tv Squawk on the Street CNBC June 20, 2016 9:00am-11:01am EDT
together so there are more jobs. >> your gamble is yes or no? >> yes. >> okay. optimist. a lot to do to get there. >> heavy lifting for all of us around the world, the daunting future of technology and everything else and otherwise. >> thank you for joining us. make sure you join us tomorrow. right now it's time for "squawk on the street." ♪ congratulations to the cleveland cavaliers bringing home cleveland's first major sports championship in more than half a century. good monday morning. i'm carl quintanilla with jim cramer, we welcome david faber back to post nine of the new york stock exchange. we start the week with a rally as new brexit poll shows momentum for the remain camp. pound's at a three-week high, europe up 2% to 3%. bond's back up here, 1.65 and oil reclaims 49. a strong rally going into a busy
week for the economy. the brexit vote, yellen on capitol hill coming up. redstones made their big move last week, the latest on viacom and the near-term future of a company that could come down to a court decision in delaware. >> and big weekend for disney. some box office records and game seven as you know for the ages. first up though stocks rallying around the globe on hopes for an anti-brexit vote on thursday. a new poll by survation says 45 remain, 42 leave, but if you take all the polls together, still about a dead heat. earlier this morning on squawk, black rock on the markets as we count down to thursday's vote. >> i think you'll see more fiscal policy stimulus. if that's the case i do believe we'll see more inflags because we still have 4.7 to 5% unemployment. going to create more job demand and more wage inflation. if we have these infrastructures spent here in the uk, other
places, i believe that's the beginning of another leg of a rally for equities. >> definitely shows the hypersensitivity to these polls. that will be the case for the next few days. >> yeah. i urge people to recognize there are actual real companies in the s&p 500 and many of them are doing just okay. the most sensitive thing's obviously oil, oil going higher. interest rates going higher. so i think you can say maybe the banks have a 45 minutes of good opening and the oil companies, well, they can have a day where they bounce back because when we get to 45 things started going back up. i don't like this rally, i think people should calm down. there is absolutely nothing that is so pertinent to our markets that you should buy up here. >> what are your thoughts as we move closer to the vote? 45 to 42, we saw the latest polls, not sure to read them in
terms of how accurate they're going to end up being. >> i just felt that the incredible changed everything. well, first they stopped campaigning. when they stopped campaigning the remaining group seemed to move on but i believe it's going to become kind of about her murder. and i don't think it's talked about enough. i just think that changed the equation. i think people just said wait a second, this is crazy. we got to like calm down. calm down means remain. >> there are other dynamics. this was a story in the times about brussels basically saying you are going to hurt, this is going to hurt job ifs you do this. >> so there's the labor party, and i was listening to wilt this morning talking about this. look, there's just grave splits in different parties there and it's much more than we understand. you have more conservative people and people who favor obviously keeping their jobs,
and if you want to keep your job, you made it sound like, well, wait a second, you better remain. i also think that's good fodder for people saying i was brussels to, you know, pull us around like this, boss us around, but i do think you're starting to get the real numbers of what could hurt. it hurts more to exit than remain. >> though that doesn't mean they're not going to vote to exit. >> no one ever wants -- you know, today they were talking eloquently about the migration -- migrant problem this morning on "squawk on the street," saying let's peel it away, it's not about the panel. it's about people say, listen, if we're part of the eu, then we're part of it lock, stock and barrel. >> no, immigration seems to be one of the key issues in terms of dividing. >> yeah. much more of a trump issue to use the coverage i saw in "usa today". >> last week you said don't despair over the polls, this week you're saying don't --
>> i don't want someone to come in up big today. i think you'll get a better chance -- i don't mind the stock market. i feel like i'm the only one that doesn't mind. i look at some of these european stocks and i feel if people feel, hey, we should be up that much too you're going to be sorely mistaken. for instance you hated apple on friday, which everybody seemed to do, you can't love it off of brexit. using apple as an example of one of the stocks people feel is a value trap, that it doesn't work, that it's really all over. and maybe it is for the moment, but i do feel that we have to understand that this does not change things. >> can yellen say anything tomorrow or wednesday with this vote hanging? >> someone's going to ask her would you reconsider everything you said post the election -- >> post the referendum on thursday. >> yeah. just start the clock again. it's not like last night where there's an ending. you know, the game ended and we did not at that point, well, how about the wednesday game and the tuesday game. you know, the game ended.
wasn't it joyful to watch some other thing that happens in our lives that ends? they're not going to get together again on tuesday and wednesday on capitol hill and discuss, you know, it was over. >> by the way over fast too. it wasn't one of those games where endless time-outs and took 40 minutes to play the last five minutes, it just happened. >> 46 seconds left and it was 46 seconds. they took the time -- >> pretty much. >> it was a joy to watch that game. >> pause for worries about broken wrists in that -- >> yes, that final fall he took. right here. >> they're calling it the block, maybe one of the best -- best game seven in almost a generation. >> yeah, it's funny how nba came back in our kosh shens when you say i see guys saying buy nike, sell ua, it's emotional. there's new curry sneakers kind of dovetailed on the results of
last night's game, i think. >> oh, man, what a game. >> that right there. that got you. watching him on the floor. and then here he breaks down. >> i want to buy cleveland -- cleveland is the only thing here i'll buy this much. >> really? on future performance? >> you think buying cleveland was the buy yesterday, maybe not today? >> since 1964 i think you can stay in cleveland for more than a day. >> interesting now. the championships belong to kansas city, denver, cleveland and pittsburgh. >> and pittsburgh, wae. >> what happened to the coasts? >> yeah, short the coasts. >> it does bring us by the way to abc and disney, which also had new -- >> yeah, that's the way we did that. "finding dory" making history, sequel to finding nemo, highest debuting animated film ever in north america, previous record holder was "shrek" 3.
>> did you go? >> not yet. >> i have to tell you this is the great tug of war of stocks i've seen. you've got "finding dory" and "shanghai." against that you keep hearing chatter that espn lost another subscriber during the game. they might have lost someone. and that seems to not to be too cute about it but it's espn subs versus movie slates. and i think the movie slate should trump, but it doesn't matter. people feel disney become a value trap. >> really? a value trap? >> because every time you get excited you find espn -- the bundle. david, i missed you in the understood l. >> well, i'm back. happy to talk about the ever dwindling bundle any time you want. >> i appreciate that. i feel in the end i'm watching abc and thinking, okay, if this were on espn -- remember when people put the bcs in espn and very exciting -- you got to hand
it to her. those guys are really tall and big and she managed to get right in that crowd. i like that. but i just think that's neither here nor -- that's nothing. >> you went to doris burk from "finding dory". >> abc, espn, shanghai. >> you come back and say, oh, man, you've got that interval where you're not thinking about espn for a nanosecond. abc doing better, theme park doing better, finding dory and get inkling espn is not doing so well and it's like -- >> abc is like a pimple on the you know what of espn. it's not going to move the needle at all. >> don't know what would. >> espn is huge and the theme parks and movie are very important. abc not so much. >> that's the equivalence issue. skb i don't know how to value box office versus espn and
whether this was finding dory, we knew it was going to be huge and it's huge. isn't that worth something? earnings per share you can kind of bank on. >> sports business journal is citing some sources last night's overnight ratings which would put it in the neighborhood of the highest since '98 for an nba final. >> is that true? >> yeah. pretty good numbers. >> sheesh, cleveland, that's a small market. a team with -- it was kind of like, you know, the old versus new. i mean, it was silicon valley being trumped by american industry. >> coming back from down 3-1, don't forget that. that was what was incredible. >> america should be triumphant over silicon valley, right? >> i guess. is it a contest like that? we're all part of the same nation. shouldn't we be focused on the external foes?
i did like it. industrial america versus -- >> yeah, industrial america versus the big, rich billionaires who do nothing but, you know, move stuff from this computer to -- >> no, no, you're talking about hedge funds. that's different than the guys in silicon valley wlo do create huge companys that do create a lot of value. >> allegheny rhythms, turn people into simulations. >> when you were looking away i thought maybe it was a simulation. >> i'm here, baby, back, better than ever. >> this is the west coast and this is a little more like cleveland, right? this is cleveland here, don't you think? this is part of cleveland. >> what is that an -- >> i like the tape. >> oh, that's total cleveland. because, you know, it's just hard scrabble, 1964. like how bad some statistics most people were not alive when the last time cleveland won something, i think that says something about american industry. maybe it's about natural gas and bringing jobs back and
inshoring. >> i'm all for that too. >> metaphorical. >> one of the most exciting nights ever. >> we're going to count down to what looks like a big open on wall street today. a rally is stacked, we'll see how we open in just about 18 minutes. more "squawk on the street" from post nine, don't go away. ♪ using 60,000 points from my chase ink card i bought all the fruit... veggies... and herbs needed to create a pop-up pick-your-own juice bar in the middle of the city, so now everyone knows... we have some of the freshest juice in town. see what the power of points can do for your business. learn more at chase.com/ink (mamost of the show. we missed can do for your business. (woman) and there's no way to restart it. (jon bon jovi) with directv there is. ♪ you see, we've got the power to turn back time ♪
well, it's going to be a busy week perhaps in delaware. not just e.t. and williams, we'll get to that later, but of course viacom will be in the spotlight. no data as of yet. the delaware court has assigned the honorable andre bushard as the chancellor who will oversee the lawsuit that has been brought frankly by both sides in this ongoing despispute we toldu for weeks that culminated on thursday when i was out by its controlling shareholder national amusements. it is that that is at issue and will be decided by this delaware chancellor. and, guys, speaking specifically about the case itself and talking to people, it seems like an uphill battle for viacom's --
and fred the lead director leading the charge to say essentially you do not have the right to remove us because national amusement's you're controlling shareholder in the form of mr. redstone is not competent to do so. in the sense of the concept of whether they would look to the competence of a shareholder some lawyers have told me is patently absurd. think about a future proxy case where you say, jim, you know, whatever it might be, some public company you're involved with. you've got a proxy case and say those shareholders that say about your shares that guy's not competent. delaware court is not going to be in position to review the competence necessarily. national amusements is a company with a board of directors, it's an operating company and it seems likely though we certainly can't prejudge, likely that they are going to say we're not ruling on anybody's competence here. this is your controlling shareholder. they tossed five members of your
board. that's it. you're out. it becomes unclear what mr. solerno's director is really thinking here along with his lawyers, but we'll see. that's the new viacom board. it's the old one still in effect until we get the ruling from delaware. and then of course when they are seated as they are likely to be, as they are likely to be, then the question becomes who become the ceo, and frankly i believe it will be an interim ceo. >> one of these board members perhaps? >> yes, i think it's possible. it could even be -- here's speculation, i mean, would dooley, he's been the c.o.o., but would he take over at interim i don't know at this point. guys, the key question for many people is are they moving towards trying to put together once they have replaced these five directors with the asings of the delaware court, will they
try to put cbs and viacom back together? >> that's what i keep hearing. >> i think that that is something that's got to be looked at very carefully. >> you do? >> yeah. i think that it is, again, the reporting is yet to be fully done. we're not down the road yet. but you have to consider that that is a strong possibility. let me leave it at that. >> but they do that, i mean, cbs has been a winner, viacom i regard as a loser though there's an interview we read just a few years ago they weren't. but cbs is about programming i can't miss. and viacom's all about programming that i can watch whenever i want. >> it's all true. and cbs would be inheriting a lot of the weaknesses of viacom that we know about that have resulted in the stock price being down though frankly the stock price has been up lately, which is another question, who are you protecting here? the stock keeps moving up every time we hear the board is going to be replaced, so who are you protecting? he says he's doing it of course -- because he's protecting shareholders who are
being unfairly manipulated by shari redstone who is manipul e manipulating her father who is not competent. yes? >> it does seem -- i looked at the back bios of the people that they put on the board. total heavyweights. >> not bad. no, not bad. they're not check the box people. over the weekend it looks like alan murray at fortune had an interview with dauman. i have not been able to speak with philippe, we've detailed moneys of millions of dollars that has been a failure of the stock price to achieve anything here, even its peers returns. what people fail to see says the vast majority my compensation's based on performance. i don't realize that unless the stock performs, so when the stock does not perform, i do not in fact collect the money that i'm being reported as having received.
in fact, i've suffered along with shareholders because i have a lot of shares myself and in reality i've lost far more than the $54 million in this period. that's not inappropriate. i'll be reward first-degree and when the stock recovers. he sold a lot of stock. >> he did. >> i remember when he sold a lot of stock and exercised options and sold early, so i'll go back and look. but i remember it. i'm just reading this quote because this just came out. so, yeah, all right, he may own stock, he may be suffering but he also sold an awful lot of stock as well. >> i don't know, geez, i mean, the guy is well paid -- >> by the way stands to reap even more rewards if he is and when he is most likely dismissed. >> fired? yeah. win-win for him. i would love that contract. so would 317 million other people in this country, right? >> then the question becomes do they try to put cbs and viacom back together. obviously the person who would run the combined company, i look forward to speaking to mr. moonv moonves. >> you'll probably get him
today. >> i would like to speak to him. >> well, i'm stopping trading the moment you do. that would be the best interview in the world right now. >> he's not going to say anything right now. that's the thing. >> when we come back we'll get cramer's mad dash and count down to the opening bell, one more look at the premarket as we get some green arrows both here and europe and in asia to some degrees as well. back in a minute. mary buys a little lamb. one of millions of orders on this company's servers. accessible by thousands of suppliers and employees globally. but with cyber threats on the rise, mary's data could be under attack. with the help of at&t, and security that senses and mitigates cyber threats, their critical data is safer than ever. giving them the agility to be open & secure. because no one knows & like at&t. ♪ experience the thrill of the lexus gs f sport. because the ultimate expression of power, is control.
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tumultuous week. quiet day so far this morning. >> yes, it is. >> little nike on the mad dash. >> piper comes out saying it's a little too cheap. this stock has been under pressure for a very long time. actually, since it reported last. the domestic wear coming back, i thought foot locker was an attractive story, the nike domestic, china is an attractive story, but i think this stock has really been beat down. i'm kind of more leaning toward the idea that lebron and basketball, maybe high ratings, basketball sneakers have been in the doldrums, maybe this one wakes up. it's too expensive, david, no doubt about it, but i think it's kind of spent its time in perg toir. under armour has too. a lot of these may have been sports authority, you know, folding, but a lot of it is just this kind of sentiment that's gotten too negative. >> see that kevin plank s.a.p. ad last night? >> yes, interesting.
and jim gafigan, i find hysterically funny. >> under armour getting an ad basically paid for by s.a.p. in the respect of multiples here, i'm just curious. >> still the highest. >> is it? >> yeah. that's really a quandary because what happens is is that we've had severe multiple compressionist, people become very negative about our market. you have a lot of overseas business but that could cut well with brexit, i think if there's going to be a stay vote, a remain vote, get past the gloom for sports authority, nike may be the thing to go to. i just -- geez, the multiple compression, david, that's been going on is extraordinary, intact in anything that's apparel. and i think people have gotten too negative, ralph lauren i think they've gotten too negative on, it's extraordinary
how high multiple stocks gotten so infectious. >> not a lot of gloom today at least in the premarket. perhaps what may be the results of the brexit vote later this week. we're going to have opening bell in about four minutes. stay with us on "squawk on the street." at the marine mammal center, the environment is everything.
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you're watching cnbc "squawk on the street" live from the financial capital of the world. the opening bell in 60 seconds. and what a week we have setting up. yellen on the hill tomorrow and wednesday, the brexit vote on thursday of course. some housing data. we're going to get fed ex earnings and kbh and a few others. >> i think people have to be wary housing and auto, there's a lot of states auto still good because of the bigger trucks because of oil, the housing starts we're also excited at 1 million. i mean, come on, that's 1950s speaking. we need to get up and see what le nar says. kb is a cheap stock, i can't wait to hear what they say. fed ex gives you the best read
of any company in terms of the world's growth. a lot to do. and don't forget the amazon read through. >> that's right. take a look at the s&p at the bottom of your screen. if you're just waking up and wondering why the rally, this new survey out of the uk shows 45 remain, 42 lead. and if you average the last six polls, it turns back to about 50/50. there's the opening bell at the big board today, ringing the opening bell is etf manager strategy shares celebrating the company's rebranding at the nasdaq first trust advisors at river front investment group celebrating the launch of four new etfs. >> yeah, meatball. etfs can be welcome if they help our viewers, but the plethora of etfs is very hard to keep track of. and a lot of them they tend to lose -- people lose interest in them. i just like to put that warning out there because there's -- the broad breadth of etfs i think has minimized individual stock.
but when you listen to what they say, of course individual stock risk is too great. well, individual stock risk brought you facebook, brought you apple, it brought you a lot of stocks -- it brought you nike, under armour, i don't find individual stogs being toxic. >> i hope not. that's your bread and butter. >> i hope it's not wonder bread, nobody owns that anymore, maybe it's a wrap. >> does hanes celestial make bread anymore? >> yeah, they do. we don't need bread, we need wraps. >> let's get through some calls. yelp upgraded. >> how about that they could beat numbers. that's very controversial. people saying it has to get bought, other people saying you don't know about the google algorithm. yelp hasn't been able to get the advertising people are excited
about, he's out there trying to make it work every day. i thought it was interesting saying they were going to beat the numbers. >> he is. when you use the service, i was on a vacation where it was helpful to have in a city i wasn't that familiar with, but i ended up using google as often if not more with the google maps that has the reviews there and i wonder if google is hurting them. >> remember, they can fix the algorithm to make sure you're driven more, there's a big change. i felt that too when i was recently taking a trip and i asked for best honors on the l.i.a. and sent me to some place that was, let's say not that pertinent. >> no? >> no. >> was it suboptimal? >> it was suboptimal. but i found the premiere diner, exit 52, that place is superb. and they love this show. >> very nice. we always like to hear that. >> that's good. >> so yelp is higher. semantic, ubs goes from sell to
buy. >> oh, come on, everybody's so happy to have a pulse. went private at $1.3 billion in 2011, and bain bought it for $2.4 billion in 2015. and these guys pay $4.7 million and we're supposed to be excited? they're excited because semantic had not had a pulse and suddenly it's got one. no thank you. >> no thank you. but that sounded like a pulse. >> i got cyber security stocks i can tell you right now whenever you want. please don't buy up 219. >> goldman and j.p. morgan leading the dow, along with boeing and these reports try to revive the 747. >> geez, may be iran, may be russia, two outlaw countries, good luck there boeing. but there are some notes out deutsche bank says the bear peak case is not right. boeing is a very inexpensive stock if you believe they can get russia and you believe that the price war between say american air and there's a very
good note about spirit today. maybe you just kind of have to think that the price cutting the airlines, david, while you're away in terms of multiple compression really rather extraordinary. people are just bailing from american air. it's selling at five times earnings. if it's for real you're going to regret that. but, yes, i thought that the boeing call was very, very meaningful because people really hate aerospace. >> three of the worst s&p stocks last week were airlines. >> yeah. oh, my. that bank of america downgrade of american air just made you feel like, guys, get it together. the price wars that kind of happen, no one was focused on between spirit. and we never found out about that management change ceo spirit. >> no, whatever happened? >> yeah, i don't know. but i think the airlines have been the leading ugly stocks so let's watch them. they've led us down bad. >> this will probably be the defining week for that saga that we've been following in the
pipeline industry. williams and ete. that sad, sad story of a deal that, well, certainly ete wants nothing to do with. this week they will be -- in fact, court case begins today in delaware. this is the key case in front of vice chancellor sam glascock iii. we should get a decision on whether a delaware court is going to force ete to file on the terms originally contracted including of course that $6 billion in cash, about $8 a share in cash paid to williams shareholders, or whether they are going to let ete out based on the inability to get tax opinion from its advisors. we'll see.
this will be done before the shareholder vote, williams shareholders which will take place in a week. so they'll know what they're dealing with. >> i need your help badly because both stocks have been going higher. how is that possible? >> may be moving higher because oil is certainly -- well, not last week but had been moving higher. >> no, and natural gas has been -- >> you're right. there's a view that ete is certainly in a difficult position to do the deal borrowing the $6 billion to pay the $8 a share, having to cut the dividend as much as it will. they've done away with any of these synergy numbers they were originally talking about. but the other question is are they also not in a great position, jim, to your point of why it's going up if they don't do the deal because they have holes in their cash flow stream down the road a year or two from now the williams deal was supposed to fill in. >> it created this nationwide network, could be a fabulous
network for natural gas as we switch much more quickly from coal than anybody thought. coal was supposed to be the dominant form of fuel for at least the next five years, natural gas has already passed. i'm watching the mlp industries, i'm watching this group very closely because this whether or not he will group is rallying. and this whole group will be rolled back by a decision of which -- >> now of course the spread in the deal is still 23. it's a huge spreads given there still seems to be largely a belief that the deal will not make it to the finish line, but we'll see. i've seen it before, ibp tyson is certainly one example where the judge in delaware says you agreed to this and you have to follow through on it. >> how does it work? so you have people in the courtroom? and just quickly whip out their cell phones? like the old days? >> it's like the old days. >> so two decisions viacom and this williams ete where there will be guys saying, listen, ete by a nose.
>> ete has a definitive outcome you could view as being much more definitive. viacom that's already playing out and as we said more likely it gets affirmed at the terms of the board. >> natural gas up again today, i've been following natural gas clo closely. you're saying it's more of a cavaliers golden state decision. >> we're going to know, right, who wins and loses, but what it means -- i mean, williams will go up if the deal goes through. >> ete pays etp, in the article today talked about the amount of money kelsey warren makes -- >> $200 million from the dividend. that dividend will be cut. on the williams side, listen, you're going to get the $8 but don't forget you're going to have dividend cut substantially. so what you're going to lose in
payouts over time really the differential's only about $2.88 as opposed to $8 that you won't be getting. >> the idea that these are going up with oil is gravely mistaken. what does happen to have is that the etfs, speak of the devil, are so powerful they take up everything. as oil came back, but these are much more natural gas oriented and i would warn people these stocks, i have to tell you, david, one wins and one loses and they both lose. >> you're not alone in that point, jim. >> they've been very sanguine. >> yeah, so we'll see. no word -- well, i haven't had up to the minute reporting on whether there've been any talks but there hadn't been recently in terms of the two companies. >> they hate each other. >> oh, yeah. >> who hates each other more? >> remember anthem and cigna? they're not particularly friendly right now.
talk about a spread of course journal reporting this morning that the antitrust regulators are really giving them a serious lookover. while they have not said they will move to block, they certainly seem to be indicating they're likely to do so. read the story in the journal if you want more, but yeah. >> there's so much bad about m&a right now in terms of what's happening and terms of antitrust. >> it's been a tough year for antitrust. but you gave so much crap to the -- on the airline deals, maybe they were finally listening to you. >> i tell you why i happen to see both the attorney general during that period and person who's very high ranking in the justice department and they said love the show. >> thanks. >> the show, have you seen what i've been -- love the show. it was brutal. it was really like, hey, you know what, great victory golden state. no, actually we lost that game. >> they didn't get the headline. finally, today's the day that
16-year relationship between costco and amex comes to an end. >> yeah thrks is something i want to address on "mad money" because i have to tell you this is one of those things where it's a points issue. you get a lot of point fws from visa. the visa deal is good i think for both parties. as a big costco user i was encouraged by the people at the register to say, listen, come back after the visa thing. it's really great. and the gasoline at costco, if you want to go out of your way, now i have to drive 25 miles to get the deal on good gasoline, so maybe it's more of a push. >> yeah. >> but when we go to costco, david -- >> 25 miles total or 50 total? >> 50 round trip. when we go to costco, david, i tell you it's going to open your eyes. >> i look forward to that. >> all but about 20 or so s&p names are in the green. let's get to bob pisani. hey, bob. >> only a few defensive names like consumer names are kind of
flat. we're up 1.25%, carl, in the s&p but quite a rally going on in europe. show you what's happening there remember the sterling having its best day i think in seven years against the dollar. so a lot of the wars over brexit are being fought in the currency markets here. there's the ftse, done a complete u-turn in the last two trading sessions. we were down notably for the month on thursday and have turned around in the last couple days almost flat for the month, believe it or not. you see germany, france and spain all doing well just off the highs today. europe's still trading right now. european banks all to the upside. a lot of people wondering whether this is an overreaction, lloyd's up 6%, but remember financials even with these gains a lot of financials are still down mid single digits for the month. so you're still dealing with low growth and low interest rate environment, but just shows you this brexit was a real overlay on the additional problems, the low interest rate environment, the low growth that these banks have been dealing with. sort of a triple lan li assive
mentioned. large swaths of the british market on the upside here. berkeley group rally, london stock exchange concerns london might lose certain preeminence so very, very broad swaths of the european market rallying. here in the u.s. reversal of a number of trades. thursday was a bottom, remind everyone we were at $46 on crude and we were at 2050 on the s&p 500. that's a 50-point move in the s&p 500 in less than two trading sessions. and normally the s&p's amplitude is about 12 to 15 points in a single day. this is huge moves in just the last two trading sessions here. sectors here not surprisingly our bank sector finally we've got a day with ten-year yield on the upside helping the bank sector, that's the kbe bank index, modest rallies here but
it's across the board. as carl mentioned it's a very strong rally, the breadth is notable. energy stocks doing well. health care also on the upside. interestingly tell k telecom, b some of these banks still down, some single digits not anything as bad as europe but tough for the banks dealing with the double whammy of low growth and low interest rate environment. oil stocks up, dollar down, we've got a nice rally in u.s. oil moving to the upside here. usual names up modestly about 1%. finally just note these defensive names, which had had a nice move as people moved into defensive names last week, all are flat today here. not much of a rally here. but that's not surprising given the risk-on nature of the market today. finally note late friday the s.e.c. approving iex's application to become a stock
exchange. they're specifically allowing iex's speed bump, that was quite controversial, but iex says will decrease, theme for michael lewis's flash boys book. the dow up 244 points. >> energy and financials leading the way. let's get to jackie at the nymex. >> good morning, carl. that's right, oil prices going over $49 a barrel this morning. and the strength that we're seeing as bob mentioned is really on the currency play here. you've got a weaker dollar, you've got the basket of currencies that it's measured against a little bit stronger today as these brexit fears are easing a little bit. and that's really why oil is at the upper band of the range we've been watching. but that's been the expectation for the next month or so, so not really a huge surprise on the energy trade. remember as brexit fears do ease you're also going to have concerns about global growth easing as well, that's supportive of oil prices too. meanwhile gold ticking a leg lower and with currency in weakness you would expect gold to be higher.
not so much a currency play, more of the safe haven trade coming off a little bit. remember, gold is still pretty much close to 1300 and it is a strong trade right now some people are staying in as they see how the volatility plays out this week. expect volatility is what traders are telling me. saying margin requirements are going to be raised anywhere from 7% to 10%, this is only from a few firms, but it is an indicator that there's a worry we could see big swings in kbhodtikbhod -- commodities. >> thank you very much, jackie. we're going to stay on top of this morning's rally dow up 250 points. s&p within a stone's throw of 2100 yet again. don't go away.
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lewandowski who made some news himself in the last few weeks, the presumptive republican nominee faces more challenges ahead of the convention in cleveland not too long from now. we'll watch that. meanwhile, dom chu is watching breaking news regarding v.w. >> correct. the former ceo chairman of volkswagen, now there are reports here coming out that german prosecutors are opening up a probe or an investigation into whether or not there was market manipulation on the form of volkswagen's part based upon when they actually released data about their emissions cheating scandal. at the heart of this, again, the idea that perhaps the company knew earlier on than when it actually disclosed the information whether or not it knew it had an emissions scandal. prosecutors looking into possible market manipulation, latest headlines from multiple outlets.
we'll keep you posted. back over to you. >> dom, thank you very much for that. you said at the open, jim, not a big fan of this setup so to speak. >> yeah. >> what happens as we move on? >> i just think that, look, this thing's not over with brexit, this is last weekend's polling because there wasn't allowed to be any campaigning. i don't want people to pay out big for things they hated last week because then you just get whipsawed. as much as my travel trust is in a bunch, facebook, amazon, netflix, google, now alphabet, i just don't think that's where people go. they go to honeywell, they go to 3m, they go to the big industrials, but feel if we got rid of risk overseas they'd be higher multiple stocks, we'd pay for more their earnings. i think those are the stocks that have staying power and you go in and buy something you hated last week because you felt
fundamentals were weak, you're going to get hit again. i also think clorox and general mills have been unstoppable and those are stocks people feel very little risk. >> we talked about the bookies last week and why those haven't moved. lab ros tweeted 95% of the money staked today was for a remain vote. >> really? 95? >> yeah. >> you know, twitter is so dead and yet still alive. right now i'm writing off twitter on twitter. i'm saying this thing is no good and i'm going to tweet a million times on that. right? for all my followers. because it's finished. it's so finished i'm going to dress it all day on twitter. >> stock's only down 30% this year so far. >> that's not bad. >> i tell you you got to read that hive article. >> i will. total disarray there. disarray. >> we'll get stop trading with jim in a moment. dow's up 233.
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board member wrote a picture -- you couldn't find anything about her since 2005 she made hundreds of thousands of dollars, but nothing. there's nothing on the website, things she says she does, nothing, can't find a thing about her. so chip wilson, i want to hand it to you absolutely right versus 2013, i was rough on him, but he's got a point with his longstanding board member of 2005, that's who he blamed wrote a picture, where are you, that's my point, the street asking is lulu wrote a picture board member for real? >> interesting. now there's that narrative. >> yeah, a university we couldn't find. good reporting there. met her through jim stewart through columbia. >> very nice. >> would like to know where in the heck roda picture is. may be flip wilson, he's going to flip. >> the flip wilson show. >> i'm flipping on chip is what i'm saying. i'm flip wilson. >> geraldine. >> yes. but i just followed up because i
thought he was too aggressive, i felt, on this board. but when i did the search in 2005 looking at the street piece, chip come back on. >> what's on tonight? >> we're going to talk about what happened to the jewelry group. why does jewelry not sell anymore? what's the health of jewelry? >> i don't know. >> well, you'll find out. >> okay. >> hey, welcome back. >> thank you. good to be back. >> full strength as we like to say. >> happy father's day to everyone a day late. >> dow hanging onto 234 points. more "squawk on the street" after this. ♪
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♪ welcome back to "squawk on the street." i'm simon hobbs along with sa h eisen and david faber. rising hopes that the uk will vote to remain in the eu thursday, financials leading the charge, the rally in oil leading wti on the verge of regaining $50 a barrel, a big week for the markets. of course janet yellen before the senate committee tomorrow.
and then the house on wednesday. >> our road map begins with stocks surging this morning. new polls showing an increase in possibility of britain remaining inside the eu. we'll have the latest on that brexit vote that is coming later this week. another big week for the fed as chair yellen prepares for two testimonies on capitol hill. cleveland celebrating first title in half a century. break down the big dollars behind the game and what it means for lebron james and steph curry. coming up, the world's biggest advertising festival kicking off, our very own kayla tausche is live from can lions, big lineup ahead there. the founder and ceo of pandora tim wester gren will be joining us. you won't want to miss that interview and much more coming up from kayla on "squawk alley". 250 points on the dow, getting a welcome boost from the uk. thursday's brexit vote still too close to call, but risk assets
around the world surging on new opinion polls that show campaign for britain to leave the eu appears to be losing momentum. joining us now is john silvia, chief economist at wells fargo securities. this is a big move today. do you think it's the beginning of perhaps a dear change in sentiment? >> i think it is basically a change in sentiment. we also have to worry, simon, about volatility here because while the sentiment may have moved today, in two or three days we'll see what the actual vote is. but volatility is the number one story both for the equity market but also for the british pound. >> okay. let's go obviously the polls are still too close for thursday. but let's go with today's price action. let's believe in the price action. how much of an overhang do you think the uk has been to the market in many senses? and if we are able to remove that on thursday, where do you think we might go? >> oh, i think you still go up because you're going to have
better trading realizatie iniinn the uk and europe, both economies probably going to improve in terms of economic performance, taking away the downside on economics, taking away the downside on currencies. and i think risk-on surely says stronger economy better equity markets. >> probably ask the chief economist this, do you think we could get back to the record levels? we're about 1.5 points below the record we had on the s&p of may of last year. do you think that might be attainab attainable? would your strategist say that's on the cards? >> oh, i think it definitely would be in the cards. you're talking about 1.5% growth in both the euro and uk. take away a little uncertainty, talk stronger growth, you're still not talking about any interest rate increases. you've seen already from the fed that the fomc that they're not going to be moving any time very quickly. so i think, again, you've got more upside, absolutely, simon.
>> i mean, obviously front and center as far as interest rates are concerned as janet yellen beginning two days of testimony beginning tomorrow. less than two weeks of course after the news conference off the fomc decision. the classic thing to say is she will correct any misperceptions she believes the markets have tomorrow morning. do you think there may be misconceptions there? >> no, i think the mashlgts got it right. the fed's going to be very cautious going forward. they're going to allow the expand, fomc has no problem with being over the next year or two flatten interest rate expectations for 2017 and 2018. i think the market's got it pretty well right. >> john, it's sarah, what does the fed do if britain does vote to leave the eu? >> well, sarah, immediately the problem becomes one of flight to safe haven, so the dollar will
become even stronger. i think sarah's going to cause the fed to be even more cautious in terms of raising rates because not only do you have a stronger dollar, now you have uncertain economic growth and contrast to what simon and i were just talking about uncertain economic growth in both the uk and euro area. and of course our trade with euro and uk will also be negatively impacted. so i think it even delays further any fed move. >> so it sounds like you're not expecting any action in that scenario. what about from the european central bank? do you expect any sort of stimulus or efforts to provide liquidity? what is going on in those plan b contingency meetings that central bankers are having? >> absolutely. first is providing stability. there are some significant euro bank relationships in london. the spanish, irish or german banks that are in london, so liquidity has to be provided.
but clearly, sarah, the problem is you're going to have weaker economic growth in the euro and uk because of weaker trading relationships. that makes the ecb even more favorable towards further ease down the road. >> okay. what's the bigger picture on the fed here, john? let's say britain remains within the european union. do you subscribe to this view that was going around last week perhaps in line with pull out on friday beginning to top out on interest rates that there may not be another interest rate rise from the fed and kindly sort of shifting it off stage left before our very eyes if you like. >> i agree, simon. >> do you? >> i think what was really key when the fed lowered their potential gdp estimates and really settled on 2% economic growth. well, okay, if that's your target in terms of growth and inflation still modestly increasing at the time, yes, i expect once again the fomc and
janet yellen this week will show very cautious fed looking at all the data rksz simon, looking at global and economic financial and right up front the euro brexit situation is a major uncertainty. >> but, john, you know if the fed is not going to substantially raise interest rates and we've only had one interest rate move so far, that must be hugely beneficial for risk assets would go the argument. certainly that's the argument we've had for many, many years. why are you laughing? you don't agree with that? >> no, i agree entirely. >> why weren't we rallying through last week then? >> oh, i think still the brexit issue, simon. i think that major uncertainty, it's a date certain, it's a major break in economic policy. i think the market still had to be cautious in front of that. but now with the fed increasing interest rates a little bit less than what most people had
expected and certainly the fomc members bullets, comments coming out really emphasized the economy can grow a little faster. fed isn't going to take the punch bowl away that favorable. >> good to see you, john, have a great week. john silvia joining us from wells fargo securities. when we come back, big news this morning in politics as reports say donald trump is firing his campaign manager. we've got the latest on that. plus, cannes lions kicking off big advertising meeting. our very own kayla tausche will join us with a look at what is to come from that festival. dow up 270 points. opportunity's knocking, where self-proclaimed financial superstars pitch you investment opportunities. i've got a fantastic deal for you- gold! with the right pool of investors, there's a lot of money to be made. but first, investors must ask the right questions and use the smartcheck challenge to make the right decisions.
strong rally going here. the s&p up almost 1.5%. the all america economic survey is out. our steve liesman joins us with the exclusive results. steve, good morning. >> hey, sarah, i want to share with you some amazing results, differences between trump and clinton voters when it comes to investments in the market. stuff that other polls don't have because they don't ask about the economy the way we do. first take a look at overall views of americans on the stock market the way we do every quarter. you know, this good time to invest number had been up at
40%, it came down to the 30s. and it's kind of stay there hed. the only good news percentage of americans saying a bad time to invest came down. where did it go? a theme we've seen in all the results around the election, it's gone into the not sure. a lot of folks are not sure about a lot of stuff these days also when it comes to the election. take a look the other division we do which is the financially those with incomes over $100,000 and money in the stock market they ticked up a bit, they ticked up a bit just a little bit too. so really call it statistically flat though. let's go to the next thing, what are the best investments right now according to the american public. real estate winning again, i think this is the fourth in a row real estate won with 32%. gold 21%. in a statistical dead heat with stocks. but take a look at differences between trump and clinton. 32%, they're pretty much in agreement on real estate, look at the differences. trump voters tend to be gold bugs, 31% also saying that gold is the best commodity, 12% for
clinton voters and stocks trump voters down on stocks, clinton voters have a little bit more support for equity, sarah. >> just remind us, steve, very quickly of the overall election results that you took. >> let me show you that because it's really interesting. 40% for clinton, 35% stay trump. but look at this number right here, 25% with 14% saying neither and 11% saying they don't know. this theme of uncertainty running throughout our poll. and it's all online, sarah, cnbc.com. >> pick up on the stocks versus gold. what i was going to ask you was is it normal for people to rank gold above stocks and then saw the bar chart you have. no, it's not normal. that's a major turn in psychology there to think -- >> we've had moments, simon, when gold comes up. when the stock market falls, when you're in uncertain times, i believe when we had things like the fiscal cliff -- into
that number two, number three spot. but the difference with trump and clinton voters is emblematic of something we see throughout which is the typical trump voter is more pessimistic and more angry skprks that shows up in their preference for gold right there. >> all right. steve, thank you very much. >> pleasure. >> always interesting. meantime, the world's largest advertising festival cannes lions international festival is kicking off. tough gig, kayla, in the french rivie riviera. >> yes, it is very tough, but guys, i can assure you i'm wearing spf 70 because i'm easily the palest person here. started in response to the film festival, but it's really more to include a who's who of media and tech as the advertising tech and media world have all collided. and executives you might think that they're just having a day at the beach, but they say it's more like attracting bees with honey because it's so beautiful
here that who wouldn't want to attend? and everybody does attend so ends up being one of the most productive weeks of the year. if the big wigs are here that means we are going to be here and the hot topics we hear everybody buzz about is virtual reality, messaging, facebook, google, twitter, hosting beach front property to show interactive demos to advertising partners. we will talk to adam bain, sir martin of wpp later in the week, also shane smith of vice. but just as interesting guys is what's happening behind the scene. snapchat was a keynote last year and they are certainly making a splash and taking a lot of branding across the city on the pa lay, hosting a lot of dinners, certainly trying to drum up or keep momentum going for their burgeoning ad business. also the embattled ceo of viacom is also reportedly here to be meeting with ad partners,
assuaging their concerns about the business after taking down the guidance for the company. of course the distraction over who will end up running sumner redstone's empire. and of course to keep the palace intrigue going, leslie moonves, is also here. next hour we'll talk to vox, tim westergren of pandora and we'll manage to enjoy in the meantime. back to you. >> kayla, what is your perception of the difficulty that big tech has in grabbing more of the advertising budget? because obviously there was some retrenchment and they felt a lot of them that they had to perhaps articulate their story better to shift the ads spend as much as they had hoped they would. where does the power lie in cannes this year, do you think? >> it does feel, simon, like the power is still with facebook and google. where advertisers are spending with tech companies, they are
spending about 85% of it with those two companies. so it seems like the fight is actually between some of these smaller tech upstarts. you can't even call them upstarts like twitter who are trying to fight for that remaining 15% market share. that's really where the fight is. i think the big broadcasters who are here, and the traditional media companies know that everything is moving online. and so they just want to be there when the puck eventually gets there. but it's pretty clear that they're going to be fighting a turf where facebook and google already have much of the income there. >> seems like a good time, kayla, also to be talking to ad execs about advertising itself with the rio olympics coming up, with the u.s. election which is set to bring in big time ad dollars on both campaigns. and of course some of the big macro economic issues like brexit this week. >> oh, yes, and we will talk to sir martin sorrell about brexit of course. there are huge implications for what happens there. we'll be talking to the manager
of nbc's own $4 billion ad business what inventory looks like for rio, how that's going so far. so a lot of big topics and you can bet we'll hit them all. >> okay, kayla, it's going to be a busy couple of days. looking forward to it. kayla tausche joining us from the south of france. coming up on the program, reports saying donald trump is parting ways with his campaign manager. we'll have the latest from the campaign trail next on cnbc. i laugh, i sneeze...
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a shake up in the 2016 presidential race this morning. donald trump parting ways with his controversial campaign manager. for more let's check in with our own chief washington correspondent john harwood. john, how much of a surprise is this? >> it's not surprising. the only question was when something like this was going to happen. corey lewandowski is somebody who deserves the credit for the way he guided donald trump, as campaign manager to the republican nomination.
he ran it from the beginning even though he had not run a presidential campaign before. and he built his campaign around the big donald trump rallies, donald trump's domination of media attention. but that formula doesn't necessarily work in a general election when you're trying to appeal to a broader audience, when you're facing just one opponent. and corey lewandowski'sbelligerr combativeness as exemplified by this incident with the reporter michelle fields where she was approaching donald trump at a rally, corey lewandowski grabbed and jerked her arm, this briefly generated charges against lewandowski though they were not p pursued. but that sort of similymbolizes style and lately he'd been bumping up against paul manafort, and given how difficult donald trump's campaign has become, his deficit widening in the polls, it's
inevitable he was going to make that turn to paul manafort more fully and indication of how difficult it was within the campaign, tweeted out after the firing of corey lewandowski, ding dong the witch is dead. so that is an open demonstration of just how toxic the trump campaign had become internally. we'll see now whether with lewandowski's departure it becomes a smoother and more broadly appealing operation, guys. >> or something that's perhaps more aligned to the party itself, to the establishment gop. as of course he looks to raise funds and the discussion around that and what might happen there, john. >> absolutely, simon. look, paul manafort is somebody experienced in presidential republican politics, he's run conventions in past republican campaigns. this is someone who knows how to do the mechanics and the fund raising and all the things that go with the national republican
campaign. corey lewandowski for all the strength he showed during the primary campaign was simply not experienced and equipped to do that. >> one last question, john. there is this discussion about whether there's still an anti-trump push within the party that may materialize at the convention. i know that the trump campaign is basically saying, look, this is a figment of the media's imagination. how would you weight what is going on here? how real does it appear to be? >> i think it's pretty unlikely that donald trump is going to be stopped at the convention. and i do think that this move that donald trump made probably diminishes that likelihood by solidifying control in paul manafort, somebody with bona fides among conventional republicans, traditional republicans. it's not out of the question. and as trump's deficit widens he's now in the average of polling six or seven points down, that's a pretty large gap in our system given how
polarized our polls are. you've got to have an alternative. you've got to have a candidate organizing. and you've got to have a large constituency for that person. in the primaries nobody develops such a constituency. it's not likely it's going to happen now. >> john, thank you. john harwood in washington. coming up on the show, the brexit vote takes center stage as hbo's last week tonight host john oliver weighed in on the debate last night. >> there's also overwhelming consensus about the damage britain could do to its economy by leaving. reports by groups like the british treasury, the bank of england, the imf, the oecd, the national institutes of economic and social research, price waterhouse coopers, and the center for economic performance have all predicted that leaving would have a negative effect on the british gdp. and the pro brexit response to that has not been great. >> i think the people in this country have had enough of experts with organizations --
acronyms -- >> what do you mean? >> organizations with acronyms saying they know what is best consistently wrong. >> yes. [ bleep ] these eggheads with their studies and degrees. i get my economic forecast from clever otis, the gdp predicting horse. >> we'll break down the possible brexit results and how to play the market ahead of thursday's historic vote next. sup jj, working hard? working 24/7 on mobile trader, rated #1 trading app on the app store. it lets you trade stocks, options, futures... even advanced orders. and it offers more charts than a lot of other competitors do on desktop. you work so late. i guess you don't see your family very much? i see them all the time. did you finish your derivatives pricing model, honey? td ameritrade. a good car has to maneuver quickly.
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no surprises. buying business internet, on the other hand, can be a roller coaster white knuckle thrill ride. you're promised one speed. but do you consistently get it? you do with comcast business. it's reliable. just like kung pao fish. thank you, ping. reliably fast internet starts at $59.95 a month. comcast business. built for business. i'm sharon epperson. here's your cnbc news update at this hour. the supreme court rejecting challenges to assault weapons bans in connecticut and new york. they left in place a lower court ruling that upheld laws passed in response to the newtown elementary school shooting involving a semiautomatic weapon. a suicide car bomb has killed at least 12 people in afghanistan this morning. the bomb hit a minibus carrying private security guards in kabul. the guards were from nepal and
on their way to work in the capital. a brutal heat wave expected to continue today in arizona. in phoenix temperatures climbed to a record setting 118 degrees, fifth hottest day on record. the high today is expected to be 117 degrees. and speaking of hot items, mattel has one they recently released game developer barbie as a way to get girls interested in technology. she sports jeans, jacket, sneaker, dyed hair, hip ster glasses and a headset. none of it is pink. it's already sold out on mattel.com. my daughter would love that. that's our cnbc news update this hour, sarah, back to you. >> i would love that too as a little girl. sharon, thank you. >> absolutely. take care. companies and their executives don't usually weigh in on elections and politics, but the brexit vote is proving so consequential economically that it is prompting some big business to speak out. the alcoholic drinks giant behind johnny walker and kettle
one, numerous other brands based in the uk sent an internal memo today to employees laying out whied ceo says it is better to remain in the eu for the company and for the scotch whiskey industry, says, quote, remaining the eu gives us easy access to the european single market, that's 500 million people on our doorstep to whom we can sell our brands without much red tape. he goes on saying being in the eu means the uk benefits from the tree trade agreements europe has already signed and cites a recent agreement with vietnam as a good example, quote, over the next seven years this will eliminate 45% import duty on spirits exported into vietnam. if we leave the eu, our products revert to paying 45% import duty until the uk is able to negotiate its own trade agreement. this will have an impact. so largely due to trade he says it makes little sense to risk the uncertainty. for more on what other ceos are
saying our willford frost joins us from london ahead of thursday's historic vote. we should note, wilfred, the dow just erased all of last week's nearly 200 point decline because of some of the optimism on some of these polls. >> absolutely right. markets rallying significantly, sarah. first i wanted to point out earlier i told you you need to bring your own umbrella, but the sun is out. maybe you don't after all. your know british weather is very volatile, market suggesting a bit of a volatile response in recent days to the brexit vote. strength today as polls have improved. one of the reasons as you said big business coming out in force today writing to employees deagio one of the names 5,000 employees to speak of who may be influenced by that letter. ford, the uk arm of the automaker writing to its 14,000 employees, another major company today getting in touch with voters backing them, urging them to back the stay camp.
i would add though that both letters seem to point to that uncertainty. a period of uncertainty in the intermint period. they're not saying the economy will collapse on the 24th of june, the day after the vote. also worth pointing out smaller businesses tend to favor exit while bigger businesses remain. so lots of points coming across in the business community. the question of course is whether employees do listen to that. it's really an argument focused on those who are undecided. people already backing exit because of issues like immigration or unsovereignty are less likely to be swayed by these sorts of things. back to polls, other factors polls have moved significantly as you said dow erasing losses from the end of last week. rather than the business argument i think is more down to the sense of unity we've seen particularly within the remain camp following tragic events last week. and as we speak parliament is in
special session to pay tribute to murdered m.p. jo cox. prime minister speaking saying she epitomized the very best of humanity. that's the sentiment going on inside the houses of parliament behind me. whether that continues to build the sense of unity behind the remain camp we'll have to wait and see, but the polls, the betting markets, they've certainly moved to suggest that remain is the more likely of the two outcomes now. >> wilfred, it's simon. is it fair to say -- it's interesting with the ceos i think the financial times ran an article last week where ceos were being asked to sign another letter remain, one said what's the point we're not going to move anyone on this issue anymore. is it fair to say that the argument has shifted from economic to immigration and then perhaps more controversially to race? i think one of the lords, one of the female lords has actually resigned from the exit campaign overnight in the way that she
perceived that side have been arguing its case. >> indeed yes. had been backing leave, she's now backing remain because she felt the immigration argument had gone just a little bit too far in recent days. it's worth noting while significant and symbolic, she wasn't a lead face of the exit camp, but certainly relatively high profile person changing their view. listen, i think it's absolutely right, simon. we've said before how devoters like being told what the economic negative will be leaving or do they want a positive reason to embrace. that's certainly an aspect with all these businesses coming out. i think a letter from your ceo is probably going to resonate a little more than mark kearny or janet yellen, not sure who they are saying there's going to be a hit to gdp, a factor maybe you don't even think you'll feel in your wallet. i want to touch on the extent of the market moves we've seen today. most of the traders moving the sterling market is based here in
london. london is a cosmopolitan place likely to vote remain. go to the areas i don't think these arguments are being felt so much. yes, there's a sense of unity over the last two or three days for remain, but a lot of those people won't be swayed by it either way. i just wonder how pronounced this move in markets has been today and whether that's really totally justified. more polls of course due to come out. and campaigning due to pick up much more in the next couple days than it has been in the last couple. and can the leave camp get the focus back on the likes of immigration where they do well? >> it's going to be close. i'll see you tomorrow, wilfred. i'll bring my sunglasses and rain boots. never know what to expect in london. so for more now on how the outcome of this brexit vote could impact the markets, let's bring in barrington pitt miller, you know, wilfred brings up a good point, rally in the dow,
even bigger in places like germany and european banks, are investors getting ahead of themselves here with three days to go before the vote? >> well, i think it demonstrates the very high intensity nature of the potential outcomes here. if we do have a remain vote, i think we'll continue to see this sort of rally continuing for a while, particularly in the uk equities, potentially continental european equities, sterling strength, euro. and i think it will have a positive impact on global markets. i think the issue is in the event of an exit that brings very considerable uncertainty to the entire euro project and markets detest uncertainty. and that uncertainty will potentially bring in some very serious fat tail event risk, the integrity of the euro to question, i think that's why you're seeing this very high beat in market reaction both to the increase in the exit and to the remain poll. >> so with that big of a risk as
you spell it out, how are you positioning for the vote? and how are you hedging if it goes the other way? >> well, we've certainly taken down a lot of risk going into the vote. we are cautious on uk assets. we've been cautious in our positioning in continental european assets. and i think the same would be true for both opposition in credit and rates, we have developed a relatively defensive stance given the potential for that high intensity, high impact event in the event of exit in europe. >> barrington, i think it's worth pointing out that -- and this is potentially where the danger lies, that actually most people who control money, for example german industry, does not believe that the uk is going to exit. if i look at the merrill lynch fund manager survey roughly three quarters of big fund managers if not more think it's not going to happen. look at the survey out of germany of industrialists, they don't think it's going to happen. therein lies the danger of course that actually on thursday they do vote to leave and
actually all hell breaks loose because if you look at the moves we've had over the last couple of weeks, arguably they've not priced anywhere near what people think might happen on thursday. is that fair to say? >> absolutely right. been talking with a number of financial institutions senior managers in recent weeks. it's interesting they are very surprised that their own clients are not de-risking substantially. so i would absolutely agree with you that the general position is probably moving towards remain if you're active in global markets. but i think the tail risk to the downside, if you start to question the european project integrity very serious for global markets. sorry. >> i just wanted you to get more specific. what about european banks? what type of moves given what they've seen so far, deutsche bank, ubs, barclays, are you talking about in terms of how much they'll be hit if they do vote to leave?
>> well, i think there's an interesting point here. ecb is very active in the credit markets and the rates market. so if you want to express a view of deep concern on the back of an exit vote, the equity market becomes almost the most inevitable place you have to express that opinion. that will be therefore very challenging to stop and absolutely hit the nail on the head. remember also that the markets are very hard wired these days to look for systemic financial stress, post the euro sovereign crisis, the market looks for those chin ks, moments of weakness in architecture. they will be absolutely looking at the financials. >> and if i look back, barrington, at where europe or the eurozone traded over the last ten days, you can see from the price action that it's the italian banks, or it's the spanish banks, the weaker banks with so many questions that really do shift ironically on whether britain stays in the eu or not. is it possible that you
construct a chain of events where the epicenter of the uk voting to leave on thursday becomes the failure and the recapitalization hopefully of one of those players? >> i think that we've witnessed -- you're right on the equity market news, but we've also witnessed quite a significant widening of the peripheral interest rate spreads versus the bund. and i think that very clearly tells you during those periods of sort of the polls moving towards brexit but the market is deeply concerned back potential ramifications on the peripheral assets and ultimately peripheral financial institutions. i'm not sure in and of itself a brexit vote is the catalyst for a serious problem in a single idi situation in europe, but i'd certainly think that is where the potential epicenter of an exit vote would manifest itself.
the uk first order impacts material, more so than europe. but the seconds round impacts are going to be more acute in continental europe because you begin to question the integrity of the euro project. >> which is why we're going to have to watch the ecb. barrington, we've got to leave it there. barrington pitt-miller of janus capital. nike releasing an ad highlighting the victory. what the big game means for advertisers ahead on cnbc. sir! it's the president!
congrat... picture from mars looks great. it's about time business communications caught up. go from an audio call to a video conference with the push of a button. vonage. business grade. people friendly. in terms of great nba rivalries we've got bill russell versus wilt chamberlain, magic johnson versus larry bird and now lebron james and steph curry. cleveland cavaliers clinching historic comeback last night becoming the first team ever to win an nba finals after they were down three games to one.
game seven also capped high stakes battle between nike and under armour. nike quick to capitalize on the win and its lebron endorsement with this ad last night. for more on the big business impact and the big money at stake, we're joined by cnbc contributor mike jackson, chief marketing officer with event solutions international. and, mike, does nike see any increase in sales and/or decrease from under armour as a result of the results from last night? >> well, thanks for having me. you know, nike's this iconic brand. and their positioning is really not so much anymore about selling product. it's about creating this kind of movement. and the fact that they had that ad ready, i believe, which really captured consumers all over cleveland, really just keeps putting them in the hearts and minds of consumer that are barely passionate about sports. so i think they'll continue to
beat nike. i don't think under armour will kind of out-nike niek nike, and they've got a challenge going forward. >> you think under armour has a challenge, clearly a bad loss so to speak for mr. curry, but i would think his star still shines very brightly as well. >> oh, steph curry is an outstanding spokesperson, outstanding ambassador for the under armour brand. i don't believe that, you know, i wanted to imply that they have a challenge going forward, but if you go back to the early '80s when the cola wars going on between pepsi and coke, i kind of look a little bit at what's happening between nike and under armour to be consistent with that. pepsi went out and made big splash, signed a lot of high profile players and coke took a step back, kind of retrenched themselves in their brand positioning. again, as you saw in that ad last night, nike's positioning around being there for the moment, being more about a
broader movement, having their products and their personalities like lebron, like curry participate in that, it was just brilliant positioning from a very, very tough competitor. >> mike, we were talking to one of the crew that is renegotiating the contracts in nba, the salaries for the players. and she was suggesting that actually one of their main hopes is they could take nba internationally. i see from your resume here you've worked for coke, for pepsi, a lot of international brands on international campaigns. do you think that nba is being marketed abroad where you could presumably get some exponential growth adequately enough? do you see ways in which they can make that better? what would you advise them to do? >> you know, one of the things that is happening with the nba is -- and this was kind of started with, you know, the whole era of michael jordan and magic johnson and larry bird continued with kind of kobe. they became kind of global superstars. consistent with that is the
positioning around steph curry and lebron. and i think what the nba really needs to focus on is how do i take my brand, the nba, our teams and really put them into the conversation versus black mamba, kobe bryant, being a superstar in places lie china. >> my 13-year-old son never saw michael jordan play, but he's still buying jordans. does this win take lebron up to that same level? >> you know, that's going to be a real challenge because nike and jordan, you know, i was talking to my son last night and said, hey, if you think about brands and you think about product, the only nike product associated with basketball that you can even remember is air jordan. you know, kobe's had his shoe, lebron's got his shoe, and so, you know, that's kind of rarefied air where michael sits. i don't know if that's going to be approached upon. >> lebron also has a lifetime contract now with nike which is
something that only michael jordan has. in that sense it's similar as well. >> yeah, they're going to be working together for some time. >> mike, thanks for joining us. appreciate it. >> thank you. >> mike jackson chief marketing officer event solutions international. coming up on the program, still up 243 points on the dow. the looming effect of a possible brexit boosting markets this morning. we'll break down how it's also having an effect on crypto currencies next. & in a world held back by compromise, businesses need the agility to do one thing & another. only at&t has the network, people, and partners to help companies be... local & global. open & secure. because no one knows & like at&t.
because you have enough to worry about. i did not see that coming. don't deal with disruptions. get better internet installed on your schedule. comcast business. built for business. bitcoin has been spiking. the crypto currency has been going higher pretty much all this month with the british pound seeing increased volatility ahead of a brexit vote. some are wondering whether bitcoin is a safe spot to invest in during economic uncertainty. fred irsam, good to see you. thanks for joining us. >> good morning. good to see you. >> is that really the reason why bitcoin has made a move higher in recent weeks, because of uncertainties like brexit? >> i do think so. i'm not sure it's all associated with it, though. i think a lot of it has to do
with the devaluing in china and what we have consistently seen with bitcoin is chinese investors often flock to bitcoin. the other thing i will say is broader euro zone tensions, so as european banking stocks struggle, we have seen in the past when cyprus has struggled, bitcoin has rallied. so things that i think effect the stability of the banking system broadly help bitcoin. >> isn't there also an upcoming supply shortage, pre-programmed code-induced sort of limitation of supply that's coming in july? some are attributing it to that. >> that's correct. you are referring to the block where the inflation rate will effectively be cut in half. i do think that's a reason for the price increase as well. it's by nature a limited supply currency. it will be fixed at 21 million bitcoin ever created so as the inflation rate goes down, the price seems to be going up in
expectation of that. >> the risk is people will look at this and say it's a safe place to invest but it still is pretty volatile. there are still a lot of risks. there was a "new york times" report this weekend that a bitcoin centered or block chain centered venture capital fund was hacked and a third of the value was stolen. >> yeah. you are absolutely right. it's still early days of creating the internet of money which is really what's happening here. so it will remain volatile for awhile, i believe. but it's kind of like early internet stocks and you know, the late '90s or 2000s, there's so much potential but it's very early. there's a lot of experimentation. i think it will be worth a lot long term, but there's going to be some bumps in the interim. >> i wonder if we have to distinguish between talking about an alternative currency where we talk about the price of bitcoin versus what mark es is
excited about and the new york stock exchange which is also an investor in your company, aren't they investing for the technology of the block chain with the hopes that one day it will change the way we do payments? don't we have to distinguish between that and the price of a safe haven alternative currency? >> in some ways, yes. in some ways, no. i think that you need a native currency in order to power the economic incentives to make the entire thing work and to run, because people won't maintain it for free. so the two are linked. that being said, i don't think bitcoin has to become the global currency in order for block chain to have a massive effect on the way we transact on a day-to-day basis. >> where are we in that effort for block chain to have a massive change in the way we use payments and in the way that banks operate? >> i think that we are in relatively earlier days of it. i would say we are probably 15%
to 20% into it. if you think about this as a global network trend like the internet, we are probably in the early '90s where there's a lot of money going into it, a lot of development happening, but at the same time, in terms of the arc of somebody using it for multiple actions as a part of their every day lives, it's definitely in the earlier part. but the promise and the rate of change in the ecosystem is high and is definitely there. >> all right. we continue to take note, especially had we see mids like this. thanks for joining us to discuss it. speaking of things technology, "squawk alley" is on deck. jon fortt is the member of the team that didn't go to cannes. good morning. >> we will talk markets, the dow up better than 240 points, but the nasdaq doing the best of all indices, up nearly 80 points at this point in early trade. also on the show, we have tim westergren coming to us and we
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headquarters in burbank, california. "squawk alley" is live. happy monday. kayla tausche is live from the cannes lions international film festival in france. here for the hour, kelly evans. >> not in front of the ocean, though. beautiful shot. >> joining us re/code managing editor and cofounder of confide. our top story this morning, a rally under way on wall street on news of british exit from the