tv Squawk Alley CNBC July 15, 2016 11:00am-12:01pm EDT
conference from the french prosecutor. it is expected to start any morning. the french president addressed his country the last hour and said the 84 people that were killed, many of them were young children and also foreigners. he said 50 people are between life and telth. earlier he visited one of the hospitals where victims are taken. the spokesperson told nbc they received 30 teens and young children. the youngest of whom was six months old. two of those children have died. the children were crushed by the truck suffering multiple broken bones and that the hospital staff had been trained for mass causalities because they were expecting an attack at some point in nice. we're learning more about the attack and reporting to the may mayor's office. he's 31-year-old living in nice. the attackers believed to have moved to france in 2005 after attaining his french residency
status through marriage. his family is being questioned. there is video that shows what appears to be the final standoff between the attacker and the police. you can hear gunfire as officers race toward the vehicles and surround the cab and shine their lights inside. two americans are among the victims. 51-year-old sean copeland and his 11-year-old son brody copeland. his family released a new photo of the two of them on a baseball field. both were very involved with their youth baseball league. that's father and son on the diamond. kayla back to you. >> michelle with updates on the latest of the nice attacks. donald trump naming governor mike pence as his running mate. he planned to do so at an event in manhattan. he postponed that but john
harwood has more on what was widely affirmed and expected. >> it has been a roller coaster all week long with this vice presidential selection. donald trump auditioning various members of his ticket. newt gingrich, chris christie and mike pence. it appeared yesterday that he was set to announce mike pence. mike pence flew to be in new york for an announcement that had been scheduled for 11:00 a.m. today but then of course after the attacks donald trump thought it was inappropriate to hold that event and then he went on fox last night and indicated that he hadn't made his final decision which caused a huge guessing game over whether this was still open or not but now donald trump ended that uncertainty and meezed his party by doing this. house speaker paul ryan yesterday praised mike pence as a solid choice, social conservatives and served in the house and comes out of
conservative radio and made it easier to compete this fall. there had been a debate and newt gingrich had been a finalist and he launched a fairly aggressive open campaign for the job believed to have been favored by jared kushner that's donald trump's son-in-law. it's 24 hours after planned and republican ticket, donald trump and mike pence. >> john, how much is this to disgruntled delegates and does it truly put away any movement from the never trumpers that people were talking about making an appearance next week? >> it's a significant one to them carl. this is going to be a popular choice with republican delegates. most of these are regular republicans. they're conservatives and people that have been part of this party in it's conservative identification over the last couple of decades. that's what mike pence comes out of. donald trump does not come out of that tradition so there's
misgivings about him. not enough clearly as we saw yesterday for them to oust donald trump and overturn the results of the republican primaries. the never trump movement was crushed last night but this is going to be something that makes a lot of republicans feel better about donald trump. the ticket is still going to be defined by donald trump when you have a personality that large. not to mention simply the buy at the top of the ticket. this election is going to be about donald trump but mike pence is going to be something that is reassuring to some segment of republicans who might otherwise have been troubled. >> john, thank you for that. john harang ge john harwood that made his way to new york. and it's good to have you. >> you thought pence was a good idea. >> at some extent they're all ahead of the game.
it hadn't been offered until this morning. donald trump was in california yesterday. i believe in what i heard from john harwood. it's a popular pick inside the republican party. there's going to be a little bit about how mr. pence handled the so-called religious freedom act a coup m of years ago. i think that's minor stuff but on the other hand, pence will really help mr. trump among the more traditional conservatives in the republican party and i have known mike pence for a long time. human events magazine, human events newspaper picked him as the man of the year, conservative man of the year a bunch of years ago and i did the interview in the write up. that's how long i had known it. >> how does the business community feel about him though? >> much has been made about the fact that he's scandal free.
but he did have a couple of strikes against him on social issues where businesses. >> in the debate about the religious freedom act, pence actually wound upsiding with the business community and was very much concerned of that. and indiana by the way is almost a swing state right now and it suffered all the slings and arrows of the manufacturing wage downturn in recent years. the reason i love the guy is the free market and tax cutting guy for a stable dollar and he's a trader and he's a growth guy and is going to help trump in washington when they get there. mike pence was number three in the leadership. he was the head of the republican committee years ago. he gets along very well with
mitch mcconnell and paul ryan and these are all big pluses. this is going to be fine. business is going to have to make their deal with donald trump on trade. i'm a free trader. happened my whole professional life but for free traders like me what is wrong with enforcing trade deals that are consistently broken. free trade means in force of the law so free trade might work. that is trump positions. and maybe think he's a protectionist. he says we're going to make the oath. i happen to agree with that. the chamber of commerce can't agree with that. >> those that want to pick apart pence's twitter account where he praised ttp, does that mean they have a long way to go to come to materials. >> that's his instincts.
his instincts were good. there's boards and commissions out tps side of the united states that will ajudicate him. outside of the united states we need brexit and trade here. his heart is in the right spot and he is going to -- i think john harwood is right. he's going to quite the so-called never trump conservatives. >> you don't expect those fireworks next week? >> i do. these are good friends of mine. i'm turning the other cheek. i love these people. we have been working together for decades but they're going to have to live with the fact that donald trump is the candidate. period, end of sentence. mike pence will help in that effort but he may have a little bit -- >> does he help lock in ohio, wisconsin? >> let's see the votes but you're right, i mean, indiana is a lot like ohio. indiana is a lot like pennsylvania and michigan.
they face the same middle income wage earner problems and i think he will. i think at the end of the day, let's no go crazy. people vote for the head of the ticket. that's the main thing and i think the main plus for mike pence is in the event of an emergency, god knows, he can be president. he is qualified by virtue of his experience as a house member and a leadership member and a governor. that's really nowadays the biggest thing. >> jobs, retail sales, wholesale inflation, are we building anything? >> you know, look, the numbers came in pretty good. today's numbers particularly. year over year not so good. nothing has really changed. ly hold to the view, profits are falling, business investment is falling and manufacturing is flat. there could be a mild business recession. we need a couple more months to figure that out. last quarter was lousy with seasonal adjustments or
whatever. the second quarter is going to be better. you'll probably go from one to three or 3.5. >> so barclays goes to 2.9 this morning. >> fair enough. you have to average this thing out. i don't see major moves in the economy. i don't see major moves unless something happens and i'm not sure what that's going to be. you know i have supported trump's tax cut for many months because of the business tax cuts 15%. and my view that's the single best economic stimulant we could have. >> one thing, about nice. the tragedy about nice, last night, mr. trump in an interview said that if elected he would declare war. the president and congress, he would ask for a formal declaration of war against isis.
we should have done this at least a year ago. these tragedies are multiplying. right now france has been our ally for 300 years, 250 years, why aren't we standing shoulder to shoulder with france. it's what trump has been calling for. why don't we have a declaration war to show energy, emergency, commitment because these loan wolves keep talking about how inspired they are by isis. i want to deinspire. he told me on my radio show, he said the united states must take out their safe havens in iraq and syria. take them out and that would turn the tide. trump said that. i'm waiting for hilary to say it too. it's a foreign policy.
we have to go there. we have to go there and declare war and mobilize this country. >> i believe it in my heart. >> always good to have you. we'll see more of you in the coming days. >> when are you going to cleveland? >> tuesday night. >> i'm going sunday night. >> on that issue of global terrorism, the third attack against france in 18 months. let's bring in our military analyst colonel jack jacobs and white house correspondent, great to have both of you this morning to shed light on this situation. i want to start with you because larry just brought up the question of nato and what nato's involvement should be in the situation. she believes nato needs to be more involved do you share that view? and when do you think that happens? >> we'll start with you. >> you can't conduct any kind of military operation unless you
know what the objective is. using military force is useful if it's directed at something. there is no agreement on what it is on what the military force could do in this situation and syria or iraq or any other place is not at the end of the day going to get what the united states needs in order to protect itself. so the use of military force alone is insufficient. >> president holland has extended the state of emergency in france and it had already been under a state of emergency after previous attacks. what does that do for the country and for this fight against terrorism that has already been on high alert and they have already been trying to route out this ideology. >> yesterday in an interview the french president didn't want to prolong the state of emergency. it's better i'm going to lift it on august 26th and then the
attack happened and now the state of emergency is there for three more months. what is interesting is what's next? is it going to be that? do you need an international coalition to send troops to syria and iraq and especially where isis militants are? that's the real questions that the politicians have to face at this moment all over the world and nobody know what is is going to happen next. >> colonel i was at the nice airport last month though. there was a heavy military presence there. michelle just reported that the hospital staff had been trained in mass causalities because they expected an attack to take place in france and in this resort community. what's the sad state of affairs where we have this heightened presence and yet we still cannot solve this issue.
>> i think one of the causes of the difficulty yesterday is something really simple. it doesn't make any sense to permit very large numbers of pedestrians on the promenade during a big celebration and not do something simple that most people know and most people in law enforcement know how to do. that is to seal the area off. no way that any vehicle of any kind could have gotten anywhere near all of those people and the fact that this truck was able to roll through slowly initially indicated that there was insufficient security and i think that the investigation is going to demonstrate there were huge failures in physical security that were demonstrated by local police. >> colonel on immigration, obviously we're back to talking about restricting visas from hot beds of terrorism. do we need to think of france as one of those areas? >> well, if you're going to
subscribe to the notion that you're going to prevent people from other countries, countries you might suspect have people in them coming to the united states who are potential terrorists, then yes. but you're talking about doing something that is physically operationally, and probably politic politically impossible to do. the united states tuz not have the political will or the physical capability to do what is being suggested. >> what is your read on the scope of the effort to combat isis ideology within france at a regional level? >> people are really trying to do something with the teenagers who are deeply influenced by isis. they're trying to counter isis propaganda by teaching young people in class and also in special centers about the ideology of this regarding isis. what is interesting at this
moment is to see what's going to happen in the french society. is france going to live like in israel. people are leaving. many with security guards. what is going to happen next? because the french prime minister was quite pessimistic a few minutes ago when he was talking about the threat of terrorists and he was saying that there's a new reality in france and that the threat of tourism is there and it's not going to go away. so the french were extremely worried about the possibility of an attack. they're still extremely worried and there's a consensus at this moment in france about the fact that unfortunately it can happen again. >> well, we know that there have been arrests in years past related to isis. it's just hard to imagine such an ugly thing happening in such a beautiful place. we appreciate your time this
first case of female to male sexual transmission of the zika virus. while zika is transmitted by certain kinds of mosquitos it's also known to be transmitted by male sexual partners. the update comes after a young woman in new york city tested positive after traveling to an area with active transmission and subsequently she had passed the virus to her male partner think sex. the ctc is continuing to investigate this and says it's updating recommendations for sexually active people. it recommends all pregnant women that have partners and zika is proven to call birth defects like microcephaly. we do not have it in u.s. states through mosquitos but 1300 travel associated cases and areas like puerto rico are hit especially hard.
record highs this morning. let's bring in the direction of floor on rags at ubs to talk more about what today has meant and more importantly what the last week or two have meant. >> yeah, i know, it's been quite dramatic and i think that you saw some sideline money really start to panic, you know, fear of missing out took over. and there have been others that have maybe not record amounts of cash but very large amounts of cash and, in fact, the public has been with drawing funds from the market almost all year and it's been the corporate buy backs and i think once they saw
the rebound people said wait a minute. maybe this isn't as bad as it looked and they came in. some of this week's action had to do with the expiration today. people wanted to get things up above particular strike prices. there were some of the frustrated shorts complaining that the pattern was in the lightly traded overnight futures and then we would gap up here and then kind of cruise along so i think this morning's had to do with the expiration and that's wearing off and next week we'll see and both the ppi and cpi coming in stronger than expected so at least the conversation will switch a little. >> and people didn't have to worry about china gdp coming in
very smooth and stable for the second quarter. do you believe that number and do you think that china lost a sense of priority for the market that investors haven't focused so much on it? and they'll realize again and the horrible things in europe and everybody is completely distracted. >> we finally get a positive sign on that yield for the first time since late june. are you starting to rethink your view of rates going into the end of the year? >> not quite yet. i think that inflation is a little stronger than most people had thought. but i'm not sure that it's strong enough, you know,
certainly july is not on the table. i doubt that september is on the table. then we get into the election debate and whether they come in or not. we'll know a great deal next week and on thursday the ecb is going to make some decisions about where they want to go. and that will give us some guidance. if the bank of japan looks like it's going to try to ease further and the ecb is going to try to ease further then i would argue that the fed could sit there and say they're doing work for us and we don't actually have to raise rates comparatively our rates are higher than everybody else. >> you mention it is a quadruple today. set us up for the end of the session today and what we should be watching for. >> well, i think there's some minor rewaiting so i don't think it's going to be an enormous close. i would look to see if you start
to see things drifting down. for now the s&p is right around -- if it began to drift down below 2155 or so then you would see extra pressure put on it. >> thanks so much. >> good to see you. >> when we come back, more coming from nice, the tragedy that left 84 dead. ten of those children. we'll go live with the latest. [announcer] is it a force of nature? or a sales event? the summer of audi sales event is here. get up to a $5,000 bonus on select audi models.
good morning, bob. >> we are experiencing right now the kind of a follow up that has become routine. unfortunately the terrorist attacks have become more and more routine throughout the world. the latest, of course, was what happened here in nice france right after the independence day fireworks last night. the bastille day fireworks. a truck driven by somebody that was a terrorist. he is now dead. drove the truck, apparently there was no question that it was an intentional driving of the truck to try to mow down pedestrians. as a matter of fact, he was very successful in that. about 80 are dead and several others very critically injured. it is called a terrorist attack
and obvious almost from the beginning that this was an intentional effort to wreak terror on france. this is a situation where the mediterranean sea was the site of a fireworks display. the moment the fireworks were done then of course we had the attack. the bus drove on to the sidewalks and mowed down the pedestrians and the people ran screaming from the area, thousands of them, stampeding in fact and now we have a situation where the investigation has begun and the truck that the terrorist drove and the struck is still sitting over there. to meticulously go through it. it took them several hours before they removed all the bodies from the beach and we now have another aftermath of a terrible, terrible terrorist
attack. >> thank you so much. europe closed about 3 or 4 minutes ago. simon hobbs back at post 9. >> clearly west european stock markets are are negative and what happens in nice overnight. it may be because central banks are so acocomodative. it's a risk averse market adding risk in general terms and you see that here in the united states. the travel stocks were down on the knee jerk reaction in europe. it's the big hotel and easy jet has a lot of those and the price action is greater if you look at the profit warning we had from the watch manufacturer swatch which suggests it's profits could be down 50 or 60% at the time. and those stocks also moved on
that corporate news just to the point of the risk aversion moving back during the course or walking back over the week. sterling, the u.k. pound had a great week. it's best week since 2009 and despite the fact that the devoting member of england and the bank of england can ease. and the u.k. government comes in with physical measures as well. again to the general point about walking back the risk aversion, you see a sell off in the government bond markets today as we move back toward a more normal situation the yields are rising and the yields also moved from negative to positive as you can see there just at the end of that chart. don't forget there's a european central bank meeting on thursday. you may get talk about the possible extension of qe. that's the chart for the bund
during the course of the week from negative to positive. they may extend qe beyond march of 2017 and they probably won't move on thursday. we had euro zone inflation moving positive. >> guys back to you. >> simon, good weekend to you. >> back to bank earnings on this front. city reporting second quarter earnings that topped expectations despite a drop in profit. the analyst call expected to begin shortly. wells fargo reporting earnings at that company that matched estimates. revenue was slightly short. joining sus the senior bank analyst at morning star. we keep hearing the refrain lower for longer. the street had been prepared for low rates to hit these banks but were they not prepared for them to hit that much? >> i think that's part of it. the downward movement on the long end of the curve surprised
people. people were widely expecting the fed to begin a rate raising cycle in december. now again lower for longer is on everyone's list. so that's part of it and i think for bank investors especially there's a crisis around every corner. i have a lot of questions about the implications of brexit and whether the consumer credit cycle is turning in the united states. obviously energy was a big problem in the first quarter. all of those things weighed on the bank sector but in my opinion what we saw this quarter is things really aren't that bad. >> except wells fargo often gets lumped in with a bunch of stocks that are considered brexit proof or relatively immune to global uncertainty because almost all of their revenue comes from here in the u. s. what did we learn about some of the risks underlining in wells fargo. >> one of the things that
investors have been looking for is banks to be firing on all cylinders and that wasn't the case for wells fargo. especially when you compare the results. it seems like underlying loan growth was not quite as strong. deposit growth is the best banks. they rose a little bit more than i would have expected and wells is provisioning perhaps more aggressively than some of the other banks. i think one of the reasons for that is wells has been lending more aggressively. we saw them reach out on the risk sector in terms of energy lending recently. twef seen them aggressively buy portfolios. wells has been able and willing to take more risk and now we're seeing the rules of that in numbers as provisions normalize. >> on some of these deposits up
4 at wells, up 10 at jp morgan, how do those numbers compare historically and where do you think all the money is coming from? >> that's a good question. historically jp's results are very strong. wells results more on par. you know, i think part of that is just, you know, generally that the u.s. economy is doing much better. i think we're seeing deposit growth and more importantly in my opinion, actually, loan growth. there's been a relatively strong point for all the banks. consumers are starting to borrow again. as we look out in terms of what happens with rates and growth, the fact that consumers are really coming back to borrowing, to spending, is a really encouraging sign in my view. >> jim, we have seen city positive earlier in this session. now it's down 1%. there's a sense that the bank is cutting it's way to growth. how much longer can they do that? >> yeah, i think people would have been surprised a couple of years agatha they would still be
cutting their way to growth at this point and there's something to that but what you want to see from a bank like citigroup that ten years ago was far too big and unmanageable spread all across the world, i look at it as a positive that they're still continuing to cut when you see the better performing banks like wells at the end of their rope when it comes to improving performance without some help from the global macro economy. so a lot of litigation and restructuring charging at city. over a billion dollars a year there that could come down. still city holdings. there's still room for them to cut and in the emerging market side of things that shrinking now or not growing as fast as we would like, that's a big positive going forward when you look out a couple of years. >> financials lead the market up yesterday and today they're the worst performing sector. we'll see what monday brings. for now our thanks to you. >> thank you. >> take a look at herbal life. up 14% as the ftc settles with
either circumstances the stock would not be able to proceed on the share and 14.5 times earnings would you get obliterated. this is the most attractive they have been and that's why we stayed short. >> let's bring in scott that's been following this. >> wondering when this day can come. >> he doubled down some what yesterday. carl icahn was out with a statement today saying that the settlement vindicates their research and conviction. he's going to take a look at what the ftc had to say today. not only in the news conference but in the statement and feel like they agree and he was right. and either shutting it down or not, he got that side of it wrong and they use the ftc.
and it's pretty stunning. herbalife is going to have to stop and making a claim about how much it would like to make. it will have to compensate the losses as a result of unfair and deceptive practices. that doesn't sound like a company and the ftc in the complaint found stuff that they were ready to sue over had they not been able to reach this settlement today. >> how much long-term damage has been done to this company and how much value has been destroyed, the stock was 80. >> the stock, sure but the stock is still what nearly 70 as we're having this conversation? i think the most important things to consider from here forward are what the impact of the changes are going to have on the u.s. business and in reality is only 20% of herbalife's overall business. they operate in a number of
countries successfully including china. that's going to be the tell. there's significant changes that the company is going to have to make. at least 80% of herbalife's product sales must be comprised of sales to legitimate end users and there was no such numbers before. we have to prove that 80% of those sales are actual retail and user customers and that's significant and could have a big impact on the u.s. business and we'll talk about that and a lot more in just a little bit. >> let's go to the cme group to rick santelli. >> good morning, thank you, kayla. i enjoyed having rebecca here at the beginning of earnings season and what i walked away with with all her polling of so many institutional investors around the globe is a couple of key points. investor sentiment was on the
far side. and globally think prexit and brussels and all of that and then you throw in negative rates and end up with a real durable slow go economy. that's important to understand that the fed is in a laundry of central banks and doing many things that do agree with but it is a durable slow growth economy and we'd like to have more and we don't want to have less. consider this. atlanta, gdp updated after all the data today. 2.4 versus what was on the 12th of july, 2.3. now look at that in the context of what larry said today, smart guy. averaging. we know to average it 1.1 last time. i'm sorry no matter how you slice it, if many, many quarters slow grow is the definition and
there's just a little surge of life in interest rates. that what we're going to talk about in the latter half of this. a ten year note yield year to date and there's a very easy way to assess. is there a bounce? is there a sell off in treasuries that you should be concerned about as an investor. let's preface this with the notion that we just traded zero and that actually is pretty big sell off and they were at minus 19 and minus 20 basis points. the same could be said with treasuries. now we're at 157. i can't tell you how key that is. on a closing basis it was right before valentine's day. that yield was 166. and that was here. and now we're testing it for the first time.
this was crucial. my guess is we consolidate at lower yields. that's the top of the range. if we do get above that and the 157 to 166 range is key. >> thank you very much. when we come back a lot more on the terror attack in nice france as we await more developments from the investigation. we're back after a break.
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the country experienced in less than 18 months. on the ground just outside nice, tom bergeibergin, joins us on t phone. thank four your time. the attack was of an undeniable terrorist matsch na terrorist nature. how close are we to figuring out what motivated this driver? >> we don't know yet. from police sources and other background, we don't have any reliable information at this point in time as to what motivated him. at this point in time, that would really just be speculation. obviously, it comes in the context of a number of islamist attacks in france.
so that's already [ inaudible ] making statements regarding possible motive. >> tom, is there any sense that this attacker was working with a terror cell in the south of france, or that he was acting alone? what do we know now? >> again, on that, that's one we -- obviously one of the first things police always look at. was this part of something bigger? whether international contact, what that would be between an individual and other people. again, phone records, et cetera checked to try and establish that. at this point in time there simply isn't any evidence from police that that is the case. there is some mention about the individual's background, and it's not entirely unblemished background in terms of certain criminal activity, but in terms of international islamist group, like isis, that's something we
simply do not know at this time. >> obviously, many attacks to look back on in the last year and a half. always a question whether french or belgium intelligence comes under scrutiny. is that likely to happen if simp think that driver was a petty criminal? >> i suppose. the motivation, and, you know, was that something that could have maybe -- maybe might have put this individual on the authorities' radar screens. of course, the other one is, the specifics of this attack. what we had was a driver who, an individual, who took a lorry and plowed it into people over a 2 kilometer stretch, and last night what was going on, now, one could look at whether the -- you know, whether that could be prevented, in a more mechanical
way. there have been reports he was caught nearby for quite some time beforehand and that could suggest maybe traffic checks might have had some impact and one could look again at the construction of some of these areas. i was there this morning and last night, and i could see, you know, really specific points at which he had anchored the, or the walkway, the promenade, the road pretty much goes from the airport right into nice, a beautiful stretch of street. you have roads decorated by trees, but then an area which is long and open for in excess of two kilometers. at the start of that he mounted the curb and went along that. whether that could be looked at in the future. >> right. fortifying an area like that would be a huge effort.
tom bergin of reuters joins us on the phone from france. markets drifting ever lower since the open. consumer sentiment that missed. more on what the afternoon may bring in just a minute. there's a lot of places you never want to see "$7.95." [ beep ] but you'll be glad to see it here. fidelity -- where smarter investors will always be. if only the signs were as obvious when you trade. fidelity's active trader pro can help you find smarter entry and exit points and can help protect your potential profits. fidelity -- where smarter investors will always be.
markets trying to get through a lot of economic data today including surprises. steve liesman is watching. >> do the wrap it up, up date. boil it to one number. up 0.1. k cnbc, wrap it up, tracking 2.7. range, 2.3 to 3.3, solid rebound from the first quarter. favorite economist, at the top, stephen bradley, and moody's, 2.8. bottom, morgan stanley, 2.3. all data coming in on the up side except 2%, and gdp and retail sales consumer, uppowering this second quarter rebound. back to you. >> stephen, thanks. next week, kayla earnings from at&t, gm, starbucks, morgan stanley, mattel, you name it. >> and interesting financials
are drirching t idriving the ma. top line, shaky, though. >> meanwhile, still expect trump to formally roll out mike pence as his pick maybe tomorrow and then the rnc next week. back to post nine and "the half." all right. thanks so much, carl. welcome to the "halftime report." i'm scott wapner here at post mine. with us for the hour today, stephen weiss, jim lebenthal, josh brown and here, gfi group chief macro strategist. happy to have you with us today. top story, herbal life affair taking a dramatic turn today as the fec and government reach an agreement. paying a fine and significant changes to its business practices. the stock surging today on that news. as many