Transcripts For CNBC Squawk On The Street 20140808

The markets, tensions growing across the globe this morning so why are stocks set to open higher . Not a lot of good news for mcdonalds, and why asia is troubling for the fast food maker, and gap is not struggling after same store sales. Whats leading the Company Higher . Cbs making shows for netflix behind the ceos big plans for the streaming service. Breaking news from Michelle Carusocabrera back at hq. Busy morning, michelle. We want to update what the president said last night, two u. S. Navy f18s dropped two 500 bombs on isis enemy forces this morning. No word on casualties, fighter jets flew off the uss george w. Bush Aircraft Carrier in the persian gulf telling nbc news, two navy f18 drops two 500 bombs and in addition, the pentagon tweeted out details as well saying the u. S. Military aircraft conducted a strike on isis artillery used against Kurdish Forces defending u. S. Personnel. As the president warned last night, that arab strikes occurred this morning trying to protect u. S. Personnel. Remember, we have a consulate there, one in the south of iraq and a full embassy in baghdad. This is the u. S. Diplomatic locations where we have u. S. Forces. Carl, back to you. Thank you for that, Michelle Carusocabrera. Jim, markets having to weigh this news, not a surprise with what the president said last night. Headlines, vague, russia interested in deescalating the conflict in ukraine. I was making notes on the august, september, october 1990 rallies on friday where people felt there was a deal with iraq. Were back in that period where james baker is speaks and think that somehow theres going to be a deal with sodom. There were three spikes that people really got faked out about. This is all about not about iraq. Im talking now about iraq 1990. This is the way russias playing out. More interested in ukraine . Not the least bit interested in iraq with the stock market. Totally interested and focused you dont believe interested in u. S. Military loss of lives because so many people lost their lives in iraq for so far, not a great thing. Im ricveted by the idea at 3 3, the futures were down. You get up early when the futures do this stuff, you got to do it. We gradually got up, and someone thought merkel had a conversation and putin is speaking softly, and thats continued. Unless we hear something midday to near the end of the day, someone says, you know, theres nothing going on, but if we hear of any talk, theres a short squeeze into the weekend, and when nothing happens, we open down 13 or 14 on monday. That was the pattern established clearly in 1990, and its the pattern to revert to. You cannot play this. Meaning dont buy it . Dont buy it . Until you see our president make some comment which indicates ive been talking to merkel, im concerned, but talking to merkel. Merkel is the one to solve this. It cannot be solved by our president because they will not turn off our natural gas, but theirs. They are elected leaders. They dont want to be thrown out. They are not looking at the stock market. Listen, lets just come to the table, but they are looking at land and september of 1938, made a bad deal with hitler. Thats the way they think on this stuff. You have to see merkel on the phone with pew tip, and then you can buy them when the president says it was a fruitful conversation. What about the argument that the breadth this week, its been negative by a hundred points on the dow, not as bad as last week, short term exhaustion at play. I think what happened is this is a Procter Gamble market because rates are down to 2. 3, and were in the hunt for yield again. Watch the stocks. The money shifts back into yield, right, given the fact that bond market equivalents have to be strong even in the face of weaker earnings by the companies. Kellogg and general mills, hideous quarters, but bouncing well. Clorox had a good run. Proctor, okay, they close a hundred, 78 to 8 1. They are just bonds. They are bonds. Right. Its not helps mcdonalds though. Thats not a bond, man, i dont know what that is, wow. Worse than expected july sales globally and across the individual regions, sales in asia, of course, particularly bad, which they attribute to the food safety issues with its supplier. Global comps down 2. 5, looked for 1. 2. Asia pisk down 7 00, they think that was the supply chain issue out there. When i saw that people say europe was not bad, but japan down 17. There is a revulsion. Theres a sense around the globe this good tasting food is bad for you. I put up mcdonalds against white wave. Soy milk. Im not a fan of it, its sweet. I like almond milk. Its less sweet. 44 growth for lightweight. Plantbased foods are front and center, and and that stock up 0 10 , best performer yesterday of the major stocks i follow. Why . Its the antimcdons. People are getting wise. They dont want to eat there globally. Not yielding 3 preponderate 5. Its a junk bond, junk food, junk bond. Man, that was good. Thats the harshest thing you said. Sometimes i surprise myself. Faber would say, thats not bad. Junk bond, junk food. You were in soshi. Its before and after sochi. That is when Interest Rates went down, the High Water Mark relations with the United States. Look, you were telling me, like, you guys were cavorting. Now, thats the last place took that off the list of preferred places i want to go to. Looking at the world, okay, Interest Rates going down, but unless you have a situation where the yield is firm and youre not concerned about the funds not mcdonalds. They have a great balance sheet, but cant have the numbers over and over again. Im giving up on the food chain. I hate the food chain. I hate the food chain. How tight is the leash on don thompson . The company need an engineer like he is or a food guru . They are not doing much with affinity work. He could say, jim, panera offers a better menu. They are not doing well. I come back and say, well, okay, what company put up numbers that are just amazing . Economy p chipolte. That downgraded today. Be careful because qdoba had unbelievable numbers driving up jack. The fiesta group doing plus7. They have the petina of plus7. The message is getting through to the generation x. Generation d, they want to destroy you. Social media makes it so you cannot eat that stuff. Yeah. Its becoming i went to mcdonalds in vienna, had to, you know, you you go to mcdons for certain reasons, not for the food. Yeah, absolutely. You just go. I look at mcdonalds and yum, and what i think of is processed food, and its just processed food in china is bad for you i mean, this is not a good trend, and i think all of our Food Companies have to accept the fact that you have to go white wave. Earthbou earthbound, clean salad, that was just incredible. Hard to source on a large scale. No, absolutely. You have guys wow when you hear of genetically modified food, listen, thats great, feed everyone on natural and ogranic . We prefer people not to starve. Were in the nonstarve game. Exactly. Doesnt mean you have to eat at mcdonalds. You can eat at home. That will be a drag on the dow this morning. Yes, it is. Gap up sharply in the premarket, more than expected, 2 rise in july for comps. Retailer provided better than expected Second Quarter earnings guidance, strong sales at banana helped the gap the most, and old navy up 3. Saw that. Looked good. This thing has become month to month, and i dont like that. Last time was not that good. This is a hedge fund game. Betting on how, you know, Banana Republic is doing. Be careful with gap. They are so incredibly inconsistent. You cant create a trend on a very short period of time, but, yes, congratulations to them, seemed to pull it off here. I think that when you look at these mass retailers, you dont see a lot of Apparel Companies doing all that well. A Sporting Good company, hideous numbers, but it was not nike. Under armuor doing well, hit or miss. Under armour sticking it no lulu, selling half the stake, a proxy battle. Went to a pe firm so they say buy it. I think if you recommend stocks on a takeover basis, have good fundamentals, and lulus are not good. This is no underarmour. In the meantime, hawaii preparing for two storms, iselle battling the islands with winds and rising surf with Power Outages and downed trees, more than 1200 people in Evacuation Centers across the big island. Others stocking up on food, supplies, gasoline, emptying the store shelves, look at that. All this as hurricane julio gathers steam, its now a cat 3 as of late last night. It will be expected to past north of hawaii late monday, but this is the first time in decades the islands had to deal with this. Yeah. Hopefully the big island did take some of the wind out of iselle. Had a smart guy from walmart on squawk talking about how ready people are, reassuring. Its water. They need water. That tended to be they got it. They figured out a lot. Well, at any given point, the food, aside from pineapples and fish in hawaii is imported. Yes. Flown in. Ive been to hawaii, and it is inincredible. It does not have a lot it is an oasis, but one that needs a lot of food. Yeah. Vimeo taking on youtube announcing three of youtubes biggest stars with millions of followers are jumping ship to go to vimeo, the ceo joins us this morning. Plus, what the cbs chief said having people buzzing. Interesting quarter there. Look at futures. Does not look dramatic, but its a long way from the selloff jim mentioned last night. The press secretary tweeted the u. S. Military aircraft have conducted an air strike on isis or till lair. Well see what that means for the futures today. More squawk on the street in just a minute. Two media giants reporting quarterly results, cbs beating estimates by 7 cents, revenue fell short. And the ceo says the Company Might sell rights for new shows to outlets like netflix and amazon, and news corp. Reported one cents a share, missing by two cents, but revenue beat. Interesting cbs, up front, disa pointing. The chatter was fine. He went on, and while the head lines came out, the stock was clobbered. Im used to the pattern with the media companies. Your get on the Conference Call, and he says, okay, you want to sell stock . Go ahead. Well buy it. The doubling the buy back. Yeah, that was i mean, when people at home, when the ceo comes on a call saying were going to double the amount we buy, dont sell to them. Buy with them. I mean, why . We so out think things. Hes saying, listen, well take every share you have, and so you then dont say, you know, im going to sell them. You dont do that. By the way, they have a lot of franchises that are doing quite well, and i almost find when i hear that people say that theyre peaking, i come back, an i say, well, if they are peaking, they are just a franchise creator. Okay, disney, theme parks, showtime doing well. There was a lot on the call i liked, but what i liked more than anything else, nfl thursday. Its going to be a home run. It is going to be huge. Going to be huge. Taking thursday by storm. You know, a lot of people asked is the nfl peaking . I say, well, its peaking because its peaking like this. When i was in philadelphia last week, how much do you think the franchise cost . I dont know, how much is Steve Ballmer willing to pay . I dont know, 7, 8 . Nfl is red hot. Dont believe for a minute were not going to stop on thursdays. Heres les moonves talking about selling content to netflix. Well have more intergnarl and domestic licensing streams dealing on the syndication front like the extension with netflix for the Library Programming here in the u. S. So we feel very good about the quarters ahead and about her long term growth process as a content Company Going forward. A good quarter. Spin off cbs outdoor, now over aereo, and now this. Aereo, no one on aereo anyway. Les is confident. Les is in the Conference Call. I love a confident ceo. If you listen to the zinga call, not as confident. Yeah. Netflix, this is the second ceo of the week who said, you know what . Were in bed with netflix, the other one was bob that stock, by the way, ridiculous, back to 85. That represents the world wide slow down tweet i gave you. Yes. People are saying people are not doing as much or going everywhere and travel is going to be down. Post 17, which i said all week, a game changer. The High Water Mark of globalization may still saying this may have been sochi. We have to be careful. The world is slowing. If youre in certain stocks that require travel, industrial, autos, believe me, the numbers are in jeopardy right now. In jeopardy. Driven by geopolitical up certainty. Yes. Driven by russia. You know, you know they are not focused on money. Go over to the best book on world war ii talked about how the business interests said, listen, hitler, we can deal with it. Business said dont go to war. Sure. If youre a major leader, like, dont let business tell you whatted too. We did that once before. Putin is not hitler. The idea im totally think that putin is a bad actor here. Sure. But recognize these leaders know that if business comes in and says, listen, you have to help us. They are not going to help you. They are not going to help business here. Timely on news corp. , we have to mention too, they did miss by 2 cents. News and information revenues down 6. They had good Book Business over at harper ca eer collins. Ad revenue down 9. Look at ginett, that has momentum. The australian papers, what do i know, but, come on, bring it home. Cramers mad dash, counting down to the opening bell in a minute. Heres the premarket as we recover from the losses overnight. More squawk on the street in a minute. In a world thats changing faster than ever, we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. White chocolate loversividual. Dont like dark chocolate. Milk chocolate lovers dont necessarily like dark or white. Before we couldnt really allow the consumer to customize their chocolate. We needed a scalable Cloud Solution allowing them to select what they are looking for. Now there is endless opportunity to indulge. Customization is made with the ibm cloud. The ibm cloud is the cloud for business. About seven minutes until the bell on friday. Lets get cramers mad dash on the market open. People talking about a new king of networking, and its a risk to networks, a remarkle call last night. This company was public earlier this year, probably will be the best ipo. People do not talk about it they should be. They are what people regard as being the next generation cisco. Be careful. Cisco dont underrate cisco. Morgan stanley say august 13th, theres a good quarter. People spend, this is Cloud Network infrastructure, and when you hear the term cloud and network and infrastructure stop thinking about a risk to record, but networks. Not a clive davis play. No. Herb albert. Hey, hes smart. He sold at the top. He heard about the ipod, digital music, and he said thats what makes me sell at the right time. Greatest businessman ever. Its a quarter recommended, and the numbers too low. Its been the numbers have been too low since being public. Smart guyings. This fits in the cloud theme . Yes. And the ciscos . Yes. Cloud has been dogged at late, high multiple stocks, but, yes, cloud is game on as is did concur technologies, the travel companies, the companies with great momentum. Focused on russia. File it away, you know, theres no deal with russia over the weekend, opens down, thats when you buy stock. I imagine you dont want to buy it up 8 is like you hope someone comes in up 12. Thats not been the way that its worked in this market as of late. Right. Postsochi. More to cover, and opening bell in five minutes, squawk on the street will be right back. Today from the wall street hot seat to backyard sizzle, how the former executive changed his life and pursued his passion trading big when the world moves, futures move first. Learn futures from experienced pros with dedicated chats and daily live webinars. And trade with paper money to testdrive the market. All on thinkorswim from td ameritrade. Youre watching squawk on the street on ynbc this friday. Opening bell in a few minutes. If youre just tuning in, futures rallied 20 points on the s p since the lows last night. Weakness on the heals of the president s announcement since he authorized the air strikes on iraqi milmilitants, and the strs have now happened according to the pentagon. Slow down to end all slow downs there. When they raised retail, thats as dumb as is gets. We rebounded, and you dont like it . I dont like rebounds based on people betting there could be something going on because they just hear chatter, and then it builds on itself, the shorts cover. I like the markets that open down and pick among the rubble, particularly the yielders. I dont like markets opening on an air pocket because i think numbers are coming down, and by that you mean . I think the estimates are too high now for the international industrials because of the slow. Naslow down. I think up to 20 exposure in europe. Add net, reported great number, stock down 10 . Why . They do business in new york. Europe was strong for them. Everyone says that was, not anymore. How about the notion, all right, at 1920, theres a buy the dip mentality, 1890 like last night, thats not the case. Buy the dip works if the numbers will not come down, global wind at your back, buy dips. I worry about the numberings for the airlines, worry about the numbers for the transports and industrials. I just dont see numbers going higher. They go lower. Its great to buy a dip when profits go higher, not when they are stalled. With all that, theres the opening bell on this friday. A look at the s p at the top of the screen. Down here at the big board. Lng partners celebrating its ipo. That should be good. People want to transport lng. Thats the energy, what a win. Over at the nasdaq, compass emp celebrating its listing. If there is a deal using a 1990 prototype says you think theres a deal, and when theres not if theres a deal, we go higher. Its about russia. If theres a deal, then its like all bets are off, come in, buy honeywell at 95 on monday. By a deal, surmising withdrawaling troops from the border no nato into ukraine, you know, give peace a chance. All we are saying is give the shorts a cover because give it a chance because, you know, honestly, this is not about iraq because iraq happened, futures rally, and, you know, two f18 s dropping two 500pound bombs, 30 seconds over tokyo, we did more than that. I think you have to be careful here because you have to know that putin is talking to americale. Those are the two people to settle this, putin and merkel. Its not nato or our president. If you know that, then, sure, you have to cover your short. With that, germany in correction territory. Im worried. Bmw sales, does it get better . I dont like gold trading. Its trading up. Thats been a terrible thing. Golds been great going down. Oil is up, but i think that is iraq. Oil going down hurt the s p. Maybe someone says, hey, listen, buy the market, oils going up. Its all deals with putin. That said, you got to watch earnings here, even those domestically focused, and monster is the best gainer today. Ive been a huge fan of monster, not because i use the stuff. I prefer red bull, but monster had a good quarter, international expansion, and Goldman Sachs is right about monster, saying its a bad short. How do i know its good . Go to alcoas quarter, aluminum for cans doing well. Dive down, speak to them, and its not pepsi co or coke, but selling aluminum cans are red bull and monster. Thank you. Hes the goto guy. Hes from germany, that thing is going, hes a suave fellow. The word was ouch. Taking bookings guidance way, way down. Committed the unpardonable sin which they say that they were unhappy with their quarter. Aspired to do better. I know. Now, i mean, why is the stock not down worse . That was a candid disappointed no, never say that. Say, you know what . Outlook is choppy. Never use the disappointed word. This guy has to go, go to Conference Call school. Never use that word. But they do have a huge amount of cash, 1. 1 billion, thats keeping the stock from going downward. Strauss, a smart executive, runs take 2. My friends who are gainers saying evolve is close to grand theft. They have enough power to get through the goalie. Zinga does not. That keeps them from the cash position and fact they are not burning it. The promise of a new tiger woods golf game. Yes. Tiger was with ea. Yes. Coming out next week. He may mot win this weekend they need him to stay haemt to get zinga. Ea is doing better, but until i hear him say disappointing, i was going to modify well, not the quarter i wanted, but he gave the word disappointed so i didnt have to worry. What about tkmr, fda modifying the hold on this treatment for ebola. They have a drugged called t tkm ebola. Theres a woman who runs ive been watching peggy, shes dynamite, the white house correspondent. If you have if you are have an illness which is fatal, she has been oriented, so they will not hold it back if they die anyway. Thats rfda. Cop gratlations for being like that. They will throw anything at this. Theres a Company Called map pharmaceutic pharmaceutical, not what allergen bought, but fda will say, you know what . Throw everything at it. These people will die. Its what they did with aids in the 19 8s, when it was grid. Said, we have to do whats necessary. Thats congratulations to the fda for the aggressive stance. As they should, especially in africa. Oh, no, these stories are, wow. Human tragedy there. I know its not money, markets. Mark said on another network, bloomberg, the ceo of rand gold, the best gold ceo. Theyve got a huge facility in the gulf, but a major one they have one in the ivory coast, which is shut down the border there, but they were asking him, what do you do . You have to get used to not shaking hands. Yep. It just stunned me. No contact. Dont shake hands. Incredible. Gold does that. The conviction buy list today . New mine, open to a takeout . I like the gold look, if you buy gold stocks, buy rand, symbol gold, therefore easy to remember, and what does he want to do . The guy who said how can you do it in ivory coast . Go to congo . How do you do this . I wouldnt go there. He said, jim, gold mining is not for sissies. I said, what are you implying . He said, what do you think . I love him. Doctor mark bristow. They have one more huge find. Hes the real deal. I love him. Hes the greatest. Keep your eye on lions gate today, 27 cents beats by 9 cents. Take it where you can get it. Best of the entertainment stocks. Going back over less is more here, back over cbs, and, yeah, i mean, people recognize content is completely king. If you have content, you advertise is over many ways. Give that to netflix. Selfincriminates and amc this week where the cost of the content hurt no, cbs is i mean, they are talking about a new csi like summit, new jersey. Theres any put a csi anywhere and they make money. Bridge hampton, water mill, i mean, les, i hand it to you, hes hilarious in the call, by the way. Listen, you jokers, buy the stock. Im going to buy it. Theres a level of joviality on that call. I get on the call, and, oh, all is good in the world. A former actor. He has that sense. Les is jets, crushed them. Crushed them. Ive been fantasy king two years in a row super bowl. You only mention it every other day. Most twitter followers at jayz and beyonce. Housing, jim. Depot might be a separate story, but lenar winners list. You know, its about time. Where do rates have to go to buy the stocks . Funny you say that. I hear people on twitter saying the word refi is coming back. If you missed the first window do it. Housing prices have come down, oka okay . Your mortgage is back. If you have not refinanced, i cant believe youre getting another chance here. You got to call your broker this weekend. I have floating rate projects im doing really . Im going to check avails. Unbelievable. You really thought that story was done. I cant believe where rates are. What a gift. Im told mcdonalds might be getting a reprieve from the premarket weakness. Up its the tenyear. Junk bonds junk food against aaa bonds. Mcdonalds has a great balance sheet. People think they will do something. I prefer to own companies that do well, but, look, in the end, utility that sells burgers. Yum, though. Below 70. Not a yield. Thats going to be ugly. That ak i know yum, they were like, jim, dont lose faith in us. Im not, but the chinese are playing hardball. They are playing hardball with apple. Do you notice the tenor of china is not, like, hey, i love you guys . The negative publicity out about our companies are amazing. That media, its not a free press, its not a jefferson thing going on over there. No. The communist party runs it. By the way, they are capitalists, but they have, like, a dictatdictatorship. Like dating a woman not good for you. Theres a lot of allure over there. I dont know anything about that. Its tough. You mentioned Deutsche Telecom how they need to do something regarding ownership. They say they are in no rush. Meanwhile, john ledger tweeted i predict the uncarrier, meaning them, overtakes sprint in total customers by the end of the year. There, i said it. Ledger, dont get in front of him. Believe me, i know this sprint, because of ego, might buy 200 million lines himself. Maybe use a lot of minutes. They are competitive. Legers the real deal. We have colorful ceos all the sudden. Is he too colorful . Should he be a ceo . The pink shirt, i dont know. Anyone with those numbers has every right to be a ceo. Hes good. A lot of shareholders agree. Yes, Spencer Rascoff and legere, they are the empty chairs. I dont know if you can get the camera to the empty shares, but waiting for them to show. In the end, they are, here we gg go they like to host. Open invitation. With all that, jim, dow hanging on to a gain of six points. People are selling nike. Nike was quoted they had the Conference Call that nike was doing well, but people sell anything. Hey, bob. Okay, very good, checking on an ipo we got here. The important thing today is confusion on the part of the traders. Only hard facts we have, s p futures, the confirmation that the u. S. Conducted an air strike on isis. Other than that, i got calls asking about whether or not there was any report to the vague rumors about russia trying to deescalate the conflict, apparently russian media, causing confusion overall, and one of the reasons were up. If you look at the sectors, no real direction right now. Most of the s p is on the upside, but utilities and consumer discretionary, both moving up at the same time, thats not a lot of direction necessarily. I do think all these conflicts, and there are many of them, are causing some problems with the u. S. Stock market, particularly earnings. Earnings very good so far. 90 of the s p reported. The numbers good, 9 earnings growth, but look here at whats going on here at the chart. Put audiotaup the chart on earn. 73 Beat Estimates so far, a good number here. Normally, we see with the companies that beat, we see a pop in their price in the two days before and the two days afterward. They usually pop up an average of 1 . It has not happened. This is not been a good quarter, even for those companies that have been better than expected earnings. They have been down 0. 1 , those are companies doing better on the earnings front, and only way to account for that, unless you think the market goes straight down, is whats going on in the Global Affairs affecting our particular market. Moving on, ignite restaurant, the loser today. Joes crab shack. Thats not a typo, down 30 right now. They had a big miss and blame the weather. They one of the few doing that, but they are trying to expand aggressively, may be cannibalizing it. May be truth there. Thats a big miss. Snack foods had a bigger loss than expected. Higher wheat costs, a company talking about higher overall food costs. Mentioned several of them. Beacon roofing, a terrible time, all roofers are down. Residential roofing sales up 2. 7 . Monster, agreed numbers, revenue on the light side, but a winner today. Guys, back to you. Thank you very much, bob. Lets go to the bond pits, and Rick Santelli is in chicago. Happy friday, rick. Happy friday, carl, and happy friday to those long treasuries as yields continue, continue to move lower. The yield curve keeps you on the right track with the trade, 10s minus 2s. You lase its flattened 70 points for 2014 from over 265 to now 196, amazing trade. Look at the twoyear chart there. You really see it in action. Lets look at the two day of 10s. Down three on today, down 11 on the week, settle at 249. Last week, if we look at the twoyear chart, that jumps at you, looks like theres more room to go with respect to the pattern. Boons getting closer to 1 . 10 2 yield the low before it moved up to 106 unchanged. The guild, the other sovereign in europe, had a meeting with regard to the central bank, twoyear chart is all you need to look at, looking similar to the 10s, just hanging, dangling out there at 246. Last chart, this is the dollar, euro versus dollar, euro weakest in september. I dont have a chart. Watch the dollaryen as well. A lot of room for rates to go down. Carl, back to you. When we return, mcdonalds fell more than 6 in the last month. Sales coming in worse than expected. You see the stocks up 23 cents now. What do you do with the name . Talking about that later when squawk on the street continues. In todays market, a lot can happen in a second. With fidelitys guaranteed onesecond trade execution, we route your order to up to 75 Market Centers to look for the best possible price, maybe even better than you expected. Its all part of our goal to execute your trade in one second. Im derrick chan of fidelity investments. Our onesecond trade execution is one more innovative reason serious investors are choosing fidelity. Call or click to open your fidelity account today. We do . I took the trash out. I know. And thank you so much for that. I think we should get a Medicare Supplement insurance plan. Right now . [ male announcer ] whether youre new to medicare or not, you may know it only covers about 80 of your part b medical expenses. 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One child fail to get to the air sickness bag in time. Another left his shoes on the plane. His shoes and a third simply doesnt want to be here. Until now. Until right booking now. Planet earths number one accomodation site booking. Com booking. Yeah a group of 900 writers signed a letter to amazon over the dispute with the authors, and the Group Includes steven king and patterson. Says, quote, as writers not published here, we people strongly no book seller block the sale of books or prevent or discourage customers from ordering or receiving the books they want. Big piece in the times today, jim, about dougless presston, one of the author, and the guidance given about losses, is this why they are leaning hard . They are times are tight. I dont know. This is one, as an author, everyone is scared of amazon. They believe amazon is the force of, you know, just a force of negativity. I understand this debate. Patterson such a big seller. Yeah. So, i mean, look, i dont know. This is this is a fraught ground. Amazon made it so books are cheap. Its a tradeoff. Well, authors argument is you made a business on us, on book writers. Right. That was your ground zero. Same as music, sapped the profit margin. Theres a piece in the journal, spending 2 billion in the next several years. They are the next battleground, talk about send, send, send, and its not killed the stock. The Stock Holding up. Netflix is spend, spend, spend, and solar city is spend, spend, spend. I mean, these companies that are blessed that they can spend most companies, if they dont say they are firing people, stocks go down, but solar city, tesla, amazon, netflix are allowed to spend, spend, nointe no one cares they spend. And you dont care they were begin the leash . No, i dont at all. If im competing against you, im sitting here trying to make the quarter. They say, listen, who cares about the quarter. Talk about vision. Throw google in there . They have a multiple, that multiple on the 2016 numbers blow the s p. Highly valued companies. Other companies its hard to find a multiple. Tesla in particular. Its very hard to value, but that does not mean short it. It means they dont have to play by the rules. They are everyone else is rembrandt. Okay . Yeah. Stock trading with jim in a minute. Dow holding on to a 22point gain, and squawk on the street will be right back. The ca illac summer collection is here. During the cadillac summers best event, lease this 2014 ats for around 299 a month and make this the summer of style. Yyyup. With xfinity internet soyour family can use all their devices at once. Works anywhere in the house. Even in the garage. Max whats going on . Were doing a tech startup. Were going public [cheering] the fastest inhome wifi for your entire family. Only from xfinity. Thats why i always choose the fastest intern. R slow. The fastest printer. The fastest lunch. Turkey club. The fastest pencil sharpener. The fastest elevator. The fastest speed dial. The Fastest Office plant. So why wouldnt i choose the fastest wifi . I would. Switch to comcast Business Internet and get the fastest wifi included. Comcast business. Built for business. Time for cramer in stop traying. Next week is retail week. Gold man sachs, saying you have to buy my sis ahead of the quarter, sell kohls. I hear its not that bad, but nordstroms is my favorite. The bar is so high, friend of tom brady, lundgren, the bar is high. Be careful. Macys has the omni channel, doing things rights, but i wish the stocks were not high. People buying retailers, gasoline going down, and rates going down. Home depot, breaking out retailers here as gloom is possible. Gasoline and Interest Rates drive people to the stores. Right. That does not mean i i like domestic and yield, but not international because the numbers are not coming down. Numbers are not for domestic companies. Gasoline is going so low. By the way, theres a hidden story. Gasoline comes down because we are producing so much, and we cant sell enough. Right, unless the rules change further. The gasoline coming from canada is going to move down our prices, and in two years, not priced off of brent anymore. Gas sleoline is the hidden tax. Dont dispair. Thats fun to watch. Whats tonight . Dexcom, monitors juvenile diabetes, terrible disease, monitor your kid at school. They got it. Shutter stock, a Company Using the web for money. Terrance craig a guy to watch, sold another company for a big amount of money, best technology for diabetes, and i hope medicare covers it for elderly. Great week, jim. Fun to work with you. Good luck tonight. Thanks, dont worry about it. In chip you know, we trust. Although, ill take this early. Good. Jim cramer, mad money tonight at 6 00 p. M. Eastern. Simon . Advice of jim next on the show, a man with 320 billion in asset under management. Mcdonalds down 8 in two months, a look at whether they are now a buying opportunity. That, and an awful lot more in the second hour of squawk on the street. At humana, we believe the gap will close when healthcare gets simpler. When frustration and paperwork decrease. When grandparents get to live at home instead of in a home. So lets do it. Lets simplify healthcare. Lets close the gap between people and care. horn, ding, ding how long have i had my Car Insurance . I dont know, eight, ten years. I couldnt tell you but things were a lot less expensive back then. If youre 50 or over you should take a new look at your Auto Insurance. You may be overpaying. Actually that makes a lot of sense. Old policy. Old rates. And thanks to your experience behind the wheel, you might save 404 by switching to the aarp Auto Insurance program from the hartford. Plus, youll get benefits that reward your driving record, like our promise that you wont be dropped. Wait, you wont drop me . Seriously . Thats right, you wont be dropped. 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Well even send you this free calculator. Call now. Why wait . Markets this morning, dow hanging on to a gain, would not have thought the case last night with the futures down triple digits. S ps down current levels after authorizing the air strikes last night, but we have managed to claw back a little here. Maybe driven in part by vague headlines that russia wants to deescalate the ukraine conflict, but dont take that to the bank. Meantime, data, and Rick Santelli is here with that. Rick . The last of the Second Quarter data, wholesale inventories for june, up only three tenths, looked for a bigger number in last months half of 1 , last months drop of threetenths. Up what we were looking for. Last month unrevised. Inventories key, revisions Second Quarter gdp. April on inventories is 1 . Last month, change now to only up three tenths, was five, and the last read up threetenths. My guess is youll see a little taken away from the 4 handle we have on Second Quarter gdp. Back to you, carl. Rick, thank you very much. U. S. Air strikes underway in iraq. President launched a new air campaign three years after u. S. Forces left that country. The pentagon confirms that fa 18 aircraft dropped two 500pound bombs to defend the city, and we are in washington, d. C. This morning with more. Good morning. Reporter morning, again, carl. We got word within the past hour or so that the first air strikes as part of the campaign took place. We knew overnight that the humanitarian aid was dropped for the civilians trapped on top of the mountain in northern iraq. We know the u. S. Military is flying air strikes missions against isis targets that we are going back on forth what term to use for the force. What we know is two fa18 air ships dropped 500 pound laser guided bombs. The artillery targeted, the president last night in his remarks at 9 30 eastern time really very much put this mission in the context of defending that city. Take a listen. To stop the advance on erbil, i have directsed strikes should they move to the city. We intend to stay vigilant and take a,s if they threaten the personnel or facilities anywhere in iraq including the consulate and embassy in baghdad. Reporter guys, no consideration how long it lasts or whether this initial series of air strikes was successful or not. A need for more humanitarian aid in northern iraq. They dropped 5300 gallons of fresh water according to the military overnight, but looking at an estimated of 10 to 40,000 civilians in the mountain area. Theyll require more water than that, obviously, over the next coming days, so, clearly, an openended kmimt he eed commitm the president is emphatic he does not want the United States involved in a ground war in iraq, guys. Thanks for the update in washington. Joining us now on the phone, retired army kernel and nbc military analyst, jark jacobs. He used the word open end, and how is america and the military going to know when to stop now that the strikes have started . Well, when the president gives the command for them to stop, and if the isil forces continue to move, well continue to drop laserguided and other precision guided ammunitions on targets of opportunity, particularly six targets like artillery and rocket installations, easy to spot and take out. Open ended means hes going to probably keep going until he says that the assault is over or delayed, and that our consulate will be safe for a while. President obama has been trying for so long to stay out of what has become iraq sectarian war. Are we in it now . Is the United States entangled in a precarious situation now involved with air strikes . Depends on who you ask. I think the president would like to stay out, but i think that the humanitarian situation was overwhelming and compelling, convincing the National Command authorities to take action. Furth furthermore, whats at risk here, and the president laid it out is the safety of our consulate and the americans there. He said quite unequivocally we will not let it fall. You can expect a target of opportunity to continue to be engaged by stand off weapons like laser guided bombs and tomahawk cruise missiles and so on until theres evidence that the that the lay siege is over. We should mention theres american Oil Facilities in the area, and that is not insignificant in the context either. Just to come back again on the question asked of you, if the president is now planted the American Flag in the conflict, and in the belief presumably if the kurds lose, iraq is lost, what is he going to do if the onslaught continues . If he continues to bomb. Isnt there a risk that inevitably, some, perhaps say, you get drawn back into the conflict . I think you always have the opportunity opportunitys not the right word, but risk of special forces on the ground. We got them on the ground now. A possibility well increase the number of special Operation Forces on the ground, but sending conventional troops to the area no matter what the threat is to american interests there, i dont think that the president is going to take that going to make that decision. I think they would rather evacuate than put more more than troops on the ground. Political perception is that the American People are not for it, and as long as we can attack the enemys locations, with stand off weapons, they are all for it, but put conventional troops on the ground . No. No. Quickly, who is supplying isis weaponry . How did nobody see this coming . Well, oddly, a lot of the weaponry came from the United States actually. Given up by the iraqi army. Its an organization an organization of opportunity itself. Look for the extremists to do something against syria. This war in the area, looks to be one huge war, and it does so because it is. What is taking place inside in iraq has to do with whats taking place inside syria, and that will continue until the situation is politically resolved, which is not going to happen any time soon, so yeah. I think were in for a long haul im afraid. Unfortunate reality, colonel jack jacobs, thank you. We remain resilient to the tensions in the middle east. We have eukraine to consider. We are 2 away from the record highs on the s p. Joining us now the ceo of principle global investors, has more than 320 billion in assets under management. Jim, good morning. Good morning, good to be here. There is a flight to quality here if you look at the bond market. Yes. It was depressed for the reasons noted, the yield below 2. 4 . Why is the equity market not suffering . I think its not suffering because in spite of the negative news over the last few weeks, u. S. Private sector continues to do well, and the u. S. Equity market held up in the last two weeks better than other markets in the world, and i think this is driven by the wellknown positives in the u. S. Market, thats cheap energy, productivity, innovation, and the housing market. So in spite of the height in geopolitical tension and growth slow down in emerging markets in europe, i think the u. S. Market is okay. If it were not for the geopolitical tension and the growth slow down in emerging markets and europe, its 5 or 10 higher. I was actually shocked within the last half hour to have a conversation with a trader where i basically repeated what you said to me more or less, though, slightly shorter, and she, frankly, puffed on a cigarette, looked at me, and said, dont you think everything is material after 9 11 . I was very taken aback by that because shes right, isnt she . This is no longer conflicts that necessarily occur somewhere that we never go to. No, thats right, and both the situation in iraq and in ukraine have a very serious negative tail risk. The way i would expect most traders to be thinking about it is 80 or 90 gets contained, worst risks do not happen. For example, 80 or 90 chance we in the u. S. Are not drawn into a ground war in iraq. That 80 or 90 is benign for the market. The negative tail risks when that goes up is what holds the market back. Dont you have to consider here that there will be a Global Growth slow down . Or have a trade war with russia hurts europe more . We feel it in terms of corporate earnings, not the mention the middle east where you have energy supply, not imminently threatened, but the more the whole region is under unrest, that harms oil. Exactly correct. Thats the republicason i say w not for the gegeopolitical tension, the market would be higher. Fundamentals in the u. S. Remain good. If either situations or Something Else goes badly wrong, you know, like more of the west being drawn into the russiaukraine situation, intensified sanctions, you know, we already saw bad gdp numbers from italy this week. If germany dips into recession, which it could with sanctions, then you see that growth slow down deferring the negative development. You know, jim, a logical consequence of what you say, actually, were okay for now, but in two weeks tame in jackson hole, yellen starts on app exit strategy. Shes already started. I shifted emphasis a little bit on when they finally raise the feds fund rate. I would have said second half of next year, but recently, its come forward because to where . Where do you think . Second quarter of next year. If she starts articulating that on whatted too with the balance sheet, however she phrases that, if she does it in jackson hole in two weeks, the markets react negatively, arent they . They may in the near term, but theyll get used to it. What i expect to see happen is different to note with all the events how it plays out, but, to me, the likely scenario for late 2015 is a yield curve thats pretty well flat at 2. 25 or 3, but not higher than that. Wow. Not higher than that. A flat yield curve is the end of the withdrawal cycle. Rates are low and oversupply offed commodities, all that stuff is going to lead, i suggest, to a very muted Interest Rate cycle. Jim, thank you for the analysis. Thank you. When we come back, deals that once were and why the regulators win with the New York Times jim stuart, and weak sales in the world, how can the chain turn around . Dow up 25 points and s p clinging to 1912. Back in a minute. So now weve turned her toffee into a business. My goal was to take an idea and make it happen. Im janet long and i formed my Toffee Company through legalzoom. I never really thought i would make money doing what i love. We created legalzoom to help people start their business and launch their dreams. 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Sleep train your ticket to a better nights sleep welcome back, shares moving lower after the auctioneer posted profits weaker than expected in terms of earnings and revenues and blamed a higher tax rate for the decline in core earnings. You see there shares down 10 towards session lows, a lousy year, stock down 30 so far year to date. Carl, maybe a lower bid from investors for bids. Back to you. Thank you, dom. Two potential deals in m a, two deals fell apart, 21st century fox gave up on time warner, and sprint failed the bid for tmobile. We have a look at this, on set, columnist with the New York Times as well as a cnbc contributor and winner of the plitzer prize. Happy friday to you. If youre a regulator, speak softly, carry a big stick, right . Its working, amidst the bad news, this is a good news story for consumers. I mean, both sprint and tmobile, time warner and fox, are direct competitors. Whatever else you say about it, if they merged, theres less competition, less pressure to inno valt, not good for consumers. It took a big political hot potato out of the hands of the regulators. They are so happy these deals went away. Neither one of them, both will have a fire storm of criticism, political, if not from the regulators. You only have four cell carriers now, would have reduced it to three. Youre talking content, diversity of content, a really big political issue. The media side, its a fractured business, right, a lot of places to get content opposed to telecom. The studios moving, tv producers, five to four, looking at printing every concentration of ownership under one owner. That makes people nervous who care about content. Thats a theme in the antitrust law and regulatory law for decades, not prominent recently, but coming back now, and we have a tougher enforcement environment there. They are cracking down more. I read the article. You suggest they seem to be taking the credit when arguably it is not theirs to take, particularly on fox. I just want to the suggestion is that under the obama administration, theyve been tougher. Certainly than the Bush Administration was. People watching the program now go, what about the Airline Mergers they let through . The elephant in the room is our Parent Company is trying to take over time warner cable, another antitrust issue. They may not agree with the premise of the story. Youre right. I dont want to overstate the role the regulators play in the collapse, but it was a factor. There were a lot of hearings there, and it was a political issue, but and, again, i dont want to give too much credit, but theres no doubt that the sprint deal collapsed because they realized they were not getting anywhere. As i report in the column, they had meetings with the Justice Department and fcc, pointblank, its not going it fly, well sue you. Is there record that tough . Only by comparison, completely law sai fair, and they sued to block that, settled, but got a number of made concessions, yeah. Had concessions, so lets be fair to them. They are doing things, litigated the hr block case, litigated the deal for tmobile, sued on the airline thing. Its more activity than weve seen. Hard not to throw in walgreens there, not political, but government retaliation if, in fact, they change the tax space. The point they made to me, the regulator, and its a fair one, its good to at least have corporations thinking about the possibility of the antitrust laws might be enforced. They dont have to go out and sue every single time. They are seeing the measure take effect. Thats a healthy environment. Tobacco will be interesting to watch as well with the lorillar. Definitely. As consumers think about it, do you have to think about it differently with the success of netflix and amazon . Absolutely. The question is has the internet really levelled the barriers, come in and create content . If you look at the major Hollywood Studios. When is the last time we saw the creation of the major Hollywood Studio . Dream works tried. Did not work. The names out there, they played to the early part of the 20th century. Big barriers there. How many big tv producers do you see . One thing for netflix to come in, piggy back this, yes, youll see that, but the main barriers are not gone. Fox would have be 30 plus . 40. 40 . Wow. Two leading movie producers would have been at 40 . Thatll get your attention. Definitely. Looking forward to the story. Thank you. Ahead on the program, a miss for mcdonalds, sales weak, and whats that mean for the giant, and after the recent fall in the stock, is now a buying opportunity . Meanwhile, the markets up 20 points on the dow despite iraq. The ca illac summer collection is here. During the cadillac summers best event, lease this 2014 ats for around 299 a month and make this the summer of style. Yyyup. With xfinity internet soyour family can use all their devices at once. Works anywhere in the house. Even in the garage. Max whats going on . Were doing a tech startup. Were streamlining an algorithm. Were going public [cheering] the fastest inhome wifi for your entire family. The x1 entertainment operating system. Only from xfinity. Iselle lands in hawaii and downgradesed. Jim cantore is there as islands prepare for the second hurricane. Jim, how is it looking . Reporter well, its looking wet. You can see behind me, the rain is coming down in buckets. The trees though, not employeeing all that much. The storm collapsed today. We lost the wind field. That is huge considering the wind damage potential that was, if you will, on alert for yesterday when this thing was an 80 Miles Per Hour tropical storm, but now its a flood threat, not on the big island, but also maui as well. We still have to get through this over the next 24 hours. Then, we look at julio, and comfortable information is showing with that. The models pull the storm away allot further from the islands. If its going to weaken and move away from the islands as this model shows, still over a thousand miles away, plenty of time to watch and could come back down, but we could dodge the second bullet. Watching until it gets here. Have to deal with the flooding here from iselle. When you think about what it means to tourism, about 750,000 people come into the hawaii islands during the month of august on average. Thats about 25,000 a day. That total in terms of what is spent and working its way through here economically, 1. 6 billion dollars, so to lose a couple days, even three to five days because of this threat, thats a huge deal economically to the islands and one felt this august of 2014, unfortunately. Thank you very much. Well continue to check in with you, stay dry out there in hawaii, jim. Meantime, mcdonalds under pressure reporting worse than expected quarterly, and all of the individual regions. Stock is holding up given the fact that the numbers of missed so much. Lets get insight from the director and Senior Research analysts, and i was surprised to see the Stock Holding up so well, peter, given the numbers missed hard in the u. S. , of course, thats 30 of mcdonalds business. Yeah, the numbers were pretty ugly. I would tell you that the issue is really coming out of china with food safety concern they got going on there with comps down 7 , and given the magnitude and timing, so this issue started on july 20th, and comps ran flat or so for the entire region, now down 7 , so just that, you know, comps in china and japan, running down high teens, 20 . I dont think thats going to turn around any time soon. I think that can take, you know, six to nine months for this to blow over. Youll see pressure for it continuing going forward. There are factors out of mcdonalds control, and food safety concerns in china is a big one, struggle with the low income consumer here in the United States, weather issues, you name it, a lot of excuses, but how much of this can you attribute to execution problems and to management problems at mcdonalds because they have not been able to turn around u. S. Same store sales in over a year . Well, keep in mind they had a good run of call it ten years or so of just really great comps, month after month, year after year. Theres no low hanging fruit, taking share from all competitors for many, many years, and right now, everybodys nibbling back at them and taking share back. Yeah, their comps are down, you know, 3 plus in the u. S. , and traffic is down around 5 , so, yeah, struggling in the u. S. , but its after ten years of great comps. Hey, peter, how does fast food compare to technology . I know Big Technology companies ultimately fail because they are wrong or they become seriously smaller than they used to be, and, therefore, not good investments. Is fast food different . Mcdonalds so big, so resourceful, can be intelligent, ultimately will always be a buying opportunity if the stock is down, say, 8 over the last couple months as it is. I dont know its a buying opportunity, always be around and biggest restaurant kpcompan in the world . Likely. Its a franchise model, 35,000 units around the globe, adding more units, taking share around the globe. In our view, always around, not going away, hard to kill a restaurant company. Hey, peter, yielding 3. 5, how much protection is that . You think the floor is in the 90s or below . You know, i think youll see support around 90 bucks. I wonder if the dividend goes up this year, maybe modestly once we get to september, might go up a penny or two to get, you know, just to continue the trend. I think youll see some support, but if things dont get worse, i think it can hold around the 90 level. Expect u. S. Comps positive when . A mid2015 story . They are innovating, shake fries in the philadelphia market, high density prep tables installed in the restaurants, product innovation, i hope early 20 15. Talking about this learning lab or Discovery Lab they have out west, but awaiting to see the fruits of that labor. Didnt i send you that once . No. The new one is under wraps. Correct me if im wrong, they dont make promises, the minute theres a new toy, they expect to see it, and its obviously not going to happen that quickly. Very true, and its, you know, 14,000 locations in the u. S. , and you got to get something thats differentiated and not easily rep kated by the competitors. Not very easy to do and something they put in all the restaurants and supply a lot of. Its not an easy thing to do, so, yeah, i think once they have a product, well hear more about it, but its going to take time. Well, look, investors, i wonder how much patience investors have. Its been an underperformer. Do you not attribute this to don thompson, and do you think hell be there in one year . I think he will. I think don will be there in a year. I think they are facing challenges, definitely here in the u. S. And around the globe, but there are things they can do. They can shift advertising more digitally. They can introduce innovative products. I think they just need to be a little bit thinking outside the box, and i think its got to happen on the menu. I think thats where the changes have to happen. Thats whats going to drive the same store sales. Yep, peter, thank you so much for joining us on mcdonalds. Stay with the consumer theme right now. Over to chu for a quick market flash. Thats right, from the breakfast table at mcdonalds to home, the stock plummets after the cereal maker cut the profit for the year in the latest acquisition. The companys buying Peanut Butter maker, american blanching, for 128 million. In june, bought michaels foods, and nearly ten times normal trading volume, the stock there down by 20 , a rough day for shareholders waking up and see a fifth of your market value gone. Back over to you. Thats an understatement. Thank you. Coming up, the pentagon confirmed air strikes in iraq. General rar ri mccaffrey will join us live. Thank ythank you for defendiyour sacrifice. And thank you for your bravery. 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Navy jets dropped two 500pound lacer guided bombs on artillery sites, according to the pentagon, marking the beginning of air strikes the president mentioned yesterday. Lets bring in Barry Mccaffrey this morning. Good morning to you. Morning. The president said i ran office bringing troops home, but what brings a longterm reversal in that staps . Well, toy dont think well be involved in great extent in the middle east, certainly not with ground forces. Right now, i think the president is thrashing around using minor military power as a political gesture. Last night, we had three aircraft drop food and water to 50,000 refugees. Today, two Navy Aircraft drop four bombs. You know, this is not decisive use of military power, not on the ground in the area. I dont think we know what were doing. Im sorry, you dont think we know what were doing . No. I dont think we got a, you know, an octoberive that weve written down, what is the purpose, and we go to the pentagon, interviews this morning were with the White House National security adviser. Where was the joint commander with the mission . Turkeys not going to spot sore u. S. Air power attacking targets in a region. I doubt kuwait is. We dont have a Status Forces Agreement with iraq. These are minor uses of military power without a clear political objective that were trying to achieve. So what do you argue for in the room . Would you be in favor of a more sustained air campaign aimed at defending not just this, but sustaining isis further in. I would be in favor of articulating what our political objective is, trying to protect our u. S. Military people by attacking isis artillery posts . Write down what we are trying to achieve. We actually want to protect 1. 5 million refugees in iraq, 2 00,000 just in the last month or so, and 50,000 now up in the mountains, and in the last week, and we cannot do it with two fa18s and three air drops of food and water. We should arm the kurds, supporting the kurds, if it is important to sustain them against isis. Interesting, general, to the point you make, that its kind of woolly, for lack of better expression, the president said it was about humanitarian aid and genocide. Its about defending u. S. Forces and facilities there, which i dont know if thats the Oil Companies or not or the consulate. In the mean time, arent you describing a classic case potentially of Mission Creep here . If the objective is to save the kurds, how far you go to save the kurds . Well, dont go so far to call it Mission Creep. It is political gestures using tiny amounts of u. S. Military power without a clearly defined purpose. The big failure was an attempt to keep the kurds from being a separate component of iraq. Were trying to support a centralized government in iraq with malawki. Theres little we can do. Again, theres no significant u. S. Military power in the region, and, by the way, isis is primarily a syriabase e ed jih move. We have to include syria in the targeting. Cant this spread . If we dont do anything, how far can they get . Beyond the borders of iraq . Well, they already are. They are in lebanon and sere that in a major way. They are in iraq. They are a significant threat to western european and we are looking at an ethnic religious civil war in the middle east in which they rearrange the National Boundaries over the coming ten years. Primarily through warfare. But, you know, my argument would be sort out what we want to achieve, and then decide on the use of u. S. Military or economic or intelligence power to get us there. Right now, these are political gestures, apparently being manipulated from the white house basement instead of by a joint commander with a defined military campaign. Financial lly, general, you understand political realities. Are you in favor, if policy drawn this way, putting troops back in iraq . Absolutely not. This is a decades long bloody conflict. We have interest there. We have to be engaged. The europeans probably have greater interest than we do, but, again, what you do is you stand behind your allies, have them be the boots on the ground. Stand behind the israelis, behind the kurds, shore up the Egyptian Government as shaky as it may be. We have to work through other partners in the region and not use Navy Aircraft to substitute for u. S. Longterm policy. General, good to see you again, thank you for the time today. Good to be with you. General Barry Mccaffrey joining us from seattle. The geopolitical concern and yield on 1046 year treasury right now, 237. 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In a we believe outshining the competition tomorrow requires challenging your Business Inside and out today. At cognizant, we help forwardlooking Companies Run better and run different to give your customers every reason to keep looking for you. So if youre ready to see opportunities and see them through, we say lets get to work. Because the future belongs to those who challenge the present. Some relief for lulu lemon shareholders, stock up 2. 3 actually after the Company Makes up with the founder, chip wilson. We have the story at hq. Is it the end . I dont know if its the end or beginning of more to come, but we have Details Behind the deal. Half the stake in the company to private equity firm, and source close to the transaction, they made the deal because its a tremendous long term opportunity for the investment in the fund. They are a business, private equity firm knows well having helped launch the business initially. The source says the stock price was at a level where the transaction made sense. They bought half the company with the promise to professal e professionize the company. They think lulu is in the early innings of the live cycle, and they are aiming to take the maker to the maximum potential with ecommerce, kecking consumers, expanding the global reach, some initiatives in p focus, back to you. If they do that, why is he selling 845 million of stock . If thats true, why sell . He still has half the company, simon, and probably thinks that outside influence helps get his message across stronger than what hes been able to do on his own. Remember, we have two directors coming in to join the board from a ad vent and would think they would be in the same mind set as wilson, and thats why he decided to do the deal with them, ultimately, his stake could still grow, but in order to have that stake grow, he had to sell some of it to get partners on the inside to help him get there. Thank you. Theres other issues to worry about too. Thank you. Lets get to the cme group, Rick Santelli, good morning, rick. Good morning, i want to welcome jim, the voice of sanity in the wilderness. Theres big things for the markets. Simple question. Has the fundamentals change . Buying less product . Things expensive because of geopolitics . The answers no. Not changing purchasing efforts. Crude oil is even going up. Its obvious to me theres reasons to defend the economy. I get that. Maybe geopolitics is a good reason to point to sub par Historical Performance in the economy, but that does not mean its true. Lets go over some. I did some quickly. This is may last year, Interest Rates rose dramatically, you made a great comment about the move last may. What was it . May of 20 13, went to 3 by september. 140 basis point rise. When bernanke said they would taper. They are bearish on Interest Rates, looking for a rise in rates. Happened last year. Thats right. They predict what happened last year. Precisely fighting the last Interest Rate war. Right. On the wrong side of the market. Two things get capped as a technician. Thinly traded zones, you come back and fill them in. If thats the case, two and a quarter, most likely, home base moving forward. Your thoughts . Exactly. A fundamental story on it, whats happening with the markets right now, we have weak growth, still disappointed where we are going. Averaging 240,000 to 245,000 in jobs, reading the memos . Did that last year, 2012, 2011, and inspect 1990s, 3 00,000 jobs out of the recession, and in the 1980s, 500,000 jobs from the recession. Using a phrase you like, the kid gets a c, and you get an application to harvard. Its not enough. Describe what trend growth is. Is that how we answer the question . Exactly. It contracted 2 in the first quarter, earn 3 world, we should have had 7 growth in the Second Quarter to get back to the trend. 4 is not a rebound. Sub3 trend. Exactly. The trend is is 2 , maybe less. Thats what everyone is having a hard time understanding. Yields keep sinking. Jim, thank you, carl, simon, back to you. All right, thank you, rick, very much. Markets here starting to get traction, dows up 70 points, s p back to 1917. Well get the wisdom of art cashin in two minutes. Where the reward was that what if tnew car smelledit card and the freedom of the open road . A card that gave you that im 16 and just got my first car feeling. Presenting the buypower card from capital one. Redeem earnings toward part or even all of a new chevrolet, buick, gmc or cadillac with no limits. So every time you use it, youre not just shopping for goods. Youre shopping for something great. Learn more at buypowercard. Com could help your business didavoid hours of delaynd test caused by slow internet from the phone company . Thats enough time to record a memo. Idea for sales giveaway. Return a call. Sign a contract. Pick a tie. Take a break with mr. Duck. Practice up for the business trip. Fly to florida. Win an award. Close a deal. Hire an intern. And still have time to spare. Go to comcastbusiness. Com checkyourspeed if we cant offer faster speeds or save you money well give you 150. Comcast business. Built for business. Oils on the move. Get to Jackie Deangelis at the nymex. Seeing interesting volatility in oil prices because geopolitics are front and center and on traders minds heading into the weekend. U. S. Sending humanitarian aid in iraq and talking about potential astrikes. We are focusing geographically on the north. Most Oil Production is in the south. Really no huge threat there at the moment. Thats why these prices are not moving through the roof. Of course, as Russian Troops amass on the ukraine board watching that and the conflict in israel and gaza, too. Wti price is around 97. 5. Backing off from highs earlier in the session and branch prices negative. Over 105. Traders are cautious watching the issues around the world and see how they play out. I do want to point out by all accounts if we were not seeing geopolitical conflict, you would see downward pressure other than these oil prices for several reasons. First, opec backed off on demand forecasts saying Global Production is up and as the equity markets are seeing weakness over the last week or so, traders saying Global Demand forecasts could come down as well. These prices are going to see volatility and youll see something major have to happen overseas to send up up higher. Normally this time of year, a lot lower. Jackie thank you noor. Breaking flus from the faa. Decided no aircraft, no civilian aircraft should fly over iraq airspace for fairly obvious reasons. To recap, the faa here, reg later here in the United States suggesting that u. S. Airlines should not fly over iraq. Though why any pilot even at 30,000 feet would want to attempt that im not sure after ukraine. Market, up 54 points on the dow. Art cashin joins us director for praises and cnbc contributor. You said something important in the break to us explaining the trades we just talk and. Todays not actually from your perspective about iraq. Its about the ukraine . Yeah. The iraq situation could be far more dramatic in the future but for today its all about the ukraine, and it is the fact that youve seen the rebel leader in the ukraine resign, and be replaceed by a ukrainian local. That kind of opens up some possibilities, that is, in fact, rumor. Noc not the right yesterday that spiked the russian market intraday and has given russia a bounce. Going into the weekend, you have cooing noises coming out of the kremlin and youve got a change in leadership that possibly opens the door to some further negotiation. Surely theres a lot of nervousness out there with the situation in iraq. I mean, these are not problems that are going away over the weekend. In fact, they only look to be escalatin escalating. Think about russia, the u. S. And europe, a trade war is brewing . No yes. No question. But the market is yearning for some kind of sense of resolution or direction. So its season upon the ukrainian thing. Were also right now, the viewer should watch the s p, 1915 to 1918. That was the top of the afternoon rally yesterday. So thats going to provide a little resistance and here well see if we can get through that, but, you know, jackies right. You want to watch the price of oil to see exactly what kind of tension there is out there. Can you help me with whats happening in the bull market . The move is absolutely move. The yield on the ten year treasuries rally has don down to 2. 377 when i last looked. A flight to quality. Rick santelli suggesting this is the new normal. Were not talking about rising Interest Rates now. That was last years battle, because the economies are so depressed. Yet the other side of the market, is the high yield side, where youve got outflows now for a fifth consecutive week, and that points to that fear of higher rating the exit door. Those are contradictory arguments. Arent they . They dont seem to fit together. What you have to look at, the two different buyers. The buyers of high yield are not people like Central Banks and other interimmediataries looking at extremely low yields in europe and i remeend you of one thing. Remember qe winding down with tapering. Yes. The last two times we had qe end, guess what . The yields on the ten year went down, and high yields and other things went up. So i think theres a little bit of room, a rebareality buil thank you for the analysis. Art cashin from ubs. When we come back, talking about moonves, amazon. Dont go anyy. Squawk alleys up in a minute. Thank you daddy. Military families are uniquely thankful for many things, the legacy of usaa Auto Insurance can be one of them. If youre a current or former military member or their family, get an Auto Insurance quote and see why 92 of our members plan to stay for life. So proctor and gamble getting into a brand new category right now. Simon, its under the always brand p g, multibillion opportunity. The reality is, baby boomers in this country are ageing. Its stunning to see the growth and what is known as incontinence in the household products category, outpacing growth in tissue, toilet paper. You name it pap great chart showing growth in baby diapers versus the growth in adult diapers. Adult diapers, can you see, smaller category than baby diapers in terms of dollar sales but growing rapidly. Why Procter Gamble is getting in. Interesting business move. Worlds Largest Consumer company struggling with growth. Kimberlyclark, biggest. Private label big as well. An limpts say p g given its scale and Brand Recognition with the always brand and this does mostly affect females, that it could sort of disrupt the industry and take market share here. I have to say, as the years advance, stories like this fill me with fear. That this is what dont you worry. Actually, thats true in japan for a while but its going to happen here given our demographics, no doubt about it. How do you know that sort of thing . Average age in japan, 45. That incontinence market, 25 of the global share. Biggest opportunity there but happen income western europe and the u. S. As well. Well be sparkling at dinner parties after this. Im glad the baby diapers are out of the house, if you know what im saying. Have a great weekend. Thanks for the great segue. 8 00 at amazon, 11 00 a. M. Here in the east. Squawk alley is live. Welcome back to squawk alley this morning. A check on the markets on this friday. Obviously, premarket and overnight action especially the nikkei down 450 points overnight would not have led us