Transcripts For CNBC Squawk On The Street 20240622

Now below 48. Roll back with china falling hard. The biggest drop in eight years. A 40 billion farm pa deal. Teva buying allergan and mylan and facebook. Its two price targets ahead of wednesdays earnings. The impact that is having on the nasdaq. First up this major selloff in china. The s p and nasdaq each coming a off the worst week since march. Jim, you have been fielding questions on twitter all morning long. Why the pain . You wrote, because we are china right now sample we are. I mean look i wish which werent. It was amazing to watch china roll over in the middle of the night and then see our futures unchanged. Thats just false. I mean the reason its false is because there is a link between minerals arc link between oil and us. So we have a lot of companies that i think arent going to do well with coin going down. More importantly the rest of the world, holly cow, is brazil going to take the product . Europe . You need to see europe get stronger, brazil not just kind of go away and look i hate this setup. Its not that i dont like this. I mean we got to get through the fed, china, i think the government is letting coin the market come down. I dont think they want to waste the fire power. The irony, you pick up the New York Times the lead story is how powerful china is. Somebody asked you, should we be exporting oil . You said to whom . Who will boy right now . The saudis are pumping at the maximum they can pump. The russians are pumping at the max much. Its almost as everyone is just saying we got to break the other oil companies, including u. S. Companies. I think oil is going to slice at 43. What has to happen i hate to be so literal about this. We have to get to where we have to go i used to think at my Old Hedge Fund take oil down to 40 where maybe it moves. Canadian oil this morning is trading 32 bucks for their thick oil. 32 bucks. Because there is no place to put it. Exports. You think we take out the prior lows . Yeah we have to. Really . Saudis want it low. Those who have come on air and said the saudis dont care why are they pumping the maximum to a market that doesnt feed it . The tanker rates are up. Theyre trying to store all this stuff everywhere. I think its really important for people to recognize there is no place to put the oil. Meantime you mentioned the fed. We have to get through a twoday meeting. We will get advanced gdpt. Data is crazy this week. Oh, geeze, its a thin week. I was watching the volume on friday. You have Major Companies that are down dramatically on like 1298,000 shares. Its almost as if we are back into 1983 in terms of the amount of stock that trades. Meanwhile, usa today this morning in front of the money section takes a look at an acronym that jim actually penned. They give him credit for this thing, facebook amazon netflix, goggle. You had said last week the bang is back. The bang is bad. They should have wrote bang is bad. Its muvenlg masking everything. When have you stocks up 100 points, there is nothing else, the numbers are coming down. I will probably stress it on fang is for real. Facebook netflix, goggle. We cant buy stocks. There is like 4 fix stocks we dont want. I was going to say 95. Clearly people leak it. Fang means hold it. Ill put every time into anything thats growing. We got four stocks that are growing. Interestingly enough. None of those stocks depends on china. Thats right. I saw this morning. I think this is right. The s p is negative yeartodate if you take out amazon and google. Yes. If you take out, but if you take fang is making everybody feel good. Fang makes me feel bad. I did love look im always happy, its nice to be recognized. You have to recognize the reason why fang works is because Everything Else is bad. Ah speaking of that, ahead of facebooks Quarterly Results on wednesday, suntrust the social network, now to 125 from 100 saying it expects ad growth of more than 15 . They cited mobile and video ad strength. Twitter and yelp are out with earnings tomorrow, facebook on wednesday. I mean do you continue to like it . Charitable trust owns facebook, theyre in the 20s. Kept this the whole time i have been saying i hate these price target rates they reported. But fang drove them all up. In other words, facebook went up with those. Look should you take profits in facebook . Look if you are nimble. Yes. But my problem is just that i dont like it when expectations get ahead. I think yelp will be bad. I think its just executing poorly. The problem with twitter, well documented by say rob peck at this point at suntrust is that there will be no growth. But there is a ceo that will come in. A bigger bang . I think it will be this week. Its important that dorsey get out. Sec doesnt leak that stuff. I would point out i really like whats in the pike for twitter. I think i have been taking a look at some of the things they will do. Twitter can be your defacto news page when they finish with these. Anthony noto will reassert himself. Is he well, ruth porak. She keeps changing the world for google. Changed the world it will be a fascinating Earnings Call tomorrow night. Teva agreeing to acquire allergan for 40. 5 billion in cash and stock. They say they expect about 1. 4 billion in annual cost synergies and tax savings from that deal. Teva has withdrawn that offer from mylan, Allergan Brent Saunders earlier talked about what the teva deal means for his company. This is the right deal for us at the right time. You look at our branded business aesthetics eye care gi Womens Health urology, infectious disease, these are a higher margin higher Growth Businesses for us so now we can really double down build those therapeutic categories up and also look for future transformational deals like we did the allergaf deals. What an interesting way this turned out, dont you think . This is tevas spite full of mylan, going over this my car itable trust owned this a while. Going over the number bs they paid 17 times ebitda. David is not here. I use ebitda as his get to. Thats the highest price paid for generic. By the way, teva is up. Dont forget allergan gets stock. Mostly no debt this morning. On monday last week im freting about the debt of allergan. Now its like no debt. Look. They can buy amgen if they want to. Dont forget they have a great tax basis because theyre a foreign country. Saunders talked about future deals. Thats right. That great tax status. Brent, i know the company is braced overseas. He is based about 25 minutes from me in jersey. Thats over the hudson. But i like the deal so much for allergan. They are able to control their own destiny it is the great growth stock in that group. Be i the way the proprietary drugs are fantastic t. Stock was up 36 at one point this morning. Because its a member of the s p its come down. Is it the same school of thought as all sper gan on friday . Should people be that worried of a spa is . They talked themselves up big about this alzheimers drug which is good its four years away. The numbers were miserable. They guided it down. You have to think about what your end stage sales are going to be much much lower. They didnt get this stroke yield didnt work. So it was a triple wammy. The stroke drug is not going to be able to fill the hole whine now and alzheimers. The deal is bigger. The franchise is not as good. Biojen was very promotional. I think it got whacked. A lot of people on twitter were saying this is ridiculous. Not if you look at how biojen promoted itself. They overpromoted and under delivered. If there is a cautionary tale. What is it . I think you dont talk about these drugs being great . You just dont do that. Brent saunders is talking about how the Company Might do in the next threequarters. Given the fact that all sper gan has so much. You talk about a 2018 2019 drug. You got to be careful. Lily was little promotional. Alzheimers disease, everybody would love to do anything. We do not see anything that indicated they rolled back plaque aggressively. I dont think the fda is about to approve anything new on alzheimers. So i thought biozben gen hurt itself by saying this is the drug and the bailout, you have a big hole in biojen. Lets contrast that, bob eugen you put out a 2020 number. He has a longterm situation going on. The number was a very reasonable number. Cellgene is not expensive. So i like that. Gilead is going to report. We will find out what they do with tear capital. I think thats important. Being interviewed by squawk, he basically said listen we dont have the big label here. Its not going to be people who cant take the statins are going to go get it. I thought thats the way to do it. Listen, its a good drug. You should take the other statins first. When you dont promote, carl you dont have to overlimit. We are getting breaking news out of yahoo this morning. They say theyre shareholders should reject a mini offer, they want to buy them at 3745 t. Bid was unsolicited. Yahoo knows the offer surprise about 4. 5 below that author commenced. Interesting wrinkle there. Love those guys trc, who the heck are they . We dig below for a small amount. Is that going to put the pressure . Hey, trc, listen to me get in the game. Dont do that like that bee hive valley iron pigs maybe we put you in the film. Reading, aa. This is unbelievable. This is aa i dont mean like credit rating. I mean Like Major League baseball. Fallen team. This is not a cool handles no hitter. When we come back. What disney ceo bob iger is saying about the future for his company. Won is the biggest brands what that could mean for the consumer. We are expecting some pain at the open after the worst week for the s p since march. A lot more squawk on the street from post 9 in just a minute. En Power Outages in the us are caused by weather. But utilities can now predict where the power will go out, within a few city blocks. Working with ibm theyre combining micro weather forecasts with detailed data from local sensors. To predict where outages are likely to occur. And send crews exactly where theyre needed, when theyre needed. Ibm analytics from the internet of things is making energy smarter every day. [ piercing sound ] daddy lets play sorry kids. Feeling dead on your feet . Ive been on my feet all day. Dr. Scholls massaging gel insoles have a unique gel wave design for outrageous comfort that helps you feel more energized. Dr. Scholls. Feel the energy Disneys Bob Iger talking about the sland scape of television. What it could mean for the future of the decision i division. Heres what he had to say earlier this morning. I think eventually disney becomes a business sold directly to the consumer. Where there is an engagement, espn will use that information to customize their product to enable personalization to essentially engage in a much more effective way an offer advertisers more value as well. Iger said there was something of an inevitability to that. He said few want to use hbo as a model go ahead. He argued they would be at a scale much larger than that. Right. I liked his comments on china that there is no real worries there. I think they made decisions that talent should not be overpaid. And i think what theyre really banking on is that you really watch the programing. Because of the programing. There are some people i think on the tech list theyre so good. But Collin Howard one of my absolute favorites, one of my favorites and just a guy you dont want to lose bill simmons, i understand is controversial. So oberman, controversial because of the costs of the production. But they got to be careful on how many people they lose. There are some real Fan Favorites up there. Thats why we love espn so much. They argue the bench as you would expect them to. I know thats absolutely right. Along. As someone engaged with daily fantasy. I want all the info i get. I want to make sure they decide not to get rid of guy was a news breakers and reporters. But i dont know you will lose some stars always. Its a free agent marks. In terms of the broader disney, he argued the consumer is acting leak there is not a problem. Theme parks are going to crush it this year. Theyre going big in shanghai. He has seen a rough cut of the Star Wars Film without the special effects in the music. He says he cant wait for the world to see it. I think he is right. Bob iger deserves the benefit of the doubt. The stock is up very big. Now i think china will be goods. One thing i worry about with iger remember if you look at this at whats happening in tv i mean everyone is getting so smart, theyre looking at tear bill trying to figure out what to do. Espn 42 is not going to happen. Which is at the high school level. Will you not get that channel. No, it makes you wonder if we will see the rhetoric if terms of the competition we see from the wireless coverage. The bundle is terrible. I think that could happen the rest of the company is going strongly. There is so much to leak. I wish the stock were lower. Its had a run since okay. A lot of that is because, look iger hes phenomenally good. There isser have few on the story so to speak. Im an older person. I want every bit of espn. There are satisfier people saying wait a second if i can get less espn im be fine. You read everything. Some peoples tastes are a ill already pharaoh. Yes. I will pay for what i use. The mac Football Games the midamerican, theyre not as in tune to that. Wow, what is going on in the mac conference . Well watch disney and get cramers mad dash. We will give you an update on what happened in chosen overnight. Thats the biggest loss since 2007. 1,500 companies were halted limits down over there. We will talk about that and reasons why when squawk in the street comes back. So lets do something about it. Eight minutes until the bell. Lets get cramers take. This is an issue by goldman, their upgradech one of the things i dont like about last week and this week to some degree, companies that reportch Eric Weissman has done a remarkable job. I think this is the place to go. Not unlike nike stephen curry. There is very little resistance to paying higher for sneakers. This is why china is such a ka 91 dominican republic. Why are they paying so much for nikes, jorns . All costs are coming down. On how many . 200 billion. I think that will be way too long. They had a big bet on canada. You decided. The pipeline didnt get built thats why its selling. Royal dutch is very exposed. The big infrastructure plays, i dont know im concerned about then the market is ugly. There are a lot of Different Companies that raised money. The saudis apparently want to break canada and United States they say break. Watch free port. That is an oil company that sounds like a copper company. That irin gold copper. Were the logical short. The debt load is horrible freeport wait until the market jumps up. This is the one to watch. Other than like hunger. Its money. You say bad in the world, cramer. Of the minerals. A rough looking chart. Well get the opening bell in a couple of minutes. Dont go away. Theres a difference when you trade with fidelity. One you wont find anywhere else. Onesecond trade execution. Guaranteed. Did you see it . In one second, he made a trade we looked for the best price and the trade went through. Do the other guys guarantee that . Didnt think so. Open an account and find more of the expertise you need to be a better investor. You are watching cnbc squawk on the street. Live from the capital of the world. The opening bell in twoandahalf minutes as we kick off a busy week. 71 Companies Reporting earnings today, a quarter of the s p this week alone. We will get gdp on thursday. We have a twoday fed meeting. We got durables. We will get chicago pmi. Plenty to work with. This is one of those weeks, where you cant get to everything. So there will be a company or two that will report great numbers. We wont be able to follow it. The macro, china and the fed. Theyre both things people want to sell in front of. I think there will be a relief rally. China the communist party wants to go down fast. The one thing that will happen. China is up way too much these are state banks. There was a lot of margin lending there i dont want to be so negative or china. Chinas a rich company. They got a margin amount in the meantime, its tough to buy diag i dont think. Luxury goods people still go. I worry people think the major state banks. I tried to do a run of the companies some of these companies are selling outrageous. Some are coming down big. I do want to see a degree the shenz is down the 300 is down. Then we can sort it out its got to get there, wash everybody out, start anew. In the meantime that polishs your appetite for domestic names how . Well, i want to buy kroger. Thats the best example. Kroger shanghai. Theyre going to by a shing. Ironically the Hong Kong Dragon boat fell in new york city. Theyre celebrating. At the nasdaq, the special olympics, new york chapter doing the honors there. We are told there might be a return as a dragon. So well keep our ion the tevas around perigos. Theyre all caught up in this kind of well how much is perigos worth . The spread is big. At the end of the day, what is that . Flat. Its a heat seeking missile people want to sell thats what traders do. They sense a lot of desperation in the market. They go to overweights. The markets become too pessimistic. Look. The stock its not like its in the 50s. I said guy, there is a lot of pressure. Remember, there was a deal. Theyre not they have the wrong intellectual property. Which makes it difficult when you have Sky Works Solutions which has the right product. One is hardware. Sky works supported an amazing quarter. When that stock got hit that was a sign. Sky works quarter. I went over that thinking there must be something in that Conference Call that was bad. It was a great quarter. That stock got crushed. Some of the chinese concerns listed here reflecting what happened in the turn overnight. If i want to go to jd. Com thinking theyre walmart and kohls or something. The a in fang amazon is even up here is a better buy than any of the chinese. China, these companies are again not expensive anymore. There is a lot of people who are in china. A lot of people there. There is baba right there. Down 3 . They caught the top. Carl. I was just going to say that the timing on a lot of these. Today, the emotions. Ouch. It was a one of those where its like you know if people borrow money to buy tear stuff. The Chinese Government will pop up alibaba, i dont think so . Is the Chinese Government to order a lot of chairs . You always come back with the chairs. I was trying to buy chairs i said i dont know they got a special game to boy a lot of things they got a sperm at a bib shop on h m on steroids. Meantime the joy globals the transoceans, the diamond offshores the wynn resorts. To make a move to think there will be deep water drilling here. I was shocked at how poorly the mexican options went. These were things snapped up. They were not snapped up. I want to ask the kimberlys, the proctors. They have an ideal. If the fed says the wrong thing, that deal wont be worth anything. If the fed says listen china is the problem people will battle. Unilever had a remarkable report. Somebody asked. We had 225 billion in outflow. Money had to go somewhere. Do you believe it went to cash . I think some cash. I go back to the visa quarter, charlie sharp, a sharp man, a great quarter. He said people are saving. People are absolutely saving. So its possible. They pri the money in. Theyre not earning much on the cd. I think they want to buy a lot of these theyll buy kellogg or kraft. Its a good company. Theyre not coming in yet to the mlps. They are saving. And the shark is so smart. You go over the Conference Call. You realize americans are saving more. Thats a part of the damper on the economy. We used to be a problem. Now were like japan. Yes, people are taking the capital one was the outlyer. They added reserves. I think they were being putin. The visa call was a little shudder. The opposite was some of these companies that sell into homes leak the whirlpool quarter was strong for the u. S. Watch visa him you got to read the Conference Call. I know theyre really pain. I was coming back from the hamptons, im reading and you are like do that like what . Well get more from mastercard on wednesday as they report. You mentioned amazon and google are up in the pretty tough taping. I mean white fang and black tooth being the rest of the market. I only say that because david neighborer is not here. He did not know soupy, which is very painful. In terms of the indexes, the do you is below 17. 5. I noticed today, half of the dow is in correction mode. Cash intel, dupont, walmart. Imx. Rough names. There was one moment where the ceo was like yeah i know were bad. I know were disappointed. I dont like disappointment. Geeze its like you bought the to go. Meditation. You dont go in there to say that stuff like maybe some you know geter living from chemicals. You dont go on your Conference Call unless you expect to be vis rated and sell sikorsky. When every country in the world is rearming you sell score can i at the bottom. I may have to go up there and really slap them around the head there. There. I dont think you will get that. Maybe not any time soon it shows you how painful the industrials have been. Caterpillar. That guy the ceo. Very nice. Apple. A couple tidbits on apple. One thing that best buy is selling in august. The other is reports arguing the company is using a bm model for a would be apple car. Which some analysts some others believe is definitely on the drawing board. I think it might be. I to the the apple watch was going to be in a lot of drawers, so to speak. You have to try it on to like it as much as i do. I was doing one of those things get smart that was an old show, im on my watch. And he says take me off your watch. Im on my watch. There is like mad money, kramer is talking out of his head no hi ha, bud why is cramer shouting into his watch . Its like hey, haley. Nobody is there. The problem is nobody called. Suchy sales, don adams. Agent 99 was one of my favorites. The best. The do you was down 148 on the floor. Good morning, bob. 4to1 declining, industrials, energy and materials. Those are the groups having the toughest time of it. Remind everybody what happened over there. Down 8 . Shinzen notably on the weak side. It spilled out over the rest of the world. You look at Asia Hong Kong is down 3 and taiwan indonesia, the philipines. It spilled over. Germany is down its spilling over into the Commodity Markets as well. So copper is down roughly 1 the lowest level in six years. Wti crude is on the down side. We are getting close to the old low with the march 17 low we saw a little while ago. Not far from that. Energy and materials are among the weakest performers. The usual names, apache eog. Freeportmcmore ran and we were in some very strange territory. Particularly material, industrials very very stretched. The material sector is almost three standard days below the moving average. Three standard deviations mean 99. 7 of the time you are in that range. When you are down that far, its stretched. You rarely see it away from the 50Day Moving Average n. Times when we see this in the past usually a week later, these sectors goop out. They did a study a little while ago. The problem is with china growth in doubt, it creates problems. Just because you drift back up the next week doesnt necessarily mean you will get a significant balance. So a lot of doubts about whether even tow statistically this is a good buying opportunity. Take a look at the xlb. These are the materials sector here crashing essentially. The same with the xl lead. This is the energy sector. You can do this to a certain extent with the industrials. Thats simply a collapse in the last six or seven weeks t. One thing that has been holding up. The consumer staple names are flat slightly on the up side. Philly morris. Kelloggs was up. Not a lot to particularly write home about t. Four everybody watches. The once holding up the nasdaq 100 a mixed picture today, apple to the downside amazon and google marginally to the upside. The dow down 140 points. They have been waiting for a viable balance in tears, energy and industrials. But the fact that it didnt work when this happened about two months ago in Energy Stocks think is causing a lot of people to be hesitant to step in and boy right here. Thank you very much. As we said earlier the ten year got close to a twoweek low on the yield. Lets check in with rick. Hey, rick. Absolutely. As a matter of fact on a closing yield basis, getting closer to three weeks, of course. If we look at it into today. We see the 8 30 durable numbers didnt help the markets much. Normally it pushes yields up. The headline number wasnt bad. The more you drill down and look at revisions, the more negative durables look you see the momentum to the down side to a june 1st and that pegs where we sit with regard to how important these low 220s are. Twoday booms. Not exactly the same at that time person. The drift is more consistent. If you look at tense pineing booms since the difference between the two is consistent. We still assume this thelma and louise hookups to sovereign instruments. If we look at whats going on on Foreign Exchange to change gears a bit. I find fascinating him of course the euro is strengthening. It isnt necessarily strengthening because of food news, its strengthening for rev. S that pushed the dollar down and up. A lot of the global issues of the day pay have fed implexs. If you look at a two day of the dax, that goes a long way in telling you what itself going on as well. A higher euro isnt necessarily good for stocks. Month to date the dollar index pretty much says everything even know its know where near the lows of the year its better off than in the spring of this year, carl back to you. Rick well see you in a while, lets find energy. Jackie. Hi, good morning, carl the Energy Complex is down across the board. We are down 65 cents on wti. The session low, 4720 it was mentioned earlier, we are not very far off. Just about 5 off the yeartodate lows. Trade herbs are thinking we will get back to those levels. What are the concerns right now . Its coin. Its the dollar. That brings many etoo the greek count numbers that came out on friday. Traders were stunned. Analysts alike, we saw 21 ricks coming back online t. Supply question at this point is what is going to hap to pricing. What will have to happen to prizeing to get u. S. Producers to back off in a meaningful way. Of course, that itself the larger question. I do want to talk about gas price, the lundberg survey came out this morning. The National Average 282. That penny decreases over the last two weeks, of course as i know and a lot of people tell me on twitter, they are getting hurt in california. That is the state average is the highest 413. Lundberg is saying the supply problems are working themselves out. People in california should see some relief soon. Back to you, carl. Jackie thank you so much. When we come back, a lot of red on the screen. We will take a look at how the coin selloff impacts u. S. Markets. A lot more ahead. The dow down 160. Judgment gains the best since february. Now almost gone. The s p is below the 200 gma. Once again, we are back in a moment. [ male announcer ] some come here to build something smarter. Some come here to build something stronger. Others come to build something faster. Something safer. Something greener. Something the whole world can share. People come to boeing to do many different things. But its always about the very thing we do best. In the us, three in ten College Students drop out. But how can you spot whos at risk . The one who lives far from campus . The one who works the night shift . The one with new responsibilities . One thing cant tell you, but the right combination can. Universities are using ibm analytics to understand pressures in and out of the classroom some expect to cut dropout rates by twentyfive percent. Ibm analytics is working to make education smarter every day. Take a look at the sectors today. We actually have one s p sector in the green after last week when all ten, jim, were red for the week. Last week was a really terrible week. You look at the charts this week, you sense there is a lot of pain. How long can it go on . Its not clear to me. We learn from china and the feds relief for the rally after the feds. Coin does matter i wish vp wish it didnt. I know there is a lot of strength in china away from the stockmarket. When i say that im reading the New York Times, when i looked at where china is and how powerful it is overseas you know they have the money, i dont think they want to do that. Theyre not fools. I think they were thinking it would come down slowly. When you have that many stocks halted, that many banks that need to recapitalize they have a lot of work to do on the side. They arc that you yellen on the fed will provide what theyre calling fresh clues. They thought to raise and greece occurred. Will they understand that huge commodities race to the bottom will they understand companies will not make it through this period . Theyve learned a lot now unemployment is very good. We will get the cost index. You read minimum wage is in place, i think with the feds its a little daunting. To me there was housing inflation. The numbers on friday were horrendous there is a lot you wouldnt want to debate. That will be in the second half. In the meantime dow is down we will get stock trading with jim in just a minute. A powerful new dell 2in1 laptop. Whoa what are you doing . Putting on a movie. Im trying to watch the game here. Look i need this right now ok . Come on i dont want to watch that. Too bad this is happening. Fine, what if i just put up the x1 sports app right here. Ah jeez its so close. He just loves her so much. Do it. Come on. Do it. Come on yes awww, yes that is what im talking about. Baby. Call and upgrade to get x1 today. Time for cramer and stock trading trading. They mentioned so many Different Companies. Mad money posts, blue apron, so Many Companies in the grubhub space its i think an influential piece you mean everyone is in that game. Biogen, the world is fighting over there the stock lost so much of its graw. Jp marken says its oversold management is tarnished. This is a stock to watch. This is the key to the next leg of the market. If they keep biojen up. People will go back to cellgene regeneron. They will make that a stand. Otherwise you know when we boil it down to fang once again like i point out, fang is back fang is everything you dont want. Its the only stocks that are back. We dont want that. Fought that i want the cold stocks to come back. Theyre a little late. Coal, no king coal no. When did you come up with that . The story says it was a few years ago. It was a long time ago. It was candies, netflix and deckers, but sales force was in there. I will say that fang is narrower than candies. We got four stocks you cannot have a leader. What was the eve . Express script. Candys, i dont know. Thing a ro films will get shorter and shorter. And amazon netflix. Not good enough. In terms of support, chartists are looking at 2063. If the Chinese Communist party comes in we have to all stay up for what the communists do but we still see the feds that would cues a thursday rally i was reading quotations. He has a chapter discipline. What it basically, you applied that. They were disciplined traders. Now it doesnt have the level of relevant it used to have in coin. Well, we all got schooled on greek parliamentary procedures. Its like the fish in the ocean. I lad to dust off the eight army books. They can bring back the eighth army in coin. I studied china at harvard. At that point they were real communists. Now its like theyre in charge. There is a lot of speed bumps. Whats on deck . We have Qlik Technology lars is going to tell you he is winning business from ibm. Thats possible. Ibm is more than a dashboard. Ibm stocks have been very heavy, i think thats a nice word heavy. You will have a lot to work tonight. Gasoline is coming down that penny will be down more than that. Watch kroger and biojen. My daughters you could eat off the floor. Well see you tonight, jim, thank you so much. Jim cramer mad money 6 00 p. M. Eastern time. As you can see, china is down 8. 5 overnight. Well be right back. Good monday morning. Welcome back to squawk on the street. We are live at the new york stock exchange. Marks getting a tough start to the week on a busy week for earnings. A quarter of the s p will be filed this week t. Selloff in coin overnight has meant pain for india and europe now its our turn. The dow is down 126. Lots of rip him effects. Lets get to the road maps for the hour. Which companies have the most exposure for that market in the u. S. . Plus disney ceo bob iger speaking out in an exclusive interview. Will espn be sold directly to consumers . Hear what he had to say about that and more. Plus Luxury Retail stocks taking a hit. Is eight symptom of a bigger problem . How do you invest in retail right now . Coming up later the ceo of schrieber labs looking to see how the nfl practices with Virtual Reality. How he is using Trek Technology to transform the gridiron. Chinese markets having a big impact on markets as well. They have a fed twoday meeting this week. We got our first look at the gdp on thursday for more lets bring in a senior economist . How vulnerable are we to this chinese roller coaster beyond the short term with the dow down 130 . Lets keep in mind china gdp in 2002 was roughly 2. 5 trillion. Its now over 10. 5 trillion. Chinas economy is 15 of global gdp. Our expectations are for gdp expectations that continue to desell rate over the next 12 24 and 36 months. In the u. S. Or when it comes to the Global Growth. The estimate is roughly 2. 9 . Imf is at 2. 5 him when it comes to the u. S. We believe the u. S. Will be 2. 5 growth. Little implications there. For the euro zone. Its going to take the brunt of it. The largest trading partner, china and effectively we think gdp will be roughly 1andahalf . We look at emerging market europe, here in the United States. We look at the companies, posed. Yet the u. S. Continues to be a closed market with exports at 13 of gdp. Is there an impact of whats happening in china to this economy . You know, thats the biggest question, of course the drop in commodities is being watched closely. However the way the fed looks at any drop in Commodity Prices is largely transitory. In the short run will likely have a negligible impact. We are looking at what impact will it have . We seen it come down a bit. Overall the fed is likely to look past this one. I completely agree with anika. I think the med moves in september october and has signalled that and in this week, she will be consistent with that major message. When it comes to the u. S. Stockmarket, we havent seen an impact. The three worries, greerks china and the Federal Reserve tightening policy. Is china the biggest . China is the biggest. Everyone should be concerned about that. The feedback moves into emerging growth t. Feedback looped into profitability. We will have an impact from that inflexion point. The Federal Reserve like anika mentioned, well look at this as a transitory effect. Anika, a lot of tech knicks in additions, though look at charts antsdz argue that china has the least correlation are Global Markets of any stock market in the world. Why should we worry about it this time . Yeah i dont know that we should necessarily worry about it. When you look at the chinese stockmarket, especially relative to the u. S. Stockmarket, we see a very small proportion of households actually have an investment in the equity markets. So again, we dont necessarily believe that this is going to have a large impact. Definitely not on the u. S. Economy, largely, a lot of this volatility will likely fade to the backgrounds. And i was going to say, yet, Energy Materials for the beat out stocks. You got to watch this exposure. You do indeed. Our expectations are for about a 5 total return for 2015 into 2016 for the next four quarters. We do believe you have to move up the quality spectrum as you start to see Global Growth desell rate. We havent had a meaningful drop below the 200 days since ebola. Looking back. That was an outlyer event. Since then its been a signal to buy. Do you think its different . I think while you see this change in Monetary Policy in the United States and are you bumping up abenefits the valuation issues you look at a forward multiple 18 times, any type of draw down of expectations for growth and profitability. Which we believe will happen over the next threequarters to four quarters. Well give you that opportunity where the market will perhaps go down about 5, 7, 10 . Finally, what are you looking for in terms of the gdp report on thursday . Yeah the big gdp report the Second Quarter is actually not going to be the big one. We likely will see a 1. 9 pace. Whats important for this gpp report we will get seasonality issues that will be addressed. We also will get two new measures for gdp and this is the big benchmarking. We continue to look for the sek sec half of the year to show trend line improvement. Well see. Its up 2 , though. Well leave it there for now. Wells fargo, chad morganlander. The dow down 154 points carl. Lets dive deeper into the china impact. What can we expect in terms of Ripple Effect on domestic fames. Dom chu has more. Lets take that conversation you had with anika and chad to the next level here and throw numbers behind it. Our team of wrieders took a look at the bigger stories here with regard to china and found, yes, there is a relationship between the large cap etf the one that tracks the Biggest Companies in china you can see, no surprise, no big deal. According to our data partners there have been again we seen them drop 10 plus in the course of a month. What happens on the hooes is an s p 500 that also falls. At least it has in the last 21 times its happened. On average, the s p 500 during those times has fallen by 5 itself. Its only been positive four times. So the general trend is weakness in this market proxy leads to or at least is correlated with some of the moves in the s p. Now, amongst some of the stocks according to S P Dow Jones indices that have perhaps an outsized exposure to asia look at qualcomm, western digital. No surprise that Technology Stocks make up a huge part of this list. Those companies have at least half of their sales from that greater asia region of course china the biggest economy there. It could have rip him effects. So a lot of traders, sarahs and investors will be looking to see whether some of these types of Companies Feel a bit of a pinch in case that china story starts to get bad in a bigger way. Back over to you guys. No surprise technology is one of the worst performing sectors right now along with energy. Thank you for breaking those numbers down. Tesla saying it will buy allergan generic business. We are joined with the details of the latest in what is this m na frenzy. So the deal breaks down and stocks about 33. 75 billion in cash. 6. 75 billion in teva stock giving allergaf a 10 stake. The ceo joined us this morning saying it came together in the last three weeks the consolidations were some of the reasons for the deem. Take a listen. Its a small part of made us receptive to have this conversation with teva. You look at how dynamic this industry is. How quickly its changing. We want to leave that change. I dont want to follow that change a lot will impact the generic business. It says innovate. If you innovate you will get reimbursed. We also discussed what the Company Might do with all those proceeds indicating more deals could be in the works. When you look at our branlded business aesthetics eye care gi Womens Health urology, infectious disease, these are a higher margin higher Growth Business for us so we can double down build those therapeutic categories up and look for future transformational deals like we did the allergan deals. They are up quite significantly on the deal today. A lot of people feel the stock reaction is driving the consolidation that management seems is being rewarded. You see mylan traded down. Teva is dropping its bid, perrigo is up. This puts more pressure on mylan to get this deal done. This pacman of the deal in the drug space continues, carl. Its so hard to keep track of in story its amazing, thank you, mech meg terrell in new york. When we come back this morning Disneys Bob Iger speaking out on squawk early this morning, what he had to say about the future of espn. More on that exclusive in a momentch before we head to break, another check on the market. The s p moved, it is obviously still very early. Well be back in a minute. Disneys bob iger speaking out if an exclusive interview, talking everything from china and the future of television and espn. Our and drew ross sorkin joins us, what an interview, man, its all everybody is talking about today. Thank you carl thank you for presenting that. We did have ob iger on. Perhaps the big news we havent heard him talk about this hinting at what happens in the world of real unbundleing, two its prized asset, espn a third of disneys business questionings have always existed to what happens to that in an unbundled world. Listen to what says about that. I think eventually espn is a business sold directly to the consumer. There is an engagement and espn will use that information to customize their product, personalization, to essentially engage in a much more effective way and also for advertisers more value as well. Of course, the big question if that were to happen, what happens to the economics of espn and all the fighting they have done to stay on the bake cable tier and how that changes. One of the other issues we talked about, of course the big issue has been china, disney making a huge bet on china and particularly shanghai, heres what he had to say there. We opened up a new disney store in shanghai a few months ago. I was there, the week before last. Still doing extremely well. We havent opened the theme park. We dont fully know t. Research we have done suggests the Chinese Consumer is fought really in terms of its behavior indicating there is an issue with their markets. Bob geiger taking the opposite side of what ray galeai said to a note to investors last week. How he felt there was not an investment there. Not now. Bob iger making the case for longterm debt. You have to seek through the noise, there you have it carl a. Couple pieces of news out of that interview with mr. Iger. Ten there is the movie stoirksdantman had another winning weekend. We talked about antman and star wars. We talked about the valuation of disney and how people dont think of it as a media company. They think of it as a Consumer Products Company Given the franchise and the investments theyve made. We talked about technology and jack darcy being on the board and with square maybe up for an ipo in twitter and whether that lays. We talked to carl sandberg. We hit a lot of topics this morning. The big question now will be what happens to the future of valuation of sports rights of teams, if in fact owners even want to see espn start to distribute this way. It will be fascinating over the next five years, obviously, andrew thanks, for sticking around. Thank you, appreciate it. Thanks, andrew. Coming up some of the biggest names in Luxury Retail. Kors, coach and lauren are trading near lows is eight symptom of a bigger problem . Well discuss with an analyst after the break. A mid a broader selloff in the markets. Michael kors coach and ralph lauren are trading near new lows joining us to discuss this market retail analyst oliver chen. Oliver if you look at the names hit the most coach, michael kors exposed internationally. Is eight china story . There is a big story, antigift giving as well as softening on materialism is affecting it in addition to the macros. At kellen we are concerned about the handbag market in general. We think accessories could be a little weaker with the rise of leisure and wearables and no new it bag, thats an issue as well. With the retailers, they get a portion of sales in china, they rely on chinese Tourist Spending in asia and europe and the u. S. Are they starting to see a weakness there . Well the good news tiffany, you do capture a lot of Chinese Tourists in europe. Also we have more Chinese Tourists domestically in the u. S. , over that is offset by a weaker european tourism, so hopefully, you want to be exposed to global companies. Were recommending quality like a costco, a tj. People understand retails weekness visavis china, what explains the tour of china . Is it about shoes . Is it something es . About price points . I think it comes back to brands. Also thinking about a return of capital, dividend yields shareholder repurchases. So what are the best American Brands that can be global stories in many many countries. You think about the athletic companies, costco tjx. Victoria secret. So those are the great American Brands, you have investors looking for less fashion rick looking for more quality. Who is the most exposed . Tiffany, fossil and rachl too. Pe values multiples, those are definitely riskier. It sounds like you like you mentioned tj maxx. So is it off price and domestic . Is that the strategy right now in retail . A little ought both. Whats good about tj being off price is a globally appealing kind of phenomenon. There is less fashion risk. Also if you think about the consumer for back to school and fall, its all about promotions discounts on National Bronze so thats a key theechl its about the new normal t. New consumer. Also people dont dress in uniforms from headtotoe. Tjx is a treasure hunt. Thats an exciting xeerns e experience with the consumer. I was in costco over the weekend. Of course, you were. Halloween costumes right, obviously, backtoschool. Is backtoschool getting an earlier start . If so is that a signal that theyre worried about gaining momentum going into the fall . We have this mixed picture. On the one hand consumers are getting to shop labor day is later this year. In a sense, shopping is happening after you see what your friends have at school. That being said there is a promotional war right now. So you think about amazon macys, costco. They need to pulse aught out traffic. Traffic is a big deal. You have a prediction you said amazon will surpass macys as the number one retailer of clothing by when . Five years t. Market share could go from 5 to 14 macys is at 7. Amazon is benefiting from tons of traffic. It doesnt need to be your enemy. It can be another Distribution Partner the store of the future. Companies would better brand, big brands matter a lot as they control a lot of the distribution destiny. What happens to macys . I like macys. I like the macys story. I think its great quality management. What is happening is macys is multifacetted. There is real estate. It could be worth as much as 19 billion. You think they will go that route . Its a Management Team that understands the importance of shareholders and making good decisions. The problem with doing this, though, you may not want to sign up for a lot of rent expense. Its a lot of risk. Its the Management Team that doesnt want to take that financial risk because retail is risky. Retail involves fashion. Jogging pants for the fall . Thats a trend . Joggers. Men with joggers pants. Hey, you can wear these to work. Banned bottoms. Laces, lululemon. Its all about this versatility. So joggers for men and women. Got it. The death of denim at the expense of athletic leisure. If denim has stretch, you can play it both ways. You are seeing performance denim. You can go dancing, do your thing if you feed to. Oliver chen always good to check in with you on the trends for fall. Thanks on the chinese exposure. This morning stocks taking a leg lower. Off succession lows after the bloodleting in china overnight. We will navigate that when we come right back. You focus on making great burgers, or building the best houses in town. Or becoming the next highlyunl. Mornings. Wonderful, crazy mornings. We figure you probably dont have time to wait on hold. Thats why at xfinity were hard at work building new apps like this one that lets you choose a time for us to call you. So instead of waiting on hold, well call you when things are just as wonderful. [phone rings] but a little less crazy. Were doing everything we can to give you the best experience possible. Because we should fit into your life. Not the other way around. Good morning, everyone here is your cnbc news update at this hour. President obama is meeting with the ethiopia prime minister. He urged to press freedom and political opens in they have focusing on al shabab in somalia. Later in a News Conference president obama criticizeing Mike Huckabee and ted cruz for a series of campaign attacks he said would be ridiculous if it werent so sad. Yesterday, huckabee likens the nuclear deal with iran to quote marching the israelis to the oven end quote. Hundreds of family members, friends and classmates taking part in a prayer vigil for two missing 14yearolds in south florida. Earlier the coast guard found the capsized 19foot boat that they were on. And an autopsy will be feed to evaluate what led to the death of the late singer whitney houston. She died six months after she was found face down and unresponsive in a bathtub in her atlanta home. That is the cnbc news update at this hour. Lets go back to squawk. Markets in the red today off tear lows after big losses in china, overnight, lets bring in our director of operations at uvs who joins us. Art, good morning to you. Good morning. Well july was looking okay there for a while. I am told we are 900 points below the all time on the dow. It was a fast ride. Its been kind of a whacky year i think. The dow has been in and out of plus territory for the year. 21 times. I think that may be a record. Im not entirely sure. Close to it. We havent seen many of those. Right now, we are trying to bounce off the 200 Day Moving Average in the s p, with i is 2063 or so. But there is no real verb. You dont see a Short Covering or anything else back in. So they have to spend time to get people out with a little more faith that theyre going. Cramers point is we are holding to the levels which the government wants coin to fall meaning their markets. Oh, it is the trouble, they dont have a lot of experience with it. So it would appear they did come in. They tried to add some support and then probably there were discussions about, we cant do this every day. So lets step back a little bit here and when they did, the whole thing fell apart. I mean i havent been able to check it out. I am being told the negative breath among those stocks we are trading was up in the possibly 70to1. I mean we talk to 9to1 phenomenal. That was the baby in the bath water routine. Yet on the way up for the Chinese Market up 40 on the year the u. S. Market did not react to it here on the way down, its more spooky. Is that because of there is a fear that the authorities just dont have it under control . Well, i think its two things. They dont have a lot of experiencech were not sure what they will be doing. Secondarily, if you look at the interrelationship of the asset classes, it looks like not just in china but elsewhere, people are getting spreezed if different assets my line about if you cant sell whatever you want, you sell what you can. In some cases, they may be selling equities to raise money to pay for the goditys. Not just in shanghai. So that interrelationship is what has gotten the markets a bit. The question this morning, massive outflows from china, this month, for q q2 where is it going to a bank . Some may be going to pay off debt. Some of those adeath sets were up on margin buying. So thats got to get corrected. That money sometimes disappears. Money heaven . Yes. If you buy a stock on margin. It goes up it suddenly goes down lower than where it was, its not like your money is being transferred anywhere. Now we have yellen tomorrow and wednesday, journal today they may offer fresh hints they are getting closer to raising the rates. The hints can, the actual raising of rates cant. I think i have maintained here time and time again that i think its Stanley Fisher pushing very hard saying look weve got to keep the possibility of september opened in the markets mind. He wants that to happen. If you look at the futures trading in the fed funds, they dont even get above 50 until you get out to december. Whats your best guess at this point . Next year. I have been saying it all along. In terms of the internals in the u. S. Markets, everyone was talking about how its just a few big tech stocks propeling this market higher. Thats something that concerns you. The breath of the game. It concerns pe greatly. It is becoming narrower and narrower. When a few stocks are pulling the wagon, you can run into trouble. As i alluded to. I dont want to make a comparison. I lived through the 70s. The nifty 50 dont worry tail carry us along. When they fail to carry, you saw the market drop 50 like a rock. Art, lets hope that doesnt happen. No, no no living through it once. Well talk to you soon. As we mentioned, coin the eye of the storm the shanghai composite tumbling over 8 . Its biggest daily decline in eight years. Joining us by phone, evercorydon alleged strasdheim. Was it driven by the chinese authorities stopping to intervene . Or a signal that its not working . Sarah, we dont really know exactly what happened yesterday other than 78 of the stocks in china were down. 3 were up to arts point earlier. 19 were halted. No trade. This on july 4th. The shanghai schennzen markets stopped being markets. That i became a government operation. Investing in china right now i think is simply unsuitable for foreign investors. Even if you sounds like larry fink. Is there no asset in the entire economy . Well, im speaking there about the equity market. Larry sfink is starting to sound a lot like me. Whats happened is market peaked in june. It was fantastic. Runup, to buy stocks turned down as manias do july 4th they said timeout. We have to stop this. It has not been successful. There is a lot of stock, carl that is still for sale. Thats why you have these down days if in fact beijing is not intervening and buying stock. Beyond the alargeing some okay churning stockmarket move the question everyone has, what does it mean for the real economy there . Especially the consumer. A lot of American Companies are exposed to. Well for the Chinese Consumer. I think its a relatively small event. Equities are only about 10 of Household Wealth in china. 40 is housing. 25 is the bank. Maybe 10 in equity the other 25 Everything Else. This is a symptom of a bad economy in china and thats what the Foreign Companies and domestics are getting hammered by. We were getting coin data pretty much all year indicating the chinese economy is slowing. We were expecting. That they were transitioning the economy. The market rallied on this time they will provide more support and stimulus. Has that completely changed . I think it has. Earlier in the year there was an awful lot of cheer leading. They reported 7 growth for the first half of the year. Nobody believes that number including beijing officialdom. They are talking about growth being within a reasonable range and their policies however, are massively trying to lift growth. So nobody believes those numbers. The underpinks are fought there for the market. Thats what the bake problem is. By the way, i said larry fink. The message we are trying to send is interesting. Understandable the attitude on china has changed. Do you think regulators understand the pressure theyre under . Theyre not experienced in this market control. Well the, im sure the regulators dont. But more important than that i dont think the people at the top do. This intervention on july 4th basically i think undermined the president chis entire pro market reforms agenda. On july 4, they basically threw out, broke the most invisible symbol of any economy in the world. Its stockmarkets. Saying this is going to be its going to go up. Because were going to make it go up. This is a massive mistake, but important negative longer term. Well leave it there. Thanks, for junk on the phone, talking through some of the china concerns donald straszheim. Chrysler meantime getting hit with a 100 million fine for faming to complete the safety recalls, covering more than 11 million vehicles. Our phil le beau joins us from chicago with details on this. There is another mess. Good morning. A whopper of a fine when you break it down it comes out like this. 70 million is the cash penalty. Fiat chrysler will immediately pay to the federal government. 20 million for the fiat process and if they commit further violations in the future it will get whacked with another 15 million it will be under the Free Standing agreement. An independent safety auditor will be appointed to oversee how hay handle safety recalls in the future. Within the last few weeks, the ceo of Fiat Chrysler was talking about the need for his company to change its tactics when it comes to safety issues i totally acknowledge this we are not perfect. We need to continue to work with the agency put us in the right pack. That agency being the national Highway Safety administration. There is an unprecedented buy back a part of this agreement. 129,000 ram pickups with defective systems, they can have the vehicles bought back. 1 million jeeps, those owners will either get some form of compensation to have a repair done or incentive to come in and buy another vehicle. This stock today, Fiat Chrysler. It has been hit because of this. Its down more than 4 for much of the sex. Its interesting, guy, when you look at the stock, its still up this year. And people will say, why . Because sales are likely to be unaffected by all of this. Back to you. Yep up 25 this year t. Dow is cutting its losses down 8 points. Up next football practice of the future. The ceo bringing Virtual Reality to the biggest teams in the nfl. Squawk on the street will be right back. Can a business have a mind . A subconscious. A knack for predicting the future. Reflexes faster than the speed of thought. Can a business have a spirit . Can a business have a soul . Can a business be. Alive . No students ever been the king of the campus on day one. But youre armed with a roomy new jansport backpack, a powerful new dell 2in1 laptop and durable new stellar notebooks, so youre walking the halls with varsity level swagger. Thats what we call that new gear feeling. You left this on the bus. Get it at the place with the experts to get you the right gear. Office depot officemax. Gear up for school. Gear up for great. Is this 190 04 all over again . Strategist tom lee says its looking leak it. It could be bullish. He breaks it down. More squawk on the street coming right youup. Welcome back to squawk on the street. Burgerer kings parent company, restaurants bronze are seeing stronger than expected sales. Chicken fries, a big sellers. And sales rise by nearly 7 . Sales of the tim hortons donut chain, shares are up 7 . A nice run for Restaurant Brands international. Thank you very much. Lets go over to the cme group and check in with rick santelli. Good morning. Camp. Our first guest of the week. Charles, thanks for taking the time. Hey, rec. All right. You know i read your research. Your notes faithfully. This morning the one thing i totally agreed on and id like you to dig down into it. Weve seen some rather aggressive inflows into bond etfs and mutual funds. Tell me. Well, there has been a lot in the last monthandahalf activity going into bond etf and bond mutual funds and there has been money coming out of equities. People are nervous, scared. The u. S. Economy is really not growing. The economic index shows no growth. It was up 4. 5 last year. People are putting money into bond funds. We are seeing bond prices going up. The more money the higher bond prices go we are seeing money into high yield believe it or not. So if i think about that should the fed and Stanley Fisher prevail and a snuging up in september . I would think bond funds might have a bit of a roller coaster ride at these levels. Your thoughts . Yes. And there is only one reason that they want to raise rates in september and thats because they want to raise rates in december forget all about the underlying economy. So its. I have been saying for the last year. Over a year there has been no rate hike in 2015. I still think that if its based upon whats going on in the economy as opposed to a political issue or Something Like that. All right. So now were in total agreement t. Last minute plus heres the thing i didnt understand. After our discussion here your systems are actually getting a bit countertrend looking for stocks to bounce short, medium term. Explain why you believe that to be the case . Sure. So far in july over 60 billion afloat shrink has been announced, cash takeovers, buy backs, 60 billion more than all new share sales, new ipos, secondaries, Insider Selling and also individual investors have sturned bearish. Theyve taken like 6 billion out of u. S. Equity funds, u. S. Equity etfs, compare 6 billion coming out by individuals, 60 billion going in from companies. Thats a very bullish number. Now, china is creating fear and all that but under lying, a lot more money is chasing fewer shares given a neutral psychological effects, the markets should go up from here. Well thank you very much charles you know bob dasani has been doing a great buy back. Now it may be the fundamental that holds the market around. Thanks for taking the time. All yours. Still ahead the ceo joins squawk allie leave to talk about Companies Getting bic big d. C. Funding. Thats coming up later. Well be right back with the dow down 91 points. Can it make a dentist appointment when my teeth are ready . Can it tell the doctor how long you have to wear this thing . Can it tell the Flight Attendant to please not wake me this time . The answer is yes, it can. So, the question your customers are really asking is can your business deliver . Call it the nfls Virtual Reality revolution. Some are turning to Vr Technology to give players a leg up both on and off the field. Strivr labs could have ten teams by the end of camp signed on. Lets bring on the ceo of strivr labs. You may remember him for kicking the extra point back in 2007. Good to have you with us. Good morning. This is fascinating. Youve had goodell in. Walk us through some of the confirmed martpartners. Who is interested . Honestly just about everybody right now. Due to the sensitive nature of what we do with the teams, we dont discuss publicly who were talking to or who is onboard that hasnt released it themselves yet. We do have dallas san francisco, minnesota. Theres two or three more about to be announced as well. And we couldnt be more excited in addition to the college teams, dartmouth, vanderbilt, rice stanford. Thats where this came from. And for them its a phenomenal recruiting tool. And for the nfl teams its them showing their players and fans theyre committed to helping their players perform better. Walk us through how it works. What do i do physically if im a player and using your technology . It depends on what you with ant to do carl. When you put this thing on and you put on the headset, you can look around as if you are right there on the field. The thing that differentiates us from other competitors we dont use a video game engine. We actually use real video. So when you put this thing on you are looking at grass, looking at the sky. If youre a quarterback youre looking at your left tackle. If youre a linebacker looking across the ball at your quarterback. I mean weve taken the bio biometric data. Your heart rate will go up, i promise you. Youll probably tell me that the screen is blurry and ill say to you, no youre blurring it out because youre sweating. That happens. The point is that, yeah, were putting you right there and its pretty neat. Do you have any plans beyond football for your company . Absolutely. We are already talking to some professional baseball teams. Were already talking to some nba teams. Thats the truth. Im not going to say who they are. We dont fudge people. We just treat it straight up. Weve talked to a couple golfers about visualization stuff. Yeah we have big plans. Were focused on football. We have to do football correctly. Or else well just completely die as a company and we dont want that to happen. I see were watching some video as youre talking. I assume youre using oculus we talk about them and facebook. How much can you customize it . If i know im playing jacksonville sunday can i load in their players and see how i perform against them . So again, if you want that specifically, you need to use the video game. The problem is the science says the Research Says that stuff just doesnt work from a cognitive stand sppoint. What we do we are with these teams at practice every single day. And whatever theyre doing at practice to prepare for the game we put in our simulator and they can do it over and over again which is very powerful. To answer your question about oculus we have a very Good Relationship with them. We really respect what theyre doing. Theyre obviously incredible. Theyre the best right now. We also know theres other stuff out there thats just around the corner when oculus releases their product at the beginning of next year. Were also very honest even with the oculus guys were going to pick the best headset, the best headset for athletes. If theres a different one for football than baseball so be it. Oculus have been great. They said thats fine. It helps Virtual Reality even if youre not using our stuff. Thats cool to hear that from them. As of now we do use oculus. I see cowboys and niners. I dont know a lot about football, but i dont think any of them are set to win the super bowl. Will this really help them . I dont know. Be careful. Its the beginning of the year. Every season hatch the playoff teams from the Previous Year dont make it the next year so you never know whats going to happen. You know what were in a pretty cool spot. I think were going to have several teams that have veteran quarterbacks. Lets see if this can help them sustain that play and get to the next level and a lot of teams like minnesota that have a secondyear quarterback and a lot of Young Players with teddy bridgewater and the other guys. Theres going to be a natural progression there for sure and hopefully we have something to say about it. It will be pretty neat to watch. Derek, you have to come back once were not too far from preseason obviously. Its going to be fun to watch. Thanks for your time. Anytime. Derek bell the cofounder of strivr. Kayla tausche, whats coming up on squawk alley . Were watching the steep selloff. Will there be contagion, watching companies down because of that. What you need to know. Well tell but the forthcoming square ipo. What that means for that company as well as whether that forces twitters hands to pick a new ceo. And speaking of twitter, well walk you up to earnings from twitter and facebook. Those are happening this week. And all that have is up ahead on squawk alley. I thought you said you were gonna test drive this buick first. I am test driving it. For 24 hours. Wheres the salesperson . At the dealership. Nice buick i guess that testdrive last night went well. Actually, im still on it. You know, were testdriving this buick for 24 hours, right . Yeah. So what are you doing . Testwashing it. Okay, well let me know when youre done, im gonna take it testshopping. Introducing the buick 24hours of happiness testdrive. 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