloud is built f. Welcome back to Worldwide Exchange. A farewell performance in hamilton. Three additional cast members also dee paragraphing the musical. All four cast members bowing. Set to the west wings it was on Facebook Live. So they could see miranda and the others say goodbye. Sterling, sterling effort from the whole team. A lot of people tuned in to Facebook Live including my sister who was bummed she didnt get the final lottery. It was a modest goodbye. An extraordinary performance. Im sure hell continue. He will surprise people. The usa network giving mr. Robot fans a huge surprise. The network owned by nbcuniversal, releasing the first 40 minutes of the shows Second Season on social media three days before the actual release. Appropriately, the show about a renegade computer hacker interrupted its own Facebook Live session with a message from a hacker before unveiling the new episode and went on to other social platforms as well. Twitter and snap chat and Everything Else and took it away. Ive never seen the show. I havent either. Its a clever marketing. Ive got to get through it quickly. Youre way behind. Its so good jack dorsey. The latest victim of a twitter hack. The twitter account was briefly taken over by a group over the weekend. A tweet linked to the hackers website in a video that displayed the groups name along with an image of a hooded figure. In the same span, they appeared to have her account hacked by theyre obviously pretty good hackers if theyre getting into the accounts. The ceo of twitter. I dont know if thats the best optics for the company. Now to todays mustreads. The stories catching our attention. Former treasury secretary Larry Summers writing in the financial times, voters key deserve responsible nationalism. The reason youre seeing the brexit vote and the rise of what he calls demagog, antiglobalization, donald trump is the economics need to change. What he writes is whats needed is a responsible national itism approach where theyre expected to pursue economic welfare as a primary objective. But where their ability to harm the interests of citizens elsewhere is circumskriebd. He says not necessarily less integration but more of an awareness of what these policies, whether they are global by nature or not, are doing to help citizens and just be more inclusive. He gives examples like the italian banks and the bailout from that shouldnt be the word from brussels. Interestingly, you picked that one. Similar themes echoed in my pick this morning. Oped by britains finance minister George Osborne. It says britain is open for business, he says. Our economic trade ties with north america must become stronger. My message is simple. Were not withdrawing from the world. Britain will be a beacon for free trade, democracy and security more open to the world than ever before. And he goes into it to say that when he took off in 2010, Corporate Tax was 28 . Its already down to 17 . He wants to cut it further to 15 . This doesnt mean american businesses should disappear. The fact that britain pulled out of the eu, its very good tone. Offset it a bit for the first time in 40 years, the uk will set its own trade terms. That conversation starts with the u. S. , of course. His old pal that helped him during the campaign, obama said that the uk would be the back of the queue if they left. Theyre changing their tune. I wonder whether that message got across during the campaign. Does he have a role in the next government . Under the next Prime Minister . We dont know. Its hard to make promises to wall street here in the u. S. If he doesnt, in fact, know how the negotiations are going to go when it comes to london as the financial center. Right. Hes close to the theresa may. Perhaps he would remain in government. If she wins. If she won. Well have to wait and see. Good point, though. Were approaching the top of the hour. The team is getting ready for squawk box. Michelle Caruso Cabrera is live sass we watch futures go to record highs. Could be another good day. As you know. Youve seen them. Phil lebeau at the farnborough air show. The ceo of virgin atlantic. Im sure well be discussing that editorial by George Osborne where he makes a good point that now the United Kingdom can be more competitive with the shackles of what tends to be socialist eu policy. Could be better off if they get it right. Of course, it depends on who is in government as you guys point out. There is a study. People pay to do studies but there are too many bosses. I mean, i dont think thats true where we work, of course. However, i hear its a problem in other places. Well discuss. Well, there we go. Im interested to listen to that discussion particularly. If theres any veiled implications during the discussion. Michelle, thank you very very much. We look forward to squawk box in 12 minutes time. Still to come, your stocks climbing towards record highs and bond yields hit record lows. Well have a weigh in on the drivers next. Well be right back. Josh, dont you haveiends . Yeah, so . It stinks here. Youve got tom are you kiddin wash it . Lets wash it th febreze. For all ththin y cant wash, use febre. Fric whoaesr hey, it smells nin here and try pluggable febreze, with up to 4 times the freshness. In one refill pluggable febreze and fabric refresher. [inhale exha mnemic]. Two me ys breathe happy we a newmerican century. Born with a a nger to fly and a paion to build somhing better. And what an amazing time its been, dedeftecade invation, inspiration and wonder. , we say tnk you americaor a century of trust, for the privilege of flying higher and higher, tether. Stocks are rallying. S p 500 flirting with record territory. John bill ton head at jpmorgan asset management. Good morning, john. Good morning. How do you reassess u. S. Stock now that we have retraced all of the post brexit losses and are heading into earnings season . Well, i think you got to recognize that the u. S. Is looking at two things. We saw evidence of that on friday. Number one, we had a strong jobs report. One which was demonstrating that the labor market is still relatively strong. Of course, thats the life blood of the u. S. Economy. But also one thats not quite overheating yet. The average Hourly Earnings were still in reasonable sort of neutral kind of range. So its suggesting that the economy is warm but not too hot. Then, of course, look at what happened in the current season, the bond markets, which suggested that actually the market believes that the fed are very much in a first do no harm kind of approach to the world right now. Of course, what that means is, reasonable growth in the u. S. Supportive policy around the globe. Of course, the likes of the other Central Banks potentially about to add more unrefined cane sugar to the mix as we talk more about stimulus from japan, possibly the uk and as we move towards the autumn, possibly each the ecv. John, as we go into earnings season, which sectors are you looking for possible positive surprises . I any sectors that have suffered from the weakness that we saw during 2015 in energy, i mean, clearly Energy Stocks have been one of the best performing sectors during the course of this year. Ultimately, wed be looking for some of the headwinds from oil to have passed and secondly, those big exporting sectors which have suffered over the course of 2015 from the strong dollar. Evidence that those headwinds are now being taken away would give reassurance to markets to investors into u. S. Markets. John, youve got a global view. I want to ask you about italy which stands out today as europe is in the green minus the italian stock market. How much of a problem right now is the stress in the italian Banking Sector and how will it play out and how many ripple effects will it cause . I think italy is a known issue for europe. I mean, i think what were seeing is a couple of things coming together. There is a Balance Sheet problem within the italian Banking Sector which is wellrecognized by the markets. There are mechanisms which need to be put into place potentially to shore that up. The issue you have with negative rates in the eurozone is it means that the ability for banks to earn their way out of trouble has been severely compromised. I think what were seeing now with further talk of stimulative Monetary Policy, just another refocusing on the Balance Sheet problems and the lack of earnings potential out of the banks within italy and more broadly across europe. Its absolutely pivotal as to how this does play out. Broadly speaking if we look at past rallies in european stocks with the exception of the. Com boom, theyre led by the banks. Until the banks demonstrate the ability to earn, its very difficult to make a bullish call on europe as an investing region. Certainly in the equity markets. John, do you think we have to see more easing as well across europe and maybe the uk to get economies going again . Is that what you expect this week . Where herein lies the issue. Part of the problem is weve seen the limitations of negative rates. We move probably more towards credit easing. Potentially thats the route we go through. As far as the bank of england, clearly Market Pricing for cutting rates either at the july meeting or potentially the august meeting. Certainly, that does seem to be a broad consensus given the downgrading of growth trajectories for the uk. I think whats more broadly helpful, though, is to think what are the levers that the bank of england could potentially fall. Weve seen the Counter Cyclical potentially giving more leeway for banks. Could we see credit easing, funding for lending, its making sure that credit gets into the end economy thats more important at this particular point than necessarily the headline Monetary Policy rate in my view. Is the bottom line, john, it sounds like youre saying that the u. S. Stock market and potentially bond market is the place to be right now if you want to be defensive and if you want to be in a resilient growth environment. Well, were in a world where growth is positive but not spectacular. Brexit clearly has removed a few Percentage Points out of potential uk growth and at the margin takes Global Growth down. The fact of the matter is, when youre in a low growth world, and a world where you have got stimulative Monetary Policy, youve got a couple of things going on. First and foremost, a great reaching for yield. Thats happening within the bond markets. Thats leaking into the u. S. Treasury bonds. But also in the equity markets, youre looking for defensiveness and quality. Simply put, the u. S. Market is more or less perfectly placed for low growth world. Thank you, john. John built on. 30 seconds left to g highlighting a few things were watching today. Financials is your pick. The financials. Were going to gept Bank Earnings toward the end of the week. You wonder how much bad news is baked in. Its still the worst performing group of the year. It could hardly have a worst Interest Rate environment. Well see that later in the week and squawk box is coming up in five seconds or so time. Have a great day. Good morning. Japanese stocks soaring after a landslide election victory for the countrys Prime Minister. Plus we had the jobs report and that Still Matters to the rest of the world. New this morning, the farnborough air show takes off. Big planes and even bigger deals. If there are kids wandering around your neighborhood looking at their smartphones in kind of a different way, even more focused, theyre probably catching pokemon. Its the new game that has nintendo stocks soaring. But it is generating controversy. Its monday, july 11th, 2016. Squawk box begins right now. Live from new york, where business never sleeps, this is squawk box. Good morning everybody. Welcome to squawk box here on cnbc. Im becky quick with michelle carusocabrera. Andrew is off today. Lets look at the equity futures. The dow futures are in the green once again. 46 points higher is the indication. S p futures indicated up by five and the nasdaq up by 19. The s p 500 trading near record highs. In fact, the alltime closing high is 213082. The 2134. 72. They were set in may of 2015. They were tested on friday. You saw the s p closing within just a few points of that record level. 2129. Overnight in asia,