Conflicts creating market unease? And US Futures Holding Up. 6/16/25
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Escalation in the Middle East, spiking oil prices growing on ease on the streets of the U.S. As the problems mount, will they chip away at the pillars of this market? Not so far this morning, futures are actually solidly in the green. But how long can this market hold up given all those catalysts outside? It's Monday, June 16th, 2025. This is Worldwide Exchange on CNBC and streaming on CNBC+.

Good morning and thank you for being with us. I'm Dominic Chiu in for Frank Holland on this Monday morning. Let's kick off the hour with a check on U.S. equity futures. As I point out, we are solidly in the green. You can see right now the Dow is implied higher by just about 197 points. The S&P higher by 36 and the Nasdaq up by close to 150 at this point.

among some of the pre-market movers that we are seeing right now so far. On the gaining side of things, Insight, Smurfett Westrock, Coinbase Global, Carnival, Omnicom Group, among those stocks that are anywhere between 2% and 4.5% of the upside on the S&P side of things. Meanwhile, on the oil price side, we have seen a little bit of a reversal today.

higher and we've now moved lower over the course of the last hour or so. And again, if you kind of look at what's happening right now with oil, U.S. benchmark crude prices are down three quarters of one percent. The ice brand crude futures are down about three quarters of one percent as well. So keep an eye on those energy prices. They are kind of moving around.

still with the upside volatility that we've seen over the course of the last few days, given the Israeli airstrikes and the Iranian response and back and forth and everything else. Checking on the bond market side of things, we are seeing moves higher for yields, believe it or not. Interesting move here. The 10-year note yield is at 4.438%. The two-year note yield at 3.975%.

and the 30-year long bond higher at 4.929%. So some of that safety trade may be coming out of the market right now. To currencies now, the dollar, at least on the dollar index side of things, just down marginally so at 98 for the ICE U.S. dollar index here. And gold prices, also one of those safe haven trades we had been paying attention to, lower on the day so far by one half of 1%, $3,433.90.

Let's see now how Europe is shaping up as its trading day is really kind of getting underway. Karen Cho is in London with the early action from across the pond. Karen. Hi, Dom. We are seeing all eyes still on the Middle East. A lot of undercurrents for the market today as a result. That moving oil and gas price also having some bearing here. Early action here in Europe, we'd seen a firmer oil price. So that has supported some of the energy names in the European markets.

Also, the diversification trade continues. So European banks still at the front of minds for a lot of investors. Some weakness coming into the defensives today after some selling Friday session that saw risk off. So the defense is under pressure today. But overall, you can see we've bounced now. The further we get through this session, the more positivity we are seeing move on to the charts. French stocks, for instance, now up nine tenths of a percent leading the charge.

more modest ranges around the UK and German stock market. Elsewhere, we are seeing weakness in the Japanese currency as some of the defensive risk comes off in the Monday trade. That is underpinning the Japanese stock market in the trading session today. You can see a much firmer range for the Nikkei 225. Also moves to for Nippon Steel after the US president approved the takeover of US Steel. So that's moved the needle on that stock.

Also on the move today, worth pointing out the movements in Caring stock and also Renault Caring right at the top of the Stocks Europe 600 today. Renault right at the bottom. And the latest is that Renault CEO Luca Di Meo is leaving his post with the carmaker saying he is set to take on new challenges outside the auto sector after a five-year stint. French media is reporting he could become the new CEO of luxury group Caring, which of course is the owner of Gucci, Don.

All right. Karen Cho with the latest there on the market action, including some possible executive moves. Thank you for that. Now for more on the conflict between Israel and Iran, where the situation has now escalated. NBC's Alice Barr joins us now with more on that. Good morning, Alice.

Good morning, Dominic. President Trump is with top allies today at the G7 summit in Canada and facing a full plate of both foreign and domestic issues with the expanding conflict between Israel and Iran front and center amid mounting concerns over a new round of attacks between the two major military powers. President Trump saying it's time for a deal to de-escalate while adding, quote, sometimes they have to fight it out and promising to keep support.

reporting Israel's defense. Israeli Prime Minister Benjamin Netanyahu saying in a new interview that American pilots are helping to shoot down drones that are headed toward Israel. If the U.S. does continue that assistance to Israel, Iran has threatened to strike American military targets.

Lawmakers are calling that a red line that would meet a forceful response, with many in both parties defending Israel's goal of destroying Iran's ability to make a nuclear weapon, while still calling to prioritize diplomacy. U.S. embassy offices in Israel are closed today as the high-stakes conflict grows. And again, expect this topic to be center stage among world leaders at the G7.

All right. Alice Barr with the latest there out of Washington, D.C. Thank you very much for that. Oil prices are rising and now falling in those Middle East tensions. Our J.P. Ong is at Energy Asia in Kuala Lumpur, Malaysia, with the talk on the ground. And J.P., what can you tell us about just what the energy industry is saying about that conflict in the Middle East?

Yeah, Dom, good morning to you guys out there in New York. And yes, the specter, at least, of this rising conflict in Israel and Iran, pretty much on the minds of many of these business executives here and industry leaders in the oil and gas space on the sidelines of the Energy Asia Summit. We did speak to Lorenzo Simonelli, the chairman and CEO of Baker Hughes. He said that the last 96 hours for them has been quite hectic and also very fluid. And while they can affirm that their projects and their personnel that are in the various sites and projects involved,

in the Gulf region are safe and secure at the moment. It's going to be a wait-and-see approach at the moment before they can decide how far, how quickly they can roll out and progress with some of their project activities in the coming days. But again, a lot will depend on how things develop between Israel and Iran, which isn't looking very good. Meg O'Neill of Woodside, Australia's Woodside, also talked to us and said that while they do not have any projects there,

Because 20% of oil and gas passes through the Strait of Hormuz, it will be important to see how things develop there with regards to price action and how that will impact their outlook. Now, just let me say something about their ongoing project in Louisiana, because with the advent of many countries expressing interest to import LNG from the United States to help rebalance

some of those trade surplus in those large economies. They've seen a lot of interest now in possibly importing from their projects in Louisiana, but they'll have to wait until 2029 for the first shipments to go. But again, there's attractive opportunities for them if they play their cards right and actually manage this and execute properly.

properly. We'll have more conversations also over the next few days, including that with Shell CEO Wael Sawan, which will be tomorrow. And we'll be asking a lot of these business executives exactly what they're viewing with regards to the future of secure and renewable energy and the specter of this conflict and what it's casting

over their business outlook for the oil and gas space. Tom, it's back to you. All right, JP Ong with the latest there from Malaysia on the oil and gas trade. Thank you very much for that. Let's get some more insight now on energy markets. Joining me now is John Kilda, Founding Partner at Again Capital. He's also a CNBC contributor. John, thank you very much for being here. JP just kind of gave us the outlay of what some of the industry is feeling right now. Can you tell us whether or not

the reversal that we are seeing in oil prices right now is going to be indicative of the volatility we see in the coming weeks.

Right now, certainly, Don, the volatility is going to stay with us for the next several weeks, no doubt. What's happening right now, though, is you're seeing a collective sigh or just expression of relief in the market because it's pretty clear that the Israelis at least aren't targeting at the moment any kind of significant infrastructure, energy infrastructure that would impact global flows.

There was some spectacular pictures and things over the weekend about a quote unquote refinery that got hit in Iran. Well, that was actually a natural gas processing unit. And the Israelis were very precise in their strike there because it's a shared production unit, natural gas production unit with Qatar. And the Israelis only hit the Israeli part of it.

So it just goes to show you how everyone's trying to be very careful here about, you know, obviously containing this whole situation to mostly military. There's obviously some civilian casualties already. That's tragic here. But as far as the oil market goes and oil supplies go, right now they are not in the crosshairs when prior to this we thought they would be a front and center target really across the board. John, we don't want to call this speculation, but-

Everybody in the energy markets right now is going through sensitivity analyses, scenario analyses about just what kinds of catalysts could drive prices up or down and what the likelihood of them are. One of them is the U.S. hypothetically being drawn into this.

a broader Middle East conflict. What exactly happens hypothetically if the U.S. becomes more involved in the conflict between Israel and Iran? We have two scenarios there, Don. First of all, I think first off, U.S. gets involved as this thing get wrapped up much more quickly. Do the Iranians have to capitulate and work something out diplomatically or whatever happens with the regime? But I mean, I think beyond that, you have to ask yourself,

Are we in a place these days where there's enough to galvanize all these other Arab countries again, like they did back in the 70s, to really coalesce and act unilaterally, act together against United States and Western interests and close off the oil, do another oil embargo? That is just not in the cards. U.S. is just too close to Saudi Arabia, Kuwait and UAE.

The Iraqis just aren't in a position to do anything to us. Libya, some of the other key producers, same thing. So we're just not where we were back in the 70s and early 80s and even for many, many years since then. This is a different setup. You have Syria now in a new place with Assad being gone.

It ran's proxies really across the board in the region, also decimated for the most part. Houthis are hanging in there, but that's about it. So, you know, U.S. gets involved here. Maybe this thing comes to an end and the whole all of the markets can breathe a sigh of relief. Equities go up. Oil goes back down. Hey, John, just a couple seconds left here. If if you had to, knowing what you know now, make a prediction for oil prices at the end of the year, are they higher or lower than they are now?

I'm going to say lower now. Lower. All right. John Kilduff, thank you very much for that on the ongoing tensions in the Middle East. We appreciate it. We've got a lot more to come here on Worldwide Exchange, including the one Gorton investors have to hear today and the stock pick every investor needs to know. But first, what happens to stocks if the U.S. gets drawn into the Middle East conflict more? We just asked John that. We're going to explore that further. Plus, is Wall Street looking past growing unease in major cities around America?

And at what point should investors take notice of the domestic strife? And the president's big beautiful bill is caught in the middle of a congressional showdown. We're going to tell you why. We've got a very busy hour still ahead when Worldwide Exchange returns after this commercial break.

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Substance use disorder and addiction is so isolating. And so as a Black woman in recovery, hope must be loud.

It grows louder when you ask for help and you're vulnerable. It is the thread that lets you know that no matter what happens, you will be okay. When we learn the power of hope, recovery is possible. Find out how at startwithhope.com. Brought to you by the National Council for Mental Well-Being, Shatterproof, and the Ad Council.

Welcome back to Worldwide Exchange. The markets are coming off a negative week as the conflict between Israel and Iran continues to escalate. Joining us now for how investors are reacting is Steve Sosnick, the chief investment strategist for Interactive Brokers. Steve, thank you very much for joining us this morning. I went to John Kilduff just this past couple of minutes ago.

and asked about what would happen hypothetically if the U.S. got more involved in what's happening between Israel and Iran. I wonder what your take is on the market reaction to the U.S. hypothetically becoming more involved in the conflict.

Well, good morning, Dom. And that is certainly a concern. I would say that right now, we seem to be on the sidelines. I think the market, the reason we're seeing a positive market reaction this morning is things didn't get markedly worse over the weekend. I think were the U.S. to get involved, investors would need to reconsider what's going on. But in general, markets don't really

follow geopolitics all that well. And I think we've had, obviously, they're watching the oil price and oil, you know, oil does watch geopolitics very closely. But from a stock's point of view, I think the market is saying, you know what? Israel is a relatively small country. Multinationals don't have much action going on in Israel, enough to

to affect their bottom lines, although many do business there. And Iran has basically been out of the world economy for decades. So I think the market's saying, you know what, as long as we stay on the sidelines and oil stays around here, we can manage this conflict. It doesn't affect stocks that much. If the U.S. were to get involved, different story. I think it's an interesting point here because geopolitically speaking, over the course of the last, you know, maybe even two decades at this point,

Every time there seems to be something, especially in the Middle East, that looks like it could flare up, things eventually calm down and the markets continue higher. If that's the case this time around, what exactly, Steve, in your mind is the primary or secondary driver of what's going on in our markets currently speaking?

Oh, the primary driver is momentum. And we're seeing a return to the momentum trade today. It's basically, you know, like we took a day off and now, you know, everybody can resume their normal activities. When we think about the stocks that have been driving the markets, you know, let me phrase it differently. When geopolitics come into fray, equity markets basically say, how will this affect the bottom lines of my companies?

And ultimately, in this case, you're not going to see it too much. So if you've been basically involved, let's say, in the AI trade, mega cap tech, this doesn't affect your life too much. It will if oil metastasizes into something and rates have to change and things of that nature. But in the short term, markets are saying, OK, you

you know, the stocks that you have up on the board right now, ultimately none of them are that affected by it in the short term. And that's why markets have been able to look through some very messy geopolitics. Sure, that's why I watch oil and bonds. Bonds did not react. Bonds reacted kind of weird on Friday with rates going up. There wasn't much of a flight to safety trade. It was much more about the Fed not being able to cut rates.

With the Fed meeting this weekend, no one was expecting a rate cut, but I think people were hoping to get one signaled. Probably not going to happen right now. But in terms of the day-to-day bottom lines of companies, the stuff that equity investors are good at, understanding revenues, cash flows, earnings,

This doesn't have an immediate effect as long as we have a modest, only a modest rise in oil prices. And Steve, we've got just a few moments left here. If you were to assess what the economic data is showing, are you generally still positive on the markets vis-a-vis the economy?

I do think the economy is a bit more worrisome, I think, than the markets are letting on here. I think the big risk, as far as I'm concerned, is the fact that we are seeing some slowdowns. So far, the markets kind of look through the tariff stuff much better than we thought. The consumer sentiment numbers have rebounded. But right now, there's nothing that's going to push the Fed off the sidelines. They're concerned about tariffs, understandably so. We still don't really know how those are going to get resolved. The can's been kicked down the road, but nothing's been resolved.

And now if you have the prospect of higher oil prices, the Fed really can't do anything. So my big concern is that the economy slows and the Fed is stuck on the sidelines, watching and waiting to see how prices react. And that to me is the thing that could upset the momentum trade in the longer run. All right. Steve Sosnick at Interactive Brokers. Thank you very much. We'll see you soon, sir.

My pleasure, Don. Take care. All right. Coming up on the show, the looming showdown between the Senate and the House that could threaten President Trump's mega tax and spending bill. That story coming up.

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Substance use disorder and addiction is so isolating. And so, as a Black woman in recovery, hope must be loud.

It grows louder when you ask for help and you're vulnerable. It is the thread that lets you know that no matter what happens, you will be okay. When we learn the power of hope, recovery is possible. Find out how at startwithhope.com. Brought to you by the National Council for Mental Well-Being, Shatterproof, and the Ad Council.

Welcome back to Worldwide Exchange. Another issue the markets are keeping a close eye on is the president's mega tax and spending bill and the new showdown that could threaten to derail it. Emily Wilkins joins us now with a story about that reconciliation process and how it's playing out. Emily. Hey, Dom. Well, yeah, right now we are all waiting for the Senate. They are preparing to release their version of Trump's mega bill, at least that key tax portion. But as they're

as they do, House lawmakers are sending warnings to their Senate counterparts that if it doesn't include certain proposals, it will not be able to clear in the House. Remember, any changes the Senate makes are going to go back to the House and need to have yet another vote there. And one of the biggest sticking points is the deduction for state and local taxes or SALT. If you remember, a small group of House Republicans from states like New York, New Jersey, they were able to raise that cap.

to $40,000 for those making $500,000 or less in the House-passed bill. But numerous senators, including Senate Majority Leader John Thune, are now saying that $40,000 cap is going to be smaller in their version of the bill. That's partly because there are no Republican senators from high-tax states in the Senate, so no one to really push for it.

But also the cost of raising that SALT cap, it's estimated to be $350 billion. Of course, by reducing that cap, that $40,000, senators can then lower that cost and use some of the savings on other items like extending tax breaks for businesses.

One of the House members who is pushing for that higher salt cap, New York Congressman Nick LaLotta, told myself and other reporters that the House struck a really delicate balance on salt when they passed it, and he advised the Senate to not change it. Then he threw down a red line. If it's a dollar less, I'm a no. If it's $39.999, I'm a no.

A dollar less or he's a no. So Senate's version of Trump's bill, it's likely to make a couple other changes from the House version as well, including extending tax credits for certain clean energy sources. And it's likely to propose fewer cuts to programs like SNAP than the House bill did. And we are expecting to see details of the Senate's tax proposal today as lawmakers return to town. Although at this point, Dom, we're not really expecting the Senate to vote until next week at the earliest. And Thune has said it could even happen that week of July 4th.

All right. So, Emily, if it's next week at the earliest for the Senate side of things, just what does the timeline look like for the big, beautiful bill to possibly become law?

So if it does happen that the Senate is able to vote, and we're not talking about like this Monday, we're talking next Monday, that week, if the Senate is able to pass it, then it's a question of whether the House is going to come in. They're not supposed to be here for the week of July 4th. But if they want to make that deadline, they'd likely have to come in and vote on it that week. So you're getting right up to the deadline there. And Dom, you're starting to hear a number of senators say, look, it might not happen by July 4th. We might have to push it further into July.

All right. So there's the timeline there, hypothetically. Thank you very much, Emily. We'll see you later on. Coming up on the show, whether it's the Middle East escalation and the concern over any U.S. involvement or protests in our own American cities. Our next guest says the geopolitical situation globally is definitely not business as usual for the markets. We'll explore after the break. A moment in this country where we watch violence erupt. This cannot be the norm.

It cannot be the way that we deal with our political differences. Now's the time for us to recommit to the core values of this country. All right, that was Minnesota Governor Tim Walz urging Americans to end the violence when it comes to our political divide. We're going to have much more on this and when and if this could become an issue for the markets overall a little later on this hour.

Welcome back to Worldwide Exchange. I'm Dominic Chiu in for Frank Holland on this Monday morning. Let's kick off the half hour with a check on U.S. equity futures. And right now they're solidly bid. The Dow is implied higher by just about 165 points. The S&P higher by about 30 and the Nasdaq up higher by about 120 points. With regard to the oil prices, very much in focus given Israel and Iran. Oil prices are now turning 5%.

falling on the day. U.S. benchmark West Texas Intermediate, $72.51. It's off about one half of 1%. A similar percentage decline for Brent crude prices. The world benchmark gauge currently $73.73. Also on the oil trade,

Citigroup just out with a note this morning saying that it sees Brent crude continuing to trade between 70 and 80 dollars a barrel in the near term, but keeping its long term forecast of roughly 60 to 65 dollars per barrel for Brent crude futures.

Now, checking in on the bond market side of things, we are seeing a move higher in yields, lower in price. So that safety trade may be coming off a little bit. The 10-year note yield, 4.43%. The two-year note yield, 3.97%. And the 30-year long bond, 4.926%.

To the currency side of things and the dollar, the safety trade kind of playing out as well there over the last several days. But now the dollar index is lower by one quarter of one percent. Ninety seven spot. Ninety eight for the ice U.S. dollar index. Gold price is also a focus on that safe haven trade lower on the day as well. Three thousand four hundred and thirty seven dollars and 90 cents or less.

down about one half of 1% for that COMEX oil trade. Now, some of the pre-market movers so far today on the laggard side of things, we showed you the winners so far in the last half hour. The NASDAQ 100 laggards include Analog Devices, Datadog, CSX, Axon Enterprise, and CrowdStrike all off fractionally in a broadly up tape so far.

Well, the G7 summit begins today in Alberta, Canada, with a focus on the trade wars, the wars in the Middle East and Ukraine, and a possible shared mission by leaders to minimize any tensions with President Trump. Now, a lot has changed since Canada last hosted the summit back in 2018. This time, President Trump has hit dozens of nations with tariffs that risk a global economic slowdown and little progress in resolving those aforementioned conflicts as well.

Add to that the issues of immigration here domestically, the rise of artificial intelligence and China's continued dominant role in manufacturing and key supply chains.

For more on all of the potential risks facing the global financial markets and system, let's bring in Tina Fordham, the founder of Fordham Global Foresight, also the former chief global political analyst over at Citigroup. Tina, thank you very much for joining us to share your expertise. I just laid out a laundry list of potential catalysts and factors at play. Can you tell us why the markets are not reacting more forcefully to everything going on domestically and abroad?

It's really quite a moment when you look at the constellation of geopolitical risks. But one thing that I can say with the perspective of covering geopolitics and markets for 25 years is that the perceived importance of Middle East conflict and its relationship to the oil price

has declined over time. But I think in this case, the market is really failing to appreciate the potential gravity of the moment. If they are failing to kind of understand the gravity of the moment,

Can you blame them a little bit if they've seen this kind of a situation develop over the course of the last almost decade, decade and a half now, always centered around the Middle East? And it's always been the situation where after a few weeks of heightened political risk and geopolitical uncertainty, things just kind of fizzle out and get back on track again.

yes and that's a luxury that said the commodities markets in particular have been able to afford and remember what really changed in this equation was the onset of US shale gas supply so so that really did a lot to reduce the and the kind of catalyst to oil prices %uh Middle Eastern geopolitical risk but we're talking about something quite different now right we're talking about the US potentially getting involved

in what we could call the big one in geopolitical risk. There are probably two. One is China-Taiwan, and the other is attacking Iran's deep underground nuclear facilities, which would be very different from the kinds of skirmishes that you're referencing. Last year, the exchange of ballistic missile fire, and then the possibility of regime change. We're not talking about a controlled explosion,

happening in Iran and I think this is where markets are feeling to understand the risk trajectory.

Tina, you know, over the course of the last several hours and maybe a few days here, there's been a campaign within the Middle East between Israel and Iran to assert their force on each other. We learned over the course of the last maybe day or so when Israel has reportedly now claimed it has aerial superiority going all the way from the western borders of Iran all the way to the capital city of Tehran.

That seems like a pretty strong statement and escalation in this particular move. What exactly can we expect between Iran and Israel, given the fact that there is now leverage being put on with regard to military superiority?

And so that air dominance is really something significant. And it's something that Russia, for example, hasn't been able to accomplish in three and a half years of its war with Ukraine. So the Israeli dominance, the success of Operation Rising Lion to date,

the targeted assassinations of not only key leaders but government ministries, this is a really advanced operation, a long time in the planning. But for it to be successful on Israeli terms, it would have to undermine that nuclear capacity, and that can't be accomplished without U.S. assistance.

military assistance. And so what Trump decides to do is the key variable in this trajectory. All right. That is the key for sure. And I've asked the same question from a number of our previous guests as well about what happens if the U.S. were to hypothetically get more involved. So, Tina, thank you very much for answering that for us. We appreciate it. We'll see you again soon, Tina.

Thank you. All right. Coming up on the show, the problems aren't just overseas, but here domestically as well. Protests are spreading around the country and political violence are something the markets have so far ignored. But how long can that last? That story coming up.

Welcome back. The man suspected of killing a Minnesota state representative and her husband and wounding a state senator and his wife is now in custody. NBC's Jay Gray is live in St. Paul this morning with the latest details on that story. Jay.

Hey there, good morning, Dom. Yeah, we're at the Capitol where there is behind me a growing memorial to the victims. In fact, take a look and you can see we've already had people out early this morning, Dom, coming by and paying their respects. Look, this as we learn more about that manhunt and the capture of this suspect, a massive team of officers

stalking the suspect through the woods, making their move just after nightfall, and having him surrender. They circled the suspect in those woods, gave him verbal commands. He got down on the ground, crawled to them. We're told that he did have a weapon at the time, but that there was no confrontation between law enforcement and the suspect as well. That suspect, Vance Belter, is 57 years old. He's accused...

of killing a lawmaker here, a state lawmaker, and her husband wounding one of her colleagues and his wife. It's an attack that really shook this community to its core. A political assassination is what the FBI has called it. We know that Representative Melissa Horkman and her husband Mark had children. They were killed inside their home. As for the wounded victims,

In this case, State Senator John Hoffman and his wife Yvette, he was hit, she says, nine times. She was hit eight times.

They have somehow survived. He is through surgery and both are expected to make a full recovery. So there's a lot of relief, as you would imagine, with this arrest. But they're still working through what is a lot of grief here and will be for quite some time. All right. Jay Gray in St. Paul with the latest here on that tragedy in Minnesota. Thank you very much for that. Now, does the rise in political violence in this country threaten confidence in the U.S. economy and the U.S. markets?

While things may be more intense right now, it isn't the first time we've seen this in America. Matt Dalek is a political historian at George Washington University and joins us live this morning. I guess, Professor Dalek, the big question right now is these things strike at our core as a country. We don't have violence when it comes to politics. What exactly can this do one way or another, if anything?

to the confidence in the American economy and financial markets? Yeah. Well, first of all, it's hard to know exactly how violence affects the economy. I think in the moment we're in, though, the instability

of the last six months and frankly, the last five years, the political violence adds to that. So we have the tariffs, the trade war, the Iran-Israel conflict,

a rising series of attacks over the past decade, and a period of inflation. And the violence, I think, makes a lot of Americans feel a lot more unsettled. It feels like a more fraught time when the country feels at war internally.

And and I think that does have a you know, even though it may be hard to quantify, it does add to a sense of chaos in the country, the immigration raids as well. And and it certainly doesn't seem to benefit anyone economically in addition to the horror side.

that it is in and of itself. You know, Matt, one of the things you bring up a number of points with regard to some of the stunning developments that we've seen domestically speaking. On the other hand, we have had President Trump come out and strongly condemn what happened, the violence in Minnesota. We have the FBI now investigating this as a political assassination, right?

What exactly can the American public maybe glean from those responses and what we'll see in the coming weeks to either put them at ease or make them feel as though they should be a little bit more defensive with regard to their behavior and their sentiment? Yeah, well, it's obviously a good thing that President Trump came out and condemned this violence. I think, you know, he is both a victim of the violence. He was a subject of two assassination attempts.

but he's also an accelerant. Most of the time, his rhetoric focuses on dehumanizing people, calling them a vermin and scum, saying, you know, the greatest enemy to the United States is within, right, fellow Americans. Trump also pardoned the January 6th rioters,

including those who beat police officers, essentially condoning an act of horrific violence against law enforcement. So I'm frankly not optimistic, given the track record, that we're going to have a sustained period of unity or any attempted national, serious national healing.

Bill Clinton, after the Oklahoma City bombing, went to a deep red state, Oklahoma, Republican governor, and gave maybe the best speech of his presidency that I think had a positive effect on the country. And the 1990s was a period of robust economic growth. So I think there are things that leaders can do, but it's got to be sustained over time, and it's got to be sustained through both words and deeds. And unfortunately, I don't think that most

Reasonable observers are seeing that likely to occur now. All right. Well, here's hoping our country can find a way progressively forward through this and to deal with all of the tragedy that we've been seeing so far. Professor Matt Dalek, thank you very much. We'll talk to you again soon, sir. Thanks so much for having me. All right. Coming up on the show, the one word that every investor has to hear today and the stock pick that every investor needs to know. Plus, our Phil LeBeau is live at the Paris Air Show. Lots of news coming out of there as well. Phil.

Dom, two topics getting plenty of attention here in Paris, defense spending and improving the air traffic control infrastructure, not only in the U.S., but around the world. Few companies are better positioned to talk about that than TALIS. We'll talk with the North American CEO of TALIS when Worldwide Exchange returns.

All right, the Paris Air Show is underway at a time where a lot is happening in the industry, from the war between Israel and Iran to last week's crash in India. CNBC's Phil LeBeau is standing by with the CEO of aerospace company Thales North America, Alan Pellegrini. Hello, Phil. Hello, Dom. Alan, thank you for joining us here today. Dom set us up perfectly, talking about you've got defense, you've got trade issues, you've got air traffic control. You guys touch on all of that.

Give me some perspective in terms of the defense side of the business. Some would say we're sort of towards the beginning here. You noticed an increase once the Ukraine war started. How much does what's happening in the Middle East energize governments and contractors to say we need to do even more? Well, I think it's the overall geopolitical context, you know, starting with the Russia-Ukraine conflict.

But, you know, I think further exacerbated, you know, when the U.S. administration took over, I think Europe became more inclined to want to continue to grow their investments in defense. And I think just the overall geopolitical landscape, including what's recently happening in the Middle East, has just created an environment

where nations need to invest to defend themselves. And I think we're seeing that globally, not just here in Europe or in the United States. Does the growing use of drones, both as a threat and counter-threat, change the perspective that you have and your company have in terms of future opportunities?

Not for us. As a company that puts sensors and communications and stuff on platforms, we don't care if it's a drone or an aircraft or a land vehicle or an unmanned maritime vehicle or manned. What's important for us is we're in the business of gathering information and helping decision makers make important decisions.

So certainly there's going to be a proliferation of unmanned vehicles. We believe we're well positioned to be one of those that is providing the latest technology to augment those platforms, including introducing technologies like AI that will really kind of exponentially increase their performance. How much do the trade wars that are going on right now, and there's still a lot of uncertainty between the U.S. and the EU, how much does that impact what you're doing in terms of

managing your margins because you can't pass it all along to the customer, right? Yeah, no, that's exactly right. You know, fortunately for Talus, half of our business is in defense, half in civil, most of it outside of places like the United States. So we're largely able to mitigate the effects of the tariffs, certainly for our business in the U.S. It has adverse impact.

We're taking a lot of mitigating steps to minimize it. I think what's most important, Phil, is that we get some stability. What is the trade situation going to be? What are the tariff levels going to be? And then companies like Talus can make educated decisions on what we do with our supply chain activity. I think that's what's most required. A lot of people don't realize that you guys have long been doing a lot of work when it comes to air traffic control management. For sure.

the efforts, and we're going to be talking with Secretary of Transportation, Sean Duffy, a little bit later on. He wants to make a lot of changes and make them very quickly, and he wants Congress to write them at least a sizable down payment check. Are you optimistic these changes get made?

I am optimistic. One, because I think they're long overdue. I think we completely applaud the administration and Secretary Duffy in particular for these very, I think, strong actions to put forth an aggressive but achievable plan to upgrade and modernize

the ATC system. I think it has a lot of momentum with the U.S. Congress. I think it will pass at least, I'd say, a significant down payment. And when do we see some of these changes actually kick in? Three years, four years from now or sooner?

I think the plan is for a three-year rollout. I think many of the changes can be starting to roll out much sooner. I think if we embrace technologies that are state-of-the-art and available today, and we'd like to think we offer some of those capabilities, then I think the FAA can move quite quickly to deploy new technology. Alan Pellegrini, CEO of TELUS North America. Rarely, Dom, rarely do we have a guest here in Paris

who touches on so many different topics. Glad that we could talk about them today with you, Alan. My pleasure, Phil. Dom, we'll send it back to you. Sean Duffy coming up a little bit later on today. You don't want to miss what he has to say. All right. So thank you to Phil LeBeau and Alan Pellegrini live at the Paris Air Show as well. Of course, as Phil points out, he'll be back on Squawk Box later on with other executives as well, including from defense contracting giant Lockheed Martin.

Well, coming up on the show, why our next guest believes in the maxim, one man's trash is another man's treasure when it comes to his stock pick today. We'll reveal this mystery chart straight ahead.

All right, welcome back. We've got a news alert for you. The EU is prepared to accept a 10 percent flat tariff rate from the U.S. under clear conditions. That's according to German business newspaper Handelsblatt. The hope is a flat tariff will keep the U.S. from slapping higher rates on things like cars, pharmaceuticals and some electronics. The U.S. has not agreed to limit the car tariffs just yet, but an interesting development with regard to the trade front.

Well, moving on to the futures right now, they're solidly in the green. Joining us now for a look at the trading day ahead is Drew Pettit, the director of U.S. equity strategy over at Citigroup. Drew, thank you very much for being here right now. What do you make of the market action so far today? I mean, it's not going to get close to getting back what we lost on Friday, but it seems interesting that we do have a bid given escalations in the Middle East.

Yeah, look, sometimes markets feel a little bit inhuman at these points, right? Like conflict really isn't good. We all would like to see relatively peaceful resolutions here. But

Honestly, markets are trying to figure out what the fundamental impacts are going to be. Unless we have really oil and other price shocks sticking around longer, markets could quickly look through these volatility episodes. So honestly, oil at $70 really doesn't change our thesis here. As we move past the worst of tariff fears, we think the market can find some footing here and companies can start reinvesting in businesses again. Drew, what do you make of the

The volatility regime that we're seeing right now, missiles are flying in the Middle East and the VIX gets up to about 2021. The tariffs hit back in April and we see the VIX go up to close to 70 to 80. Is the market prioritizing the right things here?

At least short term, yes. The tariffs at the level on Liberation Day actually challenged a lot of business models. There were some companies with relatively low margins, not a lot of pricing power that you could honestly see going out of business at those rates or at least needing to aggressively reshift where they manufacture, aggressive cost structure changes and a lot of impending near-term losses.

you know, from a fundamental perspective, again, unless we have lasting pressure, like we've seen in other conflicts that, again, weren't necessarily short-lived, but the pricing impact on the commodity front was relatively short-lived. I think the market is properly looking through this, at least for now. But just...

Honestly, to tie this all together, it's look at the commodity market for clues around inflation and how that could really read through to economic impacts in the U.S. All right, Drew, before we let you go, the mystery chart we put up in your word of the day. Let's take us through that.

So it's RSG. And honestly, this all ties back to what we think our word of the day should be, scarcity. What's scarce beyond, honestly, birdies at Oakmont here has been companies that are improving ROE based on

margin expansion and efficiency gains. RSG has both of those. So this is a company that has passed an investment cycle and here they're reaping the rewards. They have industry best free cash flow conversion. I think it's a really good stock to own in this environment. All right. RSG and scarcity. Thank you very much, Drew, for that. Keep it right here. Squawk Box picks up the market coverage starting right now.

You've been listening to CNBC's Worldwide Exchange. You can always catch us live weekdays at 5 a.m. Eastern. Substance use disorder and addiction is so isolating. And so as a black woman in recovery, hope must be loud.

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